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Attwood v Lamont

Attwood v Lamont

Case [1928] HCA 27 24 August 1928

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41 CLR 316

PETERS AMERICAN DELICACY COMPANY CHAMPION

RESPONDENT. DEFENDANT,

ON APPEAL FROM THE SUPREME COURT OF

NEW SOUTH WALES. Contract-Implied term-Necessary implication-Restraint of trade-Restrictive clause 1928.

-Reasonableness-Validity-Injunction

The respondent in writing requested the appellant to "enter my order for SYDNEY,

supplies of " your "ice-cream for sixty months to commence 1st April 1927 on Aug. 13, 24.

the following terms and conditions, and in consideration of your doing so and supplying ice-cream as hereafter stipulated, I agree not to sell, serve, supply or vend any other make of ice-cream or ices, or make any of same myself, during the period this agreement is in force." After setting out the prices for which ice-creams of the various kinds were to be supplied, the document continued: "I will pay for all ice-cream or other goods ordered and supplied c.o.d. (failure to make payment as provided herein releases the supplier from any and all obligations to make further deliveries until the amount owing has been paid). Prices are subject to alteration on giving customer seven days' notice in writing." After deliveries had been made under the contract for a few months and before any attempt on the part of the appellant to alter the prices, the respondent ceased to take his supplies of ice-cream from the appellant, and proceeded to procure them from other manufacturers.

Held, by Knox C.J., Isaacs and Gavan Duffy JJ. (Higgins and Powers JJ. dissenting), that the appellant was entitled to an injunction against the respon- dent, as the contract on its proper construction did not involve an undue

41 CLR 317

By Knox C.J., Isaacs and Gavan Duffy JJ.: (1) The undertaking by the H. C. respondent not to sell, &., ice-cream other than the appellant's 'during the period this agreement is in force" was not synonymous with the obligation of the appellant to supply ice-cream 'for sixty months"; (2) on the con- struction of the contract as a whole, the effect of the clause as to alteration of prices would be that upon a notification of an increase of prices (which had not been given) there would be a cesser of the contractual obligations; (3) the restraint was not unreasonable in the circumstances.

Decision of the Supreme Court of New South Wales (Full Court): Peters American Delicacy Co. Ltd. v. Champion, (1928) 28 S.R. (N.S.W.) 253, reversed, and order of Long Innes J. restored in modified form.

APPEAL from the Supreme Court of New South Wales.

A suit was brought in the Supreme Court in its equitable jurisdic- tion by Peters American Delicacy Co. Ltd. against Ernest Simon Champion in which the statement of claim was substantially as follows :-

1. The plaintiff is a company duly incorporated according to the laws of the State of New South Wales with power to sue and be sued in its said corporate name.

2. By a contract in writing made between the plaintiff and the defendant on 1st April 1927 the plaintiff agreed to supply to the defendant…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Attwood v Lamont

Details

AGLC: Attwood v Lamont [1928] HCA 27
Case: [1928] HCA 27
Decision Date: 24 August 1928

CaseChat Overview and Summary

The case of *Peters American Delicacy Company Ltd v Champion* involved an appeal to the High Court of Australia from a decision of the Supreme Court of New South Wales. The dispute arose from a written contract between Peters American Delicacy Company Ltd (the appellant and supplier) and Ernest Simon Champion (the respondent and retail vendor) for the supply of ice-cream over a sixty-month period. The contract contained a restrictive clause wherein the respondent agreed not to sell, serve, supply, or vend any other make of ice-cream or ices during the contract's duration. The respondent ceased taking supplies and procured them from other manufacturers, leading the appellant to seek an injunction.

The central legal issue before the High Court was the construction and validity of the contract, particularly the clause concerning price alterations and its impact on the restraint of trade. The respondent argued that the contract was invalid due to an unreasonable restraint of trade, contending that the appellant could arbitrarily alter prices, effectively preventing the respondent from profitably trading or dealing with anyone else. The appellant, conversely, argued that the contract, properly construed, did not impose an undue restraint and that an implied term of reasonableness should apply to price alterations.

A majority of the High Court (Knox C.J., Isaacs, and Gavan Duffy JJ.) held that the appeal should be allowed. Their reasoning was that neither of the rival implications – that the appellant could arbitrarily set prices, nor that prices must be reasonable – could be properly inferred from the contract. They found that the parties had expressly addressed price alterations, and the contract, when read as a whole, indicated that upon a notification of a price increase, the contractual obligations would cease, as the respondent was only bound to pay the initially stated prices unless further assent was given. Consequently, the restraint of trade was not considered unreasonable in these circumstances. Higgins and Powers JJ. dissented, finding the restraint of trade to be undue.

The High Court allowed the appeal, reversing the decision of the Full Court of New South Wales. The order of the primary judge, Long Innes J., granting an injunction was restored, but modified to exclude the phrase "or after due notice at other reasonable prices."

Orders