Peters (WA) Ltd v Petersville Ltd

The appeal concerned Peters (WA) Ltd and Petersville Ltd, arising from a dispute over a sale agreement for an ice cream business in Western Australia. Peters (WA) Ltd, the appellant, manufactured and sold ice cream under the "Peters" marks in Western Australia. Petersville Ltd, the respondent, manufactured and sold ice cream nationally under the "Pauls" marks and under the "Peters" marks in all states except Western Australia. The core of the dispute involved a covenant within the sale agreement that restrained Petersville Ltd from selling ice cream products in Western Australia. This restraint was coextensive with the duration of licensing arrangements but extended to products not covered by those arrangements. The High Court of Australia was required to determine whether this restraint was subject to the common law doctrine of restraint of trade.

The legal issues before the High Court included whether the restraint of trade doctrine applied to the covenant in question, and if so, whether it was reasonable. Specifically, the court considered circumstances where the restraint of trade doctrine might not apply, including the potential adoption of a "sterilisation of capacity" test in Australia. The court also examined the development of common law concerning restraints of trade, the considerations of public interest, and the relationship between the common law doctrine and the *Trade Practices Act 1974* (Cth).

The High Court's reasoning focused on whether the restraint fell outside the scope of the common law doctrine, rather than requiring justification under it. While the appellant did not argue that the restraint fell into established categories excluded from the doctrine, such as those relating to land purchases or leases, it relied on broader reasoning from *Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd*. This reasoning suggested that certain restraints might be outside the doctrine altogether. The court noted that the *Esso* decision indicated that covenants given on the sale or lease of land generally do not fall within the doctrine. However, the present case did not involve such a scenario. The court ultimately dismissed the appeal.

The appeal was dismissed with costs. The style of the appellant was also amended to read "PB Foods Ltd".