GROCER SEEKS INJUNCTION

Press, Volume LXXXIII, Issue 25272, 26 August 1947, Page 5

GROCER SEEKS INJUNCTION

CLAUSE IN LEASE OF SHOP

JUDGE’S COMMENTS ON DEFENDANT’S ACTION

"I am unable to hold that the defendant has done, or is doing, or is threatening or intending to do, what he agreed not to do. The utmost that can be said is that he has assisted his wife to do what he agreed not to do. No honourable man would have done that, and no honourable man would, if he could help it, allow his wife to do what she has done and is doing."

These words, from a judgment by Lord Lindley, were quoted by Mr Justice Fleming in thfe Supreme Court yesterday when giving judgment in a case in which George Stanley Holland, a storekeeper, sought an injunction restraining David Malcolm Macfarlane, a storekeeper, from carrying on business in opposition to him, and also claimed £5OO as damages.

“I adopt the words as applicable in the circumstances,” said his Honour. The plaintiff was represented by Mr J. T. Watts, and the defendant by Mr E. C. Champion. Plaintiff’s Claim In his statement of claim the plaintiff said he was a grocer at 20 Riccarton road. In November, 1942, ne was called up for military service and he successfully appealed for the defendant, who was then in camp, to carry on the business. • It was agreed orally that the defendant should lease the premises and be allowed the benefits of the business during the tenancy. The defendant agreed with the plaintiff that he would not carry on the business of a grocer or general storekeeper within xme mile, for five years from the termination of the tenancy, and would retire from the business at 20 Riccarton road within one year after the cessation of hostilities. The ' defendant vacated the premises on June 7, 1947, and since June 9 had carried on a grocery and general store at 27 Riccarton road, which was across the street from, the plaintiff’s premises. The plaintiff claimed that he had 345 registered customers and the defendant tpok 300 of them with him. The plaintiff sought an injunction to restrain the defendnant from carrying on business at 27 Riccarton road and from soliciting plaintiff’s customers. The plaintiff also asked for £5OO as damages. The defendant denied that he was carrying on the business of a grocer or general storekeeper at 27 Riccarton road, but stated he was employed there as shop manager for Riccarton Provisions. Ltd. He had reached an oral agreement with the plaintiff to purchase the plaintiff's business, but the plaintiff later repudiated it. He further stated that in August, 1946, the plaintiff started business in opposition to the defendant in premises adjoining those leased by the plaintiff to the defendant. Clause Criticised “On the question of rectification, I consider there is not sufficient evidence to justify me granting the rectification asked for. The question whether or not there has been a breach must depend on clause 13 of the agreement to lease. It states that the lessee is not to carry on the business of a grocer and/or general storekeeper within a radius of one mile for a period of five years from the expiration of the lease hereby granted. It is unfortunate that the restrictive covenant was drawn in such a skimpy manner. It closes only one of many gates. It is the worst drawn restrictive covenant I have ever come across.” said his Honour, after he had heard evidence from both parties.

This was a Court of law and not of morals, but he certainly thought that, in the circumstances, the defendant did a very wrong and shabby thing. The plaintiff served his country during the war and. being compelled to leave his business, arranged with the defendant to purchase the stock and lease the shop for the period of the war or for 12 months after the signing of the armistice, continued his Honour. The Legislature saw fit to pass legislation dealing with leases of that kind, which had the effect of extending such leases. It seemed a pity to him that the legislation did not exempt servicemen from its provisions. The defendant not only took advantage of those laws—as he was legally entitled to do, whatever the morality of it—but he also found an easy way to get round the restrictive covenant. The defendant decided to talk it over with his relatives, and a private company was formed with a capital of £lOOO, of which the defendant's wife held 400 shares, his sister 300, and his cousin 300. With that money the company purchased the defendant’s stock-in-trade and set up in competition just across the road Still he was unable to find that the defendant had committed a breach of the law or a breach “of this badly drawn covenant.” The evidence showed that the defendant was only manager for the company, said his Honour. He then quoted the remarks given above and gave judgment for the defendant.

“But I am justified in disallowing him costs. No order will be made for costs,” concluded his Honour.