NELSON BROS. v. SOUTHLAND FROZEN MEAT COMPANY.

Otago Daily Times, Issue 10621, 13 October 1896, Page 2

NELSON BROS. v. SOUTHLAND FROZEN MEAT COMPANY.

APPEAL COURT DECISION,

(Pxa Uniteo I-bss Association.)

Welunoton, October 12,

In the Appeal Court to-day judgment in the case of Nelson Bros. v. Southland Frozen Meat Company was delivered by Mr Justice Denniston on behalf of the Full Court. The origin of the o__e was briefly this: The Southland Frozen Meat Company had an agreement with Nelson Bros, that the latter'-were to take the output of the company's works, and were not to be concerned in any other frozen meat works in the district or restrict in any way tbe business of the company. A new company being started by Mr J G. Ward at the Ocean Beach the Nelsons agreed first to take the ontpnt of thi6 company and afterwards to purchase the works. The Southland Company therefore brought an action for breach of agreement, and Mr Justice Williams ruling that each of theee agreements was a breach of tbe contract with the Southland Company, the jury aesessed damages at £7000. Nelson Bros, subsequently moved for a nonsuit or a uew trial, and the main question for the Court of Appeal,to decide was whether the provisional direction of Mr Justice William* was right aa to either or both of the alleged breaches. The agresment.was for three years, and the court thought it was perfectly competent for defendants during the currenoy of tbe agreement to make every arrangement, and do every act nbt in terms forbidden, for entering into the most strenuous competition with plaintiffs." The moment the three years expired there was nothing to prohibit appellants buying any exi-ting works so long as they did not use or assist in using them during the currency of the agreement. It was not preparing to compete but actual competition that was provided against, and it did not seem reasonable tbat the simple act of putting materials together, was intended to be forbidden, the said >«ct constituting no interference with plaintiff's business during the term. The main reliance of respondents was tbat it was an agreement which interfered or restricted their output of business, trade, or profits; that the effect of the purchase was to strengthen Mr Ward financially, and thus enable him to continue to compete, or compete more actively with respondents. The court was unable to accept this, either as. a.mea.ure of damages under the first paragraph of the agreement or giving' a cause of damages under the second. Under the second paragraph respondents would require, as a condition precedent te a cause of action, to show actual loss. The suggested injury seemed much too fancifulaud remote. There was no evidence that Mr Ward was in financial difficulties, or that be was in a better positipn by having parted with part of bis business. It was true that on the 2nd November, 1893 •he wrote saying that it would bean everlasting favour to be allowed to do what respondents agreed to—that was, to allow him to draw at three months for £20,000 against the sale of works—that he had heavy payments going out for the wool (scour) seasoD, and with the extreme tightness prevalent this would put him in a first-class position, but it nowhere appeared that, he would, have heen in a worse position had he kept his works and had them to raise money on. An advance was made after the sale was Completed, and amounted really to a loan by appellant! on the security of the works. Had tbe appellants bought or advanced the money on any other branch of Mr Ward's business it would huve equally put him in funds. It nowhere appeared'that but for tbat advance Mr Ward would have bsf.n unable to continue his works, or that the.advance enabled mm to compete more vigorously. Even if it did this the court would consider'the injury too remote to give a right of action. As to tbe second alleged breach—the out-put contract, —tbe prohibition was not against assisting freezing works, but' assisting or being concerned or interested in their erection or use. They did not think that even if injury were proved tbe ont-pnt contract was a breach of any purchase of stock by appellants in Southland would interfere with the business of respondents, and it could not be said it was intended to prohibit this. The court was of opinion that respondents bad failed to show that entering into and acting on either of the agreement* with Mr Ward constituted any breach by appellants of their agreement with respondents, and that judgment should be entered for tbem, with costs in tho Supreme Court to be settled in the. Supreme Court, bad costs ia the Appeal Court on the higher scale. Sir R. Stout, for appellants, ssked for leave to appeal to tbe'Privy Council. Mr Bell, for respondents, offered no objection, aud the application was granted.