THE SOUTHLAND FROZEN MEAT COMPANY v. NELSON BROS.

Otago Daily Times, Issue 11113, 14 May 1898, Page 6

THE SOUTHLAND FROZEN MEAT COMPANY v. NELSON BROS.

THE PRIVY COUNCIL'S JUDGMENT,

The following is the full text of the decision of the Privy Council in the appeal case of the Southland Frozen Meat Company, v. Nelson. Bros. (Limited), heard before the Lord Chancellor (Earl' Halsbury), Lord Herschell, Lord Macnaghten, Lord Morris, and Sir Richard Conch:—','. ' ;'. . , ■ . Lord Herschell-. In this case the appellants brought their.- action to recoTer damages in respaob ef the alleged breaches of an agreement which they entered iato on the 26th of June, 1891, with the respondents. They allege that there had been two breaches of the eighth clause of that agreement. The agreement, speaking generally, was an agreement by which tie respondents were to purchase all the output oE the appellants' freezing works at Bluff. There are only two clauses to which it is necessary to c*ll any special attention, the one which gives rise to the complaint, and the one which precedes it. The seventh clause provided " that in the event of Nelson Bros. (Limited), during the. said'term.of three years"—which was the term during which this contract was to operate—" making a contract for a period of oue year or inora with any company, body or pareon carrying on within New Zealand the business of freezing for owners or growers of stock, by which higher f.o.b. prices or better terms than thoae named herein, shall be offered, or given by,-Nelson Bros. (Limited ) then Nelson Bros. (Limited) shall either give the same terms to the company"—that is the appellants—" or in the event of their declining to do so' shall allow the company, if it: so desires, to terminate this agreement, on the company giving one month's notice." The eighth clause is as .follows:—" That Nelson Bros. (Limited) shall mot daring the said term of three years, erecc or assist, or ba in any way •concerned or interested in the erection or use of freezing works on land or water at the Bluff, or within the limits of the Southland or Wallace Counties, without making special arrangements ■with the company, or do anything of a likenature which may in any way interfere with or restrict the output, business, trade, or profits of the company." Now; the first breach1 alleged, is tbr.t, during the currency of the three years Neletiu Bros, (Limited), the respondents, entered into ; a contract *with a Mr Ward;I"who' had erected^ freezing works in the neighbourhood of Bluff, by which they agread on certain terms, to take .the whole of. the output of his 'freezing works. .T'There^can be no doubt that such an agreement is within the provisions of■section 7, and that the appellants were entitled to moist upon getting the same terms as Mr Ward, and if they were refuged such tarms, could have terminated their agreement by giving a month's notice, but it is said that section 8 was . really, broken by the agreement entered into witbJMr Ward, and that, although thai agreement-wag within the general terms of. section 7, yet nevertheless section 8 takes it out of the general terms of section 7 and extends to it a more stringent provision. ■ ■ ■ Now,' the question turns upon ths meaning of the words "erect or assist; or be in any way concerned or interested in the erection or use of freezing works,at Bluff."' Was the purchase under au agreement by,which they were, to take all the frozen meat produced at Ward's works within any of these words-? It was certainly cot an erecting or assisting in the erection ; but it is said that it was an assisting or being concerned, or interested in the use of tha works. Their Lordships agree with the court below that it is not quite certain that the word "assist" is intended to apply to the word "use," and may. not be limited to the word " erection," but Ida not dwell upon that. I aseumo for the purposes of the argument that the word " assist" governs the word " use," as well as the word i' be ectiou." Ib seems to their j Lordships that' this agreement, especially in connection with clause 7, which I have just read, and which throws light upon it, must be construed in a business fashion, and the words must be applied not at air to everything that might be -said to coma, within a possible dictionary use of.them, but must He interpreted in the way in which business men- wouldinterpret them wh»sn used in relation to a business matter of this description. ■ It seems to their Lordships thnt the first' matter : dealt with and prohibited is the erecting or assisting in tha erection ; but then it w*s not enough fea prohibit the erecting or assisting in the erecticD, becsuse somebody else might erect and complete the works, and the same, prejudice would follow whether they'used the works which they themselves erected or used the worke which somebody elne had erected. Therefore it is.atflo directed against the being interested or concerned or assisting in the use.: Now, the use seems Id thsir Lordships to mean' the manufacturing use—the use as work* for the freezing .business—which was carried on there. That it, according to my mind, the business cease of '.' use " as found in this clause in connection with the words "freezing works " sud the word •' erection." Now, if that-bo the true meaning, it geems perfectly clear that a contract to buy all the produce of the works is noli in any reasonable senss either an assisting in the use of the works or btiug interested or aoncarned in the use of the works; If that conclusion be arrived at, it seetn3 equally to j settle the question whether the latter part of the clause assists tbe appellants, whereby the respondents undertake not to do anything of a like nature which may interfere with or restrict the output or profits^or business of tße appellants. When you have once arrived at what J the nature of the earlier part of the clause i», I ar,d what is there prohibited, aud when you have once arrived at the conclusion that its nature is suoh as I have indicated, then it seems that this agreement and tha aution under it, to take, all the output of Ward's freezing works, is not doing anything of the like nature with that which is.prohibited in the earlier part of the clause. , , .' The other breach alleged is this: It is said that in May, 1393, some months prior to the termination of the three years, aa agreement was entered into by which the respondents were to become the purchasers of Ward's works at the commencement of the jear after the three | years had terminated. Certainly an agreement j for the puvchsse of the-works at that date | could not of itself,-be said to be au eracting or i*n aesisting or being in any way concerned or j interested in their erection or use. -It is not I pretended that uulesst buying the output was ! ?.u assisting or being concerned in the u«e, the I respondents were concecned in any other way, j but it ia said that ;n the agreement it was stipulated that by the time when j tha sale was lo be completed certain

auxiliary or additional works were to be completed also, go as to make the works altogether satisfactory; and the suggestion is that al« though the agreement itself, if it bad been an agreement for completed works might not have .bees a breach of the eighth article, yet that, inasmuch as the agreement provided for the erection of a boiler-bouse and certain cottages, that constitutes a breach. Their Lordships are unable to adopt that view. It does not seem to them that, giving full effect to the argument, it can-be possibly said that by reason of that agreement being entared into the respondentsassisted, or were in any way concerned or interested, in the erection of the freezing.works at Bluff. '•■'..' ' ; I ■.'.'' One other point is made. On the 7th Norem. ber; 1893, less than two months before the three years expired, Mr Ward appears to have been pressed for money. He asked Messrs Nelson Bros., the respondents, to let him have ft loan, not in the least in connection with the expenditure of money upon the freezing works. There is no evidence that any of it was spent, or intended to be spent in that way. They gave I him a bill at two months' sight which' would be due in January. How can it be said,that a | loan co made, for which, no doubt, they had' the security of the agreement that they had entered into, which was to take effect on the Ist January, was an erecting or assisting ot. .being in any way concerned or interested in the erection or use of the freezing works ? Their Lordships are unable to think that this, question can be answered in any but ono way— namely, that it was not a breach of that stipnIntion. For these reisouf their Lordsbips will humbly advise her Majesty that the judgment appealed from be affirmed, and that the appeal be dismissed with costs. -