Garden Cottage Foods Ltd v Milk Marketing Board

JurisdictionUK Non-devolved
JudgeLord Diplock,Lord Wilberforce,Lord Keith of Kinkel,Lord Bridge of Harwich,Lord Brandon of Oakbrook
Judgment Date23 June 1983
Judgment citation (vLex)[1983] UKHL J0623-4
CourtHouse of Lords
Date23 June 1983
Garden Cottage Foods Ltd.
Milk Marketing Board

[1983] UKHL J0623-4

Lord Diplock

Lord Wilberforce

Lord Keith of Kinkel

Lord Bridge of Harwich

Lord Brandon of Oakbrook

House of Lords

Lord Diplock

My Lords,


Although the action in which this interlocutory appeal is brought may, if it is proceeded with, raise interesting and complex questions of European Community law and the remedies available in English law for contravention of the Community's rules on competition, the only issue which falls for determination by your Lordships at the present stage is whether the Court of Appeal (Lord Denning M.R., May L.J. and Sir Sebag Shaw) were justified in interfering with the refusal by the commercial judge, Parker J., in the exercise of his discretion, to grant to the plaintiff in the action ("the Company") an interlocutory injunction against the Milk Marketing Board ("MMB") in either of the alternative terms in which an injunction was sought.


The learned judge in his judgment (of which only an agreed note which is not a transcript is available) had expressed the view that damages would be an adequate remedy for any loss sustained by the Company during the period before the action could be brought to trial, if the Company were then to obtain judgment in its favour. It was stated unanimously by this House in American Cyanamid Co. v. Ethicon Ltd. [1975] A.C. 396, 408, that where this was the case and the defendant would be in a financial position to pay the damages, no interlocutory injunction should, normally, be granted. Parker J., however, also took into consideration the fact that the injunction applied for would disrupt the business of MMB and the businesses of four distributors that it had recently appointed on profit-sharing terms. He also took into account the imprecision and unsuitability of the wording of each of the alternative forms of injunctions asked for.


In an expedited appeal by the Company against the judge's refusal to grant an interlocutory injunction, the Court of Appeal delivered an extempore judgment on 18th May 1982, shortly after the publication in the Weekly Law Reports of the decision of this House in Hadmor Productions Ltd. v. Hamilton [1982] 2 W.L.R. 322, 325, in which this House took occasion to point out that on an appeal from the judge's grant or refusal of an interlocutory injunction an appellate court, including your Lordships, must defer to the judge's exercise of his discretion and must not interfere with it merely upon the ground that the members of the appellate court would have exercised the discretion differently. The function of an appellate court is initially that of review only. It is entitled to exercise an original discretion of its own only when it has come to the conclusion that the judge's exercise of his discretion was based on some misunderstanding of the law or of the evidence before him, or upon an inference that particular facts existed or did not exist, which, although it was one that might legitimately have been drawn upon the evidence that was before the judge, can be demonstrated to be wrong by further evidence that has become available by the time of the appeal; or upon the ground that there has been a change of circumstances after the judge made his order that would have justified his acceding to an application to vary it. Since reasons given by judges for granting or refusing interlocutory injunctions may sometimes be sketchy, there may also be occasional cases where even though no erroneous assumption of law or fact can be identified the judge's decision to grant or refuse the injunction is so aberrant that it must be set aside upon the ground that no reasonable judge regardful of his duty to act judicially could have reached it. It is only if and after the appellate court has reached the conclusion that the judge's exercise of his discretion must be set aside for one or other of these reasons, that it becomes entitled to exercise an original discretion of its own.


My Lords, I have ventured to repeat much of the ipsissima verba of the relevant passage of my speech in Hadmor Productions Ltd. v. Hamilton, which had the considered approval of all the other members of the House, since, from the list of cases reported as having been referred to in the argument at the hearing of the instant case, it would appear the attention of the Court of Appeal was not drawn to it. Certainly there is no hint in any of the judgments that the members of that court considered that they were doing anything other than exercising an independent discretion of their own. Although there was some additional evidence before the Court of Appeal that was not before the judge, no member of the court relied upon it or even referred to it; there is no suggestion that the judge misunderstood the evidence before him; and, so far as I can see, the only suggestion that he may have misunderstood the law is that he ought not to have taken it for granted that if the Company had a cause of action at all in English law for contravention of Article 86 of the Treaty of Rome it was one in which a remedy in damages would be available to it. To this suggestion I shall have to revert when I have outlined the facts and referred to the relevant Community and United Kingdom legislation.


To complete the procedural history of the instant case, the Court of Appeal allowed the Company's appeal. They granted the Company an interlocutory injunction, not in either of the alternative forms sought by the Company in its notice of appeal but in terms suggested by Sir Sebag Shaw in his judgment. These are so unclear as to what conduct by MMB would constitute a contempt of court under them, that counsel for the Company has not attempted to defend them before your Lordships. Instead he has invited this House to substitute for the injunction set out in the order of the Court of Appeal an injunction in terms not hitherto suggested in either of the courts below and which on examination showed similar defects of clarity and precision. That at least five unsuccessful attempts have been made to draft an interlocutory injunction that would make it clear what MMB could do and could not do without committing a contempt of court, goes far to vindicate the judge's view, which influenced his exercise of his discretion, that upon the present state of the evidence, to the paucity of which I shall be referring shortly, it is not possible to devise an appropriate wording for an interlocutory injunction which would enable MMB to know precisely what it is required to do or to abstain from doing.


My Lords, it was this procedural history that induced an Appeal Committee of this House to depart from its usual practice and to grant leave to appeal in an interlocutory matter the decision of which will not be conclusive of the action.


I turn now to such sketchy facts about the nature of the Company's business as can be gathered from the available evidence. These are relevant both to the cause of action in English law to which it claims to be entitled against MMB and also to the question whether the view taken by Parker J. that, in the event of the Company's succeeding at the trial in establishing its claim, damages would be an adequate remedy for any loss it had sustained while the trial was pending, was so untenable that an appellate court would be entitled to disregard it.


The Company, which started business in May 1980, operates from the residence of Mr. Bunch at Crowborough in East Sussex. Mr. Bunch and his wife are its only employees. In effect, it is Mr. and Mrs. Bunch with limited liability. The only part of its business that is dealt with in the evidence is its purchase and re-sale of bulk butter. Between May 1980 and the commencement of the action in April 1982 this accounted for 80 per cent of the Company's turnover. Of its purchases during that period 90 per cent were from the MMB, and of its resales 95 per cent were for export to a single purchaser in The Netherlands, J. Wijffel BV (JWBV). Save that the Company purchased bulk butter from MMB ex-creamery or ex-coldstore, there is no evidence as to the terms on which it was sold on to JWBV or whether the Company or JWBV itself was responsible for making arrangements for the transport of consignments from creamery or cold store to The Netherlands. Your Lordships may take judicial notice that under the Common Agricultural Policy (CAP) mountainous surpluses of butter are produced in the EEC, for which there is no market for human consumption as such within the Member States of the community. Some of this surplus, it would appear goes into the "bulk butter" market where it is dealt in by private traders as distinct from being purchased by the intervention agency at intervention prices under the CAP; but as to how this bulk butter market operates and whether it bears any resemblance to other international commodity markets, your Lordships can find no inkling in the evidence.


MMB is a statutory authority established by the Milk Marketing Scheme 1933 as subsequently amended. The scheme is made under legislation that is now contained in the Agricultural Marketing Act 1958. MMB is also subject to the EEC Council Regulation No. 804 of 1968 on the common organisation of the market in milk and milk products and to a further EEC Council Regulation No. 1422 of 1978 which authorises the grant to the MMB, and to other Milk Marketing Boards in Scotland and Northern Ireland, of exclusive rights to purchase milk in those three parts of the United Kingdom respectively, and contains other provisions which on the face of them appear to permit the imposition of restrictions on free competition in milk products. At this stage of the proceedings in the instant case, however, your Lordships are not concerned with any of the detailed EEC Regulations relating to the organisation of the market...

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161 cases
3 firm's commentaries
  • Private Enforcement In The UK
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    • Mondaq United Kingdom
    • 15 October 2008
    ...Wales, Scotland or Northern Ireland. For the purpose of this article, the focus is primarily on the position in the English courts. 2 (1984) 1 AC 130, (1983) 3 CM LR 3 A general EC right to damages for loss occasioned by a breach of article 81 on establishment of a causal relationship betwe......
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    • 30 September 2009
    ...House of Lords ruled in Garden Cottage Foods v Milk Marketing Board that third parties can sue for damages for breach of competition law (1984) 1 AC 130, (1983) 3 CM LR 5 Section 12 and Schedule 2 Enterprise Act 2002. 6 The C AT also has jurisdiction to hear appeals from regulatory and/or c......
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