Goodyear Tyre & Rubber Company (Gt. Britain) Ltd v Lancashire Batteries Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,Lord JUSTICE ROMER,LORD JUSTICE ORMEROD |
| Judgment Date | 08 July 1958 |
| Judgment citation (vLex) | [1958] EWCA Civ J0708-1 |
| Date | 08 July 1958 |
| Court | Court of Appeal |
[1958] EWCA Civ J0708-1
In The Supreme Court of Judicature
Court of Appeal
The Master of the Rolls (Lord Evershed),
Lord Justice Romer and
Lord Justice Ormerod.
Mr GUY T. ALDOUS. Q.C. and Mr S.J. WALDMAN (instructed by Messrs Osmond, Bard & Westbrook) appeared on behalf of the Appellants.
Mr MERVYN DAVIES (instructed by Messrs Gregory, Rowcliffe & Co., Agents for Messrs Read, Roper & Read, Manchester) appeared on behalf of the Respondents.
: This appeal has raised a question of some importance upon the meaning of Section 25, sub-section (1), of the Restrictive Trade Practices Act, 19%. The sub-section reads as follows: "Where goods are sold by a supplier subject to a condition as to the price at which those goods may be resold, either generally or by or to a specified class of person, that condition may, subject to the provisions of this section, be enforced by the supplier against any person not party to the gale who subsequently acquires the goods with notice of the condition as if he had been party thereto".
An advertisement had appeared in a local paper in the North of England which stated that a trader known as Tower Battery Depot (which is in fact a name under which the present Defendants trade) was selling certain goods with a 2/- in the £ discount on all those goods. The advertisement gave a list of the goods comprehended in the offer, and that list included tyres; that Is obviously motor tyres, all the more since the advertisement was addressed to "Motorists". The advertisement having come to the notice of the Plaintiffs, they (or, rather, the British Motor Trade Association as the agent of the Plaintiffs) proceeded to send a gentleman to the premises of the Defendants, and that gentleman gave what is commonly called a "trap order" to the Defendants. He gave an order, that is to say, for two Goodyear tyres of a certain type, not because he particularly wanted them, but in order to discover whether in fact the Defendants would sell those tyres at less than what is called their "list price". There was some question in the evidence of what had occurred between this representative of the British Motor Trade Association and the Defendants, but in the end it is tolerably clear (and no argument about it has been addressed to us) that the two tyres were sold by the Defendants to this gentleman at a price which represented their list price (to use again the common expression) lose a discount of 10 per cent, or 2/- in the £. So the present proceedings were brought in order to restrain the Defendants from doing that which it is said the sub-section which I have read entitles the Plaintiffs to prevent them doing.
That, I think, is probably a sufficient statement of the facts, apart from those facts which relate to the precise information about the so-called list price which the Defendants had and which, on the other hand, it Is said they ought to have had or Right have had. The distinction Is, I think, best made clear by reference to two exhibits. The first is a circular (and It has been so described in the argument) issued by the British Motor Trade Association. It is headed 'Restrictive Trade Practices Act, 1956" and, upon the face of it, purports to be "list and addresses of manufacturers and concessionaires who prescribe conditions as to price for their respective specified products". Inside you find: "Important notice under the Restrictive Trade Practices Act, 1956. To all traders in motor goods. Take notice that". Then In the first numbered paragraph is a recapitulation of Section 25. The second paragraph reads, so far as material: "The under mentioned manufacturers have authorised the British Motor Trade Association to give notice on their behalf that they each individually supply for resale each of their new products of the kind or kinds specified in the schedule subject to conditions as to price, including a condition that they shall not be resold or offered for resale at a price other than the appropriate price prescribed by the manufacturers concerned, plus Purchase Tax and delivery charges". Paragraph 4 says: "Details of the conditions as to price prescribed for any of the specified products may be obtained on application to the manufacturer concerned, quoting details of the goods in question". The schedule contains a large number of manufacturers and concessionaires, and among them is the name of the Plaintiffs is this action, Goodyear Tyre & Rubber Co. (Gt. Britain) Limited., with an address, and, under the heading "Specified Products", "All Goodyear tyres, tubes and flaps".
It is not in issue that the Defendants in this case had, at all relevant dates, a copy of this circular. I should perhaps have said that it is dated April, 1957. Since then, later editions of it, with some immaterial alterations, have appeared; hut for the purposes of this action (or, rather, of this motion) the circular which I have, dated April 1957, is the relevant one, and that Is the circular which the Defendants indubitably had seen.
It will be observed that the circular is issued by the British Motor Trade Association, stating that they are agents of each of the manufacturers. No point has been taken as to the validity of that claim, and it must therefore be taken that the British Motor Trade Association was in truth the agent of the Goodyear Tyre Company, among others, to make the statements made in the paragraphs which I have already read. It is, of course, plain enough that those paragraphs fall very considerably short of informing a reader by themselves of all the precise conditions as to price which affected the resale of Goodyear tyres in the hands of a retailer. In order to discover the full import of those conditions, it is necessary to turn to another exhibit, which is the Trade Price List issued by the Plaintiff Company; and, since it is enclosed in a green cover, I will for simplicity hereafter refer to it as "the green exhibit". It contains over 30 pages, of which 30 consist of details of the appropriate prices to be charged by a retail trader and a wholesale trader for the numerous kinds of tyres, tubes, etc., manufactured or marketed by the Plaintiffs. The particular tyres with which the trap order founding this motion was concerned are called "Suburbanite" tyres, and on page 6 of the green exhibit you find that "Suburbanite" tyres of the particular dimensions dealt with re listed for retail sale at the price of £6.18. 0, per cover. At the end of the exhibit is a section, consisting of more than one page, headed "Conditions of Sale", and under that heading You find (for example) paragraph 4: "Notice of Conditions, purchasers of all products manufactured, sold or supplied by the Company, undertake and agree to bring fully to the notice of all traders", etc., "the terms of these Conditions of Sale"; and then this " Price Maintenance". That is divided into five subparagraphs. It is unnecessary to read them all. The first, (a), is: "No person shall sell any of the Company's products to any trader at prices or terms directly or indirectly higher or lower than the prices specified in the current Trade Price Lists for the time being authorised", (b) is: "No person shall sell or supply any of the Company's products to any commercial vehicle user" (other than as stated) "or to any other person what so ever, except a trader, at prices or terms directly or indirectly higher or lower than the prices specified in the Company's current Retail price Lists". Then in paragraph 6 there are other conditions which include a restriction on advertisement for sale at prices otherwise than in accordance with the booklet. The vital paragraph for present purposes is that to which I have already alluded, numbered 5(b), because that is the one which affects sales by retailers. It will be noted that there are two features about it, which no doubt are necessary but might be said to be special. They make exceptions in cases of sales to traders as therein Mentioned, and the paragraph also refers to prices being higher or lower "directly or indirectly". The reason for the latter obviously is that it would include, among other things, cases of sales where other goods are taken in part exchange or where the terms of the sale are by way of hire purchase. In other words, it is not quite so simple as the case referred to in argument where a man buys over the counter In a tobacconist's shop a packet of 20 Players' cigarettes. To such a transaction part exchange and hire purchase would not be applicable. It follows, therefore, that a full comprehension of the price conditions is quite a complex subject; and no wonder that the green exhibit contains as many pages as It does. But what I have read emphasises the main issue which has been debated before us and which is this: Is It sufficient for the purposes of this potion (and it is only with that that we are concerned) that the Defendants had the notice as I read It from paragraphs 2 and 4 of the British Motor Trade Association circular? Or, In order to comply with the requirements of Section 25(1), should the Defendants, if they are liable to restraint by the Court, have been given full notice of the exact terms and conditions as they are found in the green exhibit?
It was the view of the learned Judge, as It was the argument of Mr Mervyn Davies before us, that a proper reading of the terms of sub-section (1) meant that the latter of the two alternatives I have posed was the correct answer to the question; Hi other words, to use the language of the learned Judge, the Defendants could not be liable to procedure for an injunction unless it could be shown that they had knowledge of the actual terms of the relevant condition....
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