Lonrho Plc v Tebbit and Another
| Jurisdiction | England & Wales |
| Judgment Date | 05 June 1992 |
| Date | 05 June 1992 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal
Before Lord Justice Dillon, Lord Justice Stocker and Sir Michael Kerr
Fair trading - share capital restriction - minister's private law duty
It was arguable that the Secretary of State for Trade and Industry, having required from the plaintiff company pursuant to section 88 of the Fair Trading Act 1973 an undertaking not to obtain more than a certain proportion of the share capital of another company, on the basis of a Monopolies and Mergers Commission report that a bid by the plaintiff for control of the other company might be against the public interest, was under a private law duty to the plaintiff to release the undertaking immediately after a further MMC report stated that the proposed merger would not be contrary to the public interest.
Since the plaintiff was asserting a private law right, albeit one arising out of a background of public law, the right was properly asserted in an action by writ without the need for a prior application for judicial review.
The Court of Appeal so held when dismissing an appeal by the defendants, Norman Beresford Tebbit, the secretary of state at the material time, and the Department of Trade and Industry, from the dismissal by Sir Nicolas Browne-Wilkinson, Vice-Chancellor (The Times September 24, 1991; [1991] 4 All ER 973), of an application by the defendants to strike out the claim of the plaintiff, Lonrho plc, on the ground that the claim disclosed no reasonable cause of action or was an abuse of the process of the court.
Mr Stephen Richards and Mr Michael Patchett-Joyce for the defendants; Mr John Beveridge, QC, Sir William Wade, QC and Mr David Pannick, QC, for Lonrho.
LORD JUSTICE DILLON said that the case was yet another action arising out of the attempts by Lonrho to obtain control of Harrods. It was important to emphasise at the outset that the case came before the court on a striking-out application; only the abuse of process point called for a conclusive decision on a point of law at the present stage.
In 1979 Lonrho acquired 29.99 per cent of the issued ordinary shares of House of Fraser plc, Harrods' owner, and subsequently made a bid for all the House of Fraser shares. A merger situation, within section 64 of the 1973 Act, arose, and the MMC reported that the proposed merger might be expected to operate against the public interest.
Accordingly, the secretary of state, under section 88 of the Act, obtained...
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