May & Butcher Ltd v The King (Note)

Petition of Right.

The suppliants, May & Butcher, Ld., who were general contractors, alleged that it was mutually agreed between them and the Controller of the Disposals Board for the purchase by the suppliants of the whole of the tentage which might become available in the United Kingdom for disposal up to March 31, 1923. The material letters for the purposes of the case were dated June 29, 1921, and January 7, 1922. By the earlier of these letters written by the Controller to the suppliants it was stated that “in consideration of your agreeing to deposit with the [Disposals & Liquidation] Commission the sum of 1000l. as security for the carrying out of this extended contract, the Commission hereby confirm the sale to you of the whole of the old tentage which may become available …. up to and including December 31, 1921, upon the following terms:—

“(1.) The Commission agrees to sell and [the suppliants] agree to purchase the total stock of old tentage ….

… … … … … … … … … … … … …

“(3.) The price or prices to be paid, and the date or dates on which payment is to be made by the purchasers to the Commission for such old tentage shall be agreed upon from time to time between the Commission and the purchasers as the quantities of the said old tentage become available for disposal, and are offered to the purchasers by the Commission.

“(4.) Delivery …. shall be taken by the purchasers in such period or periods as may be agreed upon between the Commission and the purchasers when such quantities of old tentage are offered to the purchasers by the Commission. ….

… … … … … … … … … … … … …

“(10.) It is understood that all disputes with reference to or arising out of this agreement will be submitted to arbitration in accordance with the provisions of the Arbitration Act, 1889.”

By the second letter dated January 7, 1922, the Disposals Controller, referring to verbal negotiations that had taken place for an extension of the agreement between the Commission and the suppliants, confirmed the sale to the latter of the tentage which might become available for disposal up to March 31, 1923. This letter, which varied in certain respects the earlier terms, stated that “the prices to be agreed upon between the Commission and the purchasers in accordance with the terms of clause 3 of the said earlier contract shall include delivery free on rail …. nearest to the depots at which the said tentage may be lying. ….”

Some time later the proposals made by the suppliants for purchase were not acceptable to the Controller, and in August, 1922, the Disposals Board said they considered themselves no longer bound by the agreement, whereupon the suppliants filed their petition of right claiming an injunction restraining the Commission from disposing elsewhere than to the suppliants of the remainder of the tentage; an account of the tentage that had become available; and compensation for the damage done to them.

By the demurrer, answer and plea the Attorney-General said that the petition of right disclosed no sufficient and binding contract for the sale to the suppliants of any tentage, and further that it was a term of the contract (if any) that the suppliants should pay a reasonable price for the tentage and that the suppliants were not at the material time ready and willing to pay a reasonable price.

Rowlatt J. held that the letters of June 29, 1921, and January 7 and 18, 1922, constituted no contract but contained merely a series of clauses for adoption if and when contracts were made, because the price, date of payment and period of delivery had still to be agreed; and that the arbitration clause did not apply to differences of opinion upon these questions. The Court of Appeal (Scrutton L. J. dissenting) affirmed Rowlatt J.'s decision.

The suppliants appealed.