Regent Oil Company Ltd v Aldon Motors Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RUSSELL,THE MASTER OF THE ROLLS |
| Judgment Date | 05 May 1965 |
| Judgment citation (vLex) | [1965] EWCA Civ J0505-1 |
| Court | Court of Appeal |
| Date | 05 May 1965 |
[1965] EWCA Civ J0505-1
In The Supreme Court of Judicature
Court of Appeal
From: Mr. Justice Plowman, (Chancery Division)
The Master of the Rolls
(Lord Denning),
Lord Justice Davies, and
Lord Justice Russell
Hicks & Co., Agents for MR. C. A. SETTLE, Q. C. and MR. O. M. W. SWINGLAND (instructed by Joynson-Hicks & Co., Agents for Godfrey, Davis & Batt, Mitcham) appeared on behalf of the Appellants (Defendants).
MR. PETER OLIVER, Q. C. and MR. D. J. NICHOLLS (instructed by Gates & Co.) appeared on behalf of the Respondents (Plaintiffs).
(As Revised)
The Regent Oil Co. seeks an injunction against Aldon Motors Ltd., who is dealers. On 31st April, 1960, the Regent Oil Co. advanced to the Defendant Company a sum of £8,750. The Defendant Company was then carrying on a business as sellers of petrol and as a garage, John's Garage, Dorking Road, Gomshall. This advance of money was divided into two parts. One part was £600 granted to the Defendant Company on a legal charge being executed by that company infavour of the Regent Oil Co., whereby they were to repay the £600 over a term of 10 years at 360 a year. The other part of the money, the £8,150, was granted under what is called a Solus agreement, whereby the Regent Oil Co. were to supply the garage dealers with all the petrol they wanted and the dealers were to buy their petrol from the Regent Oil Co. and agreed that they would sell their petrol at the Regent standard retail price ruling at the time. The £8,150 was calculated like this: it was a rebate in advance allowed to the dealers on their sales of petrol and it was estimated at the rate of 1¼ d. per gall., £5 per every 1,000 galls, or thereabouts, and it was estimated that over the time there would be 1¾ million galls, sold. The agreement was to last for 17 ½ years and by it, in short, the dealers were to get their petrol from the Regent Company and to sell it at Regent's ruling prices.
That agreement was entered into in the year 1960. I will refer a little later to some particular clauses in the agreement, bat I go on to say that, that agreement having been entered into in 1960, towards the end of 1964 and the beginning of the year 1965 the Defendant Company in effect snapped their fingers at this agreement and decided that they would not take any more petrol from the Regent Oil Company. They changed, it is said, the name of their garage and renamed it the Grove Garage. They sold the petrol of other companies, one company called European Petroleum Distributors Ltd., and they sold petrol under the name Lion petrol. The Regent Company sent someone to see the garage, who saw that the globes on the pumps had been removed and replaced by other globes and so forth. The Defendant Company's people there frankly admitted that they had discontinued taking the Regent products. The Regent Company say that the Defendant Company did this in an endeavour to get Regent to provide further finance.
In those circumstances Regent Oil Company have brought an action in which they seek an injunction to prevent the dealers, the garage people, from breaking the contract under which they agreed to take all their supplies from the Regent Company; in other words, under which they were tied to the Regent Company.
What is the answer that is made? The Defendants admit they no longer take their supplies from the Regent Company, but they say they were discharged from any obligations under this agreement because of the events which have happened. The Defendants say it was one of the conditions of this tie that the Regent Company should operate a price maintenance system whereby the prices fixed for their petrol products were regulated by law and, indeed, that they would enforce them. The Defendants say that what has happened, particularly since the Resale Prices Act of 1964, is that this Company has renounced its price maintenance system as it indeed has. They have written letters round saying that the dealers are themselves to judge the prices at which to sell retail. Indeed, since 30th April of this year it is now illegal for them, under the Resale Prices Act, 1964, to insist upon a price maintenance system.
It has been argued strongly before us that it is an implication under both these agreements, both under the legal charge and under the Solus agreement, that there shall be a price maintenance system in force fixing both the wholesale buying price and the retail selling price, and thus a defined profit margin. Reliance is particularly placed upon clause 6(3)(A) in the legal charge, which says. "…if at any time the Company shall reduce the profit margin on any grade of petrol… supplied by it to the Dealer below the profit margin ruling in respect thereof on the date of these presents then" in certain circumstances notice can be given by the dealer whereby he can give the Company notice that unless he is put in as good aposition as he would were he a dealer with the other companies then the agreement shell come to an end. There is a similar clause in the Solus agreement.
I need not go into the details of the clauses in both agreements but simply to point out the contentions that arise on them. Mr. Settle, for the Defendants, says there cannot be a profit margin ruling in regard to petrol unless the two extremes are fixed in accordance with the definition. The profit margin is defined as being "the difference between the standard bulk wholesale price and the retail prices published from time to time in the Petroleum Times". That is the definition. Mr. Settle says- "The standard bulk wholesale price is one end of the margin: and the retail price must be the retail price fixed by the Company in such a way as to be enforceable by law". He says that, in the situation as it has developed, the profit margin as so defined no longer exists. I cannot agree with Mr. Settle's argument upon this. It seams to me quite plain that, even before these latest events under the Resale Prices Act, one Company at least, the Shell Company, never enforced price maintenance. On the evidence that Company did not even insist upon it on paper all they did was to recommend a retail price. And certainly since these new events the oil companies have not enforced, but have recommended retail prices. Indeed, they are entitled, under the new Act, to recommend prices appropriate to resale. It seems to me plain that the "retail price" in the definition clause is not confined to a price fixed so as to be...
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Petrofina (Gt. Britain) Ltd v Martin
...clause is not now enforceable — see Resale Prices Act 1964, but most dealers sell at the recommended or ruling prices — see Regent Oil Company v. Aldon Motors, 1965, 1 Weekly Law Reports, p. 956. 5 3. Mr Martin was to stock the lubricating oil of the Petrofina Company and to foster its sal......
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Esso Petroleum Company (Ireland) Ltd v Fogarty
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