Total Oil Great Britain Ltd v Thompson Garages (Biggin Hill) Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER of THE ROLLS,LORD JUSTICE EDMUND DAVIES,LORD JUSTICE STEPHENSON |
| Judgment Date | 07 October 1971 |
| Judgment citation (vLex) | [1971] EWCA Civ J1007-2 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 October 1971 |
[1971] EWCA Civ J1007-2
In The Supreme Court of Judicature
Court of Appeal
Appeal by defendant from order of Mr. Justice Kilner Brown on 6th July 1971.
The Master of The Rolls (Lord Denning)
Lord Justice Edmund Davies and
Lord Justice Stephenson
Mr. ANTHONY THOMPSON (instructed by Messrs. Anthony Leader & Co.) appeared on behalf of the Appellant Defendants.
Mr. J.K. TOULMIN (instructed by Messrs. Denton Hall & Burgin) appeared on behalf of the Respondent Plaintiffs.
This case raises an interesting point on a solus agreement. The Total Oil Great Britain Ltd. are an oil company. They own a garage at Biggin Hill in Kent. In 1969 they let that garage for 14 years, from 1st May, 1969, to a dealer, Mr. Thompson: and it became vested in Thompson Garages (Biggin Hill) Ltd. The lease was granted for a premium of £3,000, at a rent of £2,500 a year. In the lease there was a his to the oil company. The dealer agreed to take all his supplies from the oil company and to pay them at standard prices. There was a provision for a rebate according to the quantities supplied. in one of the schedules there was this clauses:
"The dealer shall purchase motor fuel from Total for delivery in loads of not less than 4,000 gallons each and shall pay for them upon delivery (unless otherwise agreed) at the relevant prices contained in Total's Wholesale Price Lists to dealers in force at the date of each delivery."
That clause states plainly that payment was to be made on delivery. That means that, when the tanker came and delivered the petrol to the garage, the dealer would pay the driver in cash or give him a cheque. It appears that. on each delivery, a sum of £600 or more would be payable for each tanker load.
During the first year business was good. The dealers took more and more petrol from the oil company. But there was an unfortunate happening early in 1970. The dealer gave two cheques which were not met on presentation. In consequence, the oil company sought to impose new terms. Instead of cheques, they wanted banker's drafts to be given to them when the petrol was delivered at the garage. This gave rise to difficulties. it was not possible to calculate the exact amount of the draft until the fuel had been delivered. Sometimes the tanker had towait while the calculation was made and the draft got from the bank. These difficulties were such that the oil company sought to impose even more stringent terms. The oil company made an entirely new stipulation as to payment. By a letter of 11th November, 1970, they said:
-"with effect from the delivery of the Order you have placed for Friday, 13th November, 1970, all future orders for motor fuels placed by yourselves for deliveries to the above garage will be accepted by the Depot, provisionally, and subject to - in each and every case -receipt by the Depot of a Banker's Draft to the correct value, prior to despatch by the Depot of the order to Biggin Hill Garage."
That stipulation comes to this: When the dealer wanted a supply of petrol, he had to send to the company's depot beforehand a banker's draft for the amount. Now, the depot was at Purfleet, the other side of the Thames. It took an hour by car to get there from Biggin Hill. So the dealer would have to calculate the exact amount of petrol he wanted, send to the bank and get a banker's draft for the amount, then send the draft by car to Purflect, before he could get a supply. That was was difficult enough on weekdays, but much worse at weekends and holidays when the banks were shut.
The new stipulation was entirely at variance with the agreement. The agreement said "cash on delivery. The new stipulation said "Banker's draft before delivery". In my opinion that new stipulation amounted to a repudiation of the contract. By it the oil company evinced an intention no longer to be bound by the agreement. It is just like the illustration given by Lord Blackburn in The Mersey Steel and Iron Co. Ltd. v. Naylors, Benzon & Co. (9 A. at page 442). He was speaking of Withers v. Reynolds. 1831 (2 B. & Ad. 882) when one party said; You may bring your straw, but I will not pay you upon delivery as under the contract I ought to do. I will always keep onebundle of straw in hand so as to have a check upon you." Lord Blackburn said. that that amounted to sayings "I will not perform the contract": and that thereupon the other side could say: "I will not go on with the contract."
In consequence of that repudiation, the dealer went else where. He got supplies from another oil company. He had a good deal of justification for doing so. He did quite well out of it. The Total Oil Company were disturbed by this turn of events. There were negotiations. Eventually a meeting was held in March, 1971. After it the Oil Company wrote this important letter of 29th March, 1971:
-"We now write to advise you formally that, pending resolution of the outstanding balance on your account, we are prepared to resume deliveries to Biggin Hill Garage against our standard conditions of sale which as you are aware are cash on delivery ….
Will you please confirm by return that you are willing to purchase all your requirements of motor fuels and lubricants in accordance with the terms of your lease."
The Biggin Hill Garage did not accept this offer but went on getting supplies elsewhere. In consequence, the oil company on 30th April issued the writ in this action. They claimed an injunction to restrain the dealer from buying elsewhere.
Mr. Thompson for the dealer says that the oil company have repudiated their contract by insisting on the new stipulation of payment before delivery. He says that the dealer accepted that repudiation. He treated the agreement as at an end and got deliveries elsewhere. Seeing that the repudiation was accepted, the oil company can no longer insist on the agreement being performed.
The difficulty which faces Mr. Thompson, however - and he faces it quite frankly - is this. The agreement is contained in the lease. If the lease is at an end, as well as...
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