Unique Pub Properties Ltd v Beer Barrels & Minerals (Wales) Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Chadwick,Lord Justice Scott Baker,Lord Justice Brooke |
| Judgment Date | 14 May 2004 |
| Neutral Citation | [2004] EWCA Civ 586 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: 2003/1506 |
| Date | 14 May 2004 |
[2004] EWCA Civ 586
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE NEUBERGER)
Royal Courts of Justice
Strand,
London, WC2A 2LL
The Right Honourable Lord Justice Brooke
The Right Honourable Lord Justice Chadwick and
The Right Honourable Lord Justice Scott Baker
Case No: 2003/1506
Mr Nicholas Green QC and Miss Catherine Taskis (instructed by Sprecher Grier Halberstam LLP of 30 Farringdon Street, London EC4A 4HJ) for the Respondent
Mr Jeremy Cousins QC and Mr Philip Kremen (instructed by Hughmans of 59 Britton Street, London EC1M 5UU) for the Appellant
This is an appeal from an order made on 23 June 2003 by Mr Justice Neuberger on an application for summary judgment in proceedings brought by Unique Pub Properties Limited, the owner of some 4,000 tenanted public houses, against Beer Barrels & Minerals (Wales) Limited, a wholesale supplier of beers and other alcoholic and non-alcoholic drinks to the public house trade. The primary relief sought in those proceedings were injunctions restraining the defendant from selling or promoting the sale of beers to those of the claimant's tenants who were subject to a 'tie'; that is to say, to those tenants who held under leases which required them to purchase beers only from the claimant or its nominated supplier. The judge granted final injunctions in substantially the terms sought. He refused permission to appeal from his order. The appeal is brought with permission granted by this Court (Lord Justice Aldous) on 20 August 2003.
The underlying facts
The judge found as a fact – and it has been common ground on this appeal – that public houses let by the claimant are let on terms which require the tenant to observe and adhere to "terms of trading" which impose a tie in one or other of three distinct forms, conveniently described as "Full Tie", "Part Tie (Guest Provision)" and "Premium Tie". The relevant terms of trading, incorporating the three distinct forms of tie, are reproduced as the first, second and third schedules to the order of 23 June 2003. I shall return to them in a later section of this judgment.
The claimant has, for some time, sought to enforce its terms of trading indirectly, by making it difficult or impossible for its tenants to obtain supplies of tied products from third-party wholesalers such as the defendant company. With that object in mind the claimant has adopted the practice of circulating to wholesale suppliers the names of those of its public houses which are subject to a tie. On four occasions during the period October 2001 to October 2002 Mr Robert May, the claimant's Operations Planning Director, sent to the defendant company (and, no doubt, to other wholesalers) lists showing the public houses said to be subject to a tie in one or other of the forms to which I have referred. Three of the covering letters – dated 3 January, 4 July and 15 October 2002 – contained the instruction:
"Please update your records and continue to ensure that you do not solicit beer and cider in breach of the ties in these pubs, or take unsolicited orders from these retailers."
The defendant company carries on business from premises on an industrial estate at Bridgend, Mid Glamorgan. By June 2003 the company had been trading for about eight years. Its turnover was then in excess of £4.5 million. The company has disclaimed any intention to make sales which would involve the breach of a tie to which the purchaser is subject; but points out the practical constraints imposed by its method of trading. Sales are made, predominantly if not exclusively, in response to telephone calls from prospective purchasers. The position is described in paragraph 4 of a witness statement signed by its managing director, Mr Gurmit Singh Bedesha, on 20 June 2003:
"The company has a team of 5 telesales people who, by their very nature, are there to take orders and not to enter into lengthy debates with the customer at the end of the telephone as to whether they are tied and if they are tied, what the nature of the tie is.
Their instructions are to take orders and the system that the Defendant company has set up is that they ask as to whom the pub belongs and whether it is tied. If the publican states that he/she is tied then a supply would not be made.
The company does not cold call on public houses and relies on publicans telephoning for orders."
It is plain that, other than the standing instruction to enquire of the purchaser whether or not he or she is subject to a tie, the defendant company made no cross check against the lists with which it had been supplied by the claimant. At paragraph 5 of his witness statement Mr Bedesha explains why it would be impracticable to do so:
"I must make it quite clear, on behalf of the defendant company that we do not seek to induce or break the Claimant's ties but it would simply be uncommercial to put in place a system to check each and every telephone call. The company relies on low level operatives as telesales operators and whilst the company has a computer system, this is simply for invoicing and stock control. It is not particularly sophisticated. The Defendant company is advised by its lawyers that there is no requirement to install a computerised system to check telephone orders against the lists sent to the Defendant company by the Claimant,… [and]… it would simply be uncommercial to have the telesales people having to check through [those lists] when taking an order. As a matter of business it would be disastrous as I have no doubt that the publicans would go to one of our competitors as speed is very much the essence of the business. These people require delivery within sometimes, a matter of hours. It would mean that every call received from every customer would need to be checked, whether or not it was from a lessee of the Claimant."
On 13 January 2003 solicitors for the claimant company wrote to the defendant. The letter enclosed (for the first time) copies of the claimant's standard terms of trading in the three forms to which I have referred. It went on:
"It has now come to our clients' attention that you have been supplying tied products to one of its pubs, The Cavalier Public House, in Cardiff. Such supply gives our clients the right to seek an injunction from the Court to prevent such conduct and damages for any loss suffered by them. Unique and Voyager [Voyager Pub Group Limited, an associated company] have issued proceedings against wholesalers on a number of occasions in the past, and have succeeded in obtaining injunctions and undertakings to the Court. Our client's remedies against you are not effected (sic) by the fact that they may also have remedies against the tenants concerned."
Proceedings were threatened unless, by 22 January 2003, the defendant (i) gave undertakings not to supply, nor to promote the sale of, tied products to any of Unique or Voyager's tied houses, (ii) provided details of the steps it would take (by putting in place either a blocking system or otherwise) to ensure that it complied with that undertaking and (iii) disclosed copies of all invoices, delivery notes and other related documents relating to supplies made of tied products to the Cavalier public house and to any other of Unique's or Voyager's tied houses.
The undertakings sought were not forthcoming. On 16 January 2003 solicitors instructed on behalf of the defendant company wrote that they considered that the claimant's actions "to be nothing less than a clear restraint of trade in relation to our clients". These proceedings were commenced by the issue of a claim form on 25 February 2003.
The tie imposed by the terms of trading
As I have said, it has been common ground that public houses are let by the claimant company on leases which require the tenant to observe and adhere to terms of trading. Those terms of trading are set out in a schedule (typically, the fourth schedule) to the lease. They impose a tie in one or other of the three forms – "Full Tie", "Part Tie (Guest Provision)" and "Premium Tie". In each case the tie contains a positive and a negative element. Paragraphs 2(1) and 3(1) of the Full Tie are in these terms:
"2. (1) Subject to the provisions of this Schedule the Tenant shall purchase all Specified Beers and Specified Ciders that he requires for sale in the Property only from the Company
…
3. Subject to the provisions of this Schedule the Tenant shall not sell or expose for sale in the Property
(1) any Specified Beer or Specified Cider not supplied by the Company
…"
In that context "the Company" means the claimant or (where a notice under paragraph 9 is in force, its Nominees), "the Property" means the premises demised by the lease and "the Schedule" means the schedule to the lease in which the terms of trading are set out. "Specified Beers" and "Specified Ciders" mean, respectively, the "types of beer" or "types of cider" set out in Appendices 1 and 2 to the Schedule "however they are brewed fermented or packaged (and which are represented by the brands or denominations of beers [or ciders, as the case may be] stated in the Company's Price List)". The "Company's Price List" means "the price list from time to time of the Company for the goods which it offers to supply to purchasers at the Tenant's level of distribution".
Paragraphs 2(1) and 3(1) of the Part Tie (Guest Provision) and the Premium Tie are in similar terms to the corresponding paragraphs of the Full Tie – save that (i) the Part Tie does not extend to...
To continue reading
Request your trial
-
Enterprise Inns Plc v (1) Palmerston Associates Ltd (2) Paul Rigby and Another
...MR). 40 It was said that the particular issue which arises in this case was considered by the Court of Appeal in Unique Pub Properties v Beer Barrels & Minerals (Wales) Ltd [2004] EWCA Civ 585 where the court construed the tie as a tie by brand rather than a tie by type. Reliance was place......
-
Natuzzi Spa v De Coro Ltd
...with the object and intention of bringing about such breach, see p.693 and 697. 41. In Unique Pub Properties v Beer Barrels & Minerals [2004] EWCA Civ 586, Chadwick LJ commented on the combined effect of these two principles at Para.28 of the judgment of the Court of Appeal in the context o......