Murphy Company v O'Donovan
| Jurisdiction | Ireland |
| Court | Supreme Court |
| Judgment Date | 14 December 1939 |
| Date | 14 December 1939 |
High Court.
Supreme Court.
Landlord and tenant - Lease - Construction - Licensed premises - Tied house - Trade agreement between lessors and lessee - Covenant by lessee to transfer licence to any person nominated by lessors - Covenant against assignment of the premises and transfer of licence without consent - Agreement to deposit licence for safe keeping only - Admission that licence was the property of lessors - Whether provisions in contravention of Licensing Acts - Agreement to deal exclusively with lessors for porter and stout to be sold in premises - Breach of agreement - Whether agreement an unreasonable restraint of trade - Landlord and Tenant Act, 1931, s. 56.
Appeal from the Circuit Court.
The plaintiffs, who were a firm of brewers in the City of Cork, sued the defendant, who was their tenant of certain licensed promises in Cork, in respect of breaches of a trading agreement made between them, the provisions of which have been summarised in the headnote and are fully stated in the judgment of Johnston J.
The material particulars of the plaintiffs' claim, for the purposes of this report, are set out in paragraphs 1 and 3 of the indorsement of claim in the Civil Bill, as follows:—
1. "By indenture made the 23rd day of May, 1934, between the plaintiffs of the first part, James Carroll, of the second part, and the defendant of the third part (being a trading agreement in respect of the premises, No. 22 George's Quay, Cork), after reciting that the plaintiffs were the owners of the said licensed dwellinghouse and premises, No. 22 George's Quay aforesaid, and reciting further as therein, it was agreed, inter alia, that the defendant should, while licensed, deal exclusively with the plaintiffs so long as they should brew and vend porter, for all porter, and so long as they should brew and vend stout, for all stout, whether in draft or in bottle, which the defendant should sell in the said premises or under the cover of the licence thereto attached."
3. "On the 18th May, 1936, the defendant received into said premises, No. 22 George's Quay, a kil of stout manufactured by a firm other than the plaintiffs, and on the 19th day of May, 1936, the defendant sold all or portion of the said kil of stout to sundry persons on the said premises, No. 22 George's Quay."
The plaintiff claimed, inter alia, an injunction restraining the defendant from selling stout or porter other than that manufactured by the plaintiffs on the said licensed premises, No. 22 George's Quay, or elsewhere, under cover of the licence attached to the said premises.
The defendant traversed the matters pleaded in the indorsement of claim and also contended, inter alia, that the indenture of the 23rd May, 1934, was wholly void and illegal on the following grounds:— "(a) the covenants contained in the said indenture are in unreasonable restraint of trade; (b) the whole indenture contemplates and provides that the custody of the defendant's licence paper shall be in the plaintiffs, whereas the policy and provisions of the statutes regulating the licensed trade in Ireland require that the said paper should be in the defendant's custody, (c) the whole indenture seeks to create in the plaintiffs all interest in the defendant's licence, whereas the policy and provisions of the aforesaid statutes require that there shall be no property in a licence for the sale of liquor."
The defendant held the said licensed premises under an indenture of lease, dated the 10th December, 1893, and made between the plaintiffs of the one part and Margaret Burke of the other part. The lease provided, inter alia,that "the lessee . . . her heirs, executors, administrators and assigns . . . at the end of the term hereby granted or other sooner determination of this demise shall and will . . . transfer the licence attached thereto unto the said lessors, their successors or assigns . . . and she, her executors, administrators and assigns shall, during the said term, duly maintain the licence for the sale of beer, wine and spirits at present attached to the said premises (and which is hereby admitted to be the property of the said lessors) in full force and effect, so long as she shall be permitted by the lessors to hold the same, and that she and they shall conduct the business of publican in said premises in such regular and orderly manner as that the Magistrate's certificate for the renewal of said licence shall not be delayed or refused; that she and they shall pay the annual duty payable on said licence for the renewal of same, and hand over every such renewal, when and as soon as same shall have been issued, unto the said lessors, endorsed by her; that she and they shall and will deal exclusively with the said lessors and their successors for all porter and stout which shall be sold in said premises or elsewhere under or by virtue of the said licence and that she or they shall purchase from the said lessors and their successors at least 4 tierces of porter in every month and shall pay the usual price in cash for same; that she and they shall not assign, underlet, or part with the possession of said premises nor transfer the said licence therefrom without the consent in writing of the said lessors, their successors or assigns being first had and obtained, and that she, her executors, administrators and assigns shall and will at any time hereafter, on being called on by the said lessors so to do, transfer the said licence to such other person as shall be named by them the said lessors, and shall do and perform all and every the conditions in an agreement respecting said licence bearing equal date herewith."
The indenture of the 23rd May, 1934 (in which the plaintiffs and the defendant are respectively called "the Company" and "the publican"), after reciting the lease of the 10th December, 1893, the assignment of the premises to the said James Carroll, the agreement between the said James Carroll and the defendant for the sale of the premises and the covenant by the lessee not to assign, underlet or part with the possession of the premises or transfer the licence therefrom without the consent in writing of the plaintiffs and to perform the conditions in the agreement respecting the licence, recited further as follows:— "and whereas the Company have for valuable consideration acquired the right to have the porter and stout both on draught and in bottle manufactured by them, and no other porter or stout whatsoever, sold in said licensed house and premises, as the publican doth hereby admit and acknowledge, and whereas the said James Carroll has requested the Company to consent to his assigning his interest in said licensed house and premises and in said fixtures therein and in transferring said licence to the publican, which they have agreed to do in consideration of the publican entering into the covenants on his part hereinafter contained, and the publican has agreed to enter into such covenants in consideration of such consent."
The provisions in the said indenture relating to the licence were set out therein in paragraphs 1, 2, 3, 4, 5, 6 and 11, as follows:—
"1. The publican will forthwith proceed to obtain a transfer of the said licence for the said house to his own name, and, when said licence shall have been transferred, will deposit the same with the Company for safe keeping only on behalf of the publican and to be-produced by the Company as hereinafter provided, and will duly maintain same in full force and effect and will at the proper period of the year renew the same and pay the duty chargeable thereon.
2. The Company will at the request of the publican produce the said licence at such time or times and at such place or places as it may be necessary to have the same produced for the purpose of having the said transfer of the said licence to the publican duly granted, and will also produce the said licence at such other times or places as it may be necessary and proper for the publican to produce the same for any purpose or requirement of the Licensing Acts or other Acts or regulations affecting licensed persons or premises for the time being in force, or for the purpose of complying with any requirement of the Excise or Police Authorities, or whenever the publican may reasonably require the same to be produced for the purpose of enabling him to carry on the trade or business of a publican in the said house and premises.
3. The publican will immediately on demand deposit every renewal of the said licence with the Company for safe keeping as aforesaid and to be produced by the Company as in the last paragraph mentioned.
4. The publican will duly obtain any confirmation of the transfer of the said licence which by law may be required.
5. The publican will not under any circumstances transfer or attempt to transfer the said licence to any other person without having previously obtained the consent in writing of the Company to such transfer or attempt to transfer the said licence as the case may be.
6. The publican will at all times during the continuance of his tenancy conduct said house in an orderly and regular manner and so that the Justice's certificate for the renewal of the said licence shall not be delayed or refused."
"11. In case the publican in breach of the covenants and agreements on his part hereinbefore contained shall fail or decline to apply for a transfer or confirmation of a transfer of the said licence at the proper Court, or to apply for the annual certificate for renewal of said licence, or to withdraw the entry standing in his name in the books of the Inland Revenue when thereto required by the Directors of the Company, or in case the publican shall fail or decline to execute or do any act, matter or thing which may be necessary for the purpose of obtaining a transfer of the said licence to the publican or...
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