A coal merchant, engaged both in the home and foreign trade, sold his home business to a company, entering at the same time into an agreement with the company not to ‘directly or indirectly carry on, or be engaged, or concerned, or interested in the coal trade in any part of Great Britain or the Isle of Man.’ He subsequently sold his foreign business to another company on credit, looking for payment to the company’s future profits. The company subsequently started a home business in Great Britain.
Held that the mere fact of his being a creditor of the company did not make him ‘concerned or interested in’ the coal trade in the meaning of the agreement.
This was an appeal from a judgment of the Court of Appeal (Williams, Stirling, and Cozens-Hardy, L.JJ.), who had affirmed a judgment of Joyce, J. The facts were as follows:- The respondent Harrison carried on business as a coal merchant, being engaged both in the home trade and also in an export trade. He sold his home trade to the appellants, who were also coal merchants, retaining the export trade, and entered into a covenant not to ‘directly or indirectly carry on, or be engaged, or concerned, or interested in the coal trade in any part of Great Britain or the Isle of Man.’ He afterwards sold his export trade to a company. The sale was not for cash, and he looked to the profits of the company’s trade for payment of the purchase money. The company afterwards began to carry on a home trade, and the appellants brought this action for breach of covenant, asserting that the respondent Harrison was ‘concerned or interested in’ the company’s coal trade in Great Britain.
Joyce, J., and the Court of Appeal gave judgment for the defenders. The pursuers appealed to the House of Lords.
At the conclusion of the argument for the appellants their Lordships gave judgment.
Citations:
[1905] UKHL 571, 43 SLR 571
Links:
Jurisdiction:
England and Wales
Company
Updated: 26 April 2022; Ref: scu.621194