In 1916 the respondent society which the appellant had joined in 1903 altered its rules. By the new rules, to which the appellant objected as in unreasonable restraint of trade, members became bound under penalty to sell their whole output of milk to the respondents at their price, whilst they were prohibited from withdrawing from membership of the society except with the consent of a committee of the members. The rules referred all disputes between the society and its members to the decision of the Irish Agricultural Organisation Society.
Held that a dispute as to validity of the rules of the society was not a dispute between the society and its members in terms of section 49 of the Industrial and Provident Societies Act 1893. The action was therefore competent- Heard v. Pickthorne, 1913, 3 K.B. 299.
Held further (dis. Lord Parmoor on the ground that membership of a cooperative society is analogous to a partnership), that as the combined effect of the new rules was to impose restrictions more onerous than reasonably necessary for the protection of the respondents’ business, they were ultra vires of the society.
Lord Chancellor (Birkenhead), Lords Finlay, Atkinson, Shaw, and Parmoor
[1919] UKHL 644, 56 SLR 644
Bailii
England and Wales
Contract
Updated: 04 January 2022; Ref: scu.632772