Creamoata Ltd v Rice Equalization Association Ltd [1953] HCA 40

Creamoata Ltd v Rice Equalization Association Ltd [1953] HCA 40

The effect of what passed at the meeting of 14th and 15th November 1950 was to release Creamoata in equity from any obligation under clause 4 of the deed in respect of any rice harvest after that of 1950; alternatively, if the obligation subsisted, it was subject to an implied condition that it would bind only so long as the Rice Marketing Board was willing to allocate the whole harvest to members of the Association; otherwise, the covenant constituted an unreasonable restraint of trade and was void.

Parties
Appellant; Defendant: Creamoata Limited; Respondent; Plaintiff: Rice Equalization Association Limited
Jurisdiction
Australia
Judgment Date
23 July 1953
Procedural Posture
Appeal / On Appeal From the Supreme Court of New South Wales at Final Decree
Outcome
Appeal allowed; suit dismissed.
Legal Topics
Deeds and Releases in Equity, Restraint of Trade, Implied Terms, Incorporated Associations, Negative Covenants, Specific Performance and Injunctions
Equity Contract Law Competition Law Deeds and Releases in Equity Restraint of Trade Implied Terms Incorporated Associations Negative Covenants +1 more

Case Brief

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Parties

Creamoata Limited

Appellant; Defendant

Rice Equalization Association Limited

Respondent; Plaintiff

Procedural Posture

Appeal / On Appeal From the Supreme Court of New South Wales at Final Decree

Legal Issues

  1. 1 Whether Creamoata Limited remained bound by a negative covenant in a deed with the Rice Equalization Association after a board resolution indicated Creamoata should resign, despite the absence of a formal deed of release.
  2. 2 Whether Clause 4 of the deed (restraint on applying for increased quota from the Rice Marketing Board) was void as an unreasonable restraint of trade or was discharged in equity.

Ratio Decidendi

The effect of what passed at the meeting of 14th and 15th November 1950 was to release Creamoata in equity from any obligation under clause 4 of the deed in respect of any rice harvest after that of 1950; alternatively, if the obligation subsisted, it was subject to an implied condition that it would bind only so long as the Rice Marketing Board was willing to allocate the whole harvest to members of the Association; otherwise, the covenant constituted an unreasonable restraint of trade and was void.

Court Disposition

Appeal allowed; suit dismissed.

Orders

  • The decree of the Supreme Court below is set aside.
  • Order that the suit by the Rice Equalization Association Limited against Creamoata Limited be dismissed with costs.