Butt v Long [1953] HCA 76

Butt v Long [1953] HCA 76

The covenant was capable of being read, by reference to the parties' business, as concerned with transhipment between railway systems, but its words contained no express or sufficiently implied local limitation to Wallangarra and Jennings. Without such a limitation it operated more widely than reasonably necessary to protect the respondents' transhipping business and was invalid as an unreasonable restraint of trade. The decree enforcing that covenant therefore had to be discharged.

Jurisdiction
Australia
Procedural Posture
Appeal / High Court Appeal From So Much of the Decree of Roper C.j. in Eq. as Granted Relief Based Upon the Express Restraint of Trade Clause
Outcome
Appeal allowed with costs.
Legal Topics
['validity of Covenant Not to Carry on Business' 'construction of Restrictive Covenant' 'partnership Dissolution' 'sale of Business and Goodwill' 'passing Off Relief Not Appealed']
['contract Law' 'restraint of Trade' 'equity'] ['validity of Covenant Not to Carry on Business' 'construction of Restrictive Covenant' 'partnership Dissolution' 'sale of Business and Goodwill' 'passing Off Relief Not Appealed']

Case Brief

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Procedural Posture

Appeal / High Court Appeal From So Much of the Decree of Roper C.j. in Eq. as Granted Relief Based Upon the Express Restraint of Trade Clause

Legal Issues

  1. 1 ['Whether the covenant not to carry on the business of a transhipping agent for five years was invalid as an unreasonable restraint of trade.' 'Whether the covenant could be construed or impliedly limited to the business of a transhipping agent at Wallangarra and Jennings.']

Ratio Decidendi

The covenant was capable of being read, by reference to the parties' business, as concerned with transhipment between railway systems, but its words contained no express or sufficiently implied local limitation to Wallangarra and Jennings. Without such a limitation it operated more widely than reasonably necessary to protect the respondents' transhipping business and was invalid as an unreasonable restraint of trade. The decree enforcing that covenant therefore had to be discharged.

Court Disposition

Appeal allowed with costs.

Orders

  • ['Appeal allowed with costs.' 'Discharge so much of the decree of 2nd December 1952 as decrees that the defendants George Albert Butt and Harold George Butt and each of them be restrained for a period of five years from 1st September 1952 from carrying on a business of a trans-shipping agent at Wallangarra or...