Gonzalez v Trinidad and Tobago Petroleum Marketing Company Ltd
| Jurisdiction | Trinidad & Tobago |
| Judge | Hosein, Z., |
| Judgment Date | 15 May 1985 |
| Neutral Citation | TT 1985 CA 75 |
| Docket Number | No.1656 of 1985 |
| Court | Court of Appeal (Trinidad and Tobago) |
| Date | 15 May 1985 |
High Court
Hosein, J.
No.1656 of 1985
Mrs. Morean for the plaintiff
Mr. W.J. Alexander S.C. and Mr. Patrick for the defendant
Contract - Agreement for defendant to supply petroleum products to plaintiff for a period of five years — Whether clause restricting plaintiff to sale of defendant's lubricating oils only is in restraint of trade and therefore void — Whether injunction to restrain defendant from withholding supplies from plaintiff should be granted.
The plaintiff is the owner of a parcel of land at No. 13 Tenth Avenue, Barataria and a service station standing thereon. By an agreement dated 5th June 1981 between the defendant and the plaintiff the defendant agreed to supply petroleum products to the plaintiff for a period of five (5) years subject to the terms of the agreement (herein called the agreement).
Clause 2 of the agreement in so far as is relevant provides as follows:
The dealer shall purchase exclusively from the supplier all gasoil, kerosene and other petroleum products including lubricating oils and greases and petroleum specialty products which during the continuance of this agreement the dealer may require for his own use or for sale in the course of his business in Trinidad, and so long as this agreement shall remain in force, the dealer shall not directly or indirectly sell, distribute, stock or display or purchase for his own requirements in Trinidad any petroleum products other than those supplied to him by the supplier.
It is this clause relating to the supply by the defendant to the plaintiff and the sale by him of lubricating oils other than the defendant's that has given rise to this controversy, resulting in a letter from the defendant dated 20 th March, 1985 purporting to terminate the agreement and the removal on the 26th March, 1985 from the plaintiff's premises by the defendant's servants or agents of the pumps and other equipment supplied to the plaintiff under the agreement and the peremptory closure of the plaintiff's business.
The plaintiff promptly commenced legal proceedings by his writ endorsed with his Statement of Claim dated the 2nd April, 1985 claiming inter alia that clause 2 of the agreement restricting him to the sale of only the defendant's lubricating oils is void and by summons dated 15th, 1985 applied for an order requiring the defendant to restore to the plaintiff's premises the pumps and equipment removed and supplies of petroleum products pending the determination of the action.
In support of the plaintiff's summons there are filed four (4) affidavits: three by the plaintiff himself respectively dated 10th; 16th and 23rd April, and a fourth dated the 23rd April by one Robin Narinesingh who is himself a dealer. The defendant has filed three (3) affidavits in answer. There are two filed by the defendant's corporate services manager, Rosalie Feurtado-Toby, respectively dated, 16th April, and the 22nd April. The third affidavit is that of one Norman Gomes the defendant's equipment maintenance supervisor being the person who supervised the removal of the pumps and equipment referred to earlier.
On the facts before me Mrs. Morean for the plaintiff contends that on this application to determine whether the injunction sought ought to be granted there are two (2) issues:
The first is whether clause 2 of the agreement relating to the sale of lubricating oils is in unreasonable restraint of trade and therefore void;
The second is whether the plaintiff is operating outside of the provisions of the Petroleum Act and in particular whether he is in contravention of Section 6 thereof.
Mrs. Morean submitted that the words used in clause 2 - viz “including lubricating oils” “…. for his own use” and “for his own requirements” operated to impose an unreasonable restriction on the land owner as to the trade he could carry on upon his land. Reliance was placed upon Nordenfelt v. Maxim Nordenfelt (1895) A.C. 525 for the basic proposition that a contract in restraint of trade was contrary to public policy and therefore invalid. Secondly upon Petrofina C.B. Ltd. v. Martin (1966) 1 All E.R. 126 where a somewhat similar restriction to that imposed in the present case was held to be void. While the period there (12 years) was greater than that in the present case, it was argued that one must bear in mind that in the Petrofina case there were other sources of supply of petrol available to the dealer. Here it is said that the defendant has a monopoly in Trinidad and Tobago and so no other sources of supply of gasolene are available. Thus withdrawal of supplies of gasolene means inevitable closure of business as in fact has occurred.
Further it was argued that in the Petrofina case, the Court of Appeal stated that a solus agreement in gross that is, an agreement restricting the supply of motor fuel to a petrol filling station to one particular supplier, the agreement not being a term of a lease or mortgage, was an agreement in restraint of trade and accordingly, although a solus agreement in gross was not automatically bad, it was invalid unless the restraint was reasonable as between the parties to the agreement and not injurious to the public interest and reference was made to Lord Diplock's statement when dealing with the restrictive covenant as follows:
‘In that case as regards lubricating oils and greases, the garage proprietor is not prohibited by the solus agreement from selling other brands but he is prohibited from displaying any advertising material about them and from using any lubricating oils or greases other than Petrofina's in the lubricating bay ……. In his judgment, Lord Diplock concluded that:
“I do not find it necessary or profitable to consider whether any of these restrictions, had it stood alone or been imposed for a shorter period, would have been enforceable. In compination they are in my view far more than adequate to protect any interests of Petrofina which they have a right to have protected. They seek to create a new commercial serfdom from which the garage proprietor can obtain manumission only on finding a substitute serf. To this the Courts of twentieth century England will not lend their aid. This solus agreement is unenforceable…”
In respect of the sales of lubricating oils, - the difficulties of selling Superlube and the problems connected therewith are set out in paragraphs 6 - 10 of the plaintiff's affidavit of the 10th April. The gist of his complaint is that Superlube is not among the popular oils and so, trade in this area of his business is severely limited and as a result there are losses. If this clause is enforceable not only will he continue to sustain a loss but he is further restricted from purchasing any other oil even for his own use or for his own requirements. It was argued that the sale of only one brand of lubricating oil was thus in unreasonable restraint of trade and a fortiori where the defendants were already the sole suppliers of gasolene on the local market, it would not be in the public interest that he should be restricted to selling only a single type of lubricating oil. Reliance was placed upon Sky Petroleum v. V.I.P Petroleum (1974) 1 WIR 576: There, as here, the defendant was the sole means of keeping the plaintiff's business going. It was said that in that case as here the plaintiff had “no greater prospect of finding an alternative source of supply for the filling stations.”
What I have to decide it was argued is whether any injunction should be granted to protect the plaintiff in the meantime. The argument ran that much of what was said in the Sky case is applicable here with greater force. At page 578 letters “C” and “D” per Goulding J:
“There is, in my judgment, so far as I can make out on the evidence before me, a serious charge that unless the Court interferes at this stage the plaintiff will be forced out of business. In those circumstances, unless there is some specific reason which debars me from doing so, I should be disposed to grant an injunction to restore the former position under the contract until the rights and wrongs of the parties can be fully tried out.”
The order ultimately made was to restrain the defendant from with holding supplies etc. That in my view was just another way of granting a mandatory injunction. If a Court took the view that a mandatory injunction ought in all the circumstances to be granted, it ought to so order instead of resorting to the use of a double negative construction - a practice frowned upon in 1899 in Jackson v. Norman by Brick Co. (1899) 1 Ch. 438. So in support of the plaintiff's claim for an injunction heavy reliance was placed upon the Sky case and the Petrofina case as showing that the restraint in the case before me would more than likely be held to be bad.
I shall deal with the question of illegality when I come to consider, the arguments of counsel for the defendant.
Mr. Alexander S.C. for the defendant argued that there were here reasons for refusing the injunction sought or any:–
He submitted that the principles for the granting of an interlocutory mandatory order are different from the principles which apply for the purpose of a prohibitory injunction and argues that on the material before the Court the plaintiff has not shown (as he must) any real prospect of succeeding at the trial for a permanent injunction since he is in breach of section 6 of the Petroleum Act;
Secondly that the American Cyanamid case (1975) 1 All E.R. 504 cannot be taken to establish any proposition jettisoning or eschewing the principles for the grant of a mandatory injunction and submits that the plaintiff has to do more than show a prima facie case;
Thirdly the plaintiff's case is an abuse of the process of the Court, sine he did not disclose...
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