"1907 March 26
COZENS-FARDY, M.R. VAUGHAN WILLIAMS and BUCKLEY, L.JJ.
The plaintiffs were brewers and the lessors of a public-house known as the Hollydale Tavern at Peckham. The defendant was a licensed victualler, and the assignee of two leases of the same premises granted by the plaintiffs. The leases contained covenants by the lessees for themselves, their heirs, executors, administrators and assigns, that they would not during the term of the leases buy, receive, sell, or dispose of either directly or indirectly, or permit to be bought, received, sold, or disposed of either directly or indirectly, in or upon, out of, or about the said premises, or any part thereof, any porter, stout, beer, and ale other than such as should have been bona fide purchased of the lessors or of their successors in business.
Early in 1900, in consequence of the Boer war, an extra duty of 1s. a barrel (called the war tax) was imposed on beer. The principal London brewers met and agreed to put this extra 1s. a barrel on their customers, and in March, 1900, the plaintiffs sent a circular letter to all the tenants (including the defendant) of their tied houses in which they said: "You are doubtless aware that Her Majesty's Government have imposed a war tax on beer of 1s. a barrel, and we are consequently compelled to add this amount to the price of all our beer." For some time the plaintiffs supplied and the defendant paid for the beer at the increased price, but subsequently he refused to pay the extra 1s. a barrel, and in July, 1905, the plaintiffs sued him on a specially indorsed writ for 264l. 0s. 2d. , being the amount due from him for malt liquors supplied by them to him at the increased price.
By his defence the defendant admitted that the goods mentioned in the claim were sold and delivered by the plaintiffs to him in pursuance of the said covenant, and alleged that it was an implied term of the covenant that the plaintiffs would supply such porter, stout, beer, and ale as the defendant might buy or purchase from them at the fair market prices of the day, and that the prices claimed were not the fair market prices of the day for the said goods. Alternatively, he alleged that the prices claimed were unreasonable, unfair, and excessive.
The action came on for trial without a jury before Bray J. on April 28, 1906, when judgment was given for the plaintiffs. The defendant appealed.
The appeal was heard on March 26, 1907.
Montague Lush, K.C. , and W. O. Hodges , for the appellant.
English Harrison, K.C. , and Hansell , for the respondents.
COZENS-HARDY M.R. I think the view taken by the learned judge in this case was quite correct. The defendant Day is the occupier of a tied house. The tie is in the usual form with one exception, the tenant is bound - I am not giving the words, but merely the substance - to keep the house as a licensed house, and ie to do what he can to promote trade. That, of course, presupposes the necessity of securing for the house malt liquors, and then comes what is known as the tie. It is a covenant that no beer shall be consumed at the house except that which is bought from the plaintiffs, Messrs. Noakes and Co., Limited. There is no express provision by Noakes and Co., Limited, binding them to supply beer, still less is there any provision fixing the price at which beer is to be purchased, but Mr. English Harrison has argued the case with great fairness and in a manner which, whether it is right or wrong in point of law, is at least as favourable to the defendant as it can possibly be put. He assumes that there is an implied covenant by Messrs. Noakes and Co., Limited, that they will on the request of the defendant supply him with beer of drinkable and reasonable quality and at a reasonable price. Now I am clear that that implied covenant is not one which binds them to supply beer at the lowest possible market price. It must be at a reasonable price, and when we have evidence here that the price of beer at the date of the granting of the lease was 36s. a barrel, and that at the date when Day became assignee of the lease it was 33s. a barrel, and that subsequently the cost to the brewer was increased by the extra war tax of 1s. a barrel, it seems impossible to say that the charge of 34s. a barrel was not a reasonable charge. I should have come to that conclusion apart from any evidence, but when we find from the evidence given on behalf of the plaintiffs by the representatives of two breweries, one of them certainly a very large brewery, it is plain that the course taken by Messrs. Noakes and Co., Limited, is not a peculiar individual course taken by them in distinction from all other breweries, but is one which other breweries in a large way of business have thought themselves justified in taking. The New Westminster Brewery Company, all of whose houses are tied, have done exactly that which Messrs. Noakes and Co., Limited, did. The Cannon Brewery, which is a very large brewery, have done the same thing. Their houses are mostly tied houses, but with a certain proportion of free houses, that is to say, houses as to which there is no tie. It is said by Mr. Lush, "Oh yes, there are many houses in the full sense of the word free, but they are not free houses because they have obtained a loan from the brewers." In my opinion that is not really important to any point we have to decide here, and I see no ground for holding that there has been anything but a reasonable price charged for the beer. The appeal is dismissed with costs.
VAUGHAN WILLIAMS and BUCKLEY L.JJ. concurred."
