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Decisions of the Nineteenth Century Tasmanian Superior Courts

Melville v. Bent [1832]

contract, restraint of trade clause - business goodwill, sale of - injunction - equity

Supreme Court of Van Diemen's Land

Pedder CJ., 21 September 1832

Source: Hobart Town Courier, 28 September 1832

A decision of great importance took place in the Supreme Court on Friday last. It affects all persons connected with trade or commerce so materially, that we are anxious to give it the utmost publicity. The following is an outline of the case. In 1829 Mr. Bent advertised the Colonial Times newspaper, the materials of his printing office, and the business thereof for sale, notifying in his advertisement his intention to retire wholly from that occupation, in order to reside upon his farm. Mr. Melville became the purchaser for sum of 900l., and took a receipt for the same in which the nature of the purchase was detailed, and the good will of the business particularly mentioned. No further contract was entered into between the parties. Upon the sale being completed Mr. Bent retired, as he had agreed, into the country, and Mr. Melville stepped into his business, which he carried on as his successor. In the present year Mr. Bent thought proper to resume the business of a Printer, upon the same premises, Mr. Melville having removed to the office where he now resides. Mr. Melville finding himself aggrieved by this, and his business injured, filed a bill in equity for an injunction to restrain Mr. Bent from further proceeding in the printing business contending that having sold the good will thereof to him, Mr. Bent had no right to resume it. Messrs. Gellibrand and Ross were for Mr. Melville - Messrs. Horne and Cartwright for Mr. Bent. Upon filing the bill Mr. Melville having made the necessary affidavit to the preceding facts, applied for an injunction which the Chief Justice having refused, the proceedings went on upon the bill to which Mr. Bent's Counsel having demurred the demurrer came on for argument on Friday. It is unnecessary to go over the arguments of the counsel on both sides, which were equally able an[d] ingenious, His Honour the Chief Justice stated, that he had taken much pains, and trouble to ascertain the hearing of all previous decisions on similar subjects. His Honour, referring to the principles which governed the Lord Chancellor Macclesfield in the celebrated case, Mitchall v Reynolds lst Peere-Williams, 181, that all general contracts not to exercise any particular trade are void, considered that this case came strictly within that principle. That the contract between Mr. Beat and Mr. Melville was, if any thing, a general contract, and as all such are void in law, so also must the principle prevail in equity. His Honour explained the distinction (in the case of a man selling a particular business) between his resuming the same business and the like business. In the latter case no contract into which he could enter could bind him; while on the former he would be prevented from resuming the sameidentical business which he had sold to another. Mr. Gellibrand having cited the instance of Dolly's chop house, the Chief Justice referring thereto stated, that if the owner should sell Dolly's chop house, and all the good will thereof, he could nevertheless, any general bond not to trade in the same way notwithstanding, open another chop house at the very next door, and intercepting the very customers proceeding to the house, the custom of which he had sold, carry on a fresh similar business without the possibility of being prevented; the principle of law being to discourage all restraints upon trade. Upon this ground, and seeing that Mr. Bent's contract with Mr. Melville was, if any at all, a general contract, which being void in law, a court of equity could not step in to support. His Honour was of opinion that the demurrer was good.

Published by the Division of Law, Macquarie University and the School of History and Classics, University of Tasmania