JC Williamson Ltd v Lukey and Mulholland
High Court of Australia · 1931
JC Williamson Ltd v Lukey and Mulholland (1931) 45 CLR 282
A theatre company orally agreed that two traders would be the only sweet sellers in its theatre for years, then ended the arrangement. The Statute of Frauds barred a claim at law. Could equity help?
In Patrick Stevedores, a case about interlocutory orders made by the Federal Court, the joint reasons of Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ said of the objection that an order would involve the court in “constant supervision” of continued conduct that “Reservations of that nature have been expressed in decisions of this Court”, citing Williamson among them, but that “questions of degree rather than absolute restrictions upon the scope of curial relief are involved”. They described the House of Lords in Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd as accepting that the concept of “constant supervision by the court” by itself is “no longer an effective or useful criterion for refusing a decree of specific performance”, and as placing stress instead on whether a person subject to the order knows with precision what is required and on discouraging “repeated applications for rulings on compliance”. Dixon J's statement of the supervision limit therefore remains a reservation recognised by the Court, but the joint reasons treat its application as a question of degree and not as an absolute bar.
What happened?
J C Williamson Ltd was the lessee of a theatre and its directors were able to control the letting of a shop nearby in which confectionery was sold (Dixon J). Lowe J found that in or about October 1926 the company and the respondents, Lukey and Mulholland, orally agreed that the respondents would take over the lease of that shop and a further five-year lease, and in return would have the exclusive right to sell sweets and confectionery in the Theatre Royal, Melbourne, and its precincts, paying £14 a week when musical comedy was performed and £12 a week when drama was performed (Starke J). The parties also understood that the respondents' employees selling sweets were under the control of the theatre's management as to dress, deportment and behaviour (Starke J; Dixon J).
The respondents took over the lease, took the new lease, sold sweets in the theatre and made the weekly payments (Starke J; Dixon J). Before the term of the agreement expired, the company "purported to bring it to an end", contending that no fixed period had been agreed (Dixon J). Lowe J held that the agreement was one not to be performed within a year and so fell within the Statute of Frauds, that part performance took the case out of the Statute, and that damages could be awarded in substitution for an injunction under s 62(4) of the Supreme Court Act 1928 (Vic). He assessed them at £2,250 (Evatt J). The company appealed to the High Court.
What did the Court decide?
The report records the Court's orders as "Appeal allowed. Judgment of Supreme Court discharged. Action dismissed. Respondent to pay costs of appeal. The parties to abide their own costs in Supreme Court." Dixon J gave as his reason for leaving the parties to bear their own costs in the Supreme Court that the defendants had disputed the agreement and failed on that issue.
Proposition
What is the principle?
An award of damages in substitution for an injunction or specific performance under s 62(4) of the Supreme Court Act 1928 (Vic), made on an oral agreement that the Statute of Frauds left unenforceable at law, was set aside and the action dismissed. Dixon J (with whose judgment Gavan Duffy CJ agreed), Starke J and Evatt J each treated the power as depending on an equitable remedy being available; Dixon J said that it “is confined to cases in which there is a title to equitable relief”. Dixon J held that specific performance was unavailable, saying: “Specific performance is inapplicable when the continued supervision of the Court is necessary in order to ensure the fulfilment of the contract.” Starke J (who thought enforcement of either side's right would need continuing superintendence beyond any court), Evatt J (who recorded that specific performance was not seriously contended for) and McTiernan J (who held that the respondents' acts and services could not be efficiently supervised) each also pointed to the need for supervision.
On the injunction the Justices gave different reasons. Dixon J held that the acts of part performance did not directly relate to the negative duties the respondents relied on: “It is enough to say that no acts of part performance have taken place from which a negative equitable obligation arises.” He said it was unnecessary to decide whether anything but a legal right enforceable at law will support such an injunction. Starke J held that a court of equity would have had no jurisdiction to enforce the exclusive-selling stipulation by itself, saying: “But it is contrary to all equitable principles to enforce part of an agreement and leave the parties without any remedy whatever as to all other obligations of that agreement.” Evatt J said that “it is open to the gravest doubt whether any such injunction would be granted by a Court of equity in the present circumstances”, but gave no concluded opinion on that, and held: “I hold that the doctrine of part performance does not apply to cases where the only equitable remedy available is that of injunction, and the Court refuses to enforce the contract as a whole.” McTiernan J did not decide whether the doctrine of part performance extends to an injunction against breach of a negative stipulation; he held that, if it does, the acts relied on were not unambiguously referable to the negative stipulation, so the action should still have been dismissed.
Why does this case matter?
Students often meet the case as a one-line authority and cite it for the imprecision of the parties' terms. Starke J said he passed by "possible vagueness of the agreement". An examiner looks for the limit to be placed where the Justices placed it and for the remedy to be traced to its source: a student who jumps from a broken contract to damages has missed the step the Court treated as decisive.
Exam and application relevance
Use the case as authority that the Justices who dealt with specific performance (Dixon, Starke, Evatt and McTiernan JJ) treated the need for continuing supervision of a contract of this kind as a ground on which the court would not order it, and that a claim to damages in lieu under a provision like s 62(4) depends on a title to equitable relief (Dixon J). Attribute each piece of the injunction reasoning to the Justice who gave it, because Starke J held that the stipulation could not be enforced separately, while Dixon J, Evatt J and McTiernan J each left a question about the injunction undecided. Where a problem turns on whether the need for supervision is a barrier, state Dixon J's formulation together with the later qualification in the joint reasons in Patrick Stevedores, which treat the reservation as a question of degree. Compare the facts of a problem with the facts here: a licence to sell goods in premises the other party controls, with duties on both sides, and an oral agreement within the Statute of Frauds.
Check your understanding
1. What did Dixon J say the power to award damages in substitution for an injunction is confined to, and what did he say about specific performance where the Court's continued supervision is needed? 2. Gavan Duffy CJ wrote one sentence. What was it, and does it make him one of the Justices who gave separate reasons? 3. Which Justice held that the doctrine of part performance does not apply where the only equitable remedy available is an injunction and the court refuses to enforce the contract as a whole, and which three Justices each left a question about the injunction undecided in dealing with the injunction? 4. What did Starke J say about enforcing the exclusive-selling stipulation separately from the rest of the agreement?