Lessor of tied public house nominating new supplier having no brewery connections – Whether new regime affected by EC competition issues raised as regards previous nominee brewer- Judgment for lessor
On 28 March 1990 Mr and Mrs Taylor (the lessees) took a new lease of Millfield public house in Widnes, Cheshire from a predecessor of the defendant lessor. The lease required them to purchase a range of specified beers and other drinks exclusively from the lessor or its nominees. In or about 1997 the lessees joined forces with other tenants of the lessor in opposing the requirement to deal with the then nominee, Scottish Courage (the main litigation), the central issue being whether the tie, as then operated, was invalidated by Article 85 (now 81) of the European Community Treaty. On 29 March 1998 the lessor changed the nominated supplier to a non-brewer wholesaler, SupplyLine Services Ltd (SupplyLine), which carried supplies from 15 independent brewers with plans to increase that number. From that date until December 1998 (the 1998 period) the lessees refused to deal with SupplyLine. The lessor, while accepting that the lessees had an arguable case as regards the main litigation, cross-claimed for summary judgment against them for damages for loss of the commission that it would otherwise have received from SupplyLine over the 1998 period. The lessees accepted that they would have had no defence if the lessor had nominated SupplyLine from the outset, but contended, inter alia , that the fresh nomination amounted to an attempt to impose upon them a unilateral variation of the lease.
Held: The lessees had no arguable defence
No valid distinction had been drawn between the present case and the Court of Appeal decision in Passmore v Morland plc [1999] 1 EGLR 51, where it was held that an agreement could move into and out of the prohibition contained in Article 85 as the surrounding economic circumstances changed. Nor could the lessees point to any rule of EC law that required the court to treat a change effected in accordance with the lease as one imposed unilaterally by the lessor, the question being simply one of interpretation in accordance with English law.
Mark Brealey (instructed by Maitland Walker) appeared for the claimant lessees; Richard Field QC (instructed by Masons) appeared for the defendant lessor.
Alan Cooklin, barrister
