Maybury v Atlantic Union Oil Co Ltd [1953] HCA 89; (1953) 89 CLR 507 (10 December 1953)

HIGH COURT OF AUSTRALIA

MAYBURY v. ATLANTIC UNION OIL CO. LTD. [1953] HCA 89; (1953) 89 CLR 507

Contract - Appeal

High Court of Australia
Dixon C.J.(1), Fullagar(1) and Taylor(1) JJ.

CATCHWORDS

Contract - Oral collateral agreement - Consideration - Inconsistency with written contract.

Appeal - Interlocutory order of judge of Supreme Court - Judgment entered by consent without trial.

HEARING

Sydney, 1953, December 9, 10. 10:12:1953
APPEAL from the Supreme Court of New South Wales.

DECISION

The judgment of the Court was delivered by DIXON C.J.
We are of opinion that this appeal should be dismissed. (at p515) 2. The appeal arises from an action which was placed in the commercial causes list. The cause of action upon which the plaintiff sued is one which the appeal does not bring before us. It was conceded in the Supreme Court that to that cause of action the defendants appellants had no valid answer. But there were two pleas filed by way of cross action, and it is matter raised by those pleas which does come before us upon this appeal. The proceeding in the Supreme Court took not a usual course. Before the action came to trial an order was made raising as preliminary questions certain questions of law. Two of those questions are now submitted for our consideration. They were decided by the learned judge in favour of the plaintiff and judgment in the action was then entered for the plaintiff without the action going to trial. The judgment was entered in the action without going to trial by consent of the defendants , and a difficulty certainly exists in the path of the defendants as appellants by reason of the course the proceedings took. For it seems reasonably clear that any right of appeal from the decision against them on the points raised which they had prior to judgment being entered would only be by leave, because it was an interlocutory order. Their consent to the entry of a judgment without going to trial was no doubt logical, because the intervening proceedings could not have served a useful purpose. But the course taken may be insufficient to convert what was an interlocutory order into a final order for the purposes of their bringing an appeal as of right. There are also other difficulties which it is not useful at the moment to discuss, for we base our judgment upon the substance of the matter. (at p515)

3. The agreements upon which the plaintiff respondent sued are for establishing an arrangement, for a period or periods of time, with a broadcaster, described as a radio producer, the company being desirous of using his talents for the purposes of advertising. The main agreement is long, and it was made with one only of the two defendants appellants. Its provisions placed upon him the obligation of broadcasting a series of weekly advertising programmes called in the jargon of the agreement "packages", and by various clauses it gave to the respondent company which employed him under the agreement a substantial amount of control. It seems obvious from the tenor of the agreement that it rested with the plaintiff company to provide broadcasting time and arrange a network for the broadcasts, whilst the obligation was placed upon the defendant to provide the programme and make arrangements for it. A very substantial remuneration was to be paid. (at p516)

4. In two pleas by way of cross action the defendants appellants sue for damages, the pleas being numbered (3) and (4). The third plea claims for a breach of a collateral agreement, the fourth for breach of an agreement which the defendants find in the terms of the main written instrument itself. The first written instrument was made, as I have said, with one defendant alone. Another written instrument followed, converting that into an agreement with himself and his wife, who is his fellow defendant appellant. The third written agreement which was mentioned in the plaintiff's declaration merely brings the arrangement to a conclusion. (at p516)

5. The third plea, being the first of the two pleas by way of cross action, is in the following terms: - ". . . the defendants for a plea of cross action say that in consideration of the defendants entering into the agreements (and I emphasise the word 'agreements' in the plural) with the plaintiff which are set forth in the declaration herein the plaintiff warranted that the packages of radio entertainment to be prepared by the defendants for the plaintiff would not be broadcast in such a manner as to compete with and be in opposition to a session conducted on any other broadcasting station by one Bob Dyer who had previously conducted a broadcast session of entertainment for the plaintiff; and the defendants entered into the said agreements with the plaintiff; yet the said packages of radio entertainment were broadcast in such a manner as to compete with and be in opposition to a session conducted on another broadcasting station by the said Bob Dyer; whereby the defendants lost the benefit of their said agreements and were injured in their business and professional reputation and were otherwise damnified". (at p516)

6. It is reasonably clear, if the substance of the matter is looked at, that the allegation that the agreement alleged in that plea was in consideration of the defendants entering into the agreements must be wrong. The making of the three agreements at intervals of time could not have afforded the consideration. During the argument it has been treated as an allegation in effect that the consideration was the entering into the second of the two agreements, by which both the defendants became parties to the transaction embodied in the first agreement. The plea, it will be seen, alleges a collateral agreement made in consideration of the making of a main agreement. It sets forth a term, introduced by way of collateral agreement, which seeks to control the action of the plaintiff respondent under the main agreement. A collateral agreement made in consideration of a main agreement cannot effectively subsist unless it is consistent with the main agreement. Once an agreement is made in writing it is treated, unless the parties are shown otherwise to intend, as the full expression of their obligations. If it is established that the writing was intended to contain only part of a fuller agreement it may be otherwise. That, however, is not the present case. But it may be established that an entirely separate agreement was made by the parties. One of them may give a collateral promise in consideration of the other entering into the principal agreement. But if such a collateral agreement is to have effect as a contract it must be consistent with the provisions of the main agreement, the making of which by the other party provides the consideration. If the promise sought to modify, control or restrict the principal agreement it would detract from the very consideration which is alleged to support the promise. (at p517)

7. Turning to the main agreement, the clause upon which the plaintiff company relies as conferring rights which would be controlled by the collateral agreement, were it valid, is a clause giving to the company a full discretion. It is cl. (3) of the first agreement. That clause begins by saying that the so-called "packages", that is, in effect, the entertainment for the radio time concerned, shall be broadcast over a network of radio stations to be determined from time to time by the company. It then proceeds to give the date when they should commence, and says that thereafter a package shall be broadcast weekly up to and including a determinable date. The clause then adds "The date hour or time for each broadcast shall be as determined by the company". It is clear on its terms that that clause invests the plaintiff company with a discretion to determine any hour and any time at which the broadcasts shall be made. (at p517)

8. The plea by way of cross action alleges a collateral agreement which would limit that discretion by preventing the plaintiff company from appointing a broadcast for any time which would be in opposition to a session conducted on any other broadcasting station by Bob Dyer. It is true that the plea speaks of the manner and not the time, but strictly speaking the manner of broadcasting is under the main agreement a matter for the defendants and not the plaintiff company, and it is clear enough that what is meant is an occasion which competes with the broadcast of Bob Dyer. (at p517)

9. We think that the oral collateral agreement alleged conflicts with the main agreement and cannot stand with it. As is said in Hoyt's Pty. Ltd. v. Spencer [1919] HCA 64; (1919) 27 CLR 133 by Isaacs J.: "The truth is that a collateral contract, which may be either antecedent or contemporaneous . . . being supplementary only to the main contract, cannot impinge on it, or alter its provisions or the rights created by it" (1919) 27 CLR, at p 147 . The collateral agreement which is alleged does impinge on the clause which I have read, and does affect to alter the rights created by it. We therefore think that the collateral agreement cannot stand with the main agreement and is unenforceable. This was the view of Kinsella J., who gave full reasons for his conclusion, and we think that he was right. (at p518)

10. The other plea by way of cross action - the fourth plea - does not depend upon a collateral agreement. It depends upon the construction of, or an implication found in, the provisions of the three agreements sued upon. The plea alleges that it was a term and condition of the agreements set forth in the declaration that each package of radio entertainment by the defendants appellants should be broadcast once weekly during the continuance of the agreement and not more, and all conditions were fulfilled, and so on, and yet the packages of radio entertainment were broadcast more than once weekly whereby the defendants lost the benefit of their agreement and were injured in their business and professional reputation and were otherwise damaged by it. It will be noticed that the plea does not itself allege who did the broadcasting more than once weekly. It does not, in other words, allege a breach by the plaintiff respondent. Passing by that consideration, it appears to find, in so much of the agreement as it refers to, an obligation upon the plaintiff respondent not to broadcast more than once weekly. As appeared during the course of the argument, the facts which the defendants appellants set up are that broadcasts were made at a late hour from recordings in addition to the weekly live broadcast. There was, in other words, a recorded rebroadcast. The provisions of the agreement do not in our opinion impose upon the plaintiff a duty which would be broken by what is alleged by this plea by way of cross action. I shall not go through the clauses of the agreement on this subject. They have just been discussed. It is sufficient to say that they do contemplate recordings. It is true that the provision which deals in full with recordings does so as an alternative to live broadcasting. But the main clause dealing with recording contains the provision that "Any other titles routines ideas scripts and recordings supplied by the producer or by the company and used or intended to be used for the purposes of this agreement shall be and remain available to the company for its use at all times during and after the termination of this agreement". There is nothing positive in the agreement to impose upon the plaintiff respondent a duty not to rebroadcast in addition to the weekly live broadcast, and we think that this provision is inconsistent with the view that any implication of that sort should be made or extracted from the agreement. In fact it enables the company to use recordings at all times. The contention that the word "recordings" applied only to a limited recording of some portion of what is called the package we think is not in accordance with the language used. It is, of course, applicable to a portion, but on its natural meaning it would include a recording of the whole of a package. (at p519)

11. For these reasons we think that the fourth plea by way of cross action also fails. His Honour Kinsella J. gave his reasons for that conclusion, and in those reasons we concur. The appeal should be dismissed with costs. (at p519)

ORDER

Appeal dismissed with costs.