Tesco v Constain - Thomson Reuters

[1912] 2 Ch. 125 Page 41912 WL 17392 (Ch D)(Cite as: [1912] 2 Ch. 125)FN2 [1893] 1 Ch. 484 n.,FN3 H[1892] 3 Ch. 75.FN4 (1901) 85 L. T. 767, 770-772.FN5 H[1893] 1 Ch. 477.FN6 (1909) 54 Sol. J. 31; see note at end of this report, p. 134.FN7 H[1911] 1 Ch. 138.Moreover, this is not within the terms of the power. The covenant for paymentby the company is released. Modification does not include destruction. Thebenefits (if any) supposed to be given by this resolution are entirely illusory.Gore-Browne, K.C., and Wheeler, for the defendant brewery company. The Court isasked merely to interpret the deed. This is a question of the law of contract,and a primary rule is that an additional term is not to be introduced into awritten contract unless an implication necessarily arises that the parties sointended: Hamlyn & Co. v. Wood & Co. [FN8] The plaintiffs seek to read acondition precedent into this contract, namely, that the power of modificationshould not be exercised unless extraordinary difficulties arise. But there is nota word in the trust deed or schedules to shew that special circumstances musthave arisen, and the cases cited on behalf of the plaintiffs have nothing to dowith the real question before the Court, with the exception of In re JosephStocks & Co. [FN9], which is a decision most strongly in support of themodification in this case. The other cases were cases of compromise and notmodification.FN8 H[1891] 2 Q. B. 488.FN9 (1909) 54 Sol. J. 31; see note at end of this report, p. 134.The terms on which the company made the offer in this case were not illusory.There is no suggestion of fraud or collusion. Individual holders may havepreferred to have a perpetual debenture rather than run the risk of having one oftheir number wreck the whole business of the company by applying for a *131receiver. It is true that the modification must be within the terms of the deed,--which we submit it is: In re Joseph Stocks & Co. [FN10],--but the parties haveagreed that if what is proposed is good enough for three fourths of the wholebody they will all be bound by it. That being so, the Court has no jurisdictionto override the decision of the majority and say that what they have contractedto do they shall not do. The occasion has come when this has been done in goodfaith. The debenture-holders are not giving up much; they keep their security andtheir good charge and are getting their 4l. 10s. per cent. interest.FN10 54 Sol. J. 31; see note at end of this report, p. 134.Hughes, K.C., and J. K. Young, for the trustees. The trustees throughout haveacted bona fide and with propriety and have done their duty, and there is nosuggestion that they were acting unfairly. The decision in In re Joseph Stocks &Co. [FN11] shews that the modification in question was fully authorized by theCopr. © West 2004 No Claim to Orig. Govt. Works