Heron v Port Huon Fruitgrowers' Co-operative Association Limited [1922] HCA 20

Ee ar ee a v NSW aS x ae fk R.)

OF AUSTRALIA. 315

{HIGH COURT OF AUSTRALIA.)

HERON . 2 c " : E z . APPELLANT;

DEFENDANT, AND THE PORT HUON FRUITGROWERS' CO-

OPERATIVE ASSOCIATION LIMITED Puaintirr,

} REsPonveENr.

ON APPEAL FROM THE SUPREME COURT OF TASMANIA.

Contract—Validity—Restraint of trade—Reasonableness of restrictions—Company— 4, o A. Articles of association—Control over shareholders' produce—Penalty or liquidated g99_

damages—Companies Act 1869 (Tas.) (33 Vict. No. 22), sec. 16. Ww

. He 7 By the memorandum of association of a company registered under the 5, ae

Companies Act 1869 (Tas.) the objects for which the company was established were to do everything which might be or be considered conducive to the proper MetpouRNE, or best sale, handling, packing, treating, grading, marketing and branding of May 15, the fruit belonging to members of the company or others and particularly

(inter alia) to establish and carry on depots for packing fruitgrowers' products, xox C-J- and to transport and sell fruitgrowers' products ; and to buy and sell and ,Gayan Duty export the products of fruitgrowers. By one of the articles of association

each shareholder was to be deemed to have entered into a contract with the

company that while he remained a shareholder he should in each year send to

the company, to be packed, graded and sold in such manner as the directors

might from time to time decide upon, his entire crop of merchantable fruit

upon certain terms and conditions. By other articles it was provided that

each shareholder agreed to abide by and observe all rules from time to time

made by the directors relating to packing, grading, selling, distributing and

marketing his fruit ; that every shareholder who should sell or dispose of any

marketable fruit grown by him except in the specified manner, should forfeit