Negative Covenant in Ore Sale Contracts Supports Interim Injunction Despite Hardship and Price Objections

A negative covenant in an agreement for sale of ore, prohibiting the seller from parting with the identified ore in favour of anyone other than the buyer during the contract term, was treated as specifically enforceable in equity. On that basis, interim protection was continued because the usual balance of convenience and adequacy of damages inquiry was of reduced significance where the covenant was clear. Objections based on low consideration, alleged unconscionability, hardship, and want of readiness and willingness were rejected, as mere inadequacy of price or an onerous bargain did not by itself defeat relief. The court also found that the contractual process for sampling, weighment, and payment did not require court supervision.

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Issues: Whether the plaintiff was entitled to continue the ad interim injunction on the basis of a negative covenant in the agreement for sale of ore, and whether the defendant's objections based on inadequacy of consideration, alleged unconscionability, want of readiness and willingness, and alleged difficulty of supervision defeated interim relief.

Analysis: The agreement contained an express negative covenant prohibiting the defendant from selling or otherwise parting with the ore to anyone other than the plaintiff during the subsistence of the contract. Such a covenant was treated as specifically enforceable in equity, and the court held that in the presence of a clear negative stipulation the usual inquiry into balance of convenience and adequacy of damages was of reduced significance. The objections founded on low price and alleged hardship were rejected because mere inadequacy of consideration or the fact that a contract is onerous does not, by itself, constitute unfair advantage or hardship sufficient to deny relief. The court also found that the materials were identified goods to be delivered ex pit mouth, that the contractual machinery for sampling, weighment and payment did not require court supervision, and that the plaintiff's later steps could not be demanded before the defendant had performed the earlier contractual obligations.

Conclusion: The plaintiff was entitled to interim enforcement of the negative covenant, and the ad interim injunction was directed to continue.

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