LANGUAGE

Rothmans of Pall Mall (NZ) Ltd v. A-G

Rothmans brought this case against the Attorney-General seeking a declaration from the Court that the New Zealand Government was required to meet with it to re-negotiate a contract between them. The agreement related to cigarette advertising.

In a three-year agreement dated 17 July 1985, Rothmans had agreed to provide the Department of Health with information about the carbon monoxide and nicotine levels of all locally manufactured cigarettes which the Department of Health could then publish. It also agreed to comply with a marketing code. The agreement was stated to be "in lieu of further legislative or regulatory restrictions on the marketing of tobacco products". There was a clause in the agreement which provided for re-negotiation. The New Zealand government had introduced the Smoke Free Environments Bill into Parliament after expiration of the agreement.

Robertson J found that the agreement between Rothmans and the Attorney-General had never been a legally enforceable contract. The only consideration that the Government had purportedly given was an undertaking not to introduce legislative or regulatory measures. However, the Government was unable to give that undertaking because the executive cannot fetter Parliament's sovereign right to legislate. Since the only promise given by the Government which could be said to amount to consideration was one without any value, the contract was invalid.

Robertson J went on to observe that, even if the contract had been enforceable, there was nothing in it which prevented the Government from introducing legislation after its expiration. Moreover, the reality of the situation was that the Government had introduced the Smoke Free Environments Bill and therefore it was obvious that any meeting to seek to renegotiate the contract would have been unsuccessful. In those circumstances it would have been imprudent for the Court to order that the parties meet.