Lord Macmillan:-

The appellants challenge in these proceedings the validity of an agreement in writing which they made with the respondents on 5th December 1927. Having been advised that the agreement was not binding upon them, they intimated to the respondents that they proposed to act in disregard of it, whereupon the respondents brought the present action in the Supreme Court of British Columbia claiming a declaration that the agreement was valid and subsisting and enforceable by them against the appellants and an injunction restraining the appellants from acting in contravention of its terms. The appellants in their statement of defence pleaded that the agreement was

“contrary to public policy illegal, void and unenforceable as being [inter alia] an unreasonable and unnecessary restraint of trade in respect of the manufacture and sale of articles of commerce."

This defence, and others which were stated by the appellants but which need not be detailed here, failed before D. A. McDonald, J., who granted the declaration sought and also an injunction though in less wide terms than claimed. His judgment was affirmed by a majority of the Court of Appeal (Macdonald, C.J.A., and Martin, G