"BONUS" PAYMENTS.

New Zealand Herald, Volume LVI, Issue 17339, 10 December 1919, Page 6

"BONUS" PAYMENTS.

CLAIM BY SHAREMiLKER. IMPORTANT TEST CASE. APPEAL IN SUPREME COURT, A test case to decide whether sharemilkers are entitled to a share of tha supplementary bonus or final -payments made by dairy companies to suppliers was heard by Mr. Justice Hosking at tha Supreme Court. The case was an appeal from the decision of Mr. E. D. Mosley, S.M., at Paeroa in August, 1918, when E. F. Lawrence, sharemilker, claimed £146 from James Handler, farmer, as his share of the final payments for milk supplied to the Thames Valley Dairy Company, Limited. Sir. Fleming appeared for the appellant, and Mr. E. McVeagh for the respondent. The facts were that there was a milking ■ agreement under which the sharemilker was entitled to two-fifths of the milk cheques. The magistrate decided that the term "milk cheques" referred only to the monthly milk cheques, and did not include any supplementary or final payments, which he held were payments in i the nature of a. dividend to shareholders. Mr. Fleming urged, on the authority of Free versus the Eltham Dairy Company, that the so-called bonus payments were really payments for milk supplied, and therefore were included in the term "milk cheques." He also contended that the balance-sheets of the company showed that no bonus within the meaning of the company's memorandum of association had in fact been paid for the period of three years covered by the agreement. Mr. McVeagh supported the decision of the magistrate, submitting that the dairy company was engaged in other business undertakings besides the manufacture of butter and cheese, and that the profits from all sources were included in the balance in hand at the end of each financial year. He said it was impossible to i disentangle the profits arising from the company's dealings in butter-fat from its other profits, and that the whole amount of profits in the company's hands was properly distributed among shareholders by way of bonus or dividend. Mr. Fleming, in reply, said the company's memorandum of association showed that only "net' profits" could be so distributed, and the balance-sheets showed that the whole amounts claimed by anoellant did not come out of the net profits, and were merely ordinary payments for milk, in which the sharemiiker was ent'tled to participate. He also cited authorities to show that a co-operative dairy company was merely the agent of the suppliers, and was -bound to account to them for the full - > value of the milk. The relationship was i not that of vendor and purchaser. I The Judge reserved "his decision.