FLOUR MILLING CASE

Ashburton Guardian, Volume XLVI, Issue 10458, 27 July 1925, Page 2

FLOUR MILLING CASE

THE MEANING OF “DEAL." APPEAL COURT ARGUMENT. (Per Press Association.) WELLINGTON, This Day. The hearing of the Crown’s appeal m the case of Distributors, Ltd., and its associated flourmillers, whom the (supreme Court found not to have committed an offence against the Commeicial/ Trusts Act, 1910, was continued in the Court of Appeal to-day. Mr Myers (for Distributors, Ltd.) maintained that the agreement between Distributors, Ltd., and the flourmillers was a del credere agency in fact. Ihe relation between the flourmillers and Distributors, Ltd., was that of principal and agent, and in no sense were Distributors, Ltd., purchasers. Ihe ordinary meaning of a deal was to buy and sell, and Distributors, Ltd., m that sense did not deal. Mr Justice MacGregor: “Has not this company formed essentially to deal in flour P” Mr Myers: “Distributors did not deal in flour; the flourmillers did. The house agent does not deal in houses. The Chief Justice: “Is there anything wrong in using the word ‘ deal to describe the handling of flour. You say that 1 deal ’ cannot mean an agency transaction, but must mean purchase and sale as owner?’’ Mr Myers: “Exactly.” Mr Justice MacGregor: “The agreement contains the word ‘ deal,’ in addition to the words ‘ buy and sell, which shows that your interpretation of ‘deal’ is wrong.”

Agency Transaction. Mr Myers, continuing his argument, said that the object of Sections 3 and 4 of the Commercial Trusts Act, 1910, was to prohibit a person who owned goods from selling them on terms of discrimination to persons in the same category, and Section 4 was with the object of preventing a boycott. There was no reason for the protection of a person acting as agent. If it had been intended in the Act to include agency transactions, it was strange that there was no mention of “commission,” while “discount,” the appropriate word in connection with sales, was there. The Chief Justice said that “deal,” in its widest sense, meant the division of property for the purpose of distribution.

Air Myers: “In its widest sense, your Honor, but that is scarcely applicable.” It was not suggested that Distributors, Ltd., sold to a third party in breach of Section 3. i

. The Chief Justice: “Why, in that case, do you discuss an academic thing that has no bearing on the case? What difference does the meaning of the word ‘deal’ make?”

Mr Myers: “It is an alternative submission which we are bound to make. Section 3 has no bearing on) the case.” If the case were not governed by an American authority, said Mr Myers, and if Section 3 were not applicable, the case must be considered in the light of Section 5' only, leaving the question of public interest- alone to be considered.

“In Restraint of Trade.” The Chief Justice : “If we decide that the agreement is contrary to public interest, you fail?” Mr Myers: “Yes, but mere restraint of trade may not be contrary to public interest if executed in maintaining a certain business on a sound basis. It was quite true that the words in the Australian statute were in restraint of trade to the detriment of the, public, but the House of Lords had treated these words as meaning the same as ‘contrary to public interest.’ ” Mr Justice McGregor: “The offence is not the scheme, but conspiracy. Did they conspire, and, if so, to do what? The facts before and after the agreement are important.”

The Crown’s judgment in the case, said Mr Myers, ignored the judgment of the Court of Appeal in the sugar case. In the present case the monopoly or control was to prevent the crippling of several important local industries, and was in the interests of the public as it stabilised from year to year, the price 'of a staple article of food reasonably. He proceeded to deal with the position of the millers, and to show that this trade would have suffered without the agreement. ‘'Without some such agreement, wheatgrowing, also, cannot go on,” said Mr Myers.

The Chief Justice: “Who, then, is to look after people—the combine or the Government?” Mr Myers: “They are trying to encourage production.” Mr Justice MacGregor: “They are trying to limit production.” Prices and Production. .Mr Myers said that it was well known that there was a good crop of wheat in 1922, but unless the farmers "were guaranteed a price they were not going to grow wheat next year. Mr A. Fair:: “There is no evidence of that.”

Mr Myers quoted from the evidence to show the confused nature of the wheat industry at the time, and alluded to the Australian competition, quotas pi ices aud conditions to show that dairy farmers would have to pay a great deal more for their bran and pollard. It might well be that the arrangement brought about by Distributors, Ltd., saved 1 the dairy farmers some £150,000 a year. Irrespective of duty the dairy fanner is better off in getting his bran and pollard in New Zealand. Mr Justice MacGregor: “If the price is kept up?” Mr Myers: “The price is kept down.” Mr Justice MacGregor: “Oh! If this agreement fell through, would all the iiourmillers go out of business? They have gone on for some 80 years.” Mr Myers: “But conditions have changed. Unless the wheatgrower is guaranteed a better price, it pays him to go into some other form of business.

Mr Justice Heed: “Therefore the bread consumer is subsidising the wheatgrower and the miller.” Mr Myers: “In Australia the industry may be said conversely, to subsidise the consumer.”

Mr Justice MacGregor: “In Australia they were paying £lO a> toil for flour while we were paying £lB. Was that a good state of things to perpetuate?”

Mr Mylars: “Yes, if the wheat is grown in New Zealand.” Mr Justice MacGregor: “This is not a case of the policy of the Goveruent, but of the interests of the people.”

The Court adjourned at 1 p.m. till londay.