IS THERE TRUST?

Auckland Star, Volume XLII, Issue 153, 29 June 1911, Page 6

IS THERE TRUST?

A PECULIAR CASE.

TIMBER LEVIES AND FINES.

A peculiar and interesting case occupied the attention of Dr. A. McArthur, S.M., at Wellington, on Tuesday. The Wellington Timber Merchants' Employers' Union claimed from Prouse Lumber, Ltd., £53 15/5, alleged, to be due for timber levies and fines.

Mr. A. Gray appeared for plaintiff and Mr. T. S. Weston for defendant. Counsel for plaintiff said the plaintiff union was formed under the Conciliation and Arbitration Act, and was registered some years ago as a union of employers, the objects of which were, inter alia, to secure to the union all the advantages for unanimity of action, to protect the interests of the union in its dealings, to arrange for arbitration, to watch the interests of the timber trade, arid to promote the interests of the trade generally. "All the timber merchants, I think, without exception, in or about Wellington," counsel continued, "arc or have been members of the union." Amongst one of the original members was the firm of Prouse Brothers and Company, and they acted as members up till the time when the business was taken over by the defendant company. What seemed to have happened was that when Prouse Brothers and Company became merged into Prouse Lumber, Ltd., there was no formal election of the new company as a member of the union. From the time the new company was incorporated the meetings of the'union were attended by some representatives of the so-called new company up till quite recently. Fines were levied for breaches of the rules of the union, and for failure to make certain levies on timber. One of the items in the present case was a -fine of £25 inflicted for a breach of the by-laws:.

"SIMILAR TO A TRUST." Defendant's counsel argued that Prouse Lumber, Ltd., -was quite a distinct entity from the old firm. Looking to the objects of the union and certain provisions in its by-laws, Prouse Lumber, Ltd., was not empowered in its own memorandum and articles of association to become a member of .the union—that was to say, it was ultra vires of the company. Again, the by-laws of the union were illegal as being in restraint of trade. Tbe by-laws were made on November Sth, 1906, and the rules themselves came into force on September 10th, 1903. Counsel contended that the union was a combination similar to an American trust company. In reply to defendant's counsel, Mr Gray said the objects of the union were not to restrain trade—they were to prevent members dutting each other's throats.

After hearing further argument bis Worship said he would deliver judgment on July 4th.