Supreme Court Allegation Of Fraud In Sale Of Grocer's Shop

Press, Volume CI, Issue 29921, 7 September 1962, Page 16

Supreme Court Allegation Of Fraud In Sale Of Grocer's Shop

A man who bought a grocer's shdp in Papanui road in March last year for £3965 14s, and sold it last April for £ 1200 claimed against the previous owner and the land agent in the Supreme Court yesterday. He formally admitted his own debt of £1064 15s still owing under the sale agreement, and the Court then heard his claims against the two defendants.

Edward Arthur Green, a footwear manufacturer, claims £1550 from Gledhiui's Cash Stores. Ltd., and £2025 from Grocers’ United Stores, Ltd., also known as 1.G.A.. which acted as agent in the transaction.

Green is represented by Mr J F. Burn; GledhiM’s Cash Stores. Ltd., .by Mr J. G. Lsggat, with him Mr B. S. McLaughlin; and Grocers’ United Stores, Ltd., by Mr P. T. Mahon, with him Mr K. S. Hadfield. Green’s claim against Gledhill’s Cash Stores. Ltd., is made up of £ 800 for alleged fraudulent misrepresentation of the shop’s weekly takings. £250 for a bacon slicer found to be on hire and not part of the plant, and £5OO general damages for alleged strain and worry. His claim against Grocers’ United Stores, Ltd., comprises £BOO for alleged fraudulent misrepresentation of the shop's weekly takings —or breach of duty as Green’s agent—plus £725 for alleged misreipreeenitaticn of the value of the shoos plant and fittings, plus £5OO general damages for alleged Mrtnain and worry. Mr Burn said that when Green and his wife came from Auckland early last year they went to Grocers' United Stores, Ltd., and told a Mr Stonemian, manager of the land department, that they wanted to buy a mixed grocery business. While looking at a shop in Paipanui road, Stoneman told them that Gledhiill's shop across the road was a model I.G.A.

shop, and he would inquire whether it was for sale. Weekly Takings

Next day. Stoneman told Green the shop was for sale ait £2900—£1500 for plant and fittings and £ 1400 for goodwill—plus stock at valuation. Stoneman said the weekly takings were about £3OO a week. A contract was signed, and Grocers’ United Stores. Ltd., arranged a bank overdraft for Green. In his first week at the shop the takings were £245. and in the second they were £240. Asked about the takings. Gledihill told Green that he had never merit ioned a weekly figure of £3OO, but only £275. As a result. Green had not paid the balance owing under the agreement. Green alleged he was misled into the transaction by an untrue and fraudulent statement that the weekly takings were .£3OO, and that the goodwill was greatly overstated. There was also a matter of a bacon slicer which Green claimed he had been led to believe was included in the plant, but which proved to be on hire. Mr Burn said that Green claimed he relied on the advice and experience of G.US in buying the shop thinking that it was acting as his agent, and that it owed a duty of care to him. Green claimed it was negligent in breach of that duty. Green claimed that G.US had a list of the shop’s plant and fittings totalling £775. whereas the price it asked him. and which he paid, was £l5OO. Green, said in evidence that he did not ask to see any books before buying the shop. “I absolutely relied on 1.G.A.. knowing—cr thinking—it was a straight-forward organisation and would protect me in any way." he said. Green said that three weeks after taking over the shop he asked Stoneman to put it on the market again, and Stoneman told him to offer it at the price he paid, less £2OO because of the drop in turn-over. After 12 months he sold it at £l2OO. Green said that after he

took the shop over he asked Stoneman for an itemised list of the plant and fittings. Stoneman conferred with a Mr Craig, and they called in 4 Mr Lees to give him a’ list. Lees started to make notes on a pad. but was called out of the office. When he returned he said hq could not give Green the list. -“I never got the list, and I never learned what was on it," said Green.

During the year, he asked a Mr Lawn, secretary of I G.A., to value the shop’s fittings and plant. Lawn’s figures were £375 for the fittings and £4OO for the plant When Lawn learned that Green had passed this on to his solicitors. Lawn was •’pretty hot about it.” “Lawn said that if he’d known I was going to pass his information on to my solicitors he’d never have given it to me.” said Green.

Mr Justice Macarthur adjourned the hearing to today.