TRUSTS ACT CASE.

Dominion, Volume 5, Issue 1506, 31 July 1912, Page 6

TRUSTS ACT CASE.

■ THE CRUCIAL SECTION. CROWN SEEKING " DISCOVERY." OTHER SIDES'S REPLY. Further argument was heard in tlio Supremo Court, beforo the Chief Justice (Sir Robert Stout), yesterday morning in a preliminary proceeding in connection with tlio first caso under tlio New Zealand Commercial Trusts Act, 1910. In February last information was laid against the Colonial Sugar Refining Company, charging tlio company with having given preferential terms to a number of merchants, and with having established a table of discounts under which only purchasers of unusually largo quantities of sugar could benefit. Tho Merchants' Association of New Zealand was joined with tho oompany as dofendant, for allegedly aiding and abetting a breich of tho Act. As a test of tho individual position of members of the association, tho Crown selected and 'prosecuted tlio following Wellington wholesalo firms:—Lovin and Co., W. M. Baniuityno and Co., and Joseph Nathan and Co.

Sir John Findlay, K.C., with Mr. H. H. Ostler, appeared for the Crown; Mr. C. P. Skerrett, K.C., with Mr. C. H. Treadwell and Mr. J. Tripo, appeared for the Merchants' Association; and Mr. M. Myers, with Mr. T. Neave, appeared forLevin and Co.

There were two matters before the Court—a summons ' for further discovery, and a motion for production of 1111 mi to-book and letters referred to in ,11 r. Ostler's affidavit, and of tho whole of tho loiters alreadv produced and part sealed up. It' had been agreed that tho matters should be taken together.

Tho hearing commenced on Saturday morning, when Sir John Findlay, Mr. Skerrett, and Mr. Treadwell delivered their addresses.

The Important Section 15. Mr. Myers pointed out that his clients (Levin and Co.) were not conwrncd with the question of production of letters, etc., but they were concerned with tho general interpretation of Section 15 of the Commercial Trusts Act, 1910. They might bo affected by that at any time, and counsel proposed saying a feu- words with regard to tho view which they submitted. Itcferrmg to Sir John Findlay's contention (put forward on Saturday) that Section 15 gavo th© Court power to order tho production asked for in the motion, Mr. Myers submitted that, if the Legislature had intended to make such a drastic provision, it would have done so in plain language. Tho reference to» interrogatory and discovery in Section 15 was, he contended, only applicable to a party to the action. A party, not party to tho action, could not be interrogated until tho trial. There was no machinery to do it. Generally speaking ho (counsel) supported tho view which had been put forward on Saturday bv Mr. Skerrett. With regard to tho discovery asked for in the case of Levin and Company's letters, ho (Mr. Myers) proposed to make a few observations, which would showtile other side the futility of «nforcing this discovory. Tho letters in question were from Mr. Mowbray, but Lovin and Company know nothing of them. It was true that Mr. Mowbray happened to be a director of Levin and Company, but tho company could not be held responsible for all that its directors did. Tho Crown already lmd tJio letters irorn tho other side, and it was nothing less than oppression to attempt to enforce further discovery. As a matter of fact thera was no Tea yon why these particular letters 6hould , not have been produced when tho others were, but they wero not in tho company's possession.. In tho .course of his reply, Sir ,lolm Findlay (in referring to tho other side's general proposition that the proceedings wero oppressive)'pointed out that such proceedings were not unusual. Similar proceedings had been taken in Australia, while in our own Arbitration Act there was provision for even more drastic procedure.

Tlio Chicf_ Justice said that there wag an analogy in tho Bankruptcy Act which gave tho Official Assignee power to summon any person, before him for examination. The Crown's View of the Section. Sir John Findlay added that there were also illustrations in tho Magistrate's Court practice. When., Mr. Skorrett. spoko (on Saturday) of the Spanish Inquisition and gave way to a little rhetorical fervour not; usual in him, ho apparently forgot that, years ago, wo 'had placed upon our books a much moro drastic statute, than, tho one which he then referred to. Counsel went on to say that in tho present class of eases what tho Crown had to do jvas to' provo a conspiracy against tho public interest and the Legislature, in framing tho_ Act, had recognised that, unless tho widost reach was given to the arm of tho Court to got information from the other side, it would be impossible to get proof of any- monopoly. And unless such a wide interpretation was given, tho Act would be reduced to a useless pieea of legislation. Everything that would throw any light upon the case was, ho thought, prima facie subject to inspection. In conclusion, Sir John Findlay remarked that', while tho rights of merchants to keep their Iwoks confidential were to bo respected, there were greater rights—the rights of tho public at large—which had to bo protected against monopolistic enterprise. His Honour reserved decision.