"BUYING IN"

Evening Post, Volume CXI, Issue 40, 17 February 1931, Page 10

"BUYING IN"

AUCTIONEERING CASE

PRACTICE OF FORTY YEARS

SAMOAN BANANAS

The trial, winch is expected to last for several days, of Laery and Company, Ltd., on charges laid under tho Secret Commissions Act, was continued in the Supreme Court yesterday afternoon and to-day, before his Honour the Chief Justice (Sir Michael Myers) and a special jury of twelve. The company is charged on five counts with failing to disclose- to their principals a pecuniary interest in a contract, and on one count with rendering a false sales account. The charges arise out of tho firm's dealing in Samoau bananas, a portion of a shipment of which was sent to the defendant company to auction by the External Affairs Department acting on behalf of the New Zealand Government in July, 1929.

The Crown Prosecutor (Mr. P. S. K. Maeassey) appears for the Crown. Mr. H. F. Johnston, E.G., and with him Mr. J. F. B. Stevenson, for the defendant company. Referring yesterday to the firm's custom of buying in bananas, Mr. Johnston* said that the price was established by genuine auction, and then if any. fruit was sent to the firm's country customers they were charged the top auction

price. His Honour: "You purport to buy for yourselves gooas that were entrusted to you for sale." Mr. Johnston: "This method of dealing with the fruit is forced upon us by the conditions which govern the market."

His Honour: "All I can say is that such a practice is calculated to lead to fraud, ana is calculated to be subversive of commercial morality."

Mr. Johnston said he could not formulate the custom or practice which the firm had followed, and which he would seek to show was universal, but when the evidence of the custom was heard, he submitted, his Honour must hold it was a reasonable and honest Qne. His Honour: "I can only repeat, the custom is not an honest or reasonable one."

Mr. Johnston: "It is peculiar to my mind, if I may say so, that your Honour should so rapidly criticise a practice which has been carried on for 40 years in New Zealand. . . . All I ask is for your Honour to have an open mind." His Honour: "Certainly, Mr. Johnston, certainly. You have that." _ Evidence along the lines of that given at the preliminary hearing in the Magistrate's Court was given yesterday by Detective-Sergeant T. Holmes and Stephen John Smith, an officer in the External Affairs Department and secretary of the Cook Islands Administration, who, at the time, was in charge of_ the arrangements for marketing the frUl*When being cross-examined by Mr. Johnston as to his experience with the fruit markets, the witness Smith was asked if he was familiar with the wellknow a figures of the markets. The witness: "Well known figures? . Mr. Johnston: "Yes, 'knights of the hammer,' I thj^k they call them. The witness (drily): "Well I know them a good bit better now than 1 did a few years ago." (Laughter.) In answer to further questions from Mr. Johnston, the witness said he had never made any complaints to Laery ana Company or .anybody about the firm's dealings in the fruit. Mr. Johnston: "Did you. know the custom of buying in existed in Wellington?" • The witness: "I did not. . His Honour: "And re-selling on thenown account." Mr. Johnston: "Quite so. Witness said that he had had his suspicions, but dia not know definitely that such was the practice. # Mr Johnston had not finished his cross-examination of this witness when the Court adjourned until this morning. TO-DAY'S EVIDENCE. When the Court Tesumed this mornin" the witness Smith was further cross-examined by Mr. Johnston as to his Department's arrangements witn other firms, in Auckland, Christchuren, and Dunedin. The witness said that in Dunedin the Department had sold direct to some wholesalers who had a number of retail shops. . His Honour: "I can see sound business methods which can lie devised without taking all these nsks-without &\^. Johnston: "Yes, methods can be devised—with the same result. His Honour: "Oh! No.' In answer to his Honour, witness said that the bananas were sent to Laery and Company for sale by public sales sent to his Department were debited with freight and other charges. His Honour: "Do they account for total number of cases, consigned to the firm for sale?" Witness: "Yes." His Honour: "Are they as tar as you know in the ordinary form in which an auctioneer presents his accounts? Witness: "I believe .they are. Charles Mitchell, a fruiterer, of Blenheim, said that he had bought some bananas from Laery and Company, payin" 15s 6d a case and paying all freight charges. He did not know how the price was fixed. To Mr Johnston, witness said lie was still dealing with Laery and Company. PAID 6s A CASE MOKE. Kcnnaia Wallace Thomas, a fruiterer, of Hawera, gave similar evidence. His Honour: "Is there any reason that you know of why, because you are in the country, you should pay Jss more for your bananas than the city retailer?" Witness: "No." His Honour: "Did you know you were being charged 5s more? Witness: "I did not." Mr. Johnston: "You would expect to pay more if the fruit is repacked?' Witness: "Yes, but it is usually stated if the fruit is repacked or not. Mr. Johnston: "And you would expect to pay cartage and handling charges at this end?" Witness: "Yes." Similar evidence was given by a number of other clients of the defendant firm. . (Proceeding.)