JUDGE TO RULE

Evening Post, Volume CXI, Issue 41, 18 February 1931, Page 10

JUDGE TO RULE

EVIDENCE OF CUSTOM

FRUIT MARKETING CASE

BUYINO-IN ISSUE

A system of buying-in which is alleged to have been practised by the firm is looming large!}1 in the- hearing of the charges against Laery and Company, Ltd., in tho Supreme Court at present, and counsel for tho defence, Mr. IT. F. Johnston, K.C., and his Honour the Chief Justice (Sir Michael Myers) have had several passages over tho question. Tho firm is charged on live counts with, failing to disclose a pecuniary interest in a contract, and on one count with rendering a false sales account. A special jury is hearing tho case. Mr. J. F. B. Stevenson is appearing with Mr. Johnston for tho defence. The. question of custom again arose yesterday afternoon. "You are trying," said his Ilonour to Mr. Johnston, "to set up a -certain custom or practice, and I will have to rulo whether the practice is an honest or a reasonable one. If I hold that tho practice is an honest and a reasonable one, you will be entitled to succeed. If 1 hold tho alleged practice is not reasonable, or honest, then it cannot operate as a defo'.icc, and the question will then be —subject to any consideration of the statute —what was the mandate Laery and Company, Ltd., received"!" Mr. Johnston: "It is difficult to fight against a presumptive condemnation." His Honour: "I'm making no presumptive condemnation. . . . If . understand the custom is what it appears to bo according to the documents before me, then I will tell you yo-i will have great difficulty in persuading mo that it is reasonable and honest Would you submit that a practice which has been allowed to rise through, perhaps—l do not say so definitely in this case fit present —a combination among certain mercantile r.ion or traders in a particular trade when it is contrary to nil principles of law and equity is to bo regarded as reasonable and honest? Do you go that far!" Mr. Johnston: "I go that far." His Honour: "Well, I hope the day will, never come when counsel will find a Court to rule that." Tho evidence of Audit Inspector J. Sc-ott concluded the ease for the Crown, and Mr. Johnston submitted that there was no evidence of any offence to go to tho jury. lie held that there was uo evidence of any contract, nor was it even alleged by tho witnesses for the Crown that there was any such contract. If it were held that there was a contract, then counsel submitted that the pecuniary interest complained of was outside the contract. Mr. Johnston had not concluded his argument when the Court adjourned until this morning. TO-DAY'S PROCEEDINGS. Continuing his argument when the Court resumed this morning, Mr. Johnston dealt at length with the charge of rendering a false sales account, contending that there had boon no offence committed under section 7 of the Act. His Honour: "You certainly haven't persuaded mo, and nothing you can say to me will -persuade me that an account sale such as this is not a false or untrue document." After Mr. Macassey had replied, his Honour said: "I'm not unimpressed by Mr. Johnston's arguments, particularly in regard to the charges under section 5. There is a. good deal of force in his contentions, but I'm satisfied that the course for me to adopt is for tho hearing to continue, and I reserve for further consideration tho other questions raised by Mr. Johnston. It is not advisable to say more at the moment." His Honour also intimated that lie proposed to allow counsel a certain amount of latitude in calling evidence as to custom. DEFENCE OUTLINED. Mr. Stevenson then opened the case for the defence. There were two classes of offences alleged against Laery and Company, he said, and the defence and the evidence would be as far as the five charges under section 5 were concerned that the contracts were not made on behalf of the Crown, but, in accordance with a practice which had been in operation for upwards of forty years, had been made on behalf of Laery and Company, and any loss or profit was borne by the company. Dealing with tho charge under section 7, counsel said that tho account sales were the ordinary account sales which had been sent out over a period of years in accordance with the firm's custom. It was a custom well known to growers and others, and there was no intention to deceive. The witness Smith, from the External Affairs Department, had said in evidence that what he had expected to get for the bananas was auction price, and counsel's only comment was that he had got auction price and lop auction price. Evidence of a number of growers from the Tfutt Valley and Nelson districts would bo called, and these growers would say that they had always known of the custom of buying lain La cry and Company's and other Wellington markets. They would go further than that, and say they approved of the practice as it prevented a glut in the market, and because they were not prepared to take the risks of bad debts on country/ order business. Fruit brokers from Wellington, Auckland, Christchurch, and Dunedin would be called to say that the practice of buying in was well known in their cities. A MATTER OF CUSTOM. His Honour: "Are you calling any evidence of the growers of bananas?" Mr. Stevenson: "No, sir." His Honour: "Then what is tho use of calling all this evidence as to custom?" Mr. Stevenson: "Of course, it is impossible to call tho evidence of the actual growers." His Honour: "Then I think nothing of the so-called custom or practice." Mr. Stevenson: "We are dealing with people here who should have known it." His Honour: "Why should they know it?" His Honour added that the point did not matter just then, but he wanted to draw attention to it. Mr. Stevenson said that all the defence wanted to do was to show tho general system. The first witness called was Alfred Alexander Plielps, a director of the defendant company. Describing the firm's system of buying-iu, tho witness said that the manager of the country order department attended sales in the market and bought any fruit ho might require, or ho might also buy iv fruit for which he had no orders, with the object of assisting tho market. The ■fruit bought in in such a way would be sold afterwards, Laery and Company having to chance the price. Besides actually bidding at auctions, the manager of tho country order department sometimes arranged to buy from the company's auctioneer any lines lie might require, and this was charged to him at the highest auction price. ( His Honour: "And I suppose these good 3 are not put up for sale?" The witness said that in these cases tho goods were not put into the sale. Any buyer or retail fruiterer in Wellington was granted tho same privilege, and it was customary to soil to Wellington fruiterers and allow them to fake goods out of the salo on the arrangement that they wore to be charged auction rates. (Proceoding.)