CRUX OF THE CASE

Evening Post, Volume CXI, Issue 42, 19 February 1931, Page 13

CRUX OF THE CASE

COMPANY'S MANDATE

AUCTIONEERING PRACTICE

LAERY CASE CLOSING

The issues in the Laery and Company, Ltd., case at present being heard in the Supreme Court were clarified somewhat this morning when his Honour, the Chief Justico (Sir Michael Myers) made a statement in which he said that the question of the custom of buying in and selling at a higher price, which had been the subject of adverse comment by him, was a question for the Court, not for the jury, and that tho real crux of the case was the terms of tho mandate Laery and Company had received. The company is charged on five counts with failing to disclose a pecuniary interest in a contract, and on one count with rendering a false sales account. The Crown Prosecutor (Mr. P. S. K. Macassey) appears for the Crown, and Mr. H. P. Johnston, K.C., with him Mr. J. F. B. Stevenson, for the defendant company. A special jury was sworn in for the trial. Evidence along the lines of that he gave in the Lower Court was given yesterday afternoon by Francis Brown, a director of the defendant company. When the Court resumed this morning Mr. Macassey objected to Mr. Johnston calling evidence as to the custom of buying in. "Even if that system is shown to exist it is clearly illegal," he said. His Honour: "I have no doubt myself as to what the legal position is, and I have expressed my. views more than once." His Honour went on to say that what he had objected to in his comments was the system of an auctioneer crediting tho consignor with the highest auction price, and then charging the purchaser an increased price, including a profit to' the auctioneer himself, apart from 'the commission charged to the consignor; in other words, the trafficking by an agent in goods entrusted to him by a principal for sale. He did not intend to put to tho jury in this case the question of this custom, because whether or not it was an honest' or reasonable practice was a question for the Court, not for the jury. It was difficult to see how, even if the practice was proved, it could be held to be honest and reasonable. It probably could. not be proved because even in Wellington, according to one witness, only two out of the six auctioneering firms adopted the system. He had no doubt that it was impossible for the Court to hold that a practice, which he had already pointed out was contrary to law, contrary to equity, and contrary to the first principles underlying the duty of an agent, was honest and reasonable. The case, however, did not depend on that point at all. The real crux of tho case was, and this was what he was going to put to the jury, what were the terms of the mandate Laery and Company received? Smith, of the External Affairs Department, said one thing, and Phelps and Brown said another. If what the latter pair said was correct, then Smith, when making arrangements with Laery and Company, knew, not of the custom as a custom, but what was Laery and Company's practice; and if what they said was correct, then Laery and Company were entitled to an acquittal. "I do not see how it is possible for the Court, even assuming the custom is proved, to hold that it is honest or reasonable," concluded his Honour. Mr. Johnston: "I think it would be useless for me to call all the witnesses. . . I have no doubt at_ all that your Honour will direct the jury that such remarks as your Honour has made about the custom are not meant to prejudice the case." His Honour: "Mr. Johnston, of course not. The observations I have made are referable only to the defence of the custom as a custom." There was nothing wrong or illegal in an auctioneer coming to an agreement with his principal to sell goods subject to buying in, but his ruling concerned the other practice as a practice. After calling the evidence of growers of fruit from tho Hutt Valley district, Mr. Johnston closed his case for the defence and proceeded to address the jury. Tho case, he said, raised questions of legal interest and questions of some importance to the jury. A Government Department, it appeared, had gone into the business of marketing produce without due care and without any idea of the conditions governing tho markets, and before sending a large amount of produce on to the market had failed to find out the terms and conditions of that market. Mr. Johnston was still addressing the jury when the Court adjourned until this afternoon.