CLAIM FOR DAMAGES

Manawatu Standard, Volume XLV, Issue 128, 4 May 1925, Page 5

CLAIM FOR DAMAGES

RESERVED JUDGMENT DELIVERED. PLAINTIFF NON-SUIT] DD. Mr Stout delivered reserved judgment at the Court in the case in which the Makowhai Co-op. Daily Co., Ltd., olaimed from Stanley Quinlan, dairy farmer, the sum or £UU Os 7d as damages for an alleged breach by the defendant of an obligation imposed by the articles of association ot the company to supply milk from his farm to the company's factory. The article in question, number 16, said Ihe Magistrate, imposed an obligation, but uo penalty was imposed for a broach, except the right to call up the balance of shore capital if a shareholder ceased supplying tor a period of six months, and, if he transferred his milk elsewhere within a radius of fire miles from the factory, a further right to fox--feit his shares. Neither of these rights, assuming that they could be enforced, bad so tar been exercised in this case. Article 16 was apart from tha validation in the Dairy Industry Ait, 1924, invalid as being ultra vires. The validation contained iu the said Act was limited to a validation of the articles and of any penalty imposed for' its breach for a period of six months from tho passing of the Act. The Act, however, gave no right to any action for damages ,apart from any such penalty. An action for damages, then, could only arise if the parties had- entered into a collateral contract incoiporatjng the provisions of the said article. In this case there was no evidence that the defendant did more than males an application for shares which wore duly allotted to him, These shares, it was time, carried with them the obligation imposed by article 16 to supply milk to the factoi-y, but the mere application for shares without more was, in his opinion, insufficient evidence of the entering into of a contract, express or implied, to supply milk to the company. Further, an actual supply of jpilk could not carry the master any further, as that wap an obligation imposed on the holders of the asares by regulation. The Dairy Industry Amendment Act, J 924, did not purport to validate any. collateral contracts; the validating of these when entered into had to be judgec. according to the general principles of the law relating to contx-acts. As he was of the opinion that there was no collateral contract, express or implied, in the present case, it was unnecessary for him to consider whether if tho provisions of article 16 had been ncorporated in such a contract, that contract would hjive been valid. As the plaintiff had, in his opinion, failed to prove any right to the damages claimed, it had to be non-suited, with coats according to scale. At the hearing Mr Grant appeared for the company and Mr Coaper for defendant.