Business Venture That Failed

Manawatu Times, Volume 63, Issue 39, 16 February 1938, Page 9

Business Venture That Failed

MANAGRESS PRESENTS CLAIM FOR ADDITIONAL WAGES. A claim for balance of wages, allegedly due and amounting to £4l 16s Id, was heard in the Palmerston North Magistrate’s Court yesterday by Mr J. L. Stout, S.M. Plaintiff was Miss Rosetta Z. Duckworth, of Palmerston North (Mr J. A. Grant) and defendant Arthur Hopwood, hardware merchant, of Palmerston North (Mr L. Lawrenson). In her statement of claim plaintiff said that on February 27, 1936, defendant engaged her to manage a silk and mantle store in Coleman Place, Palmerston North, previously carried on by Hopwood under the style of Nick oil’s Bargain Store. Hopwood undertook to finance the business to the extent of £BOO and agreed to pay her half of the net profits. She managed the shop from February 27, 1930, to March 20, 1937, and during such period was paid on account of wages and salary £2 a week. After February 28, 1937, but prior to her leaving his employ, Hopwood submitted a balance-sheet and profit and loss account for the year ended February 27, 1937, which showed a nett profit of £42 2s Id. Then on April 28, 1937 defendant submitted an amended balance-sheet showings a nett loss of £270 19s 2d while she claimed was entirely incorrect. Tho minimum wage payable for a managress of a silk and mantle store was £2 7s 3d per week until Juno 30, 1936 and £2 12s Od per week thereafter, making a total of £142 19s 3d. The amount paid her was £lll 2s 9d, leaving a balance of £3l His Od. Plaintiff submitted that in the profit and loss account prepared by der fendaut showing a profit of £42 2s Id, Hopwood had wrongly debited the accounts with £4l 10s Id for depreciation on fittings and for interest and had accordingly reduced the nett profits from £B3 12s 2d of which amount she was entitled to half. After she had left defendant’s employ she set up a business of her own account and asked him to discontinue the use of her name in connection with the Coleman Place shop but lie had continued to use it thereby causing loss and damage to her own business.

In addition to the wages claim of £4l 16s Id, plaintiff asked for £lO as damages for the wrongful use of her name but his Worship said this was a matter for an injunction before the {Supreme Court.

Plaintiff gave evidence along the lines of her statement of claim, adding that there was no suggestion that it was to be a liquidation sale. Who was under the impression that she was to carry on more or less permanently. She was not allowed to buy fresh stock with the result that trade fell off. She had been engaged in business for 20 years.

To Mr Laurensou witness said she looked on Hopwood as her employer and not the business. She was the manageress and not a partner. Had she had a free hand she would have bought stock for the business. Donald G, Glendinning, secretaryaccountant, said no successful business in soft goods could be carried on without buying monthly. To carry on as a liquidation sale meant a loss as changing fashions had to be catered for. He had investigated the business in Coleman Place and deducted a loss of £3B on the year’s working but he had to approximate the value of the stock at the start.

His Worship: Do you think a man can dodge paying the award wage by promising half the profits in a concern that might be profitable or might not?

Witness: I think so. His Worship: Well I have my doubts about it. The defence was that the business was a joint venture, Hopwood being in the picture largely as guarantor. For Miss Duckworth to succeed, she must, show that defendant was her employer. His Worship: He engaged her. Mr Laurensou: But she went in with her eyes open and expecting a profit. His Worship said she was not entitled to contract herself out of award wages. He also directed attention to the fact that Hopwood had refused to let her buy new stock and the witness Glendinning had agreed with her that she had to do so to make tho business successful. In evidence defendant said first of all he offered Nicholls’ stock to Miss Duckworth but she had said she couldn’t finance it. He then offered to act as guarantor for £BOO and go fiftyfifty in the profits. He was also to find the shop and Miss Duckworth was to be manageress. .She and her brother went over the sloes: and told him they were perfectly satisfied with it. After six months he told them the business was doing no good and they had better close it down. However, plaintiff’s brother had pleaded to allow them to carry on under a promise of a profit. At the end of the second six months, the position was much worse. A trial balance without allowing for depreciation, showed a slight profit of £42 but with depreciation deducted, there was a loss of £270. Plaintiff’s brother made an offer of 6s Sd in the £ for the stock but a sale was held instead for a few weeks and the balance of the stock disposed of at 7s 6d in the £. He never considered himself personally liable to plaintiff for her wages. Never had he prevented her from buying. Miss Duckworth had had a free hand. At the end of tho first six months when he suggested closing down, plaintiff’s brother had said there was plenty of stock to carry on without buying. Mr Grant: Did you ask Miss Duckworth before you sold the stock at 7s 6d in the £? Witness: No.

Counsel: Exactly, because the stock was your own. Did you account to Miss Duckworth for the realisation of the stock? Witness admitted that he had not done so.

Counsel: Would you expect Miss Duckworth to work for you at less than award wages? Witness: Wages were never mentioned. From the way she talked she was going to mako handsome profits. They were getting a great opportunity. His Worship: By taking over a business that had been losing money for years ? To Mr Laurenson: Miss Duckworth

had not been compelled to go into the business. He always looked on the business as a partnership. His Worship reserved his decision.