SALE OF FRUIT

Nelson Evening Mail, Volume LXIV, 19 February 1931, Page 10

SALE OF FRUIT

CHARGES AGAINST LAERY AND CO. BUYINGIN PRACTICE A system of buying-in which is alleged to have been practised by the firm is looming largely in the hearing of the charges against Laery and Company, Ltd., in the Supreme Court at Wellington at present, and counsel for the defence, Mr 11. F. Johnston, K.C., and His Honour the Chief Justice (Sir Michael Myers) have had several passages over- the question, reports “The Post.” The firm 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. A special jury is hearing the case. Mr J. F. B. Stevenson is appearing with Mr Johnston for the defence. The 1 question of custom again arose on Tuesday. “You are trying,” said his Honour to Mr Johnston, '“to set up a certain custom or practice, and I will have' to rule whether the practice is an honest or a reasonable one. J.f I hold that the practice is an honest and a reasonable one, you will be entitled to succeed. If I hold the alleged practice is not reasonable or honest, then it cannot operate as a defence, 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 I understand the custom is what it appears to be according to the documents before me, then I will tell you you will

have great difficulty in persuading mo that it is reasonable and hoiiest. . . . Would you submit that a practice which has been allowed to rise through, perhaps—l do not say so definitely in this case at present—-a combination among certain mercantile men or traders in a particular trade when it is contrary to all principles of law and equity is to be regarded as jeasonable and honest? Do you go that far?” Mr Johnston: ‘‘l go that far.”

His Honour: “Well, I hope the day will never come when counsel will find a Court to rule that.”

The evidence of Audit Inspector J. Scott concluded the case for the Crown, and Mr Johnston submitted that thei’O was no evidence of any offence to go to the jury. He held that there was no evidence of any contract, nor was it even alleged by the 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. Continuing his argument when the Court resumed yesterday morning, Mr Johnston dealt at length with the charge of rendering a false sales account, contending that there had been no offence committed under section 7 of the Act.

His Honour: "You certainly haven’t persuaded me, 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 Macasscy had replied, his .Honour said: ‘l’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 mo to adopt is for the hearing to continue, and I reserve for further consideration the' other questions

raised by Mr Johnston. It is not advisable to say more .at the moment.”

His Honour also intimated that he 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 chai’ges 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 the charge under section 7, counsel said that the 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 autcion price, and counsel’s only comment was that he had got auction price and top auction price. Evidence of a number of growers from the Hutt Valley and Nelson districts would be called, and these growers would say that they had always known of the custom of buying in in Laery 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.

His Honour: “Are you calling 1 an; 1 evidence of the growers of bananas?” 3 Mr Stevenson: “No, sir.” His Honour: “Then what is the use o i calling all this evidence as to custqm?’ Mr Stevenson: “Of course, it is im : possible to call.the evidence of the tic ; tual growers.” His Honour: “Then. I think nothing i of the so-called custom or practice.” Mr Stevenson: “We are dealing with 1 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 the general system. The first witness called was Alfred Alexander Phelps, a director of the defendant company. Describing the firm’s system of buying-in, thfc witness said that tho manager of the country order department attended sales in the market and bought any fruit he might require, or he might also buy in fruit for which lie had no orders, with the object of assisting the 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 the country order department sometimes arranged to buy from the company’s auctioneer any lines he might require, and this was charged to him at the highest auction price. His Honour: “And I suppose tlicso goods aro not put up for Sale?” The witness said that in these cases the goods were not put into the sale. Any buyer or retail fruiterer in Wellington was granted the same privilege, and it was customary to sell to Wellington fruiterers and allow them to take goods out of the sale on the arrangement, that they were-to he charged auction rates. (Proceeding.)