TRUST ALLEGED.

New Zealand Times, Volume XXXVI, Issue 8192, 6 August 1912, Page 1

TRUST ALLEGED.

SUGAR COMPANY CASE. THE PRODUCTION OF DOCUMENTS ORDERED. SUPREME COURT JUDGMENT. Judgment was given by his Honor Sir Robert Stout, Chief Justice, yesterday, in the case of the Crown versus the Merchants' Association of New Zealand. In February last information was laid against the Colonial Sugar Refining Company charging it with a breach of the New Zealand Commercial Trusts Act in that it had given preferential terms to a group of merchants and that a table of discounts was in existence under which only purchasers of unusually large quantities of sugar could obtain benefit. Tho Merchants’ Association of New Zealand was joined with the Sugar Company os defendant. In the association there are over fifty members, but as a test of the individual position of these mam. bens tho Crown selected of their number leading Wellington wholesalers Levin and Co., W. M. Bannatyn© and Co., and Joseph Nathan and Co. —for prosecution. MOTION AND SUMMONS.

A motion, and a summons in this action were heard together in .Banco. The motion asked for tho production of all documents discovered in an affidavit made by Mr H. A. Gold, on behalf of the Merchants’ Association of New Zealand (incorporated), but not produced for inspection, including, (1) minute books of the association; (2) copy of letter from J. U. Cock and Co. to tho Merchants’ Association of New Zealand, dated January 3rd, 1911; (3) all letters produced, parts of which have been covered up, with respect to the parts so covered up. The summons asked for tho following: - "Why an order should not be made that tho said defendants do within four days from the service of such order file respectively further and better affidavits fully and sufficiently stating what documents are or have at any time been in the possession or power of each of the said defendants respectively relating _to tho matters in question in this action.” GROUNDS OF REFUSAL,.

The grounds of refusal, as stated in tho affidavit, . were that the documents not produced or sealed up were irrelevant to tho causes of action as they related to >ther classes of goods than sugar. Thoro was also a statement that tho minute book was a copy of the minutes of the meetings of the Wellington Merchants' Association, and was not in the possession of the defendants, tho Merchants’ Association. In the statement of claim, sp far as the Merchants’ Association was concerned, there -was first a charge of aiding, abetting, counselling and procuring the , Colonial. Sugar Company to commit, offences under the Commer-. cial Trusts Act, 1910.: There were six offences’ charged against the Colonial Sugar Refining Co., which the Merchants’ Association was charged with having aided, abetted, counselled and procured. (1) Adopting a scale of discounts and fixing of prices to create a monopoly in sugar, for tb© members of the Mer-' chants’ Asssociation and to exclude all those who aro not members from the purchase of sugar at the price at whiph sugar is sold to members of the association.

(2) Giving Levin and Co., Ltd., a discount which was not given to other buyers. (3) Giving the same to W. M. Banna/ tyne and Co. (4) Giving the same to J. Nathan and Co.

(5) Refusing 'to supply Messrs Fairbairn. Wright and Co. with sugar on tho conditions on which it was supplied to members of the Merchants’ Association of New Zealand.

(61 Refusing to supply Messrs Dillicar Brothers, in the same way as Messrs Fairbairn, Wright and'-Co. had been refused.

There were other offences charged. Paragraph 36 charged aiding and abetting, counselling and procuring Levin and Co. to commit a similar-offence to that charged against the Sugar Company, and in paragraph 37 the charge was that all of the defendants unlawfully and in breach of' section 5 of the Commercial Trusts Act, 1910, conspired together to monopolise the supply of sugar and to- control the price thereof, such monopoly and control being of a nature contrary to the public interest. . THREE POINTS. • There seemed to his Honor three questions requiring consideration:—(l) Must production be refused if -the documents aro not admissible evidence? (2) What is the effect of section 15 of the Commercial Trusts Act, 1910, which reads as follows; "(1) In any action for the recovery of a penalty or for an injunction under this Act, the Supreme Court may, in proof of any fact in issue, admit and accept as sufficient such evidence as it thinks fit, whether such evidence is legally admissible in other proceedings or not. ,

"(2) In any action for the recovery of a penalty or for an injunction under this Act no person, whether a party to the action or not, shall be excused from answering any question put to him by interrogatory or otherwise, or from producing or making discovery of any document, on the ground that the answer to the question or the production or discovery of tho document would tend to criminate him in respect of any offence against this Act.” (3) Does Mr Geld'* affidavit prevent the order being issued? ”If section 15 of the statute was not law, tho fact that documents asked >to be produced may not bo evidence is not sufficient to prevent its production' being ordered,” said his Honor. "It is enough if it may throw light on tho matter in dispute. Phipson, in his work on Evidence, states very clearly tho difference between what may be called logical relevancy and legal relevancy. It is a fact that courts exclude facts that might tend to show guilt. Prior conduct may be a relevant fact as to the truthfulness of a witness or the guilt of an accused, but it is only in a few criminal charges that such evidence is admissible. That the admissibility of the evidence is not a test in ordering production has been decided in many cases.\ RULES OP EVIDENCE.

"... If, however, the court is bound by the strict rules of evidence, the mere fact that Mr Gold said he had been advised that the parts sealed up were not relevant would not conclude the matter. The court is not. however, bound by the strict rules of evidence. How far the court may go in setting such rules aside is no doubt left to the judge at the trial (section 15), but in dealing with this application I nra bound to assume that the trial judge may set the

rules 1 aside. The law says Wjrcanf How, then, is the : court at prewat able 'to say those documents' will hot be relevant? it was urged that ■ subsection (1; of section 15 is limited to the trjal ana that previous to the trial the power, of' tho court is limited to the admission oi evidence ordinarily'admitted. '.T doubt, if the. subsection can bo so construed. r Any fact in’ issue' does not necessarily mean ‘fact in issue, at the trial/ ■li there should arise facts in issue in the action at any time the court has a discretion- to admit such evidence as it thinks fit. ; -It is not, in my opinion, however, necessary to go so far. * if evidence that would at piesent," according to the strict rules of law, be considered irrelevant be admitted at the trial, how can the court say that any evidence is irrelevant? All the court should do is to see that a defendant is not asked to do anything that would be oppressive. I see nothing oppressive in that in this case is asked in tho motion. UNIQUE LEGISLATION.

• “It was argued that this kind of leg islation is unique and sliouid be strictly construed, it can, however, haruiy. be called unique for in our bankiupic., net, in the' industrial Conciliation am. mbit ration Act, and in other nets then, aro analogous provisions. In our Customs law a mere inioimation hlecl againsi a merchant is sunicient to condemn Jinn unless ho can prove his innocence. No count it is the duty of the court to see that the liberty of the subject is not invaded unless the Legislature has made this invasion clear, but if it has, tno court must ooey the law. QUESTION OF CONTRADICTION. “The third ground urged was that il a person swears an amuavit declining iO produce documents nus auidavit cannot be contrauicicd. Tnat is so in certain cases. 'lucre arc certain grounds any of which is a good answer to a Claim ior production. Xnese grounds are (1/ ,egai pivucssional privilege; vis; tnat tne aocumouts proaucea may criiiiiuute rue party pioaucing tnem; va; tnat they may expose him to loneuure; (,-i) tnat me production would be contrary to public policy; to; tnat the documents are not in tne soio possession oi tne party maxing discovery; lb; chat tney are in tne possessiiou of tne party as agent only ior another; (7; that me documents relate solely to the case of tne paity making discovery. Mr Gold's alfauavit does not set up any of tnese grounds except as to the minutes of tne vv elliugtcn 1 Mercants’ Association. The cases creed by Mr Treadwell do 'not apply. They were cases setting up some of the grounds I have mentioned. None of them were cases turning on relevancy. To judge of relevancy, many things have to be considered and many, things may be referred to. PRODUCTION NECESSARY. “I am, therefore, of opinion that the production asked in the motion must be ordered, that is, the following All documents discovered in the affidavit made by H. A. Gold on behalf of the Merchants’ Association of New Zealand, Incorporated, but not produced for inspection, including (1) minute-book of association; (2) copy of letter J. H. Cock and Co., to Merchants’ Association ot New Zealand, dated January 3rd, 1911; (3) all letters produced, parts of which have been covered up, with respect to the parts so covered up. “Tno letters refused by Mr Gold on the ground of irrelevancy must be produced. As to the minutes of the Welling Merchants’ Association they do not seem to be in the possession of the defendants, nor in Mr Gold’s possession as an agent of the defendants, and they should not be to be produced.’’ Sir John Findlay, K.C., with him Mr H. H. Ostler, appeared for the Crown, Mr C. P. Skerrett, K.C., with him Mr C. H. Treadwell, for the Merchants’ Association, and Mr M. Myers, with him Mr T. Neave, for Levin and Co.