MILLERS’ AGREEMENT

New Zealand Times, Volume LII, Issue 12251, 24 September 1925, Page 8

MILLERS’ AGREEMENT

CONTRARY TO PUBLIC INTEREST APPEAL COURT’S DECISION COMPANIES FINED £SOO The Court of Appeal yesterday delivered its reserved judgment in the case of His Majesty the King v. The Crown Milling Co. and others. The judgment of the court, by a three-fifth's majority, was in favour of the appellants, thus reversing the decision of Mr Justice Sim in favour of the companies. THE CHARGE (Judgment of Chief Justice.) In the course of his judgment, Sir Robert Stout said that the most important section of the Commercial Trusts- Act, 1910, on .which the main charge in the present case was based, was section 5, which was as follows :

“Any person who conspires with any other person to monopolise wholly or partially the demand or supply in New Zealand or any part thereof of any goods, or to control wholly or. partially the demand or supply or price in New Zealand or any part thereof of any goods, is guilty of an offence if 6uch monopoly or control is of such a nature as to be contrary to the public interest.” ''The facts proved,” said His Honour, “show that the parties charged did conspire to monopolise the demand or supply in New Zealand of certain gqnas mentioned in the schedule, namely, articles of food for human consumption. The contest was whether the monopoly or control was of such a nature as to be contrary to the public interest.” His Houour dealt at length with the agreement between a company called Distributors Ltd., incorporated in 1922, and the millowners, which, inter alia, provided that the company should act as the millowners' sole agent for the sale of flour, and that the company in consideration thereof agreed to extend to the millowners the advantages it- possessed in the marketing and distribution of flour.

EFFECT OF THE MONOPOLY After reviewing different clauses in the agreement His Honour said: “These are some of the sections in the agreement which show that Distributors Ltd. fixed the amount of flour that each millowner is to produce, and also fixes the price. The question then is whether it is a monopoly, and whether it is monopoly that is of such a nature as to be contrary to the public interest. Is it contrary to the public interest to limit the output of flour Is it contrary to the public interest to declare that if the output of a mill exceeds a certain quantity that quantity must be exported and not sold in New Zealand? Is it of a nature that is contrary to the public interest to fix or control the price of this important article of food? “ . . . It cannot in my opinion, be said that this contract was not of. a nature to be contrary to the public interest. First, the Distributors Company had the power of fixing the price; : second, it had the power of fixing the amount of production, and where the production was to take place at different parts of the Dominion, and it had the power of declaring that flour produced in New Zealand must be exported. It was therefore, a contract of such a nature as to be, contrary to the publio interest AN OFFENCE COMMITTED ’’During the. whole of the. argument and also in the court below it seems to have' been assumed that it rests pn the Crown to show that there .has been an actual detriment to the public by the agreement. In' my opinion, that is not the law. What has to be determined, as I have had to repeat several times, is, is the monopoly or control of such a nature as to be . contrary to the public interest » | ' - "I am therefore of opinion that, the judgment delivered m the oourt below should be reversed, and that the case be remitted to the Supreme Court with a direction that an offence against seotion 5 of the Act has been committed by every one of the respondents, snd j udgment bo entered against each and every of the respondents for a penalty of £SOO, and an injunction be granted against the respondents in terms of paragraphs (b; anu (o) of the statement of claim." Mr Justice MacGregor and Mr Justice Reed concurred; Mr Justice Hardman and Mr Justice Alpers. upheld the decision of Mr Justice Sim. Provisional leave for appeal to the Privy Council was granted, while further argument in connection with the appeal is to be heard on September 29th. The Attorney-General (Sir Francis Bell), the Solicitor-General (Mr A Pair. K.C.), and Mr F. B. Adams appeared for the appellant, while Messrs C. P. Sker. rett. K.C.. and M. Myers, K.C., with them Mr W. E. Leicester, represented the respondents.