SECRET COMMISSIONS ACT.

Otago Daily Times, Issue 21264, 19 February 1931, Page 6

SECRET COMMISSIONS ACT.

AUCTION COMPANY CHARGED. STRONG COMMENT BY JUDGE. (Per United Press Association.) WELLINGTON, February 18. The system of buying-in fruit for sale in country districts, which forms the crux of the prosecution of Laery and Co., was further discussed in the Supreme Court to-day, when several passages occurred between the Chief Justice (Mr Justice Myers) and Mr Harold Johnston. The firm is charged on five counts with failing to disclose a pecuniary interest in a contract concerning asale of bananas on behalf of the Ex ternal Affairs Department, and on one count with rendering false account sales. “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,” said his Honor during the course of Mr Johnston’s argument.

Later his Honor said he was not unimpressed by Mr Johnston’s arguments, but he was satisfied the course for him to adopt was to allow the hearing of the charge to continue. Mr J. F. B. Stevenson, who is appearing with Mr Johnston for the defence, outlined the defendant’s case, saying that the practice of buying-in had been in operation for upwards of 40 years. 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 that was well known to growers and others, and there was no intention to deceive.

Alfred Alexander Phelps, director of the company, described the practice of buying-in. A country manager attended sales and bought the fruit he might require. Sometimes he arranged to purchase, and the lines bought were charged at the highest auction price.

His Honor: It is one of the most improper and irregular things done. It is a practice which is contrary to the law of equity, and contrary to every principle of commercial dealings. I want to make it quite plain that these observations do not affect what I consider to be the real question in this case. They do affect the setting up of this most reprehensible and obnoxious custom. To witness: Do you say even now that you cannot see the impropriety of such a practice ?

Witness; I do not see that we have defrauded the Government of anything. His Honor: I did not ask you that. Witness: It has been helpful to the business. It was absolutely necessary to follow such a practice. Further evidence as to the openness of the practice and its general observance among auctioneers was given. The hearing was adjourned until the morning.