A FROZEN MEAT CASE.
BOUTHLAND FROZEN MEAT COMPANY v. NELSON BROS. The case of the Southland Frozen Meat and Produce Company (Limited) v. Nelson Bros. (Limited) was commenced at the Supreme Court yesterday before his Honor Mr Justice Williams and a special jury of 12. The plaintiff company claim £30,000 damages. S;r Robert Stout aud Mr W. Y. H. Hsll (of Invoicargill) appeared For the plaintiff company, and Mr H. D. Bell aad Mr Hoakiug for the defendant company. The speoial jurors are Charles H. Tucker (foreman), David Scoular, John C. Scelye, John Bl»keley, James M'Gill, James Batr, James A. Law, David Baxter, John Burb, Nathaniel Faterson, W. Wood, aud John Ctttle.' ! The following is, the concluding portion of Sir S. Stout's address and the evidence taken on the' first day of the case :— • The next thing apparently, is that Ward wants the Elginshire's machinery, and Reid writes to Nelson :—: — I enclose copy of letter just received from Ward, which is a rep'y to a letter I wrote him pointing out how the last concession made him had reoulted in his favour. I don't think we should give way any further unless you have any special reason for doinsj so. Id d not intend to give you any further trouble in this matter, but on second thou?ht3 decided to send in this letter. When do you propose coming south ? .... I wired you to-day asking if I should sell the two boilers lying here to Ward at first cost, giving him 12 months without interest, on the understanding if we join him thoy ko as part payment. Ward has Been them, and likes the look of them very much, though of course he only pofesses to view them with the eyes of a layman. The offer made is not a particularly good one, but there doesn't seem any chance of selling these boilers to better advantage, and if you are satisfied with Ward's proposal, we may as well be out of the interest on their cost one way as the other. Kindly let me know your views on this matter and oblige. In reference to that you will find, as the correspondence goes on, that Ward got the boilers, and they were not paid for up to the end of the contract. Then, after a letter from Reid to Nehon speaking about these boilers, there is a letter on the Ist December showing what Nelson thought of the profit of £2000. It is dated the Ist December 1892 :— Dear Jim,— Bnclosed report from our London store manager is a complete answer to your letter of November 2 enclosing copy of Ward's la«t, indicating conclusively that no 'further concessions can be mad<9, aud that those already made should not have been. The consignment as a whole has been rpost disastrous, and unless Ward means to ruin himself and his trade entirely, some whole- ■ sale alteration must be made. It does not surprise me that it should be so, aa Ward himself cannot possibly know how good a cheep should be. It has taken us years to learn our business, and I have felt certain all along that Ward was falling into the error indicated by our stor« report. Ah I have mentioned before, Ward is very proud of the number of cheep he has put through, but it has always seemed to me that he has acquired th> se sheep by givii.g more for them than they were woith. This class of business is better let .alone, hee Ward if can, and go through this matter with him, and show him this letter as expounding my views. So you will see, gentlerneD, the statement about £2000 ii simply ridiculous and absurd. It was a dead loss to Nclsod, and disastrous. The next letter from Ward to Nelson asks — Would you oblige, me by .getting one of your clerks to send me a list of all rates of wages that you pay to the men in ihe various departments at your wo/k9. It would bs of service to me as Tarn framing the rules and regulations to be put up in the woiks. I hops ie is not troubliug you too much, but I shall esteem it. With kind regards. Then the next is a letter from Ward, on December 31, to Reid :—: — ■If Mr Nelson still thinks seriously of entertaining the idea discussed between us of taking an interest in the Ocean Beach Freezing Works, I should be glad to have the matter further discussed and a definite point arrived at. I refer, of course, to the time when present contracts expire. I am still willing and desirous of giving a strong preference to Nelsqnn, but if there is any likelihood of our not agreeing I want to know as early as possible, as overtures have been made to me without solicitation on my part which I have not And do not intend (until I know finally whether wo are liloly to agree) to in any way encourage, But I am frank with you in saying that if we are not going to do anything it would then, in my opinion, be in my interest to entertain the proposal made to me. I want a reply as tarry as convenient, and I am p epired to meet you, and discuss the matter with you, ■with a view to ascertaining and fixing, if necesBary.a prospective arangement ; and, as this letter indicates, this is in confidence. Then, on 16th Januar> Reid writes to Ward : I have been from* home, or would have replied earlier to yours of the 31st December. I feel sure that Mr "Nelson ia still prepared to enteitain the idea of taking an interest in your works piovided everything is satisfactory ; but I fear if you still expect to get goodwill, there ii little chance of anything being done, for you will, I am sure, agree wi'h roe that the future of the trade, as far as New Zealand is concerned, does not look very bright at present. Thio ahows there must have been a private con* fereuce between Ward and Reid at which the paying of money for goodwill was mentioned. I think to bring the matter to a head it will be better for you to state fully what your views are on the subject, and I will communicate with Mr Nelson, or, if necess-aryj go up to Napier and talk' the matter over with him. You would require to take us into your confidence and state what works lave coat, storage capacity, fieez'.ng power, &c, Ac. ; I fetl sure you will find it to your advantage to work in with Messrs Nelson Bro3 , and trust some satisfactory en rangement will be arrived at, but whatever the result of the negotiations may he, you can rest assured that any information you may supply me with may be treated as strictly confidential. And so on. Then comes a letter from Mr Ward to Mr Reid, in which he says : I will place in your hands in writing fully what my views are. It will then be for Mr Nelson to consider. The day after I wrote the wire to you of 31st ult , the chairman and banker of the Southland Frozen Meat Company interviewed me, and suggested our working together. I heard all they had to say. They wanted me to amalgamate our respective works. I declined to entertain the idea of amalgamation, though I expressed my willirgoess to work with them on the basis of each of us doing half the business of Southland. They have interviewed me again, and I expect to hear something further from them this week. If they like to agree to a fair and equitable basis to work upon I am on, but it must be bona fide, or, as far as I am concerned, I will not agree to anything that means their having the thick end of tne stick. 2"ou will sea what Mr Reid thinks of that letter and what ha says of the general norkiDg of the Ocean Beach Company. On the 11th of J anuary t&v Reid s»ys this :
I think the time is now at hand for making a Satisfactory arrangement with Ward for taking over his works, provided you have any idea of doing so. When I last discussed the question ■with Ward he was "so strongly of the opinion that he should receive goodwill that 1 thought ft better not to push the matter further. Your letter tbat followed gave Ward clearly to understand that you had no intention of paying lum any goodwill. There the affair was allowed to rest until the 31st of last month, when I received a private note from Ward, twkiag if. you
were still prepared to consider the matter. I now enclose copies of the letters which have passed between us. and which will, I think, explain themselves. I think Ward has found out at last that he has not been making money, and that it would pay him better to take your advice and put through half the number of sheep. I doubt, however, if he will ever come t j an arrangement with Cuthbortson, for he (Ward) will want all the best of the bargain. I have several times suggested to Cuthbertaon that he should try and work with Ward, but he always said it was impossible. Now I fancy that the directors of the company find that they are short of capital, and they cannot afford to carry on bu-iness at a loes. It is just possible that the present is a most opportuua time for us to step in and get control of both works. As matters now stand we hold the key of the situation. If we refuse to purchase the output of either works after expiration of present contract neither Ward nor the Southland Froaeu Meat Company can carry on, for they have not the necessary capital to enable them to buy and ship on their own account. Of course there is the possibility of Dawes and Mai tin j having a cut in, for the Bluff would just suit their cargo steamers, but you will have a very good ide.i if there v any probability of opposition from that direction. To come to the point, if you wish to ioin Ward, and either lease the Southland Frozen Meat Company's work* or again purchase their output for a term of years. I feel confident that the present is a very good time to go <o work. You will observe that Ward mentions in his letter that ho has had an inquiry from London, but I doubt if there is much if anything in this unless, A3 I stared before, Dawos and Martin are trying to get behind U3. I talked the matter over with Dobson this morning, and he seems to think there may be something •in this. Should you wish, to write to London on the subject I would suggest that you do so as Boon as possible, for we could then act promptly should it be advisable to do co. Then Mr Reid writea on the same day to Mr Ward : I am glad to learn from yours of tlio Bth inst. that there is a prospect of your making a satisfactory arrangement with the directors of the Southland Frozen Meat Company. I seveial time 3 suggested to Mr Cuthbertson that he should di-cuss a proposal with jou which Wuiild prevent absurd price? being paid for sheep, but had almost given up hopes of anything being dune. I presume you will write roe before you definitely fix the matter and I will be pleased to give you every apsistance in my power. I will be glad if you will write me aa soon as possible fitiuag what you are prepared to offer Messrs Nelson UroE., for it will take a little time to discuss the matter with Mr William Nelson after your letter reaches me. Oa the 23rd of January there came a letter from Mr Nelson : Dear Jim, — I have been on my back for some weeks, bo have been unable to write you, and I am not now very fit. I still think we Bhall have no difficulty in co "ing to terms with Ward, and I like the idei of taking up the Southland Company as well. I suppose they would tako their money out in shares in Nehon Bros. (Limited), which would give them an assured dividend. Could j-ou sound them quietly on this point? I have received no propofiu from Ward ; please hurry him up with them. What proportion would he be prepared to take in shares? We must have the district interested in us, or I would not care to have anything to do with it, and the farmsra may be assured of fair treatment from us. as we could not afford to court opposition. I have wired Dobson to come up at once. And so on. < In any case prevent Ward or the Southland Company from doing anything with anybody else till we have had our show. The next letter is from Mr Reid at Duuedin to Mr Nelson : Ward has at last put in writing his offer in connection with the freezing wOks, and I now enclose copy of his letter. He as ures me that his reason for wanting to get the matter settled one way or the other is that he has had a cable from Weddel asking whether he is prepared to sell his works. You will probably know that there is likely to be nothing in this. Mr Ward has given me some private information which he has no objection to my passing on to you in sirict confidence. It is about the Southland Frozen Meat Company. He pays ho got it from one of the directors. The dirootors of the company have had to give a joint and several guarantee for £2000 each. Four of them guaranteed. One, Mr Carswell, has refused to do so. Mr Ward states that the directors were called upon cither to guarantee or resign. Carswell refused to do either. Ward also says that there is no doubt if we want to get the Southland Company's works, or make any arrangement with the company, we shall be able to do *o on a very early date, as there is sure to be trouble soon amongst the guarantors. I listened to all he had to say, but made no remaik. It seems to me that at the present we are in the position of being able to buy any of the woiks. The question is whether it is worth while buying one at all. If it is your wish that we should buy Ward out, possibly arrangements could be made to lease the other works for a term of yea-s by guaranteeing the shareholders a certain rate of interest covering the dividend and depreciation. As I have alieady mentioned, this information about the Southlind Company is simply what Ward has told me, but I am sure that they have not sufficient capital for their works to carry on decently. Then he goes on to refer to the output of the works and to oleomargarine. I need not go into that. Then (and this ia still ia January) Mr' Ward in his letter says that he ia prepared to sell the lot for half cash— say £14,000,— and the balance in fully paid-up shares in Nelson Bras. (Limilei), and all the terms are given, the whole of the management of the freez'mg works in future to be solely under the control of Nelson Brcs. The next is a letter from Mr Neleon to a Mr Nelson in London stating the terms of the offer, and reiterating the offer thai} has been made to you — namely, the offer that Mr Ward had made to Nelson. He says, "His proposals are much more reasonable than I ant ; c : pated, and I strongly recommend their acceptance." Briefly he wants him to give him power to purchase Ward's works. That is on February 2, and he writes on February 4 to Reid that he wants to have a discussion, that he would be down to take part ia a conference, and that he hopes business may result. Then on the 6th February Mr Reid fancies that he should try to get the business of the Southland Company before making anything known that was likely to be done with Ward. Because if producers thought they were going to get control of both businesses they might form a monoply and decline to sell. Then, on the 20th February there was a letter from Mr Ward, but this was not important. On the same date there was a contract made between Nelson Bros. (Limited) and Mr Ward. Mr Bell : No ; a proposal. Sir R. Stout : No ; it is a contract, because it prevented Ward selling the works to anybody elsa. It says :—: — In considerAtion of the sum of ss, the receipt of which is acknowledged, I hereby place under offer to Nelson Bros, and Co. the whole of my Ocean Beach Freezing Woika including the whole of my freehold land, buildings, machinery, plant, and fittings of every description set forth in the schedule marked "A" and attached hereto, together with all other appurtenances in, about, or upon the premises. The items set down in the said schedule marked_ "A," under the head of contingent expenditure, to be completed in a workmanlike manner. The price to be paid to me for the foregoing to be £32,0t0 l £10,000 of which shall be paid in cash, and £16,000 in fully paid-up shares in Nelson Bros. (Limited). I This offer to remain open until Monday, 15th May. 1893. aud if accused the £16.000 cash shall
be paid to me not later than Ist January, 1894, and dividend upon the shares transferred to me shall be calculated, and shall be at the same rate as paid to other shareholders for the year ending 30th September 1894. Ihe busines* management of Messrs Nelson Bros. (Limited) to be entrusted to me in Southland at a salary of £650 p9r aimum as loug as I fill requirements to Messrs Nelson Bros.'a (Limited) satisfaction. The business to be conducted in the name of the Ocean Beach Freezing Works •so long as I retain the business mauxgement. You will see here is an offer, a contract made on the 20th Ootober 1893, which will prevent Mr Ward selliog to anybody else until May 1894. The next latter of importance is the lbtter of the 7th of April. This is a letter from Mr Nelson to Mr Reid. It says :
Talked to Roberta and the other day he told me that Ward was buying "auythinsr," many pheep being only stores. lJo3siblyl J o3sibly his remark had nothing ia it, but it put the idea ju my head that possibly a good deal of supervision would be necessary, and I think it might be wise, as our interes's in that quarter are now large, that you should hav<3 a man of your own (or rather that we should) to overlook the sheep at both works every day, as the Southland Company are by no moauH too careful in our interests. Has Smith's Company takon up entirely as against the Liners, or is he slrpping by both ?— That remark is rather pregnant, "as our interests in thab quarter are large." Then on the 14th of April Mr Nelson wiote from London :—: — Mr Sunderland arrived last week, and the proposals brought by him with regard to the purchase of Ward's works were laid before the board last Wednesday, when it was decided to accept them. It ie understood that the annual payment to Mr Ward is to be made only sa long as he is useful to us. And the offer was accepted in New Z- aland from a cablegram of the 18th of April 1893 :—: — "We have received a cablegram from our London Office intimating that they are prepared to accept your offer for the O^ean Beach Works to us as per proposal, and the teinis Sunderland took Home with him. We will, however, send you an official acceptance of your terms in a few days." Mr Ward writes : Dear Reid, — Mr Nelson handed me acceptance of the freezer offer the day he airived here en route t ) England. He and I spent a day at the freezer, and as we were measuring and sketching for Mr Nelson's infoimation it is not to be wondered at that the busy tongues of some who saw us have been at work. I have sinc3 been asked twice if it was true that Ne'son had bought the works. I, of course, emphatically denied it, and said it was not true, a* it may not suit Mr Nelson to have it known. Of course the sale doe • not da<e until January, and essentially it is quite true to deny any idle rumours of busybodies, who want to know more of other people's business than there is any necessity for. I think it only right to let you know this in case any inquiry may be made of you, as you can absolutely depend that no one will be satisfied by inquiring of me or anyone connected with me. lam not quite sure of oats yet for Dunediu. but will not fail to avail myself of your good offices should I finally decide to speculate there as well as here, and upon which I will make up my mind definitely in the course of a few days. That must have been on the sama day, perhaps on April 18. He pays on April 24 : "I hive your private letter of the 18th insb., and for which I thank you. Mr Nelson kindly handed me your telegram to him, repeating London's acceptance, the day he left the Bluff for Melbourne. I wait the further letter you refer to." Mr Bell : He sends a telegram asking for an official letter. Sir R. Stout : Yes ; I think it was posted on the 4th of May. They had sent the letter before the telegram. " 1 have much pleasure in notifying you that I have received advice from our London board of directors to the effect that they have accepted your offer of the Ocean B -ach Fre^z'ng Works in terms of your proposal dated 20th February 1893, and the schedule marked A attached, thereto. The arrangerceut to take effect from the Ist January 1894." On receipt of this letter you will see, without any knowledge or without any request being made to the Southland Freezing Cumpany, Nelson and Co. practically became the sole owners of the works in May 1893. Mr Bell : The arrangements to take effect from the Ist January following. Sir R. Stout : I know that, but practically they became the sole owner* of the works then, and you will see that what Mr Nelson predict'-d in 1891 then came about. The whole thing bad been worked up to fom that time. Every step ] had been taken with that object ia view, and now i it was accomplished. Does my learned friend really mean to Bay that because the del very of the works was not to take place until 1894 that Nelson Bros, were nat interested in them in May 1893, when they had bought them ? Certainly they were, and what the effect of that was any commercial man can see, and I will show later on. I will refer to theorrespondtnee, which again throws light upon the matter. The next thing that happens is the acceptance by Mr Ward, flaying that details will be arrapged. The next letter from Mr Ward suggests that Mr Reid should try and arrange terms with the Southland Cumpany. He suggests that they should try to fir terms with the Southland Company, but if the Southland Company would not agree then that they should give an/extra oae-eij>h'h of a penny for the balance of the year 1893, that that would stop any sheep going to the Southland Company, and then enable Nelson Bros, to make any terms they pleased | with the Southland Company. Tceyi did S not accept that because before anything happened concerning it on the 2ad of November, there is still further correspondence. Then comes tha t<>le^ram from Mr Ward :—: — I will esteem it an extraordinary favour if you will allow me to draw at three months for £20,000 against sale Ocean Beach Freezing Works I will deposit all titles to your order, also insurance cover for full amount. Heavy payments going out for wool (scour) season, and with extreme lightness prevalent this would suit me first-class. Colonial Bank of New Zealand will discount my bills on you, and as it would not in any way interfere with you will agree Southland Company. • Do try your utmost to oblige. If combined company completed I will retire bills. If combined company not competed my sale to you will be completed befoie due date. Reply paid. The reply was from Mr Nelson himself, and was as foll-swn : — My arrangement with our head office for payment on Ist January is by draft on London at three months' sight. I will give you a draft on London at five days' bight for £20,000 if Colonial Bank of New Zealand wire me that they will hold all securities on my behalf and deliver them ovtr when demanded. Above payment includes your liability on store I assume you will s^nd copy of this telegram to the Colonial B*nk of New Zealand. Then came a telegram to Reii : Strictly confidential. Tell Colonial Bank of New Zetland I have offered Ward draft on London at five months' sight for £20,000 if they will hold all securities on my behalf. They should ask Ward for a copy of my telegram to him. Then Mr Reid telegraphed to Nelson : Mackenzie approves. I will have documents hypothecated against bill, and see that everything is in proper form. Then Mr Ward writes •.
I would esteem it an everlasting favour if you will allow me to draw at three months foe £20,000 againht sale Ooean Beach Freezing Worku. I will deposit all titles to your ordi-r, also insurance cover for total amount. H a avy payments poina: out for wool season /-and
with extreme tightness prevalent, this would suit me flist class. The Colonial Bank of' New Zealand will discount my bills on you, and as it would not in any way interfere with you, will agree Southland ComEany. Do try your utmost to oblige. If comined company completed I will retire bills ; if combined company not, completed, my sale to you will be completed before due date. Then Mr Nelson wired to Mr Reid : Ward wishes to give me two months' bill on Colonial Bulk to be retired by our three months' sight draft on London. I see no objection to this. "¥ou can do it if Mackenzie approves. If the Southland scheme comes off Ward -will retire the bill. Colonial must hold securities for us. Reply. Then tjiß bill was given on November 7 — a bill on demand : We promise to pay to the order of the Hon. J. G. Ward the sum of £20,000 for value received. This was payable on the Colonial Bank of New Zealand. This was afterwards endorsed on the back : Tay to the Colonial Bank of New Zealand or order. (Signed) J. G. Ward. Four bills of £5000 each at 90 days' sight on London, substituted for this promissory note in terms 'of letter from general manager of the Colonial Bank of New Zealand. Then Muckenz'e writes : Replying to my letter of 12th JM ovember 1893, and to the letter r\om the Hon. J. G. Ward tome cUted 11th of January 1894, a copy of which is attached to this. I understand that while the four bills of £5000 at 90 day.V sight on London, now given me'in Mibstitution for the promissory note for £20,000 dated 7th November 1893, remain current, this bill is to hold the securities for the Ocean Beach Freezing Works against payment, and when those bills are duly paid said securities are as stated in my letter of the 14th of November to be handed over to you. Then there is a long talk about a proposal to amalgamate the two companies. Nothing came of tbat, so that I need not refer to it. Oa the 20r.h of December there was a loug letter from Mr Ward to Mr Nelson about the amalgamation, and showing him that if the amalgamation was carried out that they would have pra< t'.cally the whole control and management of all sheep in Southland — absolute control of the Southland frozen meat market, and that would mean that Nelson Brothers could fix almost any prices they pleased. The thing is ano l her arrangement about the same matter. Then came »n advertisement that the Ocean Beash Freezing Works will be opened on or about January. Then came an attempt— no doubt by Nelson Bris. ; and they got Mr Ward's assistance — » to bring amalgamation about in order that prices might be forced down, became Nelson Bros, thought apparently that the farmers, as was mentioned in one of Reid's letters, were to get all the cream of the profits. As to the drait, that was held over apparently. It was not met by Mr Ward on the due date, but was afterwards arranged for with them. The then proposal was only to back them up to £32,000 They were to float a cimpany for £50,000, and an alteration was made in reference to that, but I don'tknow that it is necessary for me to deal with that. There are other letters that I might mention, but I don't think it is necessary to trouble you with them at present To sum up, I must now t- 11 you what the position is. So far as we are concerned we made a form of contract with Nelson Bros. (Limited) for three years. That contract contained a condition that Nelson Bros. " shou'd not during the said term of three years erect or assist, or ba in any way concerned, or interested in the erection or use of freezing works on land or water at the Bluff, or within the limits of Southland or Wallace counties, without making special arrangements with -the company, nor do anything of the like nature which would in any way interfere with or restrict the output, business, trade, or profite of the company." Now, gentlemen, to sum up, what is the position ? There may be other letters, I may mention, that it may be necessary to read, but I do not think it needful to trouble you with them at present. You will see them when the evidence comes np. I will tell you what the position is so far as we are concerned. We made a firm contract with Nelson Bros. (Limited) for three years. That contract contained a condition that Nelson Bros, should not during the said term of " three years erect, or apsint, or be in any way concerned or interested in the erection cr use of fref z'ng works on land or water at the Bluff, or within the limits of the Southland or Wallace Counties, without making special arrangement with the company, nor do anything of the like nature which may in any way interfere with or restrict the output), business, trade, or profits of the company." They have pleaded in their plea thah they had no concern or interest, whatever, direct or indirect, in the erection of the Ocpan Beach F> c 'ziug Works nor any interest or concern in the use of the said works during a term of three years oovered by the agreement. They also plead that they h*ve not done anything which interfered with, or restricted the output of the Southland Frozen Me it and Produce Export Company as alleged in the statement of claim. I submit to you, gentlemen, that after having heard thess letters you must come to the conclusion that the whole action of Nelson Bros, was in direct violation of this agreement they had made. First of all they entered into an agresment to purchase the output of the Ocean Beach Freezing Works. Ido uot need to rest on that agreement. My learned friend asked me when speaking before did I mean to contend tbat-. entering iufco the agreement set out iv the statement of defence was a breach of the conditions of the agreement made with the plaintiffs. Gentlemen, I could say that it was a breach of those conditions, but I am not bound to rest upon that in this ea«e. I say that the whole attitude of Mr Nelson from the first interview of Mr Nelson with Mr Ward was this : I intend to have Mr Ward, a Cabinet Minister, in my arms. I will not allow him to fail. Ido nob care what happens to the Southland Freezing Company. lam determined to make him coDcesjion after concession as I intend to get hold of Mr Ward and of the Ocean Beach Freezing Works. His whole action right through has been that as you will see. What does he do ? He first enters into a contract, and as soon as that con^.mcfc proves to be a losing contract to Mr Wsrd he alters it, and jdfceiM it to such an extent that on one shipment that goes Home he makes Mr Ward a present of £300, and he does everything he can to help him, and tells his manager that he is to keep Mr Ward alongside with them. I believe that is a racing phrase, and perhaps you may be able to appreciate its full significance. I understand it means You are net to allow the Southland Freezing Company to crush Ward out of this competitive race. Well, what happens then P Mr Ward has one year's trial, and after that he finds the thing has not paid him, and possibly, like every other merchant, he may have required accommodation. We do not know anything about that, but we do know that what happened was that in Oefcjbsr 1892 they again havo fresh negotiations with Mr Ward, and that he gives a prior offer to Neleon in February 1893, and enters into a specific agreement that he will not sell the works to anybody else before May, giving the Nelsons the power to take the offer
Home. No doubt, he could then, m any'con* mercial man can see, go to any bank or any other financial institution and cay i " Gentl** men, you see the position lam in. I have m firm contraofc that they are bound to buy all my frozen meat from me, and to give me cash as soon as ever I have placed it on board the steamer. I am to get 2£ per cent, commission ' on freight." You will also see that he could say to another financial institution : "If I require it — if lamin a hole — they will come to my assistance, for you see they wish to buy my works ; they only want time to get the offer to London ; there is no doubt the term* are going to be accepted, becausa the New Zealand people are going to urge the London people to accept the offer." As in fact they did. The offer was accepted ia April, just as the season began, and he got what was just the same as cash — he got a firm offer from the Nelsons to pay the full value of the wotk9 (£32,000), to be paid on tha lab January. It was equal to cash. Would it be said, then. taut Nelson Bros., who agreed to pay £32,000, wore not interested in the works f It was the as if they had given a bill o / exchange on the works, because they had given a firm contract to purchase. Mr Bell: Surely that is a question for bis Honor ? His Honor : Probably it will turn out to be a question of law whether this portion of the transaction wai a broach of 1 he agreement. ' Sir R. Stnut : I submit the jury is to look aft the whole of the transactions as one series o£ transactions from 1891 down to the present, and I am using this as only one step In the transactions. They make a further contract, and before this agreement you have that contract and you h*vo a letter from Mr Nelson saying " Our interest now is large." How was it large ? I*, was large because practically they had agreed to buy the work*, and bought them with a written agreement equivalent to a bill of exchange. What next happens ? Mr Ward says in November the end of the season has come, aud very likely he had not made nny profit. That Ido not know, but it may be that at the end of the season he wanted accommodation, and he says to Nelson one day, " Will you give ma £20,000 ?" and Nelson replies, without any negotiations, without any question, " Yeß, £20,000, oer* tainly," and down comes & telegram, and on rect-ipb of that telegram £20,000 is given bj the form of a bill. Mr Bell : No ; the deeds were held by the bank. Sir R. Stout : Yes,. of course, the deeds wera held by the Colonial Bank for Nelsoii. Bui why should he have to give this £20,000 bill at once when asked without any negotiations or haggling. But simply a telegram come) up, " £20,000 will be an agreeable thing lo give me ; will you give it?" — "Certainly; thereis the £20,000." What does that all mean ? Tboes it not prove conclusively that from the first interview Mr Ward had with Mr Nelson there was this understanding come to between them. This is disclosed in the third letter I read to you of the 9th of August: "You know my wishes on ths subject. They remain the same an I expressed when you were here. Our connection must follow in due course." What does ib moan ? There is no doubt there would have been an ' out-and-out partnership there and then but that NelHon saw thin paragraph in the agreement staring him in the face and did not see how to get rid of it, and, as often happens, he got rid of it by going round it, and it is for you to say whether you aro to permit thah going round it. I say th*t the agreement made has been entirely violated, and if you c imo to that conclusion the only question you will havo to oonsider will be, what damfgtis have we sustained. And, flrsb, as to that I will submit that you should take our published balance sheets — published, some - of them, oven before this contract was m*de — and you will see that our profits were, in the first year of this running, the year ending the 31st of December 1891, about £5000. Tha profit on freezing was £5485, but there were general expenses amounting to £1300 outside, and there was carried over from the previous year £2721, but this balance was disposed of in this way : £1500 written off machinery. £1535 given as a bonus to shippers, and. £3969 carried fersrar.l, and that was on a small capital, remember.of £1000. And then in 1892 we find the profit from the freezing fallen from £5900 to £2900, aud practically - when you take the expenses and depreciation— £722 was written off— the net profit is le« than £1. That is in 1892. That was when thert was his competition. Then coming to 1893, , you will fiad there is a net loss, if you strike oft the balance carried forward from the previous year, on th« whole working of the concern of nearly £0000. And then when we come to 1894the loss is ttitl greater. The loss on the freezing account is £10,000. Mr Bell : £17,000 altogether. Sir R. Sloub : £16,506. Of course we had agaiubt us this : we had not a firm oonti'ACt made Sor the sale of our produce, and we had Nelson and Co. running the Tyner line and buying up— carrying out, no doubt, the policy Mr Ward advised — namely, that Nelson should pay a higher price for the sheep than they were worth, and so force the Southland Company to sell to them, and in that manner get a monopoly of the whole • district, and then they could fix the price to the farmers ss they please. That is the policy no doubt carried out at the present time. Tbat is the policy of Mr Nelson — to force the Southland Company to practically give him control of the works. Gentlemen, ho is to have the profit, we to have tha loss. Mr Bell : Is the profit of 1894 claimed ? Sir R. Stout: I am not claiming the profit for 1884. I am quite content if we get the profits for I§g2 and 1893. Then I submit to you there is another test. You can look at how our shares fell in value because of their attitude and actioDS. That is a test also of how great were our losses. I submit that you cannot say that Nelson ever showed in the position he wishes to take up that he was simply a mere buyer of the output, like any other buyor. Gentlemen, you cannot say that. From (his correspondence it is perfectly appare-nb that Nelson Brothers (Limited) were simply standing behind Ward, like a second in a duel. They were standing by him, seeing that he was supported whenever he need :d support. They were standing by him, determined to see that he should not go to the wall whatever happened. Th6y were determined, whatever happened, they should so lay their lines and work their plans as to fore a the company in the end to sell to Nelson Brothers or to come to terms with Nelton Brothers, and they thought it best to take up Mr Ward, no doubt for the five' reasons Mr Nelson gave in 1891. They wanted Mr Ward, and the whole of their - policy has had this goal continually in view, and they have gons on .to it without deviating , either to the right or to the left. They gave -concession after concession. They have not been mere buyers of frozen meat from him, ' but interested in his works, interested in him, and have dcue things that in the terms of tha aontrftob have injured our output, have injured
oar profits, and have ruined this company, and, I submit to yon, that if we can prove wo have suffered that loss, we are entitled to succeed in this action, and to recover heavy damages •gainst Nelson and Co. Counsel then proceeded to call evidence. Bobert Ferguson Cufchbtrtson, formerly secretary of tho plaint ff company, laid : I was secretary for about 11 years, and ceased to be secretary early in July 1894. I have no fuither interest in the com puny thaa that I hold 10 or 11 paid-up thares, aed that at the present time I am acting as the auditor. In 1889 the company was in a very good position. The balance sheets and reports produced were the balance sheets of the company. Mr Bell objected to the production of any documents prior to 1890, and Sir Robert Stout put in the reports and balance sheets from that year. Witness, proceed<ng, said : The company had an agreement with Nehon Bros, in 1889. That was the original agreement Mr Ward wss a director of the company up till July 1891. I knew the terms of the contract. In July 1891 there was some talk about opposition, and telegrams passed between the company and Mr Reid on the matter. In 1891 the company was doing a vtry good business. In j that year the net profit was £4300. Iv 1892 j tbe net profit was about £722. In 1893 there was a total loss of about £6000. There was no dividend paid in 1892 or 1893, but lbs eompiny paid 8 per cent, in previous year's. In 1892 a camber of improvements were made in the works. We commenced to slaughter at Afataura, in addition to slaughtering at Wall&cetown, and we hired a hulk to freeze the Blanghteringa at Mataura. Tbe works at Mataura were n-t completed till the beginning of April 1893. Tho freezing generally began in January in Southland and ended in October — sometimes running into November, but very Kareiy. Seme works were erected in 1892 at the Ocean Bsacb, near the Bluff, and were opened for work either at the end of January or the begiuning of February 1892. The opening of theee works diminished our output very materially. In 1891 our total outpnt was 100,515 sheep and ltmbs. In 1892 it amounted to 85,833 sheep and lambs. Mr Bell asked if witness was giving the figures from his own knowledge. W tness reptied that he was not. The figures were taken from a return made by someone else. He could not get at tho figures without looking at the books of the company. Proceeding with his evidence, witness said : Iv 1892 the output was lessened became buyi-r3 of Mr Ward's company were going round the country offering higher prices for cheep than we were able to give under our contract with Mr Nelson. The price of sheep in ths district was certainly raised, but we did not run up tbe price. Mr W»rd flftt raised the price, and we had to raise the prioes-af terwards in self-defence. Our output was also affected by the fact that Mr Ward accented from growers inferior sheep which we felt ourselves under our contract bound to rejeot. Our output was further affected by the shipping arrangements made between Mr Ward and Neleon Bros, being more favourable than those in%de with us. Mr Bell objected to the evidence as not being relevant. He submitted that it cmld not be relevant to the question whether Nelson Bros, were concerned in the erection or use of frozen meat works, to inquire whether they gave shipping facilities to one client better than they gave to tbe Southland Meat Company. In fact he might put it in this way : Nelson Bros, were entitled to grant any facilities they pJeaied to any client in respect of the ►hipping wjtbout a breach of agreement with the Southland Company. Sir Robert Stout paid his friend read clause 8 as if the agreement only referred to the erection of works ; bat there was no such lim'ta'ion. The Southland Company were not seeking any damages for a breach of clause 7. They were only dealing with clause 8. The terms of that clause were sufficiently wide. It said : "In any way concerned or interested in the use of the works," and this evidence he wished to adduce wts to prove that Nelson Bros, were concerned in the use of the works. After some farther argument, his Honor decided to admit the evidence, and took a note of Mr Bell's objection. Wituess, proceeding with his evidence, said : We had trouble in getting our frozen mutton away by steamer. We cuuld not get the amount of space in the steamers that we applied for after Mr Ward started his works. It was a distinct advantage to keep works clear. If the works were not kept clear we should lose fcoiincsi — we should not be able to accept oar clients' sheep. Then the works became full ■Ometime*, and we had to stop. Our sheep that were re»dy to be shipped were sometimes rejected by Nelson. .Mr Bell said if bis learned friend wanted to show that Nelson Bros, rejected soma of the Southland Frozen Meat Company's sheep that surely was not a bre&ch of the covenant which he alleged, but a breach of another covenant. 1 Sir Robert Stout submitted that it was a breach of the covenant to which he had referred because it showed other works were being need which damaged the Southland Company's output. Nelson Bros, were concerned in the use of other works, and assisting in the use of other works. His Honor said he thought on the whole he should admit tha evidence subject to Mr Bell's objection, even if this giving of a preference to Mr Ward's company was not a breach of tho eighth clause of the agreement. ' Witness went on to say : Up to the time of the sta'-ting of Mr Ward's works the company and the Nelsons had worked together moat amicably in every way. There was most distinctly a change in their attitude towards one another after that. I remember ajnan named Price. He was one of tbe largest suppliers of the Southland Company. We lost hi» custom in July 1892, I think. I had a conversation with Mr Reid in connection with allowing Mr Price the advantage of the five years' scheme. It was a scheme by which Nebon Bros, offered to growers, of Southland the highest price we were giving, provided that th^y guaranteed to give the whole of the output of th*-ir sheep to Nelson Bros, for that period of time — five years. Mr Price became aware of the existence of this agreement, and asked that we should use our influence with Nelson Bros to allow him to avail himself of it. I did so, and after some negotiation Mr Price accepted the terms of the contract. He at first refused them, and fiunlly accepted them. On announcing it to Mr Reid, he replied that that scheme was for growers of stock only and not for dealers. He also asked if Mr Price was a dealer, to which I replied that he was, strictly speaking, a dealer, although au owner of stock on leasehold. Mr Reid refused to grant the concession. Mr Bell asked if his learned friend had done with this matter of price P Sir Robert : Yes. Mr Bell desired to know what the evidence tad been adduced for? His Honor t If the matter stops here the evidence might as well sot hare been adduced. ' filr Bell : That if what I meant.
Sir Robert Stsut said ho would show what bearing it had on tbe case. His Honor aaid ha could not Bee what bearing it had. Mr Bell eaid that was what he was objecting to. He did not know how m*ny matters his friend was going to adduce in the same way. One did not know where there was to be an end of the evidence if matters of this kind were to be allowed. Sir Robert Stout said he had a right to look at the whole dealings of the parties. Mr Bell said his objection was this : that evidence as to acts done by Neteon or his agents in relation to Mr Ward or Mr Ward's works wa3 wholly irrelevant to prove a breach ot contract not to be concerned in the use, of fr< zen works if the output agreement itself was not a breach. His Honor took a note of the objection. Sir Robert Stout : Neleon Bros, have never asked your consent to any arrangement with Mr Ward ? Witness : They did sot. Did they ever furnish you with copies of tha contracts ? — No. Did you ever ccc them ?— I once saw a document in Mr Reid's hand which he informed me was a contract with Mr Ward. Did you read it ? — I read one or two words in it — that is, the words referring to the price. I never saw it in lull until I saw it in the p'eadings. Were you or your directors over made aoqutinted with these terms iv it as to the price ? —No. You heard, I believe, that Me Ward was to get 2£ per cent, for freight ?— Yei. And you applied for that on behalf of your company ?■ — Yes, and were refused. In cvrrying out your contnot did you ever ask for any concessions ? — No concessions of any importance. I once or twice asked to be allowed to send in a hundred or Wo of light sheap, ond on ore occasion 1 asked to be allowed to consign a few heavy sheep, and received permission to do so. Did yon not ask some concession about heavy weights being taken ? — I once afked to be allowed to consign at 1 par cent, for heavy weights, but was refused. In reply to further qaestion3 v?itne3S said : I have seen Mr Ward's contract since, and I know how his 'contract was carried out. Looking at the contract, I c<n say that Mr Ward had the best of the C3uhr*ct. The company's output was increasing till Mr Ward's works were starfcpd'. The capacity of the company's works in 1893 was aboirt 1100 a dny. We cuuld have very nearly frozen all the sheep that were actually frozen in Southland in that year. If we had not met with Mr Ward's competition our profibi in 1893 would have been very much more than in 1891. The Mataura works were very suitable for freezing. We had water power, and mtde a large saving in coal. We averaged a pr-ifit of nearly Is 3d per *heep prior to Mr Ward's works being started. Mr Ward bought live sheep at so much per head from the owners. Mr Bell asked how that evidence was relevant. Sir Robert Stout said his contention was that anything that Nelson Bros, did to restrict the Southland Company's output was a breach of contract. Witu-ss procerdi'ig with his evidence Faid : In 1893, about 275,000 sheep were exported from Southland. The shares of the cotnpaoy fell from 1892 to 1893 from £4 to £1 15 <— that was the £\ shares. The £3 shares Ml in the same proportion. Croas-examined : The loss which the Southland Compiny suffered was suffered in consequence of the way in which Me W*rd was enabled to carry on his company by Nol*on Brothers. Mr Reid and Mr Nsleon co-operated loyally with me up to a certain point in trying to prevent Mr Ward from starting works at the Ocean Beach. - '" Mr Bell : Did Mr Reid press upon the directors the necessity of starting works at Mataura ? Witness: Yes; the correspondence shows that. Was it not in consequence of Mr Reid's urgent representations to the directors that the Mataura site was acquired and the Ma* aura WO-ks founded ? — I cannot say that it was ab■olu'ely in consequence thereof. l have not the slightest doubt that Mr Reid's representations weighed with the director*. Whs not that just at the time when it was suggested th*t Mr Ward was about to etatt in' opposition ? — Certainly. Dj you sUggest that Mr Ward started his works with Mr Nelson's money, or assisted by Mr Nelson's support in any way ? — I make no suggestion of the kind. You have bpen giving a number of answers to Sir Robert that Ud my mind to make that iuference. Did jou make any suggestion of the kind — that Mr Ward founded his works with Mr Nelfou's money or with Mr Nelson's support ? — I did not. Were you party to the interrogatories th*t wero administt red to Mr Nelson ? —No. Were you consulted about those interrogatories ? — No. So far ai 1 remeiibrr I certainly ws.B not. Were you consulted by either the directors or Mr Cuningham Smith with regard to the qnestiot-e which were to be put to Mr Nelson upon interrogatory ? — I don't believe I was. Not by the directors ?— Most certainly not. It is quite possible that Mr Smith and I conversed over the matter, but I was not a party tv framing the interrogitoriec Did you suggest to Mr Smith or the directors that Mr Nelson was practically the owner of these wotks — that it was his money with which they had been erected ? — No. Did Mr Cuninghatn Smith make any statement on the point I am now speakiug about ? Did he tell you or ask you whether it was Nelaon Bros', money that built the Ocean Beach works ?— Ye* ; Mr Smith holds that opinion. Did he tell you so ? — Yes ; he told me he thoughf; so. Sir Robert Stout: What Mr Cnningham Smith says cannot bind us. What is the issue ? Mr Bell : It is with regard to this action. Sir Robert Stout : How does it affrfct us ? Mr Bell : It is a very important question to me. I want to get Mr Smith's correspondence in relation to this action. Any deoision given by your Honor upon this question would govern my right to get out how this action has been started. Sir Rjbart Stout: What has that got to do with this question ? Mr Bell : lam entitled to ask this question, and I am prepared with an authority on thufc point. His Honor : I thiuk the gu t: ,n i- ■<.<•!- missiM-'. Mr Smith was general rcnn-iger cf the company at ttw time of the action at law, and tho question ia not as ro the statement made by Mr Smith with respect to tbe contract, bat with respect to bringing tke action. Sir Robert Stout : Will your Honor kindly take a note >.f my objection ? His Honor intimated that he would. Mr B-ill (to witness) : Did Mr Cuniogbam Smith make any statement to you with reference to the action 2
Witness : Yes ; he had several conversations with me with referencs to the action.
What did ho say with regard to Nelson's connection with Mr W*rd ?— Ha said ho did not kiio.v absolutely whether they were interested or not, but from an inspection of their balance she- ts he suspected that they were financially interested. At what pstioi ? — During the term of our contract. Did he fay anything more ?— Very likely ; but I cannot remember the whole conversation. The opposition came into existence notwithstanding the Btronuous opposition of yourself, Mr Reid, and Nelson ? —It came into ex ; s f eaco as you say. Tben the oppcsition was oarried on by Ward. Was it not the existence of the opposition works that led to the competition from wbich your company suffered ? — Tbat is to say, if they had not been there we should not have suffered thai loss. And if Nelson had nothing to do with the purchase of the output you would have suffered in the same way ? — Th*t drei not follow. Dou't you thiuk it would have followed ?— I mo it distinctly think it would not have followed. Did you ever consider this question : Whether if at that time Ne'son did not purchase Ward's output, Ward would not have been able to give much better terms to the grower than he was ab'.e to give under Nelson's contract ? — lie would not. Is it not a fact that you and the directors of the company Dresßed upon Mr Ward the desirability of entering into a contract with Mr Ward for the output?— l say most distinctly they did not. Are you clear that you did not in any way supgest it? — Mts^ distinctly. Did you not refer to the existence of a cont act frequently in your correspondence ?—? — J Ye 3. > > ! Did it ever enter into your mifid whi'e you were secretary of the company that you could complain of the output agreement ? — No ; I dou't; think it did. Did you ever hear from any of the directors any suggestion of au objection to the existence of thut output cootraob ? — I think I did. I oan't exactly ncall the precise time, but at one of the meetings I believe that point was raised and discussed. After such a discussion, if the board had come to a resolution that the contract was objectionable, would you h-ivo written a letter attempting to lead Nelson Bros, to make a ontmct? — They did not cpme to any ab j o'ute conclusion in the matter. I wa>> secretary, and my business was to carry out instructions from the directors. I had no right to iuterforo with matters of r,olicy. I simply bad to attend to details of management. Under these circumstances, I certainly would not have written unless I had been instructed , May we not I <ku> it that any letters written were authorised by the company ?— ln matters of policy, certainly. Mr Bell asked if the following letter, dut d 23rd May 1892. was written by witness as secretary to Ne'sjn Bros (Limited) : — We are in receipt of yours of the ISth inst., and regret to find that you are not prepared to meet us even in regard to tbe request contained in our letter of '13th inst. seeing that you had previously declined to allow us any bpace on the Marnan. The reas m that we asked to be paid fqr (5(100 odd oivases waiting shipment when you sent the MrtUiiiri into tha Bluff was very plain— namely, that for the second time within a month or two you had m*de sh'pping arrangements favouring Mr Ward at our expense. We don't ask any favours at Mr Ward's expanse, and we have a right to expect to be treated with precisely as such consideration as you extend to him, and from our previous relations with your firm, which were 'of the most satisfactory nature, we more than regret being forced in self-defence to write in such a strain We cannot allow the laßt clause in your letter under reply to pass unnoticed. It is not the arrangement for carrying our meat this season that we have complained of, but the fact that you have gi anted facilities to Mr Ward that you have denied to ourselves. Witness replitd to the question in the affirmative. Mr Bell : In the letter that you wrote on the 6th of June 1892, addressed to NeUon Bros. (Limittd), and signed as fecretary of the company, you uned the^e words : We have been informed on excellent authority that Mi- J. G. W.trd received a rebate or return coiuini-siou on th* fr.-ight of all meat frozen by him and shipped by tha Tyser Line steamers. If such is the case, as we believe it to be, we must a-sk to be placed on exactly the same footing as Mr Ward in this respect. Wo uuders and that you have purchased Mr Ward's output on the same terms as our own — namely, f.o.b. steamer in Bluff Harbour, As therefore the freight is payable by you and not by Mr Ward or ourselves we must apply to you to place 113 on the same footing as Mr Ward in this mater. That is not only admitting the light of Nelson Bros, to mike a contract, but actually founds a cl*im upon the existence of a contract. Witness : I don't admit their right to make a contract at all. Mr Bell : Oa the 11th of Jane you then wrote : — I would also beg leave to point out that we have been definitely asswred that Mr Ward has sold his output (f.o b Bluff) to your good selves «t the same price »nd on the same terms as o»rselves. Such being the case, the shipments are not his, a< you put it, bu> yours, and if. therefore follows thvt he received Cjmmis-iioti from Tyser's on meat sold by him to you f o.b. and shipped by ouroelves, or, in otjjer words, on your shipments. So you had been definitely nsmred by him ? Witness: If I had bcin informed dVfiiitely I should h«.ve used the expression " you have admitted " Mr Bell: On the 15th August 1892 you wrote to Nelson Bros. : We are advised that Mr Ward recently offered to freeze shsep for one of our clients, and allow him to dispose of them either in the colony or elsewhere as he clio-e. W« are also advised that he has not only offered but has actually frozen beef for one of our clieats on the dis'inct understanding that the latter U to be permitted to dispose of it anywhere he thinks fit. wew c shall be glad to know if Mr Ward's contract with you permits him to do so, and if not wa have to requeit that you will take such steps as may be necessary to put a stop lo the practice. Now, is this not the casa : that you on behalf of your board recognise the existence of a contract between Ward and Nelson Bros., and required Nelson Bros, to cosree Mi 1 Ward if the company had the power to do so under that particular contract?— We admit that we have heard there is a contract. You say we shall be glad to know if Mr Ward's coutract permits him to do so. Did you write that by instruction of the board ? — I really cannot tell, but I think it most likely that I did. Then \ou wrot- ■ fficrally r> q tin.-i,; N*-l oa B oi in August 1892 r,<> put in lor;e the terms of the contract with Ward in the manner in which you rtquirad them to exorcise it ? — I simply wrote that letter. You can make what you like of it. I ask you whether you did not know of the existence of a contract between Ward and N"l«ou8 for the purchase of the output ?— We did uot know absolutely of its exi<<t,euce, otherwise tho^e letters n var would huve been couched in the language ia wkioii they neve ! wiisteo.
You knew that a contract existed P— We knew that it was ttifced that a contract existed.
His Honor : I understand that Mr Cuthbertson knew that there was a contract, but did not know it* exact terms. Witness : That is so, your Honor. Mr Bell said that on the sth of May 1892 the witness wrote the following letter :—: — It h admitted that you have bought the output of Mr Ward's works as well as all our own, and under our agieement he is not entitled to recaive better terms than ourselve3. Our present contention is that the practical effect of Mr Ward freezing and shipping inferior sheep is to place him in a better position than we occupy, and we think that in common fairness we are entitled to ask that you should take 6tep3 to see that a uniform standard of quality is applied to both. That is your admission. Witness : I don't know that it is. It is onr letter. Why do you say it is not your admission ? It is not I who admits it. The whole force of the paragraph leads one to understand that. It is not my admission but an admission that has been made to the company or to myself. Mr Bell then cross-examined the witness at some length further on the same point, and witness stated moat emphatically in the course of the cross-examination that in using rb.9 words in i the letter there was no admission on his put that the contract existed. Mr Bell : You assume its existeDCi*, tben. You tell Mr Reid on the 9th of May that such & contract did exist ? Witness : The admission came from au out* side source. Do you remember if you had anydiffioulty before the Ocean Beach works started with regard to freights ? — Ai a rule we had not. In the months of March and Aptil, which were the busiest months of the year, there might have been a Jits le difiicuUy, but Nelaon Broß. were alwaysinost willing to meet us in every possible way they could. But was there any differenoa afterwards ?—? — Ye?, there was a distinct alteration in the business relations. Dou r t you think there was a dittinot alteration in the tone of your directors towards Nelson, before there was an alteration iv the tone of Nelson Broa. ? Would you bo v<-ry much aftonished to find it was that way ?— I should be very much astonished. Mr Bell then proceeded to examine tho witness with regard to the losses made by the Southland Company, and asked why was it the cau^ of the load of £30.000 in three years was not mentioned io the report to the shareholders or iv the baltnce sheet. Witness said he ou'd not give any satisfactory rt)HS->n why ib was not. Mr Bell: Why did they give a series of reasons in the report which were not true. If the loss wss attributable to Nelson Bros., why did other reasons appear in the balance shett of 1893 ? Witness : I say those reasons are true. They would not have existed but for the manner in which the contract with Mr Ward was carried out. The witness was under cross-examination when the tho court rose at 6 o'clock. The court adjourned till 10.30 next morning. Wednesday, Noveidber 20. The cts« wa< resumed at the Supreme C^urt at 10.30 o'clock. R S Cuthbertson (cross-examination by Mr Bell continued) said : I do not altogether agree wi'h Mr Reid's letter of February 23. Tke price referred to was a tsmporary one. I have no doubt when he wrote it it was correct for the ixu ment, but the price fell immediately afterwards. Mr Bell : You say immediately afterwards : you are incorrect there. Bir R. Stout : You have no right to say that. Mr Bell : We know the exvjt state of tb.B frozen ' meat market. Had the frozen meat market remained as it was when Mr Reid wrote that would have been light P Witneaß : Ye 3. That is to say, Ward could have afforded to pay a higher pricß to growers than you could ?—? — Ye, so long as the London prices remained at that figure. Witness continued : Nelcou was paying us a good price. We hid the offal, the grower got back the skins. We kntw exactly wh*t we were going to get per carcase and the cost of freezing. When the frozen meat raorbet was as high in London as Mr Reid mentioned, Mr Ward could afford to give a somewhat higher price than we-cou'd The price in London, I agree, necrssarily governed the position. It was all a ques'ion of the relative value of meat. If our output had been restricted in that way it would have them to us. We had gu .ranf>es from a considerable number of sheep owners Most of tbe shiep guaranteed we got, but not all. Sheep outride the guarantee we could not get on a high London market unless Ward was equally bound. If the market fell in London, then Nelson mide a low. We had an ag e°meut with Nelsons before 1891. The price ot that was lower than 1891. Sir R Stout : Wba'. b.«s that to do with it ? Mr Bell said S r R Stout had suggested that the oiiceetions .made on a firm contract by Nelson Bros, to Ward ha.d a sinister meaning. He wished to shovr that concessions were made ti the Southland Company on a fiim contract prior to 1891. Sir R. Stoat said that for every concession to the Southland Company Nelson Bros, got a quid pro quo. Hi^ Honor eaid that, apart from any other circun.sfcances, r.o reasonable person would draw an inference of "sinister motive" from the mere fact of conci'sdons. Mr B"ll wished to show that there were ooncessions made in the agreement of 1889 with the Soufchlaud Company in order to lay them alongside another competing company. CrOES-eximination continued : I do not think j we were competing with the refrigerating com- i puny. The distance b.twteu Invercargill and j Dunedin almost invariably protected us. We never poached nor were poached upon. There was a fixed price under the contract of 1889, and that contract at Nelson's request was abolished aud supplanted by another. For the higher price an equivalent was given. Nelsons did not increase the price paid to as between 1889 to 1891 by £d. I feel certain th«y did not-. There was only one increase in price, and that was under the new contract. The busy time at the freez'ng works is f»ona March till May, and again about August till September ; generally between October and December there was hardly anything doing. In 1893 *c shut dawn aboub November, «nd contiuued shut down until tae end of the year. W) y va« pot that .irrMigPtnont carried out ? Wi'iiii"*: BiCtiiS') I believe a more favourable < ff'-c via.* received from two shipping companies. The«e two shipping companies each put £10,000 icto ths concern at the end of 1893 ?— Yt-s. Then it did not occur to yon that you had a claim of £30 000 sgainst Nelson ? — My private I opiriion was never afked. Sir R. Stout submit f ed that this was entirely irreleranb. Whatever they did with the gbip- ! ping companka was mt ft release to Nelson 1 Brothers,
Mr Bell undertook, in accordance with the rule 3of evidence, to make this relevant. Ho had indicated that the. Southland Company nevec thought of any grievance till the rival shipping companies each put £10,000 into the Southland Company. He was entitled to show tho foun« dation of the notion, and nho was behind it, and pn pared to show thfct this was cob tha action oV the Southland Company at all. Sir Robert Stout : If jou can show that I have no objection. Whoso action wit ?
Witness : May I ba permitted to state thftft the question of the csmpany havLog a causa of action against Nelson Bros, was discussed *6 one of the meetings P Sir R. Stout : Before the negotiations with tho shipping companies ? Witness : Yes ; very shortly after Mr Ward commenced opsrations— Home little time after). Mr Bellt That was before you wrote the letters saying you admitted that NeJsons wer« entitled to buy the output, and all tho rent o£ it ? — I never wrote any suoh letters. Mr Bell : I will read yon this memo, of the proposals for tho formation of a new company on the 25th of Augo.6riß93 :—
Memo, of agreement made thiß day. the ?6fch of August 1893, betwean Mestra Nelson Broff. (Limited) and Mossra Nschol and Turnbull (directors of the Southland Frozen Meat Company).
Proposals having been made for the formation of a new company, it is herehy agreed thut in thg event of thfir being carried to a satisfactory point tho following will form the basis of an agreement between the parties above-mentioned : 1. The company stall bo called* " Tho Southland Refrigerating Company (Limited)." 2. Tho Southland Refrigerating Company shall give Mtesrs Nelson Bros. (Limited) the solo right to the fret zing power of their respective works for a period of ceven youra from tho ftret day of — 3 Me srs Nelson Br a to haveaolo vi^ht to pro* vide stork for fietSs : ng, and shall appoint a representative to supervise the manipulation of said stock, auch manipulation to be carrio 1 out to his satisfaction.
4. The rate Mc3sr3 Nelaon Bros. (Limited) shall pay for freezing shall be three-eUhths of one penny per pnund for sheep and eeven-sixteentha of one penny per pound for lamb, delivered in both cases frozen f.o.b at the Bluff. 5. Mes<?n Nfhon Bros (LirniteJ) to pay 3Jd each for b>gs, quality of which must meet with their approval. 6. Messrs Nelson Bro.«. (Limited) to pay half cost of railage tj the Bluff on meat frozen at Ala tn ura works.
7. The coiipiny to fellmonger Bkias and alao tnaniimltto p«l(^, fat, etc., Ac on Messrs Nelson Bro«. (Limited) account at rates heroifter to be agreed upon. The runners, heads, fee*, 4c, &c. to be sold by Mc3s« Nelson Bros to the comp.my.
8. Me Bra Nelson Bros to make all freight arrange m nta for card »ge of meat and other producu which pass through tha works. 9. Should Me^Bra Nelson Bros. (Limited) de3fre to witluhaw from this agreement they can do so at the end of each period of two yeara by giving the directors at head three clear months' notice in writing of their inLentiou to do bo.
Orops-t xitnination continued : I cwmot tell what the motive was for not completing that agreement. The company may hare thought the offers of the shipping companies to each put £10,000 into the company belter, inasmuch at it preserved the soparate existence of the Southland Company.
Mr Bell : They desired to go on with the fight ? — Witness : They deeired to retain a separate existence. Ido not see that it raeanß they wanted to continue the fight with Mr Ward That was no d sire of ours. The reports of the annual meetings in the Southland Times were sometimes fairly accurate. Not always.
Mr Ball proposed referring to newspaper reports of annual meetings.
Sir R. Stout objected that this was not relevant. Statement* marie by directors at meetings of shareholders were not binding oa the company.
Me Bull said the chairman of the board of directors was present at the general meeting us agent for tbe company, and hi» declarati *ns wexe relevant as the declarations of any agent. What he wantfd to establish was that at the meeting there was no suggestion of complaint against) Nelsons or any mention of a right of action against them, and that at the general meeting of the company it was stated th»t the losses were due to reasons entirely different from tho3e alleged in the present action.
Sir R. Stout submitted that it could not be said that the statements of a chairman or a shareholder at a meeting of shan holders was binding as against ill* company.
Mr H^ski'g said the Southland Company to< k one particular vicv of the losses they nere now seeking to put down to Nelxons. Th« directors pub forward the statement; that their loanes were due to certain causes, not doe to Nelson*, and the shareholders must be taken as acquiescing in the view first put forward as to the can* e of thf looses.
Sir R. Stout pn sumed the minutea were the only record. How cculd ifc bo said that the statements made by a chuirmaa, wbo at the time probably was fvnctus ojjicio, requiriDg reelection, could bind the Company.
His Honor suggested that what was wanted might be shown by the report and balance sheet.
Mr B 11 would first ask Mr Cuthbcitson concerning the (statement he had read at the general meeting of shareholders, wbich appeared in the Weekly Times of 16th February 1893
Sir R Stout objected, but the objection was overruled.
Mr Bell read the statement, which was as follows :—: —
The total loss for the past 12inon'hs amounts in round numbers to nearly .£6OOO. Of the amount ab-iut £5000 is due to the ncrea&ed price paid for meat beyond the current rates of former years. About j£l&H) has arisen through the necessity for the employment of thu hulk Kdwiu Fox during the greater part of the year in connection with alterations and improvements to the machinery at Bluff and Mataura". The unfortunate fire at Wallaeet:wn Crossing caused » loss of JEW of revenue to the company, through their b-iinß thereby obliged to dispose of the offal, &c, at lower rates than they would have obtained had they been in a position to manufacture it themselves. Tne above items not only account for the total loss during the past year, but they show that if it had not been for their occurrence the directors would have been able to show a profit on the year's operations instead of n lo r -s So">e of the above items of expenditure will certainly not recur, and as since the balance sheet was published the company's cuyital account had been strengthened by the £20,000 worth of shares Bubscribed by the two shipping companies, it was manifest that the amount of interest payable to the bank will be very materially reduced in future.
Witness continued : I do not remember reading that statement, but I remember the statemeut, acd as far rb my memory serves me the Jitntements aie accurate Trie figurwi -iven in it I prepared myself. There is uy r< f-^-oco in it to any complaint against Nelson Bro3. I do not know why. I cannot tell you why. Mr Bell : Now, your Honor, I submit that the chairman of a company in making an official statement at the annual general meeting to the company from the board of directors as to the profit and loss of the company during tha preceding year, and of the reasons by which either the profit has been gained or the lots has been suffered, makes it nnt an official state* manb on behalf of the beard of directors, and
gecondly an official statement on behalf of the ' company, which may ba used, not expressly as an admission against the company, but as evidence in an action brought afterwards that the complaint in such action is the result of an . afterthought. And, in another form, I put it in this way : That the only way of proving inconsistency on the part of a company in an action of this kind is to prove the antecedent course by the speech of the chairman at the annual meeting. Sir R. Stout submitted first that his learned friend must, before putting in such a statement, prove that the chairman was authorised by the directors to make the speech. Iv the second place, the way to prove it was to call the chairman or persons who heard the speech. ThoD, he submitted that any speech made by the chairman was not admissible. His Honor : I do not see very well how you can distinguish this case from that in re the De Valla Provident Gold-mining Companj. It was there decided that a statement made by the chairman of a company at a meeting of the company was not an admission binding upon the company in an action between the company and a third party. The facts of that case are somewhat different from the present, but the principle laid down in the judgment seems to govern the present case. Ido not think, therefore, that the evidence is admissible. The speeches of the chairman of the plainfff compaDy at four several annual meetings —in 1891, 1892, 1893, and 189*— tendered by Mr Bell were ruled out. Witness continued : There waß some corre■pondence between N Mr Reid " and .myself — chiefly, I tbink, in 1892. P*rt of it wa3 in 1891. I handed Mr Hall all the letters I had. Mr HaU undertook to produce the correspondence. Re-examined by Sir R. Stout: Mr CunirgImm Smith w«s not in the employ of the company during the currency of the contract. He joked the company in May 1891. He had absolutely nothing to do with the business of the company during the existence of the contract, in 1891, 1892, and 1893. The firat official intim-tion I had from Mr Roid of the contract •with Wad was contained in his le'tar to me on the 16ta June 1892. Supposing that sheep went down in London in 1892 and 1893 after Mr Ward's contract was made what would have been the result if Ward had not h»d the contract with Ne'son ?— The result would have been that he would have lost monty on the shipmonts. Could he compete with you ? — That would be purely a question of finance. I should imagine* he could uot compete for any length of time. It would h&ve meant a great I ops to Mr W.-.rd. When you say that Mr Ward's opposition caused you loss what do you mean ? — I mean that bis being in the market and purchasing sheep of all kinds, owing to the contract he had •with Nels-n Brothers, we thereby suffered loss because, to keep our works at aU rfa<?onrbly supplied, we had to give a higher pries and to n&e pxtr* exertions to g<»t she-p. George Willis Nichol deposed : I am a directcr of the Southland Frozen Meat Company, and have been so for many years. We bad contract* with the Nekon Company. We had one in 1889, and that wt.s c-.ncel'ed and replaced by one in 189 L. I consider that for any alt ration mr.de Nelson Bivs. got sufficient quid pro quo. Mr Cuthbertson was the efficer of the company under the directors dining the existence of this contract. The company had a heavy struggle in the farly stsges of it* ex4 istence, but we had entered on a f»irly prosperous career for three years previous to the cantract of 1891. Oar ba'arce sheets show the profit* we made. Tte erection of fre?-zing works at Mataura was under onsidt-iMtion f-.r some limo before we decided to erect them. What determined us to start ar'd'tional woiks at Mataura was the starling by Mr Ward of his works at Ocean Bjach. lhat was tho immediate cause of oar being put in motion, but it had been under coDsicVr.ition previously. The competition with Mr WarJ einaply altered the character of our company from b">ing a prosperous company to b ing a company that was losing money. The pi ices given for stock were raised in competition. The mnrlffet really was excited. Sir R. Stout : The mirket in London, we know, was falling. Witness : The Ocean Beach Company and ou- stives had only one market, ar>d that wai NeUon Brop. We hid to raise the price to growers, snd we got no increase from Nelmon's. We did not lead off in rain'ng the prices. The Ocesn Beach Works first raised the prioes. We tendered for Mr Price's sheep. We first of all raised the price to growers. For the best part, if cot the whole, of 1892 we never raised the price to farmers ; we kept our price at 2d at tbe works, and we relied entirely on the farmers bringing their fctock to our works at our P'>b i-'hed rates. In addition to farmer*, Mr Price and one or two other diwera collected Bheep and brought them in at our published rate, acting on their own responsibility. In the lafctec part of 1892 Mr Price for some reason •withdrew his trade from us and went over to the opposition works. This occasioned a considerable loss of stock to vs — he was a very large dealer, — and early in 1893 there was an effort made to get his tradu ag<tin. This resuitad ia his asking ua to tender what price we would give him, and we were told the Ocean Btj=>ch Company were also asked to tender. Just before that we had raised our price £d to the farmers and published it, and seeing Kir Price would ixpecS to get something over that, we tendered 2 3-16 d, and he did not accept our lender — he acceptrd a tender from the opposition •works. We realised then that the struggle was getting very severe between the two works, and we then put on another buyer, named Fleming, and we gave him 2|d. That left only -^d as a margin to carry all the expenses of railing, freezing, bagging, shipping, and all the incidem als. It you had nob raised th.B price, wha 1 ; would hive been the result to your work* ? — We would have hod a very restricted supply of sheep, and as we had determined to go in for the Mataura works, and as we had considered it necessary in connection with these works that there should be a hulk at the Bluff, it wa°, with the dual works, necessary to keep the works fairly supplied or to shut dowD, and the latter meant losing our connection. I have not to the present time peon a copy of the agreement between ! Ward and the Nelsons. I think it was before Ward started operations that I first heard there was an agreement. When I did hear the report I thiuk it had a definite form — that the Nelsons had contracted for Ward's output. It is not correct that the company on'y thought of suing Nelcons when we were pressed by the bank. The company is not now pressed by the bank. "Ar« you independent of the bank ? — Yes Last, week we put in promissory notes fjom substantial growers to the amount of £21,000. His Honor did not think this was relevant on examination-in- chief. Now, Mr Nichol, you have heard of the concessions given to Mr Ward— the 2£ per cent, commission on freight, and that his works were to be kept clear. Do you consider Mr Ward or your company was best treated by Nelsons ? — I consider the concessions given to Mr Ward Bade his company the best favoured one. Cross- examined by Mr Hoskiog : When the
erection of works at Mataura was first projected by the directors, which was, to the best of my re'iollect'on, after the contract with Nelson was made, the at l itude I took was of advocating delay. The idea in going in for works there was that the power at the Mataura was unique for freezing works, and we knew that if we did not take it up it would in all probability be taken up by others. We al-o considered that our works at the Bluff 'and Wallacetown were not sufficiently complete. The idea was to fence ourselves as a growirjg company properly against an attack. Ycu wished to maintain the monopoly of Southland ?— No ;wa wished to mak6 ourselves as efficient as possible. The reason why I counselled delay was that we had only reached a position of prosperity and rest for about two years. We were doing fairly well, aad I aimply prfcf erred to go on qniatly. Not to my recollection did I ever take up a strong attitude on the matter. I never threatened resignation from the board in connection with that subject. The only tima that I threatened to resign was upon the contract for three years with Nelson Bros., and I did place my resignation in the hands of the chairman. 1 was very Btron^ly oppose! to that contract. The chairman, after several conversations, persuaded me to withdraw the resignation. The company did go on with the Mataura works and the hulk, and that involved us in considerable expenditure. We kuew when we were going in for the hulk that we were going in for a business that might lead us into loss. We did not consider that the Mntaura works would involve a loss, but we felt that the hulk would probably be a drag during the completion of the Mataura woks. The first amount that was under discufsivn for the Mataura works was, I think, £15 000. Before they were completed they cost £25,000. With reterence to the price of shtep rising, did jou ever fe»r any competition fivm the Burutide wjrka ? — The competition was of a very slight claracter. Our bavinees was to a large extent isolated. The Burr.side works were a good deal h »ndioApped by the extra distance from the farmer*. What were the conce?flions to Mr Ward that your company complained of ?— Notably the commission on freight. We only knew of the others since this convfpondence was discovered. I may say deliberately that we suppeated from a very early stage that Mr Wa.d had other concessions. What concessions row do you complain of ?—? — I think that the position Messrs Nelson toik up with regard to the other company was general!) of a helping character. Tho clearing of Mr W*rd'B work' was another item — I forgot it for the moment — that was before tho directors very often. The grades of thq sheep Mr Ward had to ship were made easier, assuming that the original terms with Mr Ward were the same as with us. I think that the grade was a simple one -in our contract. Considering that Nelson Bros bouod themselves not to asdst any other company, I consider that to enter into the fiuaticia] arrangements What financial arrangements ? — Lending Mr Ward £20, C00 and arranging to buy his works. How could the advance to Mr Wsrd, made after you had abut down in 1893, help him as against jou?— You must remember that both companies were fit.it ly exhausted with the stn ggle. _ But this we8 v after the shipping companies hud come to you with £20,000. Do you think now that Nelsons could have helped Ward by that a 9 againifc you ? — Well, it is simply a milter of quantity. You asked me for illustrntioup, and I gave you that as an illustration. It was not before tho directors of the company that the Nelsons offered the company the s*me contract as was made with Ward, Mr Ho'king r«ad the following letters :— R. F. Cuthbeitaon, Fsq., Southland Frozen Meat Company (Limited), Inverra'gill. Dear Sir,— Refi'Viing to the conversation I h-ul •with you last week, I now put in writing the offer th-iu made, which, if accepted, will take the place of the i recent agt cement as far as the modifications c.iutaiuud h rein go. 1. That all sheep thall be weighed separately, and the weight of each carcase marked on the ticket attached. 2. '1 hat 6 per cent, shall bo deducted from that weight for shrinkage. 3. Thut the price of all prime carcases weigbiug fiom 5'.4b to 691b (inclusive) (hot weights), shall be 2id per lb f.o b. (ba*s included). <. 4 That the price of other grades of prime wethers and maiden ewes— viz., those up to 58l r > (hot weight) and those from 701l> to 791b (hot weight)— hall be 2id per lb f.o b. (bags included). 5. That tho price of aged ewes weighing 701b and under (hot weight) shall be 23-lfidperlbf.o.b. (bags included). 6. That the price for prime merino wethers shall be 2 3-'.6d per lb f.o.b. (bags included). I will also Kgree to pay 2} per cent, on net amount of freight on above meat. Terms cash on exchange fur bill of lading, but should your woiks become bio ked with meat at any time and we are unable to provide freight, arrangement* can be ma ie to pay for meat in the woiks on production of store warrant. I enclose herewith detailed list of grades, 4c, with price of each mirked. — Youra faithfully, (Signed) J. 13. Hew. Messrs Nelson Bros. (Limited), Dunedin. Dear Sirs, — We are advised that Mr Ward recently offered to freeze sheep for one of our clients, and allow him to dispose of them either | in the clony or elsewhere, as he chose. We are also advised that he has not only offered, | but has actually frozen beef for one of our clients, on the distinct understanding that the Utter is to be permitted to dispose of it in any way he thinks fit. We shall be glad to know if Mr Ward's contract with you permits him to do so, aud if not we have to request that you will t*kc such steps as may be necessary to put a stop to this practice. ... I am also to state that my directors consider the 2J per cent, commission on freight grant-d to Sir Ward is an infringement of their agreement with you, and formally a-k you to grant them the same consideration. (Signed) B. F. Outhbeutson, Secretary. Witness: I understood that Mr Reid, on behalf of Nelson Bros., was prepared to g"ve us the same terma of con tract as Mr Ward's in lieu of tho one we had, aud when that statement was made we had a statement of what that contract was in reg rd '.o grading, and we considered that it was no better than the one we had. l I bava not the slightest recollection if the 2i per cent, commission was offered to us in connection with that contract. The attitude towards Ward as in opposition to ourselves was one of attention and consideration for his requirements. Our method of buying sheep was to give a piice per head delivered at the works. That was the method followed all through the contract. The guarantee system gradually died out during the contiuuanee of the contract. It was on its last legs during the last contract. There was very little strength in it at the beginning of the contract, as tho farmers liked to have a free hand. There was no dissatisfaction during the last contract that the large farmers were favoured at the expense of the small farmers. We had some large suppliers of sheep on outboard. We had Ellis Bros, and Mr Bell. I don't think there were any other large suppliers. Mr Turnbull and Mr Carswell were alio members of the board. I beliave Mr Carswell got commission from the Tyser line, and the board never wished to take that commission from him. I did the stevedoring for the Tyser line for some time, but I don't think it was during this contract. I
was never in favour of selling the Southland works. I do cob recollect having any correspondence on the subject of selling tho works, and I have never diEcuised the question of their sale. Re-examined by Sir Robert Stoub: If inferior sheep wera pub on the London market ib would not do us good. With the present freezing power we have we can freeze 700 Hheep a day at the Mataura works. My impression is that the Southland district has been a growing one in the product'on of sheep. I gathered from the correspondence that there was an agreement to purchase the Ocean Beach Works by Nelson Bro3. My impression is that sjius new wortta were made at the Ocean Beach Works in 1893. To Mr Bell: It was the initiation of Mr Ward's worka that made us go iuto the Mataura works a3 a necessity. I cannot recollect tint Mr Ward advocated a policy of extension of the works. Mr Carswell was strongly in favour of the erection of tbe Mataura works. George F. Clulee deposed : I live in Timaru, and have been there for many years. I have had some experience in fret zing sheep as manager of the South Canterbury Freezing Works. I believe the signature on the document produced is that of Harvey, the secretary of Nelson Bros in Loncfon. Sir Robeit Stout said he wished to put in the document to show the price of mutton in London on December 22, 1891. Mr Bell submitted th\t the d cument was not admissible. His learned friend could not give evidence of a particular iale. The evidence of va T ue or of price must be general evidence collected from a serioj of documents of the kind, but no evidence of a particular sale was evidence of value. HU Honor disallowed the putting in of the document. Witness (proceeding with his evidence) : I know the price of sheep iv 10D2. I s-nt Home sheep myatlf in thit year and the following year. 1 have the average priuf of sheep thab I sent Home in 1892 aud 1893 In 1892 the shipments made in Marcb, Juno, July, and October averaged 4 l-16d. In 1893 shipments made in January, April, June, July, August, September, October, and November averaged 73,1 D Sir Robert Stout : What would be the proper price to deduct from this price to get at the pi ice to the grower ? Witness replied : About I£J. What would be your own price compared with the Southland prica ? — My opinion is that thtre would bo a difference of £1 pjr lb in favour of my sheep. I now ask you, Me Cluke, could tho New Zealand Freezing Company pay 2£d end 2 3.-16 din Southland iv 1893 and make any profit ? Mr Bell submitted that that was an entirely irrelevant question. These people had a New Zealand market and not a London market, and therefor© the question had no bearing on the case. Sir Rohert Stout said his learned friend did not sea bis point at all. His Honor asked what was the object of the qnei-tion. Sir Robert Stout : If it had not been for the firm cuntrj,c(; that Ward had he could not have sold mutton nt the price. Mr Bell : It is admitted tho Frer zing Company knew that. Sir Robirfc S'out : If Ward had Hot had a firm contract for two yc-ars with Nelson to purchase his mutton ab the price he g t ia 1892 and 1893, bis w«.rks would have had to stop. Witness continued : I have been engnged in the meat trade for nine or ten years. I know of no London bujers except Nelsons taking conti'icts for more than a year. The general practice now h to sell c.i f. Cress- examined by Mr Ball: The Nelsons made contracts all over New Zealand, and I had hem'd that they had a three ycavi' contract wi'h the S-übhland Company. In February 1892 mutton was high. It was a rising market from the Ist January to the 19th February, and thon stationary lo the 4th March, afcer wbioh it began to fall. Having regard fco that, and to the fact that the Southland Cojipauy were bound to sell to Nelson 3ab 2£il, and could only afford to give growers 2gd, allowing o|d for freezing, I would cerlaiaJy anticipate that if growers had another outleb foe their sheep th»y would Sf-ll to another market. Therefore it would ba to the interest of the Sonthland Company that a contract at a fixed price should be /made with the Ocean Beach ? — That is equally certain. Re-e xamined by Sic R. Stout : It is well known that January and February are always the bett months for London prices. The price, after the drop in March 1892, was never up for tha rest of the yenr. Sir R. Stout said be wished now to put in the letters and telegrams he had read, and ho v/iahed to draw attention to a cliiss of letters he had not commented on in his opening — that cl*s* of letters dealing with the purchase in li} 93. Th.fi first letter was dated on the 27fch January 1893 from Mr Ward to Mr Raid. It was a Fckedule called a contingent expenditure of £6015 -teveu dwelling houßea and so on. That would be of importance, for the plaintiffs would submit that the money was expended after. the Nelsons' purchase, and paid for after the Nelsous' purchase, as it was concerned in the erection of wirk*. His Honor : I see. There was an agreement to pay at the end of the year for something which at the date of the agreement was not in existence, but had to be brought into existence. | Mr Ball :It was already under way. St R S out : It was not under way according to the letters. It was a contingent liability. Learned counsel put in ceitiin letters wiibtcn in Feb uiry 1893, and the agreement, Ward to Nelson, dited the 20th February 1893. In that agreement it was provided that the items set down in schedule A under the head of contingent expenses were to be completed in a workmanlike manner. Hi 6 Honor : That wa3 not a binding agree,ment, was it ? That was when it was put under offer ? Sir R. Stout: YfS. He put in 36 other letters, and said a point of importance, to show how the money was paid — that the thing bad bsen "put up" sinee — was an admission by Nelson in a letter on January 22 : — '"The advantages to us of the proposed alteration are as follows (but I must first p^int out why the works are now valued at £50,000 in6tead of £32,000):— Since we purchased the new storage agreed upou has been added, and sundry other necessary additions, with an amount still further to ba spent, which would bring the total cost up to £42,000, the additional £8000 of which — of course half will belong to vs — is on the ground of the large paper interest which Ward tvs in it," and so on. He asked his Honor now, in case any question might be raised, that the words in the defendants' pleadings should be addod to the eighth paragraph of the statement of claim. He had cases to show that there was no doubt whatever about the power to do it. His Honor thought it better perhaps to postpone the discussion as to whether the amendment should be made. Mr Bell: Contingent upon that, if that amendment is allowed, obviously an amend-
ment of the defenoe would hare to be allowed to me. Sir R. Stoat : I have no oSjeubton. The casa foe fche plaintiffs was then closed. Mr Bell : May it please your Honor, gentlemen, — You have heard one side of the story and practically part of the defendant's story, but what you hare not heard is a consecutive narrative of the circumstances connocted with the contracts entered into between the company which I represent and Mr Ward, and apparently there was, I should imagine, a desire on my learned friend's part throughout to prevent any consecutive account appearing of his case, for as you follow the acts f.omdateto date and the communications between the parlies, it becomes perfectly m&uifeib that the plaint If company never had, or deemed they had, any c&u^e of coroplunt against the defendant company, and that, as I shall &how ycu, this action is tb.3 discovery of certain people quite outside the directorate of the plaintiff company, who wish pc-haps — ooe or two of them— to " get at " Nelson Bro?. (Limited) and the Tyser Use through the medium of a jury of their fellow countrymen. In fact, as Mr CuniE t u*m Smith gays in a letter I am about to read to yon in a moment, " th ; s will ba a bombshell in the Nelson-CMm-Ward camp." Sir R. Stout : Smith to whom ? Mr Bell: Smith to Turnbull, Martin, and Co. Sir R. Stout : That won't be evidence. Mr Bell : I propose to read it in a moment fco the jury. It is in th-3 discovered correspondence. I will show it to your Honor, and your Honor can see what I propose to open. I propose to open and read the correspondence immediately prior to the writ, and the interrogatories that were then issued and the allegations then made agaiaht the company, and thou I shall proceed to bring the jury to what has been attempted to bo proved in this action, and for that purpose I propose to read the letters written by the gontral manager of tho compiny, Mr Cuninghain Smith, and produced by the oth.tr sirfc to us as relevant to the action. Sir R. St'jut : That does not make it relevant. I object. Mr Bell : I propose to show your Honor the letter I propose to read, and your Honor can see whether I can read it. Sir R Stout : I wish it argued firsb. His Honor : I suppose I can see the letter firat. Sir R. Stout -. The point is, that I want the matter argued. His Honor : Certainly, before Mr Bell opena a doubtful letter to the jury you have a light to argue. Sic R. Stout : I do not wish to interrupt my friend, but the practice is to take disputed points afterwards. My friend has no right to have the question of evidence or no evidence in the opening. Mr Bell: I admit that is the usual practice. Hid Honor : Why should you depart from it? Mr Bell : Your Honor will see in a moment. I must address the jury in a particular way in regard to the initiation of this action. I cannot do so without reading to the jury the documents which passed between the officers of the company and others immediately prioc to tho issue of this writ. His Honor : Do you think it is anything in your case's favour the matter should be determined in the float insbauce p Ido not see there is any binding practice to prevent this being determined ' j Mr Bull : lam so anxiou3 to get on that I won't do that. If my learned friend willuudertike not to interrupt me nio^e than ha can possibly help Sir R. Stout: I shall not interrupt unices it i 9 necessary. His Honor : There are obvious objections to introducing a letter from the general manager to an outsider Mr Bell : This is not to an outsider, but to one of the companies whi -h put £10,000 into the Southland Frozen Meat Company and has a directjr on the board. To save time I will not refer to that letter. I want lo know it tny friend objects to my readiug letters between the general manager of the company and the Bauk of New Zealand immediately prior to the comrneccement of the action. Sir R Stout : Yes, I object. Mr Bell : On what ground ? Sir R. Stout : They cannot be of avail in the actioD. His Honor : What is the position of the Bank of New Zealand ? Mr Bell : Thero was an overdrawn acoount of dose on £30,000. The Bank of New Zealand makes a demand, and thon a letter is rccsived from the Bank of New Zealand regarding the ioteution of the company iv relation to this.' The objection, of course, your Honor, to this, which appears to me to be obvious evidence, is somewhat disconcerting, but my learned friend is quite within his rights in making it. Very well, I'll take it from the company's minutes. I assume it is not contained that the minutes of the company are not evidence against them. Sir R. Stout : The minutes of the company, after the litigation was oniinehctd, are not evidence s gainst them. Mr Bell : I simply ask my friend the qu3etion. Very well, we'll tender them later on. Gentlemen of the jury, you will observe that Sir Robert Stout and those who are in cha'ge of the plaintiffs' case ara exceedingly tender as fco the production I Sir R. Stout : You have no right to say thit. Mr Bull : They are exceedingly tender as to the production of any cocrespondenca and are about to object to any correspondence concerning the commencement of this action, and I am very sorry that there is going to be an attempt to keep that from tha jury, because it would be clearly interesting to you, and, I apprehend, also 6t advantage to my clients that you should have it, and I shall endeavour later on to put it before you. At present I am only able to refer to the taot, which has been proved independently that at the end of 1893, in lieu of the proposal to amalgamate the Southland Company with the Ocean Beach Company the Southland Company elected to take into co-partnerships two shipping companies, each of which put in £10,000, to carry on the fight vigorously. And carried on it was with results not very satisfactory to the Southland Fivzen Meat Company, which in that year lost £16,785 — a sum which was euormou<sly in excess of any sum they had ever lost before, — so that when they came to fight us, without the contract but with the co-opera-tion of the shipping companies, they lost enormously ; and in 1895 they came to the concision that the Nelsons had been playing them falsj — that is to say, that they concluded —or pretended to conclude, for it was a mere pretence on their ppra r t — that the Nelsons had in the years 1891, 1892, and 1893, in defiance of their contract with them, been interested directly in the Ocean Beach Works. Now in that they were quite incorrect. Their surmise was quite faIEC, and having failed in their surmise, and having failed in the action which they launched upon that surmise, they now seek to take advantage of a matter they knew all along and never complained of. The action ought to have been
dropped when tha interrogatorioa which I am about to road Does my learned friend object to my reading the interrogatories ? Sir R. Stout : No ; and the answers if you liko. Mr Bell : Your Honor, I was about to move for a nonßuit, and I am at a loss to know why I rose to address tho jury. I have never in my experience done such a thing before Sic R. Stout : Ido noi object to my friend moving now. His Honor remarked that when the jurj was pre&en 1 ;, though he wa? there toTiear what was to be said on the subject of nonsuit, he was always disinclined to how a nonsuit argued when tha jury was in tho box, but rather to reserve leave. Mr Bell : I must move His Honor : I have no objection at all. Ii Sir Robert Stoub does not object, I am sure I do not. Sir R. Stoub : Not the slightest. Mr Bell : The grounds upon which I move for a nonsuit aro that this contract contains an express permi»6!on to Nelson Bros, to buy the output of any works. Tiiore is no evidence that we ever were concerned ia the ereclion or uso of the Ocean Beach Works othsrwise thsn in respect of the purchase of tho output. Secondly, if there were any doubt as to the construction of the contract, the lottera put in show that the plaintiffs acted upon a particular construction of that contract, admitted oar right to purchase tho output, and insisted upon certaia contingent right! in consequence — consequent upon that admission. There has been no proof whatever of any breach except the purchase of tie output. Obvioufly the question whether thnt wad a breach or not is a question for the court ; at least I submit ib is obvious. It is fo r the court and uot for tho jury. Therefore your Honor will h*vo to rule that it is a breach. His Honor : No doub 1 ; sooner or later the court will hive to rule whether the agreement to purchase the output was a breach. Mr B-ll: Now your Honor will understand why I am bound to movo for a nonmit. His Honor: It is far more convenient you should do co. Mr Bell : The other branch allr gsd is that we accep'-.ed iv April 1893 au offer made by Me Wnrd in February of 1893 to sill us the Ocean Baach Works In our acceptance it was provided that the arrangaunnb wai to take effect on the Ist of Januaiy 1891. Now that again, I tubmil-, is a question for tho court and not for tho jury. It ia a very simple question, I think, when it id considered out. His Honor: It dtpends rather on the correspondence, does it ? The evidence in oonneotion with the purchase in 1893 is in writing. Mr Bell : Yts, it is all in writing. Supposing Nelsons were not entitled to agcee to buy the Frozen Meat Works on January 1, or to erect works to as to biing them into operation on January 1, then they would be bonnd, not for three years, but for five years,— that is the position, and bo it ii in all trades. If a man agrees not ta enter into competition for two years, he is entitled to prepare himself for competition at the conclusion of that term, otherwise he would be bound for a much longer period. Then I understand tho third Bugjjc»ted breach of contract is that we lent Me Ward £20,000 in November 1893. How that h being concerned in Mr Ward's fretzing worki it ia difficult to understand. Sir It. Stout : It is a form of purchasing them. Me Bell : That is exactly what it was not. My learned friond put it to the jury that Nelsons led £20,000 as soon an they were asked for it, which was the fact, and Nelsons had ai security the works put in pledge. The fact waa that he had agreed to buy them, so th«y wera actually worth to Mr Nel-ou £32,000. When Mr Ntlson agreed to lund £20,000 to Mr Ward in November ha got as security the deeds ol the Ocean Beach Works, cud not ouly were they worth £32,000 as face value, but they were actually worth £32,000 c&sh to Mr Nelson, because he had got to pay £32,000 for them. What I mean is that they were a different security to Mr Nelson thsn to anyone else. If they had baon mortgngod to A they might not have sold for £32,000, but in Mr NeUon'a hands they were actually worth £32,000. Tha " other matters that have been {.uggeater! ar< sur&ly not suggested rs breaches themselves, but as evidence that we might have been concerned in Mr Ward'u works — that is to say, it is euj.'g<:steJ that certain concessions made to Mr Ward are indications that we were in some way or other concerned in Ward's works. Now the correspondence shows throughout that we loyally observed the conditions of the contract. If we were entitled to purchase the output, which is re»)ly the question here, then we were entitled to purchase upon any terms we pleased. Now I shall be prepared to show that Mr Ward's terms, so far from being favourable to him, the reverse was actually the retult— that is to say, that in every case we paid less to Ward for sheep and they sold for more. But irrespective of that, and atsaaung that any favour was given to Mr Ward, if we had a right to enter into the output agreement with Mr Ward we had a right tjen'erinto the output agreement upon any terms we pleased, subject, of course, to the condition that if we gave higher terms the Southland Company could, if it chose, exercise its rights ucd<-r the contract and terminate its own agreement. It all practically turns upon that. Everything we did with Mr Ward we did under the contract with him which is before the court, and our contract with him was to pub him upon the same terms as tbe Southland Company. The point is, were we entitled to enter into a contract or not. As a matter of fact Mr Ward had reason to complain tbat we did not put him on the same terms as the Southland Cismnany, and he did complain vigorously, though not so vigorously as he was entitled to. Th<?re is a clause iv Mr Ward's contract that he is to have a? good terms as the other company. Were we entit'ed to enter into that contract with him ? If we wert, then everything done was in pursuance of tbat. So that I submit to your Honor the sole question is whether the agreement to take Mr Ward's output is or is not a breach of our contract with the Southland Frozen Meat Company. If yonr Honor were to rule that the output agreement with Mr Ward was in itself a breach, then we should have to go into an entirely different line of evidence. We Bhould have to endeavour to show that if we had not purchased the output there were other people ready to do it at that time, and therefore that the damage that flowed from Mr Ward's opposition did nob result from our act. Bat if, on the other hand, we vwre entitled to enter into the output agreement, then all questions* pass except the question as to whether we were entitled to agree in 1893 to buy in January 1894. It seems clear that unless youc Honor, forthe purpose o£ getting to the jury, were to rule against me on all points, certain of these matters would not go to the jury at all. The nonsuit point comes to this : The other side, as your Honor is aware, launched this action — it is not irrelevant to refer to it even at this stage. The other eicta began by alleging, as is clear from their owff
pleadings, that we were directly interested in Mr Ward's wi>*ka. That is what they say. Sir R. Stout : That and more. Mr Bell : "What they said was this : " The defendants without having made any epeoial arrangement with the plaintiffs in the year 1891 erected or assisted, and were concerned or interested in the erection of oertiia freezing work* ab the Bluff, and were thenotforbh during the remainder of the term of three years concerned and interested in the use of the said freezing works." Well now they have administered stringent interrogatories to ascertain whether or cob NeUoo had money invested in the concern. Sir R. Stout • How does that affect the Donsuit ? Mr Bell : The interrogatories not being in I cau only refer to the pleadings to show that that is the way the action commenced. They alleged that we were actually directly concerned, and now it turns out in the evidence that the Ntlaons never had a shi'ling in the matter at all — tbat is perfectly clearly proved. Sir R. Stout: I do not admib that. Mr Bell : There is no evidence that a single shilling of Nelsons' money was ever invested with Ward, nor that Nelson paid anything to Mr Ward until the £20,000 w«s lent on the title deeds. Tbat was a transaction they were entitled to enter into upon the authorities. As to that, I don't think your Honor will bave any difficulty at all. There is plain authority upon that.' Upon a contract of this kind, lending j money, even" though the only means of being paid back is out of the profits, ia not a breach of contract. Well, putting tbat airide, I eayj there was not a shilling of Nelsons' money j ever passed to Mr Ward according to the evidence. That narrows it down to the question: Were we interested in the use of the ! works ? Colloquially, we were interested in the use of the works by having purchased the output, and co you come back to the point whether we were entitled to enter into the output agreement. That would have been arguable, I eubmit, had it not been for one clause iv the agreement and for the subsequent conduct of the parties, which makes ib clear that b/th parties adopted the interpretation of tho contract that the Nelton* were perfectly entitled to bay Ward's output. Though ib is possible your Honor may thiok it necessary to postpone your ruling upon other questions until the olote of the case, I apprehend it would fee very convenient if your Honor decided this question now, before the case goes to the jury for defence, as to whether the output agreement was a breach of oontrs.ct. Mr Hosking was also heard in support of the motion for the nonsuit. The way, he submitted, the matter should be put, was this : Clause 7 in the agreement — the 'one which referred to the purchase by Nelsons of any other output — was practically a licence or exception from the general covenant which followed, that they should not be interested in any other y works. ' At all events it meant that they might purchase the output of another person. He submitted that was the proper consideration of the document. It said, in the event of the Nelsons purchasing from any other person, that tben the Southland Company might terminate the contract or Nelsons must place them on the same footing — that was to say, subject to certain conditions, Nelsons were at liberty to purchase the output of another person ; that it was not necessary for Nelsons, before they did purchase the output, to go to the Southland Company and say we want to enter into thi« contract, will you allow us to do to ? . They could proceed independently in the first instance, to negotiate for the purchase of another person's output. If they were at liberty to purchase another person's output that necessarily involved the liberty to do whatever was necessary, fair, and proper, to give effect to that purchase. As to what was fair and proper in tha purchase of the output, they had really the Southland Company's own fctamp upon that — viz , the contract the oompany had entered into with Nelson's ; bo that the Southland Comptny might be taken by their own contract to adotit that in the purchvie of an outpnt it was proper and fair to enter into arrangements with regard to the freight. He submitted that Nelsons were perfectly justified, therefore, in entering into the arrangements as t& freight which were found in Mr Ward's contract. Now if he was right in tbe position he had taken up— viz., that there was liberty to enter into an agreement to put chase the output and (o make consequential terms upon the purchase — let them see how the matter would stand. Cuthbertson put tbe grievances which followed from the breach of the contract — that the price bad been raised ; that the Nelsons had accepted inferior »hsep from Mr Ward ; that the Nelsons had not cleared tbeir (the Southland Company's) works quickly enough. Tho-e were the three points which -were said to be the result of the breach v of contract. It was alleged that these results had followed from entering into this contract with W»rd to buy his output, j It followed that these grievances were expressly permitted by the original contract, for they were the necessary result of buying the output of any other works than thos9 of the Southland Company. If the original contract with the Southland Company said, "You may buy another person's output " it necessarily followed that they gave the Nelsons liberty to place them at tbat disadvantage. He submitted that thia was a perfectly legitimate argument, and that it could noh be got out of upon any proper construction of the agreement. Ail the grievances that Mr Cuthbertson had mentioned followed as the natural cousequence of Nelson Bi os. entering into a contract to purchase the output of any other company. The object of the company in putty) g up works at fiiataura was to keep out a rival competitor, but when they said " You can buy from other persons," they .at once said "You can introduce competition iuto the market." Then there was the restriction as to the class of sheep. With regard to that the contract whioh Nelsons were committed to enter into by the Southland Company said nothing about the class of sheep they might oontracfe to buy. It simply said Nelsons might buy sheep from another person, and said uothing about grades, so that the Nelsons were at perfect liberty to buy sheep of any grade they chose. It didn't follow that the grades which p<evailed in 1891 would be acceptable to anybody in 1892. They knew that these were matters which would change as ■ trade developed, and it did not follow that the same grade was to be provided for in the case of the third party ; but the Southland Company, in fact, went further than that. They said, "We acknowledge you may buy from other persona, and at different prices from what you give us, or on different taring, provided we have liberty t < come in and^fb get the same terms." The evidence as to this was that they had liberty to come in and have a contract on the same lints as Ward, but they said "No, it would not suit them ; it would ccst them too much money to alter their works." The way in which they treated this matter of a rival oontraot was directly shown by what had taken place on that occasion. They were to have liberty to take up the same terms if they chose, and they said they would Dot accept them. The third grievance which ««s said to have followed was that ia coda*-
; qaence of this purchase of the output the Southland Cumpany's works wers not cleared. , Whether that was so or not he submitted that it wrs not a consequence of Nel>on buying Mr Ward's output at all The true cause of what happened was that Nelsons hadn't provided sufficient fre : gat accommodation — it was not because they had bought Ward's sheep that a block ensued, but because sufficient freight accommodation was nob provided. Then they might fairly put it in this way : that the Hceuao to Nelsjus to purchase any other output; ia Southland left it open for the chance to arise of a block if they allowed competition to come in, as he submitted the cou l ract did. Theu the further consequence of the non-clearing of the wotks and of the block ab the Bluff must necessarily be licensed also. If these sct3 were licensed to that extent, theu the results which may be said to arise from them were licensed also. Thit would lead to the question as to what the interest in the contract really was. It c:>uld not possibly mean the interest which the buyer of sheep would have in seeing thmt the sheep were graded properly and so on, because that was the very thing thy purchaser of an output would do. Ib could not bs what nvght be called the natural interest shown by Nelsons in Eeeing the way the sheep were graded, for that was a proper interest for the purchaser of an output to tike. Ib was not a pecuniary interest that Nekon Br jb. were to reaaive — so much for each sheeo frozen, — the legitimate interest which Nelson Bcos. were justified in taking, and which Mr Ward might have c implained if they had not taken. It was ia evidence that Mr Ward was new to the business and. therefore there was all the more reason that Nelsons should aid the sale of sheep in London and sse that they were made proper for th 9 London market, and all the more reason why that interest which wa* apparent in the coive'-pondencs should be shown by Mr Nelson. But that interest, he submitted, was not in'ereat within the meauing of the contract. This was timply an attempt to charge ..the losses which had arisen from the doing of these acts that the defendants were lioensed to do to a breach of the covenant. They were simply tryiug to gay, "Although we licenced you to buy another nun's output, and necessatily to do other things, you must pay us for haviog done that, although we allowed you to do it." That was leally the position taken up by the plaintiff. They were trying to make the defendants pay them for what they had not guarded themselves against, and for what they had fxpr*»fely allowed the defendant to do. He suggested that the true obstruction of the covenant nob to ereco or assi;>b in erecting, or be concerned or interested in any works, mu-t be that they would not be pecuniarily interested, and pecuniary interest meaut interest in the profits. It must mem that defendants shouid not put money in the business. In the first place NeUous covenanted with them chat they would not erect certain works. That could not bb that they would n>t with their own hand* put up certain works. It must mean that they would not pay mouey to a contractor for that work. To covenant not to erect msant to covenant not to find funds. Thea how were | they to assist in erecting except by making \ a contribution to the funds for that purpose. A covenant agaiu&t erecting works | mu«t be a covenant 'not to supply any moneys required to build or to assist in putting up any poriion of the buildings. | Then exactly the game meaning must apply to assist in the use of the works. They could not put a different meaning lin the one case than in the other. He submitted that the truß construction of the covenant was clearly fchat they should not proI vide the money for eroctioa or assisting in the erection or for using the works. Tho covenant must deal with the pecuuiary interest of the parties. The learned counsel then dealt with the legal aspect of the points mentioned, citing as aut,horitie» : Bird v. Lake (H. and M., 308), Smith v. Hancock (L J. Chancery Division, p*ge 384), and Smith v. Hancock (L.J. Ch^r.cery Division, 12). Sir R Stout would first deal with hii fri >ud's lait point. He siid the test of the \v.»rd "interest" with reference to the contract completed iv 1893 v»ould be, supposing the buildiog had been burned down : Could Nelson compel Ward to re-erect them before completing the purchase P If not, had Nelson an insurable interest ? There were hundreds of case 3to show that Nelson h»d an insurable interest. His Honor : What do you say would have happened if the buildings had been burnt down ? Sir R. Stout: Ward could not have been compelled to erect them. — (Porter on Insurance, page 48) In this agreement, strange to say, the contract only was that the purchase money should be pnid in January. Mr Bi-H : No, no ! It says "to take effect." Sir R. Stout : The only arrangement was about tbe purchase money. Toe words were these: " This offer to remain open until Monday, 15th May 1893, and if accepted the £16,000 cash tthall be paid to me not later than the lit January 1894, and dividend upon the shares transferred to me shall be calculated, and shall be at the fame rate as pvd to other^hareV.ol.iera for the year ending 30bh September 1894." There was not a word about when the business was to be taken over. Mr Bel: It is in the acceptances. Sir R Stouh : There are two acceptances. Mr Bell : The official acceptance. Sir R. Btout : I don't know what tbat iK. The acceptance does not vary ib. Warren's letter, I suppose, is ib ?— " The arrangement to take effect from the 1M; January 1894." Mr Hosking : Mr Ward confirms the variation by a aubsequent letter. Sir R. Stout : What variation ? Mr Hosking : The variation •• to take effect from the Ist January 1894." Sir R. Stout : What letter do you re c er to ? Mr Hoiking : Ward to Nelson, 27th May 1893. Sir R. Stout : Read the letter. His Honor : It is obvious that if the money was to be paid on the Ist January, and there was no provision for interest in the meantime, possession would nob be given until tie lit January. I Sir R. Stout : That was not to say tbat they I were not interested. The contract provided in the schedule that certain works were to be erected and to be piid for. Tho offer gave £27,000 as the " present price," and there were contingent expenses of £6000, and they agreed to buy for £32,000 on the oondition that Ward proceeded with the erection of works in a workmanlike manner. If that was not" being interested and concerned in " he did not know what language was. How could they say they were wot interested iv the erection ? That was, he subiuitted, sufficient to wipe oat all the nonsuit points ; but as to the other pomt — I dealing with clauses 7 and B—he8 — he was not driven to make the first contention that he made, bub it was open to him to make it, that clause 7 meant outside the two counties of Southland and Wallace, and that clause 8 referred to the two counties of Southland and Wallace; and the company's reason for this was : " Outside Southland and Wallace you can contract for any output you please, but if you do you must do so ou the same terms as ours." * But clause
8 meaut that they were not to do anything to affect the company's output, and that was the meaning of the contract. If that was the meaning his friend would admit that the works constituted a breach. Mr Bell : No. Sir R Scout : Unless it was said that the plaintiff had waived or acquiesced, and that was not. pleaded. Mr Boll: If that construction is possible we rely on the Bauk of New Zealand v. Wilson. I Sir R. Stuut : The Bauk of New Zealand v. Wilsoa is not that. It is what ? Estoppel by conduct. What hava we done to estop by couduct ? Mr Hoskiug : You have not alleged this as a breach. j Sir R. Stout said the words "assist in the use" covered it. Those words were wirle enough to cover it all. There were hundreds of cases as to the meaning of the word " concerned," which was the word used in the contrAot. There was tho use of the word in the c»se of "any mrmber of a local bowd concerned in any bargain or contract who participates in the profits." Hia Honor : That ie a case of disqualification, of tha imposition of a penalty. That is a different class of case from*this. It cloej not follow that becausj the w.>rd " concerned " hns & particular meaning in that class that in the the pressnt case it should have a similar meaning. Sir R. Stout : No, but it had . a stonger meaning, because there a man was charged with crime. He cited the following authorities : — Nutton v. Wilson (58 LJ , I Common JLaw, 443), Smith v. Hancock, Wilkinson v. Pettib, Jones v. Evans (L.R., 4 Chancsry, 636), Newlyn v. Dobell (38 L J., j Chancery, 111), Baxter v. Lewis (30 Solicitors' i Journal, 705), Attorucj- general v. R>binßon '20 L J., Bxoht-quer, 188), Attorney-general v. Woodmas (Bunbury'a reports, 320), Hill v. Hill (55, Law Times), Turner v. Evans (22 L J., New Series, Q. 8., 412), Bromptoc v. Beadowa (13 Common Bench, New Series, 542), Whitely v. Bailey (57 L.J., Q 8., 643). Learned counsel submitted that the words of the contract in the present case were wider than those in any of the cases cited, and that ifc was part of the bargain that Mr Ward was to put up buildings which were to become Nelson Bros', in January. If they entered ~inb'j a contract with a contractor to erect works the mere fact that the contractor was to have three years to erect them in and was only to be paid at the end of three years would not prevent their action baing a breach of contract. The words of the contract were that they were not to erect, or assist, or be in any way CDncurnod or interested in, the erection of works during^ three years — not that the woiks were to ba completely finished during that time. He therefore submitted that; there was no ground for the nonsuit. He mighfc have referred to the letter in May and bu the letter of January 6, 1894, in which Mr Nelson eaid the company are to purchase the new storage. Mr Nelson lojktd upon it as a purchase in May, and if there was to bs an estoppel by a statemunt as to whab was the meaning of the contract, how had that estoppel not been pleaded P Mr Hall having followed oa the same side, Mr Bdll said : With regard to wh*b my leirned frieud says as to our endenvouring by the cass of th-i Bank of New Zealan-1 to alltgu a kiud of estoppel, that is nob the intention at all. My learned friend m^gnstud that the true terms of the contract are those relating to the purchase of the output, and that they mean that we are only entitled to purchase the output beyond the counties of Southland aud Wallace. And tint is a possible interpretation of the contract. What .he has now suggested is not ; and wo rely upon the Bank of New Zealand v. Wilson as showmg thtt was not the interpretation of the coutrasb adopted by the parties, that interpretation be ng obviously possible. In regard to whai has been contended as to this purchase, mind, your Honor, I contended in resj.oct to the contract of April that it must be possible in such a case to make arrangements for tha commencement of business on the Ist of January — that is to say, to make arrangements for the commencement of business at the termination of the period of re friction. Therefore it must have been competent for Nelaon Broi. to have entered into a contract for the purchase of freezing works at the same time during the year 1893; nnd that, folong as they w«jre not concerned in the use in any w»y — so loDg as they kej>t aloof from the use of the freezing wo.-ks— the mere fact that they entered into a contract that would allow them to enter into competition on the lot of January, was not a breach of contract. That is all I wifh to say ia reply. His Honor said : The question of the construction of this ccmract is one of considerable diffi ulty, and I do not wish at preseut to express a concluded opinion upon it. However, I am satisfied that it is not a case which I ought to withdraw from the jury at the present stage. It seems to me to be always desirable, where there is is any fair doubt, that where a jiry are present the matter ahould be left to ih* jury, and the doubt finally solved by the court in Banco. That is undoubtedly in the beet interest of the parties. I have groat difficulty in deciding that the contract; of Ap il 1893 was I not a br*ach of the agreement. The contract involved the erection, or partial erection, of freezing works during the perioi within which the defendants have bound themselves not to be in any way concerned or iiitiTested in the erection of fretzing works. Ou that ground, therefore, alone I »hould be inclined to refusa a nonsuit. No doubt tbat ground is cjmparatively au uusubstantial one, because it is difficult to see so far as that brench is concerned whab d image the plaintiffs suff -red from it If the plaintiffs are entitled to recover any substantial damage at the hands of the defendants, it ia because ths defendants have by bhe purchaFe of Mr Ward's output interfered with their trade and have by such purchase committed a breach of r;^<raph 8 of the agreement. I quite a^V with what Mr Bell said, that if the defendants were justified in p'lrahasing Mr Ward's output th«.t the concengions they made to Mr Ward iv respect to the 2£ per ceut. commission on tri'ight — if the defendants can be said themselves to nave made that concession — and the clause in the agreement which relates to keeping Mr Ward's works clear do not affect th-t question If the defendants wtre justified in making the output agreement with Mr Ward then the only thing the plaintiffs can complain of in the present action is the breach by the purchass in April 1893, and as I have said in respect to that broach, it is difn vlb to se* that they can cUim any substantial damage. The cardinal point in l.he case, a<j Mr B'U bus said, is whtther this output agreement with Dlr\V.ird was a breach of thia paragraph 8. I am inclined to think, though I do not wish to decide finally, that it was a breach, and for ths purpose of the present trial I shall rule that it was a breach. The terms of this paragraph 8 ara so exceedingly wide that ib is difficult to apply any of the cases cited to them. I can hardly arc de to the contention that paragraph 7 is a g" n»jral licence to do something which pan-graph 8 would forbid to be doua. The WAy to coa-
fctrue the agreement, I think, is to look at paragraph 8, and if by the termi of paragraph 8 an agreement of the kind made with Mr Ward is forbidden, then paragraph 7, if necss*ary, mU6t be reconciled with paragraph 8, if it is reasonably possible to do so ; and it I can be reconciled by limiting the right of puri ohase of oatpufc to the purchnse of outpub in parts of New Zealand other than Southland and Wallace Counties. The covonaut contained in paragraph 8 is : " Thai; the defendants shall not during the term of three years eroot or assist or be in any way concerned or interested in the erection or usa of freezing works on land or water at the Bluff or within oeit&in limits." They ara not even to assist in the uqo of such works. I confess these words are so wide that it is certainly difficult for me to say that the action of the defendants does not bring them within these words. What the defendants have done is that they have dealt with a rival freezing works at the Bluff, not as a chance customer, but as a purchaser of the whole of the produce for a definite term. It certainly does seem to me as the case stands at present that that circumstance does bring them within the paragraph. If it does so then I do not think that the case of Wilson and the Bank of New Zealand and thd cases there cited apply. That case was one where a document was capable, fairly capable, of two constructions, and the parties had placed a particular consbruct:on upon it, and had acted on auoh construction. Thtre was, therefore, a kind o£ estoppel on both parties in sajing that the construction they had adopted was nob a proper construction. Hera Ido not think that is so. If the construction which I have for the purposes of the trial placed upon thu paragraph is the correct one, theu, unless the plaint ffs have released the defendants or unless the plaintiffs have in some way or other estopped themselves fi-oni saying that this construe' ion of the contract is the com ci one, tben, notwithstanding any doubtful conduct or delay or inconsistent conduct on the pait of the plaintiffs, the plaintiffs are entitled to rccovor damages against the defendants for a breach. It m»y ba that this particular bre»ch — viz , the breach by purchase of Mr Ward's output — is [ not sufficiently all- gi<l in the breach which is charged in paragraph 5 of the btittineat of claim, but ib is quite clear that the question of whether | the entering into ttvh v agcinent with Mr W»rd was a breach of the agreement or not is pometbing which the parties cams here to try, became the defendants themselvtia in their statement of defence h'.ve set out the agreement with Mr Ward at lei gt'a, and have in j t^rms stated that it was no 6 a breach of the agreement. I say, therefore, that I must lei the ease go to the jury. Of course I reserve leave to yovi to move for a nonsuit. Mr Ball asked his Honor to bear in mind that he made at the outset, and would renew it the conclusion of hi 3 case, application for leave to amend paragraph 3 ot the t.tttemer)t of dtfeiice by making it more clear that they could roly on the doctrine of the Bank of New Zealand v. Wilfoa. Mr Bell satd he would prefer to resume his address to the jury in the morning, and at halfpast 5 the cuirt adjourned until 10.30 next day. Thursday, November 21. On the court resuming, Mr Bell said there was a misprint in the report of his Honor's judgment in the morning paper which might mislead the jury. His Honor was made to say that it could be i>aid that Nelsons gave the commission of 2£ per cent, to Mr Ward. It should have besn "if it could be said," &c. His Honor : What I said was whether or no the commission was given by Ntliou Bros., or by Mr Reid, ss agent for the Tyser line, it was really immaterial if the sale ot the output was not a breach of, the covenant Mr Bell, re suming his address to the jury, said : I must ask jour attention to the correspondence which I am forced to read to >ou this moruiug. Though it may appear to you 'hat part of it might be omitted and your time saved, I appeal to you to give me your&t'eation because you will remerolnr that my learned frie-ud, quite naburally, summarised the correspondence and made selections from it quite naturally, and not at all unfairly, for the purpose of maintaining the case of prejudice which he submitted to you. If you rtmenber, my learned friend did not rely upon this output contract as a breach of the covenant with the plaintiffs. What he wanted to bring before you were the other matters, such as the commission of 2^r per cent, aud the shipping arrangements, which he relied upon as ahuwiog that NeUou and Co. had an actual interest in War-is works, and that they had unfairly assisted Mr Ward Now, yi.u are of course aware by this time that my i olientß find themselves in this unfortunate j position for the moment, because for the moment I you and I are bound to accept the position that in making the agreement with Mr Ward for the purchase of the output Nelson Bros, did commit a technical breach of the agreement they had made previously with the Suutulaud Company. I say unfoctuuate, because you will remembrr that nobody ever thoughb uutil yes- | terday that it war a bieach of contract. | Sir R. Stout : Pardon me. Mr B 11: I di not know, of course, what my learned friend thought before, and I am not going to ask you to assume that my learned frieud did not think so ; but vhat I want you to bear in mind is this, that from first to last the Southland Company never pretended for a oiuglc moment that Nelson aud Co were prevented by anything from entering into thu output agreement with Mr Ward. Oa the contrary, they admitted that to be the position. They never complained of it, and they continued their relations with Nelson, and actually claimed that Mr Nelson should take a certain course with regard to Mr Ward in respect of this very output coi.tract ; relying upon their rights under the seventh clause of thd contract. It appears, therefore, tbat the Southland Company was equally wrong with the defendants in the construction of the contract. Technically it seeni3 we committed a breach of contract, and the Southland Company find they have a technical breach upon which they can rely.« But you will remember that thiaacfion was launched upon the suggestion of dishonourable conduct on the part of the company which I represent ! They were charged with dihhonmirable conduct. Th-y wers charged with secretly having a direct financial interest in Mr Ward's works. It j was charged th*t Mr Ward's finance had been found by Nelson, and tb.it practically the works had been erected by their money and the business carried oa by their money. There never was any foundation for that suggestion ; bu'j you will obnerve that the atftt«-raei;t of cluim was founded upon that. In V' a s'afcarntub of claim the plaintiffs aIU-yc — thry did not set cut the whole agreement, but thuy seb out a particular clause of the agreement which had been ma.de between the Southland Company and Nelson Bros, in these words: — "That Nr-lsjn Bro3. (L'mited) shall not duripg the sai.d term of three years erect or assist in the ere°tion or » use of freezing works on land or water ab the Bluff or within the limits of the Southland or Wallace Counties without makinjj snecial arr&ncemtnta
with the company, nor do anything of the like nature which may in any way interfere with or restriot the output of the business, trade, at profits of the company." They set out that and when they came to allege what we had dona they said we had erected in the year 1891— remember the output contract was made in, 1892— itt the year 1891 the Ocean Beaob. Freezing Works. They say that in 1891 tho defendants ereuted or assisted and were con« cerned and interested in the erection of ceitaia freezing works at the Bluff, in the County o£ Southland, known as the Ocean Beach Freezing Works, and were thenceforth, during the remainder of tho said term of three years, concerned and interested in the uae of the fre> zing works. Their allegation, you will obaerv*, therefore, was this — an accusation of dishonourable conduct on the patb of my client*. Now, it is of very great importance to my oase> and I am sure you will feel ib to be of very great importance to tha question* which you have to consider, to ascertain whether Ne'sou Bros, were guilty of dishonourable couduat in this matter. That for the moment they Hud, and I may even assume that finally they will find, themselves to have commit ted a technical breach of agreement by entering into the output contract, yeb you will remember that tho output contract was entered into with the full as«nt of the Southland Company, and thtfc at the time we entered into it it was for the benefit! of tho Southland Company, prices being high, that- such a contrast fhould be made: otherwise Me Ward would be able to drive them out of the market, and that from first to last they never complained tlut Nelsons could not in fairnees and honour muke that contract with Ward. On the contriry, from first to lasbthey admitted that such contact existed. Tho Southland Company claimed tba 1 ; they were entitled to equal benefits with Mr Ward, aud to ht placed in tho same position, and iusi»ted from time to time tbat Nelson Bros, should take certain action under their contract with Mr Ward fur the purchase of his output, in order to put the Southland Company on the same basis es Mr Ward. If ib did appear that ths Sojthlund Company had received worss term* from Nijlcoji Bros. th-m the Nelson Brcs. grai.t' d to Mr Ward, it might bo a uoa^tsr which would affect yout judgment, and accordtrgly my learned friend, Sir R Stout, has introduced this evidei cc and made a suggestion for the purpose of endeavouring to convince you that we did more than aot fairly as between the Southland Company and Mr Ward — thfct, in f-ict, Mr Nt'lsui, tho mHiiKgiug director of the c^nvsuy in New Zealand, through Mr R«id, the ag*-ub for iho dt-feudant compinjr, favoured Mr Ward at the expense of the Southland Company. It will therefore be my duty to prove to you, as ib happens that I can- prove quite co: clusively, that so far from <he Southland Comp&iiy having had the worst i.f the two contracts, they lud a long way the best o c ib. That can bo proved in several wayo. You must bunt in mind that Mr Ward, through Mr IVher, vigorously complained of the t rms whioh he hud as not putting him upon a level basis with the Southland Company. And he hid the rijht to complain in that respect. As appear*, and as you know, a concession was made to him because they were bound under the contract with him to pub him upon no wi.rsi terms U>au the Company was placed, and you remember the Southland Company over aud ovec again say thnt is all they want : that they want; no advantage, ooly to be placed on the same term 3. Now Mr W«rd had a real grievance as it turn* cut, and if this act ; ou had been brought by Mr Ward, founded upon the contract under which they are bound to place him on the same terms as the Southland Company Sir R. Scout : There is no such clause. Mr Bell : My fritted says there is no such clause. 1 will procied to correct him. In the contract with Mr Ward there is this clause: 11 In all other re pects »aye tho<e mentioned in this agreement the said Jo-eph. George Ward is to be plated on the same footing aud to have the s*tne te>m* as the Sou hi and Frozen Meat and Exp' r'. Company (Limited)." Sir R Stout : Exactly. Mr Bell : I shall endeavour to keep entirely within what the evidence proves. I am a stranger here, and my learned friend is known to you all, but I do hope you will not believe I would misrepresent any matter to you. Su R Stout : lam uot suggesting that ; bub you may be mistaken. Mr Bell : I hava a very difficult duty to perform, and I am endeavouring to perform it in such a way as that I shall nob strain a single point of the evidence, and that I may without waste of your time bring the case before you as clearly aR possible, and unless it is absolutely necessary I hope; my leirn»-«l friend will be able 1o refrain frotfintarruptionß. What I was snjivjg we's this, that if Mr Ward had brought an action iuste^d of the present plaintiff, we should have had- a more difficult case, we should have been forced to adnuib that we had not pub him upon a level with the Southland Frtzm Meat Company. We should h'.ve been able to show, as the correspond tncs itself shows, that we legally esideavourftd to do to. That is to siy, Mr Nelroa gave in»tiucti. na to put biin ulongside but to give him no advantage, nor the Southland Company any advantage, but by reason of the contract he was placed originally in a worse' position, and although we endeavoured to place him alongside tho S mtuland Frozen Meat Company we were not ablu to do so. As I say that can be proved in several wayd, aud fi:sb of all by a comparison of the eontraebs. Indeed as yoa are aware the plaintiffs' had bo pruvc this 2£ per cent, commission and the ihipping arrange ments in order to make even the semblanre o£ a case that Mr Ward got better terms. I cay that wbab I have nsserted c*u be proved by a companion of the prices. The way to teat it is this : What did Nelson pay Ward for meat and what did they pay the Southland Company ? We can take the whole of the meat ; we will lay before you tho accounts and we will show you what i meat was bought from Mr Ward and whab from the Southland Company. He will show you the prices we paid, and you will see that we paid the Southland and other companies, oa every shipment, more than we paid to Mr Ward. Thit, I think, will be conclusive evidf-nce to jou that, though we were endeavouring to do our duty by both parties, ib happens that the present plaintiff has got the best of the balance, which we endeavoured to hold fairly. Again I say we were holding tbat balance with the express assent of the Southland Company, though in law it appears that assent is not sufficient to amount to a consent by them, bo as to relieve U3 from liability for having ftitated into the output- oonrract >v>fch Ward. Before I endeavour to - w you what was the position at the time, an:i bo ore I enter upon the correspondence, I wf uIJ point ous to you that you have to sea whether you are going to accept the suggestion made by Sir R. Stout, that if we had not entered into a contract with Mr Ward, Mr Ward would have collapsed, and there would have been a monopoly secured to the Southland Company. Now you will donbfclean have to assume that in order to find for the plaintiffs, for I feel confident the directions to you will be that the damage does not necessarily follow from the out-
» ! ■ — — " ! pnt contract. If yon think that but for fche making of the oabpat contract, there would have been a collapse of Mr Ward's busines» then that may be. I am not admitting that it is, bat I am assuming for % moment that may be a proper element lor your consideration, and yon ate asked to say that because the market happened to fall } afterlrards that Mr Ward would have thrown up the ?poDge, and there would have been no compeitiou of the woiks, notwithstanding that the eogines were on their way and that the buildings to hold them were actually erected. Firbt of all this was a fight in Southland, and you can judge from the way in which it has been conducted whether it is at all likely in this Southland contest that Mr Ward would have thrown up the Bponge. But you have another matter to consider. What happened at the end of 1893? trices were low then, and the Southland Company were absolutely at the end of their finance; they were absolutely insolvent ; they could do nothing. What then happened ? In order to keep them going, and to prevent the port becoming a Tytser port again, the other two shipping companies came in and each put £10,000 into the Southland Company's works. Very well ; now jou will be able to judge as to that. It would be idle for my learned friend to contend that the opposition would have collapsed. The shipping companies, as I have laid, in the end of 1893, with a disastrous market, came in and each put in £10 000 in Order to keep the Southland Company, which mutt have collapsed, upon its feet, and to enable the company to compete in a disastrous market. Very well ; yon have to consider whether it is at all probable that these companies which step in immediately to prevent the collapse of the Seuthland Company wonld not have stepped in to prevent the collapse of Ward if it had been necessary. You are asked to assume that Mr Ward had no resource, and no finance to begin with. There are other considei ations of the same kind, of which you will be able to judge. When you have to come to » judgment upon the point which is now before you you will be able to discount — it saems to me the facts compel you to discount — the statements made by Sir R. Stout. He calculates the fhc.p by millions, and says that but for the output contract they would have baen able to make cer'ain profits. Now, I ask you to bring your minds to the consideration of what were the circumstances at the time when the contract of 1891 was entered into. The circumstacces are these: The defendant company, Nelson Bros. (Limited), is a London company, the principal branch of which is at Napier, and it has freezing works in one or two other places. Besides carrying on the business of f rot zing it purchased the output of frozen meat from other freezing works. You have had before you the commercial result of that. Nelson Bro?. (Limited) took the risk of the London market — the chance of profit and the risk of loss. Any freezing company which happened to sell its output to Nelson obtained this benefit: that it knew precisely, subject to any fluctuations in the tallow and pelt market, what it could affurd to pay for the sheep, and where, as in the case of the South- ■ land Company, the grower got back the skins, there was really no fluctuation, and the company selling to Nelson Bros, knew precisely what they could afford to give the grower. As ifc happened, and as everybody practically Is aware, so far from Nelsons having had the advantage, they had a considerable disadvantage. Of coutße, they might hare had the advantage ; -they could not pretend, and never had pretended, that they were public bsnefaotors. All that kiud of thing is humbug. They were ' a company naturally doing the best they could for themselves, but interested in the welfsro of the colony in which they have so much money invested, and interested in doing well for the growers who provided them with material. They were, of course, interested in making a profit for themselves, but they were interested above all, as I think every public company is, and notwithstanding what is said about binks and companies my experience of them is that the) are, interested above all in trying honestly to perform their contracts. What other interests can officers of a company— managers, directors, and so forth— have other than to perform their contracts P — and as a rule you will find it. That is my experience. We are accustomed to hear public companies spoken of — I think it was my learned friend who began a famons address to the jury with — " Gentlemen of the jury, this is not an ordinary oass : this is a case against a bank !" Sir R. Stout : No. Mr Bell : My learned friend has the oredit of it. Sir It. Stout : lam afraid my friend is drawing oil his imagination, as others have done. Mr Bell : It is not my imagination. The Story is told against my learned friend. Sir R. Stout : I ntver heard of it before. Mr Bell : If I am wronging my learned fritnd I regret it, but you must know that this kind of thiog is always suggested : this is a public company, and Sir R. Stout : We are a public company, Mr Bell: Yes, the Southland Frozen Heat Company is a public company too, and I think you Hill observe, gentlemen, that nothing has been soggeited to the discredit of those managing that company. As I have said, the plaintiff company find themselves astonished at the wonderful chance which has fallen to them — namely, that they never suspected there had dm n any breach ; that they themselves always acted upon- the lines that the whole thing was proper and fair, yet they find themselves suddenly in the Supreme Court with a breach. The company for whom I am speaking I think I shall be able to establish to your satisfaction has endeavoured to perform its duties honestly, loyally, and consistently. Ido not want to say anything more about that, I prefer, if the correspondence speaks for itself as I apprehend it does, to leave it to the jury, who after all have it to consider. Undoubtedly if the jury thought .that we bad behaved dishonestly or unfairly to the plaintiff company, if we have deliberately deceived them and been parties to a swindle upon them that would naturally affect any que.'-t'iQn of damage that is submitted to you. , It has been strenuously suggested that Nelson Brts.' firm is identical with tho Tyser liae of steamers. That point, as you are aware, tas been insisted upon for the purpose of alleging that Nelsons paid Mr Ward the 2£ .per cent, commission on freight. I must state to you the position as between ISfelsons and the Tyser line, because it is of importance with regard to that question of commission. Messrs Nelson Bros, are no more identified with the Tyser line than I am. Their position in regard to the Tyser line was this : The Tyaer line of steamers was introduced to this country by Nelson Bros. — that is Co say, th&t the steamers came here to take ffelsons' produce, just as any other line of steamers might have done. Later on, as you toay be aware, some shares were taken up by •Nelsons ia the Tyser Company, just as Nelsons jtought shares in the Southland Frozen Meat .Company ; and, as we shall see later on, Nelsons had no control over the Tyser lice. The connection between them arose in this way : Mr Dobson; fcfee manager of the company, ir&o had
nothing to do with Nelson Bros, at Napier, was agent for the Tyser lino. Mr Dobson made the arrangements for the company, and naturally Mi- Neleon, being by far the largest shipper and being a personal friend, Mr Dobson and he conferred together about the agencies for the Tysftr line. There was *no relation of any sort or kind except that they were personal friends, and their business relations being close and that they met together frequently. But it happened that Mr J. B. Reid was the agent for both companies at DunediD, and ifc was because Mr Reid was agent for both companies in Dunedin that this error in the minds of my learned friend and his clients has arisen. Mr J. B. Reid received commit>sion from the Tyser Company, and he also received remuneration from Nelson Bros. (Limited) ; but the remuneration Mr Reid received from the Tyser Company he put in his own pocket ; it did not belong to Nelson and Co. Nelson and Co. had nothing to do wibh ifc. Now Mr Ward was, as yon are aware, the head of fche Ward Farmers' Association in Southland. He was a very large importer and a very large exporter, or rather his association was, quite irrespective of this frozen meat business. Mr Cars n ell was the agent at fche Bluff for the Tyser line, and he received a commission upon all meat shipped of 5 per cent, from fche Tyser Company. That was the way he was remunerated. As you have heard from Mr Nichol, Mr Carswell was a director of the Southland Frozen Meat Comi p»ny, and in that capacity had something to do with the meat going by the Tyser Hue. Nevertheless the Southland Company never claimed from him, nor could they claim, the 5 per cent, which he got for the meat of the Southland Compaßy which went through the Tyser line. Now of that 5 percent. Mr Reid, who was agent at Dunedio, got 2£ r.er cent, from Mr Carswell on the meat shipped by ths Tyser line at the Bluff, that being the meat at th-it time of the Southland Company. Mr Reid received that 2£ per cent, not as agent for Nelsons, but as agent for the Tj ssr Company, aud, as I told you, it went into his own pocket. Nor was any interest Mr Rejd had in fche sbipping of the Southland Company's meat by the Tyser steamers any concern of Nelsons whatever. Mr Carowell did it, and shared the commission with Mr Reid. But it came to ba of importance to Mr Dobson that Mr Ward, the head of the Ward Farmers' Association, should be connected with the Tyser lino, and that you will see was actually before Ward's Frozen Meat Company started. After conferring with Mr Dobson, Mr Reid, as one of the inducements to Mr Ward not to start competition — for you will see shortly, if you aro not aware of it already, that Mr Reid and Mr Nelson loyally co-operated with fche Southland Company in endeavouring to prevent Mr Ward starting ; — and one of the inducements Mr Reid was able to offer was this : Ha said to Mr Ward, " I can get you the agency with Carswell, of the Tyser line, at the Bluff ?" Sirß. Stout: When? Mt Btll : I will road ifc in a moment. You will find that offer was made to Mr Ward as one of the inducements to prevent him starting — that Mr Ward was to be appointed agent for the Tyser line with Mr Carswell at the Bluff, and ia that capacity Mr Ward was to get the 2£ per cent, from Mr Carswell which previously Me Reid had got as agent for the Tyser line. Nelsons never got ifc ; ifc was no concession by them. Mr Re:d had the 2£ per ceafc., and subsequently Mr Ward got it. Bufc he did not get it from Nelsons. Though he got 2£ per ceut. on his own meafc, Nelsons had no power to offer that at all, bufc Mr Reid, who happened to be the agent of Nelson Bros, and the agent for the Tyser line, appointed Mr Ward joint agent with Mr Carowtll at the Bluff, and in that capacity Mr Ward got the 2£ per cent, commission. There never was any hocus-pocus about ifc at ail. I wish my learned friend. Sir Robert Stout : I never said a word. His Honor : I did not notice anything. Mr Hosking : It was oDly one of Sir Robert's laughs. Sir Robert : I have tho right to laugh if I please, but I did not do so. Mr Bell : It has an effect to a certain extent in putting me out, and I am sure Sir Robert Stout did not want to put me oufc. Ifc has also a general effect and brings into court fche tactics ha has brought against Mr Seddon and Mr Ward in auother place, and the fact is I am inclined to feel it more now than 'I did in fche place to which I had reftrred. I hope ifc does Eot seem so ridiculous to you, gentlemen, as it does to Sir RoLerfc Stout. I repeat ifc seriously and emphatically, because I know it is true that there wee no liccus-pocus aboufc the matter at all. There is no pretence for saying that Nelsons got, or could have git, from Tysers the commission. They did not get it. Typers paid it to Mr Carswell and he divided ifc with Mr Reid, and subsequently with Mr Ward whnn Mr Ward became the sgent for the Tjser Company. As I have said, ifc was not only the frozen meafc ; the Tyser Comj any were anxious to have the influence of Mr Word. Mr Ward was a large shipper and a large importer with respect to the Ward Association, quite apart from th'"B ; and further, Mr Ward had the unpleasant habit of bringing in outside shipping, and you will remember at that time the Tyaer Company were very, anxious to make the Bluff fche Tyser portend they not only got the business of tho Wa-d Association bufc Mr Ward on their side, and he was a troublesome man to • have against them. I htve devoted some time to that because it waa made a great deal of by Sir R. Stout, and it is made a good d>;al of in the correspondence, which I will c:me to, by the Southland Company. They iusist that tfcey should have that Z-k per cent., and Sir R. Stoub suggested that ifc was mo6t unfair that we should give it to Mr Ward. We did nob give it to Mr Ward : we had nothing to do with giving it to Mr Ward. Mr Reid never consulted Mr Nelcon or Nels in Bros. (Limited) whether that appointment was to be made. Mr Reid made ifc as agent for the Tyser Company, and without consulting fche Nelson Bros. That explains that the Nelson Bros, never had anything to do with it, and I hope I shall successfully Sad hereafter a complete answer to fche whole case upon this claim and other claims that fche Southland Company made. Then, the claim for 2£ per cent, is obviously inconsistent with fche allegation that we were not entitled to enter iufco the contract with Mr Ward. If we were not entitled to enfcer into the contract with Mr Ward, what earthly right had they to claim the 2£ per cent. No two things can be more absolutely inconsistent. There is no earthly pretence on the other side, nor do I think it can be suggested, that there is any method of making the two points consistent. It is an unfortunate thing that the inconsistency of the plaintiff company at the present moment is net a legal acs'.ver fco the claim they are making on us ; but ifc is very necessary that I should bring oufc the question of the 2£ per cent, in order fco show, first, that we were right in opposing fche claim for the 2-^er cent., and, secondly, for the purpose of putting before his Honor the fact that throughout the correspondence this emphatic claim for 2£ percent, was founded on the existence of the output contract and that the rights which the Southland Company claimed were in consequence of that; output contract. The next point I want to e&U
attention to — and again I appeal to you to bear ifc in mind, and without accepting what 1 say, to judge between myself and my lonrned friend and fche clients we represent — is the persistent attempt fco give this action a local and political colour. Sir R. Sfcoufc : Who has done so ? Mr Bell : There has been a persistent suggestion that in some way or other Mr Ward Sir R. Sfcoufc : Surely my learned friend has nofc a right to say this. His Honor : Lefc Mr Bell say what fche suggestion is. Mr Bell : There has been a persistent suggestion that Mr Ward is in some way interested in this action. Letters of Mr Ward have been read, obviously only for ouo purpose. At least you will have to judge how it come 6 that letters of Mr Ward, whioh have nothing to do with fche subject-matter of the action, except as indicating the negotiations for au agreement, which are obvioualy nofc evidence against the defendant company — or which, I submit fco jour Honor, are not evidence against fche defendant company — have been read to you and published in the local papers. I am nofc going to waste your time or mine by any coalmen 1 ; on fchafc. Fair or unfair, ifc Las been done. The point fchafc I am upon, and I am begging your careful attention to ifc, is that in no way or other is Mr Ward interested in the reeu't of the action. Sir R Stout : I never suggested it. Mr Bell . This action is an action brought against the Nelson Bros. (Limited), and whatever Mr Ward may have said or done would have no bearing prejudicial to my clients, and should have no bearing, and I am appealing to you nofc fco allow ifc fco hava any effect on my clients. But fco s.iy Ihi3 positively and emphatically that there has been some suggestion that there is something in the correspondence — fche letter is not disclosed, and the only thing I know of that should not havo been dioclobed has been read by Sir Robert Stout, — and I say that not a single word can be read to you of which any man need be a3hamed. Sir R. Stout : Not the letter of January ? Mr Bell I'll come to ifc in a moment. You see, gentlemen, what efforts are going to be still made to bring Mr Ward Sir R. Stout : It is nofc Ward's letter, bufc Nelson's. Mr Bell : We'll see what is there a man need be ashamed of. I say that because, while I appeal fco you not to allow fche prejudices thatare introduced into the case by reason of Mr Ward to affect you, I must not be understood as suggesting, admitting, or thinking anything which I ought to condema, and I appeal fco yon fco leave that matter oufc of your consideration. Ido not advocate Mr Ward in any sense whatever, here or outside, but ifc is only fair that, when I ask you not fco consider against my clients any connection with Mr Ward, I should say there is no reason that I can see why I should make that appeal, but ifc appears fche other side is desirous of making a lever with fche jury of Mr Ward's words aud Mr Ward's action. Sir R. Stout : I never attempted to do so. I purposely did nofc make any reference to Mr Ward or attack his conduct. If my friend docs nofc want ifc done he had better nofc press me to do so. I only read fche letters — and I stated so in my opening — fchafc were ab'olufcely necessary to show fche relations between the Nelsons' and Ward, and I was bound fco do so. Mr Bell : I cannot think that is so, though I accept what my frieDd has said as absolutely correct, and I admib that disposes of the matter, but I appeal to your mind?, gentleman, whether ifc did nofc reach your minds in the same way as mme — namely, that there was an attempt fco bring into this matter a political prejudice. As my friend discards ifc I hope you will accept ifc from him as I do, and that you will look at ifc as discarded. His Honor : I understood Sir Robert Sfcoufc, in opening, to s*y that Mr Ward's conduct was nofc called in question. That is so obviously. Mr Bell: Your Honor has, I think, not grasped the position. Certain letters were read and published His Honor : You suggest that they have no bearing on fche present action except as a matter of prejudice. Mr Ball : Ido nofc think I could explain to your Honor without emphasising more th»n I care to do. His Honor : Sir Robert Sfcoufc has repudiated any attempt fco attack Mr Ward, and any such attempt would be entirely relevant. The jury will clearly understand that Mr Ward's conduct is not called in question. Mr Bell : I hops the jury will understand that I do nofc say fcbab for fche purpose of making a complaint, bufc I impress upon you the fact that in no sense has there been a verdic 1 ; against Mr Ward, aud the verdict; will have to be paid by my clients, and whatever Mr Ward may have said or done they aU n.9 are responsible ; and I feel bound to add, having said that, because otherwise I might seem to cast an unworthy reflection on Mr Ward, which between both of us might be misunderstood, that I very emphatically assert fchafc so far as I know there is nothing I need, if I were entitled lo explain it, have avoided an explanation of. Again I point oufc to you this, gentlemen, tb.it whether Mr Ward's action was right or wrong iv Southland in starting his opposition, wo are not responsible for ifc, and thab musfc be conceded to me in the beginning, for ib is quite obvious that Mr Reid and Nelson Bros, loyally attempted to prevent Mr Ward from entering upon that opposition, nor had we any negotiations with him at all until ifc was absolutely certain that there was going fco be an output there immediately, and that somebody would havo fco have fchafc our put, and then, aa they say, in the interests of everybody — of the Southland Company as well as of themselves — fche Nelson Bros, entered into the agreement, and they made ib coincident with t-he terms of the Southland Company, this being evidence that throughout they were acting iv the interests of the Southland Company as well as of themselves ; and I do not see how any body of business men can come to any other conclusion than that the Nelson Bros., in entering into the contract, entered into ifc in fche belief that thay were acting in the interests of the Southland Company, for fche market then was high, and, had Mr Ward nofc been bound and had the market con1 tinued high, the Southland Company's works musfc have been stopped. They btlieved — and everybody believed — that fche tr*de that went to Mr Ward would be a continuing trade, that all that trade would come away from fche Southland Company, that fche Southland Company would, in the event; of pricea remaining high, lose all their tirade, and fchafc fche Nelson Bros, would lose their output at fche port. But up to fche time fchay entered into fcho output agreement fchev hid loyally cf-operatfd with fche Southland Company fco prevent Mr Ward from starting. That'is proved beyond all doubt by the correspondence fchafc is produced, and fchafc correspondence is a genuine correspondence, passing nofc only bafcween fche Southland Company and Nelson Bros., but correspondence written between the two heads— Mr Nelson at Tomoana and Mr Reid at Duuedin — which cannot possibly bs otherwise tbau absolutely truthful ; and this is another point I ask you fco bear in mind. Mr Nichol and Mr Cufchbertaon both speak $f the value to the Southland
Company of the Mafc&ura site, and both speak of the advantage that site would have given the Southland Company had it not been for fche fact that Mr Ward had a firm agreement with tho Nelsons. How did the Southland Company become possessed of the Mafcuura site ? The Mat-aura site belonged to Nelson Brothers— they had the option of the purchase of it, and it was, as the other side insisted, the key of the situation, — and at tho time that- Mr Ward's op* position wa3 threatened, and in order to enable the Southland Company to present a bold face bo Mr Ward, the Nelsons transferred, without any consideration, without a shilling of money, this valuable site fco tho company. This site, which according to the other Bide was fche key of the situation, was given up by the Nelsons to the Southland Company when thay were being threatened with fcho opposition of Mr Ward and for tbe purpose of enabling them to start fche Mataura works and of preventing Mr Ward from starting. That aofc alone, if it stood alone, would be sufficient to destroy fchesuggesfcion that we had acted ofch"rwise than with all loyalty to the Southland Compiny, bufc I p*?s from that to ask you to consider something which I have fco say fco you aboufc fcho correspondence itself. There is a great deal of correspondence which has been produced and read and -published — there appears to be sorae exceptional interest taken in ifc, — corre»pondence whioh is marked private and confidential. I dare say you are not aware that, when in an action of this kind discovery is made, the person who has to make the affidavit ba3 to swoar that he has no papers in his possession other than the papers in a certain list, and when fche list is given fche other side is entitled to see tbe documents. I ask you to consider what private and confidential correspondence is likely fco be. In the first place, I put ifc as an exunple, if there was some moderate profanity in it, ifc might be used with great force here, and yet ifc would nofc be wholly unintelligible correspondence. Men writing in these terras, writing in a frieadly way to one another, write very candidly and very frankly, and, for my part, I feel sure that if my private correspondence was to be used against me, I should be very sorry that it shoull fall into the hands of Sir Robert Stout and have it road, and very likely I might be subject to actions for libel. The fact is that one writes in a correspondence of th»fc kind fche truth in a very frank way. Now my learned friend emphasised this "Dear Jim" correspondence, and I daresay that was assumed to be a most improper way of addressing Mr Reid. Sir R. Stout : I never suggested it. I sever hinted at ifc. Kir Bell : Sir Robert Stout spoke of ib in a scoffing way, and said "Ne'son Bros, never wrote to ' Dear Jim ' again in that way." Mr Reid is a much younger man than Mr Nelson, and is a personal and intimate friend, and there are a great many genfclomen in New Zealand, I daresay, who in writing to Mr Reid would address him by name. He is personally popular, and ib is nofc unusual that he should be so addressed ; bufc that is what Sir -Robert Stout would make oufc, as if he would suggest there was a "Dear Joe" correspondence going on also. — (Laughter.) Sir R. Sfcoufc : I never said so. Mr Ball : The fact is, and this is what I seriously pr?ss upon you, that you have before you the bare confidence of these gentlemen, written in strict confidence one to another, and I ask yon if there is anything fco be ashamed of. Mr Nelson was giving the reasons that affected him, and as Sir Robert Sfcoufc has suggested that two Cabinet Ministers were placed on the advisory board, it is well to observe" that the whole of ifc is perfectly truthful, and ifc is an observation that anyone had a right fco make fco his friend, and agent;. Of coarse, all fchafc can be used in a court of justice in an unfair way, bufc I pufc ifc fco you whether in- tbe whole of this correspondence, where you have fche bare confidence of both parties laid open, there is anything that any man need be ashamed of. It is obvious that in some way or other fche private and confidential correspondence which has been produced has been divulged broadcast all over the colony, and when Sir Robert Stout began to read it ifc was better ifc should be read, having regard fco the fact that in some way or other this had been divulged. Tho correspondence which was marked " Private and confidential" and which was produced under order of'the court to the other side had been— l do nofc say published, but scattered broadcast. Sir R. Stout : Will you prove fchafc ? Mr Bell: Yes, I should like to ask my friend himself. Sir R. Stout: I did nofc see ifc all till I came down for tbe case. Mr Bell : lam nofc commenting on the taste of the reference fco " Dear Jim " and to the use of the correspondence in that way. lam only begging of you to remscuber fchafc the correspondence is marked and intended fco be private, and ifc is only by an accident that ifc comes before you, and you are nofc fco treat ifc as if these people had been playing ducks and drakes with other people's money in that way. And that correspondence I propose fco treat in another way. That correspondence shows that the JKc'son Bros, aud Mr Reid were most absolutely honest and loyal io the performance of their duty to the Southland Company. This correspondence recognises not only fche legal but the honest and loyal duty fco preserve the obligation to the Southland Company, and that part of fche correspondence I'll ask you to listen fco with as much attention as you can give. As you know, the Southland Company had with the Messrs Nelson a contract existing bafore the year 1891 — a contract the term of whioh had nofc expired and which was cancelled and replaced by fche contract of 1891. That: you heard from Mr Niohol, who told you he was anxious fchafc fche contract should not; be cancelled and that the existing contract should be kept on foot. The price was raised from 2|d to 2£d, the contract was' cancelled, and the Nelsons took a three years' agreement in 1891. Now, I want you to remember that, because I ask you who were fche better able to judge than the Nelson Bros, of the chance of a high market. You observe that in order to get a three years' contract with the Southland Company they actually gave £d more per lb. They then — they, fche very best judges, fche men who purchased practically fche greater part of fche output of the colony — believed that the market was going fco be so good that they voluntarily, in order fco get a three years' contract, gave an extra &A for the expiring term of the existing contract. If that was their opinion, emphasised in that way, you will have to consider whether they were not equally honest in their belief, when they entered into the contract with Mr Ward for two years, that the market was going to continue to be high, and that in the interests of everybody they h»d to make an output agreement with Mr Ward. Remember fchafc the three years' agreement would be ruinous fco them in a low market because they were paying % fixed price. That judgment of theirs you have in 1891 as a perfectly disinterested piece of evidence, determining for you, absolutely and conclusively, the fact that in the early part of 1891 the Nelsons believed fchafc for three years there was going to be a high market. Was there anything which would induce them to alter that opimoa ia
February 1892 ? Were they nob in the etrm position then ag in February 1891 P— beliewt ing that they were going to have a high market and anxious to secure the out« put. And if the market had oontinued high the output agreement was the only thing that would have saved the Southland Company. The fact that the market was low is the only thiDg that enables the Southland Company to say tint the output agreement with Mr Ward was a damage to the oompany. Had the market remained high, so far from the Southland Company having a cause of complaint against the Nelson Company, the Southland Company would have had to admit that was ths only thing that saved them from ruin ; and I want to chow you that was what the Nelson Bro* honestly held to be the position in 1892 as in 1891. If the' market had been high it must h*ve saved the Southland Company, and the evidence of that is the letters of Mr Reid to London, which emphatically di- close tho belief of the Nelson Bros, at the time. Mr Reid, in ths letters written to his principals, shows conclnsively that tho opinion of the Nelson Bros, at that tims, equally as in 1891, was that if they did not make ths agreement the Southland Company's works must stop, and that it was the accident of the London market which has entitled the other side to make evej» the protence of a grievance ; and subsequently we shall ask for a direction that the accident oE the London market is not a damage which tha other side cau claim for in respect to the output agreement. I'll not trouble you with tha correspondence which took place immediately prior to the agreement of 1891, though I' shall probably put it in, for I am anxious in what I shall now read to you— I shall endeavour to keep to tha correspondence which is in my opinion neoessary— that you should have it bsfore you in sequenoe, in order of date and in ordar of event, and before I go to it I ask again for your attention, thongh I am asking for a great deal, I know. I candidly admit that. I assure you I shall do my best not to wastß your tim?, and if you will endeavour to follow the correspondence, as I have it brought before you in sequence, I am satisfied that you will have that which will enable you to judge fairly between us, but if you do not grant, me that I am satisfied you will not be able to do your duty fairly, having regard to the fact that excerpts were mads from the correspondence, and that it was not brought before you in the sequenoe of events. Now, the position that tho 'Nelson Bros, took up was a position of persistent and consistent loyalty to the Southland Company. I do not claim credit for it. They were bound to do ifc in accordance with the co a tract, but they went beyond that, and not only openly but between themselves they always recognised their honest duty to the Southland Company. They were not in any sense under mx obligation to fche company?. On t£e contrary, the Southland Company are at the pressnt moment under an enormous obligation to them. That you can see, for as soon as the Nelson Bros, left them they loifc £17,000, whereas while the. Nelson Bros, were with them their losses were practically nothing. Something has bean said about the extension of the works having been forced upon fch« Southland Oompany by Mr Ward's opposition. That was not the case. You will find that a committee was appointed by fche company to consider the question of an extension of work* before the opposition, and that evidence shows that they could only freeze 500 a day, so thai without an extension of the works this claim would be limited to 500 day at the outside during the season. Tha evidence is upon their own minutes that they could only freeze 500 per day. Therefore the expenditure on the works, which caused a great increase in the bank interest and a heavy capital expenditure, was not compelled by the opposition of Me Ward, but by the exigencies of the market. Mr Nichol and others were vehemently opposed to any construction of works at Mat&ura, buti if they had not extended the works they could not h&va done an output in Southland of over 500 a day, and they suffered no injury in consequence. , Tho agreement which was entered into ia 1891, and which was dated tha 26tsh June, but in respect of which the negotiation! were entered into before the 26th June and practically the agreement was carried out, is in these terms — I am not going to read the whole of it, but ifc is not set out in the case : it begins by sayiDg— The agreement between the parties hereto, bearing date the Bth day of April Icß9, is hereby determined and cancelled. That ii to say, the existing agreement was cancelled, and that was an agreement at 2sd : Nelson Bros. (Limited) shall purchase and taka from the company all mutton and lamb which shall during tho term of three years, computed from the Ist day of January 1891, be frozen by thfl company, and shall pay for the same the following prices— viz , for prinio crossbred wethers ana" maiden ewes, 2}d per lb ; for prime merino wethers and aged ewes, 2Jd per lb, with a reduction to 2 3-16 d perlb for each year in which, tha total number of sheep frozen by tho oompany shall exceed 60,000 ; for prime lambs, 3sd par lb ; the said pricea to be for the meat free on board at the Bluff, frozen (bags included), and to be paid net cash in Invercargill within 24 hours of signature and on delivery of tho bill of lading, the woights to be taken from the company's scales. I need not read fche whole of that paragraph. It goes? on to say : If at the end of any one year the company shall have a surplus of net profit, after paving a dividend of 8 per cent, on the company's capital to the shareholders and providing a sum of £2000 for that year for depreciation of machinery and buildings and for a reserve fund, then such surplus, or so much thereof as shall be requisite, shall be applied by the company in paying a bonus pro rata to shippers of mutton through the company, such bonus not to exceed l-16th of a penny per lb of the meat frozen, and of such bonus Nelson Brothers (Limited) shall be entitled to so much thereof as is payable in regard to meat supplied by them, Then: The company shall not freeze any sheep or lambs in their said woiks excepting for and sale by the company to Nelson Brothers (Limited), »r such 03 shall be supplied bjr Nelson Brothers (Limited) to the company for freezing. So Nelson Bros, might have themselves purchased the whole of the sheep to supply to the company for freezing. In fact they had to give a guarantee to supply a oertain number. Nehon Bros. (Limited) shall take over and relieve and indemnify the company from and against all contracts at present existing between the company and any other company, body, or person with regard to freight, and shall at their own expense provide freight for the whole of the company's output during the said term of three years at regular interval! of not less than two steamers every three months with an interval of not less than 21 days between the departure of ona steamer and the arrival of the next. So that under the contract the Nelson Bros, were entitled to an interval, certainly, of 21 days between the steamers, and they were only required "to supply two steamers in three months. In fact, they supplied a great many more, and the company was only once blocked— for one short period in 1892, -when all over the colony every port was blocked, the supply of sbipping being little and the supply of frozen meat large. There was a guarantee to the company that at least 40,000 sheep should be sup* plied by the Nelsons, and the Nelson Bsflfc
(Limited) if ttey did not ptr'orm tha gnv rantes would have to pay. Then I go to the leventh clause, which is the one which is the subject of consideration :—: — " That in ihs event of Kelson Bros. (Limited) during the said term of three years making- a contract for a pcrio 1 of oue year or mwj vvitli any company, body, or person carrj ing on within New Zealand the business of freezing for owners or groweis of stuck by which f.o b. prices on bet'er terms than those uamed hereiu shall be offered or given by Ne'son Bros. (Limt'e'i), then Nelson Bros. (Limited) shall either give the fame terms U) the company, or, in tha eve-it of their declining to do so, shall allow the company, if it a? desires, to terminate this agreement on the company giving one month's notice in writing to Nelson Bros. (Limited) of their intention to do so. Of course had tho contract stopped there it could not have been open to question that the output agreement with Mr Ward was authorised by the seventh clause, and nobody, I suppose, denies that, for Mr Ward was a person in Now j Zesltnd oarrying on the business of frefz : ng, and they are eitulcd uudor chine 7 to enter into any contract for the purchase of output providing they ran the risk of the Southland Company cancelling the three years' agreement iftheNelsm Bros, refused to give the Southland Company the same terms as (o Mr Ward. That was the position at the time of the agrezment with Mr Ward. The Nelson Bros, understood, and unhappily for them the Suithland Company tiro understood, that was not affected l>y clause 8 which I now proceed to read: Nelson Bros. (Limited) shall not daring the same term of three yeais erect, or assist, or be in any way concernel or interested in the erection or use of freezing works on laud or water at tho Bluff or within the limits of the Southland or Wallace Counties without making special arrangements with the company, nor do anything of the like nature which may in any way interfere with or restrict the output business, trade, or profits of the company. Obviously the agreement under clause 7 would obstruct the output of the company, and so the words "of a like nature " wero pub into clause 8. I am only endeavouring to show the honesty of the proposal. lam not for a moment pretending to cay that the legal interpretation put on the contract is not the correct one ; but, I ask you whether it ia not ther construction which business men would pub on a contract of the kind that there was no prohibition against the purchase of meat. What was prohibited was being concerned in the erection, or in the use after erection, of freezing works at the'B'uff, but th»t they had a right to buy the output of anybody in New Zealand applied. What did ib matter to the Southland Company whether the Nelson Bro«. paid in Auckland or elsewhere than in the Southland and Walkce countits for sheep ? What pcssible difference could it make to them ? I*> «ras no concern of theirs. Take this: The Nelson Bros, are tnhking terms with a company at Wellington for the put chase of output — what earthly cocceru was that of the Southland Company ? Why should they bother themselves as to the arrangements made by the Nelsons at other ports ? They were concerned to see that in Southland the Nelfons should not offer .better terms to another company than themselves, but neither they nor the Nelson Brof . cared two straws what might ba dote outside the district of Southland and Port of Bluff. The Southland Company were only really concerned wi.h the question of the terms Nelson Bk.s. raighb make with any other company iv thtir own district. In fact, there was Burosi dc ; that might compete. There was possible and probable competition even then in Southland. Somebody was bound to step in Men if Mr Ward did nob. Then followed a clause that inasmuch as there was certainly go<ug to be oppes'tion from Bomebody — tverjbody anticipa'ed opposition — From whomsoever icwas it should nob be from the Nelsons. The Nelsons were the moit dangerous people ; they had works in Tomcaaa ; they had started works elsewhere, and they had assisted ia the erection of works elsewhere ; they h&d the advantage of the Matanra eitc— they were the ovnu-vt of ib. And the Southland Company said, " Wei l , if there is going to bi competition — there is sure to ba competition, but do not you come in ; if you do not come in and erect works it is possible for us to carry on ; there is the Mataura sits, we may extend our works." That was the meaning of the contract, andrl press that on ycu because it is said we have been d's'oyal. Whatever the legal meaning — no- oue suggested such a meaning until S-r Robert S:cut ?uggeated it the other morning — the balauco sheets and the corres^ndence show that not only did the Southland Company not pretend thst what I have stated was not the meaning, but they insisted that ib was the meaning, and they claimed in consequence of that meaning that they were entitled to certain rights., Nobody denies that that does not put us in a very strong posit i n. He w»8 not contending now as to the strength of his legal position. He was contending as to the position of people honestly carrying out wba* they conceived to bo their legal position ; and hpwever wrong they might be in the interpretation of a, legal contract, the other people interpreted it in the Fame way, and if any injury had be%n done, it had been an injury done by a .mutual mistake as to tho meaning of a legal document that both parties had drawn up so that there could be no mistake about it. And here bis clients were in the unfortunate position of an interpretation btiug put upoa this cjntrncfc which the parties thennelvcs never dretimt was the legal interpretation of it. He was able to answer Sir Robert Stout's suggestion that there was a complete change of front on the part of Nelson Bros. Sir Roberb had said they were fair up to a certain poiufr, but suddenly Chang* d. Now there were two distinct pba6e3 of the action under tho contract bstween the Southland C.mpany and Nelson Brcs There was the point of time at which it became clear to Nelson Bros.' Company that Ward could not be prevented from erecting his works. Up to the time that they found that Ward bed actually ordered hia machinery they (fid their best with the Southland Company to try and "bluff " Ward from starting oprosition. Then came the time when —it being clear that there was going lo be an output in Southland— tley had to consider what was the best thing for them to do. That was what Sir Robsrt Stout called a change of front. It was a necessary change of their position. Up to the point when it was certain that cheep were going to be put cut they acted loyally to the Southland Company, and when they believed the output was going to be made they believed that the output was going to be disastrous to the Southland Company and themselves, and they entered into a contract for tke purchase of the output. It w*s for their Jbenest that they did that, because .they believed that there wai going bo •be a high market. Why did they cuter into a contract ? They were not bound to enter into • contract in May 1892 for purchasing Ward's output. What did that show P Ib showed eonclntively that they thought there was going fee be a high market. Surely as business men . jbbey were not going to do what was nob to their own interests and the interests of the Southland Company. Thoy thought for two years ib wis to their benefit to purchase Ward's ontput Qv ft fixed price, and it would have been a most
disloyal act if fcbej had refused to purchase the output. Toe Southland Company would have been in a worse position than they wero to-day, because they wou'd have had to find monc-y to keep up the fight against tb.3 opposition ; and their fluancial position wa3 so weak that ib would have led to their ruin. Mr Reid gave the reason which influenced them in his letter dated February 23, 1892. He said : I am in receipt of your favour of December 23, and am very glad indeed that things luvc turned out very much as you anticipated, aud a substantial rise in valuo of both mutton and kmb is j advised by press cablegram. It was rath r unfor- | tunatd, however, that all buying operations were dslased so long, for olh nvis-j you would h*ye had all the December and January shipmout? in your own bands. However, you will receive a few thou-and good slicep aud lambs from the Bluff and Poit Chalmers which should realise a fair profit, and you will be able to clear your heivy stocks without los>. I have just entered into a contract for the purchase of the output of | the Hon. J. G. Ward's works at the Bluff for two I years, and enclose copy of agreement, which will expUiu the terms of the agreement. As you are, of course, aware, we h*vc a contract with the Southland Frozen Meat Compiny for the same torm, and the arrangement I have just made with W»rd will not greatly increase tha number of sheep or lamb 3 shipped at the Bluff, for if we get them from him wo cannot geb them from the company. It will, however, asaist us greatly, for had he been free at present with mutton celling at 4Jd and lambs at G'id he could havo paid growers higher prices than they coul 1 get through the company, and in all probability woik at the Southland Frozen Meat Compiny's works would have been st>pped. A* the matter now stands we have securei the total output of Southland at a fdir price, and need not trouble ourselves where the sheep are frozen. Mr Reid, again writing to London oa Marsh 22, 1892, said : You will observe, now that there are two freezing establishments at the Bluff, how necessary it was for ua to enter into this contract with Mr Ward, for our contract with the Southland Frozen Meat Company provides that we t*ke the total output of the works without stipulating auy fixed quantity, so that we could only expect ti get meat from the coinpiny when it was low in Londo i, for when high growers would sell to Ward. However, the muttar is now settled for the next two y»»ar*. and 1 tru^t the result will ba satisfactory. What he would point out was the perfect honesty of these transactions, because the letter* to London gave as a reason the f»cb that it was necessary in the interests of Nelson Bro3. and the Southland Cjmpany rh*t such a conWct should be entered into. He said: "You will observe how essential ib is that this contract should be entered iuto." There was a third comid^a'.ion •rose during the course of this contract. He had f poken of two phases. The firat phase was that during the first part of Ward's threatened opposition the Nelsons joined the Southland Company in endeavouring to prevent opposition. Whnn opposition was absolutely determined on, Nelson Bros then, in tha interests of themselves and the Southland Company, entered into a contract for the purchase of Ward* output. There was tha third pha9e : that it bcctine neoesoary for Nelson Bros, to cot-sidcr with whom they would do business for three years. They were not going to lose tueir trade, aud so they eventually determined that at the end of throe yeaiM they would do business with Ward. That they were entitled to do. Besides that, it must be manifest that N'-lsons could nqver have thought they were entering into an agreement which compelled them to stand out of the ou'pub altogether. At the end of the three years the Southland Company had practically sold out to rival shipping companies. There was no doubt tbab tbnt was a declaration of <war by the Southland Company against Nelson Bro.«. Ib was suggested that there was somebhing improper in Nelson Bros, having agreed to buy the works erected by Ward. The works wero not completed till the end of 1893, and thay wire all erected by Ward out of his own money. Not one shil'ing tvesr passed from Nelson Bros, to Ward in respect to these works. They purchased his output, and uev^r gave him a shilling for works till November 1893, when they lent him £20,000 agsiusb a security of £32,000, which he was to pay on Januiry 1, 1891-. He (Mr Bell) did not think any reasonable man could re!u*e to put his name to a bill under those terms. It would have been most unneighbourly and unbusinesslike if he h&d refused to endorse that promi«Bory note. Learned counsel proceeded to s\y that in the minutes of the company on May 8 the following words would be found : — An info»mal discussion arose as to the fact that the pre-ent capacity of the works (DOO per day) is inadequate to freeze ths number of sheep iiow offering, after which it was moved by Mr Ward, seconded by Mr Beaven— "That a committee consisting of the chairman and M?Bsrd Ba.?stian, Cariwell, Nichol, and the mover be appointed to consular whether any necessity exist? for increasing the works, and, if so, to nuke a recommendation as to what should be done at the next meeting of the board." On the asm-* day Mr Reid cama in to the meeting, and Nehons' contract, the termi of which had been drawn up, was discussed. Then on May 14 Reid wrote to Cubhbertßon, enclosing a draft of an agreement. He said : We have your favour of the 12th inst. ; also draft agreement, which we now leturn. The dra f t seems to be in order, but we have a few slight alterations which we think will improve the wording of the agreement. . . . We will be glad lo sign an agreement with Blight alterations, aud if you will get it prepared at ones the writer can get Mr William Nelson to sign it next week, as he ia going to Napier. Then came a letter iv reply on May 18 from Mr Cuthbertsjn as follows : Referring to yours of 14th inst., I have had clean copies (two) of the agreement made out, and forwarded them by this opportunity. Your suggestions have been embodied, and I shall be glad if you will obtain Mr W. Kelson's signature to the same at your early convenience, and return both copies for completion. Then ou June 3 Mr Ward wrote to the chairman of directors of the Southland CompaDy : Owing to my continued absence from Invercargill,'and con-equently my inability to attend the meetings of directors, I beg to place in your hands my resignation as a director of the company. On July 12, 1891, the following appeared on the minutes of a meeting of the company : — Leave of absence wa* frmi'oi to Mr Ward duriDg the session of Parl'-dm-nit. Then on the eatce day it wss romlviid to postpone signing the contract with Nelson until Mr Reid came down. Then on June 17, 1891, Mr Cuthbertson wrote as follows to Mr Rsid :—: — Your letter re Mataura site was received last nigbt. Ido not know if any of the directors will go up, but I will, and return with you to town s.itne evening. I presume the site is the one in which Mr Carswell ia interested. The directors have had the matter of ending works in tint district under their consideration, and are pretty well of opinion that slaughtei yards would mcci all present requirements, the frec-ziag being cun centrated at Bluff. The difficulty is lint w« cannot see our way to spend any large sum of money on additions or new works so long ai the whole of our output is sealed down to the Nelsons at a fixed price, with the provision that they are not bound to fiad us more than 40,000 sheep per annum in event of growers not accepting the price for the meat named in the contract. Already the reduction in freight will soon enable growers to get higher prices than you give. Our output may seriously suffer in consequence Such an avant would be bad enoueh alth oar nroaent out*
liy on buildings and plant, but it would be folly ou our part to spend more money on these, with a possible minimum output of 40,000 per annum, caused by our having sealed up our total output to you at a fixed pries for a term of yeara. Now he wanted to read an extract from the minubos of a meeting of the company on June 26, 1891 :—, Tho report from the engineer, dated 25th inst., was read rt the proposal to erect works at the Mataura to be run by water power, the co3t of which he eitims»ted at £310 J. Moved by Mr Btsstian, seconded by Mr Nichol— "That the secretary and engine r go into figures to show the comparative co.Sj of fraessi&g at trj v liiuff only, and at the Bluff and Mataura cojij-jiullv." Hid point was that that work wa j t! » >■> ( o prevent Ward from starting in oppo^i i• • The efore his clieubs were not response t' >r any damage tbab was suffered in cols 'ij.ieuca of the excessive expenditure at M»tuira. .That work was done for the banefit of th« Southland Company — done, nob in consequence of any improper acb on the parb of his clients, but in conisqueace of ailion which the So ithland Company deomed to be wise — acting on the ad vie 3 of Nelson Brothers. No doubt the Mataura works and the hulk might have been better arranged. Thea came the flutter in the enmp ciuied by Ward. There were six telegrams ou Ju'.y $ from Reid to Cuthbertson, and , these showed what step* Rtid took to press upou CuUibertson the absolute necessity to start at Mat aura for the purpose of preventing Ward from starting. Then ou July 6 Cath- ; bertson telegraphed to Reid :— | They ordered machinery first week January. Site selected for works is a few miles this side of tha Bluff. Then there were Ih9 extracts of a meatinx of the oompsny held oa July 7, 1891 : — The chaiiman explained that, he had callcl the directors together to consult; them iv conuectiou with a matter that had led to Mr Waid's resignation as a director of this company— namely, the fact that Mr Ward had cUled upon him a few I days ago iv order to resign, in consequeo.ee, he stated, of hU having accepted the management of a new freezing company that was about to commenre operation* in Southland. The chairman fiutier stated that Mr J. B. Reid was desirous to cousult with the directors as to what steps, if any. should be taken at this juncture. After an intoimil discussion, it was resolved to aljourn till the Kith inst., and to ask Mr Reid to ba present. Mr Reid went on July 10 ia answer to that requeit, and ou July 8 ha wrote ts London, and here was bii candid statement of what took place at fie ni'e'iug: — I have had no end of trouble to get th-e directors of this company to s : gn the contract. After having had it prepare 1 by the r own s ■licitors they refused to siipi, and wanted to reopen the whole^uestion. I refused point blauk to discuss any other business until the contract wa3 completed, and the result was that the meetiug ended without auy business being put through. lam gla't to B*y everything is now settled, and I am able to send you a copy of the agreement. I have been very anxious for some tima past for the dirdctors of this company to increase their power, for sheep are incre ising very muuh iv Southland, but they would never move in the matter, and ib now turns out that the Hon. J. (i. Ward, who was a director of the company, is going to build works. The secretary and directors of the company are very much excited about the matter, a»d I am going to Invercargill to-morr.>w afternoon to hear what they have to say. I hive under offer at present a spit ndid site at Mataura Falls, a few miles from Gore, and will try to get the company to build theie, for all the freezing can be curried on by water power at very little, cost. I had a long talk with Mr Ward the evening before last about his scheme, and now know tha position. Mr C'uthbeitsoa is of opinioa that Messrs It barts, Brydone, and Co. are interested, but I know privately that such is not the c»se. The fact is that Mr Ward has a very large business at the Bluff, and he finds that it doo* not suit him to allow all the meat to go away without his getting anything out of it ia th<s blnpe of commission, and he intends to build tha works entirely on his own account. lam coufident that, had the diiectors of the company acted promptly, Ward would not have gone so far with his '■cheine, and eveu now it may not be too lii'e to fix mattii'.s up, for I doti't think he is so far on with the scheme as he is trying to make out. The only difficulty, I fear, is getting the directors of tho Southland Company to act promptly. I fancy whatever the result is we will be all right, for I kuow Ward is very anxious to work iv with U3. lam goiu,; to lavercdigill tomorrow, and.wiil writeyou fully on my return. Wo have started killing at Milton, and everything is going on well ; 350 pjr d*y are now being slaughtered. Then oa July 11, 1891, Mr Reid wrote the following letber to Mr CiU.hbertsou : — I have your telegram of this day, and had pre- 1 viously noticed- telegram in paper" re Mat-iura works. I tslo^raphed Mr Ward this morning infoimiug him that your directors had decided to build at once, and that I must, therefore, be free to act as I think proner. I think if you wish to communicate with Ward it will he better to do so' through me, for I know he will fjel very much hurt at your directors when he hears they have decided to fight. Than Mr Cathberlson telegraphed to Reid : Have publicly announced our intention to build at Mataura. Presume you will advise Ward ? Reid then in pursuance of that telegraphed to Ward on July 11 : Directors Southland Company have decided to build at once, so we had better both consider ourselves freo to act as we please. On July 13 Mr Reid wrote to Mr W*td : I thank you for your telegram of Siturday, which has just reached me. 'Jhe directors of the Southland Company have deciicd to build at M-»taura, and will slaughter there as well as at some station near Gore. I thought it only right to advise yo i promptly, for it is better that we both should be free to a^t as we think best. I would very much like if we could come to some artaugement wiJi the comu&uy, for JL am confident that with two works going the result will be a serious loss to both of us. Tnc New Zealand Hefrigerafcine Cjmpany are paying railage on all sheep from Balclutha to Buvnside, to try and prevent our getting them at Milton. Freezing charges have been reduced lo 3d, so you will easily see that growers arc getting all the craam. It is not Mcsni'd Nijson Bios.'wish that sheep should bo parchased under their v^lue, but for the p^t few months competition has been far too keen and buyers have been making heavy losses. I will be glad if you can tuifgrst any wav out of the dilliculty before it is too late, for I diead having to purchase at extreme prices simply to keep engines going. Then on July 13, 1891, there was a meeting of the Southland Cjmpany, and the following record appeared on the minutes :: — • Moved by Mr Nichol, seconded by Mr Ellis— "That the secretary write to Messrs Nelson Brothers asking them what amount of support thsy would be prepared to give to the proposal to establish works at the Mataura in the way of taking up shares in this company, and alto whether, iv the event of such works being erected they would increase the minimum nutput guaranteed by them, airl to what extent." Nelton Bfoa., in view of the opposition, could not do ehbe' of these things. Th-n on July 16 Mr Ward wio'". to Mr R-iid : — I am obliged to you for your letter dated 13th inst,, as aho for your telegram apprising me (list the ditvc'or.s of Southland Company had decMei to build at M.it^ura, so that we might both be free to act as we think be-it ; aid in this I quite concur, as I stited to you iv Lmucdin 1 would, as a matter of what I belkve to be bast for my.s:lf and Nelson's people, have preferred to work witu you, and I had, prior to leaving Invercargill, told Mr Turnbull that my de-iirj was to work with them. But since I left th> ir decision to spread them lei yea (aud I, of course, a*sume with Nelsons' concur- I rence aad co-operation) leads me to infer that they
have noßerious desire to reciprocate my wishes in the matter, and I may add that my expro-»a desire to work with both was quite bona fide. However, if it is to be a matter of fighting each other, I cm make myself quite safe, both so far as the cost of erection of works aild plant and risk of purchasing sheep, and then with a diminished chance of personal gain from the shsop freezing business have auy other advantage that such a connection may give to my own business. I am at present free to discuss any fair and reasonable arrangement. But jou can quite uudeistand that unless we can agree to ssmething that is mutually satisfactory soon that I mu«t, as a ma.tar of self-precaution, fall back oa other arrangements that I can lvadily fix up. Though I readily and frankly pay again that, as a matter of preference, aH other things being equal, I would prefer to work with Ne'sous, but if the latter cautiofc be done I will not iv any way be put out, and will follow the couivo I believe to be the next best, and your friends can do the came. If yonrself or Nelsons are free to discuss matters with me here kindly let me know, so thit we miy finally determine whether we woi k together. Tho msterial be was opening now was essential to the estaSl'shing of a point put before them — viz., that the defendant company was peifectly loyal to the Southland Frozen Moat Company. He wanted to show that they had been perfectly consistent in their efforts to prevent Ward starting. In the letter of tho 23rd July 1891, Mr Rt id in writing to Londoi after telling them that Ward was building on his own accjunt, said .- I have authority from Mr Dobson to offer Ward a joiut agency Tyaar line of steamers with the present agent (Mr Carswell), and if this will please him I cau get the directors of the Southland Company to take over his ongint^ if it has been ordered, which I very much doubt. Of course if Ward has quite nude up his miud to build, he must just do so, and we can please ourselves Utor on wh-tuer we purchase his meat or not. But our duty at pranent is clearly to protect the prcsuit company so far as possible. . Th&t was Mr Reid's uudertt&nding, and it was everybody's understanding. Then on the 6ih August 1891, writing to Mr Cuthberbaon, Mr Reid says : I have just received your telegram giving me permission to have a talk with Mr Ward. I feel sure that if your directors 6tick to their giouud and go on with the works at once that Mr Ward and pat ty will retire. I expect Ward told jour chaitman of his scheme in consequence simply to kesp him quiet, and it is absurd to sugg-jst woiking together when, as you say, more sheep aye offering than both works will freeze. My only fear is that your directois will not act promptly. I will come south to-morrow moiiiin*. On the Bth August 1891 Mr Rtid wrote :— - I was all ready to start for Wellington thU morning, but was detained at the last moment and cinnot possibly get away to-day. I will therefore explain my ideas as clearly as possible by letter. You are no doubt award that there are now no commissions attached to the meat business, and, strictly between ourselves, the producer and purcluser will in my opinion very sodu deal direct with each other. The sheep business is therefore now the most profitable to apents, and the propo al I have to make will therefore refer more tj this branch of the business than to the other. It is as follows :—(!) That yon give up all idea of building works at Bluff or elaewhsre and give all your support to Nelson Bros, and to Southland Froz m Meat Company ; (2) that in return for this and in consideration of your giving ux> any rights or privileges you may have secured, you shall be appointed joint agent for Ty<ser Line (Limited) with Mo-^rd 11. Car.-»well and Co , Inveivatgill ; al?'o, tint you get a <H3couut of 2J per cent, on fret-zing c\x\ gos on any of yourclieuts' sheep tint you may influence through the works. I presume you are awara that loading agents gdt a commission of 2i per cent, on meat f night and 5 per cent, on general cargo, besides agency fee for entering and clearing each sieamer, no that this is roal good business. You could not hope for many y^ars to came, even if jou built works, to get hjlf the output f Sou'hUad, aud I think whan list we met y it were quite satisfied that there was Hop 'ofitt) be made out of freezing overations, so that if this proposal is earned out it would clearly be a direct gain to you, besides bting a certainty. You will understand that I have no authovi'y for saying that the directors of the Southland Company will allow 3'ou a discount ou freezing cln.ig.-s, for they know nothing of thin proposal; but, if you fall in with my ideas, I will suggest that you give me authority to negotiate for you. There is no doubt tint ai long as Mcsra Nelson Bros, purchase sheep iv "Southland that lycor'a steamers will rarry them, and, with M;Uaiu\i iv full operation, the output sh uld hi greatly increased. I may say, in strict confidence, that I told Mr Oar»wdl that I woul t probably make you tb ; s offer, foi'it would not do to go behind him in any way. He, of course, does not like the idei of losing the business but is satisfied to leave the matter in our h<inis to make the best arrangements i ossible for all parties interested, and 1 have explained to him that in the event of your accepting, probably the joint agency in the future, with increase of business will f e as good for him as the whole business has been in the past. I may say in conclusion that I frankly admit that I should prefer to work with them against you, and outside of this bu mess altogether there are mauy ways iv wh'ch we could work togather if thorough confidence existed. Here Mr Rtid simply endeavoured to get Mr Ward to give up all idea of fretzing at the Bluff. Oa the 9th. Mr Nelson wrote to Mr Ward in answer to the letter of the 4th. They had not that letter. Mr Reid eaid : Dear Ward, — I have deferred answering your letter in the hope of some daylight appearing. But you know the fix lam in. lam absolutely bound by. the Southland Company, and am helpless for two ye»rs. All my viewa have been put befora them with no av»il. You know my wishes on the subject. They remain the same as I expresse I when you were here. Dobson will see you on Friday, and I hope you will fix up matters with him as far as he is concerned Our cjnnection must follow in due course. Now, Djb3on was the agent for the Tyser line, aad whether they were connected or not there was to be some fixiDg up bttwr-en Dob«on and Ward in connection with this 2£ per ctnt. c;>mmi'siion. S ! r Roberb Stout : Dob3on was agent for Nelson, Mr Ball said that Dobson protably did acb a? Nelsons' attorney when Nelson w»s out of the colony. Nelsons' works wera at Tomoiua, and Tomcana wai s me diftin3e ironi N<pier. There was a shipp'tig department at Napier, aad possibly Mr Djbson was the Napier agent for Nelson Bros. lie was inttiuoted that his friend was wrong in his assertion that Me Dobson was Nd'ous' agent in th's connection. Sir Robert Stout s%id that what he had stated was (hat Mr Dobson sometimes acted for Nelson. Mr Bell said hit learned ffiend's statement was that Mr Dobson was agent for the Nelsons'. Mr Dobion was agent for several companies, and for all he know h? might havo Rcled as shipping agent for Nelson and Co., bub in no other relation. Mr Ward wroto on the 10th ia reply to Mr Reid's letter of the Bth. Mr Ward expressed his willingaess to come to terms, and he K&idVN- w jo'i have marie a proposal dealing principvllj v/jtii Mi ppii.g ; I will nuks you a piopo^.il vhic'i 1 think i.-j worth con Mcriug, amt wo'ill clear the wholi grouud fur s-Upa'ti's. It is — I. That the •SouthUnd Frozen Me^l Company (aud yourself) abandon the intention of eivcting works at Mstaura and let me erect mine there instead, so as to ensure what you arc aiming at — a central works,— and I to give Nelbon3 and Tyjeiy eich a thiid >-hare of thd work*. This wou'd ep&ure the following :— (a) Get rid of tin opp'-s - tion company ; (b) ensure a monopoly of the whole district for Nelson sv-d Tyser ; (c) a prosp-rous future for tba S uthlatul Company witrjout over- j weighting them&clv^s with additional capital ; < W) the certainty of no other works bain? ftrp.ntsd
in the district; (c) the division of the output of the district into two instead of three ; (J) prevent an inflation (through coinnctii-ion) in the value of sheep; (ff) it would tn.-mro a uniformity of freezing charges a« a'l worksBluff, Mataura, Buniside ; (A) it would allay tho dissatisfaction that now exists among email ihcep farmers (who are, and have been for the last ihree years dissatisfied with tho present company) ; (t) It would bo the best safeguard against the antagonism that always underlies a large monopoly ; (j) it would cause Nelson*' Home agency getting tho whole business of Southland. 2. A manager's salary to be paid to me and to have the division of the shipping proposed by you. The abova I believe (o be the right direction to fix tho business up for all paities. If you thiuk it worth discussion telegraph me and I will, if you desire it, go on to Napier (as I can get there and back easily and quickly) and discuss it with Nelson and Dobson. In the above proposal tho Froeen Meat Company lose nothing at all, they retain their own busnoss. They gain by uot having competition. You lose nothing at all. You gain by havirg nil the district office without competition. I gain by preventing competition and tho way of fighting. I believe it is worth considering. Ou the 11th August, Mr Reid, writing to London, speaking of these negotiations of Mr Ward, eaid :—
Mr Ward is a very clever business man, and would ba a valuable mau with us 80 long as it does not cost us anything to get him. The jury would see, the learned counsel said, bftcauso Tyier was paying the commission fir^fe of t>ll there was a proposal to Ward to give up the freezing works and to have the Tyeer commission, and on the other hand to give up Mataura, and all combine and avoid fighting. Sir Robert Stout had referred to that letter as bsiug evidence of a desire to acb in an underhand way r gainst the Southland Company, but the jury would bbo what the relations wore betwteu Mr W.ird, the Southland Company, aud Nelson, at the time the let'ec was written. Sir Robert Stout did nob understand, h* supposed, the position of the patties w lieu the letter was written. In a telegram to Nelson on the 15fch August, Mr Reid said : — Ask him for a copy of letter and his reply. Suggest you h aring nil he h.13 to say, and then taVe time to consider. Do not think Southland directors would entert.iin his proposal, ar.d we must be loyal to tha company. The offer I made was a very good oue. Mr Nelson then said to Ward in the letter of 19 .h August 1891 tbab was read with so much unction on the ' dear Jim,' and so on :—: — Pou Jim,-I have your copy of Ward's letter, but I have not yours referring to it ; but I may as well at once give you the result of my interview. (1) I am sa'isQed he means to build; (2) the machinery lias loft or is about to leave Kngland ; (3) sve m«<t work wiMi him ; (-1) I think a Cabinet Minister a ireful addition to the firm ; (5) I like Ward. Mr Nelson w«s satisfied on these three points, and if they weio true.asth^y were, he wan quite right in sa>ing tht-y must \vo:k with him. If Ward had eivcted the works at I had time, and they had not worked with him by purchasing bis stock, vrhat would have become of the trade of both Nelson aud the Southland Company ? Having regard to the anticipated market as shown by th-j letters of Mr Raid to London and of Mr Cufchbertaon's own letter, it wo 3 quite clear that Mr Nelson was justified in his conclusion, though his surmise as to what would happen in 1893 proved incorrect. The letter w*a just the kind that anyone would write upon tho subject, ib was logical, quite sequent, and writing to a frknd it was natural andy true. It was nob pleasant when it became public that a mm should have written, "ACabiuttb Minixler will be a upoful addition to the firm " ; but that was whet was running in his mi'io, and there was no r.-r-'on why he should >iOb say ib fo Mr It M. What it amounted to was this! : If we are going to carry on business in S jubhland and there is going to be a row, if we can by any possibility keep on good tirms with a Cabinet Minis cr it will be better for us. Besides that, they would probably gather from some of the other correspondence that it was a very natural observation. An > one opposed to the present Government might have said bo. It was a very natural trying. One would not suppose that a. Cabinet Minister on one's own side would do onj thing ta help one, bu!< a Cabinet Minister on the other side of politics would do all kinds of thing?, for as soon as a man becimo prominent iv politics he was capable of any villianics or any virtue i acaordiug to whether he was regarded by a supporter or au opponent. Then it went on to gay : I think Ward's suxgastion (o take ovor Mataura a good thing for all concerned, but it must be in couj unction with N elson Bro*. (Limited), for our own s ifet.y and the pood of the trade. I understand that we are pledged to Bluff Company rot to take any interest ia freczi'g works in the district during the cuirency of our contract, so that we cannot join Ward without their consent. Then comes the question, Will they give that consent? 'lhey will have to settle the question, whether it is better fo>- them that Ward should start alone or ia conjunction with us 1 lam quite clear it would be better for them if we were in it. This is really the first point that must ba settled, as we caunot move without it, and I should strongly advisa them to consent. Taken as a whole, 1 agree with the sentiments contained in Ward's lelb-r lo >ou, to that I nfel Pay no more to you on that h>>aii. I have told Ward that my feeling is decj.le<))y to woik with him, but that I shall do nothing without the consent of the Bluff Company. And nothing had been done without their ccn?ent. Sir Robert Stoufc : What consent was ever given. Mr Bell would reppat that nothing was ever done without their consent. I should aid that one of my rpa,sons for leaning towards Ward is that I cannot forget the slippery nature of the Bluft Company ia the past ; aud, although they are supporting ns loyally at the present moment, there is no lelliDg how soon the change may coin<>. At pi cent it suits them—by-an<i-bye peihaps it won't. I can enter further iuto detailo when the question is settled as to whether Bluff Coinptny agree for us to go in with Ward or no, so set this ball rolling. Then, in the letter of the 24th of August 1891, Mr Raid wroto to Nel3on saying he noted (hat Mr Nelson was auxious to work in with Mr Ward, and, referring to the proposal to give him the Mataura Works and bo avoid fighting, and added, " I do not agrea with you that Ward has made np his mind to build." Tbea on the Ist September Mr Reid wroto to Nplson : " I have not so far been able to do anything. I fear unless Ward agrees lo fall in with the proposal of tho company nothing will be done." They would sse th&t at that time there was not the slightest idea of the output question. The question was that there wss going to be competition in freezing work* which would be difaitroas to all concerned, and the question w« vh>i, rouM be d< no to prevent it. And M It i I Mopped in and endeavoured to prcviii/ it. Mt- Nel o!i took a. different view from Mr Reid. Mr Reid was convinced that Ward was not go^nj to build ; Mr Nelson was couvluced that be would. Me Nelson thought ib waß better to give Mr Ward Mataura. On the other hand, Mr Reid preferred the altc native of makiug Ward the shipping agent. Then Mr Ward wrote on the 4th September to Mr Nelson telling him thafc practically tho v.hole thiDjj was ovoi\ In tfoifl letter Mr Wcvrd said j
I can't, howover, do more than indicate, as I bave all along done, my willingness to work with your people and the Tyser line. However, if an arrangement can't be come to, I must do the best I can elsewhere. This I can do, but I will still hold myself free for a reasonable time in the hope that we may be able to mako an arrangement mutually advantageous. As far a3 works are concerned they, however, go ou now at the site I mentioned to you. Whether the Mataura people go on or not, I am satisfied that the site I have is the very best one in many respects in Southland, and I am n»t the ulightest afraid that even with the advantage of Water at Mataura which the other concern will have that I cannot more than hold my own as far as economy of working is concerned. What they save in watsr I cm more thin make up in other ways. Then Mr Rdd, writing to London on the 7fch September, says: ''Ward seems determined to go on with the works at the Bluff. I «m trying to bring about an arrangement which, if successful, will do away with the necessity for having so many works." Then there was the other letter about the Cabinet Minister— the letter of September 9 :—: —
Dear Jim,— l am EGrry we have not got the Cabinet Minister in our arms, but you can do no more, and I feel for you in your awkward position. I have just wired you no good coming to Napier. Ward writes me that he cinnot work with the Southland Company, and shall go on by himself. He is willing to spend reasonable time in further negotiations. I have replied that, as he knows, I am in the hands of the parent company and can do nothing without their content. Dobaon goes up to Wellington in Tyser's interest, but I dou't BUppose will do much. My objott in asking you to write shipping company asking them if they wanted meat was to directly identify them. Theu Mr Cuthbsrtson telegraphed to Mr Reid on tbe 14th September :—
Directois regret they cannot see their way to adopt the suggestions of your" firm, which under existing circumstauot-s they Ibiuk would be fatal to the company's protpects. That phase of the question was tbus terminated by the failure of the negotiations. The directors of the Southland Ccmpany refused to give up Mataura, and Ward ret used to stop going on. Mr Nelson was then convinced that the machinery had beeu ordered, as in fact ii> had, and was on its way. And thea Mr Dobsoo, the agent of tha Tyser line, wrobe tbis ktter to Mr Nehon on the 19th September 1891:
Dear Nelson,— ls it possible for you to say that you will buy from Mi- Ward upon equal terms ■wi'h Southland. Possibly when he gets uuderway he will want to Fell h ! s mutton to you. Send me an answer. I want to write him on Monday. Mr Nelson answered that on the same day :
Dear Bob,— l do not think I would care to say just now that we would buy Ward's mutton on the lame terms as the existing company's, thoi gh no doubt we shall buy. from him on the best terms he can obtain. As a matter of fact they bought on terms better fer themselves than the terms they h<;d with the Southland Co-rpiny. That was the first reference to — the bfgianing of — the meat question, and the jury would see that it began by a letter from the age^t of the Ty?er line to Mr Nulsod, a^kiDg whether he could say that he would buy Ward's muttdh, snd Mr Nelson wrote back sajiog that he did not care to fay ju«t now, &c. Then, on tbe sth October, Mr Rskl, writing to iJondoD, says :
I was quite unable to bring about any arrangement between the directors of the company and Mx Wsr-J. The former would not give up the Motaura scheme and the latter would not entertain a proposal to fieeze his sheep at the company's woike. It remaius to be seen what the result will be. Probably Mr Ward will go on with his ; works, and if he can get anyone to buy his meat competition will be keen ; if not, he will prob-bly be glad to sell out after working for a year or two. Then there came a telegram from Mr Reid to Mr Ward of 3rd November 1891 saying: "If you bave not ordered boilers, have two that would soib you. Reply Wellington Club." Now, reepf c'iDg those boilers, it was suggested thab Mr Ward had some advantage. As a mvtt-irtf factMrWnrd had some little cause of con>pl<iiut in respe:& to this. Their history was this: Th're were a couple of eld boilers be'ongiDg to Nelsons wlrcb. they could not get rid of. They had been on hand for some time, having been imported for use on a hulk hi Dunediu aud not u^ed. They were lying of no use ; here was a chance to get rii of them, and acci i"ingly Mr Reid telegraphed to Mr Ward.
Sir R-.bert S'out : Were they their 6wn. Mr Bell : They had been on their hands for come timo, and'they cou'd not get rid of tbena. There had been attfmpts to sell them, bub there was only an effer for cne. Mr Ward was starting, and Mr Ectd eventually got him to buy them, and sold them to him on a year's terms, writing respecting the s »le thab as they could not sell them otherwise the r e would be no rrore kns in selling them in that way than in keeping them. It was an ordinary bus'uess transaction . The boilers were for sale, and bad been sold to the first person who could be lonnd to take them. On the 23rd January 1892 there was a letter signed by Reid and addres ed io Ward which had been read and referred to ?n scathing terms as evidence of a desire to guide Wfcrd in the corduci of his burners. Would I hey believe it ttaattb/s was a circular wHfh was Eenfc by Nelson Company to the /r z.*;rs of nisat in the colony ?
Sis- R. Stout: It was not sent to us as » Circular.
Mr Bell said it had not been sent to the Southland Company at all, because they were tinder a contract which did not include grading. This was what Nelson required in respect of grading, and the Southland Company hail a contract which exempted them from gradiDg and which was very much in their favour. Prime sheep covered from 50ib to 751b, and in some easas the Southland Company had been allowed to go as far as 80lb, though sheep of that cize of coulee were not prime sheep. On the 23rd of January the meat arrangements bf £?an. On that day Mr Reid wiots to Nelson :
Dear Mr Nel-on r — I had a long yarn with J. G. "Ward this morning, and think we should now m -ke him an offer for the output of his worko, for if we don't get the sheep from Ward we will get theni from the company, and it is just as well to keep him sweet. I thiuk 2fcd (f 0 b.) for 551b to. Cslb sheep would fix him for two years), same as Southland Frozen Meat Company, or, if you ■would prefer it, I could probably makd a contract for one year at 23d (f.o b.). It seems to me that we cannot lose anything by making the offer, and while Ward ia sending circulars all round the country things are bound to be Tißßettled. Ward told me yesterday that at present he was free to arrange, but he might not be in the same position within the next few weeks. Of course we can take this statement for what it is worth. But my own opinion is that he Is very anxious now to make terms ; but if prices improve and he' is not m a position to give a better pr'ce than the Southland Company, the tables will be turned, and we will be out of it on both sides. Mr Ritchje told me in confidence that Ward told him that he had been offered freight frtfm Australia, but I fancy this would necessitate giving the firm a guarantee of a fixed quantity, which he could not possibly give. I nave promised Ward to make him an offer on Saturday next, bo please telegraph the best you can do on receipt of this. They would see from this that Mr Reid was anxious to make arrangements, not at all in Mr Ward's interest, but because he feared that both he and the Southland Company wcnld be ©ut of it if Ward wu not fixed'and Diices im-
proved — and as a matter of fact prices for a short time did improve. On the 28&h January Nelson telegraphed to Reid to make the arrangements proposed, and on the 29 ,h January Mr Reid wrote to Ward offering him the terms, and on the same day, writing confidentially, he said : Referring to the offer for the output of your works, and the conversation I had with you some few days ago, you will of course understand that in the event of accepting the offer all freight arrangements will be made by Nelson Bros. (Limited), and you will be free of responsibility so far as that is concerned. _ I can also secure you the loading commission on all meat supplied by you. I presume it is not your intention to consign on growers' account ; indeed my experience is that very fo^v cave to risk the London market, and prefer to accept the best price going. Should you, however, wish to consign no doubt I could arrange tor a further 5 per cent, on such shipments to b« returned to you, part of which yuu could return to shippers iv the ordinary way. As you are aware 10 per cent, primage is always charged, 5 per cent, of which is returned, and no doubt you would receive the same concessions as others. As far as general c*rgo is concerned, I regret that I am unable today to say exact'y what return will be nnde to you, but you have my assurance that you 'will be secured and placed on the very beit footing possible. I need hardly ask you to treat all our negotiations as strictly confidential. Then followed the letter of the 23rd February 1892, which he had already read, at tho com-m-ncemeDt of his address. This was from Mr Rt id to London, advising as to entering into the contract in rclatisn to the frozen ouea 1 :, and saying that if Ward " had been free ab present, with mutton celling at 4|d and lambs at 6|d he could have paid growers higher prices thau they could get from the company, and in all probability work at the Southland Frcz^n Meat Company's works would have been stopped. As the milter now stands we have secured the total output of Southland at a fair prico, and need not trouble oureelves where tho sheep are frizen." That w*s the position they* took, and were entitled to take, as they understood. If they had not made that contract the Southland Company would have been oub of it. The contract, was made, and they had now to fiud oub at what date Mr Ward actually commeuced. It would bs seen that Me Ward had sent cut circulars in all directions, but he whs not inactive operations then, and the Southland Company were still freezing ; and it was idle for the Southland Company to claim that at the time the contract was made they suffered any immediate less. The Southland Company weretheonly freezing company then subject to competition from Burnside, and Mr Ward could no louger buy at the extravagant prices which he could otherwise have given, regard being had to the prices that were current in Loudon. Mr Ward wanted tha matter kept private, and Mr Reid wanted it nob kept private. Mr Reid and Messrs Nelion Bros, never wanted any privacy — thoy were doing what tb.py were entitlfd to do, and they wanted no secrecy. Mr Ward was anxious at that time that he should nob appear to be associated with the Nelson's — for the purpose that he might still b? able to pat himself forward as tbe benefactor of the human race in starting an opposition. Mr Reid wrote to Mr Ward on the 4th March that he found it impossible to ke-p their connection private; and Mr Ward replied :
Re privacy of meat sale, I still think it is better both in the inteiests of Messrs Nelson Bro». and myself that no publicity be given to our rrlationsliip. It wculd for a certainty render the buying of sheep more difficult for me, and Nelson's opponents would feel that a large monoply of Southland was in bis hands. And this might create further opposition— at anyrato, it would not do any good, and I do not see why either of us should satisfy the curiosity of inquisitive opponents. I fully rec >gni£e it is only a matter of time when otheif, will know, and I do not think there is any need to hasten knowledge. Tr.e reason that was put was thi3 : "On my (Mr Ward's) part I do not want it disclosed ; on your (Nelson Bros.) part your opponents will begin talkiug about the monopoly of Nelsons in Southland." But it was never suggested that thera was the slightest necessity for secrecy in this mabter, and secrecy w.is never kept. Now on tho 12th Marcb. 1892 Mr Cuthberlson wrote to Mr Reid tho first of some letters ha (Mr Bell) wished to call special attention to :
You will doubtless remember that we arranged to supp'y you with somewhat over 10,000 sheep for the Star of Eneland by the 7th inst That steamer 1 cached Bluff on the 10th, and we commenced loading her within an hour or so of her arrival. This morning when we had about 8000 on board Cap'ain Todd stopped us loading, saying that he could not t ike any more from us, although tha Star has room for 12,000, and <we can, if necessary, supply that number. I have just wired yon asking what the meaning of this is in the face of the above arrangement. Our agreement is tbat you are to supply us with freight as required, and we tru^t that you will kindly bear this in mind As far lnck as theda'e of the Indrannjo loading we intimated the amount of (space required ia the next Star, and on the 26th ult. ; in answer to your own inquiry, we wired you to the above effect. But this is not all. On the arrival of the Star, on being asked by Mr Gray how many rheej he wanted, Captain Todd replied that be did not know how many the Star required to fill her up, but hs had received definite instructions that he was to take (5000 sheep from Mr Ward aud from us whatever balance was required to fill up the steamer I may as wtll say once for all that we must decline to be made a convenience cf in this manner and be made subservient t:> Mr Ward's requirements. If the steamer could not take the number applied for by both Mr Ward and ourtelves, it was cleaily the proxier couise — To do what ?— to make a proportionate division of the total available space, and to that we would have had no objecti'.'ii. But we must protest in the most emphatic manner ngainst any preference being granted to Mr Ward as against ourselves. While at the same time we regret that any oeca-ion should have arisen to force us to make such strong representations. But to return to the purport of ou^ telegram, we wish to point out that while it may be perfectly true that 8000 ia a fair proportion for us to get out of the total available space in the Star of England, yet we consider that we are justly entitled to as much space as we could fill seeing that Mr Ward was unable to do so himself. The condition of the sheep that he presented for shipment, as well as those he had in his works, were such that the ship refused to take them, and under these circumstances we consider that we have been badly treated by being stopped loading at B'JOO when the steamer was not nearly full. Finally, we are informed on the best authority that many of the sheep and lambs offered by Mr Ward for shipment (and of which some 900 were actually taken on board) were so s,oft as to be mis-shapen. Now, no amount of freezing will ever bring these sheep back into their proper shape. It would be seen that what the company deminded from the Nelsons was a proportionate division of the available space, and they protested against a preference baing given to Mr Ward as agaiusb thernsilves. His Honor : What date is that ? Mr Bell : March 12, 1892. Sir R Stout : It is not from Cuthbartson to the Nelsons.
Mr Bell : It is written to Tyser's agent and to NeWons' agent.
His Honor : There is nothing ia that letter to lead one to infer that Mr Cuthbectson was aware of the Nelsons' purchase of the output. They only knew that Mr Ward was shipping. Mr Bell : Possibly that may be so ; possibly ib may be token as & letter written to Tyeer's
agent, but ooupled with the other correspondence it is important.
Sir R. Stout : There is no suggestion in that letter that it was Nelsons' sheep. That came a good deal later.
Mr Bell said the next letter was on the 22nd March, and he hid already read it as evidencing the necessity that existed in the interests of all parlies that the output agreement should be entered into. Then came a letter of the sth May 1892, part of which he read to Mr Cuthbertsoa in the witness box — ib was a letter from Mr Cuthbertson to Nel«oa Bros. (Limited) — and he wished to read ib again :—: —
We are in receipt of your favour of 3rd met., and regret to find tha r you have t>iven a\v*y all the meat space iv the Mamari without reference to the requirements of this company. This h now the second time, within a couple of months or so, that our interests have been sacrificed to meet Mr Waid's cumeuience, and we must beg firmly and resi c-tfully to protest against any advantage being withheld from ourselves that is granted to Mr Ward. We have never asked that you should favour us at Mr Ward's expense, nor do we desire it, and we consider that in insi-ting that wo should be placed on the same footing as Mr Ward we are only askiug what is fair and just, and further we thiuk that on reference to our agreement with yourselves you will rind it expressly mentioned that nothing is to be done by your firm *liat will injure our busine-s. We think you, too, will see that it is very important, now that we have to competo with Mr Ward, that yon should protect the interests of this company in every way in your power without doiug any injustice to Mr Waid. And in this connection we are foiced to call your attention specially to thf fact that while we are bound down to a very h'gh standard of quality Mr Ward 13 not, or, if he is, he does not auhcie to it. It is a well-known fact tbat at the Ocean Beach works there arc no rejections— everything is frozen, whether prime or infesior, whether up to weight or very much below it. It is admitted that you have bought the output of Mr Ward's works as well as all our own, and under our agre>-men!j he is not entitled to receive better terms than ourselves Ojr preEent contention is that the practical effect of Mr Ward freezing and shipping inferior theep is to place bim hi a better position than wa occupy, aud wa thiuk that in cimnion fuirne*s we are outitled to ask that you should take steps to see that a uniform standard of quality is applied to both. Now, he (Mr Cell) wculd remind them — there was no qui'ntion about it — thab was a statement, au admissi >n, oF the whole position the defefldanls occupied. Mr Culhbertson said on beh»lf of the company, "You purchased Mr Ward'b output. That i* aM right, but you must not give him better t'-rms ; and wo ask you to see that the same standard of quality is applied to him as to us." Lexrned cuiiusel broke off to remind them of what there was in that agreement. Mr Ward, as they remembered,got 2£d for first-class sheep — 551b to 65lb— and a less price for sheep over and under that weight. The other company got 2£ 1 for prime sheep — prime theep meaning tfrom 501b to 75'.b, and sometimes they were allowed even as far as 80lb ; they got 2^d per lb for sheep beb*?etn 501b and 55!b and between 551 baud 751b, whereas Mr W*rd gob less prices. Ou the other hand, Mr Ward was able, they said, to get sheep which weie not prime. Later on, when Mr Ward's terms were altered the company were again offered Mr Ward's terms in an express letter, and later on they were offered the same terms in another form when Mr Ward's contract had been modified and he had secured a remedy for a manifest grievance he had suffered. Mr Ward had been competing but he -had been unable to compete at * profit ; but when be was put on what Messrs Nelson Bros, attcaipbsd to call level terms th j y said to the other people, "you can have Mr Ward's terms." The Southland Company were offered a grading contratt, but' they did nob want to be graded— they wanted 2£d per lb with a wide rnnge. Then, when Mr Ward found he was not on equal terms with the Southland Company, he came to the Nelsons relying on a clause in his contract eutitling him to be put on the saraa terms ; and he got what were called concessions, but what he was really entitled to — namely, an ir. create in price, because he was to be put in all other respects on the same terms.
Sir R. Stout : All other respects tban the terms in the contracts.
Mr Bell : Whatever Mr Ward was entitled to in the strict letter of the law he was entitled to that in honest dealing, and the Nelson Company did nob come with any catch leg*l interpretation of the clause — they did not want to take advantage of such technicalities as the Southland Company unfairly and unjustly, with the able assistance of his friend, were endeavouring to take. He might say at once that he had no doubt that the jury would have % a very forcible and- brilliant attack upon his clients at the conclusion, and at that time both himsslf and his fiiend (Mr Hosking) would be silent.
Sir R. Stoul : You hava no right to open to the jury in that way.
Mr Bell said his friend (Sir R. Stout) was possibly right in his legal interpretation, but the Nelson Bros, had endeavoured to act in accordance with an honest and common-sense meaning of tha contract. He was only prot< cbing his clients in warning them that if Sir Kobtri; Stoub was keeping ia reserve all that attack, of which there were so many muttered threats, it would bs impoJsible for bim (Mr Bell) to answer i 6. He did nob know the motive of the violent attack Sir Robert was going to make, but probably he was going to reserve all the merits of tho case for the defence. The Mamari, learned cjunsal continued, was not a Tyser steamer, but was a Shaw-Savill steamer, and the arrangements in concection with it were not under the control of Mr Dobson or Ml 1 Reid. On the 9ch May Mr Iteid, writing to Mr Cuthbertson in answer to that, said :—: —
As you are probably aware, arrangements have been made with the Tyser Line (Limited) to carry the output of your works, and we cannot hand your meit over to an outside steamer even if we wished to do so. Of course, if work was actually delayed by your works being blocked, as in Mr Ward's case, we would make the best arrangements possible, but so fay I have never been advised that your works will be full before Star of Victoria arrives. Ido not intend to go fully into the question of our agreement with Mr Ward, but you have my assu ranee that there is not a clause in it which gives that gentleman the slighteet advantage over your company. Now, as his Honor had clearly pointed oub, there was no prebeucs that the company did not know of it. Mr Reid's right to make the agreement was never contested. Bat Mr Reid said there was no advantage to Mr Ward, and that was true:
You will no doubt remember that I asked you some months ajo to adopt the grading system, but you have not djf played any great anxiety to nie=t our wishes in the matter ; had you done so I could hive arranged a price for sheep that were jast too light or heavy for firtt quality. I suppose it ia to this class of sheep you refer when you say that anything ia frozan at Ocean Beach works whether prime or inferior. Before closing this subject I can only say that if you prefer Mr Ward's contract to the one you are at present working under you can have it, but I trust that, even if the competition between you is keen, you will distinctly understand that rests entirely between Mr Ward and your directors. Now Mr Reid said, " The contract gives Mr Reid no advantage, and you can have it." All that Mr Cubhberteon had to say was, " Let ns have a look at it ; we'll see if we like it" And
probably it was after that that Mr Cuthbortson called on Mr Ward and saw it and did not like it. Ou May 18 Mr Reid wrote in answer to another complaint from Mr Cuthbertson. The latter wrote on May 13 :—: —
We regret that you are not prepared to offer us the same facilities for shipment as are being granted to Mr W.u\l. We thiuk that you will readily see that it is no affair of ours to which line our meat has been promised, and we still contend that in making arrangerurntß for sending iv the Mainari to Bluff you entirely oveilooked this company and consulted only Mr Ward's convenience. Under the ciicumstances we consider we are fahly entitled to ask for payment of the meat. —that was to say, that the Shaw-Savill Company's steame"r should take equally tueic meat as well as Mr Ward's, and what foundation could there be for that other than what Mr Cufchbertson frankly stated on the 'sth May — namely, that the seventh clause of the contract outitled them to certain rights. Oa the 18fch May Mr Reid wrote :
You have not been delayed a single day by shortage of freight, and whenever you asked for a steamer arrangemants have been mads to send you one. I will at all timed he glad to meat your wishes with regard to freight, and if proper notice bo given you will be supplied, but I fear you are not trying your utmost to try and meet me in the samo ti-rnn. Otherwise you would not have complained of the arrangements made for carriage of your meat this season. Then on the 25rd of May there was another letter from Mr Cubbbertsoo, to which learned counsel ai-ked special attention, as it followed the same Hoes as the letter of the sth of May :
The reason that we asked to be paid for 6000 odd carcases waiting shipment when you sent the Mouari into the Bluff was very pi lin— namely, that for the tccond time within a month or two you had made shipping arrangement!; favouiing Mr Ward at our expense We don't ask any favours at Mr Ward's expense, and we have a right to expect to be treated with precisely as much comidenition bb you extend to him, and from our previous relations with youi firm, which were of the most satisfactory nature, we mnre than regret being forced in self defence to write in such a strain. We cannot allow the last clause in your letter under reply to piss unnoticed. It is not the arr ngement for carrying our meat this season that we have complaint?*! of, but the fact that you have grunted facilities to Mr Ward that you have denied to ourselves. He wished to lay special emphasis on that, for itsbowtd that it was not a shipping complaint, but that apparently what the company complaiued of was that some privileges were granted to Mr Ward which were not granted t > them. Then came an important letter of the 6ih of June fiom Mr Cuthbertson to the Nelson Broa. : We have been informed on excellent authority that Mr J. (J. Ward received a rebate or return commission on the freight of all meat frozeu by him and shipped by the Tyser line steamers. If such is the case, as we believe it to be, we must a^k to be place I on exactly the same footing as Mr Ward in this respect, We understand that you have purchased Mr Ward's output on the same terms as our own— namely, f.o.b Bteamer in Bluff Hobour. As, therefore, the freight is payable by you and not by Mr Ward or ourselves we must apply to you to place us on the same footing as Mr Ward in thia matter. He (Mr Bell) did nob know if his Honor had observed that the claim was founded only on the fact that the purchase of Mr Ward's output was on the same terms as theirs — f.o.b. That was a demand for 2£ per cent, based on the exi&teuce of the contract to buy Mr Ward's output, and based on the 7th clause of their contract that they should bo placed in the same position. Mr Reid replied bo that to Mr Cuthbertson :—: —
I am in receipt of your f *your of the 6bli inst , contents of which are noted. It is true that Mr Ward receives a small loading commission from the Tyser Line (Limited) on hia meat shipments, but with this Messrs NeKon Bros. (Limited) have nothing whatever to do lam going to Napier in about 10 day 3, and will then represent your case to Mr Dobson, and advise you whether he can see hia way to give your company the same conces---. sion. Wishing you will consider this satisfactory.
Sir R. Stoub : Mr Reid says in another letter he would have to consult Nelson Bros.
Mr Hoakiug : Because it would have to come oub of the Nelsons' pocket.
Mr Bell : Mr Cutbberfcson, wrifciDg to Nelson Bros, on the 11th June, saya :
I am duly favoured with yours of the Bth inst., iuforming me that it is a fact that Mr Ward receives a commission from Tyser on his meat shipmeats, but chat with tbN your firm ha 3 nothing to do. I have to thauk'you^for promising to see what can be done in this matter when Mr Reid goes to Napier shortly, and I need only say that this company will not be satisfied unless it is placed in as favourable a position as Mr Ward. I would also beg leave to point out that we have been definitely assured that Mr Ward has sold his output (f.o.b. Bluff) to your good selves at the same' price and on the same terms as ourselves. Such being the case, the shipments arc not his, as you put it, but yours — His Honor would ses how they founded their claim — and it therefore follows that ha receives commission from Tyser's on meat sold by him to you f.o.b. and -shipped by ourselves, or, in other words, on your shipments. Now, it would be seea that the Southland Company claimed the 2£ per cent., because they said the meat was sold to the Nelsons f.o b., and, therefore, the shipments were Nelions', and not Ward'?, and, therefore, they were entitled to the 2£ per cent., and that the Nelsons should give it, and nob Dobson.
His Honor : What date is that letter ?
Mr Bell : The 11th June 1892. From that time forward, through 1892 and 1893, subjeob to one or two other letters which he would read, from tha beginning to theendof the dealings with the company, that; was the basis on which they dealt. The company said: "The shipments are not Ward's, but your 3 (Nelsons'), and,' therefore, you get the commission, and you must give it to us; we claim it not from Tyeers, but from jrou, and you must give it ; " and yet, having co dealt with the Nelsons throughout 18 or 19 months, they said now that the Nelsons' contraot was a legal breach, and they demanded heavy damages for the breach of the contract and for the injury done. Then there was soins correspondence with Mr Cuthbertson, which he (Mr Bell) might want to put in, but he was not going to trouble the jury with it. There was a letter from Mr Reid to Mr Cuthbertson on the 16th June 1892 :
Ai previously advised I will discuss the question of the 2i per cent loading commission paid to Mr Ward by the Tyser Line (Limited) with Mr William Nelson. The company were claiming from Mr Nelson as if the commission were received by Mr Nelson and not by Mr Ward. Mr Reid continued t
I may say there is very little difference in our contract with Mr Ward from that made with your directors. I think the only variation is that Mr Ward has agreed to weigh each carcue separately, while you could not see your way to do so. The highest pi ice wo pay Mr Ward is 2id f.o.b. fo. 1 prime sheep weighing 55!b to 651b i_ lower grade 3in proporti m. I give this information for your own private use only, for I wish you to be able to tell your directors that you are satisfied that Mr Ward iB not getting better prioea thaa the company you represent. I sincerely trust you will, as I request, treat this !• Her as strictly private, and thai you will aot again take notice of any reports circulated contradicting the information herein cont&teasU
Then on the 4th August Mr Cathbertsc-q wrote :
I shall of course submit to my directors you* offer to give us 2} on the freight provided w« grade the meat as Mr Ward does. — that was the offer to givo the 2^ per cent, uj to them provided they graded —
I shall feel obliged if you will kindly give ma exactly the different prices and claßßes which you airange with Mr W. I did not take a note of them yesterday, and though I know the price for first - class sheep to be 2Jd and for lamb 3Jd, yet I do not remember the two intermediate prices, nor the tares. I shall also be glad if you will let me know whether Mr Ward has to wait till the bill of lading is sigued before he is paid for the whole or any part of a shipment. You will remember my stating to-d iy that the treatment we have received from Nels m Broa. during the last six months or so was very different from what had been previously accorded to us, and you deprecated such an idea. But in order to show you that it has -a solid foundation in fact, and that we have not received from you anything like the same consideration that our rival has — Mr Cuthbertson reported that old grievance about the Stir of England, and then laid —
We fiad that in addition to his contract price for meat Mr Ward geti a commission .on tha freight. You Rimply decline to givo us a similar concession. It is beside the question to say that this commission is given by Tyser and-that Nelson has nothing to do with it. No judge or jury would ever draw such a distinction. The concession cannot be separated from the contract, tha coni mission forms au integral parb of the prico received by Mr Ward for hia mutton, and was given him, admittedly, as an inducement to got him to sell his output to NeHon. There is no getting away from that fact. And the position I take up in this matter is checked by two things : (1) That while the offer made to Mr Ward by tha Tysor Company in common with the N Z and S.S. Comynuies was that be should receive a com-, mission on nil his shipments, and not on othez people's shipments, yet the Tyser Company are actually giving Ward a commission on shipments made by another firm — viz., a firm who purchase his output of meat. In all fairness and justice, Mr Ward has no claim on Tyser for a commission on any shipment but%is ovfn ; and yet Tyaer (as yon put it) voluntarily gives him a commission to which he has no claim whatever under their original offer. Then when this company asks met ely to be put on the same footing as Mr Ward they- are refused. (2) That the foregoing negotiations were carried on by the same individual, which is equal to saying that in this mattor Nelson and Tyser are one entity. I feel that we have many good grounds for complaining that we have during the last six months been repeatedly refused when we have asked for the same treatment as has l<een given to Mr Ward ; and it is absolutely certain that a continued refusal on your part to place us on an equality with our opponent will lead to serious results. ' I have hitherto done all in my power to make things go smoothly in connection with the contract, because I thought you treated us well, and thai you might have been sometimes 'treated bettei by us ; but in thejnatters referred to I cannot any longer take your part, as I have done many a time before. I tru»t that you will yet nianaga this matter of the 2£, as I feel certaiu that tha directors will not agree to any alteration of oui present standard.
There was a point yet to be determined, which had nob yet been put, and that was, what would have happened if the negotiations bad resulted in the Southland Company getting the 2£ per cent. ? They were,offered the 2£d per cent if they accepted the grading.
Sir R. Stoub: Surely that is cob tho connundrum we have to settle.
Mr Bell said there was still another form in which the matter could be put to his Honor ali tbe olose of the case : he had still to ask his Honor for a direction upon the evidence, Then came this letter from Mr Rtid to Mr Cuthbert Bon on the lObh August : Referring to the conversation I had with you last week, I now put in writing the offer then made, which, if accepted, will take the place oj the present agreement, ai far as the modincationt contained herein go : 1. That all sheep shall bo weighed separately.^and tiie weight of each carcase marked on the ticket attached. 2. That 6 per cent, shall be deducted from that weight for shrinkage. That was the offer of the grading contract for shfiep — an offer which was formally repeated then. The last paragraph was important.
I will also agree to pay 2} per cent, on net amount of freight on above meat. Term* cash on exchange for bill of lading ; but should your work? become blocked with meat at any time and wa are unnble to provide freight, arrangements can be made to pay for meat in the workß on production of store warrant
The new terms were that if the Southland Company accepted the grading they would gob the 2£ per cent, commission in order fco make the thing .perfectly level, and Nelson Bros, would, instead of paying with the bills ol ladiDg, pay, if the works were blocked, on the production of the store warrant, .and that would relieve the company of the previous complaint that while they had meat ready foi shipment they were not allowed to geb it away. Then what happened? There were threi letters of the 15th August, which were all of the utmost importance to his clients. The first was a letter from Mr Cathbertson to Nelson B(O3. (Limited) : . Your favour of 10th hist, was submitted to my directors at their last-meeting, and whijle I wm instructed to inform you that they ara unable at present to agree to your request to adopt xhe new system of grading and taring, owing to. the expense connected with the necessary alterations to our building and the consent of our guarantors being necessary to. the new system of tare, I ana also to state that my directors consider the 2J per cent, commission on freight granted to Mr Ward is an infringement of their agreement wita you, and formally ask you to grant them the same consideration. So that the Southland Company were still in-, sisting on the s*me position — they were refusing the grading contract and they were reiterating their demand for the 2£ per cent. Mr Cubhbeit3on was directed by the board of directors to make that demand, and there was a minute to that effect. The other letter of the 15bh August was aHo a letter from Mr Cuthbertson to Nelson Bros., and that letter was a letter demanding that the NeUons 6hould emrcUe as against Ward certain powers which it was assumed they had under the contract with Ward. Mr Cufchbertson said :
We are advised that Mr Ward recently offered to freeze sheep for one of our clients, and allow him to dispose of them either in the colony o elsewhere as lie chose. We are also a'l vised that he has uot only offered but has actually frozen beef for one of our clients on tho distinct understanding that the latter js to be permitted to dispose ol it anywhere he thinks fit. We shall be glad to know if Mr Ward's contract with you permits him to do so, and if not we have to request that you will take such steps as may be necessary v, put a atop to the practice. The jury would observe that on- the 15th August there were two formal demands -one for 2£ per cent, on the basis of the position that Mr Ward had sold his whole outpub to Nelnon Brothers ; and the second a demand' by the secretary by direction of the board upon the Nelsons', assuming the existence of a contract batweea the Nelsons' and Ward, and requiring tbe Nelsons' to stop a practice by Ward. Then on the came date there was a private letter from Mr Cuthbeitson to Mr Reid : Surely it must be obviouu that we do not coir, . plain of tne shipping arrangements -made for u« In themselves. What wo do complain of is that hetter arrangements were made for Mr Ward\ and when we a=)ked for similar consideration at on eauivalebu -ommission both were refused 49
■us. Had not Mr Ward received considerations th,at were not accorded to us in the way of getting his meat away, and gtttinx paid for it, we should have had no cause for complaint. As it is we certainly have cause to say that we have not been put on the same footing When he said that from first to last it had never been pretended that there .was any complaint by the company against the Nelsons founded upon the making of the output agreement there was some question raised about; it, but it was cow absolutely borne out that the company never complained that the output agreement was a breach of the eighth clause, and as Mr Cuthberlson put it here, "We never complaiued of the shipping arrangements iv themselves ; we admitted you did the best ; our complaint is that you did tetter for Mr Ward ; that is what we complain of ; and had cot Mr Ward received considerations that were not accorded to ns in the way of getting his meat away and getting paid for it, we should have had no cause of complaint." Now, that letter was written on the same day — and at the same time no doubt — as tbe two official letters written by Mr Cuthbertson, each of which recognised the existence of the contract for the purchase of Ward's output, and each of which vested a solid claim as against the Nelsons upon that assumption. As he (Mr Bell) had already said, he would be able to show that instead of Mr Ward getting the advantage the Southland Company had got tbe advantage from start to ' finish. Mr Ward complained, but in regard to that learned counsel would not trouble the jury by reading the letters. There wa» % 'letter of the 7th Angtut by Mr Fisher, Mr Ward's principal m«n, complaining bitterly that he could not compete with the Southland Company because he was not put on the same terms as to prices. fie said he could fight them on equal terms, but he was not on tbe same equality with them iv (he matter of price. And that was a fact, for 14r Ward only got 2£d per lb for sheep betwten 551b and 651b, whereas the other eompmiy got 2£d for sneep between 501b and 751b ; they were able to buy first-class sheep against him, and, though he was continuing to buy, and intended to go on, he appealed to tbe Nt-hon Bros, to put him on fair terms with tho Southland Company, and that was done. Some concession was made to Mr Ward pursuant to the provision in the contract, and the Nelson Broi. were to hold the balance between the parties, and not join either one or the ether. In answer to the letter of August 15, claiming commission, Mr Reid wrote formally to the secretary of the company : lam in receipt of your favour of 15th inst. I liave previously advised you that the 2£ per cent, loading commit-sion on freight to which you refer is a matter between the Tj ser line and Mr Ward, and Messrs Nelson (Limited) have nothing to do with it. And then he added in a postscript : The Nelson Bros, get the total output of Mr Ward's works as explained privately to Mr Cuthbertson. Sir Robert Stout had put it that that was the first statement by Mr Reid to the secretary regarding the contract, but that was absurd. It was written on tbe 19th August in answer to - two letters Af the 15th which founded a claim on that assumption, and in the letter of tbe sth there was the s»me suggestion that Nelson JBros. bad bought the output. His learned friend Mr Honking suggested to him — and be wai oonfident that the suggestion waß correct — that the postscript was in answer to the inquiry of the 15th August whether Mr Ward was at liberty to freeze for outside people. To that the answer is, "No; Mr Ward can't freeze sheep to be sold elsewhere, nor can he sell as he thinks fit." Mr Ward was not to treat with others, but was to give the whole output of every kind, including clitnbs' meat. Throughout this correspondence, which runs up to December 31,* 1892, there is never any complaint. Ward's meat is being publicly passed into Nelsons' ships f.o b.— into the same ships as the Southland Company's meat. There 13 no suggestion of complaint till four months — no, nor till two months— ago, because when this action was launched nobody thought there was a basis for this claim. I want to read a letter of 19th August. There has been a suggestion that Ward was allowed to freeze inferior sheep to the detriment of the Southland .Company, bul it was their brands got damned and it was Ward who got the name. The Southland Company had previously been careful, but ceased to be careful in 1892-93. Sir Robert Stout protested against this point go.ng to the jury. Mr Bell read the letter of August 19, 1692, Keid to Ward : I don't think, taking all things into consideration, there is much, if any, difference between you, and you are both getting a splendid price for your meat. I' have no control over the Southland Company as far as their charges are concerned, and if the directors like to give away id by increasing tho price to producers I cannot object. I quite understand how difficult it is for you to purchase sheep just now. and make your freezing .charges out of them at contract price ; but this is ill the result of unhealthy cornpetition'in Chrisfcehurch. and I venture to hope that things will shortly settle down to their proper level. You ■will, I am sure, admit that at present London prices there is less in the business for Nelsoa Bros, than for you. The growers get all the cream. I want you to remember that although it is attempted to say that the competition with Ward was the only tbing which made prices - high, yet, as Mr. Reid points out, unhealthy competition in Canterbury was raising the priefs in Southland. It was the fever in Cbristchurch which raised the prices. Meat went up abnormally by reason of the competition by people who' knew nothing of the business, and "the growers got the cream." But when the Southland Company says that the competition between Ward and the Southland • Company created the losses of the Southland Company, there is a perfectly genuine piece %f evidence in this letter. In the Utter of 20th August to Nelson Reid refers to the same point as in his letter to Ward. Both of these letters refer to the absurd state of things, tha fevered state of things in Chrfstchurch ; the price of stock put up all over the country. There is a letter on August 1892, in which Mr Nelson 0&ys: I feel it will be to our interest to keep Ward alongside of them (the Southland Company), which he is not unless their sheep are all firstclass weights. I want to give Ward no advantage, but he should be as nearly equal as we can make him, and would rather give him an extra id than let him go to tho wall. Of course, I would rather not do this (though if we did it would be cheaper mutton than we have been getting from Cbristchurch), but Cuthbertson's letter, which you sent me, makes it clear Ward will be a more comfortable man to deal with in future. Ward was receiving 2£d per lb for sheep of 551b to 651b, whereas the Southland Company received 2±d for sheep of 501b to 751b. So 6b at he was not being kept alongside them in his grading under the contract. Nelson gays :— "I want to give Ward no advantage." " I would rather give him on second-class than let him go to the wall." That would btiDg bim to 2£d for prime instead of for first olass. At the end of 1892 it became necessary for Nelsons to choose between the Southland Company and Ward. It was obvious that it would be with the greatest difficulty they could get * contract
from both. Both were complaining, though Ward was disposed to make the best of it. It was pnly natural that any person at a diufcanco reading the correspondence would think Ward would be a more comfot table person, &c, but in September Ward complained that he had not been put on level terms. On 3rd September Reid wrote to Nelson :—: — I had a long yarn with Ward on his wayfoutb, and as you say he seems much «xerciaed over the meat business. ... I have thought over the business in every possible Avay, and have come to the conclusion that the only way to cirry on the business successfully is to give Ward an all-rouud price of 2Jd f.o.b. for all prime sheep. That would bring him level wih the Southland Company. The meaning Tjf that is "they were good sheep, though too light. Anything under 551b is noi first class, anything under 501b is too light, but if you don't freeze lots including light weights somebody else will." The grower has a certain proportion of first class, heavy, and light, and of course gives the preference to the buyer who will take the lot. Freezers may run up to 901b and be as low as 451b. A large grower has sheep running 551b to 801b, another's run 451b to 551b. A man wanting to buy only first class will have a bad chanca against a freezing company who would* buy all kinds. Nelson wanted only first class, but it would not do to follow that course too persistently, or else another would get the market for all classes. Now you are aware that in 1893 the agreement was made which his Honor has held to be in equ'ty a breach of ' agreement. We accept that position. The contract made at the end of 1893 to buy in 1894 was to take effect on the Ist January. No man agreeing to stay out of busintss for a term would by his agreement be debarred from making, preparations to refume business at the end of the term. The jury had been I old that Nelson Bros, most improperly injured the company by doing what j they did. What they did in respect to this purchase was technically a breach of contract, and had been so ruled, but no damage was suffered by the Southland Company, nor did his clients act in any improper way in purchasing. They pimply acted upofi their construction of a business agreement, and blundered iuto enteri ing into a binding contract. If they had said, " You keep that offer open to us till January i," the ruling would have been in their favour instead of in favour of his learned friend. Sir Robert Stout said the jury had nothing whatever to do in a case of damages for breach : of agretment of contract with the honesty of the men who broke the agreement, nor with motive His Honor : That is so. Mr Bell observed that the jury might have inferred from Sir Robert Stout's address that they had something to do with it. Sir Robert Stout said his address was on different ground altogether. Mr Bell proceeded to say that if his clients had committed a breach of contract it was a mere technical breach, that no damage followed from it, and that they did not break the spicit of the agreement. He also read the following extract from the minutes of a meeting "of the directors of the Southland Frozen Meat Company, held on the 26&h JApril 1895 :— Manager explained the reasons which led him to believe that Nelson Bros, had been connected with the Ocean Beach Woiks since 1891, and suggested that an action should be brought against them for damages on account of breach of contract. Draft letter to Bank of New Zealand submitted for approval. Revived - " That the draft letter as amended be sent to the Bank of New Zealand, and that prior to doing so Mr Hall be instructed to engage Sir Robert htout as counsel for the company . . . and that the amount of costs to be incurred at tbe outset not to exceed jCIOO. That a writ be issued against Nelson Bros, for .£30,009 damages, whether the bank consents or otherwise." He stated that on April 22, 1895 the Bank of New Zealand wrote to the Southland Frozen Meat Company as follows :— The Bank of New Zealand, as mortgagee under the several securities shortly specified in the schedule hereto, does, by this notice in writing signed by its manager at Invercargill, hereby demand that you will pay or cause to be paid to it or its manager or owe of its cashiers in Inyerciigill aforesaid the sum of £22,141 7s sd, being the amount of all moneys which according to its books appear to be this day due, owing, or payable by you to it under its said securities, together with such further sum as shall be the j amount of interest on the taid sum of £22,141 7s 5d at the rate of £8 per centum per annum, being the current rate for the time being by it to its customers in Invercargill on overdrawn accounts, computed from the date hereof until the actual date of the payment thereof, together with all costs and expenses as provided by the said securities : And hereby gives you notice that in case you make default in payment of the said principal and interest moneys it will proceed to exercise the l.owera of taking possession and sale of the mortgaged properties pursuant to the terms of the said securities. Then on April 26, 1895 Mr Cuoingham Smith wrote the following reply to this letter from the bank : — I have received, through Messrs T. M. Macdonald and Son, your demand dated 22nd inst. for payment of £22,141 7s sd, due by the company to the bank, which I laid before my director! at their meeting to-day. The directors will use every exertion to find the money required within the time specified in the mortgage— viz , three months from date of notice— and they ask for the co-operation of the bank in the following matter : — On June 26, 1891, this company contracted with I Messrs Nelson JBro3. (Limited) to sell them the whole of the output from their works for three years from Ist January 1891 to 3lßt December 1893. One of the conditions of thi3 centract was embodied in clause 8: "Jhat Nelson Bros. (Limited) shall not, duiing the term of three years, eiect, or assist, or be in any way interested or concerned in the erection ov u=e of freezing works, on land or water, at the Bluff, or within the l-'mits of the Southland or "Wallace Countieo, without makiDg special arrangements with the company nor do anything of the like nature which' may in any way interfere with or restrict the output, business, trade, or profits of the company." The Ocean Beach Works were erected in 1891, during the currency of the contract, and we hive strong evidence to show that Mecsra Nelson Bros. (Limited), during the years 1891, 1892, 1893, were largely interested in these works. Prior to the erectio/i of theEe worka this company was in a prospering state, pvying regular dividends to its shareholders. Since, and owing to their erection, they have lost £30,05). The directors, having taken legal advice, have passed a resolution to the effect that a writ, claiming £30,000 damages for breach of contract, be at once issued against Nelson Brjs. (Limited), and they ask the cooperation of the bank a» mortgagee, which they confidently expect to obtain. It is evident that if the company should succeed in obtaining adequate compensation for their loss caused by Nelson Bros.' action, as above, they would be in a b»H«r po-i-tion to meet their liabilities, wh-ca hav<> been caused by Nelson Bcos.' b-eich of contract. Our solicitors are of opinion that, with the evidence in hand, a strong case for damages could be made out. He went on to say that he was goirg to put in the interrogatories administered, for the purpose of showing what kind of fraud and dishonesty w&6 alleged against his clients. Those were the interrogatories : 1. Did any communications pass between the Hon. Jostph George Ward and the defendants or any of their servants or offirera in connection with
the Ocean Beach Freezing Works either before the erection of-the said works, or during tho courso of erection, or after they were erected ? If so, stats the nature of all such communications, and, if the same are contained in letters, state the dites of all suoh letters and the persona by whom and *to whom the same were written respectively. 2 Did_ the defendants order or cause to be ordered in England or elsewhere all or any part of the machinery used in the said Ocean Beach Freezing Works ? If so, what were the circumstances under which the same were ordered ? If the same w<s ordered on behalf of the said Joseph George Ward, did he ever pay the defendants for the same ? 3. Dkl the defendants remit to the said Joseph George Ward, or to any b.mk or person for payment to him, any sin; " -ms of money either shortly bufoie the n\ \i\ Beach Freezing Works were erected, <.■•. ; tUo comss of their erection, or shortly hUvx their erection? If so, state the amounts of any bums of money, and j the dates on which the same were respectively remitted. 4. Did the defendants, either directly or indirectly, pay or contribute any sum or sums of money towards the coat of erecting the said Ocean Beach Freezing Works, or towards pay- i m-nt of the puiclnse money of the land on which the same were erected ? 5. Did the defendant? or any of their officers, with their knowledge and consent, guarantee the repayment to the Colonial Bank of New Zealand of any moneys advanced or to 1^ advanced > to the said Joseph George Ward in connection with the j erection of the said Ocean Beach Freezing Works? 6. Have any moneys been paid to the said bank by the defendants or any of their officers on account of any such guarantee?. 7. Is any sum of money now owing from the defendants or any of their officers to the said bauk on account of any such guarantee? 8. Did the defendants either directly or indirectly pay or contribute any sum or sums of money towards the expense of carrying on the said Ocean Beach Freezing Works before the 31st day of December 18'. J 3? 9 Did the defendants employ or pay any of the servants employed in or about the said works before the said 31st December 1893 ? 10. Did the defendants ever agree to purchase the said Ocean Beach Freezing Works or any interest therein from the said Joseph G. Ward or any other person ? If so, state the date and terms of the said agieement, and whether] the same was ever carried out. 12. Was any agreement or agreements ever made between the difendants and the said Joseph (t. Ward in relation to the said Ocean Beach Freezing Works other thau that set out in tho statement of defence? If so, state fully the terms of any such agreement or agreements ? 13 Did the said Joseph G. Ward ever hold, and, if so, what number of shares in the Oceau Beach Refrigerating Company (Limited) as a trustee for the defendants? 14. Does he now hold any, and, if so. what number of such shares as such trustee as aforesaid? 15. Was any agreement or agreements ever made between the defendants and the said Joseph George Ward in relation to any shares in the said Ocean Beach Refrigerating' Company (Limited)? If so, state fully the terms of any such agreement or agie^nents. 10. Was any agreement or agreements ever made between the defendants and the said Ocean Beach Refrigeiating Company (Limited) in relation to the said Ocean Beach Freezing Works 1 If so, state fully the terms of any such agreement or agreements. 17. Is it true, as stated by Mr W. S. Davidson, one of the directors of the defendants, at the ordinary general meeting of shareholdci-o of the defendants, held on the sth February 1895, that tho defendants had then lately acquired a large interest in the said Oc?an Beach Freezing Works, and that this had tended to swell the item of investments in the balance sheet? If so, state ' when and under what circumstances the largo interest acquired in the said works was so acquired. Note.— The whole of the above interrogatories are to be answered by William Nelson, the general , manager in New Zealaud of the defendants. Mr Cuningham Smith seemed to be a very suspicious gentleman, and he came t;> the conclusion that the Southland Company were dealing with a pack of rogues, and so this £100 was used voted for these interrogatories. A mare's ne3t had, however, been discovered. No such investment as they expected was ever made. The investment they weie mosb curious about was an investment in their own meat company's works, whereas they thought that Nelson Bros, had bought shares in the Ocein Beach Works. Unfortunately for his c'ients the £100 had been expended and something had to be got for the £100, perhaps something more, and so the ac ion was pursued upon a technical ground which had nob entered into anybody else's mind until ib came before the jury, when it turned out that there was a technical ground. He hoped, however, the jury would not forget that the damage was caused by the output agreement. Sir Robert Stout : You cannot say that. Mr Btll did say that, and he intended to prove it. It never was pretended that there was any complaint, but they had it from Mr Cuthbertßon that there was some kind of a growl shortly after the output agreement was made. The faat tint ths directors did growl at one time was a strong point in his clients' favour, as showing that they had the matter before them and came to a deliberate conclusion and determination with regard to the output agreement. Having shown the history of this matter from the beginning to the end, and having endeavoured to show that his clients were honestly trying to carry out their contract on every side ho had performed his task. j Evidence was then called. James B. Reid, representative for Nelson 8.03. in the Foubh Island, deposed : The Mutual Agency Company is agent for the Tyser Company in Dunedin at the present time. In 1891 I was the agent, and Mr Carswell was agent in Invercargill. Mr Dobson was the colonial repreECii'a'iva of the Tyfer line in New Zealand. He was never agent for Nehou Brcs. He might have done Eome work for them by special request. He was representative of the Northern Investment Company in New Zealand, and his duties in that capacity and as representative of the Tjs'ir line occupied his time pretty fully. Mr Dobson lived at Napier, and Nelson Bro3'. (Limited) place of business is aboub 12 miles from Napier. In 1891 the commissions for the Tyser line were divided between Mr Carswell and myself ; they did not go to Nelson Bros. The commission which I divided with Mr Carswell Nelson Bros, had nothing to do with. Later on at my suggestion Mr Ward was appointed joint agent with Mr Carswell at Invercargill. I discussed the matter with Mr Dobson in connection with other business — that was, the wo:>l business. The 2^ par cent commission was then lost by me and went to Mr Ward. That was about tbe time Mr Ward's freezing works were started. Nelson Bros, did not make ib up to me in any way. Ib wbs a mistake to suggest that it in any way came from the Nelsons I got it from the Tyser Company, not from JTe'.Fons, and it went fi\ m the Tjser Company to Mr Ward. I remember tbe em'ract which existed with the plaintiff cowinny. That i a the ord-Vaiy co>ir*e would L..\t expired in 3 SOI. We w r.j p:<.jir-g 2Jd, ai.d cuttrtd iuto a i.ew eon I -dot for thre.l yturs at 2A 5, gaining on extendel coutrr.ct. Ea.-ly in 1891 wa considered ib an advantage to get a three-years' contract in lieu of the one-year's contract, and we paid £d per lb for that. We had then aleo their sale output I made the arrangements which resulted in the contract dated the 29bh of June 1891. There was a good deal of negotiating before the contracb was signed. At the time it was signed Ido nob think we had any oonferol over Che Mafcanr*.
water power. It was about the time of the scare concerning oppoiition at MataurA that we Secured the water power rights there, W hen we acquired tkose rights we immediately offered them to the Southland Company, without any advantage to ourselves. After Mr Ward's resigi atiou of his position as a director of the Southland Company and his threatened opposition I never took any action inconsistent with my letters. I never invested any money in Mr Ward's works, nor did Nelson Bros, prior to January 1894. Tha whole of the negotiates, except an interview or two, is shown in the correspondence read. Uuder the agreement set out we purchased Ward's output for two years. It was thought that would be an advantage. There was a prospect of charges being reduced somewhat, and it was thought better to have a purchase for a long period than a short one. The meat market was very good ad Home in February 1891. It was decided in the interests of the Southland Company that wo should make that firm contraot with Ward. At that time both lamb and mutton was high in London, and Ward could have sold his sheep by cable at higher prices than our contract prices. No objection was ever made to j me to our entering into an output agreement with Mr Ward. Quita the contrary. I had several interviews with Mr Cuthberteon, but I cannot give dates of them. It was generally known before • the 15th of May by those interested in freezing that we had purchased Mr Ward's output. Mr Ward put the meat on board the steamer — we bought f.o.b. Nelson Bros, had the contracb to supply the Tyser line with cargo, and the cargo was supplied by Nelson Broß. I was on good terms with Mr Cuthbertson, and remain on good terms with him. From May 1892, and thereafter throughout 1893, we were openly bujiug Ward's output. There was never any complaint or suggestion of complaint by any person on behalf of the Southland Company of our buying Ward's output. I have compared the prices under the contract with the Southland Compmy and tbe prices paid under the contract with Mr Ward. It is not true to say that Ward was favoured in the contract made with him as oropsred with the contract made with the Southland Compauy. The contracts were of different kinds. Ward's contract (the original contract) was for graded. We arranged with him for 551b to 651b sheep — that is the very pick of the sheep, — tbe most most valuable weights, and when you take out of a small range of weights you get a very small percentage of a mob of sheep. With the company we simply had a prime quality i arrangement— all weights from 50lb to 751b or 801b we treated as prime, and paid for at 2£d all round ; whereas Ward only got 2£d on 551b to 651b, and a reduced price under that. Tint is the original contrtct, and comparing the company's contract with tha original conI tract, that appears from the price paid to Mr Ward as well as from my own judgment. I often saw the sheep. A modification was made in the contract with Ward. On 29th September I wrote to him :—: — I We have not yet written* to you confirming your arrangements made in connection with your contract with vi for the output of the Ocean Beach Freezing Works. They are as follows :—: — The price of all prime, firat-class sheep jve'ghing from 501b to 751b net weight, to be 2Jd per lb f.0.b. ; prime carcases up to 80lb net to be taken up to 5 psr cant of shipment at: the s-ime price All sluep under 301b and from 751b to 801b, except the 5 per cent already mentioned, to be paid for at 2rl per lb f.o.b. In reply to your favour received on the instant, proposing amendments to these arrangements, we have to inform you that the matters contained the eiu are receiving careful consideration, and as soon ai we have determined what coun>e should be followed wa will write joufuither. In the meantime, it will be better to abide by the new arrangements as they stand, so please invoice the Star of England shipment in accordance therewith, and oblige. Those terms were equal to the Southland Company's contract, or, if anything, in favour of the Southland Company. We were compelled to take aged ewes from the Southland Company, bub not from Ward. I am able to say positively, as the maker of the contracb and as an expert, that the Southland Company bad much tbe besb of it at firet and till September 1892 — thereafter, much the best. We were then only compelled to take 5 per cent, of the heavy weights, whereas with the Southland Company we had to take them all. Wita regard to the matter of providing sufficient (shipping, we had no control over the Marmati, but we arrr.ngtd for her to go to the Bluff to load. The Southland Company complained that their works were blocked, but all the wotks in this island were blocked in tbe summer months of 1892. There was a glut of freezing and a deficiency of shipping —at Timaru we were blocked for a long time. We had an arrangement with Mr Ward to keep his works clear. With the Southland Company we had an agreement to provide cne steamer every six weeks, and we provided steamers in accordance with our contracts. At times we were short of ste&raerp, but we always endeavoured to provide. In Napier we held back a lob of sheep to give space to the Bluff —we kept th"tn bjck and gave the Southland Company and Mr Ward more spare. It is a fact that we sent a etoreman to Ward's worjjs. We sent a man who was recommended by Mr Cuningham Smith. We were asked to send a man became I complained that they had not a thoroughly qualified man to attend to the temperatures. Referring to our advising Mr Ward re grading, we wanted to bring about a uniform system (Mr Nelson's system) of grading and bar branding, and we advised all the freezing companies, not Mr Ward specially, we always wanted grading done. lb is a great advantage to the buyer. I know Mr Price, the dealer. He wanted from us a five years' contract such as we gave to Mr Bell, but five years were only made with growers. We didn't make a five years' contract with him. I believo Mr Ward did, but we had nothing to do with ib. I know that Mr Ward bought 3heep outtido the Southland district as far as Milton and froze them at bis works. Before the year 1893 those sheep went to Barnside. Ward bought a great many sheep north of Clinton which had previously gone to Burnside, so any increase ti the outpub of Southland would be due to that as weil as to other causes. He bought Hill End sheep, 14,000 or 15,000. 1 I don't think the Southland Company bought out of their own district. I bad a general knowledge of Mr Ward's sheep, and know that there were resales cf the inferior sheep, e^.ecially at Wallacetown. He wa3 not freezing infeiior sheep— tho reject! were sent to the s»leyards. I had no con'rol of Ward's or the Southland Co-nprtny's buying I only ior-k their meab at the price* a^rf ed on. Those p.icps would not be advantageous to the fret-zing works. Mr Ward had noi any practical experience as a buyer. It hadti'i been any p«rfc of his own woik to buy sb^ep. About t' c boilers — they were ordered by the New Zealand Refrigerating Compauy, and we agreed to lake them, bu'; it wai found that we could not use them, find they lay in Sparrow's yard for 18 months I offere.d them to Mr Ward gome time afterwards, and he bought them, getting a year without interest in which to pay. I obtained
Mr Nelson's confirmation by my telegram and letter of 17th November 1692. To Sir Robert Stoat; The Nelsons and Tyßers were interested together to a certain export in the freight, but not otherwise. There was to be a eliding scale of freight depending on the price brought by the sheep. The TyaerS were not to my knowledge otherwise interested in the price of the sheep. Mr Edward Montague Nelson, of London, is & director of * the Tyser line and of the Nelson Company. The Mr Nelson here looked after the Tjser line) and nothing was done by Mr Dobson about the Tysor line without consulting Mr Ntlson. Mr Nelson did not take any part in the matter of; ! the commiasion. It would have paid us well to I have given the Southland Company 24 per cenfc if they would have graded their sheep. This 2£ was to have been paid by Nelson to tho Southland Company if they had accepted m grading contract. Mr Ward, manager, acted in conjunction with Mr Carswell for Tyeer. I told Mr Ward to treat Mr Carawell as their agent. Mr Ward was to get 2£ per cent, on the. freight on his own meat. When we entered iuto the contract with Mr Ward in May mutton was high. Weconsidered Ward's a good contract. We did not think of the price as over top price or more than the cheep were worth. When I wrote to Mr Ward on 29th J*noery that oar offer was over market price I referred to the price of the moment. The prica rose in March. i I hid fixed up a contract which gave Ward more than market value, but I knew that ihcep rose in England in February and March, and as it was a two years' contract we considered ib good. We probably lost by that contract, as things rarne down after the contract was made; and we had to make a concession to Mr Ward on 29bu .Sept^mbsr 1892. New Zealand mutton (prime Canterbury) was low at the time. It was only lower on 19th August. We had to give Mb Ward that increase to make him level with the Southland Company according to our arrangement. The two contracts had to be practically the same. We raised the price in accordance with that arrangement. We had an understanding with Mr Ward besides the writing. It was only some time after the making of the contract that we recognised the stringency of the conditions of the grading contract. It was imposfciblo to get the sheep. We did not make the concession t j s*ve W»rd from loss. I can't say whether the Southland Compmy experienced tho atuie difficulty. They didn't grade. The court adjourned at 6 30 until to-day, Fkiday, November 22. The crcfi>cximiuatiou of James B. Reid, representative for Nelson Bros., was continued. Sir Robert Stout : Have you found out, Me R nd, when Mr Ward's association came to aofc. afi agent for the Tyeer lino. Witness : Tho last commission by the Mutual Company was Febiuaiy 1892. When did the Ward Association do any 'work for the Tjser Company ?— The Mutual Company wtre agents for the Tyaer Company up to tha time Mr Ward was appointed, and I can only get the information out of the Mutual Agency Company's bo.'ks. I have the information now. 'A heir connection ceased early in February. Did tho Ward Association or Mr* Ward ever act as ageuts for Ty<<er before 1891- P — They ac^ed as ageuts from thb tin; we gave up the position. What do you mean by acted as agents? Did they do any work P — That is a question I cannot answer. I know that they wece agent*. If they did not do any work they should have done it. In reply to fuither questions, witness eaid the usual commission for agent* in the colony was 5 per cent. Mr Cm-awc-ll's commission was divided. Sir Rob3tt Stout : In your letter of June you said to Mr Cuthbertson in a private letter to him : " I give this information for your own private us a only." Then I suppose you don't mean to say up to that time you had disclosed the nature of the contract with Ward ? Witness: There was no desire to keep it sestet. Did you disclose it ? — To whom ? Did you discloss the nature of your contract with Ward P — No ; thsre was no object in doing so, but there was no secret about it. Did you ever disclose it until this action was commenced ? — We were never asked. I suppose the contract of 1893 in icference to your purchase from Ward,— you never disclosed that P— l dou't think so. Do you remember a special letter addressed to the farmers by Mr Ward ?— No, I do not. Do you know that it was denied that there had been a sale ? — I have seen a reference to it iv the correspondence. You remember Mr Ward's letter of the 20th o£ April 1893, in which he says : " I have since been aoked twice if it was true Nehons had bought the works. lof course emphatically denied ib, and said it was not true, as it may not sait Me Nelson to have it known. Of course the sale does not date until January, and essentially it is quite true to deny any idle rumour of busybodies who want to kaow m«u;e about other people's business than there is any necessity for ■' P You knew that the purchase of the works was denied by Mr Ward in 1893 ? — Yes, I knew it. . • You did not take any steps to disabuse the public mind P—ltP — It was not my business. Were not the prices gained by this concession better than the Southland prices ?— Just so. The words of the Southland contract are : ••For prime c:o;sbreds (wethers and mvden ewes), 2£d." What did you uudert'-aud that to meau ? — All frheep passed by the ireezing companies as Btandatd for prime qualities. What did that mean in weights ? Do you mean to say that there were sheep under 50lb P — Oh, yes ; we took sheep under 501b. Di<l you ever take any sheep fro.n the Southland Company under 501b except by special request ? — We were nob Mippoaed to take any under weight, but we to.k any Bheep of ptinio quality. Was it, not a fact that prime meant from 60ib to 801b ?— No. What did it mean ?—lt? — It meant any for which the company had a certificate. If Mr Cutbb?rt9on says that the range of weights was from 601b to 801b will you contradiot him ? — Yes. When Mr Nolson told you •' lay Ward alongside of the Southland Company," what was meant by that ? — I understood it aimply meant to put both parties on equal terms. | Did it not mean that you were to allow Ward to get an advantage of the Southland Company ?— lt meant that the contracts were to bo as noar an pos-ible the same. Then "Jayiug alongside " meant that Ward comphtiaed that tLe fight was unequal ? — Yea. Then "laying al^ng-iido "meant giving him & ccuceisun?— Yes ; it was a concession o£ course. Mr Ball (to witness) : You were asked yea* lerday about the Tyser line. What did you gay when you were asked by Sir Robert Stout; ts to the connection between Mr Nelson and the Tjser in ■ ?
His Honor : I have the following note :— " I think Dobcoa consulted Nelson on maa# things." Witness stated that thtvt was ftiwu he said.
Sir Bell (to witness) : You are able to say positively that Ward did not receive any 2* per cent, from Nelson ?— I am. Did Nelson Bros, give Ward 2£ per cent, commission? — Mr Ward received no commission whatever from Nelson Bros. You were asking yeiterday about the understanding, which you understood existed with Mr Ward, that he should ba put upon the same terms with the Southland Company ? You were asked to-day whether iV was in the contract or outside the contract, and I understood the answer was : " There was such an understanding, and if it was not in tbe contract, ib was outside the contract ? " — Yes. You have seen the agreement since?— Yes. ! Mr Bell read the following clause from the agreement : — "In all btber respects — save those ' mentioned in this agreement — the said J. Gr. "Ward is to be p T aced on the fame footing, and jreceive the same terms as the Southland Frozen <Meafc and Export Company (Limited)." Henry George Warren deposed : I am a member of fche managing stiff of Nelcon Bros, i in New ''Zealand. I have been through the accounts showing the coat paid by thera oa each itbipment per pound in New Zealand to Mr IVard and to the Southland Company. The statement produced is prepared by myself from the "New Zealand invoices. Mr Bell said that the statement showed that in the Star of England shipment 933 sheep were purchased from Mr Ward and 6984 from Abe Southland Company. Tbe cost paid to Mr Ward w«s 2 24d per lb, and the cost paid to the Company 244 d. Then in the Hawke's *$»y shipment the coat paid to Mr Ward was «J-38d, and to the Southland Company 2 463 ; in the Maori King shipment the coat paid to Mr "Ward wftß 2 323, and to the. Southland Company 2 4E>l ; in the Star of Victoria the cost paid to Mr. Ward was 231 d, and to the Southland Company 2*46 ; and so forth, showing that the Southland Company received more per pound in every case than Mr W»rd received. The 'question as to the returns showing the prices realised on each shipment to London was objwsted to by Sir Robert Stout, and disallowed. Witness, continued : I have 10.-ked at the account about the boilers. They were paid for by deque from Mr Ward in June 1894. Mr Ward wa3 allowed 12 months' credit, and wa* charged interest on any period over the 12 months. By Sir R. Stout : I saw the cheque drawn out in luvercargill. That was at the time of the fixing up of the new company. WiUian Nelson deposed : I am ooloni&l manager for the Nelson Bros. (Limited), who are a London company with freezing works in New Zealand at Tomo.ina (Gisborne), Waipukurau (WoodvjUe), and at the present moment at the Ocean Beach. At tboae works the company freeze mutton and beef. The company also purchase mutton frozen by other works. In 1893, 1C93, and 1894 there were free z'mg works in Ntw Zealand selling on their own account, The average total output of New Zealand per year for those thres years was, roughly, two millions. Sir R. Stout: In 1892 it was down to a million and a-half. Witness continued: The last return will be Bomethiug over two millions. My company itas been annually tekiog about one-htlf of the total output — from three-quarters of a million to one million. With the exception of Waiftara, which means Auckland, none of the freez ; r-g works in the colony shut down in 1892 or 1893. By " shut down " I mean "suspended operations for the whole year." The Waitara works are not open now. They have had two or three struggling attempts to open, snd hava oj.ened and shut down again. I remember the agreement my company had wish the Southland Company prior to 1891, and I remember tbe making of the contract of 1891. Mr Bell : What was your object in cancelling tbe anterior contract and making a new contract at £d advance in the beginning of 1891 ? Witness : Primarily, of course, the objecb was to make money ; bat, beyond that, secondarily, to extend our contract for three years. .We always found it more convenient to extend our contracts when we had a little in I) and than to let the contracts run out. It was ray desire to have the three year*' ontracfc at ft price fixed. Everybody thought at the time that it was a good contract. There was very considerable competition at that time for the purchase of the output of works. Before I go to 1892 I ask you with regard to the reUtions of the company to the Tjser line. What hat the N*hon Company got to do with the Tyser line ?— Our earliest connection with it was that Nelson Bros, were responsible for introducing the line to the colony. After" the Tyser line was introduced into the colony we were morally bound to keep their boats filled. We had a contract with them to use our best endeavuuw to fill their boats. It is ab'olutely incorrect that we had control of their boata. Sir Dobson was manager of the Tyser line in New Zealand at its inception, and since his death Captain Todd has been the manager. I was a closely iatimtte friend of Mr Dob3on, . but I had absolutely no control, directly or indirectly, over MrDobson's actions in connection with* the Tyser line. He was not a man to control. There was a eliding scale of freights charged by the Tyser line to us. The freight would be higher when the meat market ' is higher, lower when the market is lower. That was an arrangement we had as well with the Shaw, Savill, and Albion Company and the New Zealand Shipping Company. We also shipped by Turnbull, Martin, and Co.'s boat} on the same terms. The sliding Ecale was the same in each case. My brother has been a director of the Tyser Hoe. Whether he is so or not at the present time, lam not clear. There is no relationship between tbe two companies other that I have described. Nelson Bros, had no connection with the 2£ per cent, loading commission shared betwfen Mr Reid and Mr Cars well. When Mr Ward stepped into Mr Reid's shoes and shared the commission with Mr- Cars well, tbe Nelson Bros, had nothing to do with it. It was simply an accident that Me Reid happened to be our agent and MrDobson's also. ; On the 10th August 1892, an offtr was made by Mr Reid to the Southland Company, in which Mr R-id offered the company 2£ per cent, if they would accept the grading contract. Was that made with your authority ? — Yes, it Wa» ; bj my instructions dist'nctly. What is the 2£ per cent, in that letter of the ' 10th August ?— Tne offer of that 24 per cent. I was a suggestion made by my? elf to Mr Reid &b s probable satisfaction of a difficulty that Mr Cuthbertson was always complaining of. Mr Cnthbertson had it so firmly impressed on his mind that we were giving 2£ per cent, to Mr "Ward that nothing we could say could m'vke Irim believe otherwise, and it occurred to me that if we could gati»fy Mr Cuthbertson by goma aimple means it would be a great object to attain ; and I told Mr Reid that if the Southland Company would consent to grade their meat, which thing we had often beep trying to get (them to do, we would pay Mr Cuthbertson 2i per cent, on the freight, not by any means as having anything to do with the freight question, bat because 2£ per ce.nb. on the freight represented a figure which I wai prepared to pay for having my sheep graded. Th&t was
refused. I never had any complaint after that from the Southland Company. There was not much room for it. You heard of Mr Ward's proposed erection of opposition works in June 1891 ? — Yes. Day by d*y as events developed we simply stood alongside the Southland Company, and mst every event as it occurred. We and the Southland Company were simply one and the fame thing at that time. We met every incident in connection with the rumoured erection of Mr Ward's works to the best of ability in order to checkmate Mr Ward, and to prevent the erection of works in opposition to the Southland Company. The history of the Mataura site is that the Southland Company first of all contemplated taking it, but they held off and did not take ifc. I felt so certain that the Mataura site would be the site upon which opposition works, if any, would be erected that I myself got the site under offer for a month ; and we parted with the site to theSonthland Company."! We were very confident at that time that we could keep Mr Ward out of buildiug. On August 18 you wrote to Mr R-;id that you were satisfied Mr Ward meant to build ?— Yes. That was the result of a conversation I had had with Mr Ward. I did not in any way join W<trd in the erection of works. Sir R. Stout : lam not suggesting that any money was put by Mr Nelson in the works before the agreement of 1893. Witness continued : Before January 1, 1891, I had no financial interest of any kind in : Mr Ward's work?. When the negotiations ] between the Southland Company and Mr j Ward fell through, until I received Mr j Dobson's letter in September 1891 ioquir- | ing whether I would buy Mr Ward's output on the same terms as those on which I was buying from tbo Southland Company, I had no negotiations with Mr Ward Mr Dobson was interested in obtaining the output from Mr Watd as well as from the South- i land Company in order to maintain the Bluff as a Tyser port. Our agreement with the Southland Company ia 1891 had ousted other shipping companies, and made the Bluff a Tyser port so far as frozen meat was ! concerned. la the Southland Company's contract thore was a guarantee that we should I supply (ham with 40.000 sheep at least. Thera I was no guarantee in the contract with Mr Ward. The SouthUnd Company looked on that guarantee as of such adeaufcige that they declined to give the contract without ib. At the then size of their works 40,000 sheap would have been a fair and reasonable year's work. The freezing works are not open for 52 weeks ■ in the year. We certainly did not afct mj-t to give Mr Ward any uudue advantage over the Southland Company at any time, and as a matter of fact the output contract made with Mr Ward was not advantageous to him. At' first the : contract was nothing like so good as the Southland's contract. It took us some time to discover that, but when we did discover it, we had to make concessions in order to treat Mr Ward equal. After the concessions Mr Ward's contract were not quite as good, bub we had made it is nearly equal a? possible. That was what was meant by keeping him alongside the Southland Company ; that if possible neither should have tbe advantage. It was by my instructions the offer was made to the Southland Company if they would grade to concede to them 2£ per cent. It was in my mind to keep strictly to the contract with the Southland Company's people, and as a matter of fact according to coy understanding of the contract I did bo. Mr Boll : Did you understand the agreement of June 1891 prohibi'ed you from entering into an output agreement ? Sir R. Stout objected to the question. It was not for the witness to interpret tho contract. Mr Bell said he asked the question on the ground that the contract was capable of two intarpretations — Pollock on Contracts (6th edition, 433). (To witness :) Did you understand the agreement of Juno 1891 prohibited you from entering into an output agreement with Mr Ward ?— Certainly not. Did you raad the seventh and eighth clauses of the contract ?— I did. What on your part did you understand the seventh clause to give you power to do ? His Honor : Batter pub it in the form, Did you undei^tand ? Sir R. Stout : I object to this also. His Honor : Yes, bat nob on the ground of its being put in s. leading form. Sir li. Stout : No. Mr Bell : Did you understand the seventh clause as permitting you to enter into an output agreement in any part of New Zealand, including the counties of Southland and Wallace ?—? — Yes, so long as the terms were not superior to tbofe allowed to the Southland Company. Then, did yoa understand that the output agreement was erecting, or assisting in the erection or use of freezing works ? — No ; certainly I did not. Did you at any time until the present year hear from the Southland Company or from any person connected with the Southland Company lhat the Southland Company construed the contract in 'a different sense to that which yon have just stated as your understanding ? — No, not a word. Did you act upon that interpretation which you have just stated as yours ? — I did. Have you read the letters from the Southland Company ? Sir R. Stout : I object to the witness being allowed to interpret the letter 3. His Honor : Ido nob understand Mr Bell to ask that. Mr Bell : You have read the letters commencing with tbe letter of sbh of May — Mr Cuthbertson to Mr Reid — including the three letters of 15th of August ? — Yea. Did you receive any communication from the Southlaud Company at any time uutil this year in any sense differing from what is conveyed by those letters ? Sir R. Stout : What ia meant by that ? Does it raean that no complaints have been made agaiust tbe output contract P Mr Bell: Yes. Sir R. Sboub : We admit th*t he did not. Mr Bell: I wish to have it in the notes. Did you ab any time receive any communication from the Southland Company conveying an interpretation of the contract of Jun9 1891 inconsistent with that conveyed in the correspondence just referred to ? Sir R. Stout : Did he receive any communication at all ? You cannot put that question ; it is asking the contents of written documents. Mr Bell : The question is, your Honor, whether the parties have consitt9ntly acted upon a particular interpretation. The particular interpretation having now been pub before the witaees, ii is a necessary conseqi\rnco he shonM prove there has bten nothing inconsistent on the p&rt of either patty from that, and to show that is the object of the questions. His Honor : Can you get at what was or was not in written communications he received unless you produce them ? It is fair to assume at present that if the company had made communications in which they had raised any objections to this output contract we should have had them before us. The inference is there is nob. Mr Bell : You asfe toe witness are there any
other documents. If he says " Yes," the documents must be produced or the answer is not evidence ; if he says " No," that is given as evidence — it is evidence of facb. His Honor: I understand there are written documents. Mr Ball : There are, but no other written documents relating to this matter. Sir R. Stout : He has already said the only letters conveying complaints are the letters produced. Mr Bell ; The complaints practically end with the letters of the 15fch August, because, as the witness says, they then offered all they asked and there was no further fuss. Sir R. Stout admitted there were no documents relating to the matter except those produced. Mr Bell : Then I will confine my questions to communications other than by written documents. Sir R. Stout ; There is a point there as to whether the coropiny could verbally cjmmunic*to or vary documsnts under seal. Mr Bell said the question he put was a general one of exclusion, not a question of inc!usion. (To witness :) Did you receive any communication from anybody indicating a view inconsistent with what you have stated to the court ? — No. Mr Bell : Your Honor hai noted that the form of the question is not objected to, but the object of it ? j Witness continued : We bougM sheep f.o b. and had nothing whatever to do with the works ; they might have been frozen anywhere. We buy sheep f.o.b. from miny other works, and we have no control over the worka.-* I remember the letter of January 29, 1892 [read] frocn Reid to Ward, in wlrcu the words cc ur, " The offer U beyond present market, but we ar<i anxious to work with you." In making a contract it is of little importance what the price is at the moineut. The price we gave for a two yeara' contract has little to do with the price in the London market at the moment. As a matter of fact prioes did rise in the London market after January 1892. It is to our previous experience wo look to form a judgment. The object of the contract was to make money ; but the double objec b in this case was this : If we had not made that contract with Ward I looked upon it that we should have been absolutely deserting our friends. At the time I looked upon that as the last thing open to ms to protect the interests of the Southland Company. It is so apparent to anyone who knows anything at all of the meat trade that the Southland Company were absolutely bound to ua, whatever the price of meat was — whether high or low, they had to give their meat at a pr'ce. At that time, as I have explained, thera was considerable excitement in the trade tor various reasons. The popular belief right throughout the country was that we hsd a very good time before U3. I undoubtedly joined in that belief. I thought we had *a very good contract, and Mr Reid's letters that have been read ara still further proof of what he thsughfc individu*lly. lam perfectly clear in my own mind that had we not bought Mr Ward' 3 output, using the wisdoaa we did in the matter, somebody else would Lave done it, and I am sat^fled they would hava given him more money than we did. The shipping companies were anxious to cut in. 16 is a simple thing in the light of past j events to say what happened, but charts such as Weddel's could not be prepared until after the events. There was excitement in the trade at time which was nob justified by subsequent events. Mr Bell : If your anticipations rf 1891 had been realised and no output contract had been made with Ml 1 Ward, what must necessarily have been the result ? You Bay somebody else would have given the contract. Assuming that had been so, what would have been the remit ?— Witness : The result would bavebeeo that Mr Ward must necessarily have taken all the sheep in Southlaud except the 40,000. They would have got that under our contract ; but they would have got no more unless they were prepared to do as they did in | 189* and 1895, lose money. , Sir R. Stout : They have not lost in 1895. You are quite wrong. We have nob lost up to this. Mr Bell: Probably the £30,000 claimed is taken into consideration. (To witness :) * You gay that if you had nob euterod into the output contract, somebody else would have done so ?—? — Witness : I was perfectly clear about it at the time. Had it anything to do with the violent competifou which then arose bet ween Mr Ward and the Southland Company ? — Nothing at all. Examination continued : There was competition between them, but I do not think it was exceptional. I took shares in the Southland Company. I took them at tho time of the erection o1 the Southland work*. At tho time I was supposed to have £1500 worth of shares fully paid up. I had no other shares at any time in the company. It has been suggested that Ward bought inferior sheep. On one occasion I made strong complaints to Mr Reid. Wkon I took over the shares we purposely did not change the brand. The question or chang- ■ ing the brand was discussed, bat the brand had j made «uch a good name for itself that we could nob afford to do it. I know that from the account sales. Sir R. Stout objected to this as nob being evidence. Witness : Naturally we should have put on our own brand, but the brand had made such a good name for itself that we did not change the brand. The Ward brand meat produced more money in London, and we could not afford to change the brand. I heard Mr Cluleo's evidence. Mr Clulee 13 not a large exporter, but distinctly a small one. Mr Clulee said there was no C3tnpetition in 1893. Ido not agree with that. HaviDg regard to Weddel's oh&rfc for 1893, I adhere to the opinion I have expressed. There would havo been competition. In my opinion the shipping companies which came in in 1893 would have corns in at any time before if they could have got in. Cross-ex*mined by Sir Robert Stout: The Tyser line has only two steamers. I don't know that my brother was one of tho largest shareholders in the Ty»er lina. I believe Nelson Bros (Limited) are shareholders in that line. We supplied the moat for the line. It J was quite likely that Mr Dobson consulted the ! firm about the appointment of Mr Ward as agent at the Bluff. Sir Robert Stout said in a letter written by witness he said: M We have got a Cabinet Minister to ourselves. That is a feature not to be despised, I can tell yon, in these days." Witness : No one woald deny that. What would be the bu-iners advantage to you. ? — I call that tbe me*hod of a wise man. Haa anything resulted from it ? — Apparently a good deal. Did you not consider that a Cabinet Minister would be of advantage to you. That is what you meem by this letter ? — I should say N,o to that. I will leave it to his Honor to imagine what I meant by that. I cannot define it. Did you consider yourself bound to vary the contract that you made for purchasing on behalf of tho purchaser ?— Gexteialir. undo* certain conditionfc J
For what purpose ? — Simply on the ground of common justice. In justice ? Is not the motto of all commercial man to bay in the cheapest market; and sell in the dearest ?— lbis a motto of all business men fco look to the future, and it is" my motto to run my business wibh the view of making a gain in the future. In reply to further quesbions wibness said he made the contract under the belief that the price of meat would go up. Ib was a faoS that South Island mutton was far better than North Island mutton. Nelson Bros, were not particularly anxious to get works under their control in the South Island. They were anxious fco get South Island mutton. Sir Robert Stout: When you took the site at Mataura, was ifc not with the ultimate intention of building works there in order to get control of Southland? — I am not going to say that, because ifc was not bo. I got possession of fche Mataura Bite' because I felb perfectly certain that some opponent of fche Southland Compauy would have taken up that site if I had not taken ib up. 0 In your letter, when you say something about I laying. Ward alongside of the company, you also j I say you cannot let Ward go to the wall. You were doing that from a purely business \ point of view, were you ? You considered it to your interest that Ward should not go to the wall pp — I looked upon it to my interest to treat him exactly the same as the Southland Company. ""* Are you aware what" the average weight of the sheep was that Mr Ward sent in ? — No ; I am nob. Are you aware that your firm took a greater number of light-weight sheep from Mr Wardthan from the Southland Company ? — From the oorrespondeuce, they apparently did. You agreed to purchase the Ocean Beach Works in 1893 ?— Yes. Did you consider at that time that you had a right to purchase them, or did you nob ? — I clearly thought I had a r'ght bo raske arrangements for the purchase of theie work*, so long as I did not commit myself to the purchase or use of the works till January 1894-. You never asked the Southland Company to consent to your makiDg that purchase? — I did not need to let it ba known on fche house tops. Did you not, in 1893, really look upon Mr Ward as your partner iv the Ocean Beach Works ?—Witnesß? — Witnesß laughed ab this question, and replied in the negative. You agieed with Mr Ward that he was fco make additions at the Ocean Beach Works ?—? — No ; that is not co. Were you buying any goodwill with the Ocean Beach Works ?— Mr Ward knows that better than I do. I don't know how much of this is goodwill. In reply to another question witness said the words of fche contract for tha purchase of the works were tbab the works were to be finished before the firm took them over in January 1894-. Mr Bell: I had proposed, your Honor, bocill Mr Ward, to put him in fche box and tender him for cross-examination. There are only one or two questions Mr Ward could have answered which I could successfully make relevant fco my case. Ifc may be proper, though, that Mr Ward should have a right to answer the kind of suggestion that has been made agaiusb him. (Sir R. S'out said thi,t he had made no suggestion Bg<tiusfc Me Ward. He had strictly said that they had nothing fco do with Mr Ward. His Honor : Then, if that ia the case, thera is no nead fco cill Mr Ward. Mr Bell : Mr Ward is emphatically anxious to go into the box, and I am equally clear that I have no quesfciou fco ask him which is relevanb to fche issue, and I wish to do nothing to delay the court. Sir R. Stout : I have no questions to ask Mr Ward, and I shall not oomment on his nob being called. Mr Bsll : I have no association wibh Mr Ward. He is nob now in any way associated with tho Ocean Beaoh Works. There" is no connection between Mx Ward and my clients, but still Mr Ward is anxious to go into fche box. His Honor : Mr Ward might go into the box if he wishes to make some explanation. Sir R. Stoub : I objecb to that. I don't see why Mr Ward should intervene in the case. His Honor "• What can possibly be suggested from the evidence that Mr Ward has done which he ought not to have dove. Supposing fche Nelsons were wrong in taking his output, what is that to Mr Ward ? Supposing they committed a breach of the contract Mr Ward was not a party to fche contract. Sir R Stout asked leave to put a question to Mr Reid. James B. Reid, recalled, said he was aware the Sjuthland Company did not keep to weights. He always rejected excessively fat sheep. Mr Bell pub in three bundles of documents, all of which had been referred to. A fourth bundle had been made up, containing some documents which had been already read and some which had been objected to. He proposed fco call for fche lefcbers which had been written by Mr Caningham Smith, general manager of the company, to the shipping company, and from the shipping company fco Mr Cuningham Smith immediately prior fco the commencement of the action. He submitted that these should i be admitted on exactly fche s&me principle on I which fche demand from fche bank and fche I minutes had been admitted. The file of documents was handed up to his Honor for perusal, and while they were being perused William Cuningham Smith, called under subpoena, was put in the witness box, bub not ! sworn. Mr Bell read the subpoena to witness to produce his letter book containing copies of letters written by him to Mr Gibbs, manager of tho New Zealand Shipping Company, and to Mr Moore, of Messrs Turnbull, Martin, and Co., regarding the subject mitbsrof the action, and asked whether he produced these letters. Witnes3 : I have brought my private letter book which contains letters to Martin, but I claim that I cannot produce it, because I think if it were produced I should be liable to libel. Mr Bell : We hava nothing fco do with that, Sir R. Stoub : He declines fco produce. Mr Bell : Thon I call for your Honor to deal with the witness ? H s Honor : Why are they not produced ? Sir R. Stoub : He says they might render him liable to libel if they are produced. Mr Bell : That is not an answer, His Honor : If they are evidenoe they ought fco be produced, I think. * Sir Robert Stoub submitted thafc the privabe eorrefqioadence of Mr Smith or any other individual could nob be evidence against fche company, and was not evidence because the letters were not original. He objected fco copies. His Honor observed thafc the witness wa3 asked fco produce his letter book in which were copies of letters from him bo Mr Harbin and bo Mr Gibbs. Mr Bell said the witness was required also to produce letters written by Mr Martin and by Mr Gibbs to him relating in any way to the subject matter of the action,
Sir R. Stoat: All official letters hare been disclosed on the affidavit and sworn to.
Mr Bell : I might ask your Honor if it would be right for the court to ask if any documents have been destroyed since fche writ. I submit! to the co art that if documents* are nob produced it ought to be asked if there is any ground for the suggestion that they have been destroyed. Witness : Most decidedly not ; .not th« slightest. His Honor : There' i« a difficulty about the letter book sorely, Mr 801 l ? The letter book contains cosies of the letters he has written. Must yon not produce the originals? Musfe you not subpoena the persons with tho origina's ? . Mr Bell «aid he wanted the documents poasibly to examine tnis witness and possibly for the examination of other witnesses. Thu documents were nob produces.! on the affidavit of discovery, and the only way to gfi fca«m was to subpeona tha witnww. Ho (Mr Bell) submitted that he was entitled to see the letter book. Supposing the docunu-nb was a documeuk the witness was bjund to produce on the discovery, it contained a copy of an entry written by this witness rolating to the subject matter of th» action.' Sir R. Stoub : He has not His documents In court. Mr Ball : He i« bouad to. Sir R Stout: Not if it prejudices him. His Hon or : Taore may be goo 1 oxou »c fo? not producing tbe doc-amenta, bub they bhould be in cour>y. ,s»Are they in ooart ? Witness: No; bub they are close to tha court. Mr Ball, to save time, did nob press for the production of the correspondence, but tendered the documents which were under the consideration of bi-j Honor, as showing the motive of the action aud the grouid of loss tho company had intended to allege. Sir R. Stout objected to these letters being pub in, as they dealt with counsel's opinion. After some discussion it was agreed between the parties that an extract from a letter from the Southland Company to th>j Shicpin^ Company of April 26, 1895* should h<* put in, and that the o'har letters should not bs put in. Amendments of both the statenent of olaim and statement of defence wore made, leave being reserved in each case to objecb. | Mr Bell : Now, yonr Ho.ior, I ask for a direction that only three breaches have been supported by evidence— (a) the making of the oatpnt agreement in 1892, (b) the agreement o£ sale in 1893, and (c) fie loan of £20 000 to Mr Ward in November 1893. Thon I s*y as to (a) thnt it U not a breach of the eighth olause of the agreement of 1891, it is not a breach laid in fche btttement of claim, it is a contract expressly authorised by the agreement of June 1891, and th"*b both parties adopted as the construction oE fche contract, and noted upon suoa construction, that the output agreement was not a breach of the eighth clause. If it; was a breach, ib was (a) expie>sly waived by tho plaintiffs ; (b) thepUiufctffa elected to treat it as nob a breach of the eighth clause, but as authoristd by the sevenfcb clause, and on that election claimed from the defendants rights which they could nob olaim on that basis; (c) fche plaintiffs expressly acquiesoed in the output agreement, and (d) tho plaintiffs arranged with the defendanbn to acc-jpb, as for the mutual advantage of both parties, the output agreement. Coming back to head (&),'fche agreement tor the sale in 1893 is nob a breach of blie eighth clause, inasmuch as it is expressly provided that ib does nob take effect until the Is 1 , Jauuary 1894, and ib is nob a breach in any case. A* to damages, I ask for a direction that tb.o sum lost by the plaintiffs is nob the measure of damages caused by the broach since their own action in attempting to defeat Mr Ward and the excessive prices paid by them were the result of their policy, and such loss is nob damages flowing from fche breach, th"»t the extra expenditure in works and plant incurred by the pliiutiffa was nob a consequence o? any breach but an acb that resulbs from their attempb to defeat Me Ward, aud that the loss (if any) of tho plaintiff company followed from either the erection of tha works or tbe making of the output agreement. In regard to the first' causa, we had no part in that, and with regard to the second cause, they are barred by acquiescence from claiming. • Sir R. Stout : The only direction I ask is that on tha pleadings there is no proof oE acquiescence. As to damages I submit that fche direction th»fc should go to the jury is that they should give damigos nob for the erection of the works, but for Nefoon's breach. The output contract necessarily led to damage to us, and if so the jury must take into consideration the circumstance whether there was a likelihood of any persona stepping in to give a firm contract for two years. If nob, ib is perfectly clear from the evidence tha 1 ; Ward could not carry on, and we could nob have had the competition of less. That is the evidence. Mr B ill : 16 ia all fche other way. Sir R. Stout: Thea, I thiuk a separata branoh of damage should bs pub to the jury and a separate assessment made on tbe ground that, assuming there was no output contract at all, the contract, made in April 1893, gave Ward a firm contract on which he could finance and be en&b'ed to carry on hio works — when bub for that he would not have carried on — and gave him an eaormoas advantage to carry on fche contract. His Honor : Ido nob think I can direct the jury as Mr B»ll asks me to. If the eatstiag into the outpub contract was a breach, then the moment the oontr-icb was executed the breach had been committed. The subieqnenb action of the parties, I think, would be relevant to the question of damage. It might be very well contended that this right being infringed and no claim made to stop its infringement, they were rea'ly nofc suff-ring any damage by the infringement. If the entering into the output confcracb was a breach, then that contract was made without the knowledge of the plaintiff*, and fche breach, having been committed it is difficult bo see that any subsequent act of theits can amount to an acquiesence in tha breach. I snail direct fche jury as I have already indicated. I shall also further direcb the jury foe the purposes of the present cise — of. course, as I said before, the direction is more in order fco prevent rhe necessity of the jury being summoned agun than that I am absolutely satisfied tbe direction is a correct one — I shall direct that entering into the oubpub contract; was a breach, and that entering into the agreement of 1893 was a breach, and that these are fche only two breaches — there are no other. Then the question fche jury will have to de« fcermiue is what damages have been proved fco flow frem these breaches. I do nob think I can give any very dhtinct direefcion as to damages., I think Sir Robert Sboub's suggestion that there should be two heads of damage is a perfectly reasonable one, and that ib will satisfy both parties that ifc should be pnt in that way. The jury have to be satisfied that fcae plaintiff company have suffered damage from fche defendants entering into "the outpub contract, and entering into (be other contract, aud they would have to ascertain fche amount of such damage. They would have to find that entoriar 1 'r. th<; .w-pnfc contract ot the other contract n v . vof any damage, They would
nd, of course, the losea the company sustained I ing those two years is not neoeasarily a fne-ature of damage. I shall have practically to i the jury, as I have &*id, and in tho way I have already indicated when the motion for the non-suit wan made. Bat it may be as well that this question should be reserved for tho decision of the oouit afterwards. Mr Bell: I understand your Honor rules Against me, and gives ltave to move ? His Honor : Yes. Mr HoskiDg, addressing the jury on behalf of the defendant company, said he was qoibe conscious the patience of the jury had already been severely taxed in this ocse, and he did not propose to detain them &t any great length in order to deil with the remaining part of it that fell to him. The disoussiou that had taken place upon abstruse legal points during the past honr or so had perhaps withdrawn from their minds the appearance which tha last witness on tho defendant aide, Mr Nelson, had presented in tbe box, and the evidence which he had given. Now the evidence Mr Nelson had giveu with regard to frozen meat contracts ia general throughout the colony, with regard to prioes and the ups and downs of trade, and the evidence he had given with regard to hi« own methods of conducting business, was before them. And he though however much his learned frieud Sir Robert Stout miuht, have suggested those methods were not within' the f«ur corners of tho agreement, they were certainly such methods as must commend themeelVes to the jurors, as just and fair-noiuded men of business. He thought, with all submission, that Mr Nelson's evidenca, as given by, Win in the box, did away to a large extent with' ttuf necessity for his elaborating on. the case in summing np. When that witness gave his evidence, both in answer- to his learned friend Mr Bell and his learned friend Sir Robert Sfoat, he g*ve them a very fair summary of the position and of his attitude throughout the whole of this case. He (the learned counsel) proposed to leave the correspondence, which had been gon« over and over again, before them. He was nob going to weary them by re - reading it, but wonld leave it before* them, and when thoy gob away from the interpretation which counsel for the defence contended should be placed ou a particular passage, or which counsel for the plaintiff maintained it should bear, they would be able, under the direstion of his Honor, to place their own interpretations on those lettew. With regard to the correspondence, they should, however, bear in mind, aa h ; s learned friend had said in opening the case on behalf of tho ' defendants, that these letters were largely private correspondence : naturally a class of correspondence in which the writer would lay bare his inmost tb oughts. It, too, was a class of correspondence which did not bear the impress of_ the correspondence of Mr Cuuingham Smith, who declined to produce his letters, because he was afraid if he produced them actions for libel would follow. The defendants had produced every letter from the beginning of the transaction to the end that they had been called apon to produce ; and there was not one of them of which they had to Bay " we fear to produce it because we have in it traduced tome other people." He merely wished to lay emphasis upon the fact of the fair and honourable character of that correspondence written offhand, as it were, and not with the preci6eness of ordinary business lettors. Hfi called attention to this only for the purposa of showing the class of man who had been dealing as the head of the defendant company with the Southland Company. Thia was an important faot to bear in mind, because, although it would probably be ruled that intention had nothing to do .with the question of damage flowing from a breach of contract, it should be borne in mind by them when they came to consider whether some particular act was such a breach that it should involve the payment of damages hy the defendant company. "In order that he might come » little closer to the conhideration of the point* before them, he might say that the directions which his Honor had given on tihe question of acquiescence and 60 on would relieve him from dealing with that part of the subject, and would he hoped shorten hiV remarks. In anticipation that he might haye to address them upon those points, he had, arranged his ideas accordingly, and it might be that his observations would not now be presented in the same consecutive order as otherwise. The firat point he wished to bring before them was : What was the nature of the case that the defendants were originally called upon to appear to ? The declaration presented in the action alleged that they had entered into & contract not to erect, or to aisist, or be concerned in the erection, or use of freezing works, and upon thad interrogatories had been administered by the plaintiffs. Now, these interrogatories bore oat by their character the nature of the case the plaintiffs intended to present. They had heard them read, and from the minutes which had been presented they would see that Mr Smith said that ha had very good information for saying thab Nel-ou? were JDUretted in tUe Oee±n'Bi>aoh Works in 1891, 1892, and 1893. Now, Me Smith, the gentleman, who was able to give all this information as to how the defendants were interestsd, and who might be called the source and origin of thia litigation, had not been pnt in the box in order to give them the benefit of that Information. Sir R. Stoat : He was put in the box. Mr Hosking said Mr Smith had not been put in the box and examined us a witness, but had teen simply called to produce certain documents. He could not give them any evidence , teepectiDg the good information referred to : he isould not even produce a single bit of evidence I lor them. Hia information had been embodied in letters, which he said would submit him to a criminal prosecution if he produced them. Such had been the beginning of these proceedings. What was it tbe proceedings were * founded upon at the outset of the action ? What had the £100 voted by the directors of the plaintiff company been voted to do ? It was suggested in the interrogatories that the interest of Nelson Bros, in the Ocean Beach Works could be proved from Nelsons 7 own balance eheete, which represented during the year 6 1891, 1892, and 1893 a growiug increase ia their iuve»tment«. Those investments were not detailed, and they were asked therefore the nature of the investments. Then when the answers to the interrogatories came, they heard no more about tbat part of the case, and they had heard not a single syllable of ib daring the coarse of the proceedings in that court. Then what was the nature of the caee which his learned friend came into the court with ? If be had note-d rightly what his learned friend had said, he had said, •• We do not rely upon the output agreezuent at all." Sir Robert Stout : I never said go. Mr Hosking said his learned friend had said "We only look: on it as a step in the breach. What we go on is the whole of what they have been doing — as an indication that thay were interested." Then when his learned friend Mr Bell had put it to Sir Robert Stout, he laid "We do not need tb rely on the outward agreement, because we have gob the purchisa in April 1893." Now it was not until the
ruling of his Honor that it occurred to his learned friend that he had a case at all. i Sir R. Stout : Nothing of the sorb ; that is absolutely incorrect. Mr Ho3king : Then why did his learned friend not rely upon the output agreement at the stub, instead of their coming round nfter the lu'ing and then saying it was tha output agreement that had caused the dara-tg*. The fact was his learned friend, like Mr Cuthbertson and everybody else, thought that it was not the output agreement that was the infringement of the contrast, and that it was not the output agreement that had caused the damage, and that was consistent with the conduct of the parties throughout. Just one word more in reference to these proceedings, because the oharaoter of the proceedings ought to be borne in mind in determining whether they were going to punish the defendants by fixing upon them anything in the shape of d*magos. He remembered the story of a man who, when heavily indebted to a person for an amount he could pay, had tha very goo 1 fortune to ba bitten by a neighbour's dog. The idea had instantly seized him that now was the cbauce for settling with his creditor, and so ha rushed off to him and cold his right of action to damages for a dog bite, j and to put his creditors square. Now what had they here ? They had a very fi-sree formal demand from the Biuk of Nnw Zetland calling up the amount of the plaiutiff company's overdraft. Then Mr CaninghauT Smith c»l)td a | meeting on the 2ui April, and they had the minutes lying side by side, very neatly and .quietly reposing there till uueirthed by the ! order for inspection. There .was the demand I of the Bank of New Zealand, and then Me Smitb discovered that the company had a dog bite that it could sell, and he immediately sxid, we have £30.000 in this bite of ours and I think we will bs able to square the bank. Mr Smith's valuable information, which had apparently disappeared in thin air since, was what had induced the directors there and then to vote £100 to be spent on exploiting this claim upon the dog bite. That was one of the elements of the case which they must bear iv mind in regarding this ac'ion. What was it the directors themselves considered was the ground which gave them a right of action ? Was it because they then found for the first time that Mr Nelson had entered into the O'ttput agreement ? Thera was not a word of that in their resolution ? No ; it was because Mr Smith said that his information gave him very good ground for supp jsing that during the years 1891, 1892, and 1893 Nnlso r i Bros. (Limited) had an interest in the Ocean Beach Worka, and then immediately the action was commenced. Now, what was the nature of the charge brought against Mr Nelson, for ono must associate the actionof Nelson Bros (Limited) with*persous hearing the name ? What was the nature of the action brought agaiusb Mr Nelson ? It was an action brought against Mr Nelson charging him with the mo it dishonourable conduct of which ho could poSNibly have b>;en guilty — viz., that at the very time he was entering iato the contract with the Southland Company for the purchase of their output, he was erecting in tha direct teeth of the covenant he had entered into with them, and which he was suggesting he was carrying out — he was erectiug or interested in the erection of the Ocean Baach Works for the purpose ot ruuning the Southlaud Company. That was the suggestion made against Mr Nelson, that he had bren acting most dishonestly over a period of three years in union with Mr Ward in something which if it could be proved would ba very much like a criminal i conspiracy. Mr Ne'son had this charge made against him, and it was published and sent forth to the world. Ha supposed the newspapers in Southland had not much to do, for rumours had been constantly coming from Southland as to what waa going to happen in this case. Mr Nelson now came before them as much as anything for the purpose of setting hi» reputation right with the mercantile world. Mr Nelson was a man whose busine«s resources were dependent upoa the nature of the contracts he was able to make from time to time, and the good faith with which he carried them out. Was he to have a stain like this resting upon him ? The Southland Company had brought thia action against him charging him with doable dealing, and he must allow the case to go on whatever might be the consequences of having the matter thoroughly threshed out in a court of law. Mr Neloon had come there to meet that caEe, which h*d been common ground to both tides until the action had takeu the turn it did on his Honor's ruling. Until then the output agreement was not thought of as a breach of contract that could be charged against Nelson Bros. (Limited). Now, he submitted that the action had to be looked at from that point of view, if they were to fiud somsthing in the shape of damages against the defendant beyond the smallest of coin 3. By the extent to which the damages exceeded the limit he had suggested they would brand Mr Nelson's conduct with the aspect of double dealing with the plaintiff company. He asked them if Mr Nelson, judging from his i conduct in tho box, was the cla9s of m*n who ought to ba punished in aay court of law with damages because of gome technical breach whipb had been discovered for the first tima agaiußt him when he was defending his character. He wou'd now dismiss those more general considerations and come to deal with the question of what under the worst aspect of the ca«e was the amount of damage they would assess for the breach of his contract. He would ask them to remember that the plaintiffs themselves had been the judges of what they had Buffered from the breach, and in order that he might come to the question of the output agreement and deal with that, he would tike the other matter first which his Honor had anoouoced he should rule to be a breach of contract—the purchase of the works in April 1893. His learned friend, in opening, had suggested ! that he would be able to make the principal part of his case hang upon this contract for purchase iin 1893. It was now found that a technical breach was committed at the time of the contract for the sale Mr Ward was running the worka, he was left iv possession of the works, and the contract of pale gave the defendants no r'gi't whatevsr to ii-torfere in any w>y .vhatever witb tbt- control of the works. If a>iy Oainage did happen from the mere acceptance of that offer seeing that nothing whatever was done to alter the poition as between Ne.lson Bros, and Mr Ward after that date until the end of the term, it could not be said that any damages of a substantial nature had followed from the purchase of the works in 1893. All the damage that had been complained of — all the damage that had been led to fch^m in the evidence — had been brought about be.f >r.' th^ purchase of the works in 1893. Ml- CVhbertson had sud thab the d image w^s due to the defective clearing of their works, the acceptance of inferior sheep from Mr Ward, and the non-conce c sion of the 2Jt per cent on freight. Now, these were matters which were the subject o? complaint during 1892. There was no pretence that after April 1893 there were cflore complaints 'from the Southland Company. They were sbill struggling to get the 2£ per cent, commission, but there was no complaint as to clearing tib.eir works or of the inferiority of the sheep accepted
from Mr Ward. It was, ind«el, dutiug that time that Mr Ward's brand acquired tha name which made Mr Nahon so reluctant to give it up. Tnere wera no complaints occurring after April 1893, so ttut the contract for the parchase of the works could in no way have affected the dam*go which the Southland Company suff 'red, and he confidently submitted thab the jury could not grant them any damages in re3peot to that unless the theoretic il damages was found against them. He would deal a little mare elaborately as to the other matter, what thay ha^l to fiud as damages in respect to the oatput contraot was the damages which would compensate for the lo3* which ua.tira.lly flowed from the breach — that was, the loss which in the ordi-iary course of things flowed from the breach — that, he took it, was the ruling which his Honor intended to give them iv Ih ; s matter. It was not everything that am*n snfftired after a broach of contract that he was entitled to recover damages for. For instance, a man agreed to buy certain gouts which were not delivered to him, but it did not follow that all the profits he would have made on those goods would bs allowed as damigss. The law said : No, we will give you as much money as would have enabled you to replaca the goods. That was a very simple case, but here they had a more complex one, and he would ask them to look at in this way : They were sought to ba charged with all the lcsies that the Southland Company had stiff ered during the years 1832-93. That was ,wb.at his learned friend had invited them to doby tha production of the balance sheets for those two years. He must put it to them in determining whether the output agreement was the cause of that lo3s, that bafore the output agreement was entered into the Ocean Be^ch Works were there. That was one thiog. They co'ild not, of course, prevent the Oaean Baach Works being there. The defendants had tried their bsst to Bfcop them being erected, but in that they had failed. The works were already there. Then what was the next elf nisnt which had to be considered ?—? — the personal resources oE Mr Ward h'mielf. Now it had been suggested that Mr Ward would have shut up hiw works if he lud not gtt the output contract, but there had uot burn the slightest evidence to bear out bha 1 ; contaution. Mr Ward evidently had reources to pnt up tha Ocean Beach Freezing Works ; but it was plain that the Mabiura works, whero they bad not to provide steam power, had cost £25,000. Mr Ward was evidently a man who htd resources at his back, independently of the Nelsons. Thesj works baing there before the Nelsons came upon the scene at all, there were two faobora re.tdy to operate in competition against the Southland Company. Thera was the fact of thesa works baing there ready to start — their mouths were open to receive sheep ; and then there was the further fact that Mr Ward was determined to commence freezing operations. Mr Ward, evidently from the description of his character given in the* correspondence, was a man of considerable enterprise ; & man not easily beaten. They had in him no ordinary mau who would go to sleap ovor his business, but a mm who wa«i exceadiogly alert, active, and eager to take advantage of any opportunities that might offer. That was an element which they must take into consideration iv saying wha 1 ; the dvm*ges should be. It had be^n said that if they had not taken up Mr Ward there would have been no competition. He (the learned coansel) said that tho natural consequence of the erection of tha works there — ready before they were even asked to take the output ; the natural consequence of that, added to the fact that thay had in Mr Ward a vigilant man of enterprise and resource, must have been competition. He asked tht-m to consider which was the more likely to h*ve happened — t'nafc these works would have been shut up, or that they would have commenced operations? Would any reasonable man say for a momant that when Me W*rd had got his work* there, if Nelsons had refused to buy the output from him, from that moment the k«y would have been turned in the front door of the work*, that they would have been shut up, and that the £20 000 or £30,000 worth would have been left idle — that Mr Ward would have said I will have nothing more to do with freezing. The suggestion is ridiculous, yet that waa the sugges f iou made to the jury. There were tha works already, and there was Mr Ward all eager for the fight, and if Nelson* had not bought the output some one else would certainly have done so. Wnat was the position ? Mr Nelson had told them that before they came upon the scene the Bluff had been a Typ.er port, they knew how these shipping companies love each other. Although thay had recently been driven into an embrace because that was tha only alternative to cutting each others' throats, he might suggest that shipping companies did not love each other very much. The compauias worarea^y to fight, and when th« Tyssr Company had gone to th<* Bluff the term given to it was " the piratical entry of theTysers." Turnbull, Martiu, and Company were turned off and were the first to go back. Could they consider it reasonable that there wonld have been no shipping company ready to combine with Mr Ward in the operation of the Ocean Beach Works ? There was also this further fact that at the time the output contract with Mr Ward was entered into there was considerable excitement in the frozen meat market. That of iteelf was important as leading the jury to draw the inference that it was not at all unlikely that the probabilities were all the other way -that if Nelson Bros, had not purchased this output >cnejno elsa would h*ve done it. Then what did the Southland Company itself think of this ? He could show that by one little fact the Southland Company themselves knew very well that whether Nelsons bought or not someone would. Who was it prepared for the fig it ? Tne Southland Company, directly they he«d that Ward was going to build. Whit did they do ? They got fresh capital, they went to M-itaura, aud there undertook to expend £15,000 on what aft^rwa-d cost £25,000. They got works at Wallacetown, they bought a hulk, and they prepared for a fight — they uaw that they were going to meet with opposition. A« soon as Ward waa ready to start they knew quite well the opposition would commence, and they spent their money on the supposition that that was going to take place which naturally followed. And now, in order thatthismoribundcompany — thbcompiny that evidently wanted to pay its overdraft, or something of that sort— might be able to get on its legs, although Nelsons had made a contract which preserved it during the year of high prices — 1892, — it now turned round on Nelsons, and said : •> You must pay all the losses which have come on subsequently."' The very contract that Raved it in 1892 was now beiag used as the weapon with which Nelson Bros win to be chastised Tbafc w~as the conduct of the S tufchlaud Mea.t Freezing Company. That was the conduct with wh ; ch they came into court in order to get damages against the defendants. He would leave it to the jury to say whose conduct waa the better of the two. He wished to just call their attention to the further fact that during the period of this competition in 1892 and 1893— for it wa3 only with 'these two yearn they were concerned — there were no freezing work3 closed, throughout the colony ; they were all at work. It was not a p -i-iod during which the freezing trade was less. It might have been a littla
less than the previous year, bub nob much ; and Mr Nelson told them in his evidence that no works had been undertaken during that p3riod throughout tho colony. Now, ha had aidoavoured to make it clear that the competition tor which they had claimed damages was not competition in any way duo to the purchasa of the output of Mr Ward's freezing works, because anybody else nvght have purchased that output, and he had endeavoured to show them that the probabilities were that somebody else would have done so, and that it was Ear more likely to ba the f&ot that that would bs done than that the works would have the key turned in theic door, nnd remain idle if the Nelsons had said they were nob going to buy the output. He must ulso pub it this way : to show that the plaintiffs were not respousi^e for the competition. They must allow something for what might be calted the personal element. Something for Me Ward's enterprise, and something for the fact which hid been shown in the evidence that Mr Ward was the head of a very large institution, tint was concerned in a large amount of trade. If Mr Ward, for the sake of advertising, had chosen to give 6d per lb for mutton, could that have been a braach ? Of course they did not know the various motive 3 that might iaduce men to do certain things. It might pay one to buy mutton or any thiug else for a time at a high pric3 ns an advertisement or in order to secure a monopoly of the trade. If that had been done could Nelsons be blamed for it. When they had bou {ht ths output Mr Ward could deal as he liked, and that had bo >n shown by the fact that tha Southland Company had raised its prices without consulting those to whom its output was sold. They had no control over the prices paid by the freezing companies, and if those companies choose to cut cash other's throats that was thair own concer-n . Buppo nng the Southland Company had chosen to give 6d per lb, wore the defendants to t» made respoaible for the loss they mvde in consequence of that, and because they wished to ruin Mr Ward ? Tho thing was ridiculous. They could not be charged with the consequences of thiß competitive warfare because they hid entered into an agreement to purchase the output of the Ocean Beach Works. He wished, in this oounaction, to refer to the annual reports of the S mihland Company for 1892 and 1893. These reports gave the reasons for the losses sustained in tha company's opsrations It was poiuted out thib the freezing operations throughout the colony ha-1 beau carried on at a lo3S, and other reasons were assigned, but it had nivar been suggested that the output contract be' we an the defeudaufcs and Mr Ward was the causi of their losses. Ifc was attempted now to be suggested that Mr Ward had had a bst'.er contract, aud had bean-, batter able to buy ; but that had been so thoroughly answered by the evidence that he would not furthsr refer to it. Ho submitted that upon tho evidenos as it had been given it was undoubtedly the fact that Me Waid's contract was not so goad an the contract with tha Southland Frozen Moat Company. He did not think any better evidence could ba adduced of what was tbs effest of the two contracts than that supplied in the comparative statements of the cost of mutton bought from the Southland Company and Ward rsspuctively. They had thare in parallel columns the exact quantities bought and prices paid for each, and never in any single instance did Mr Ward's price come Jup to that given to the Southlaud Frt,>zin Meat Company. He did not know what ro*son Mr Word had for competing so strongly with the Southland Company, but no doubt he wauted to extend his business, and probably c >nsidcrod that after two or three years he would be able to get a monopoly. That was perfectly legitimate buu ness, and what sheep freezers throughout the colony were doing. Ho waver, it was not the dafeudants' affair, aud was not anything for which they ought now to be made pay. His Honor would .probably direct them that thu was an element they would have to take into consideration in saying whether it was part of the n\tur*l consequences of the breach that these high prices were given. The learned counsel then referred to the bUaive shi-eSs of the company to show the ciU3es assigned by the company for its lojsei, and submitted that not one penny of the increased expenditure referred to was in consequence of the output coTitrnci;, but had flowed from the iutention of the Southland Company to keap out the opposition works in 1891. Then th-ra was another important poiut: that although before the works in 1891 were entered upon the Southlaud Company had a credit bxlauce at tho bank, iv 1893 they were paying £1800 per year interest on their bank overdraft ? In what position was the company likely to ba in even to carry on its ordinary work with an overdraft on which they were paying £1800 per annum interest? and yet it complained that its position in 1393, as compared with 1891, was due to the output contract, when thay could plainly see, told by its own balance sheet, that it was the erection of the Mataura works that had handicapped it. Then Mr Cathbertson's evidence shoved that the hulk had cost them £800 in one year. There vere ono or two other very interesting things told by this balance sheet, showing to what really the losses of the company were attributable. While he had the balauca sheet in his hand he would call their attention to the last paragraph but one of the report of 1893, which was as follows :—": — " As growers are aware, the company's contract with Messrs Nchon Bros, is now expired, and tho firm has entered into possession of the Ocean Beach Freezing Works. As this company has now no contract at a fixed pr ca, we cannot as hithsrto offer growers a certaiu price for any period of time, bat we are prepared at all times to offer the very highest price for mutton that the state of tha London market will permit, aud our arrangements for the disposal of oar output are such as to enable us to place oar clients on the very best footing and equal to any other company in the colony." There thoy say having no firm contract now they could noj; enter into any long contract, and were going to buy as bsst they could. In the year 1894 £20,000 from two companies were brought into the Southland Company, aud what was the result of this resolution on the part of the directors to run free from any fired contract ? They lost about £29,000. That was a material point, as showing that the contract they had with Ne'sons kept op their position in the competition that went on, and ib was when they got free from Nelson Bros, that they lost all their money. Then he would like the jury to look j at this point. The company itself was the best j judge of what was the best cause of its loss, and as emphasising that fact there was an absolute silence iv all the reports that were put j forward until 18 months after the agreement ' \v*9 terminated — -there was an absolute silence of any claim s»gunst Nelson Bros, on &CC mut of Ward's output. In 1893 the Southland ! Company w*s heavily indebted to the b<mk, and it was more likely, if there was the leist possible chance of getting any money out of Nelson to put them right, thoy would have tried to get it if they had dreamt that tha output agreement was tha cause of their losses. A strong incentive existed for their taking action, and yet there was absolute silence on the matter. He concluded by stating that Mr Nebon had thought fit to fuht the case right through, in order that ths whole thins might
oome before the court and show that he was aa honest man. Sir Robert Stout said that Mr Hocking had told the jury that the reason Sir Nelson had. fought this case iv court wits really for advec* tising purposes. Mr Hosking interjected that that was not ao. Sir Robert Stoat maintained that th«fc w«8 what it amounted to. He wanted tho public to say he was an honest man. The jury, however, had uothing to do with Mr Nelson's honesty. The men on the plaintiff's »ide were jast as hone3t as Mr Nehon. The point was whaft damßges the plaintiffs ought to recover fr.ia two points of view. First as to the oulpaft contract, and then as to making the contract to purchase the Ooeau Beach Freezing Works. How did they arrive at thi* question ? What was Mr Nelson looking at F Mr Nalsoa did not enter into tbe contract with Mr Ward oa sentimental grounds ; he thonghfc j it would pay him, and it was quite right thab I he should look at it from that point of viow. Mr NeJsou thought there were other work-; to be started ; he wanted to keep his finger on (ha Southland sheep; he had works in Che North Island, bub he know that the North IsUnd j sheep were not equal to the South Is' and sheep* though they ware branded with Nelson'a brand ; he wanted to come in here and got his share, if not ths monopoly, of the Southland sheep. His first intention w« to stirt works at AlMfcon, bub apparenlly that did not "geo." Ho had tha contract with the Southland Company, buli when the thtee years' contract was aboub expiring he met Me Ward and fchoaghfc, "Th*t is not a bad fellow to geb on with ; I must keep Ward on my side." Mr Nelson thought ho could make good use of Mr Word, and a thing which rtcommen'led Mr Ward strougly to him was that; ha (Mr Ward) was a Cabinet Ministar ; and. unfortunately ib was Mr Nelson's opinion that aar politics and management of public business were such that to have a Cabinet Minister ia his arms would be an enormous advantage' to him from a business point of view. That being the position, Mr Nelson saw that Mr Ward would be useful to him and stopped at n >thing to get him with him. Mr Nelson was looking to his own interest, and if he was going clo<e to the wind, as ha undoubtedly was, and if he hid i stepped acrois the bounds he had to pay for it. Let them leave all tha nonsense about superior man, and honest men, and honourable * mea. | Thtt was not the point. The plaintiffs' nv>i wore, as honest and honourable men as (fir N 'son, but they did not ask fordamages because- t that. Tha jury hid to come to the question as o. 1 ,i«,ry business men, to put it on a sensible iu-iite;s footing, and to leave all bosh out of tho qu aiion. The dt fendants had chosen to make a c .ltracb which was a breach of their agreement with the plaiutiffs, and the question was, whab hud the plaintiffs sufforcl P Did tho jury nob see thab all through the thing that Ne'son Bros, were determined that tho Southland Ci-m;iany should get no ad/antige over Mr Ward and they were determined to stick to Mr War.' and prevent him from failiug so that when ■ they had got Mr, Ward in their arms^ they could ' hen do what they pleased with the South &> d Company and bring them into their arms also, and Mr Nelson predicted that he wi uld h*ve both tho Southland companii s in his arm 3, and that he would have the whole control of tLo Southland Itr.ide ; and Mr Nelson failed b-^cHuuo two shippiug companion cime to the ssji»tanco of the Southland Cimp»ny and put money in, and the shareholder* wine also, as Mr Nichol had told them, and pat £21,000 in ? If that h*d not happened the Nelson Bros. (Limited) would have succeeded in swallowing tho whole of the Southland muttoa. Mr Nelson had lo»t that i-tvke; and ib was for the jury to nay, " Very well, you bave played for a heavy stake ; you have gob your Cabinet Minister, and yoa have got the Ocean Be ich Works, bub you have nob got the Southland works ; and having failed and broken your contract you have to pay for it." They had to deal with Mr Nhlson'a honesty. ■ Mr ' Nelson was not posing for his honejty, and if he had brokou hia ontracb the plaintiffs had right to d^magas, and the nonsense that had bean i talked about honour and honesty had nothing jto do with the contract. X Mr Nelson had overstepped the mark ha had to pay damages. Was nob the output contract an immense benefit to Mr Ward and a great injury to the plaintiffs ? Mr R«ii, writing to the London people on the Bbh October 1891, said thai it Mr Ward "can gob anyone bo buy his moat competition will be keen ; if nob, he will probably ba glad to sell oub after working for a year or two." Mr Reid meant by that if Mr Ward attampbed to work without a fi'ra contract, how was he to finance ? The gett ng of the firm contract from the Nelsons was of enormous advantage to him, for ha was in this position — tho firm cotitracb for two years was simply financial safety for Mr Ward. He could thea go to a. bank and say that every she^p he. bought i wa-j i-umeaiately frozm, for the Nelsons were bound to clear his works, and he could ge6 cash— that was a financial safety for him. Was that contract most injurious to the plaintiffs ? Then thare was the suggestion, " Oi, somebody else nvght step in." Who was the soirfebody else ? Perhaps the sh'pjiiag companies? Did the shipping companies ever buy mast? The jury would hs.ve to say that with respeoti to the output contract the lojb tbe plaintiff* sustained by it was considerable. According to Mr Cuthbertson they had sustained a loss of even more than the £30 000 they ckimed. Taka their balanca sheets and sea what the cbtnp*ny wa« before— they went steadily to the bid und»r this competition, — and then sea if they were nob entitled to subibantial damage*. Then fet them look at the other coutracb. Did they as commercial men want to say that if thpy had got to financa and went to a bank and said, "Here i« a firm contracb : our works are sold for £32,000. We have got to gob p*ymsnt a few months hence"— ib was jusi the sains as if Mr Ward had gob a promissory note at eighb monthsdid they maaa to say that they could not go to any banker In the world and finance on that ? Let them look at the enormous advantage it waa to Mr Ward iv financing to get Mr Nelson to buy tha wo-ka in 1893. Why did ho need to finance ? Why was he anxious to sell the worka at the end of 1892 ? Ifc was perfectly apparent from the correspondence that he found that in 1892 his freezing works did not give him a profit any more thaa tha Southland Company. * Mr Warren's evidence showed that, for Mr Ward was getting less per lb for his sheep than the Southland Company were getting, and he was paying more. That was the evidence —it was the evidence of Mr Nichol and Mr Catbbertaon that they always paid less than Mr Ward. Hia loan must have been greater than the company'^ and it was no wonder thab at the end of 1892 Mr Ward paid ho must finance How did ha do it ? He went to Mr Nelsou and got him to buy tbe works, and got a firm offer which was equal to a promissory note for £32,000. It was quite a proper thing to do — there was nothing wrong about it in the slightest degree. It was a way to finance, and it helped Mr Ward against the Southland Company ; and if the jury believed that that helped Me Ward to fight out the battle of 1893 the company were entitled to damages for that breach also. And tbat was the whole case. All tha
/ I— W»— — — »— II i i i — — — «i— — — i j talk of foar days had oome to this point : what ?cUmeg«« were the plaintiffs entitled to get. If he (Sir R. Stout) ta'ked to them till the following morning he could not put it in any other vway. What did the jury think the plaintiffs hfcd lost ? If they thought it wag £30,000 or £20,000 or £10,000 tbe company were entitled to get that. It was all very well to say that the Nelsons did not mean to break the contract. It bad been suggested by his learned friends that the plaintiffs should have taken 'the opinion of counsel for £1 or £2 — that was vrllv rll they appeared to be able to give In Invercwfiiil— (laughter) — to ask if the Nel- j oom bail broken the contract. Me Nelson might have had an attorney in his office. At all events, Mr Nelson had done a wroag — a wrong in a business thing. .All the talk , about honesty and intention would have fceen very well in a dog-biting case, but this was a commercial case, and not a torb. The jury had to see, as business men, bow much damage the plaintiffs had suffered through tbe Nelsons' action and he was sure they would act fairly between the parties. He would pat this question to them : Had the Southland Company been injured by what Mr Neteon did ? Tbjjy had nothing to do with .motive. Nelson's motives might be of the and purest character. If the plaintiff* had suffered damage through his action, it .was the bounden duty of the jury on their oaths to award substantial damages ; and he was sure they would admit, afler hearing Mr Cuthoertfon, who w&s not now practically connected with the company — if anything, he might* have possibly had reason for soreness because he was no longer secretary or manager of the company, — there was no doubb that the company had suffered. If the jury thought the plaintiffs ware entitled to damages they must give them, and all the suggestion that the action ought to have como before, and that iS did not come feijl the bank presFcd the company, had nothing fco do with lh«m — it had no right to come under their consideration at all. Th\t Wap, moreover, all nonsense, bscause they had the evidence of Mr Cuthbertson and Mr Niohol that the directors of the company had considered «t an early stage whether tbe output agreement was a breach, and they had held over till they obtained further evidence. Mr Bell : No, no. His Honor : It was just discussed, I think, very soon after it wa9 en\ ted into, and then it wss dropped. Sir R. Stout : Why was it dropped ? Because tbe rumour was in tho air that the works bel"iiged to the Nelsons, and he suppoiad that the dirrc^ora wanted evidence to clinch tlut. "Why did they believe that? Because they could not believe, if the Nelsons only were buyc-i'3 of theep, that what went en could go on. And Mr Nelson was not a mere buyer of sbfep. He wanted to make a profit out of Mr Ward, and he at last landed h'"m in his Arms, aud that was the reason of the contract with Mr Ward and cf the increase in .pri-ce. Mr Nelson had wanted to keep Mr Ward with bim so tbafc he would became in fact h'S partner, and be had got him, and he had now to pay for it. He (Sir R. Stout) submitted to the jury that tbe evidence proved coi>c!i)?ively that the plaintiffs were entitled to dnm?g. s. He hal t.akru about onetlrrd the time th-.it hia learned friend h».d oc^nvi-d, and he ba>l put to them what needed to I c put, and that was : " How much money will you give us." His Hoaor, addressing the Jury, said : The fiir.fc i&&u<3 you have to dttermiue ie, fortunately, co vpsrativeJy timple. The real difficulty is in 1 the points of law which may be d scussod and determined on. a future occasion. For tl.e present, and for the purpose of obt lining your opinion a<? to the amount of dinmge that the plaintiffs h'sve sufftrtd, I have ruled that, as a matter of law, tht-iv have been two breaches of the agreement which the plaintiff* have entered into with tho defeud-tnts, one of the breaches ■being the <. übput contract which the defendants made with Mr Ward in 1892, and the ether being the contract to purchase the Ocean Beach Work* whiolv tha defendants made with Mr Ward in 1893. I sh»ll atk jou to determine • first what amount of damage the plaintiffs have BusUnaed in respect to the first brescb, and, secondly, tbe amount of daiirge sustained in respect of the second breech. The determination of theee amounts of damages will be all that y^u are called upon to do. The contract whicn the plaintiffs made with tbe defendants wan made,. as you are aware, in 1891. At the t'me wheu it was nnde there had been a previous contract with a short time to run, and this present contrac 1 ; was a firm contract for the three years 1891, 1892, and 1893 that the defendants sbou'd buy the output of the plaintiffs at cettaia prices. A part of ibis contract was clame 8, which has already b.ea before us. There is no need for m« t-> ivad it s>gain. If that clause has not been infrir.gr d by the defendants, then there is no cause of action. If the purchase ef the output is wot an infringement of that clause, then obviously the concessions, if any, which the defendants made in Mr Ward's favour are not in themselves an infringement of that clau«e. Apart from that clause the bargain is : that if an output is purchased the plaintiffs are to be put in the same position as the purchasers. If, however, tha purcba?e of the output is an infringement of the eighth clause, as assisting in the U6e of Mr Ward's works, then in considering how far the plaintiffs' interests have been afftrcbed by that breach you ■will properly take into ccn«i<lerat ; ou all the circumstances cf the breach, und if it ba a bieach of contract, the more favourable the terms given to Mr Ward of course the greater advantage it gives to Mr Ward, and it might reasonably be supposed that corresponding disadvantage to the plaintiff" would ensu9, and such disadvantage will pnbably be considered a matt:r of damages. As 1 have said, however, for the purposes of the pivsent case— for the purpose of getting your opinion of the amount of damages — I rule that tbe purchase of the output is a brejicb. of the eighth clause of the contract, and also that the agreement for the purchase entered into in 1893 is also a breach. I rule that these are breaches for the purposes of tbe present proceedings, the only breaches of which there is I evidence. The contract was entered into in | 1891 between the plaintiff-) and the defendants for the purchase of plaintiffs' meat by defendants. At that time the company was in a good position. In 1891, however, there was opposition threatened by Mr Ward, and the plaintiffs, in ood junction with the defendants, did their best to stop Mr Ward from starting opposition works. Messrs Nelson had a site at Mataura, and they were anxious that the plaintiffs should acquire that site and erect •works for the purpose of preventing cempetitiOD, the Mataura site being a specially favourable one for freezing purposes on acconnb of the water power. Messrs Nelson had acquired *bat site and handed over their right in it to the plaintiff company, and the plaintiff company started freezing works there, which were ultimately completed. In the end of 1891, however, all parties were satisfied that Mr Ward's works would be really erected at the Ocean Beaoh, and that it was really not talk 9Q Mr Ward's part. The defendants, seeing it -, woo hopeless to prevent Mr Ward starting in the
beginning of 1892, entered into the arrangement complained of — that they should purchase Mr Ward's output. As I have said, the purchase of the output was a breach of the contract. You have to consider what damages the plaintiffs are entitled to recover in respecS of that breach. The damages mu*t be saoh as, in your opinion, naturally flow from the breach — damages that plaintiffs would not have suffered if Messrs Nelson had not entered iuto the arrangement with Mr Ward. Ib is contended on bthalf of defendants that if Messrs Nelson had not purchased Mr Ward's output, somebody else would ; or, at any rate, that ifc would be unreasonable to expect that Mr Ward, hiving gone to very graat expense iv building tUe works, would simply, when they were completed, lock the doors and not stirt workiug. Obviously, however, it was not in the contemplation of the plaintiffs that there would not be competition by Mr Ward irrespective of any possible arrangf menfc which Nelsons might enter into. If the plaintiffs had nob thought that there would be competition between Mr Ward and themselves after the work* were erected, the plaintiff! would have had no object in using the exertions they did to anticipate Mr Ward. What everybody anticipated in iB9l before there was any probability of any arrangement between Messrs Nelson and Ward was that the natural result of Mr Ward's act ion would be nonapatition, and that there would be a battle between tho Southland Company and that gentleman, nnd they girded up their loins accordingly. That ciroumstance —if your opinion goes ia the direction I have indicated — that there probably would be competition in any case, arrangement or co arrangement between Ward and Nelson, — of course w6uld properly be taken iuto consideration in estimatiog what damages the plaintiffs are entitled to recover. The plaintiffs are not eMitled ta recover dsm^igos from Mr Ward's competition fceciuso Messi'3 Nflson had no part in starting tha buildings and putting Mr Ward in a po u'tion which enabled him to compete, bat thsy are entitled to damages in reapect of injury which is don* totham by tho aid Me*si.\3 Nelson gave j to Ward in tbafc competition by reason of enter- j ing in'o tbe output contract, and it is for you to determine wbat, in your estimation, (he amouut of such <nj-iry is. Tbe flnaniisl position of the company in 1891 was this: that there was a net balance of £1248. That reprefeated the net profita for the year 1891. Mr Cuthbertton made a somewhat different statement. On ex*min»tiou of the ba'ance sheet— which of course shows everything — it is perfectly clear that if my figures are correct there was at the bfgimirg of the year to the credit of profit and lo3S fee oant £2571, ftnd carried forward &t the end of the year £3769. But during tho year 1891 thera was an amount allowed for depreciation on machinery aud buildings of £1500, which is of course not part of the net profit ; and there was alsD a bonus of £fSOO to fihippess, and thib of course is nob part of net profits. Ntxt year the bauus does not appeav in the balance sheet, but, in fact, it was given iv a different form. So in considering the amounts of 1892 tha fact of there being no bonus to shippers is immaterial. What we have in 1691 is tbat there was a net profit of £1248, and that during that year £1503 was allowed for depreciation. Ia the year ending 31s j Decembfr 1892 — snd it is duricg this year that the ficit locs with respect to which the plaintiffs' claim p.cctUEcl— there was neither profib r.or loss — things were exsctly square. The sum of £722 was allowed for dvpreciation on machinery and building), RP.d it is of couvee bo be assumed that that 6um was a guffijient sura. I d< n't think there is anything to show it was not sufficient norn for depreii ition, so that we have in 1892 neither profit, nor loss, but the net results of the year wera £I'->lB worae than they wore in 1891. Then in 1893 we fiud that it was all loss — that there was a sum of £5955 lo3b, and during that year there was nothing allowed for deprecia'ion on building* and plai.t, though I mppose it nvißt be assumed that scraething should havo been allowed for depreciation. Tbat, therefore, is the loss which the plni..t ; ff3 sustained iv their operations during those two years. They aUo say tbi« : tbat there is a further contingent loss during these two years because of this cause. Iv the beginning of 1893 the Mataura Freezing Woks were in full operation, and they say that if th<=y had been a^le to compete in the purchase of sheep that they would hava been able to make fu'l nse of these works— tbat they were in a position, so far as freezing wes concerned, to start and fre.ze 1100 sheep per day, aud were in a much better position to carry on that business than in 1891, but they were unßble to do so. As I have said, however, the loss, which actually appears from bhe balance sheet — the loss that appijars from the balance nheeb in 1892 ia merely a 10-s of profit, but in 1893 a lose of £5955, aud nothing written down for depreciation. The plaintiffs claim that th'-y are entitled at any rate to the whole of the looses as shown by tho ba'ance sheet to hay« occurred in thope two ! years. Mr Cuthbertson es'iriiates tbat the loss from that cause is £30,000 during thoae years. It is difficult to see how thab comes. Iv 1894, after £20,000 had been pub in by tbe shipping companies, there was a loss of £16,500. With that, ho^ ever, we have nothing to do No part ' of that loss can be caueidered as resulting from any possibly suggested breach of contract on the part of "the defendants. I have given you, j then, the position of the company ss shown by the balance sheets for the years 1892 and 1893, when it is suggested losses were made through the action of the defend<uiti, and it is for you to say whether any, and if so what amount, of these looses, were caussd by such action. His Honor then proceeded to add tlmt he need hardly Bay that the fact that the company during these two yeirs had lost money was no reason why the defendants should be called upon to pay, even although they had broken their co^tr&et, till it could be shown that the losses, or part of them, followed entirely from the wrongful act of the defend»nti. They had the reports and balance sheets before them, and the report of 1892, which was tha first unsatisfactory one, gave the number of sheep that were frozen in 1891 and 1892, and those figures showed a falling off in volume of business transacted "by the excess competition of a private firm." The report of the year 1892, however, showed no surplus afcer wiiting £722 off for depreciation of bu'ldiags, and they said when the entire works were comyletsd they would be able to freeze at a lower rate than any similar coucern in New Zealand. But the cost of the building* proved greater than was supposed. After further referring to the balance sheets of the Southland Company, his Honor said it would be seen in the report for 1893 the circumstance that Me;er3 Nel a on Bros had taken the whole of the Ocean Beach output was mentioned, aud no objection was taken to that course being pursued. As he had Baid, however, as a matter of law the fact that the output contract was a breach of contracb in the first instance, and the plaintiffs became aware of bhe Ocean Beach contracb and did nob obj-cb to it, whs not in law an answer to a claim by the plainbiff for damages accruing from such a breach of contract. There was this, however, to be said, that if the plaintiffs were aware that bhe terms of the contract were not being complied with, and if they did not complain, ft
might be matter for consideration whether the damage which they now complained of really did result from the suggested breach of contract. Of course it was obvious that they were aware from the middle of 1892 at anyi-ateof llie existence of the output contract, and they never remonstr&ted with Messrs Nele on or complained that Messrs Nelson wore injuring them by tho fact of carrying out the output contract. In fact it was rather the contrary, because they complained, not that Messrs Nelson were carrying out the output contract in respect to Mr Ward, but that Messrs Nelson were giving Mr Ward concessions which he oughb nob to havegob. They therefore seemed to have acted ou the assumption that so far as the output contract was concerned, if it was a breach of contract, Messrs Nelson were nob doiDg thtm any harm. However, what the jury had to consider in estimating damages was not that circumstance only, but they had to take the whole circumstances into confederation. As to the concessions to Mr Ward, hh T6T 6 Honor said that the circumstance that the concessions were made, if it had tho effect of placing Mr Ward ia a better position, would be an element in considering the damage that the plaintiffs suffered. It might, therefore, be material to consider whether Mr Ward reaUy had an advantage which the plaintiffs had not. What object Mr Nelson had in making the concessions it teamed immaterial to ' inquire. The only thing ib was material to inquire was whether the concessions pKcad the plaintiffs at a great disadvantage. Going on to speak of the arrangemsnts entered into on May 1, 1893. by which Nelson Bros, were on Ist January 1894 to purchase the O^ean Beach Freezing Works for £32,000, his Honor s*id it was difficult to say how that was not technically a breach of the co itracfc with the Southland C unpaiiy. It was for the jury to say how far damages nr'ght be attributable to this contract having been entered into. Of course the effect of tho contract was to plaoe Mr Ward in a satisfactory fiuancial position, at sny rate so far as the works were concerned, becausa Mr Ward was very much in tbo same position as if there had b^eu a bill of eight months given to him for £16,000. Mr B^ill asktd if it was lo be assumed that Mr Waid was in an unsatisfactory pesit'ou ? His Honor went on to say that he should direct the jury to take into consideration the fact that the acoommodation Mr Ward got was to place him in funds. He did this simply because if any damages could be suggested by the breach of contract it was by rowon of that. His own opinion rather was that, although this agrecratnb was a breach of the contracb, yet it waiti t imply because of that part of the contract ' which related to the erection of buildings and freezing works during the prohibited period as a going concern. However, for the purpose of direction he should interpret the breach in the same way as Sir Robert Stout suggested — that the effect of it was to strtngtien Mr Ward's position. His Honor then submitted the followiog issues to the jury :—(1): — (1) Wh%t damages are the plaintiffs entitled to recover in respect to the breach of contract by the defendants in entering into the output arrangement with Mr Ward? (2) What damages are the pliiutiffa entitled to recover in re-specb to the agreement of May 1893 to purchase the Ocean Beach Frtcziug Works ? The jury retired at 8.33 and returned to court at 10.7 with a verdict of £3500 on each issue. Cjots were fixed as per scale, with allowai cc for second counsel and extra days' disbursements, and witnesses' expanses ; interlocutory costs to be Eettled in Chambew. Execution to bo stayed until tho termination of the Court of Appeal. •By consent Mr Bell moved for a nonsuit and new trial on the grounds of misdirection and non-direction, and to reduce damage^. It was arranged by consent that the motion should bo removed to the Court of Appeal.
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https://paperspast.natlib.govt.nz/newspapers/OW18951128.2.69
Bibliographic details
Otago Witness, Issue 2179, 28 November 1895, Page 17
Word Count
71,560A FROZEN MEAT CASE. Otago Witness, Issue 2179, 28 November 1895, Page 17
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