SUGAR TRUST CASE.

Otago Witness, Issue 3099, 6 August 1913, Page 5

SUGAR TRUST CASE.

APPEAL COURT’S DECISION. CONVICTIONS UPHELD, WELLINGTON, July 30. Tho Court of Appeal its longdelayed judgment in the Sugar Trust cases this morning. Tho convictions recorded by tho Chief Justice "in tho Supreme Court were all affirmed and all the appeals were dismissed. The Colonial Sugar Company was convicted of an offence under section 3, sub-section (b) of the Act ,and was lined £250. The eamo company was also convicted under section 4, sub-section (c) of the Act. and for that offence fined £250. The Merchants’ Association, Messrs Levin and Co., Messrs Bannatyue and Co., and Messrs Nathan and Co., were each convicted under section 9 of the Act for aiding and abetting tho Sugar Company in the commission of tho two last-mentioned offences, and were each fined £SOO. All the appellants were convicted under section 5 of the Act for conspiring to create a monopoly, and were each fined £SOO. The judgment dealt first of all with tho charges against tho Colonial Sugar Company. In some inductory remarks the court said: “Tho Commercial Trusts Act is an entirely now departure in our legislature. A measure of a similar kind exists in Australia, but the provisions of our Act appear more stringent in several respects than 1 hose of the Australian Act. By section 3 of our Act certain acts are made offences. The Legislature has considered these acts to be an evil in themselves and the. court has not to consider whether any particular act which comes within the bounds of these sections is or is not contrary to the public interest.’’ The judgment chon went on to d.souse the charge against the Sugar 'Company under section 3,' sub-reel ion (d) of the Act. Tho court did not refer to the evidence in detail but contented itself with unions. It held that the circular of October 1, 1911, which fixed the terms and conditions of the sale of sugar by the company and which contained the company's third scale of discounts, was issued with the common object of tho Sugar Company, the Merchants’ Association. and tho combinations represented by Levin and Co. preventing Messrs Fairbairn. Wright, and Company from earning the maximum d’seount. The judgment said it was an offer which, though on its face an offer to all tho world, was an offer intended by tho company to be taken advantage of by only that firm that the company believed would be able to take advantage of it, and which, as tho event proved, was the only firm which could and did avail itself of the offer. The third ecale was. in fact, framed for the express purpose of enabling Levin and Co. to earn the maximum amount and prevent any other firm or combination from earning it, and that' purpose was effected.” The court held that the offer to the general public was illusory and that it was not really an offer to any person. It further hold that Levin and Co. was a member of a commercial trust and .{that the discount was given to Levin and Co. because it was a member of a commercial trust with the object of excluding foreign competition in sugar. The judgment went on to state that although that object might be harmless and even 'audahle, if it was attained by offering a discount to a commercial trust which would not have been offered if tho recipient had not been a member and which there would have been no object in offering if the firm had not been a member, the reason for offering it was because the firm was a member of a commercial trust. The court therefore affirmed the conviction of the company on this charge. The next charge dealt with was that under section 4, sub-sections (B) and (C). The Chief Justice convicted under subsection (C). The court held there was sufficient evidence to establish an offence under both subsections, but affirmed tho conviction under section (CJ. It came to the conclusion that if Messrs Fairbairn, Wright, and Co had boon willing to act in conformity with the determination of the trust that the discount to bo received by them as purchasers should not ho given away to sub-purchasers when the sugar was resold, Messrs Fairbairn, Wright, and Co. would have boon admitted to the combination, and would have obtained the maximum discount. It was because rhey did not so act that they wore placed in a relatively disadvantageous position with respect to Levin and Co. Tho court, therefore, thought the conviction on this clmrge should also bo affirmed. The next charge discussed was that under section 9 against the Merchants’ Association, Levin and Co.. Hannatyne and Co., and Joseph Nathan and Co., of aiding and abetting, counselling and procuring the Sugar Company to commit amongst other offences the offences already dealt with. The court held that the Merchants’ Association, who promoted the scheme, and Levin and Co., who received tho discount heal alxivc to have been illegally offered by tho company, were rightly convicted, and aLo that the other firms who wore members cl the association and also of the combination were also properly convicted. Lastly, dealing with the conspiracy ohi:ge under section 5. the court held that the effect of the monopoly was to keep up the price of sugar to tho sub-purchasers, which, had it not been for the monopoly, would bo reduced, thus making it impossible f r the public to get the benefit of such reduction. and that prima facie such a monopoly was of a nature to injure the public interest. The court also held, relying on the coal vend case, that if a monopoly’ control could only be obtained by breaches of the law, if was of such a nature as to be contrary to the public interest, but that apart from this consideration the monopoly established in the present case was contrary to the public interest. The court held that there was no justification for the contention that a monopoly of distribution by merchants was necessary to protect the sugar company from foreign competition, nor was there any reason to believe that a monopoly was necessary in order to secure tho efficient and economical distribution, of manufactured articles. The court made a distinction from tho decision in the coal vend case, recently affirmed by the Privy Council, on the grounds firstly, that tho agreement in that case was not of itself illegal, and secondly that it was not detrimental to the public interest. The court, therefore, confirmed the conviction under section 5. Costa wore allowed to the Crown in respect of each separate appeal—that is to say, against tho sugar company and against the other appellants in each case —on the highest scale. Conditional leave to appeal to the Privy Council was granted to all tho appellants.