COMPANY’S POWERS

Southland Times, Issue 18972, 20 June 1923, Page 6

COMPANY’S POWERS

ALLEGED RESTRAINT OF TRADE. (Per United Press Association). AUCKLAND, June 19. A matter of interest to practically all cooperative dairy companies was raised at the Supreme Court before the Chief Justice in an appeal against the decision by Mr Henrick, S.M., at Opotiki. The point at issue was whether a certain clause in the Articles of the Association was in restraint of trade, and not in the interests of the community. The appellant was Stephen Shalfron, merchant of Opotiki, and the respondent, the Chededon Valley Co-op. Dairy Company, Opotiki. Appellant is a shareholder in the company, the regulations of which require every shareholder whose shares are. not fully paid up to send all his milk to the company’s factory. The regulations also provide that any shareholder who fails to comply with this regulation shall pay the company £1 a cow for each season, or part of the season. It was contended by Mr McVeagh, for appellant, that the regulations were invalid because they were in restraint of trade, and because the sum fixed was a penalty and not a genuine estimate of the loss which the company would suffer by milk being sent elsewhere. In reply to counsel, His Honour said that it was hardly fair to say that he would have to send his milk from Invercargill for instance. That might be due tn a slip in the Article. Mr McVeagh: Then the Articles will have to be amended. He added that the contract was one which law* said must not be entered into, or having been entered into, the contracting party was bound not to fulfil. For respondent, Mr Hogben contended that the regulation was a reasonable one and necessary for the company’s protection and a proper contract between company and shareholders. He argued that the contract was in no way detrimental to the public interests. Decision was reserved