BUYING-IN FRUIT

Taranaki Daily News, 19 February 1931, Page 7

BUYING-IN FRUIT

JUDGE’S CONDEMNATION

“MOST IMPROPER PRACTICE”

QUESTION OF ITS HONESTY

AUCTIONEERS IN COURT

FALSE ACCOUNTS ALLEGED

By Telegraph.—Press Association. Wellington, Last Night. The system of buying in fruit for sale in country districts which forms the crux of the prosecution of Laery and Co. was further discussed in the Supreme Court to-day when several passages occurred between the Chief Justice and Mr. Harold Johnston, K.C. The firm is charged on five counts with failing to disclose pecuniary interest in a contract concerning the sale of bananas on behalf of the Department. of External Affairs and on one count with rendering false account sales. “You certainly have not persuaded me and nothing you. can say to me will persuade me. that an account sale such as this is not a false or untrue document,” said his Honour during the course of Mr. Johnston’s argument. The admissibility of evidence that the system of buying in was a custom among auctioneers was argued yesterday. “If I hold that the practice is an honest and reasonable one and you prove the custom, you will be entitled to succeed,” said his Honour. “If I hold that the alleged practice is not reasonable or honest, then it cannou operate as a defence, and the whole question will be this —subject to any consideration of the Statute; What was the mandate to Laery . and Co., Ltd., on the sale of these things? and .whether the firm has returned the price it 11 o q TPPPI Vp/l-* 5 Mr. Johnston: It is hard to fight against presumptive condemnation. His Honour: I am not making any condemnation. Mr. Johnston: Must I not prove the custom first? His Honour: I have no hesitation in saying that if the practice is what I understand from documents in court, it may be that you will have great difficulty in satisfying me the custom is one you can adopt ... Do you submit that a practice which has been allowed to arise through, perhaps —I do not say bo definitely in this case at present—a combination among certain mercantile men or traders in a particular trade,, when the practice is contrary to all principles of law and equity, is to be regarded as reasonable and honest? Do you go that far ? Mr. Johnston: Yes, I go. that far. His Honour; Well, I hope that the day will never come when the court will accept such a proposition. The evidence for the prosecution concluded, Mr. Johnston submitted that there was no case to go to the jury. There had been no contract with a third party for the sale of the bananas, and any. pecuniary interest was outside such a contract. HEARING TO CONTINUE. To-day his Honour said he was not unimpressed by Mr, Johnston s arguments, but he was satisfied the course for him to adopt was to allow the hearing of the charge to continue. Mr, Stevenson, appearing with Mr.' Johnston for the defence, outlined defendant’s case, saying that the practice of buying in had been in operation for upwards of 40 years. Any loss or profit was borne by the company. Dealingwith the charge under section 7, counsel said the account eales were the ordinary account sales which had been sent out over a period of years in accordance with the firm’s custom. It was a custom well-known to growers and others- and there was no intention to deceive.

Alfred Alexander Phelps, a director of the company, described the practice of buying in. Th? country manager attended sales and bought the «fruit he might require. Sometimes he arranged a purchase. The lines bought were charged at the highest ' auction price. His Honour: It is one of the most improper and irregular things done. It is a practice which is contrary to law, to equity —contrary to every principle of commercial dealings, in fact. I want to make it plain that these observations do not affect what I consider to be the real question in this case; they do affect the setting up of this most reprehensible and obnoxious custom.” Turning to witness, his Honour asked: “Do you say even now that you cannot see the impropriety of such a practice?” Witness: I do not see that we have defrauded the Government of anything. Hi.s Honour: I did not ask you that. Witness: It has been helpful i' l the business; it was absolutely necessary to follow such a practice.” Further evidence as to the openness of the practice and its general observance among auctioneers was given and the hearing was adjourned until the morning.