FRUITERERS’ PRACTICE

Taranaki Daily News, 2 May 1935, Page 12

FRUITERERS’ PRACTICE

MATTER RAISED IN COURT CLAIMS AGAINST ASIATICS. QUESTION OF PARTNERSHIPS. A case of considerable interest to fruiterers, in the course of which counsel explained that the reason for the ventilation of the matter in court was to make public allegedly nefarious business and financial practices by certain Asiatic greengrocers, concluded the first day’s hearing before Mr. W. H. Woodward at the New Plymouth Magistrate’s Court yesterday. Joe Bros and Co., New Plymouth (Mr. W. Middleton) were sued by five complainants, represented by Mr. R. J. Brokenshire, as follows: G. 0. McCutcheon and Co. Ltd., Hastings, £2B 12s; Turners’ Supply Co. Ltd., Auckland, 10s 9d; James Parnell, nurseryman, Wanganui, £l9 9s 9d; Bhana Unka, New Plymouth, £6 12s 3d; Leslie Bolland Webster, New Plymouth, £7 7s 6d. The cases were taken together, and the hearing was adjourned after a full day’s session till to-day.

The main point at issue was one of partnership, Mr. Brokenshire alleging that the two defendants, Joe Joy and Joe Wai, had manipulated partnerships with one Jimmy Shack so as to avoid liability for losses incurred. L. B. Webster, a plaintiff, in giving evidence admitted that the cases had been discussed at a meeting of fruiterers at which it was agreed a form of Government restriction on the movements of Asiastics was required. 1 Mr. Middleton, in making submissions for a non-suit, alleged that Jimmy Shack had a grudge against Joe Way, and that no partnership really existed. He agreed with Mr. Brokenshire that certain business practices injured the prestige’ of Asiatic tradesmen, and said his clients were as keen as plaintiffs to see such habits stopped. There were five separate actions against the same two defendants, which for the sake of convenience were being taken together, said Mr. Brokenshire, as a large part of the evidence applied generally. The history of the case was that at least two Chinese, Joe Joy and Joe Chaam, had commenced business as fruiterers and greengrocers at New Plymouth under the name of Joe Bros and Co. The name was shortened to Joe Bros on numerous occasions, although it was doubtful if there were any import in that. The men were cousins. The other defendant, Joe Wai, might have been a partner, but there was no knowledge of that. Joe Joy and Joe Chaam bought a business at Stratford and took a lease, commencing business there under the same name of Joe Bros. Tire transactions of this business were those concerned in the case. About June, 1932, Joe Chaam decided to go away from New Zealand and it was necessary to get someone else to take charge of the Stratford shop, which Joe Chaam had managed while Joe Joy controlled the New Plymouth business. Yuen Dak Shack, also known as Shack Toe, or Jimmy Shack, was imported from Joe Kwong Lee’s at Palmerston North and took charge at Stratford. PARTNERSHIP SUGGESTED. After he had been there a fortnight a proposal was made to him,, that he, Joe Joy, and another Chinese should enter into equal partnerships in the Stratford and New Plymouth businesses. At that time Joe Wai was still manager of Joe Kwong Lee’s Palmerston North business and a business at Wellington, being a brother of Joe Chaam and a cousin of Joe Joy.

The three entered into an agreement, one feature of it being that Jimmy Shack had no capital and had no means but was invited to join on the understanding that his share of the profits would be applied to his contribution to capital. Shack was also to receive, .no doubt as first charge on the profits, £3 a week and keep. Joe Joy was to receive the same for managing the New Plymouth business. , .

In June, 1933, Shack retired from the New Plymouth business and Joe Joy from the Stratford establishment, Joe Wai remainiqig in both. The accounts were all made up in June and a written contract followed in September. In March, 1934, the business at Stratford being carried on by Shack, which had never been prosperous, began to fade and a meeting was held of the partners in the Stratford business, Jimmy Shack and Joe Wai. Joe Joy was also present, but it was not known whether he thought his previous connection with the business rendered him liable to the debts incurred during that time. There had been £4OO odd owing when Jimmy Shack took over. The three went through the books and a balance in a memorandum book prepared by Joe Wai was handed to Jimmy Shack. It showed that after allowing for wages due to Shack there would be a considerable loss for all parties. Shack convinced his partners he could not carry on and it was suggested he go bankrupt and be liable for all debts to exonerate the other partners. The reason given was to protect the New Plymouth business. Shack refused, saying that the debts must be paid or all go bankrupt. Joe Joy and Joy Wai agreed to purchase the business from Shack. JIMMY SHACK’S CIRCULAR. To put himself right Shack circularised fne Stratford creditors that he had been dismissed from the Stratford business, instructing them to apply to Joe Bros, New Plymouth, for the payment of debts. Shack remained in the Stratford shop, obtaining goods from the New Plymouth fehop, till Joe Sun relieved him. Shack was instructed to hand to Joe Sun the cash and particulars of debts; he did that and left Stratford in April, 1934. Joe Sun told a creditor subsequently that the money had to be accounted for to Joe Joy at New Plymouth. It was denied that Joe Sun had been engaged by Shack, and when the business closed down 10 days later accounts were sent to Joe Joy or Joe Wai. Applications for payments of debts were met by a denial of liability and the statement that Shack was trading on his own account.

The five claims were for debts incurred between August, 1933, and February, 1934, and were all on the same footing, said Mr. Brokenshire. Another significant feature was that after Shack left Stratford the landlords distrained on the goods at the Stratford shop for arrears of rent. The goods were sold and the overplus of £59 13s had been received and retained by the solicitors for Joe Bros and Co. No attempt had been made to pay tire money to the official assignee or to account to Shack. The lease of the Stratford shop had remained in the name of Joe Joy and Joe Chaam, no transfer having been shown. Joe Joy, admittedly an original partner in the business had made no attempt to advise creditors, the public or customers that he had retired from the partnership and the sign had remained the same. Joe Wai was the principal partner throughout. “The clients feel convinced,” said Mr. Brokenshire, “that this is a deep-laid scheme by Joe Joy and Joe Wai, from which, if it succeeded, they would reap the profits, while if it failed they would escape liability by having Shack as a dummy.” Notwithstanding the separation of the New Plymouth and Stratford businesses they had still worked to-

gather with goods, and the New Plymouth business had paid the rent of the Stratford shop more than once. ■ . “The creditors are doing a. service to the public by prosecuting this matter,” said Mr. Brokenshire in conclusion, “particularly as the expenses are large and the amount receivable not large. The two defendants were involved in a practice that is quite frequent and should be stopped.” . . Evidence taken from Jimmie Kwing and Andrew Chong at Stratford, G. O. McCutcheon at Hastings and Rogers at Auckland was put in by Mr. Brokenshire. Oral evidence was given by James Parnell, nurseryman, Wanganui, and L. B. Webster, auctioneer, New Plymouth. Webster denied that he was responsible for the bringing of the actions. He also denied that the idea was part of a move to influence the Government to restrict the movement of Asiatics. He admitted the cases had been discussed by the. Fruiterers’ Association, of which he was a member. He thought some better method of trading should be adopted by Chinese. , , Bhana Unka, fruiterer, Stratford, gave evidence of the conduct of the Stratford shop, and R. Greiner, law clerk, New Plymouth, .gave evidence concerning his firm’s understanding of the lease. That concluded the case for the plaintiffs.

BOOK WRITTEN IN CHINESE. Andrew Chong, company manager and court interpreter, Auckland, called oy Mr. Middleton, gave evidence concerning the memorandum book in Chinese characters, which, he said, might have been a balance-sheet audited by a disinterested party or a record kept by an interested Party. . , , , , There was no case for either defendant to answer, submitted Mr. Middleton. Joe Joy and Joe Chaam took a lease which was never assigned to anyone, but it was apparent that the rent notices were sent to Shack and the rent was paid by him personally. The other two remained liable under the lease; Joe Joy had recognised his liability, and- under that recognition the surplus money had been given him. Shack owed Joy money and the overplus from the sale had been held in part payment. Apparently Shack to clear himself, in March, 1934, had written to all creditors referring them to New Plymouth. All the evidence went to show that no change took place in the control from the time the present claims began to accrue in August, 1933, and it was plaiii the business had been carried on by Jimmy Shack, It was common practice among Chinese and Hindus to operate businesses under trade name and sign cheques in their own names. Bhana Unka had said he was trading as David and Company but the business was his own. There could be no btetter parallel than that and Jimmy Shack trading as Joe Bros. Levin and . Company had proceeded against Joe Bros, at Hawera, being nonsuited in a written judgment. At that action Jimmy Shack had insisted he was an employee and had. not mentioned Joe Wai. Later Jimmy Shack proceeded against Joe Wai at Stratford for wages, Joe .Wai being represented as an employer and there being no mention of Joe Joy. There had been notice to defend and the action was discontinued. A further action against Joe Bros, by an Auckland firm was discontinued and then Jimmy Shack went bankrupt. In a carefully prepared statement produced to the- official assignee Wai was mentioned for the first time as a partner. An Auckland firm, Somerville and Wilson, proceeded against Joe Wai. The evidence in that case had been much the same as in the present case. Mr. Wyvern Wilson, S.M., had then described Shack as an “unsavoury gentleman and an unsatisfactory witness,” and had nonsuited plaintiffs without calling upon Joe Wai to defend.

COULD NOT BE FOUND. “It is most unfortunate,” said Mr. Middleton, “that Jimmy Shack has not been produed in court for Your Worship to see. The written evidence gives no indication of the man’s character.” Mr. Brokenshire: That is unfair, sir. Mr. Middleton knows as well as I do that Jimmy Shack could not be found, either by me or by Mr. Middleton. Mr. Middleton suggested that the sixth claim-brought and withdrawn had been stopped because the plaintiff admittedknowing Jimmy Shack was the proprietor. The cases were brought, he considered, not bcause the plaintiffs expected to get money from Joe Joy or Joe Wai but because of what the Fruiterers’ Association wished. Mr. Woodward: Doubtless the plaintiffs would like to be paid. Mr: Middleton said his clients were being made the scapegoats for what had become an unfortunate practice among Asiatics. It was to protect themselves from such fruiterers as traded under one name in one town and finder another in another town that the warehousemen had banded together and brought the case. His clients were concerned that the trading basis of Asiatics should be put on a proper footing. They stood to lose more than the plaintiffs from any unscrupulous methods of their fraternity because their business was built upon the necessity of terms of credit from warehousemen.

Chinese had in- the past built up a reputation for honest trading, and Joe Joy and Joe Wai were anxious that that' reputation should not be damaged. If the purpose of the action was to secure legislation it would be served by the publicity given to the difficulties raised in this particular case. Anything done to improve the troubles complained of would be welcomed by his clients.

WAS THERE PARTNERSHIP? None of the goods claimed for had been ordered at Stratford by anyone but Shack, and if the plaintiffs were to succeed they must establish that a partnership existed at the time the goods were ordered. Mr. Middleton submitted that there was no evidence of a partnership at a time material to the action. In the memorandum book produced there was no mention of the Stratford business. He submitted that oral evidence could not be. called to say what the book had been written about.

Mr. Woodward: That rule applies to a written contract. Mr. Middleton: If this is not a written contract it is nothing. The names in the book might refer to one of a number of people of the same name. No evidence on the book had been allowed at Auckland.

So far as “holding out” was concerned, plaintiffs had admitted they did not know of Joe Wai till after accounts had been sent to Shack, and he submitted that there could be no charge of “holding out” against Wai. Plaintiffs had to produce definite evidence of partnership. The only two persons mentioned in the lease were Joe Chaam and Joe Joy, and he suggested no evidence of partnership had been addued. Shack, said Mr. Middleton, was trying to satisfy a grudge against Joe Wai, whom he owed £lll for the purchase of the business in 1932, and it was evident that there had been a power behind Shack, whose evidence seemed to have been prepared in the scheme of things to trap the two defendants. Shack said Joe Joy was a total stranger, which was quite true, but he thought it was asking too much of the court to believe that Joe Joy would take a total stranger into partnership without asking for any cash. Mr. Middleton stated that Joe Chaam was still a member of the firm of Joe Bros, and was on his way back from China.

Mr. Woodward pointed out that he had not had the opportunity of reading through the evidence, which would be necessary if Mr. Middleton were confining himself to a plea for a non-suit. Accordingly he adjourned the case.