COURT OF APPEAL.

Waikato Times, Volume 107, Issue 17981, 28 March 1930, Page 7

COURT OF APPEAL.

AN IMPORTANT CASE. PAYMENT OF BONUSES. DAIRY COMPANY AND SUPPLIERS. (By Telegraph.—Press Association.) WELLINGTON, Friday. A ease of considerable interest lo lhe pastoral community came before •the Court of • Appeal, consisting of Justices Myers, Herdman, Blair, Smith and Kennedy, to-day, in Lite, appeal of the EM,ham Co-operative Dairy Factory Company against William Johnston, of Xgaerc, farmer. The appellant company‘was incorporated in 1892 with a clause in, its articles providing that, subject to dividends from time to time declared, the whole of the nett, profits of the company were to lie paid to suppliers, provided each supplier held one share for every three hundred gallons of milk or "lOSlb- of butlerfa-t supplied during one year. Respondent became a shareholder in 1911, acquiring 76 shares. In 1921 the appellant company altered its articles, providing that suppliers should take one share for every 150 gallons of milk or sGlb. of butterfat supplied. In 1917 the articles were again altered, including lhe following: “By Article 2 a bona fide member shall mean a member who holds the number of shares required by Article 8 hereof within the time required and who supplies the company with all the milk he receives from the particular herd of cows which he has l'or the purpose of supplying milk, save such reasonable quantity as he may require for his own use during the milking season.’ Article 55 was altered to provide -that all milk or bultcrfat supplied by a non-bona fide member should be deemed to be purchased by the Company at. the price paid by the company to members, and such non-bona fide members should not be entitled to any further payments which the company might make to bona fide members. Plaintiff supplied the whole of his milk lo the company to the end of the 1923-24 season. In the following season he supplied the whole of his milk to the company till November i. From then dill February, .1925, he supplied only half the milk Lo the company. During this period he was informed by officials of the company that unless he supplied the whole of his milk be would not -be entitled under the articles Lo a share in I lie bonuses. From February 28. 1925, respondent ceased lo supply milk to the company. Respondent, in accordance with the articles, was treated as a non-bona fide member and was not paid the bonuses allowed to other suppliers. lie brought action against lhe company last year, claiming £lOl 16s 7d due lo him from tlie company as bonuses with respect lo butter and bulterfat supplied between September, 1924, and February 1925. Mr Justice Ostler Held tbal Article 55 which was regarded as an act of legislative authority by I lie company over its shareholders, amis ultra vires of lhe company, and, further, that the company had failed to prove a contract with respondent, in terms of Article 55. He Ihcrcloie gave judgment for respondent for lhe sum claimed, with costs. The appeal is now brought from this decision.