TRUSTS ACT CASE.

Dominion, Volume 5, Issue 1511, 6 August 1912, Page 6

TRUSTS ACT CASE.

FIRST PHASE OYER. PRODUCE PAPERS OR NOT? JUDGE SAYS "YES." CROWN OBTAINS DISCOVERY. "No doubt it is the duty of the Court to see that the liberty of tho subject is not invaded unless tho Legislature has mado its invasion clear, but, if it has, the Court must obey tho law." So ran a comment of the Chief Justice (Sir Robert Stout) in delivering judgment yesterday morning in a preliminary proceeding in connection with the first case, under the New Zealand Commercial Trusts Act, 1010. In i'ebruary last information was laid against the Colonial Sugar Helming Company, dunging tho company with having given preferential terms to a. number of merchants, and with 'having established a table of discounts under which only purchasers of unusually largo quantities of sugar could benefit. The Merchants' Association of Now Zealand was joined with the sugar company as defendant, for allegedly aiding and abetting a breach of the Act. As a test of tho individual position of members of the association, the Crown selected and prosecuted tho following Wellington wholesale firms:—Levin and Co., W. M. Baunatyne and Co., and Joseph Nathan and Co. Sir John i'indlay, K.C., with Mr. H. H. Ostler, appeared for the Crown; Mr. C. P. Skerrclt, J.C.C., with Mr. C. H. Treadwell and Mr. J. Tripe, appeared for the Merchants' Association; and Mr. M. Myers, with Mr. T. Neave, appeared for Levin and Co. What the Crown Wished to "Discover." A motion and summons were heard together in banco. The motion asked for the production of all documents discovered in an affidavit made by H. A. Gold on behalf of tho Merchants' Association of New Zealand, but not produced for inspection. These included: (1) Minutebook's of the Merchants' Association of New Zealand; (2)' copv of letter • from J. H. Cook and Co. to the Merchants' Association of New Zealand, dated January 3, Iflll; (3) all letters produced, parts of which had been covered up. Why Production Was- Refused, Tho grounds of refusal wore that the documents not produced or sealed up wero irrevelnnt to the causes of action ns they 1 related to other classes of goods than sugar. There was also a statement that the minute, book was a copy of tho minutes of the meetings of tho Wellington Merchants' Association and was not in the possession of the Merchants' Association'of* New Zealand; Sir Robert Stout's Decision. In firing'judgment, his Honour said:— "Three questions- seem to mo to require consideration:'(l) Must production be refused if the documents ore not admissible evidence? (2)' What is the effect of Section 15 of the Commercial Trusts Act, 1910. (3) Does Mr. Gold's affidavit prevent tho order being issued? ... "If Section 15 of the statute was not law, the fact that tho documents asked for mav not'bb 'evidence is not-sufficient to prevent its production being ordered. It is enough if it may throw light on tho matter in dispute. . . . That the admissibility of the evidence is not a test fi .i ordering production has been decided in many cases. If, however, the Court is bound by the strict rules of evidence, the mere fact that Mr. Gold said that ho had been advised that the parts sealed up were not relevant would not conclude the matter. The Court is not, however, bound by tho strict rules of evidence. How far tho Court may go in setting such rules aside is no doubt left to tho Judge at the trial, but in dealing with tlrs application, I am bound to assume that tho trial judge mav set the rules aside. The law says he can. How, then, is the Court at present ablo to say that theso documents will not be relevant? . . .If evidence that would at. present (according to the strict rules of law) be considered irrelevant, bo admitted at the trial, how can tho Court sav that any evidence if irrelevant? All that the Court should do is to see that a defendant is not asked to do anything that would bo oppressive. I see nothing oppressive in what is asked here. . .... "It was argued that this kind of legislation is unique and should be strictly construed. It can, however, hardly 1» called unique, for in our Bankruptcy Act, in th< Industrial Conciliation and Arbitrator Act, and in other Acts there arc analogous provisions. In our Customs law a men information filed against a merchant i; sufficient to condemn him unless ho cai prove his innocence. "The third ground urged was that if r person swears an affidavit, declining t< produce documents, his affidavit eannoi be contradicted. That is so in cortaii eases. There are certain grounds any o: which is a good answer to a claim foi production. These grounds are—-(1) Legal professional privilege; (i) that tho documents produced may criminate- the partj producing them; (3) that they may oxpost him to forfeiture; (i) that the producliov would bo contrary to public policy; (51 that tho documents are not in the soh possession of the parly making discovery (6) that they are in the possession of the party as agent only for another; (7) thai the documents relate solely to the case ol tlie party making discovery. Mr. Gold'* affidavit "does not set up any of these grounds except as to the minutes of th( Wellington Merchants' Association. Casecited by Mr. Treadwell do not apply. The) were cases setting up some of the ground.' I have mentioned, but; none of thorn won cases turning on relevancy. To judge ol . relevancy many things have iy l>o con sidered, and many things may bo referred to. "I am, therefore, of opinion that tht production asked in the motion must lx ordered, that is, (he following:—All documents discovered in the affidavit mode b.\ H. A. Gold on behalf of the Merchants Association of New Zealand, but not produced for inspection, including—(l) Minute book of association; (2) copy of leitei J. H. Cook and Co. to Merchants' Association of New Zealand, dated January 3 1911; (3) oil letters produced, parts ol which have l>oen covered up. "The letters Tefused by Mr. Gold on the ground of irrelevancy, must be produced. As to the minutes of the Wellington Merchants' Association, they do not seem to be in the possession of tho defendants, nor in Mr. Gold's possession, as ar. agent of the defendants, and they should not. be ordered to be produced." The question of costs was reserved. Mr. Treadwell mentioned that an appeal was probable.