LAW REPORTS.

Dominion, Volume 7, Issue 1874, 7 October 1913, Page 5

LAW REPORTS.

' : « COURT OF APPEAL. OPERATIONS IN SAWMILLING. COMBINE MENTIONED. IS THERE RESTRAINT OF TRADE? Tho operations of a North. Island sawmilling combination were dealt with by counsel in tho Court of Appeal yesterday. Tho appellants wero George James Goldfinch, junior, and Simon Atliy, both of Ohakuno, carrying on business as sawmillers and timber merchants under the namo of Goldfinch and Co. Tho respondents were the Ilaugitikei Sawmillers' Co-operative Association, Ltd., tho registered office of which is at Taihape. '• • On the Bench wore His Honour the Chief Justice (Sir Robert Stout), His Honour Sir Joshua Williams, their Honours Mr. Justice Edwards, Mr. Justioe Cooper, and Mr. Justico Chapman. The Hon. H. D. Bell, K.C., with whom was Mr. A. W. Gould, of Ohakune, appeared as counsel for tho appellants. The respondents were represented by Messrs. C. P. Skarrett, K.C., and C. B. Morison, K.C., with whom was Mr. R. M. Watson. Cause of Aotlon. In tho original cause of action taken before Mr. Justico Sim in the Supremo Court, Goldfinch and Co. alleged that the association was established for purposes in restraint of trade, and c. ntrary to public policy, and that its functions and business consisted in' enforcing agreements to that effect betweon sawmillers. Goldfinch and Co. became shareholders in the association, and upon the association's Tofusal to allow them certain discounts upon timber sold at Hamilton, a difference in the matter of accounts arose. Goldfinch and Co. claimed to deduct tho discounts from amounts which they admitted wore due to the association; the association refused to allow the discounts. Tho association wrote to Goldfinch and Co.. in February, 1912, stating: "... pending tho settlement of your account in full, we are compelled to notify membors to stop all' further supplies of timber to you." Goldfinch and Co. decided, shortly afterwards, to retire from the association; and they alleged that in consequenoe of the action of the association in circularising millers with a request not to supply them, they hod suffered great loss and damage, and would surfer continued loss and damage in thoir trade and business, and in their trade reputation. Alternatively, they alleged that tho circular was issued by tho association wrongfully and' maliciously, wherefore they claimod £1000 damages. The Other Side. The association hold that it was entitled to issue the circular to its members for the protection of its business interests; denied that Goldfinch and Co. had boen occasioned loss or damago; and denied that the communication was sent wrongfully or nialiciously, but said that it was dispatched in the ordinary course of business to tho members of the association, and'was a reasonably necessary precaution in the business in- ' terests of the association. The association, further, counter-claimed £334 14s. Gd. as the amount of the account in dispute. • Matters at Issue. In the Supreme Court His Honour Mr. Justice Sim decided that the claim of Goldfinch and Co. should be struck out on the ground that no course of action was disclosed. The case was removed into tho Appeal Court, . and among-the questions this tribunal has to decide are: Is tho defendant company (referred to above as the association) a trade union? If so, is the registration of the company under the Companies Aot void? If so, is the defendant thereby disabled by law from enforcing its counterclaim? • Tho plaintiffs Saving sued the defendant company as a duly incoiyorat-ed company with limited, liability, can the plaintiffs, in answer to the counter-claim, plead that the registration is void? The Case Argued. In his address to tho Court, Mr. Bell said that the case was one of very great importance.-, Briefly, the facts were that the sawmillers entered into a combination to receive from the sawmillers all oi dors received by tho sawmillers and distribute those orders according to the capacity of tho mills. Tho association was> constituted the vendor and the recipient of the money. All profits mado by the association went to tho sawmillers pro rata, according to the quantity of timber supplied. Tlio association was a company limited by guarantee, not by shares, and it had no capital. "The importance of the case," ho continued, "is that the decision of His Honour-establishes that a debt-collect-ing agency can be created, which collect debts by tho coercion of preventing a man carrying out his business unless >he pays." ' . Mr. Skerrett said that the letter sent by the association to its members meant: "We could;not agree upon our terms of trading in the past. We must settle our points of difference before we trade furtho'r." Later in his address, he likened tho principle upon which the Timber Association was established and operated to that govorning co-operative dairy societies. Mr. Morison was addressing tho Court when an adjournment till 10.30 this morning was made.