SALE OF MACHINES

Evening Post, Volume CIX, Issue 46, 24 February 1930, Page 17

SALE OF MACHINES

AGENT OR PURCHASERf

Judgment- has been, given by the Chief Justice (Sir Michael Myers) iv an action brought by the Gaunow Engineering Company, Ltd., of Manchester, England, against Frederick Richardson, of Wellington, engineer. The-Court was asked to determine the basis upon which the defendant should account to the plaintiff company for money received by him on the sale of certain stone-crushing machines of tho plaintiff's manufacture which were received by the defendant in New Zealand. . " -

Mr. L. K. Wilson represented the plaintilf, and Mr. It. Hardie Boys appeared i'or the defendants . •

i'or'the plaintiff it was contended that the defendant was the agent of the plaintiff in New .Zealand, that without the knowledge of the plaintiff he had sold machines in New Zealand, at a price considerably in. excess of the invoiced price, plus charges up to landing in New Zealand, and that the, defendant had failed, to account to the plaintiff for this, increase in price. An order was sought that the defendant account for the increased price less any commission to which he was entitled. The plaintiff further claimed that a commission of 10 per cent, claimed' by the defendant on the sales of.the plaintiff's machines could not now be claimed by him, as he had disentitled himself by-taking a secret profit on the sale of the machines.

The defence, was that the defendant was not the. agent of the, plain tiff but a stockist .of the plaintiff's ,g6bds; that he was entitled to sell in New Zealand at a price fixed by himself without liability to account to the plain tiff, for, that price, and that he was liable only to pay to the plaintiff the invoiced price of the goods and charges less a rebate' of ;10 per, cent. The defendant contended 'i that 'until: "sale by him to New Zealand-purchasers lie held the, plaintiff's machines "on sale or return," and that immediately he had effected a sale in New Zealand he became the purchaser of the machines from the plaintiff and the vendor of the machines to his New Zealand purchasers. ~ . After, traversing .the facts, his Honour saidi it was to be observed from the agreement that what the plaintiff purported to grant was the sole selling'rights of ,the machines. The expression "sole selling rights" was to his mind a ; neutral expression and might be referable either to an agency or to an understanding or arrarigeuient, merely that the plaintiff would not sell any of its machines to any person in New Zealand other tlian the defendant, so that he and no,-'other person /would be in 'a position to acquire from the plaintiff, and sell, the machines. His Honour point'ed;,out that the. agreement provided for commission to be allowed by way of deduction _ from the actual invoice values less .incidental charges. , The term "commission" was no doubt the term used primarily, to. denote the remuneration of an .agent, but he apprehended that there was no magic in,' the mere use of the term if it appeared from a consideration of the-whole document" that the word, was really misused, and that with due regard to its context; the real.meaning was discount or rebate, either of which seemed to be primarily the appropriate expression to be used in the case of, an allowance made not to an agent but to; a purchaser-. -The agreed method of payment as indicating the relations between tlfe'parties. was also, referred to by his Honour, who held that the relationship was that of vendor and purchaser, not principal and agent. i The Court 'declined" to distinguish in any way between, various sales or groups of sales, but held that'as far as the actual machines were concerned all were bought arid sold under the .'same arrangement with the plaintiff, and that the defendant jras entitled to'a rebate of 10 per cent, and was not liable to account lor the increased sale price. /-'• '•' . .!, la connection with, Eflarc parts, his Honout found that the arrangement between the parties was that: the defendant; was entitled to a deduction of,-5 per nentyundcr a later agreement with the plaintiff, 'and directed that accounts should be taken ou that basis.' ...'■•'.■ ; The defendant having substantially succeeded, was awarded.,,costs,, the amount of costs to be determined after accounts were taken.