COURT UPHOLDS CLAIM

Hokitika Guardian, 16 September 1931, Page 7

COURT UPHOLDS CLAIM

SECRET COMMISSION. A ROTORUA TRANSACTION. HAMILTON, September 14. Alleged acceptance of a secret commission of £250 in connection with the sale of the “Rotorua Chronicle” led to an action for recovery of this sum in the Supreme Court at Hamilton tc-day. Plaintiffs were, the lbotoruja-Bay o.j Plenty Publishing Co. Defendants were Thomas Lawson and Sydney James Saw-ell, land agents and brokers, Wellington. The statement of claim set out that Edwards Grace Gu y and Lionel George Ashton w-ere the promoters of the plaintiff company. In August, 1930, Guy engaged defendants to act as agents for the promoters and defendants agreed on payment of £SO to send Sawell to Rotorua, first to endeavour to obtain an option for purchase of the business from the Rotorua Chronicle and, if successful, to proceed in the flotation of a company for the purpose of completing the purchase. Brokerage payable to defendants on the flotation was to be at th e rate of 5 per cent., the fee of £SO to be offset on the total brokerage. An option was secured in favour of Ashton, as one of the promoters, to purchase tile company’s business at £IO,OOO. Arrangements w-ere completed and in November and December, 1030, as agents for the promoters, disposed of sufficient shares to enable the company to be incorporated and proceed to allotment. Plaintiffs stated that on September 24, 1930, Saw-ell, acting as agent in the employ of plaintiffs, without the knowledge or consent of plaintiffs, obtained on behalf of his firm from Rotorua Chronicle Ltd., an undertaking in writing that in the event of the sale of the business Rotorua Chronicle, Ltd A would pay defendants £250 commission. Thfe money ultimately w-as paid to plaintiffs by the Chronicle Company. Plaintiffs contended that this commission was a secret one and immediately upon becoming aware of this they demanded from defendant payment ol the money. The Defence. The defence was that defendants were unaware that Ashton was one. ol the promoters. They believed the promoters were Guy and Dr. Duncan. They obtained an option in favour of Ashton, not as promoter, but as nominee or representative of Dr. Duncan. They admitted receipt of £250 commission from Rotorua Chronicle, Ltd., but said this was with the knowledge and consent of Guy and Duncan.

His Honor said there was no evidence to show that plaintiffs were aware that defendants were to receive commission from the vendor. He had no doubt about the matter. Sawed was agent of plaintiffs, paid to obtain an option with a view to the purchase o. this business. He thought the Couri would be justified in drawing th e inference that Sawell could -• have got the business for at least £250. less than was paid for it. His Honor held that Guy and Ashton were the two promoters, giving judgment for them for the .amount oi the commission. The plaintiff company and Dr. Duncan were dismissed from the action.