COURT OF APPEAL

Hokitika Guardian, 11 October 1933, Page 3

COURT OF APPEAL

N.Z. DAIRY REGULATIONS

SUPPLIERS AND FACTORIES

(Per Prsss Association - Copyright.)

WELLINGTON, October 10

A case of considerable importance to the dairy farmers of the Dominion was before the Court of Appeal this afternoon in the action of John Charles Carroll, solicitor, and William James .Keeley, both of Te Ai‘oha, against the Attorney-General. The action arises out of certain provisions of “The Dairy Produce Regulations, 1933,”. which forbid the transfer of their supplies of milk- and butter to another factory if the suppliers did not receive a higher grading. The Crown contended that this had a bad effect on the general quality of the supply, and consequently of the butter and cheese produced. The plaintiffs, who jointly farm extensive properties near Te Arolna, complain that recently, dissension arose between the shareholders of the dairy factory to which they supply their cream and milk, and that, -as the result of "a .policy, initiated by .a bare majority of the directors, their position is being very prejudicially affected. They endeavoured to transfer their supply to a factory that is nearer their farms, but they were ultimately prevented from doing so by

the regulations

The plaintiffs applied to the Court by an originating summons to have • the regulations declared void, as being in excess of the powers that are conferred upon the Governor-in-Gouncil by the Dairy Industry Act, 1908. In view of the importance of the question, it was removed, for argument, into the Court of Appeal. The Solicitor-General, preliminary to the opening of" argument, stated that, irrespective of the decision of the Court of Appeal on the question involved in the ease, the Government proposed to pass legislation to cover the position. •Mr Justice Ostler: “That is .against you,- is- it not; Air Solicitor-General ? Would it not indicate that the Government thought the regulations ultra vires?”

Tiie Solicitor-General: “It is thought some of the provisions of the regulations might be better covered bv statute.” r . Air G. P. Findlay, opening the case for the appellant,- submitted that the regulations were a tyrannical invasion of: the rights of a considerable and an important class of the community;- and" thyt " they wen* not only unwarranted, but were an illegal restraint on the .rights of individuals. There was no provision, lie said, in the Act from which these regulations could be. assumed to have -the authority of ParlialPent. " ■ Mr Justice Ostlef: “The "latest announcement bf the Legislature on this subject-: appears to- be in' the-Act of 1924, which specifically prohibits dairy companies from tying suppliers to them, and says that the articles of association shall be void if they contain a provision to this effect. These regulations, however, endeavour to' do 1 what the Act of 1924 specifically prohibits.” ' The Chief Justice:; “Is there any thing in the Statute’ empowering the Government,., by Qrder-ih-Council, to limit the rights of trading between individuals?”

Counsel submitted that there was no such authority.

;Til© Chief Justice: “Then the regulations are clearly a serious restraint of trade.”

Counsel quoted authority in support of his contention that Jffiere was no authority, , either for the making of grading regulations, or for endeavouring to enforce them by tying dairy farmers to factories.

The Court adjourned until to-mor-l*o\y. - ■