Before 1942, the respondent Co. was approached by the Health Department with a request that it undertakes the treatment and supply of pasteurised milk to the public schools, and it was informed that other dairy companies had declined the proposal. The company complied with the request, after overcoming the difficulties of finance. The scheme was put into operation. In 1942 the respondent company put up a treatment plant and expanded its business. This expansion resulted in an annual turnover in the company's milk department going upto about £ 90,000 as against £43,000 in its butter department. In March, I 950, the Kia Ora company, by letter, expressed its desire that the appellant Board (which had been substituted by regulation for the Executive Commission) should examine the question of crean1 and milk supplies in the Gisborne and surrounding districts. This letter was, in substance, an application to the Board to review the whole question of zoning and to require the respondent company to cease the manufacture of butter. Moreover the letter set out the circumstances in a manner prejudicial to the respondent company. After various meetings and negotiations between the appellant Board, companies concerned, and interested parties, at..none of which were the contents of the Kia .Ora company's letter to the Board disclosed to the respondent company, no agreement was reached. The result of discussions with the Kia Ora company and detailed replies to complaints were given to the Board by the respondent company, and its letter ended with a statement to the effect that it would appreciate the privilege of appearing before the full Board with the object of stating its case more fully or of answering any questions. The Board ignored this specific request. At a full meeting of the Board held on. May 31, 1950, the Board decided that only one butter factory should operate in the Gisborne district. ·On August 3, the Board by resolution, decided to give notice of its intention of issuing a zonal order to operate as from October l, 1950 assigning to the Kia Ora company the cream collection area over which the two companies then operated. On August 29, the respondent com-· pany wrote to the Board protecting against its proposal and asking for recession of the Board's resolution and for an opportunity of being beard. On September 2, 1950, the appellant Board in exercise of the pqwer conferred upon it by Regulation 16 of the Dairy Factory Supply Regulations, 193 6 and in terms of its resolution of August 3, 1950, made Zoning Order No. 120 which was the subject of the proceedings before the Supreme Court of New Zealand. That order was to come into force on October 1, 1950. · Its effect was to assign exclusively to "the Kia Ora Co. the area defined in Zoning Order (No. 30) of 1937 as that. in which the two companies could joi;ntly collect cream produced in supplying dairies situated in that area, artd to prohibit the res-
