KAIHU VALLEY RAILWAY.

Auckland Star, Volume XXI, Issue 138, 12 June 1891, Page 4

KAIHU VALLEY RAILWAY.

AN UNFORTUNATE INVESTMENT.

A MEETIXG of shareholders in the Kaihu Valley Railway Company (in liquidation) was hsld to-day in theoflicooftheliquidators, Messrs E. Waymoufch and W. H. Churton. Only four shareholders were present, and Mv IT. Brett was voted co the chair. Mr Cliurton read the following report : — " Your liquidators have to report that on the IStli October, 1890, they were appointed liquidators of the Company in the place of the late K. C. Burstow, deceased ; that they immediately entered on the duties of their oliice and called upon tho several contributorics of tho Company to pay them the calls duo on their respective share**. Shareholders not responding, the liquidators were compelled to apply to the Supremo Court for an order for payment. This order was granted on tho - 25rd of December. 1890. Tiio following shareholders have paid their contributions in full. viz. : Henry Brett, Robert Blair, and Mrb Annie Dargaville, whilst the following, viz. : J. M. Dartra vi!lc, and .J. H. Koep, have obtained panction by order of the Supreme Court to compromise the amount of their indebtedness as set forth in the statement of account?. The call made upon the remaining contributories, viz., E. Mitchelson, executors of R. G. Barstow, and executors of Joseph Craig, have still to be collected, and also the balance due by the executors of the late FJ. Chamberlain. Your liquidators found that the whole of the uncalled capital of the Company was duly mortgnged by the company to t,!ie Colonial Bank of New Zealand, and that its claim as such mortgagee amounted to £8,771 19s. The amount received in respect of such uncalledcapiial will be insufiicicntto pay the amount due to such Bank. Your liquidators found that the available unsecured assets of the Company were of very small value, and have realised and collected the same. The Government of New Zealand hold a mortgage over tho railway line and works of the Company, and took posse3«io:> thereof on tho 29bh of May, IS9O, and as fuel) mortgagee they are proceeding to sell on tho 25th itist. Your liquidators! took legal advice as to the validity of such mortgage and their position in respect of the same, and acting thereunder called upon the Government to render them accounts of the working of the line whilo in their possession, which accounts have riot yet been rendered. All effort? by your liquidators to sell the railway have been futile, and your liquidators regret* to have to report that they aro afraid that thu line and works, which cost the Company upwards of £80,000. will not realise the amount) due to the Government, v iz, £47,000, and urrear* of interest." MrChui'ton explainod thai the meeting was callod in accordance with tho Act, which stated that the liquidators should call a meeting of shareholders ofc the end of 12 months, provided the Company was not wound up. He asked whether the meeting wished to have a reporter present. Mr Blair said there was no objection, as a general meeting of shareholders had been called, and it was agreed to allow the press ! to remain. Mr Churton explained that this was simply an interim report. Mrs Chamberlain asked, "Did Mr Dargaville pay all the calls due by him?" The Chairman said that to be in order the adoption of the report ought to be moved. Mr Blair then moved and Mr Waymouth seconded the adoption of the report. The Chairman said that it was unfortunate that copies of the report were not sent to the shareholders for consideration. He muat say that he took exception to the paragraph stating that the liquidators had called upon shareholders to pay, and it not being responded to had been compelled to apply to the Supremo Court tor an order for payment. Personally, he could say thafc was not the case. He had not been called upon byanybody. Mr Churton : " Wβ called upon you by notice, and a lawyer's letter was sent to each person.' , Mrs Chamberlain: "Let everything be published ; there is too much done underhand. 1 don't say here, but in many other affairs." The Chairman said, "I think something ought to be published in connection with this Company with regard to tho way some people have been let off." Mrs Chamberlain : " Yes, this pinches me very much, and I don'b Bee why Mr Dargaville should be let off. It is very hard for me, because I cannot raise the money : I am nob able to do so." The Chairman said it was true thafc circulars were sent to the shareholders, and he had twice been to the office of the liquidators to pay, but each time failed in seeing them. Tho next he heard was an order tor paymeni from the Supreme Court. Mrs Chamberlain : " Lawyers like a few six and eightpences. I claim that I come under schedule No. 2. I cannot raise the money without forcing things into the market. I have paid £275 and I want time to pay the balance. I cannot borrow, as I am not allowed to do so." Mr Waymouth said as one of the liquidators he might tell them that according to the Act if any of the contributories of the Company could show that they were not in a position to pay their calls, they might submit a statement of accounts to the liquidators, who if they

thought proper could recommend that it be accepted, but they would have to obtain ati iorde-- of the Supremo Court exempting them, and without that order the liquicators were powerless. In the case of Mrs Chamborlain, for whom they iall had the deepest sympathy, it was known that the estate of tho late Hon. Mr Chamborlin was solvent. Land micht not now fetch as tr.uch as it was really worth, but enough could be obtained to satisfy the call ; of that he had no doubt. Tho only thing he cculd recommend was to make nn arrangement with tho Colonial Bank. Their own duty was simple, and also very plain. Mr Blair : " You have to squcezo for all The Chairman said: " I cannot see why Mrs Chamberlain should bo placed in this position when Wγ Dargai vilie with £2,840 calls ia allowed to 'escape payment with £287! It seems to me that it was the duty of the liquidators to force him through tho Court, When I received notice of the call, I asked tho liquidators ' Is there no possible way ol getting reductions ".' and the liquidators replied, ' No, everybody must; pay in full. , 1 said, 'That beinor the case my money is ready.' I must cay I feel very much aggrieved at the way other people have been allowed to escape." . Mr Churton : "Wβ did not make the application." The Chairman : " You have assisted them in every way." Mr Churton: " Mr Darjjaville applies to the Court, is examined on oath, and Ilia statement ia to the etlect that if matters are forced it will not return 2s ia the £. If the statement was wrong, well, then ho would be liable for perjury." The Chairman: "it was your duty to make him pay, or put him through tho Court." Mr Waymouth : But ho cut the ground from under our feeb by applying to the Supreme Court. It you, Mr Chairman, believe that Mr Dargaville has made a wrong oath, it is open to prosecute him. We can do nothing when he makes such a statement on oath. The Chairman : "It may be at that particular time he could nob get £2,0t)0 odd to pay down, but might possibly have done so had lie been allowed time ; at any rate it was the duty of the liquidators to have exhausted all legal means to recover the money. They appeared to be acting very differontly in Mrs ChamberAll she asks for is time, and yet she is qompelled to pay at once. Mrs Chamberlain : " Yes, on the 26th. Chairman : " Why should sho be treated that way while other shareholders have been dealt with so leniently '!" Mr Waymouth : " Mrs Chamberlain may also apply to the Supreme Court." Mrs Chamborlain : " 1 can raise the money by selling, but then 1 shall havo no income. If I sell now, how am Ito live ?" The Chairman : " I must say I am not satisfied with the way thinge have been conducted. I think the calls might have been got from some of the shareholders whoseliabilitifis have been compromised." Mr Churton : " But even it it had, that would not have lessened the amount to be paid by you." The Chairman : " Quite so ; but I am called upon to pay in full, while others who aro probably quiie as well able to pay are allowed to escape. I inovo as an amendment 'That in the opinion of this meeting the reductions made by the liquidators in the calls due by Mr Dargaville and other shareholders were iinwarrancabteand should be brought under the notice of the Government.'" Mr Churton said that the reductions were not made by tho liquidators. Mr Waymouth : " Wβ dare not fly in the face of an order of the Court." The Chairman : " I am informed it is different altogether." Mr Waymouth : " It is with the Colonial Bank, wo aro not in the matter." Mrs Chamberlain :" Mr Dargavillo come? out best. He has a railway made to his place. His wife has the money and a few shares, on which she pays calls. He has the lot of shares and docs not pay the calls, but is let off a large eum B of money. If I havo to pay, I like the others to pay also. Tney aro" friends of mine: but personal feelings must bo put on one side." The Chairman: " What was the total of Mr Keep's liability for calls?" Mr Churton : "£1,775." The Chairman : " What did he pay V Mr Churton : "£100." The Chairman : '• How was that arrange- ! cicDt made '" Mr Churton : " In the same way as the others, by application to the Supreme Court." Mr Waymouth said it was not fair to a young man starting business to make all these things public. Mr Keep applied , to the Supreme Court and crot an order to pay £100. lie (Mr Waymouth) would defy any liquidator to do more than they had done in this case. Mrs Chamberlain: "Keep's is a very hard case, but Mr Dargaville's is different." Mr Waymouth said that the liquidators would like to have allowed Mr 3 Chamberlain time. MrChurton: " We gave her three weeks' , notice." Mrs Chamberlain: "Ib cannot be procured." Mr Blair : "It's the Colonial Bank that is at the back of this." i The Chairman :"i am informed that the Court would do nothing unless the liquidai tors first moved in the matter." Mr Churton: "We don't move. Wo . examine these people and give them our opinion of these estates. The Judcre had . our affidavit after we had examined Mr , Dargaville, and also the affidavit from the Colonial Bank. Wβ have to get the consent of the creditors in these matters. If all paid in full, there ia not sufficient to pay , the Colonial Bank. Tho Government take , over the line, ana the outside creditors get , nothing." , After some further discussion the amend- . ment was carried, and the meeting ad- ', journed until, next Monday at 11 o'clock*, after passing a resolution to allow Mrs , Chamberlain twelve months i:: which to pay the balance of her call.