ACT CHALLENGED.

Auckland Star, Volume LXVI, Issue 298, 17 December 1935, Page 9

ACT CHALLENGED.

COMPANY LAW POINT. PARLIAMENT'S ACTION. COURTS HOIiD VALID. The validity of certain legislation passed by Parliament last year relating to the operations of a group of companies operating in New Zealand was upheld in a reserved decision of Mr. Justice Callan delivered in the Supreme Court this morning. It was contended at the hearing of an action, which the Transport, Mutual and General Insurance Company, Ltd. (in liquidation), represented by Mr. Hubble), was the plaintiff and Cyril Ernie Richard Webber (Mr. Hampson), the defendant, that the Companies (Special Liquidation) Act of 1934-35 was not constitutional and that it was void, but his Honor held to the contrary.

The point was raised as a preliminary to an action in which the company, for which Mr. Hu.bble appeared for the Public Trustee, as liquidator, sued the defendant, an agent, of Dunedin, for failure to account for money allegedly due. The defendant denied that the plaintiff company was in liquidation and that the Public Trusted was liquidator, contending that the statute on which the plaintiff relied was unconstitutional, void and inoperative.

In giving a decision on this point his Honor said that by the Companies (Temporary Receivership) Act of November, 1934, the Public Trustee was appointed receiver and manager of certain companies listed in the schedule, of which the plaintiff company was one. The Companies (.Special Liquidation) Act passed in April, 1935, enacted that certain companies be wound up by the Court and that the Public Trustee should be, without further appointment than the Act, the liquidator of every such company.

The contention that this Act was inoperative was supported by the argument that the Colonial Laws Validity Act. 1805. preserved the right of a litigant in New Zealand to ask the Privy Council for leave to appeal and that the legislation passed by the New Zealand Parliament took away that right and was void. Further, it was contended that the legislation was void unless the Parliament of New Zealand by legislation adopted the Statute of Westminster, 1931. which removed the fetters imposed by the Colonial Laws Validity Act. The Companies (Special Liquidation) Act, 1934-35.it was contended, took away the right to appeal to the Privy Council against any order of the Dominion courts which refused to determine the receivership of the Public Trustee.

For the plaintiff company, continued the judgment, it was contended that it was within the competence of the Legislature to take an entire subject matter out of the sphere of the courts and that there had been no attempt in this case to take away the right of appeal from any decision of the court.

His Honor held that the submissions on behalf of the company completely answered the contention of the defendant that the statute was unconstitutional. A statute of the New Zealand Parliament was not unconstitutional unless it was repugnant to an Act of the Imperial Parliament. The statutes of the Imperial Parliament to which it was suggested that the New Zealand Act was repugnant were such that it was beyond the competence of the New Zealand Parliament to deprive a litigant of his right of appeal to the Privy Council. But the New Zealand Parliament did not purport to have attempted to have done that. What it had done was to make a law. the making of which had rendered a further continuance of certain legislation useless or impossible. To do that was within its competence.

His Honor, in conclusion, held that the Companies (Special Liquidation) Act was not unconstitutional or void and was operative.