MIDLAND RAILWAY ARBITRATION.

Press, Volume LII, Issue 8271, 23 November 1895, Page 8

MIDLAND RAILWAY ARBITRATION.

(Br Telegraph.)

[from our special correspondent.]

WELLINGTON, November 22.

The Arbitration Court in connection with the dispute between the Midland Railway Company and tha Government met uL the Legislative Council Chamber this morning, Sir Charles Lilisy and Sir Bruce Burnside constituting the Court. Messrs G. Hutchison (Wellington), Theo. Cooper (Auckland), and Jones (Greymouth) appeared as counsel for the Company, and Messrs Gaily (Wellingtou), Stringer (Christchurcb), and Dr. Findlay (Wellington), on behalf of the Government. Mr Gully intimated that Sir Robt. Stout would lead the case for the Crown. The Arbitrators said thac they desired that the Hon. E. Blake, Q.C., M.P., the Umpire selected, shoul 1 sit with them and hear the evidence. Tnis course was agreed to. The Court then called upon counsel for the Company to proceed with its case. Mr George Hutchison asked to be allowed till to-morrow to file particulars, as counsel were not aware that they would be called on to-day. This request was granted, and after Mr Gul'y had raised various points touching jurisdiction for subsequent cousideration, the Court adjourned until 10 a.m. on Monday, the Arbitrators indicating that they would sit from 10 a.m. till 5 p.m. on each day, with an interval for luncheon. It is expected that the proceedings will last three months. The circumstances out of which the present proceedings have arisen are as iollowa :— In 1384. the East and West Coast Middle Island and Nelson Railway and Railways Construction Act was passed, offering various advantages to induce the construction of the railways referred to. Crown lands, for a distance not exceeding fifteen miles on either side of the line were to be withdrawn from sale and surveyed into rectangular blocks, the constructors to be allowed the choice of alternate blocks. Should there not be sufficient suitable land adjoining the line, other land* specially affected by the construction of the railway were to be set apart for a similar purpose. The contractors were further to be entitled to any coal found on the land comprised in the endowments. Certain lands described in the schedules of the Westland and Nelson Goldfields Administration Act of 1877, and lands then ueed or about to be used for mining purposes were nob to be affected by the contract. The Act was passed in consequence of negotiations which had taken place between the Government and certain' gentlemen interested in the construction of the line, with whom a contract was entered into on the 17th of January, 1885, and subsequently ratified by Parliament, and on the 30th of April, 1886, the promoters transferied their contract to the Midland Railway Company, formed for the purpose of constructing the line. An amending Act wa3 passed authorising the Governor to enter into a new contract with the Company, as some of the provisions of the original contract were found to be unworkable; and on the 3rd of August, 1888, the new contract was executed. It provided that the works were to be completed within ten years from the 17th of January, 1885, the data of the original contract, or such further time as might be allowed under the provisions of the contract. In 1889 the Company applied to the Government for permission to change the route of the line from the western to the eastern side of Lake Brunner, and this was given Legislative effect to in 1890, when other modifications were also made. Disputes arose from time to time between the Company and the Government as to the interpretation of Certain sections of the contract and the work of the line generally. In 1892 the Company, without prejudice to its legal rights, petitioned for the appointment of a Committee to consider the position and report on its proposals for modification of the contract) and the numerous grievances which had developed. The Committee had before it voluminous correspondence between the Company and the Government s.i to these things, and as to extension of time for the completion of the work. It recommended certain modifications of the conditions. With these the Company was dissatisfied, and last year a Select Committee was appointed to oonsider the position and the correspondence subsequent to the finding of the previous Committee. The result was a recommendation that a new contract sheuld be entered into materially modifyiasj the original scheme and its scop?. A Bill embodying the recommendations was brought in by the Premier and thrown out by the House, and the Company forthwith served the Government with notice of its desire for arbitration, under section 47 of its contract, on the points at issue. Sir Charles Lilley, late Chief Justice of Queensland, and Sir Bruce Buxnside, late Chief Justice of Ceylon, were subsequently appointed arbitrators by the Government and Company respectively, and met in Wellington lasc April; but, as they were unable to agree upon an umpire, the time for the making of their award was enlarged to the 30th of January next, a period which will no doubt have to be further enlarged. Meantime the Government, acting on the advice of counsel, seized the line, under the provisions of the Railways Construction and Land Ace, 1881, on the 25th May last. The Company's claim will not be filed till to-morrow, but it is understood that it will mainly urge the delays to which ft is claimed that it was subjected by the Government's action since 1892, in respect of the applications for the extension of time, dealings in connection with the laud grants and various other matters, refusal of an extension of time, improper reservation of land grants for mining purposes, regulations made under section 34 of the contract injuriously affecting the Company, and alterations in the incidence of taxation detrimental to the Company's interests.