MIDLAND RAILWAY ARBITRATION.

Press, Volume LII, Issue 9272, 25 November 1895, Page 6

MIDLAND RAILWAY ARBITRATION.

(PRESS ASSOCIATION TELEGRAM.)

WELLINGTON, November 23.

Counsel for the Crown will move on Monday to strike out tive counts in the Midland Company's claim on the ground that they do not disclose any legal claim. They are complaints as to the graduated taxation on the land ; delay in consenting to the deviation at .bake Brunner and the abolition of tho tunnel at Arthur's Pass; the delay in consenting to the extension of time ; the statements made by the Minister of Public Works before the Parliamentary Committee, and the hindrance to financial operations by reason of the above. As to the other counts, a motion will be made for more explicit particulars, on tho ground that the Crown has never had reasonable particulars of the claim under arbitration. Objection will also be made to the jurisdiction of the arbitrators on the following grounds:—(l) That the contract has been broken, the Company only having performed a quarter or the work ; (2) That the Company has expressly abandoned a large portion of the line, viz., between Stillwater and Foxhill; (3) that the Government having taken tho line under Statute authority, and the Statute expressly providing appeal to the Supreme Court, the Company arc therefore debarred from appealing to arbitration. It is not yet known whether the proceedings will be open to the Press. The statement of the case for the Crown begins by setting out the course of legislation and particulars of the contract with the Midland Company. Under this ten years were allowed for the completion of the line, whereas the term expired on January 17th, 1895, and the Company had then only built seventy-five miles out of some 235, and these were the most inexpensive portion, in fact, only about one-fifth of the whole. Further the Company had notified its intention to abandon the line from Reefton to Motueka about ninety-four miles. The respondent alleges that the true reason why the Company failed to carry out the contract was because it was unable or unwilling to provide the funds required. It is pointed out that modifications and [concessions were being made, one of which, the substitution of an incline at Arthur's Pass fer a tunnel, was estimated by the Company itself to save it £559,881. The respondent contends that the Company by its own behaviour is estopped from claiming that there has been any breach of agreement excusing it from carrying out its obligations. With reepeot to the complaint about the excessive "eserves and delay in acceding to certain applications under olause 33 of the contract the respondent deniee that there has been any breach and says up to the last day ithe Company continued to select land, the respondent having notified the Company that the contract time had expired, and so debarred itself from any right or privilege under it. Arbitration is only submitted to without prejudice to the contention that the Company is barred from it by its own fault. The failure to perform the contract has involved a loss of benefit from the construction of the line, the locking up for ten yeais of some 5,000,000 acres of Crown lands and the loss of the grants selected by the Company of the aggregate area, 373,677 acres. The respondent submits that the Company, not having performed its contract, cannot in law maintain any claim thereunder, and that the arbitrators have no jurisdiction. Part .2 of the statement is devoted to the taking of the railway by the Governor, and the objections to inolnding the seizure among the subjects for arbitration. The respondent submits that the line being taken under statutory authority, and no dispute having occurred touching the contract, the Company cannot maintain any claim, and the arbitrators have no jurisdiction. The Midland Railway Company claims as follows:—1. That the undertaking of the Company being a work to be remunerated in part by land, as provided by Clause 16, the Queen, contrary to the provisions of the contract, refused and prevented the exeroiae by the Company of its rights of selection over large areas of land within the authorised area. 2. That if any lands were properly reserved under subclause C of clause 16 then the Company was hindered and prevented in the exercise of its rights under clause 18, by being refused the right to the timber on such lands. 3. (That the Queen, in contravention -of the contract, permitted and authorised the destruction and removal of timber on lands available for selection and thereby depreciated the value of auoh lands. 4. That the Queen, in contravention of the contract, refused to give effect to the requests of the Company under clause 33 to sell or leb the lands within the authorised area in the Nelson and Westland land districts on the western side of the main range of mountains. 5. That the remuneratian of the Company being to the extent of £1,250,000, "Bl value" in land (as the work of construction should proceed) the Queen (by and through the Parliament of the colony) by greatly increased and graduated taxation on the land imposed subsequent to the date of the contract, and without any exception in favour of the lands over which the Company had the right of selection, materially reduced the consideration of contract and destroyed confidence in the undertaking of the, Company as a commercial enterprise. 6. That the Queen, by withholding for an unreasonable time consent to the deviation of the railway line from the western to the eastern side of Lake Brunner, and to substitution of an Incline for a tunnel line at Arthur's Pass delayed, and prevented the Company proceeding with the works under the contract. 7. That the Queen, by further withholding for an unreasonable time the consideration of the application of the Company for an extension of time under clause 42 of the contract prevented the Company from raising the capital necessary to complete the railway and perform its other obligations, and to realise the benefits and rights conferred on ib by the contract. 8. That the Queen in derogation of the contract by and through the Executive of the colony, and. particularly by the false and defamatory statements of the Minister of Public Works, in October, 1892, before a Select Committee of the House of Representatives (which statements became part of the public records of the colony), made ib impossible for the Company to raise the capital necessary to complete the railway and perform its other obligations, and to realise the benefits and rights conferred on it by the contract. 9. That the Company being formed for the purpose of constructing the railway on the system of land grants as provided by The East and West Coast and Middle Island and Nelson Railway and Railways Construction Act, 1884, and as expressed in the contract between the parties, and being thus known to the Queen aa a Company which would have to raise money from time to time by share or debenture capital, or both, to enable it to carry out the contract, was, by reason of the premises* prejudiced and prevented from raising the capital necessary to complete the railway and to perform its| other obligations, and from realising the benefits and rights conferred on it by the contract. 10. That by and in relation to the foregoing matters, the credit of the Company has been destroyed, and consequently the Company has been prevented from completing the railway and that thereby it has lost the whole of the share capital subscribed, together with the profits reasonably expected thereon, and has lost the whole of the debenture capital raised and expended, with interest thereon, and also other moneys and credits amounting to a sum of £1,584,900, which sum the Company accordingly claims to recover from the Queen. These particulars are in respect only of the matter in dispute, and the difference existing prior to and on the 14th January, 1895, and do not include the claims of the Company arising out of the seizure of the railway on the 25th May, 1895 (including the Company's claim for seizure of the railway). The Company have under clause 47 of the contract submitted to arbitration under notice dated 13th July, 1895.