MIDLAND RAILWAY ARBITRATION.

Press, Volume LII, Issue 9282, 6 December 1895, Page 5

MIDLAND RAILWAY ARBITRATION.

(By Ibleoraph.)

(rSOM OUR SPECIAL CORRESPONDING) WELLINGTON, December 5. The following amended claim was filed bj Mr Harris on behalf of the Company yesterday : — •'lα arbitration. The New Zealand Midland Kail way Company (Limited) and her Majesty the Queen. General principle on which damages are claimed in respect of the'raining reserves. Where two parties have made a contract which one of chain has broken, the damages which the other ought; to receive itt respect to such breach of contract should be such as may fairly and reasonably be considered either as arising naturally, that is according to the usual course of things, from each breach of contract, or such as may reasonably be supposed to have been in the contemptation of both parties at the time they made the contract, as the probable result ol a breach of it. If the special circumstance* under which the contract was actually made were communicated by the plaintiff to the defendant, and thus known to both parties, the damage resulting from the breach of such contracc which they would reasonably contemplate could be the amount of injury which would ordinarily follow from a breach of contraot, under the special circumstances so known and communicated. Ib is a rule of interpretation that the intention of the partiea is to be ascertained from the whple contract considered in connection with the circumstances known to them both. If ib appears by such circumstances that the contract was entered into, and known by both parties to be entered into, for a particular purpose, whether to secure speoial gain or to avoid anticipated loss, the liability of each will be determined, and the amount of damages ascertained wich reference to the effect of the breach in hindering or defeating that object. The contemplation of damages will include such aa ariso, according to the in> triusic nature of the contract and the surrouodiug facts and circumstances made known to the parties at the time of making it. Application of these principles to the Company's case are as follows:— (1). The inducement and main consideration from the Quean to the Com* pauy, and in consequence of whioh the Company agreed to enter upon the construction of the railway, was the prospective granting of land on the basis of the value to the extent of SO pec cent, of the statutory cost (for laud grant purposes) of the railway and the prospective improved values of such lands. (2) It was contemplated by both parties thac the Company should rely for ita financial power upon the advantages and security which the laud grant would give it. (3) It was therefore within the contemplation of the parties that any, material injury to or depreciation in the value of the lands within the authorised area would hinder or destroy the financial power of the Company. (4) It was known to both parties that certain of the lands were oi special value, because inter alia of their vicinity to the line, of their vicinity to the settled districts, or of the large quantities of valuable timber and ooal upon such lands, and that the Company relied upon its right to select these lands as a material part of the inducement to and consideration of the contract. (5) It was the contract between the parties that that right of selection should be subject only to the right of the Crown to reserve lands whioh were or should be from time to time required - for bona fide mining purposes. (6) The reservation of lands proclaimed was not) the due exercise by the Crown in , good faith of the right of reservation provided by the contract, and therefore it was a breach of coutract by the Crown. (7). The notice of the proposed reservation of other blooke not yet proclaimed was an intimation by the Crown of its intention not to adhere to its contract, and entitled the Company to treat it as a breach -of contract by the Crown. (8). The result of such breaches of contraot was the injury to and the practical destruction of the financial power of the Company, and was a wrongful depreciation by ther Crown of the value of the land grant, and s> wrongtul restriction by the Crown of the area from whioh the Company were entitled to eeleofc their grant. (9.) The damages whioh naturally followed from such breaches of contract and from eaoh of them were the loss of the moneys expended by the Company and of the profits whioh would have reasonably resulted to the Company from the contract. These damages, which the Company assesses at the sum of £1,684,900, the Company, therefore, olaima to recover from the Crown." The Court sat at 10 a.m. to-day. . Mr George Hutchison stated that owing to some delay with steamers from the Coast several witnesses had not arrived. He had, however, five witnesses to go on with the evidence re mines. Mr Gully said he had, on behalf of the Crown, endeavoured to get all the information so far as the Company's claims had been diaoloßsd, and the Government should have ample notice of particulars. The Hon. E. Blake said that the disclosures by the Company had apparently been made as well as they oould have been under the circumstances. ' Mr Gully said the paper filed yesterday laid down certain principles of law, and yet the Company apparently based 'their claim on the mining reservations- It had been suggested by Mr Blake that a reply should be formulated by the defendants. He was ready at once to put in the answer to show what principles gnided the defence. Hβ suggested that the Company should put*in a complete statement. The Hon. E. Blake said it appeared to him that the Company claimed the fall stun under the breach respeoting the mining reserves. ■ Mr Hutchison said that the mining reserves were only one of many breaohes of the contraot The Hon. E. Blake said the claim appeared to him to be for a series of serious breaohes, culminating in the amount of total damage stated. In the second of the three claims filed there was a summary ot the claims. Among the particulars not' dear were certain mining reserves not particularly explained. These were discussed by counsel, and it was shown that all the claims wonld be explained by the Company in evidence during the day. There was also a statement objecting to the acreage, described in the proclamation. This was produced by Ml Hutchisoc.

The Hon. E. Blake s*id that enothii point to discuss was the position of the debenture holders, who bad a mortgage over the line which had been seized. The deben-ture-holders could say, "Wβ spent £754,000 on the line and our security has been seized." He thought it was necessary that the Com* pany took up this position; These preliminaries having been arranged ( the evidence was then proceeded with.

Frank Bird, examined by Mr Jones—l am a mining agent, now residing at Westport. I have btfen on the Cowfc twenty* eight years and sixteen on the southern part. I was Warden at Okarito, Rokifcika, Raefton and Westport. My duties ac anon gave mc considerable knowledge of f.he land on the Coast. t I know the district about Brighton and Charleston. I notice the portion hatched on the map produced. I agree that the lands shown there should not have been reserved, ex* cept with regard to a few men who are " beachcombing" on thebeaoh, there should be a small reserve made for them; and there are two water' races which should be considered. The population during the past eleven years has fallen off greatly in that district. I was not in any way ceneultod by the Government in the marking out of these reserves. They were made just after I left the service. Mr Eyre Kenny was my successor. The Government would have had no trouble in marking off what should have been reserved, and what should not. Any surveyor who knew the district could do bo on i.he map at a glance. On the map produced of the Bailer district there is a triangular portion near the Sham* rock lead. There is a hatched portion, I should say, ought to be reserved. There is ground there which has been abandoned several times, and is now taken up again. Otherwise this map shows that the reservetions have been made wrongly. I think the reserves should have been made parallel to the coast. There are eighty-one men work* ing on the blocks shown on the Bailer coal reserve. There are thirty-three men working. The beat lead of gold tost through thii>

•J&ls uon Addison'a Flat. The population hat remained the same for the past twelve years. There are no water-races to speak of beside those shown on the map. There, is one dam on the hatched portion. This ground is worked by long tunnel tail races, and the tailings are delivered into Dirty Mary's Creek and another. These mining operations do not in any way interfere with the hatched part. I see no reason why this land should be reserved for jnining. No rights were ever applied for m this block. There is a water-race which rune through private property there. I was »Iso Warden in the Grey Valley. IS is *bout six years since I was there. From the River Arnold to the Ahaura I find that the hatchings showing ths reservations indicate that they are larger than required. But Ido not know the country intimately. I know the Central Buller district. I was Warden from 1885 to 1890, and during my time there was no application for mining privileges on the Maruia river. It is three years since I was there. I saw no workings on that river. There were rights granted on Doughboy Creek. The Mining Registrars do not make returns of the rights issued in a district. Sometimes there are more rights registered than actually exist. For instance, a waterrace or a dam may be registered acd afterwards abandoned, and another party may take it up and register it, and perhaps give the creek another in ignorance that ie was already registered. OCbia does not apply to mining leases which have been surveyed. Waterracee as a general rule are taken across the country. Cross-examined by Mr Gully—l left the service in June, 1890. I knew the following year that the Government were making reservations. I left the Government on not the best of terms. I formed no particular impressions about the reservations at the time. My knowledge of the blocks in 1890-91 wu gained from having been on them. In the Westport district I did not prospect the ground. lam now a mining advocate. I gain my knowledge from travelling over them, and from the existing position of things. I have been round or engaged since April to collect information for this case, and been paid by the Company. I only went where I would get on horseback. I was engaged for about twelve days in making the investigation. I visited all the blooks referred to in my evidence during that time. I think, with the knowledge 1 had for years of the district, that I could form a good opinion aa to whether the country was auriferous or not. William Splaine, examined by Mr Jones —I am a gold miner for the past twenty one yean, mostly in the Grey Valley district. In company with Mr Fraser I made an examination of certain blocks about Back Creek. There are water races, huts and dams in the district, but it was abandoned ; and I conclude that the land has no mining value, but would be suitable for agriculture. Ib is evidently worked out ground, even the Chinamen had left. There is one man living there working on a farm. (There are men working there on what are known as Langdon'a reefs. There are mining leases taken up to the west of them. There is a coal formation extending towards Brunnerton. To the north there wag no gold ever gob until the Black Ball and Ford's Creek are reached. The hatchings showing the reservations are properly marked. I have prospected this country, but never got sufficient inducement to set in. I know all the old diggings on the Grey from their palmy days until now. They were live places in the old days, but are dead now. I do nob think there is any come-at-able gold left in the Grey Valley. Ib has been prospected thoroughly, and both miners and storekeepers have given all the old workings a fair trial to try and pick up the old leads. The only new ground in the whole valley ia up the Ahaura river, at River View, where a few men are working. Cross-examined by Mr Stringer—l have been in the Grey district since 1865. I have done no mining for six years. I waa engaged by the Midland Railway. I was paid £1 a day. The current rate of wages is from 8a to 10s per day. My instructions were -to take note of all races, dame and claims. We did no prospecting. There was no need to. It is common enough for men to go baok to old workings on the North Beach of the Grey. The lands on the hills above the beach are improperly reserved. Xhere has been a lob of prospecting done there with no results.

Charles Schwerin—l am a miner, residing in the Weatport district since 1867, and have been mining all the time. I know the Waimangaroa block. In the interests of the gold miners I do not think it necessary to reserve the whole block, as I do not think there is any gold there. There is about three-quarters of a mile between the railway line and the bills. There have been several shafts put down. The ground is very wet. I do not think there is payable gold there. I know Addison's Flat. Mr Gully objected to witness, having leading questions put to him or being examined from the maps, which are marked in a way to suggest a favourable answer. Mr Jones at once substituted a map not io marked, and continued the examination.

I do not think anything west of Wilson's land should be reserved. There has been a lot of prospecting done there by myself and others, but nothing payable was found. I know a piece of ground at Piper's Flat, known as Dr. Gaze's, and I worked there twenty • four years ago. I do not consider all that blook is required for mining purposes. From there to the sea is not payable. The tailings from the claims discharge into Mountain Creek and thence to the sea. I do not think any reserve is necessary. In working we lift the washdirt by a> water balance, and all the stuff over half an inch is stacked up, and the small goes down through the tunnel into the river-bed. No blocking has happened in thirty years' working, therefore no reserve is required. I know the Charleston district. From Burgin's Flab a line drawn to the west of Brown's Terrace, and thence to the sea, would cut off the land not required for mining.

Cross-examined by Mr Gully—l was not employed by the Company to go over the ground. I speak from experience. If other witnesses have differed from my conclusions I say that men might differ a few chains as to where a line should be drawn. I had difficulty to get a bit of land for other purposes. It would have been better if land nob required for mining was let out or sold for agricultural purposes. I do not think any man could prospect more than two acres in three months.

William Wilson, of Sergeant* Hill, near Westport, with mining experience since 1866.—1 have known the district between Westporfc and Waimangaroa thoroughly. The country has been well prospected without payable results. Prospecting shafts and tunnels have been tried. A tunnel about 3000 ft is atill being driven, but with no results. I do not think the land is required for mining purposes. To the west of Wilson's lead nothing hae been found. 1 know that it has been well prospected. There is no difficulty in prospecting it. It is ehallow ground and a sea formation. Some of it might be a little wet in the Piper's Flat district. There is none to the west of it required for mining. At the Shamrock lead it would be necessary to reserve the land along the leads. A line from Piper's Flat past Croninville and Brown's Terrace would cut off all not required for mining. This requires no prospecting, as it is limestone country. Further south at Candlelight to the eastward is not required for mining. This country is principally limestone, and no gold has been found there. On Block 6, from White Horse Creek to Brighton, about three or four chains wide on the terrace takes in all the mining country to Fox's river, except one small lease. All the country behind that is limestone, in which no miner would be mad enough to sink a hole. The creeks rnnningthrough have been prospected. I was mining myself on Charleston and Addieon'a in the good days. There were from 6000 to 7000 men at Charleston, about 3000 at Brighton, and 3000 at Addiaon's. The population has been decreasing ever since, because the ground is worked out. No new ground has been discovered for twenty-five years. I was chairman of the Buller County Council for three years. Cross-examined by Mr Stringer—l have been farming for fourteen years, also mining. I have been working at the Venture mine for about three years. This should have been reserved. It.is cemented sand requiring machinery. This only applies to known leads. The chance of other leads being found is very remote, the ground between the known leads and the «ea having been well prospected. People nave prospected there within twelve norths. The 2000 ft tuoßftlwM let at 6a 6d

per foot. The money was found partly by public subscription and partly by Government subsidy. I subscribed to the fund myaelf, but look upon it as a hopeless spec. The tunnel is going towards the deep shaft. As » general rule I would exclude all lands which have been thoroughly prospected, and in such cases the surface is better than the remote probability of gold. The character of the land is as a rule swampy and barren, bnt there are a few good patches. Some of the land is worth 10i per acre, some loss; 7e 6d would be a fair average price. W. S. Harris, miner for thirty years in New Zealand and ten years previously in Victoria —I have been on Addison's since 1873. I would not reserve the block from Brown's Terrace to Croninville for mining. I have worked at Charleston and the Argyle Dam. The Charleston and the Basin is about two mile* square, and the leads are well defined. There is no auriferous ground south of the Argyle to the Four Mile. At Brighton there is a narrow strip to the White Horse, half a mile wide, which would take in all the mining ground. Cross-examined by Air Gully—l don't know whether the land said to be now goldbearing ia any good for agricultural purposes. It is difficult to get through. All the leads run parallel with the beach.

John T. Delaney, of the Twelve Mile, Grey river, farmer and miner :—I was born in Grey Valley. I know the Arnold and Notown districts. The south-east portion is not required for mining. About thirty chains wide along the banks of Notown creek should be reserved for mining. The Arnold Flat might contain gold. The land about the district is good grass land. At Kangaroo creek there is no mining going on. Connor's gully is deserted. There are no miners in Red jacks, in fact none between Notown and Nelson creek. I have been through three timas this year. Cattle can live, but not grow fat on this land. I don't think any of this block is required for mining purposes. There are miners working in the gullies near Notown. The land on the road from Stillwater to Ahaura is mainly stony and billy, but there is a good deal of it in grass and gardens. Taking it generally it is fair land. The flats in Redjacks are good land, and vary from hilf to one mile wide. I applied for land there about five years ago. There is good nit land at Spring creek. CroBS-examined by Mr Stringer—l would reserve two square imilee on Arnold Flab. The reserves I would make in the creek would not include any flat land. My father took up buah land twenty years ago—fiftytwo acres, also two other blocks. It costs from 20a to 30s per acre to fell the bush. The land is worth £6 per acre when cleared. The original price of the land was £2 per acre. Another man, named Kelly, cultivated about eight acres. There is a large block at Nelson Creek, where Mitchell has cleared some terrace land lately. There is also a fifty acre block on the terrace cleared by Garth, and four acres of orchard. The reason more land waa not taken up in the early-days, before the railway was heard of, was because people had not the means or the inclination to take ib up.

Francia Rogers—l am a miner, and have been working most of my life in the Boatman's district, luaugahua. Ido not think the land on the left-hand branch of the Inangahua, towards Fern Flat, should be reserved, except the beds of the creeks. One party of ten I worked with spent 120 days in prospecting the North Creek, but we did not pay our expenses. At Boatman's there is more reserved than is necessary for bona fide mining. In Flower'e Creek only the creek bed should be reserved. From the line of the Welcome Reef and Specimen Hill, west of Raglan Creek to the main road, no payable gold has been found in tho alluvial.

Cross-examined by Dr. Finlay—A good deal of the Boatman's district is reefing country, which could nob be worked without capital. The whole of the country is gold-bearing, but not payably so. Re-examined by Mr Jones—The ground we tried at the North Creek was worked by as with machinery, and had a fair trial. Wm. Splaine, re-called, produced a corrected list of all the mining rights and privileges and the number of miners employed in the blocks visited by him in the Grey district, and showing the abandoned areas. William Frazer corroborated the list. About sixteen or eighteen men were working in the creeks on block 59. Splaine and himself were seventeen days looking up these water-races. Mr Geo. Hutchison drew the attention of the Court to the errors of the evidence printed, which were so serious as to render it useless, and suggested that if the umpire would trust to his notes the expense of the reporters could be saved. Mr Stringer referred to the numerous errors as being real works of art in their way. Mr Gully referred especially to Mr Wilson's evidence and counsel's address, and said the task of correction would be too much to undertake. The Hon. E. Blake said his own notes were full in some instances, but not so in others. He would, however, in future take care that his own notes would be full enough for his own purposes. It was then understood that the reporting arrangements should be abandoned, and the Court adjourned at 4.45. The Premier was present during the afternoon.