MIDLAND EAILWAY ARBITRATION.

Press, Volume LII, Issue 9301, 31 December 1895, Page 5

MIDLAND EAILWAY ARBITRATION.

«». THE AWARD. (PUES3 ASSOCIATION TELEGEAM). WELLINGTON, Decomber 30. The following is tho full text of tha Hon. E. Blake's tvwr.rd on tho first reference of the Midland Railway Arbitration case :— " Whereas, by deed bearing date tho 3rd day ot August, 1888, between the Queem and the Midland Railwuy Company, a joint stock Company, carrying on its buiinees in Christchuroh, New Zealand, and elsewhere, aa agreement was made for the construction aud working of certain grants and concessions to the Company by the Queen, and divers stipulations were entered iutobetween the parties touching tho premises. ,, [Mr Blake quotes at length clause 47 of the deed whioh provided for arbitration, and sets out its conditions in case of a dispute, and eoes on to say]. "And whereas the Company did, pursuant to the said clause, appoint; Sir Bruce Lockhart Burnside arbitrator for the purpose of the arbitration to be held under tha said clause, in order to determine certain disputes, differences and questions which had arisen touching the construction, meaning nud effect of the eaid deed and rights of the Company thereunder, and otherwise, in relation to matters set forth therein, and did also give notice thoreof in writing to the Governor of Now Zealand, and require him on behalf of the Queen to appoint au arbitrator for the purpose of suoh arbitration ; ami whereas ou the 28oh day of March, 1895, the Governor of New Zealand did, pursuant to tho said clause, appoint Sir Charles Lilley arbitrator for the purpo-o of such arbitration ; and whereas the aairt arbitrators did on the 9th of April, 1895, by writing signed by them, duly enlarge the time for making the award under thu said reference, hereinafter called the ' tirst reference, , until the 13th day of January, 1896 ; and whereas the said arbitrators did, on the 22nd day of November, 1895, before entering on the business of the tirst reference, by writing signed by them, duly appoint mc, the Hon. Edward Blake, Q.C.,M.1'., to bo umpire in the respect of the first refoicnco ; and whereas the said arbitrators took upon themselves the burden of the first reference, heard the allegations aud contentious of the partios on the matters in difference between them, whioh matters in difference arose not later than tho 14th of January, 1895, and are specified in the following claim of the Company, which was laid by the Compauy before the said arbitrators, and was submitted by tho Company and admitted by the Queen, without prejudice however to the Queen's right to contend as to any suoh matters that they were not within the scope of the arbitration clause, as comprising every matter in difference within the acope of the first reference. That is to say, the Company claims as follows:—1. Thab the undertaking of the Company boing work to be remunerated in part by land, as provided by clause 16 of the contract, the Queen, contrary to the provisions of thu said contract, refused and prevented the exeroise 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 sub-clause (c) of olauao 16, then the Company was hindered and prevented in the exercise of its rights under olause 18 by being refused (he right to the timber on such lands. 3. That the Queen has, in contravention of the contract, permitted and authorised the destruction and removal of the timber on lands available for selection, and thereby, depreciated the value of such 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 part with lands within tho authorised area in the Nelson aad Westland districts, on the western side of the main range of mountains. 5. That the remuneration of the Company being to the extent of £1,250,000 '8.1. value' in land (as the work of construction should proceed), the Queen (by and through the Parliament of tne colony), by greatly increased and graduated taxation on 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 consideration of the contract, and destroyed confidence in the undertaking of the Company as a commercial enterprise. 6. Thab the Queen, by withholding for an unreasonable time her consent to the deviation of the railway line from tho western t<) the eastern side of Lake Brunner, and to the substitution of an incline for a tunnel line ac Arthur's Pise, delayed aad prevented the Company from proceeding with works under contract. 7. J That the Queen, by further withholding for an unreasonable time the consideration of the application of the Company for aa extension of time under olause 42 of the contract, prevented the Company from raising capital to complete the railway and to perform its other obligations and to realise the benefits and rights conferred on it by the contract. 8. That the Queen, in derogation ot the contract, by and through the Kxeou< live of the colony, and particularly by the faleo and defamatory statements of the Minister of Public Works in October, 1892, before a Select Committee of the House of Representatives (whioh statements became part of , the public records of the colony) made it impossible for the Company to raise the capital necessary to complete the railway, and to perform its other obligations, and to realise the benofits and rights conferred on it) by the contract. 9. That the Company being formed for the purpose of constructing tho railway on a system of land grants, aa pro« vided by the East and West Coaet (Middle Island) and Nelson Railway and Ratlwayr Construction Aot, 1684, and as expressed in the contract betweeu the parties, aad being thus known to the Queen as 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 tho railway and to perform its other obligations, and from realising the benefits and rights conferred on it by the contract. That by and in relation to the foregoing matters, the credit ot the Company has been destroyed, and con* ecquently jt> has been prevented from completing the railway, and that thereby ib has Josfc the whole of the share capital, together with the profits reasonably to be expected thereon, and haa lost the whole of the debenture capital raised. And whereas on the 29th day of November, 1895, the parties notified to mc such disagreement, whereby the (matters bo comprised came before mc as umpire for award and determination, now be it known that I, the said Edward Blake, having taken upon myself the burden of the first referenoe as umpire, and having been attended by the parties and their witnesses, ana having heard and considered the allegations and proofs of the parties, do make this my award and determination in writing of and concerning the premises in the manner following, that is to say :•—• " (a) i fiad and award that the Company has not any claim against the Crown or any right to recover any sum of money from the Crown in respect of the premises; (b) I award that each of the parties shall bear and pay their own costs of the reference, and that, as between themselves, each of the parties shall bear and pay the fees and expenses of the arbitrator nominated by such party (which fees and expenses are included in the costs and charges of my umpirage and award), and that, as between themselves, each of the parties shall bear and pay one* half of the remaining costs and charges of my umpirage and award." In giving the award on the "second reference," after setting out that an agree* tnent was made for the construction and working of certain "railways in New Zealand by the Company, and for certain grants and concessions U th* Company by the Queen, and .t.bafc <\\ vera stipulations were entered into fatwaon tho parties touching tho premises, Mr Blake again quotes the 47th clausti ,•«>£/. \he deed, and goes on to say:—"And whereas the Company having theretofore made one reference (hereinafter called the first reference) under the said clause, pursuant to the said olause, appointed Si? Bruce Lookharb Burnside an arbitrator for the purpose of an arbitration •a be held unjjar wia aaid oUisae (herelnaftee

called the second reference) in order to determine certain disputes which had arisen touching the constructions, meanings and effects of the said deed and the rights of the Company thereuudor, and otherwise, in relation to matters Bet forth therein, aud also give notice thereof in writing to the Governor of New Zealand and required him, on behalf of the Queen, to appoint an arbitrator for the purpose of such arbitration, and whereas, on the 21st day of September, 1895, the Governor of New Zealand did, pursuant to the said clause, appoint Sir Charles Lilley an arbitrator for the purpose of such arbitration ; and whereas the said arbitrators did, on the 27th day of November, 1895, before entering on the business of the second reference, by writing signed by them, duly appoint mc, El ward Blake, to be umpire iv respect to the second reference ; and whereas the said arbitrators took upon themselves the burden of the second reference aud heard allegations and contentions of the parties on the matters in difference between them, which matters arose subsequent to the 14th day of January, 1895, and were specified-in the following claim of the Company, which Was laid by the Company before the said arbitrators, and was submitted by the Com* pany and admitted by the Queen (without prejudice, however, to the Queen's right to contend as to any such matters that they were not within the scope of the arbitration clause) as comprising every matter in difference within the scope of the second reference — " That is to say—the 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 ot the contract, the Queen, contrary to the provisions of the said contract, refused and prevented the exercise by the Company of its rights of selection over large areas of land within the authorised area. 2. That the Queen has, in contravention of the contract, permitted and authorised the destruction and removal of the timber on the lands available for selection, and thereby depreciated the value of such lands. 3. That the Company, being entitled to select, under the provisions of the contract, land to the amount of £19,304, and Having given notice in that behalf, the Queen, by the Minister of Public Works, on or about the 20th day of April, 1895, refused to allow the Company to exercise its rights. 4. That the Company, being entitled to select lands, the Queen, under the agreement with the Company, having sold certain lands, being those described in 131 map as ' Nelson towns, Beef ton' (190 sections in Nr. £.), and having received the proceeds thereof (particulars of which have been refused to the Company) has, in contravention of the contract, refused to pay over the same to the Company. 5. That the Queen, on the 25th day of May, 1895, in contravention of the contract and without any due or proper cause, took possession and assumed the management of the railway then in the possession of the Company, and wrongfully converted tho same to her own use. That by and in relation to the foregoing matters, the Company has lost the entire benefit of the contract n.nd all expenditure thereunder. Wherefore the Company claims to recover from the Queen the sum of £1,817,900, together wilh interest at 5 per cent, per annum upon £845,000 debenture capital from the 14th of January till the ilato of the award, and whereas the Company and the said arbitrators disagreed finally respecting the matters comprised in the second reference, and on the 29th of November, 1895, notified to mc such disagreement, whvreby the matters so comprised oame before mc as umpire for award and determination; and whereas I did on the 2nd of December, 1895, by writing signed by mc, duly enlarge the time for making my award under the second reference until the 30th day of January, 1896. " Now know ye that I, the said Edward Blake, having taken upon myself the burden of the second reference as umpire, and having been attended* by the parties und their witnesses, and having beard and considered the allegations and proofs of the parties, do make this my award and determination in writing of and concerning tho premises in the manner following. That ia to Bay:—(a) As to claims numbered 1 and 2, I find and award that the Company has nob any claim against the Crown, or any right to recover any sum of money from the Crown in respect of the said claims ; (b) as to the claims numbered 3 and 4, I certify that the parties have consented and agreed before mc, and I find and award that the Company is entitled to exercise the right of selecting, under the provisions of the contract, blocks of land up to the value of £21,066, and is entitled in pro tanto to the satisfaction of the exercise of such right of selection, to take tbe proceeds of the sales which have been made by the Queen of Nelson town and Reefton lands, now in the suspense account, the lands sold being charged to the Company at Bl value thereof, (c) As to the claim numbered 5, I certify that it was declared and agreed to by the Company, during the second reference, that my powers under the arbitration clause were limited to, and were in fact those which would have been vested in a Judge of the Supreme Court on an application under the 124 th section of the Act of New Zealand, 45 Victoria, No. 37 (1881), add thac no claim for damages could be maintained in the premises, and I find and award that there was inch unreasonable and inexcusable delay by the Company in the prosecution of the works connected with the railways, and also that there was on the part of the Company auch a wilful breach of the contract between the Company and the Queen as, on either ground, to justify the exercise of the powers of the Governor to take possession and assume the management of tbe railways, and that, in my opinion, the power conferred by the 123 rd section of the said Act was rightly exercised. And I find that tho Company has not any claim against the Crown or any right to recover any sum of money from the Crown in respect of the said claim numbered 5. (d.) And I certify that each of my findings hereinbefore stated and lettered fa), (b) and (c) is a separate and distinct finding upon the matters therein comprised, and is in no way depondent on any other of such findings, (c). I award that each of the parties shall bear and pay their own costs of the reference, and that, as between themselves, each of the parties shall bear and pay the fees and expenses of the arbitrator nominated by such party, which fees and expenses are included in the costs and charges of my umpirage and award; and that, as between themselves, each of the parties shall bear and pay one half of the remaining costs and charges of my umpirage and award."

1 The award was lifted yesterday morning by Mr George Harris, solicitor for the Company. The costs of both parties are expected to reach a grand total of £100,000.