PAYMENT OF INTEREST.

Press, Volume LXVIII, Issue 20497, 16 March 1932, Page 10

PAYMENT OF INTEREST.

NEW SOUTH WALES LAW. POSITION OF DRAINAGE BOARD. Ifc was said at last night's meoting of the Christchurch Drainage Board »y Mr H. G. Livingstone, chairman of the Board's Finance Committee, that, in connexion with the New South Wales legislation providing for the reduction of interest, it was anticipated that there would be some dispute over the withholding of a certain amount of interest duo to the Board's debentureholders in New South Wales. Mr J. S. Barnett asked if there was any ground for anticipating that there would be a dispute.

Question of Jurisdiction. Mr Livingstone said that it was a question whether the Board was under the jurisdiction of New South Wales law. According to some who were recognised as authorities tho Board had no right to withhold the amount. .The Board would not lose by placing tho amount cn fixed deposit for six months.

A Legal Point. Mr E. H. S. Hamilton said that he understood that the New South Wales Interest Reduction Act referred to interest paid on mortgages, and there was some doubt as to whether the Board's debentures came within the meaning of "mortgage." The chairman (Mr S. C. Bingham) said that the secretary (Mr C. *■ Champion) informed liim that the A.M.P. Society was proceeding against tho Waitemata Power Board, which had deducted the amount as instructed by the Audit Office.

Committee's Jleport. The clause in the Finance Committee's report on which the discussion took place was as follows: — "From the Audit Inspector a letter had been received with reference to payment of interest on debentures in New South Wales, and advising as follows: — . " 'The effect of Section 5 of the In" terest Reduction Act, 1931, New fc»utii Wales, is that local bodies in New Zealand are entitled to a reduction pt 4s Gd in the £ on interest payable in New South "Wales on debentures issued before October 11th, 1931, provided that this reduction does not reduce the rate of interest below 4 per cent, per annum. . " 'lf local bodies, after being advised of the effect of the legislation in question, pay interest in full in New South Wales, such payments to the extent or 4s 6d in the £ would be contrarv to law, and the members of the bodies making such payments would be liable to surcharge.' "The secretary reported that on receipt of the above he had notified the bank to give effect to the Audit Inspector's ruling. "The committee hag approved of the secretary's action, and instructed_him to place on fixed deposit at the Bank of New Zealand. Sydney, the sum or £383 8s Sd, for a period of six months, and to write to the Controller ana Auditor-General asking for full details of his finding in connexion with this matter.'" • , The clause was adopted, and it also was' decided to ask the Board s solicitors to advise on the matter.