LAW REPORTS.

Dominion, Volume 1, Issue 267, 4 August 1908, Page 9

LAW REPORTS.

COURT OF APPEAL,.

;THE HAMILTON GASWORKS. PUKQIfASK BY THE ggWORATJON, ASSESSMENT QP THE I'IiICE; ' • : Tlje 1 basis of assessment ofithp price tp h9 PRid by the-Hamilton liorongh Gqi|ncil iu iicqiiiring th'o local gasworks, whigh'sre-thg prppprty of, thp, Hamilton Gas Cgpipapy, the-' B»bjeot-; of -ft 'judgment pf the Court gf Appeal yesterday. - " '■ EAOTS OF THI3 CASE, tinder thp proyisioiis .pf.. a ■ sppoial Act ppssed in 1895, pijp JSenry Atkinspn was granted the right' 1 to . construct gas\yorks Ayitliiiv 'of Hamilton, Thp rights given tp. Atkinson/passed.to his.assies, andthe Ppnipany. claimed. by'- assignment, from hjiri. -The Act contajiied a pr°yiSP giving tljq Borpiigl) the right at any timeipftor'the expiration of tq.purcba.seithe^gjks and p]ai)t- at a. prjcq' to bp. fixed by -arhiti'.aT tion, AllPiher provision stated that'if-dur-ing thp period :of twelve years' the works did npt at the' rate . pf.'. IQ-'-pgr; c'eijt. pgr aopunj til© borough .should, p;i the '.purchase, tho difference. -It was' furtlier prpyided tjiat ■thp profits of'the promoters-nuist not. exceed '1§ per cent, BeFvsi&HWt •.' Tbe-.'JjtorOTgl}' PS» p'reised its riglit to purchase, ancl UPO.II thp arbitrators'failing 'to'-,agree., the matterwas rpferred .to, an ,|}njpire,','!yhp: stated- a, case fgr stho opinion: of; ; th'e,'SiiprP'!>o Court/ This 1 pase'was,.'by;'tho cojisent of -the parties, rei- : ferrod of . ~ ,

Oil behalf, pf tlip l.iprougji, it was contended that; the inpdo #.f arrivipg'at price was to' take thp present, value of the land, buildings in' situ aiifjl aetYtp'pay anything .for 'gogdwill. For tho' Company , it; sybniltte'd'.that j thq pfico .shmild; be, the;;cgnipierpial .value of the . jyprks.- iand', plßnfc ; »s, a. going-, eoncerh," taking into consideration their, present.. position, rpntal-; yaluej; earning 'power, ~ai)d • all-'p'ther gircumstaiices,-. arid not merely as.on the.sale, jf . apparatus in'situ-and laiid. and . build,iltgs.'. ....

■ > The questions for th? decision pf the Court wpro as lolldw:—*' ~ ; (I) Upon what basis or principle should thp nnjpire'propped'.'jn assessing thp pi'iop, tp bp paid for'the'gasworks? '' (2) Which cqntontignMllßt of tho' Company qir/that ;.pf thp'Borough—is..corrppt i}i law? ' • ' DEOISION OF THE COURT.' ' :

..'The Chief Justiqp (Sic lipbort Stout).licit] t|iat the' Company was not entitled'- to got any payment;for'.any goodwill privilege that tlm Company might possess as a supplier of gfis jiv t.he. Borough; It' had to be noticed tjiat t]}l? Borpugl'i was',not purchasing vflcge frsin' the..Companyj-.it had power'to. establish gasworks under' the Act of 188Q,' .and still' had power.tp do so under tho Act of I'JOO. .TW'pOwergrairtedtoit by Section 46 of the . Hamilton Gasworks Act, 1805, was simply the ppiver to''purchase the gasworks; ■ it did •' not require an assignment l'rpm tho Qom^ny''ot''jjHYi%wJgra:n(M4 : MTha simple'-wdrds'in" §|ptioiv'46,.. namely''at ii pj'ico to.be determined by arbitration" showed (bat what had' tp he ascertained was tho "price pf tho " gasworks'.and plant," not of the '•business" which was; mentioned,in Section.44. Tlip word "undertaking'.' would include, ng doubt, gasworks, plant, .gindit)ie,gog(trtill 'ot tlib busiiiess. He'did not see why, wjien a different..word wnsuspd. tho Legislature, must not bp- assumed tpi have, meant ■ something different by tho. - word? ''gasworks and pJ/int''.from the. word ."under* .taking?''Tlip. grjjpt by.- the. Legislature, toi,the ;of tho right ;to claim, -in .addition, ■to Hie g«'swor!<?, and' pjant, pro% Tit- np.,'to. 10;.. perv l QßnWper,Y.«!\|ium: from.-the date when''the ,gas ' was first • -supplied, until tho date of purchase byi 'tho, Borough showed tjut it did not ihtoiid that the goodwill was tp bo paid t'or, and,; gave this profit to the promotor as a bonus' for his enterprise. None of tiie cases cited'woro directly in point, but that : .gf ,tho Torontp; Street Railway- Company versus' 'the Corporation : • of' Toronto ! showed ,tlmt wlier'o jt could. not bo : assumed/that !a iperpetual privilege: Was .tp' bo granted by.'.tlw Act thp.'right' ! to pbt'fiin goodwill would not. bo-'assumel." Other cases : quoted all tended to support, tlio case : mado by tlio' Borough. Ho■ based 'his ;■ decision iiu favour .of.the* Borough practically on two grounds:'(l) That ' this 'Was riot'an !, assignment ;to.'tbe Cqrpora-. tlori of-atatutory privileges, Brid ; . (2) • that' tho .ijpo of the -words "gasworks..and' plant" '■ in! Section' 46did 1 not niean'' the ..word-''-'undorr,! talcing I .' in', Section; 44,.: There - was no 'statement in "the special Act ,as to what tho 10 | peri cent, annual profit was to bo - calculatcd on. Was it to bo on tho'actual capital of tho Company, or on all tho funds that-tho Qom> pany hid - expended on capital account in carrying on' its,.worksP^;Section -44 stated that tho profits to be gained by tho promoter' should, not pxeced-lfi' l per cent, per annum on tho . capital invested. In his opinion, tlio; Legislature 'no doubt intended" to' provide that the promoter was only to get 15 per-cent on /wliat, might bo termed tho' money lip had himself risked in tho business, and that ho would not- havo been entitled to charge a profit on money borrowed and carried to capital ; acoount..-In- reading,tho Words in Section .44 in their, plain signification, however, lie was reluctantly' compelled to conclude that tho words 1 "capital invested" would inclu'do money borrowod by,.tho promoter,' oil his' own security; perhaps, and put .into'".tho' business Jor; the '. purpose of carrying it' on by erectirig"b'uildirigs, machinery, • etc', The amount that tho 10 per cent;, was to : bo calculated .upon must mean all tho capital 'invested,- including sharp capital pro-, per,-money borrowed on capital account, and also the profits of the Company riot.-dis-tributed :apiongst the 'shareholders, but! used oji capital account;/, Ho was doubtful,'if tho Legislature really meant-to lay down a principle different from that' which was ..laid dpw'n in tlio Gisborno and other.Acts/ but tho Court' must interpret tho words as they appeared iii . tho Statute. Tho basis of tho payment by tho Borough to tho Coriipany should "bo- that found by tho umpire of £18;C29,' being tho value of the gasworks and plant, and £8023, being the amount found'.by- liim requiretl to make,' up tho profits of tho' Company', to 10 .per cent., on tho total 'capital employed.' • "; ; ' " Justices Williams, Cooper ana Chapman concurred. :• ; '' Tho Court intimated that it had "no jurisdiction in thti'matter of "costs. ■ v QUESTION OF APPEAL. / : . ; Mr.' Skefrott moved for leave to appeal to the Privy Council. • ' Mr.Justice.Williams; said, that that mat-,-ter was in the: sa.me position, Thcso were interlocutory proceedings,: and even if leave were gran'tocl, it was doubtful, if tho Privy Council had power to. entertain tho'. appeal, i Jurisdiction might.., bo .given to tho,Privy .Council'if the awaj-d woro drawn.up in tlio form qf the present special , caso, ■ It ,was. very desirable that tho matter should go to the Privy Council.. Mr. Skerrott, K.C., with him Mr, Cotter, of Auckland, appeared .for, tho Company, and Mr. Bell, K.C., with him Mr. Swarbrick, of Hamilton, for tbo Borough. - I