APPEAL DISMISSED

Dominion, Volume 31, Issue 21, 20 October 1937, Page 11

APPEAL DISMISSED

Interest On Local Body Debentures PRIVY COUNCIL DECISION London, October 18. The Privy Council dismissed the New Zealand appeal of the Municipality of Mount Albert versus the Temperance aud General Mutual Life Society. 'The decision of the Privy Council affects twenty-three local bodies in New Zealand, debentures having been issued to lending societies for £1,185,000 at varying rates of interest from 51 to 6J per cent. The ease concerned the rate of in* terest to be paid on certain loans raised by local bodies, most of which are covered by debentures for over £1,000,00 held by the Temperance and General Mutual Life Society of Victoria (Australia). The specific case taken to the courts referred to one debenture of £lOOO issued by the Mount Albert Borough Council. On these debentures the local bodies agreed to pay a certain rate-of interest, but subsequent legislation in the State of Victoria reduced the rate of interest on loans and the New Zealand local bodies argued that they were entitled to tho benefit of this legislation. The society contended that it was entitled to the original rate. The Supreme Court decided in favour of the de-benture-holders. The local bodies chiefly concerned are the Hawke’s Bay Power Board £200,000, Mount Albert Borough Council £130,000, Auckland City Council £99,000, Grey Power Board £53.000, and Lower Hutt Borough Council £59,000.