CASE FOR GOLDEN BAY COMPANY

Dominion, Volume 34, Issue 286, 30 August 1941, Page 7

CASE FOR GOLDEN BAY COMPANY

Address By Mr. Weston

ONEKAKA FORFEITURE ACTION

The action in which the Crown is proceeding for forfeiture of mining privileges at Onekaka against the Onekaka Iron and Steel 'Co., Ltd., the Golden Bay Proprietary, Ltd., and Pacific Steel, Ltd., completed its second week of hearing in the Warden's Court, Wellington, yesterday, before Mr. Maunsell, S.M. Mr. 11. 11. Cornish, K.C., SolicitorGeneral, with Mr. C. It. Fell, is appearing for the CroiVn, Mr. P. B. Cooke, K.C., and Mr. -M. C. Cheek for the Onekaka Iron and Steel Company, Limited (in liquidation), Mr. C. IL Weston, K.C., with. Mr. F. P. Kelly, for Golden Bay Proprietary, Limited, and Mr. W. J. Sim, K.C., and Mr. A. L. Hudson, for Pacific Steel, Limited. Mr. Cooke, continuing his address to the Court on behalf of the Onekaka Iron and Steel Co., Ltd., said the warden would find little to help him in determining this case, as there had never been one like it before, and it was safe to say that there never would be oue like it again. Mr. Pascoe, in his evidence, had said that the Government would have to impose a tariff on its own behalf on the output of products from Onekaka. The Onekaka Co. had spent over £250,000 in developing the works, and there was a chance of further capital being obtained. The company had the mining privileges fully manned from November, 11)34, till .Tune, 1935, and produced enough pig iron to last till 11)37. There was no question of want of bona fides. The company never had a chance, and it was the Government's fault. It would have been a savage ruling for the Government to say in 1038 that these valuable mining privileges must go, and must go to the Crown. The ease had taken a peculiar turn. He had not yet heard a word on law from counsel on the other side, and he asked to be heard later on questions of law. Case For Golden Bay Company. Mr. Weston, in addressing the-Court on behalf of the Golden Bay Proprietary, Ltd., based his case mainly on the agreement made on September 18, 11)31, between the receivers for the debentureholders and the Crown, by which the Crown in respect of its second mortgage and its unsecured debt for coal supplied, was admitted to rank pari passu with the first mortgagees. Under that agreement, he contended, it was proposed to realize the company’s assets as soon as possible, and pending a sale the receivers were given authority to carry o.i the business or lease the premises, or close them down for the time being. In the last event, it automatically followed that as long as operations ceased, they were absolved from the obligation to mine the ore and to employ labour, the two obligations on which the Crown's action to forfeit was based. That agreement had never been cancelled or repudiated by the Government up to the time of the introduction of the 1937 Bill revoking the rights. If evidence of the agreement were admissible that, Mr. Weston submitted, decided the case in favour of the defendants. His clients also considered they were entitled to the protection of the Mining Act, because having leased the Onekaka block to the Onekaka company, they wore entitled to rely upon the latter to observe the covenants in the lease. They did not think the Supreme Court would have allowed the company’s under lease to be forfeited as long as the negotiations in London for extra capital were proceeding satisfactorily. Mr. Weston had not concluded his address when the hearing was adjourned till 10 a.m. on September 9 at Wellington.