THE "LITTLE" COMPANY.

Evening Post, Volume LXXX, Issue 4, 5 July 1910, Page 2

THE "LITTLE" COMPANY.

MUNICIPAL TENDERING.

The Municipal Corporations Act states that persons concerned or participating (other than as a shareholder in an incorporated company or in an association or partnership consisting of more than twenty persons) in any contract with or work to be done, or the supply of goods for the council, if the payment exceeds £5 for any one contract or £10 altogether in any year, if more than one contract, shall be incapable of being elected a mayor or councillor. This matter has been mentioned before- in civic circles m Well-'ngton, and yesterday Mr. J. «T. Devine (Wellington) moved the following remit at the Municipal Conference : — "That paragraph (h) of Section 42 of 'TOie Municipal Corporations Act, 1908, ' relating, to the disqualification' of councillors, should be amended so that the exception, therein contained 6hall read as follows, viz.: 'Other than as a shareholder in an incorporated company which contains more than twenty members, and is. not a private company, and of which, such person ,is not a director or 'he general manager or secretary, or in an association or partnership consisting of more than twenty members.' " In doing so, he explained that at present a m.iv, his wife, and the office boy could form themselves into a private company, and the man could sit as a councillor, gain inside knowledge, and tender for the city's work. It was- not fair that this should be allowed, and it was evidently an oversight by the Legislature. When this soTt of thing was allowed, it was thought ithat municipal tendering was a cut-and-dried affair. This! was seconded by Mr. J. V. Brown (Napier) and strongly supported by him. The following opinion of Mr. Joliffe, Crown Law Draughtsman, was read by the president: — "The provision that a councillor should not be disqualified) by reason of a company of which, lie was a shareholder entering into a contract with the council was doubtless a sufficient saieguard so long as the law required that the shareholders of a company should not be less than, seven iv number. The Companies Act, 1903, however, introduced a new kind of company, which might consist of the councillor and his wife, or of two councillors. A •tract between a council and a private company of ihis kind would be manifestly improper, but is not contrairy to law. It is very desirable that legislation should be passed' declaring that private companies under Part V. of .the Companies Act, 1908, do not come within the meaning of incorporated companies i for the purpose of this section." j Mr. Fraser (Queenstown) pointed out that if -the Temit was passed and became law it wouldi exclude private companies even if those companies ~lhad twenty or more members. The president said tihexe was no difference between a private and 1 public company, they had both to be incorporated. Mr. Fraser asKed why not bring private and public companies on. the same level? Whjx exalude a private company V Mr. HindmaTsh (Wellington) said that some people felt that men who were councillors &ndi connected! with Einall companies had access to municipal officers, could get any data they required, and familiarise themselves with the work required, which was an advantage over other traders. The motion was amended by striking out the words "and is not a private company," and carried.