PACIFIC STEEL

Evening Post, Volume CXXXII, Issue 31, 5 August 1941, Page 9

PACIFIC STEEL

THE ONEKAKA OPTION

PRESENTATION OF CASE

RELATIONS WITH BRASSERTS

(0.C.)

NELSON, August 4.

The Warden's Court hearing of the action for forfeiture of mining privileges at Onekaka was adjourned till August 22 in Wellington.

Mr. H. H. Cornish, K.C., SolicitorGeneral, with Mr, C. R. Fell, is appearing for the Crown. Mr. P. B. Cooke. K.C., and Mr, M. C. Cheek for the Onekaka Iron and Steel Company. Limited (in liquidation), Mr. C. H Weston, K.C., with Mr. F. P. Kelly, for the Golden Bay Proprietary. Limited, and Mr. W. J. Sim, K.C., and Mr. A. L. Hudson for Pacific Steel. Limited.

' When the Court resumed Mr. Cheek made a personal explanation that the Solicitor-General's interjection at an earlier session about political propaganda had been understood to refer only to the correspondence quoted, not counsel personally. Unfortunately the newspaper report was open to the construction that the Solicitor-General meant that counsel personally had adduced political propaganda. Mr. Cheek said he was sure that the SolicitorGeneral's comment was not intended to have such an implication. Mr. Cornish said his remark had no reference whatsoever to Mr. Cheek personally. Mr. Cheek had been scrupulously fair in court. Re-examined, Frederick G. Gibbs said that from information he received he considered Pacific Steel during 1936-37 had good prospects of establishing the industry. PACIFIC STEEL'S CASE. Opening the case for Pacific Steel. Mr. Sim asked the warden either to impose a fine or dismiss the case. He | adopted all Mr. Cooke's submissions on both fact and law, also all those put forward under the heading of special circumstances. Pacific Steel would show that they had prepared the way at great expense for the establishing of the industry. The Crown, building an organisation on Pacific. Steel's work, now came to take as well the assets on which apply all the work' Pacific Steel had got together. It would be inequitable on the part of the Crown to be allowed forfeiture, he maintained. Pacific Steel, in addition to seeking compensation later, were issuing a writ against the British firm of Brasserts founded upon breach of contract and breach of trust. Mr. Cornish objected to the statement as being out of place. Mr. Sim said that the Crown, by using Brasserts' work, was disentitled to the relief sought in these proceedings. There was no want of bona fides on the part of the company. Mr. Cornish: There was no want of bona fides but want of cash. Mr. Sim said he was glad the question of bona fides had been cleared up. As regards cash, that arose out of London evidence, and he did not intend to worry the warden with it here.. ARRANGEMENTS WITH BRASSERTS. Evidence was given by Arthur Morton Henry Shirtcliffe, general manager of the Canterbury Farmers' Cooperative Association, Timaru, who said he became a director of Pacific Steel in January, 1935. He had invested £500. There were 273 shareholders and contributors. The witness said that Mr. Watson went to England to appoint experts to report on the Onekaka iron ore industry. If the report was favourable he was to see what could be done for the development of a modern iron and steel works at Onekaka Brasserts' preliminary report in August, 1933, cost 500 guineas. Early in 1934 the company received assistance from the Government to the extent of £2500 towards the cost of obtaining Brasserrs' report. In July and August, 1934, Brasserts' experts visited New Zealand, and, according to an arrangement with the Government, Pacific Steel paid the cost of the visit. The total cost to the company in connection with Brasserts was £8250. The original 100 shares of the company were divided among three people. Mr. Watson having 50. Later he handed over 25 to someone else. Mr. Watson had made nothing out of the company The company was hopeful of continuing the enterprise. A Large sum had been spent in England investigating the possibilities of the industry. WRIT AGAINST BRASSERTS. Asked what led the directors to exercise the option, the witness said he received a cable from their London solicitors and another from Mr. Watson advising the exercise of the option. The company uad never consented to Brasserts' acting for the Government, nor consented to Brasserts' placing at the disposal of the Government all data collected on the company's behalf, except, the contract to supply a report under the loan of £2000. The company had communicated its complaint to Brasserts and followed up with a writ in the High Court in London. To Mr. Sim, the witness said that the company's complaint against the Iron and Steel Department of the Government was that Brasserts. being under contract to them, were weaned away from them by the Government, who never asked the company's consent to Brasserts acting for *-he Government. Cross-examined by Mr. Fell, the witness said his belief that the business would have gone on depended on faith in Mr. Watson's ability to find the money. There was a plan which contained a proposal that the Government should guarantee 5 per cent, on £27,000,000.