PARLIAMENT Dairy Company Finance: Bill Referred Back

Greymouth Evening Star, 22 September 1949, Page 10

PARLIAMENT Dairy Company Finance: Bill Referred Back

.. WELLINGTON, sept. 21 (F-A.).--When the position of guarantors' of co-operaiiVe ddifry companies came to be considered/ the .House of .Representatives decided'this evening to'refer the Co-operative Dairy Companies Bill back to the Statutes Revision Committee. ■ , : - ■/■ Mr D. C. Herron (Opposition, Awarua) s&id the bill provided for the resumption by companies of shares held by “dry” shareholders, but what would' happen : tq the joint and severalguarantees where “dry” shareholders were signatories. Normally a joint arid several remained in;force for.the lifetime of the guarantor, and as. long as his estate survived, but, if shareholders : fvei’e to be deprived of their shares, they should at the same time be freed of all. liability. ‘ "Dangerous” Move • ‘ --Mr T. C-’Webb (Oppdsition, Hobson) took; a different view. A joint and several guarantee was a contract arid it would - be dangerous for the House/ ’in these circumstances, to, legislate :for the breaking of a contract between - a bank and a dairy company. A particular “dry” shareholder niight.be the only substantial guarantor of 1 a joint and' several. Should he be able to escape his liability C;merely.- by ‘ surrendering his' shares.?"'h.' l ' , " Mr SE."■ Langstone (Independent Labour, tloskill) said the House was duty bound to protect a man from a liability entered into as the result of an attachment to a company, which the present bill would destroy. - Mr W. A. Sheat (Opposition, Patea) suggested referring the bill back to the Statutes - Revision Commission. The' point' raised had obviously not been adequately considered either by the House or by the committee. No company should be able to push out a “dry” shareholder without first releasing him from any obligation he had entered into as a company member. The Minister of Industries and Commerce (Mr A. H. Nordmeyer) said there might be some ground for the objection, but it might be that a “dry” shareholder had given, the guarantee not as a shareholder but as a man of substance. Should he be able, to escape from his guarantee merely by disposing of his shares? The point could not lightly be set aside. He suggested consideration of the bill be deferred until he # could have the matter investigated in the hope of finding a way out of the difficulty.. Discussion Suggested Mr E. B. Corbett (Opposition, Egmorit) said there might be some validity in the point raised, but the bill was before the Statutes Revision Committee for some time and Messrs Herron, •P. Kearins (Government Waimarino) and others now objecting were invited to make any suggestions they could for improving the bill. That was not done, and it looked as if suggestions had been withheld until tonight with the object of delaying the bill as long as possible. The matter could surely.be settled in discussion between the companies and the banks.. If an amendment were to be introduced it should' be on the lines of giving no power for ■ the compulsory resumption of shares unless at the same- time ■ “dry” shareholders were released from their obligation. That would not endanger the bill’s fundamental principle. . Mr Nordmeyer undertook to confer with those interested.