THE PATENT SLIP DISPUTE.

Hawke's Bay Herald, Volume 11, Issue 837, 23 March 1867, Page 3

THE PATENT SLIP DISPUTE.

[From the >' it .Z. Advertiser,' Mavoh 4] Mb. Howard Kennahd has compiled a rather voluminous Blue Book containing all the officialdoeuhients, letters, &c, that are of importance in elucidating the dispute relative to tbe Patent Slip. He has forwarded a copy of this Blue Book, accompanied by an introductory letter, to each member of the Provincial Pouncil, and we republish that letter in another column. The major portion of the documents have already been before the public, and the later ones, which have not been previously published, only go, to show that an amicable ar-rangement-of the dispute is still as far off as ■ eW. 'They go. even farther, and plainly indicate that, while Mr. Kennard is desirous 1 : of'inaßfig some concession in order that the 'work may be proceeded with, the Govern* ment have taken their stand upon what they conceive to be the letter of the law, -'.- and, will have that carried out or repudiate : the contract altogether. -.&< We are not prepared to acknowledge that their view of the •••-'; law of the question is correct — -indeed, we they could'establish it— < taut they hav.e,tak|en; their stand upon that , . view, -fftieihertt' fie good or bad, We need ■' notTwade -through this correspondence again. The index to 'this Blue Book sufficiently shows that the interpretation we put upon it is correct. It will be remembered how, . on Mr. Kenriard's arrival here, at l fiis first •:• interview. with the Executive, the compromise that -was almost effected was suddenly broken off, and, the Superintendent going to the Mahawatu, a hiatus occurred which has since been only filled up by a useless correspondence. . , But it is not on such narrow grounds as those involved in the * letters and replies which passed between the office in Grey-street and the Provincial Gonient offices that this question should be considered. They only relate to technical points that. are pr are not to be conceded, while the broad principle that the public should consider is, whether a Government is authorised to repudiate a contract which has a tecnnicalflaw in ifc. That this contract ho&a Jtyw_,jta it is now .more apparent than ever. The Provincial Solicitor says "that the contract not haying been legally adopted by the Superintendent and Executive Council \~. ri^as not binding in law on the Province, and /therefore there was no contract between the ,1 parties/: Mr. Kennard has; taken legal opinion on the subject, and is advised that "inits strictly legal bearing there might, in law, be a possibility of such a technical defence, being admitted." It will be seen, therefore,, that the difference between the , 'Government and contractors instead of v growing narrower has widened considerably. Hitherto the only question at issue has been who should make good the site which has been incorrectly described, now it is, shall the contract be repudiated in toto or not. If driveri'to a' legal decision of the matter the contractors obviouslystand no chance whatever. They can be sued but they cannot sue. They might obtain a judgment but ib would be of little use, as the Provincial '• ; Council could bear out the Government, and refuse to vote the money given in such judgment. .-■ . , . But we trusfc that the matter may not come to such an issue as that. We trust that -the; Council will take ifc into its own hands and decide it on its merits. We hope -for this for the honor and for the good of the Province, both of which are involved in the question, as we shall endeavor to show before we close these remarks. The very ; ■ fact of the dispute being no longer the mere question of whether the Province or the contractors shall .pay for the error of the . servant of.- the Province, but whether the Contract shall be deemed good, -and carried out as such, will make the task easier. We, and the Provincial Council, have no longer to deal with a small matter, but with a large —with a matter in which something more . than £6,000. or £7,000 is concerned,— in which the honor of this Province, and with it the good of every Province in the Colony is deeply involved; We propose to put honor in the scale against pounds, shillings and pence, and without falling back on sentiment, hope that the latter will kick the .-..beam.)' \««a-. >•=•••■ - . ■ . '•-'•• •- '..':'". iTjie jfifth paragraph in Mr. Kennard's ■' letter is worth perusal. He says that he ' does. not, for 'one moment, accuse the late Government of wilfully omitting to do s uch i.acts as would legally bind the Province. ' Bufc that omission was made, and through it the contract is a dead letter. Here, at the Very beginning, the Government are the defaulters; -Unin ten tionally, no doubt, but still the defaulters. The contractors accept .the contract as a good and valid one ; they ;" lay out their money upon the faith of its being so, and go on with the work until they learn to , their surprise that through a i. stupid mistake all the work is useless, unless they or the persons who committed the' mistake go to a large further outlay. From that the trouble begins, and grows greater until the Government, who were, in • fault— not the contractors, who were deceived —talk about taking advantage of a technical defect in the contract, and repudiating it. If the Provincial Council of the Province of -Wellington allow their Government to do .; ['' this,' as ' they^can undbubtedly'db, there is scarcely a contract entered into by any Pro*vinciaiGovernment in the Colony that could not be repudiated. There are very few contracts, indeed, taken up by private persons for a Government that acoach-and-:-fcixcould not be driven through. Are there not many contracts made during a recess j,for''.'WorK that must be done, and is it not ' quite in the power of a Provincial Council to refuse to^yoteithe money for them ? As '*-•■' legally binding, and without any reference f, :to an equitable binding, contracts between private persons and Governments are mere farces. If the Messrs. Kennard had been . the original defaulters in this matter there could not be a word said in their favor, If i they had even accidentally made a blunder .. ih; 'the construction of their material, and then sought, through a technical question, to get out of the contract, ; -they would find few supporters here; bnfc it is the Government who have t; ' : pn^/thetWselyes exactly in that position. There is little doubt that impecuniosjty lips very near the foundation on iv 'i iWbifeh ; the .Government are. taking their ;>■ ssand j ; buj>, even here Mr. Kennard offera v';'-' ' \^^e§^:lS'em^irly, by; taking" bonds ins; 'i^ ; dass':to vrecHfy. the mistake that i'c-th^lr^enfc-feas^ad.e^ : -Thf to Wk^^^^&M3^^- JW^i.a>iJ)f: ■ ■looking ■^^00^^i^Mt^:Vxpyv^i . in upanji'ittte^iy^and^e are

convinced that any attempt at repudiating this contract through a technical defect in it would inflict a wound on that honor and integrity from which they would not easily recover, Repudiation is a very ugly word. It is only applied to the acts of Governments, because they alone can pay their debts in that way ; but woe betide the Government that ia reduced to such a shift. In this case, repudiation involves more serious consequences than a breach of honor. The Government are not disputing with a small firm who have undertaken a petty job ; they have got into collision with a wealthy and influential English firm, who, by their treatment in this matter, have it in their power to do the credit of this Province and the Colony great good or great harm. It would have been impossible to have gone anywhere with such advantage as amongst English capitalists to seek for some one to take up this very. Patent Slip contract. We could not have undertaken it in this Colony, and could not have got it done in any of the. neighboring colonies. We were almost compelled to go to English capitalists to undertake it. But if now we repudiate the bargain that we have made with the firm that accepted our offer, and if their representative goes home with the information that, because of a legal flaw in the contract, a New Zealand Provincial Government repudiated it, and they lost some thirty or forty thousand pounds, we shall not easily induce other English capitalists to trust their money in works for us. Mr; Howard Kennard must be looked upon as something more than a representative of the contracting firm. He belongs to a class of men in England who have great power in the commercial world, and who will look to him to report upon the advisability of taking up New Zealand contracts. If he reports against them, our agents will have a difficult task to convince English firms that such contracts are good investm|iits^fp'y..their. money. If the GovernmenttfOf^this Province repudiates, and he has to j|ssbine with such a report, every ther Goverrilnerit in the Colony will have a right to censure Wellington for its conduct, which must entail loss upon them -in all projects by which they hope to bring English capital out here. Let those who see more weight in the argumont that the country is likely to lose money by repudiation than that it is likely to lose caste take this into consideration ; but as with Mr. Kennard we believe that " the good faith of this Province, which has hitherto been unstained," is the best security, we prefer to trust the case on the question of honor, We ought, perhaps, to point out more directly the technical defect that exists in this contract. It lies in the fact of the agreement entered into by Mr. Morrison, as agent for the Province, never having been confirmed by the Superintendent and Executive Council. But, although such was the case, the Government never, during two years, even hinted that the contract was not valid ; they allowed the contractors to construct and ship material for the Colony ; they correspond with the contractors as though everything was correct, but the one error as to the foundations ; and they even gave notice, that under a clause in that contract they would seize the material lying here if the contractors did not at once proceed with the work. In the face of such admissions as these we are convinced that the decision of a Court of Equity would be that the contract should be made good. But that would be of little avail to Kennard Brothers, and we think they have taken a much wiser course of appealing to the honor of members of the Provincial Council. The reason for the Government now falling back upon repudiation at the last moment is contained in a short paragraph in a letter from the Superintendent to Mr. Howard Kennard on the 18th of last month. Mr. Kennard had made two proposals to the Government. One was that an entirely new contract should be, entered into, and the second that the Government should give its formal sanction to his erecting the slip on the foundations as they are, although he declares that it " would be utterly insufficient, and would . never raise a ship." The Superintendent, in the paragraph referred to, answers those, proposals by saying "that the very essence of Messrs. Kennards' agreement with Mr. Morrison was that they should construct a slip capable of holding and hauling up vessels of 2000 tons register," Therefore he declines to accept any proposals. Do the Government really mean to say that on such a quibble they intend to take their stand ? Again, for the honor of the Province, we trust not. They would bind the contractors by " the very essence" of an agreement which their agent's act had rendered it absurd to carry out. Their agent tells the contractor to make a slip for a rock foundation and that foundation is sand, yet the contractors are to be bound by " the essence" of that absurdity or the Government will repudiate ! As well might they contract for a submarine^ cable and then demand that it should be stretched along poles, or a diving bell and demand a balloon, because their agent had mistaken their meaning. But we have no doubt that the Council will judge the. question on higher grounds than any technical quibbling, and give a decision that will maintain the honor of the Province intact.