AUSTRALIAN MONEY

Hawke's Bay Tribune, Volume XXV, Issue 305, 11 December 1935, Page 7

AUSTRALIAN MONEY

INTEREST PAYABLE

An Important Decision

NO REDUCTION ALLOWED

(By Telegraph—Press Association.' WELLINGTON, Dec. 11. Judgment in the ease of the T. and G. Life Assurance was delivered by the Court of Appeal this morning. Between 1926 and 1928 the T. and G. Society, incorporated in Victoria, advanced to the Mt. Albert Borough Council £130,000 upon th e security of certain debentures bearing interest at £5 13.9 per cent, per annum. Interest at that rate was paid on the debentures to September 1, 193-1, but on March 1, 1935, half-yearly interest day, the council paid only £3,250, leaving a balance of £446 17/6 and alleging that it was not bound to pay this balance in view of certain financial emergency legislation passed in Victoria between 1928 and 1934 and particularly in view of the Financial Emergency Act, 1931 (Victoria), which reduced the rate of interest to 5 per cent. The society denied that the debentures were affected by this legislation and issued a writ for £446 17/6. The corporation counter-claimed for £2610 4/10, which, it alleged, it bad overpaid in ignorance of this legislation and its effect.

Hv order of the Chief Justice, the following questions were ordered to be argued in the Court of Appeal:— (1) Whether the Victorian Statutes relied on by the Borough Council had application to the debentures. (2) Whether the interest payable under the debentures was reduced by the Financial Emergency Act, 1931 (Victoria).

(3) Whether if the rate of interest was reduced the Borough Council was entitled to a refund of interest paid in excess of the reduced rate.

The first -two questions were argued on October 8,9, 10 and 11, the Court not desiring to hear argument on the third.

In its judgment the Court this morning was unanimous in the opinion that an examination of the circumstances surrounding the contract, the contract itself and the law applicable thereto disclosed that the proper law of the contract was the law of New Zealand, and that accordingly the Victorian Statutes relied on by the corporation did not apply, and that the interest payable under the debentures was not reduced by the Financial Emergency Act, 1931 (Victoria).

Each member of the Bench wrote long judgments giving various reasons for their views, but all arrived at common answers to the questions before the Court. Costs £6O were ordered to be paid by the Borough Council.

After the judgment was delivered Mr O’Shea, senior counsel for the Borough Council, asked for conditional leave to appeal to the Privy Council, but the Court decided that in this case application should more properly be made to the Supreme Court.