MUNGANA LEASE

Nelson Evening Mail, Volume LXIV, 5 August 1931, Page 5

MUNGANA LEASE

ALLEGED CONSPIRACY HEARING OF THE CASE ; ' NINTH day (United Press Association—By Electric " ' Telegraph—Copyrisht) - BRISBANE, 4tli August. The Mungana action has now passed, the ninth day The Crown case is expected to close this week. . The defence will occupy the whole of next week. Legal costs are estimated at £450. per day. THE CROWN CASE . ; STORY OF EVENTS . ''X: The details of the Crown’s allegations in connection with the Mungana case . were explained at length in the Bris- • bane Civil Court by Mr A. D. McGill, one of the counsel for the Queensland Govern meat. The action involves a , claim for £30,000 damages for alleged y conspiracy against four defendants, two ) of whom—Messrs Theodore and McCor- ■ mack—are former Premiers of Queens-',')' land. C !> • The Crown’s story, said Mr McGill,,'.'!',’ began with the Mareeba to Chillagoe Railway Act of 1897. Under that the right was given to persons to take ■ Up mining leases in tho district of Chit-. lagoe for a term of 50 years at an an- . nual rental of £1 an acre, such rent to V" be paid on or before Ist January in evely year, but the leases lyould be forfeited to the Crown if tho lessees neglected to pay the rental for a period of three months after the due date of payment."'" Certain of those leases were still in existence in 1913-1914, on which were two ;; v mines known as the Lady Jane and the.. Girotla. Also at Chillagoe were ore;' reduction and treatment works, affording a market for the ore mined from;;; •' these mines. About 1913-1914 these .... smelters were closed, and they ed closed for a number of years. In 1916, the rental for the leases was not paid* and not being paid before Ist April,T9l7, the leases became forfeited'.'.' and they were forfeited to the Crown.- - • The next significant thing was that oh' 10th September, 1917, Frederick Reid,-—-one of the defendants, applied foi a' lease called No. 502 and, on the same day, applied for lease 503. His application showed that he applied for land at Mungana in the Chillagoe district. Application was made to the mining - >. warden at Chillagoe, who recommended .. tlie granting of the leases in October,.-. 1917. At that time defendant Theodore cwas a member of the Legislative Assent bly for the district of Chillagoe, where the leases were situated. McCormack , was at the time Speaker of the Legisla-, tive Assembly. The areas included the i—mines Lady Jane and Girofia. What happened next? asked Mr McGill. On 29th October, 1917, Reid applied to be exempted for six months from doing work on the leases, on tne < ground that he required the time to raise capital to work the mines, and that, until the previous lessees had removed their machinery from the leases, operations were impracticable. At this time the smelters were still closed mid Reid was granted the - exemption on 15th November, 1917. In the next few months, Reid took in the defendant McCormack in his lease, and the Crown submitted and proposed to prove that really McCormack was then taken into the ownership of the • leases and did not just supply capital, ■ ; Reid really, taking a half-interest for 1 himself and giving the other half-mter- - est to McCormack, and,, as the Crown . proposed to show, to Theodore. . There would be no doubt about, that . -- so far as McCormack was concerned, ; and, by a declaration of trust dated 15th - January, 1918, Reid made over a half- ■ share of these leases to McCormack and kept half for himself. McCormack acquired that interest when he was a member of Parliament. McCormack, Mr. McGill contended, . went into the lease under a verbal agreement that he should share expenses, loss and profit.. Evidence would be directed as to how. they conducted them- ~ selves into the matter. , _ In 1916, Mr McGill continued, the Government commenced negotiations for * - . the purchase of the Etheridge and Chil-, , lagoe railways and the. Chillagoe smelters, and they were purchased under the . . Etheridge-Chillagoe Railway Act, which . .. was assented to on 14th November,,. , 1918. But the significant point about the Act was that it ratified an_ agreement given in the schedule to the Act for the purchase by the Government of the smelters and that agreement was dated 6th November, ,1917. . . , It was clear from the facts submitted, said Mr McGill, why Reid gave McCor- -, mack a half-interest in the leases. in ... ) MaV 1918, Reid applied for another six months’ exemption from working the leases, and'that was granted on JuneJß 191 b, which would exempt Reid until November, 1918. Under the law Reid should have, registered the fact held a half-interest in the leases in tiusb • for McCormack, but such a fact was never registered. Again, "there was no /;,• registration of any firm to show, in a - public office, the ownership of the leases. In a letter by Reid to Theodore, as Tiea- * surer,. applying for a loan of £IO,OOO to , enable the lessees to purchase machinery - ' to open and de-water the Gn-ofla and Lady Jane mines, Reid made no menti n of McCormack as holding a half-inteiest in the leases. Theodore referred the letter to the Minister for -Alines, Mr A. J°» e3 > alld supporting Reid’s application for a loan, wrote: ‘'The proposition is thoroughly sound from a business point of view, and there should be ample “cunty to covei the Government. I desire as favouiable a consideration of the application as p sible.” Reid’s application was then iereferred to a Mines Department inspector named Horsley, who ported thatit would require as much as £20,001) to pui the mines in production order. Reid’s application was refused, hut lie was granted a loan of £2BOO under the Mining Machinery Advances Act, Reid agreed to pay back the loan as soon as possible, but when the Government hacl been paid nothing on October 1, 1920, McCormack drew £ISOO as a share and half profits of £3OOO on the leases V Mr McGill added that he would show that about that date. McCormack banked £750, or half the £ISOO share from the leases. The Crown’s evidence would show that £750 went to a second person from McCormack, and when the evidence was finished the jury, he claimed, would have no doubt that that person was Theodore.