ONEKAKA CASE

Nelson Evening Mail, Volume 76, 5 August 1941, Page 7

ONEKAKA CASE

PACIFIC STEEL, BRASSERT’S AND THE GOVERNMENT FURTHER HEARING TO TAKE PEACE IN WELLINGTON { The hearing of the Oneknku inininy, ' I forfeiture suit was not concluded when j the Warden’s Court rose yesterday <u i i lernoon and the hearing was adourned j Ito Wellington until the 22nd August. j I Mr T. E. Maunsell, Warden, presided, j Mr 11. H. Cornish with Mr C. R. Fell, j (appeared lor the Crown, Messrs P. B. Cooke, K.C., and M. C. H. 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, i Continuing his evidence, A. M. It. IShirtclilT, a director of Pacific Steel, said Ihe had a fair knowledge of the business before he became a director. Wat- ; son went to England to appoint experts to report on the Onekaka iron ore industry. If the report was favourable I he was to see what could be done for ! the development of a modern iron and ! steel works at Onekaka. Their pre- ; liminary report in August. 1933, cost 500 guineas. Early in 1934 the company i received assistance from the Governi ment to the extent of £2500 towards ' the cost of obtaining Brassert's report. l ln July and August 1934, Brassert’s j experts visited New Zealand and acI cording to the arrangement with the Government Pacific Steel paid the cost jof the visit. The total cost to the company in connection with Brassert's ! was £8250. The original 100 shares |of the company were divided among three people, Watson having 50. Later ihe handed over 25 to someone else, i Witness said that Watson had made : nothing out of the company. A file of correspondence showing J transactions with the Government was i produced. The company was hopeful j of continuing the enterprise, said wit - ! ness. The will to go on was with the 1 directors. A large sum had been spent in England in investigating the j i possibilities of the industry. Asked what led the directors to exercise the option j witness said that he received a cable * from their London solicitors and another from Watson, advising exercise iof the option. Though he received the cable before 31st January he did not act immediately, because he knew the I option did not expire before 28th February. When the option was exercised i they had no knowledge of its extension. [The company had never consented to ; Brassert's acting for the Government*. The company had never consented to Brassert’s placing at the disposal of the Government all the data collected on ' the company’s behalf, except the con- j tract to supply the report under the j loan of £2OOO. The company had communicated their complaint to Brassert's ; • and followed up with a writ in the High Court in London. When counsel started to put. a ques.--: 1 tion about the basis of the company's; claims, Mr Fell raised an objection and j the Warden ruled the question out. That writ was proceeding in London ; at the present time, added witness. Mr Sim asked witness what was the j ; nature of the company's complaint ; • against the Iron and Steel Department j or the Government. Mr Fell objected again Mr Cooke supported Mr Sim. Witness said that their complaint was that Brassert's, while under contra'.' ! to them, were weaned away from them i by the Government. The Government ; had never asked the company's consent j to Brassert’s acting for the Government. Witness referred to the proposed for- j mation of a new company and said that j ; when the new company had been form- i ed and the industry was under way i Pacific Steel would have discharged its founctions. Options were obtained over freehold land, manganese and coal ureas. Cross-examined by Mr Fell witness said that his answer that “if the Government had not stepped in Pacific Steel would have erected iron and steel works,” depended on the finance being arranged. His belief that the business , would have gone on depended on his faith in Mr Watson's ability to find the money. There was a plan which coni' tained a proposal that the Government should guarantee 5 per cent, on £2.700 - *OOO. There was another large scheme which he could not remember. Mr Fell put it to witness that there was not another scheme. Had he ever heard of a Belgian scheme? Witness admitted that he had heard of Cooper and Pacific Trust, but did not know whether the oilier scheme was connected with those. It was i fact that two directors, Messrs Clarke and McDonald, when they sold some uf their shares retained the proceeds of these and did not pay the increase received to the company as the other di- - rectors did. *j Asked about the statement made by • : Mr Johnston to Mr Nash in a letter on • 13th January. 1938. that the cost of -• options was £15,000. witness said that I j he could not say how the amount was I made up above the £1450 paid to the 1 Onekaka Company. The purchase by • Pacific Steel included the freehold of i: the Onekaka Company on which the - i iron works were situated. Pacific Steel - j were never in possession of the One- )! kaka privileges; they only had options. -} Re-examined witness said that Messrs Watson and Johnston paid the whole of r! the money received from the sale of i [shares to the company as a loan. It had - 1 never been repaid. He did not see - anything wrong in Messrs Clarke and 1 MacDonald retaining their shares. Mr Sim said that that was all the evidence he intended to call in Nelson.