NEW ZEALAND NATIVE LAND SETTLEMENT COMPANY.

New Zealand Herald, Volume XXV, Issue 9098, 5 July 1888, Page 6

NEW ZEALAND NATIVE LAND SETTLEMENT COMPANY.

SPECIAL MEETING.

THE COMPANY TO BE WOUND UP. A special meeting of the shareholders of the New Zealand Native Land Settlement Company was held at the office, Victoria Arcade, yesterday morning. Hon. Dr. Pollen, chairman of directors, presided, and the following gentlemen were also present: —Dr. J. L. Campbell, Messrs. C. A. DeLautour, Thomas Buddie, J. Bailey, W. S. Wilson, John Murray, S. T. George, G. B. Owen, Rev. J. Campbell, Messrs. C. E. Button and H. Brett.

The Chairman pointed out that at the last annual meeting' the report of the condition and prospects of the company which the directors were enabled to give to the shareholders,' was not of such a satisfactory and encouraging a nature as both the directors and the shareholders could desire ; and it was understood, though not formally expressed, that it was the duty of the directors to wind up the company as quickly as could possibly be done with due regard to the interests of the shareholders. This duty the directors had carried out with perseverance, and to a considerable extent, as would be seen presently, with success. The difficulties surrounding the native titles had been well known to everybody connected with the company. These difficulties had been surmounted ; all the titles of the company had been secured, and they were now held either under land transfer titles or Crown grants, about which there was no question. All the differences with the native clients in respect to their accounts as between the natives themselves and the company had been settled, and in all cases the natives had given a written guarantee thatas between themselves and the company the outstanding accounts had been settled and accepted. In making finally the arrangements which had been made, the directors had kept in view the original purpose and object for which the company had been formed—the promoting of settlement upon the lands of the East Coast; and an agreement had been entered into by the native owners on the one hand and the company on the other, by which those lands could be disposed of with great facility in England if a market could be found for them. Messrs. W. L. Reefs and Wi Pere, as representing the trustees for the native owners of the land, were now on their way to England, armed with anthority to make the best arrangements they could for the sale of the land. The arrangements with the Bank of New Zealand, who was the only creditor of the company, would be laid before the meeting by Mr. DeLautour, who could explain the matter far better than he (the chairman) could.

Mr. C. A. DeLautour said that the arrangement which had been made with the natives was simply this—that the company's debts had been consolidated, if he might say so, and were estimated at £130,000 of secured and unsecured debts. The natives, by their trustees—he was speaking of the native shareholders; of course the company consisted of European contributing shareholders and native shareholders, whose shares were represented by the purchase money of their landthe native shareholders had made an agreement by which they undertook to accept the sole burden of the consolidated debts of the companyroughly speaking, about £130,000. The agreement occupied some little time in making ; and as they were aware, debts of such a kind were always increasing, owinctothe money required for stamp duty, interest accruing on Bank account, &c., so that though the aggregate indebtedness was £126,000 when the agreement was mooted, it had risen to £131,000 when the arrangements were completed, and as a matter of compromise, the sum of £130,000 was taken, which he thought would not entail a serious deficiency on the company. It had been found necessary that the company should increase its debt, the Bank paying £500 in order to give the native trustees a sufficient sum to pay expenses in disposing of their property, so that the whole commitment of the company was £135,000. The natives undertaking to bear this liability,

were entitled under their agreement to receive a conveyance of the equity of redemption of the whole of the real estate of the company, and also any debts owing by the natives to the company. That reserved in the hands of the company itself, as assets, the unpaid purchase money on all sales that had taken place during the last few years, represented by bills current and mortgages bearing interest at the rate of 6 per cent., with five or six years to run. These assets amounted to about £20,000— was under the mark —and in addition to this the calls made and in arrears and unpaid were probably worth £5000. There was a larger sum than this in arrear, but it was estimated that about £5000 would be recoverablecertainly recoverable if the Bank were paid £135,000. The Bank, on its part, had proposed to enter into an agreement, not yet expressed by deed, that it would not foreclose on the lands, the equity of which is to pass to the natives for a term of three years, subject to certain conditions —that the Bank capitalised the interest for twelve months, the six months' interest thus falling due in November, 1889. The trustees would have to find the six months' interest, and if they had not then found it, default would arise, and the Bank would be entitled to its ordinary remedies under mortgage; but if this condition were met, and. the interest was forthcoming, further extension would be given at six per cent, for three years in aIL In the meantime some source might be found for the sale of the land, or the raising of money by mortgage, and the Bank eventually being paid, the other assets would be divisible among the shareholders. This was the whole thing as between the natives and the company, and as between the natives and the Bank. There was one other feature of the proposals which was so far in a rather unsatisfactory position. The proposal, as he had said, was merely that the Bank should not exercise its remedy of foreclosure. At present, as he was informed, the Bank sought to preserve its right to call up the moneys on demand, irrespective of its right to foreclosure. It was not quite settled at present to what extent further calls might require to be made; this was the only point that was unsettled which was really of importance to that meeting, and of which it was very desirable that there should be some settlement. It was possible for the demand to be made, and the liquidators would have, in pursuance of that demand, to levy calls upon the uncalled capital. The original agreement upon which the present agreement was based was that the uncalled capital should remain subject to the Bank's lien, but should not be levied upon the same as the other assets, until there had been a failure to pay the Bank its security on the real estate. The position had changed somewhat since then, and the point was not yet settled between the directors and the Bank. Mr. Button would perhaps have something to say as to the details of the business. Mr. C. E. Button thought that all he need add was that if calls should be made in the meantime, and provided the lands were sufficient to reimburse the sum due to the Bank, the amount of the calls so made would be again divisible between the share holders, ana would be added to the £20,000 or £25,000, as assets.

Mr. J. Murray: May I ask how this agreement you speak of was constituted ?

Mr. DeLautour said there had been no agreement in fact. The agreement he was referring to was a statement submitted to the natives at their meeting, upon which the agreement was in the first instance signed. It was made in the presence of Dr. Pollen, Mr. J. B. Whyte, and himself. It was afterwards summarised by himself and submitted to the chairman, and afterwards to yourself (Mr. Murray). Mr. Murray : But not agreed to ? Mr. DeLautour; No, nothing is yet agreed to. The Bank is not bound at this present moment.

Mr. Thos. Buddle moved the first resolution which appeared on the circular convening the meeting, and which was as follows: — "That the shareholders confirm the action of the directors in entering into and executing an agreement made between the New Zealand Native Land Settlement Company of the first part, William Lee Rees, of Gisborne, solicitor, and Wi Pere, of Gisborne, an aboriginal native, of the second part, and the several persons more particularly described in the first schedule to the said agreement (and who are thereinafter called "The said committees"), of the third part, which agreement lies at the registered" office of the company at Gisborne, and a draft of such agreement lies at the office of the Company, in Victoria Arcade, Auckland, for the inspection of shareholders."

Mr. S. T. George seconded the motion.

Mr. DeLautour said that while he did not wish to disagree with the confirmation proposed, he thought that until the agreement with the Bank was formulated, it would not be right for that meeting to finally pass such a resolution. It was proposed in a subsequent resolution that liquidators should be appointed, and the company wound up, so that it would be necessary to meet at a subsequent date to confirm the special resolution. He thought it would be wiser that in the meantime this resolution should be made inoperative, and in the meantime the directors could prepare the necessary agreement with the Bank. At present there was no such agreement, although the basis had actually been decided upon, and even that, it might be hoped, could bo somewhat more satisfactory to the shareholders than at present seemed possible. He would like to add to the resolution, " This resolution not to take effect until it be confirmed in its present state or in a modified form at a meeting to be held on the 4th of August, 1888." Mr. Buddle had no objection to this proposal, and the amendment was added to the motion.

Mr. Murray asked whether it had been ascertained how the shareholders would be affected, supposing the Bank refused to agree to hang tho thing up. It seemed to him that, in case the Bank refused, and applied for a winding-up order, the probability of the shareholders getting anything out of the wreck would be very much impaired. Mr. DeLautour replied that the position of the shareholders would be this : if the Bank were to take that position—which, he submitted, was hardly likely—they would be liable to pay up at once to an official liquidator—to pay up the balance of the shares uncalled. For this reason he thought that, before * they passed a resolution which parted with their whole' estate, they should be quite satisfied as to the prospect, however dim, of participating in some assets. He did not, however, think the Bank was altogether likely to take up an unreasonable position. The Rev. J. Campbell thought the absent shareholders of the company ought to be consulted in a question of this account. There was only a small number present, and a good many were interested in the question ; and it seemed to him a harsh thing for the Bank to hint that a pressure of this kind would be put upon the shareholders before they knew something of what was going on. Several of the shareholders were out of the colony, and he thought they would like to have the opportunity of expressing their opinion on this point, though he did not know that it made much difference. He was not present when the meeting opened, and he would like to know whether the Bank was likely to exercise its power of calling up the balance of the capital, or whether the power would be deferred until that period of which Mr. DeLautour spoke—November next year. Mr. DeLautour said that so far the Bank had not seen its way to state that under any circumstances would it forego its right to make its demand for the £130,(MX) at any time, but that it would not exercise its right to foreclose upon the land. The Rev. Mr. Campreli, thought the directors should give some information of the negotiations with the directors of the Bank.

Mr. Morrat pointed out that the statutory notice of the meeting had been given, and it was the business of the shareholders who wanted information to have come to the meeting, and not to have it said at that meeting that they were not ready to deal with this matter. It seemed to him that if the shareholders allowed this arrangement to fall throughan arrangement which, he might observe, with all deference to the directors, had been brought about by the Bank, and through advances of Bank moneythe shareholders might find that they had lost a chance of recovering £1 or £'2 per share if they did nob co-operate with the Bank in these arrangements. Mr. Button moved an amendment, "That the addition to Mr. Buddie's motion,

moved by Mr. DeLautour, be struck out, the motion to read as originally submitted." This amendment was seconded by Dr. Campbell, and carried, the original motion being therefore agreed to. It was then resolved, "That the Company be wound up voluntarily under the provisions of ' The Companies' Act, 1882,'" but the consideration of the question of appointing one liquidator or more was deferred until the next meeting, fixed for the 4th of August next. A vote of thanks to the Chairman closed the meeting.