LOSS ON BUSES.

New Zealand Herald, Volume LXVI, Issue 20309, 17 July 1929, Page 12

LOSS ON BUSES.

MOUNT EDEN COMPANY.

CREDITORS SEEK RELIEF.

PETITION TO PARLIAMENT

[i; V '1 EI.ECIUAPtI. —SPEC IA L HEl'Oin'Ell.] WELLINGTON, Tuesday.

Placing (lie debts owing to tliein by tlie Mount. Eden Motor Bus Company, Limited, at £12.850, creditors of tho companv to-day petitioned Parliament to give favourable consideration to (lie grant of sucli relief as might bo fitting. The petition recited in detail the history of the company, which began operations iu October, 1925, serving more particularly the Mount Eden district. Iu tho following January the operations were extended by taking over services to the western suburbs, which became known as the G.O.C. section of tho company's business. Tho Motor Omnibus Traffic Act, which operated from November 1, 1926, required the company to charge a penal fare, and thereby, tho petition claimed, the company's business was seriously interfered with, and tho development of the 0.0 C. section as contemplated was prevented. Tho company gave notice on October 26, 1926, requiring tho Auckland City Council to tako over tho G.O.C. business, but the City Council refused, thereby compelling the company to establish in a Court of law that tho council was under a statutory obligation to do so. Tho decision, which was favourable to the company, was not given until August, 1927, but in the meantime the company had boon compelled to maintain tho business under circumstances which prevented it from earning fair and reasonable profits. It was claimed that the price fixed by the Assessment Court for tho taking over of the vehicles by tho City Council, namely, £15,427, was insufficient. The company submitted the vehicles should have been paid for at a figure arrived at by taking the cost of the vehicles and deducting (1) depreciation at the rate of 20 per cent, per annum, and (2) the cost of completely overhauling and renovating the vehicles. Had the vehicles been taken over on that basis their value would havo been assessed at £25,560. In effect, the Court had dealt with the vehicles as if they were "junk" and not commercial vehicles. When the activities of the G.O.C. section of the business ended the company owed the petitioners £12,850, but after the realisation of assets there was nothing with which to pay any of that amount. The petitioners urged that tho losses would not have been incurred had it not, been for the intervention of tho Act, and in the circumstances considered that the creditors should not be required to bear the loss.