USE OF £9000

New Zealand Herald, Volume LXXVIII, Issue 23994, 18 June 1941, Page 9

USE OF £9OOO

CITY COUNCIL MONEY FUNDS FROM LAND SALE LEGAL QUESTION RAISED A question raised by the Comptroller and Auditor-Genera! as to the use which the Auckland City Council may make of £OOOO paid to it by the Public Works Department in November, 1988, was argued before .Mr. .Justice Fair in the Supreme Court yesterday. The money was paid for an area of 2LI perches in Wollesley Street West, which was taken in February, 1938. for the establishment of n post office. The section is part of the six-acre area known as the city market site, which was originally granted by the Crown to the city in March, 1855. Mr. Stanton appeared for the City Council, and Mr. V. R. Meredith and Mr. X. I. Smith for the Crown.

.Mr. Stanton said the area became subject to the Auckland City Endowments and Reserves Act, 1875, and later to the Auckland Citv Empowering Act, 1918, under whicli it was to be held as an endowment for tho benefit of the city and not for any special purpose. The City Council proposed to sot aside the £9OOO as a nucleus of a fund for the erection of a block of buildings for city administrative purposes. Tho Auditor-General questioned this, and contended that the land was a public reserve or that it was held by the council in trust for a particular purpose. and that consequently tho council had no power to sell tiie land and should have paid the compensation money to the Public Trustee. It was hound to preserve the money intact as an endowment lor the citizens of Auckland.

Against this, .Mr. Stanton said, the council contender! finite simply that tin's was not a public reserve, that, it was not land held for any particular purpose and that it was in the council's discretion to use the funds for any capital purpose. Mr. Meredith submitted that where property had been handed to a local body impressed with a trust that trust always remained. If the land had been lawfully converted into cash the corpus must still remain impressed with the same trust and must not he dissipated, but treated as the original land was for the purpose of producing revenue. This land was originally reserved by Her Majesty's Government for the purposes of public utility, and there was no discretion given anywhere to, the City Corporation to handle this money as it thought fit. His Honor reserved his decision.