BORROWING POWERS

New Zealand Times, Volume XXXIII, Issue 7842, 3 July 1911, Page 1

BORROWING POWERS

ABOUT AN AUCKLAND LOAN HOW FAR CAN A HOSPITAL BOARD GO? A question of eomo importance in connection with the borrowing powers of .hospital and charitable aid boards was involved in a case heard by his Honor Mr Justice Sim in tho Supremo Court on Saturday morning. The motion before the court was for a declaratory judgment as to tho validity of a loan of =£70,000 for which -the Auckland Hospital and Charitable Aid Board applied to tho Fublic Trustee over the security of certain of the board’s reserves in the city and suburbs of Auckland. - Mr j. IV- Macdonald represented the Public Trustee, Mr Martin Chapman, K. 0., with him Mr E. J. Fitzgibbou, appeared for tho board, and Mr J. W. Salmoral. tho Solicitor-General, for tno At-torney-General. In opening the case Mr Macdonald said that the Public Trustee was anxious to lend the money if it wore legally possible to do so. The reserves ottered as security had been" a special, object ot attention by tho Legislature since 18oG, when they were granted as hospital endowments. The land was, by ti\e Auckland Hospitals Reserves Act, 18S3, placed in tho Public Trust Office and down to 1905 there had been continual amendment ot the legislation aflecting it. In 1905 tho board’s loan had been reduced to tho sum of =£7700 and _ then further legislation was passed giving the Public Trustee‘fuller leasing powers and authorising a loan of =£25,000 tor tho erection of new hospitals and buildings- In 1907 the board was givem the management of the reserves and tho limited power ot borrowing -was raised to .£50,000, preserving the right of the Public Trustee to advance -the money. Recently the board, for tho purpose of rebuilding and paying off an existing loan, applied to tho Public Trust for a loan -of J 270,000 over the security of the rents of the reserves and proposed to enter into a covenant to levy annually on the contributing bodies the deficiency of income necessary to pay interest and. sinking fund. On . going into the title the Public Trustee raised certain questions and tho beard asked that they be dealt with by the court ait its expense. Tho questions were—(a) Are the general unlimited borrowing powers conferred upon tho boards by. the Hospital and Charitable , Inatitutioms Act, 1909, controlled,, affected, or abridged by the 19U3, and, 1907 local Acts -and, if so, to what extent?-5 , ■ ’ ; ’ (b) these powers under tho said Acts be exercised, concurrently? (o) Is it ultra vires of the boards to enter into tho proposed covenant? , Mir Macdonald added that if the first and third questions- ware answered against the board it would mean that that body,, would be .£30,0f10 short iu its finsmoial arrangements. / His contention was that the special local Acts overrode the general Act and the amount that could bo borrowed was limited to' .£50,000. After hearing legal argument at some length his Honor reserved his decision.