INTEREST ON LOANS

Otago Daily Times, Issue 22064, 21 September 1933, Page 10

INTEREST ON LOANS

EQUITY COURT’S DECISION

FINAL DECISION WITH PRIVY COUNCIL

(Pee United Press Association.)

AUCKLAND, September 20,. In connection with the Sydney decision regarding the Wanganui-Rangitikei Power Board, it was stated to-day that there was a tacit agreement among the local bodies concerned that whatever the decision of the Sydney Equity Court might be the final decision should be sought from the Privy Council. Several Auckland local bodies are interested. The Waitemata Power Board raised a loan of £200,000 in Australia, the Drainage Board £50,000, the Auckland Power Board £102,900, the Takapuna Borough Council £245,000, and the Auckland Harbour Board £150,000. Several of these bodies have paid the disputed portion of the interest due into suspense accounts, A Press Association cable message from Sydney, published yesterday morning, stated that the court dismissed, with costs, the suit of the Wanganui-Rangi-tikei Power Board against the A.M.P. Society, Sir John Harvey’s judgment said it was clear that the parties intended the contract to be a New Zealand contract from first to last and that it was never intended that the obligation to pay interest at Sydney was to be subject to any law which the State of New South Wales might make. Sir John Harvey held that if a resident of New South Wales borrowed money in England, contracting to pay interest for it there, a*nd returned to New South Wales before his creditor could sue him in England, it obviously could not be set up if the creditor followed him to New South Wales that he was discharged from the obligation to pay the full interest by reason of the existence of the New South A Vales Interest Reduction Act. It was too clear for words that these loans and security were to be interpreted and enforced according to New Zealand law. The fact that the debentures were made payable in Sydney was a mere accident, and whether that was an obligation which was an inherent part of the contract and could not be varied except by the consent of both parties seemed Ibe unnecessary to consider.