DEBENTURE INTEREST

Otago Daily Times, Issue 22904, 11 June 1936, Page 7

DEBENTURE INTEREST

CURRENCY OF COUPON . PAYMENTS

VERDICT FOR ENGLISH COMPANY (Pee United Press Association) WELLINGTON, June 10. The Court of Appeal this morning pronounced judgment in the -case of the Alliance Assurance versus the Auckland City Corporation and the Auckland Transport Hoard. The question for determination arose out of the provisions in connection with the debentures originally given by the Auckland Electric Tramwavs Company, but now payable by the Auckland Transport Board. The plaintiff company claimed that the sums to bp paid on interest coupons (which were stated to be payable at the holders’ option in Auckland or London), if nresented in London, are to be paid in English currency. The corporation and Transport Board contended that the sums were payable in New Zealand currency, converted at whatever rate of exchange is current between London and New Zealand on the particular date of payment—in effects that the debenture-holder bears the cost of exchange between New Zealand and London. , The majority of the court (Mr Justice Ostler, Mr Justice Blair and Mr Justice Kennedy) gave judgment in favour of the plaintiff company, while Mr Justice Reed delivered a dissenting judgment, in which he decided that at all material times the New Zealand £ and the English £ were different, although they expressed units of accoupt in the same name. Provisional leave to appeal to the Privy Council was granted to the corporation and the Transport Board. The case was heard by the Appeal Court on March 18.