THE ONEKAKA CASE

Otago Daily Times, Issue 24699, 30 August 1941, Page 14

THE ONEKAKA CASE

SECOND WEEK OF HEARING COMPLETED (P.A.) ' , .WELLINGTON, Aug. 29. The aition in which the Crown is proceeding for. the forfeiture of mining privileges at Onekaka against the Onekaka Iron and Steel Company, Ltd.. the Golden Bay Proprietary, Ltd.. and Pacific Steel,.Ltd.,. completed its second week of hearing in the Warden's Court, Wellington, to-day before Mr T. E. Maunsell, S.M. ; v v ~ Mr P. B. Cooke, continuing his address on behalf of the Onekjika Iron and Steel Company. Ltd.. said that Mr G. A. Pascoe, in evidence/had said the Government would have, to impose a tariff on its own behalf on the output of products from Onekaka. kaka Company had. spent over £250,000 in developing the works, and there was a chance, of further capital,being obtained. The company hadjts mining privileges'.fully manned from November, 1934, till June; 1935, and produced enough pig iron' to last till 1937. There was no question of want of bona fides. The company" never had a chance, and it was the Government's, fault. It would have been a savage ruling for the Government to say in 1938 that, these valuable mining privileges must go and must go to the Crown. The case had taken a peculiar ■ turn'. He had not yet heard a word oh the law from' counsel on the other side; and. he asked to be heard later oh the questions-of law.'-' - : '-«■■ -r ' Mr C. H. Weston- on'behalf pf'the' Golden Bay Proprietary, Ltd., based his case mainly on the agreement made on September 18, : 1931, between the receivers for the debenture holders; and the Crowh. by which! the .Crown, in respect of its second mortgage >nd its unsecured deht for c^al.. supplied, was admitted to rank pari % passu with! the first mortgagees. Under that agree-, ! , ment it was, proposed tq realise the! company's assets f as sooii as possible.; Pending ''the 1 .: sale, the receivers were, given'authority to carry-on the* business' or lease, the premises or close' .them, down for the time, being. In the: last event it automatically followed that as; long as ', operations had ceased they were absolved from the obligations to mine ore and: employ labour, two of the obligations on which the Crown's. action to forfeit were based. That agreement had never been cancelled or repudiated by the Government up to the time of the introduction of the 1937 Bill revoking the rights. If the evidence of the agreement were admissible, that, Mr Weston submitted, decided the case, in favour of the defendants. His clients also considered that they were entitled to. the protection of the Mining Act, because, haying leased* the One-, kaka'bl6ck ; to the Onekaka Company, they were entitled to rely 'upon the latter.to observe the covenants in the lease. They did not think the Supreme Court \yould have allowed the company's rights under the . lease -to be forfeited as long as the negotiations in London for extra capitalwere proceeding satisfactorily. Mr Weston had not concluded his address when the hearing was adjourned till September 9, at Wellington.