AN IMPORTANT DECISION.

Otago Witness, Issue 2727, 20 June 1906, Page 24

AN IMPORTANT DECISION.

"THE MINING ACT, 1905."

At the Warden's Court at Roxburgh on Thursday; the warden, Mr F. J. Burgess, delivered the ' following de* cision in connection with Mr John Ewing's water races in that district, and in relation to the Bank of New Zealand, Messrs Mondy, Sim, and Stephens, the Roxburgh Amalgamated Company, and the Ladysmith Company: —

Application for a water r?ee for 20 heads of water out of the Tcviot Creek was made by the Ladysmif.h Gold Mining and | Dredging Company. William Coulter, ! Richard George, John G«prge, and William Young, at the Warden's 'Office at Roxburgh on August 25, 1905. and in their application they gave notice* that at the hearing a certificate of abandonment might be given in respect of water races held under licenses No. 6336, 6339, and 3945, renewed licenses 751, and last renewal licenses 633 and 645. No. 6339 and M 5 for five heads an<! 18 heads cf water respectively, are registered in the name of John Ewing, but haif the water (Hi heads) has been -transferred to the Roxburgh Amalgamated Company, giving, however, that company no right to the water race. These licenses are transferred by way of mortgage to Messrs Mondy, Sim, and Stephens. The races mentioned are practically one, 633S Ixjing only four yarde in leneth, construttetJ to discharge fire beads additional water into race No, 6*5. which m known *s the Hercules No. 1 racp. Water race- licenses 633, 6336. and 6338, for 12 heads, 13 heads. and five heads respectively, ar« registered in the name of John Ewing and transferred by way of morf<r*«je to th« Bank of New Zealand. In this rase 635 is the original race (known as Hercules No. 2> and 6336 and 6339 are very short races granted for the purpose of increasing the supply of water and discharging into the main raoe.

The application of the Ladysmith Company and others was made under the provisions of "The Mining Act, 1898," and Ootoher 12 was appointed as the date for the hearing in the Warden's Court at Roxburgh. On that date the application was adjourned to November 16, and thereafter was from time to time, owing to the uncertainty of Mr Ewing's position under the bankruptcy proceedings, adjourned to April 10 la-f, when it was heard at Roxburgh.

On October 30, ISO 3, the existing Mining Acts were consolidated, as " The Mining Act, 1905/' and on October 31 this act wu amended by " The Mining Act Amendment Act, 1965."

On the 19th rlav of April, 1905, a creditor's petition in bankruptcy wa* lodged in the District Court at Naseby alleging an act of bankruptcy on th« part of Mr Ewing on April 12. After a long delay, caused by intervening appeals, he was finally adjudicated a. bankrupt as from September 21. 1905. The Official Assignee declined to take any part in these proceedings, and wi* not represented at the hearing. The mortgagees. Messrs Mondy, Sim, and Stephens, and the Bank of New Zealand by their counsel, Mr Hutton, appeared to show causa and oppose the application. The Roxburgh Amalgamated Company, represented by their solicitor, Mr Callan, also appeared to oppose. It was contended on behalf of' the objectors that the application was informal because it asked on one application for a certificate of abandonment in respect of five separate rights. It was urged that each title should forn* the subject of a separate application. There is not much cogency in this objection. The applicant for a mining privilege ia «ntitl«d to a certificate of abandonment in respect of a previously existing title, and sections 156 of "The Mmmg 1 Act, 1898," provide* that a notification that such a certificate may be given and may form part of the original application (the practice adoptedin this case). Now, it may frequently occur that the- land applied for may include* several smaller nxe-existinsr holdings, ancl

it is open - for the applicant to insert the notification as to «ach of these in the original application, and this forms part of the application (clause ♦, section 156 "The Mining Act, 1898") and is dealt with at the hearing of the application. That being so, where (as in the present case) the different holdings are practically one property and the same evidence is applicable generally to all of them, I can see, no reason why a separate hearing must be had in respect of each of the said titles. In any oftse, the objection should have been raised earlier? I think it, was too late to take it after the applicant's evi-'.ence was concluded. The question has been raised as to whether thi3 matter should l>e dealt with under the repealed Mining Act of 1898 ot tinder the compiled act of .1905 and its amendment. This amendment everted a material alteration in tho provisions relating to abandonment. Section 11 do€ 6 awu,y with intentional abandonment by operation of law, leaving the matter one of abandonment merely. - This chsngp does .not make much practical difference, but section 12 . is very important, as it enables the warden in a first case to impose a penalty instead of giving a certificate of abandonment. If it can be held in tl'is instance that the whole matter of abandonment and the issuing of the certificate is, confined to tlie provisions of "The Mining Act, 1893," the amendment referred to can have no bearing 'upon these 1 " proceedings, - and if abandonment 'is found on the evidence, there is Ho power to impose a penalty ' in lieu of certifying abandonment. 'It seems to me- (apart altogether from the effect of section, o of the act of 1905) that the facts or state of things re-lied on to prove abandonment must* be regarded in reference to tlie -provisions of the ac^ «f 1898; ' for if these facts or matters establish abandonment there could have been no privilege in existence to which the act of 1905, on its coming into operation, could constructively apply, nor can it apply under any specific provision of the statute, for section 3 of ? 'The Mining Acts Compilation Act, 1905," la not applicable, nor (so far as water races granted before the act of 1898 may be considered as existing under that act by virtue of section 2of The Mining Act Amendment Act, 1900") can the last paragraph of section 6 of " The Mining Act. 1905," affect these races if they were abandoned before the act commenced. In that case it cannot be reasonably contended that provisions of that act can be invoked in considering circumstances which nut an end to the title before the act came into existence. In connection with this aspect of the question it will be noticed that section 123 of the 1905 act adopts all water race licenses granted under former Mining Acts btill subsisting at the date of the commencement of that act, and applies its provisions to them. If these races are found to have been abandoned during the period alleged, they wore not still subsisting when tho act came into operation, and the only authority by which the matter can be determined is the act of 1898. which adopted the6o wator race licenses by section 2 of tho Amendment Act, 1900. !But in my opinion this does not extend beyond the question, of the facts and circurjistances constituting the alleged abandonment. The question of the substitution oJE. a. penalty (now permitted by eection 12, Amendment Act, 1905, already refected to) is, I think, a matter of procedure only, and not of substance (see Ewrag. . v.. Scandinavian Company, Court of Appeal), and is consequently - rctrospective'in Us • -application. The fact, therefore, that under the law as it then stood the privileges were absolutely ond irremediably extinct does not v prevent what is practically a resuscitation of the titles by the warden when imposing a penalty in lieu of certifying abandonment. It is true that at the time the applicants, upon proof of abandonment, were entitled absolutely to a certificate from ihe warden under the procedure then in operation ; but there is no vested right in procedure, for it is a settled principle of interpretation that alterations in the form of procedure are ahvavs retrospective unless there is some good reason or other why they 6hould not be, and this applies to all actions pending as well as future. So far from there being any reason why these provisions should not be retrospective, this construction would give effect at once to the evident intention of the Legislature to mitigate the severity of the existing law in dealing iritb the rights of a person whose mining property has, by operation of law, become abandoned. Section 6 of"" The Mining Act, 1905," provides that for tho purpose of continuing and perfecting any matter or thing commenced or in progress thereunder ihe former act shall be deemed to be unrepealcd. This, I consider, can only apply to the grounds or substance of the matter "Or thing in progress, for unless there is special provision to" the contrary 'the procedure now «rietmg must supply the means by whioh th*s* matters or things are continued or perfected. A* 'illustrating this Contention, I refer to section 156 of " The Mining Act, 1898*" (now" superseded by sectfon 191 of "The Mining Act, 1905 "), which provides that unless proceedings to obtain the warden's certicate of abandonment are by summons issued at the instance of the warden, mining registrar, or mining inspector, a certificate of abandonment can only be given by the warden in the course of .disposing of an application for a mining privilege. The present ia a case of the

lattter kind ; and there is an application for a water race by the present applicants now pending. Now this application must, under -the first proviso to eection 6 of "The Mining Act, 1905," be proceeded with and disposed of unde/ the compiled act. There is no such thing as c specific application for a certificate of abandonment. There is only a notification of the applicant for a mining privilege (which notification in this case forms part of the original aplication — see 3ubsecHon 6 of section 156, " The Mining Act, 1898") that at the hearing of the application a certificate of abandonment may be given. »» ithout dealing with the application the warden has no jurisdiction to go into the question of abandonment of the former title, and it seems to me, therefore, that the two matters are too connected to be dealt with "each under the procedure provisions of a separate statute. I am of opinion, therefore, that in determining'whether the facts proved amount to abandonment I am to be guided by tho provisions of tho act of 1898; though practically it would make no difference which aofc is appealed to for the purpose, for the circumstances or facts constituting abandonment are the same under both acts, but in granting the certificate (if required) I must proceed under " The Mining Act, 1905." Applicants claim that, irrespective of the abandonment which, they allege, occurred during the interval between the date of the expiry of the last protection and the 25th August (when they lodged -flieir application), abandonment had taken place before, the protection was granted, and, if not then, it had occurred during the period of protection. The only evidence of abandonment having occurred before the protection is the -fact that for some time — how long is uncertain — before that date Mr Ewing had "ceased to use th-e water for mining purposes, and that he had sold some of the pipes belonging to the race. In support of his contention that abandonment had occurred during the period of protection, Mr Bartholomew quotes section 130 of "The Mining Act. 1893," which provides that a mining privilege under protection is relieved from liability to abandonment or forfeiture other than intentional abandonment. He claims that the race during this time fell out of repair, so as to be unfit for its proper purpose, and no steps were bona fiJe taken for its repair (subsection 2, section 152). It is quite true that during the period of protection the races were eradual'y getting worse until they reached the state described by the witnesses as their present condition, and no adequate steps were taken to repair the damage. This under ordinary circumstances would constitute intentional abandonment under 6ubsection 3 of section 352 of "The Mining Act, 1898," but I do not think that that is the sense in which the words " intentional abandonment " are used in this section. For, if it bo so, it renders nugatory the very purpose of the protection, for it enforces the doing of those things which it is sought by the protection to suspend, such, for instance, that water must not cease to flow for more than seven days, or that for a period of three months the race must not be unused for its proper purpose. The sense in which the words "intentional abandonment " is used must be either abandonment in .fact or the abandonment contemplated by eection 154 (1898 act), and I do not intend, therefore, to take into consideration anything that occurred during- the period of protection. The evidence , ie not very clear as to the abandonment / before the protection was obtained. Mp Ewiiyj had, no doubt, ceased to do an/ mining with tho water at Hercules Flnf , but he had acquired a special claim at Anderson's Flat, and had obtained an extension of hjs water-race so as to work his claim. This explains the sale of the pipO3 referred to — the poition of the race to which they belonged from its intersection with the extension was useless, and the pipes were not suitable for carrying the water to Anderson's Flat. There is no doubt that if Mr Ewing had begun the construction of his race for the purpose of working his claim at Anderson s Flat there would have been a sufficient use of the race to save it from forfeiture or abandonment. There is very little evidence a3 to this period, and I am not sure how far the steps he was taking at the time would have been an answer to a claim for abandonment or forfeiture. I prefer, therefore, to deal with the period about which the evidence is clear and definite— viz., the period between the expiry of the protection and the lodging of the application by the Ladysmith Company and others. A defence as to this latter period has been set up by the objectors that these properties were entitled to protection during a portion of the time under section 135 of " The Mining Act, 1898," owing to the bankruptcy of Mr Ewinp. A creditor's petition was presented in the District Court at Nasebv on the 19th April, 1905. Under section 57 of "The Bankruptcy Act, 1892," the bankruptcy is deemed to have commenced on the 12th clay of April, 1905, for that is the date of the act of bankruptcy. The adjudication was. however, not made until tho 21st September, 1905 (as notified in New Zealand Gazette No. 21, of the 22nd March, 1901, page 862). It becomes important, therefore, to decide to which of these dates tho words " the date of the happening of the event." under section 135 of " The Mining Act, 1898," refer. I am of pDinioa from a

consideration of the evident purpose of the protection under the Mining Act that it is to the last dates' reference must be made. An act of bankruptcy may occur three ■ months before the presentation of a petition (section 37, " Bankruptcy Act, 1892), and, if after a petition has been presented the holder of a mining privilege is entitled to two months' protection from the date of the act of bankruptcy, this protection will actually have terminated one month before the petition is presented, and probably before the owner knows that bankruptcy proceedings are pending. It is difficult to see for whose benefit protection could have existed under these circumstances. ■ The object of section 135 is to afford protection to the bankrupt's property on the passing from him to the Official Assignee, so as to allow time for its proper disposition, in accordance with the procedure provided by the Bankruptcy Act. The section exists for the protection of the creditors rather than for the benefit of the bankrupt, and I think it is the date when the order of adjudication is made, and not the date of the act of bankruptcy, or of filing the petition, which is the "event' 1 referred to in section 135. I do not think, therefore, that this section is of any effect in this case. I think the evidence establishes abandonment by operation of law. Abandonment has occurred under subsection 2 of section 151. and the races are to be deemed intentionally abandoned under subsections 1 and 3 of section 1521 These races were granted for mining ourposes. The evidence is rf clear that for three or four (years no mining whatever had been done by means of the watw of these races, nor have they been used directly or indirectly for mining purposes. The mere running of a little water for a certain distance along the races cannot by any straining of language be construed into a user of the water of these races for its proper purpose. I cannot accept the contention of counsel for the objectors that the fact of the caretaker having been constantly engaged on these raeee, and having been employed from time to time as part of his duty in keeping them in a condition to carry the small quantity of water whioh the evidence shows has been flowing therein, constitutes (under the interpretation of mining; purposes) a use of the race for such purpose. To bring themselves within the operation of the interpreting section it seems to me the owner? must, show that they are really engaged in mining operai; ons, depending: upon these raocs and upon their maintenance and repair. In surh case no doubt, such work would be in furtherance of tnat purpose and conduce to it ; but this ploa cannot avail where no mining, either actual or constructive, ie in hand to which it can conduce. Work don-e- on a a - aee that is not u*ed for any purpose at all cannot be said to bf either incidental or conducive to mining or mining purpose*!. No claim to consideration can be based upon tho lawful use of the water course or water, as the owners were not using the i water at all, but are letting it run to waste. Races No*. 6339 and 645 are constructed to carry 23 heads of water, and races Nos. 6336. 754. and 633; 30 heads. The evidence shows that a proportionately very small ouantity of water has been flowing along these races — just enough practically to keep tlie bottojn covered, and then only for less *'*tn a third of the length. The raocs ar<* <d-ib of repair ; thistles and willows are growing : in the ditching, tlie Burning is cmite rotten and practically useless : and there ie no doubt that if anything like the full quantity of water were turned into these raceq they would collapse. They ar^ quite unfit for tneir purpose, and are really beyond repair. As far as I can judjre from tho evidence, the smaller raoee 6339. 6336. and 745b have not been used at all, Ihe water, instead of entering them, having been taken direct into the main races. As to the 11£ heads of water 3fesigned to the Roxburgh Ama-lffO-mated Company out of the Hercules No. 2 race, it cannot be claimed in respect to it that water belonging to this race has been used for mining purposes, for, although this company has, in pursuance, as they considered, ot their righte under the assignment, been taking into their own race about this quantity of extra water from tho water flowing in the natural channel of the creek, they have really taken such water without right or title. To have in any way identified Uiifc extra water taken by them as the water of the Hercules No. 1 race, it should have been first appropriated out of the watera of tho creek by that race, and then supplied to them. Otherwise, when it had once passed tho intake of the No. 1 race it became part of the ordinary water o£ the creek, and liable to bo u^d according to priority by the holders of racps lower down, for you cannot ear-mark flowing water. Under their agreement the company undertook to obtain a right from the warden to divert this water into their race, but thi.s was never done.

Upon -a review of the whole of the evidence I am compelled to the conclusion that these races were abandoned before the applicant's water-race application was lodged, and of " The Mining Aot, 1905," with its amendment, had not been passed, a certificate of abandonment must have issued ; but, as I interpret the law, I have power now to impose a penalty, in lieu of giving the certificate, if I am satisfied it is a case for a penalty. Mr Bartholomew has argued that the same consideration iB not due to the present objectors— the Bank of New Zealand and Messrs Mondy.

Sim, and Stephens — as would have been given- to Mr Ewhig himself, as they could have secured themselves by the remedy afforded them under their deeds of mortgage. 1 think, however, they are entitled to the same consideration as the mortgagor would have been if he had been in a. position to appear. The default which they have to answer is tho default of the mortgagor, and it is only equitable that what might have been urgea by him in extenuation should be opea to them also, unless, of course, it had been shown (which, it has not) that there are circumstances rendering tkem culpable beyond tho measure of blame attachable to tlie mortgagor.

In determining whether or not I should 1 impose a, penalty, I am guided by the decision of the Court of Appeal in the case of Ewing v. the Scandinavian Company. That decision was /in relation to a forfeiture, and rested largely upon the interpretation of the extended provisions of subsection 4 of section 150 of "The Mining Act, 1898" (now section 184 of "The Mining Act, 1905 "), but the principle is applicable to the present case, although it relates only to abandonment, and the power to fine in such a case is expressed in the barest possible language. The court decided that the effect of the wider language employed by section 150 was that ! a warden, in considering whether or not a I fine should be imposed, is' not bound by I any traditional policy hitherto adopted by !^wa!rdens, but tho court 'is freer now than formerly to exercise its discretion according to the special circumstances i» «»ch ' case in the widest sense. Now, in section 12 of the amendment -act, 1905, there is no language corresponding to the expression's used in subsection 4 of sepfion 150 of the 1898 act ; but I assume that the act is conaistent in its policy, and where it has expressed its purpose in relation to any proceeding in one of -its parte, and is silent as to an analogous proceeding in another part, I am justified in inferring the same intention in both cases. In the present case it is quite clear there was no intentional abandonment, and upon a review of all the circumstances attending the abandonment, by operation of law I think I 'should impose a penalty. Mr Ewing has had these races a long time. They have cost him large sums of money for purchase, alterations, repairs, and general maintenance. He estimates that these water-races and the mining connected therewith have cost him about £10,000. While the mining claim which they commanded was payable to any extent at all. and even after it had ceased to pay. Mr Ewinpr used these races constantly foe mioinp. When the ground became too hopelessly poor to work any longer lie took up another mining claim. at Anderson's Flat, and appliod for permission to extend his race there. He employed a surveyor and other competent persons to decide upon and lay off a proper line of race Obstacles and difficulties met. him at every turn, through conflict with private interests, and through defecti\e legisjation causing delays which provented his obtaining the necessary capital to carry on his undertaking. The project was one involving the expenditure of a large amount of capital — beyond the ability of an ordinary man to undertake, — and Mr Ewing, there can be no doubt, u&ed every legitimate means in his power to procure this capital. He obtained protection for his properties while thus engaged, and this protection- ended on May 18 of last year. Before this happened he had become involved in bankruptcy proceedings, and, beinfif doubtful of his position and uncertain as to his rights under the circumstance*, he did not take any steps towards repairing his races or working with thorn. He has sworn that but for the bankruptcy lie would have been able to obtain the necessary oapital to carry out the proposed works, and that even now if abandonment is not declared he can make arrangements with the mortgagees by which this object can be secured.

My finding is that the waicr racog referred to have been abandoned, buf that, in lieu of issuing a certificate of abandonment, I impose a penalty of £40 in Jespoct of each objector's water-race, and order objectors to pay applicant's costs.

I think the right of the Roxburgh Amalgamated Company to the Hi heads of water is involved in the abandonment of the water race, out of which they derive their right, but the case of Frater v. Home (1.J.R., N.S., M.l* 33) is strong authority for imposing a penalty in lieu of enforcing abandonment. There is little doubt that the warden, if applied to, would have granted permission to shift the intake of the race and alter its course so far as these Hi heads are concerned, and, as pointed out by District Judge Grey in the case cited, the default of the company was not actually the non-user of the water, but their failure to obtain this right from tho warden. Consequently, it seems to me that even if I had not felt justified in imposing a penalty on the mortgagees of this water-race, I should have done co with respect to this company's interest. Instead of iseuing a certificate of abandonment, therefore, I impose 4 penalty of £20, to be paid by the Roxburgh Amalgamated Company, in addition to tho £40 to bo paid by the mortgagees, and I order them to pay one third of the total oosts of these prooeedinge, the other two-thirds to be borne equally by the Bank ol New Zealand and Messrs Monuy, Sim, and Stephens,

Fine and costs to be paid within one month 1 , in default of payment certificate of abandonment to issue.

[This decisfon means that 'the Amalgamated Company pay 3 £23 Is 2d, Bank of New Zealand £43 Is 2d, and Mondy, Sim, and Stephens £45 Is 2d.]