THE MOKAU LANDS.

Otago Witness, Issue 2996, 16 August 1911, Page 8

THE MOKAU LANDS.

STATEMENT BY THE ACTING

PRIME MINISTER.

WHO WILL MAKE INQUIRY?

NATIVE COMMITTEE PROPOSED.

OPPOSITION DEMAND MORE EVENLY-BALANCED TRIBUNAL.

WELLINGTON, August 8.

Tho statement of the Government in reply to the allegations made by the Leader of the Opposition in regard to tho Mokau land transaction was made by Sir James Carroll this afternoon. *Tho Acting Prime Minister said this matter wae first brought under the notice of the Government by a letter dated 25th September, 1908, from the solicitor for Mr Herman Lewis, the registered owner of tho leases formerly held by Mr Joshua Jones, to the Native Minister. In this letter it was stated that the lessee was willing to join with the Native owners of the lands in any scheme which would facilitate the immediate settlement of the block in small areas, and it was suggested .that the Native Land Commission consisting of the Chief Justice and the Hon. Mr Ngata, which was then sitting, should inquire into the matter with a view to the area being disposed of under “ The Native Lands Settlement Act, 1907.” It was also suggested that the respective values of the interests of the Natives and lessees might be determined by some independent tribunal. About this time Mr Joshua Jones petitioned Parliament claiming Ip be entitled to an

interest in the , Mokau block, and the application of Mr Lewis was hung up for some time, in the hope that Mr Jones and Mr Lewis would be able to arrive at some arrangement. In the month' of February. 1909, the Native Land Commission/ "then consisting of the Chief Justice and Chief Judge Palmer (of the Native Land Court) dealt with the matter. The commission found that there were four subdivisions of the block, containing about 53,000, acres, leased to Mr Jonas, the main subdivision comprising about 26,500 acres, and the three ctner subdivisions containing together about 26,500 acres; also that the lease of the main block contained a clause requiring the lessee to form a. company with a capital of £30,000 to work coal upon the property and expend the sum of £3OOO per annum in development work, the lessors receiving 10 per cent, of the profits, in addition to a small rental. It appeared, however, that Mr Jones had obtained from some of the lessors of the main block deeds purporting to release him from the covenants as to the formation of the company and an expenditure of £3OOO per annum in consideration of an additional rental of £IOO per annum. The commission arrived at the conclusion that there were serious doubts as to the validity of the leases, and it reported against the proposal that the lands should be disposed of in the manner suggested by the lessee. In consequence of the report caveat was directed to he lodged against dealings with the property. The caveat was not removed until after proceedings in the Supreme Court were threatened and after the Re-gistrar-general and the local registrar had satisfied themselves that it was im-

possible in law to support the caveat. On receipt of the commission’s report the Natives were notified by the Government of its terms, and it was suggested that they should take the opinion of counsel as to their position. At this time the Government was being approached by the Natives and by the respective solicitors for Mr Jones and Mr Lewis with a view to a settlement of the difficult questions which had arisen in relation to the block, and it was desirable that the Natives should be represented by counsel in these negotiations. Mr Skerrett was accordingly retained by the Natives who had approached the Government, and acted for them in the subsequent negotiations which took place. The substantial legal questions raised as to the validity of Mr Jones’s leases as understood by the Government at this time were shortly that the lease of the main subdivision, though originally valid, Had become liable to forfeiture owing to non-performance of the covenants as to the formation cf a company, and the expenditure of £3OOO per annum, and that the other lease had been illegally granted to Mr Jones, and should never have been registered by the District Land Registrar. The lessees’ answer to these suggestions was as to the main subdivision that the Natives had received an additional rental of £IOO per annum for a period of over 20 years, and had waived any forfeiture that had been incurred, and even if this were not so, the Supreme Court had powejr to and would in the circumstances relieve them from forfeiture, leaving the lessee to perform the covenants for the future, and as to other subdivisions, he contended that even assuming the leases to have been legally granted and registered, his

title to them was made good by the terms of the Land Transfer Act, he having purchased from the registered proprietor without notice of any defect; The Government was informed that Mr Skerrett had advised the Natives that the leases other than the lease of the main subdivision were invalidly granted, and that if they had been made good by the provisions of the Land Transfer Act the Native owners of these blocks were entitled to claim damages from the assurance fund of the Land Transfer Office, and that accordingly formal notice had on the 19th of April, 1910, been given to the Registrar-general of Lands on behalf of the Natives, claiming £BO,OOO damages._ As the result of many months of negotiations the Government came to the conclusion that the best way out of the difficulties was to purchase the interests of the Natives and lessees in the block, which they believed could have then been acquired for twenty shillings (20s) an acre. The Government valuation of the blocks comprised in the leases was at this time £31,273, but Cabinet decided to have a special valuation made by the Lands Department. Mr Kensington, Under-secretary for Lands, accordingly instructed the commissioner at New Plymouth to have a valuation made. The commissioner employed two Crown lands rangers, who made an exhaustive inspection of the property, and on receipt of these officers’ reports the commissioner reported to Mr Kensington that the Government could not safely pay more than £26,000 for the land. Mr Kensington then reported fully to the Government, suggesting that it might he advisable, in order to have the area settled, to pay from £30,000 to £35,000 for the whole

estate, but that there would be considerable risk of loss if more than £30,000 were paid. It also appeared that the district surveyor who inspected the land in 1905 reported then that in his opinion the block was not suitable for small settlement. The Government decided that, in face of this report, it could not purchase at the price demanded. It next went into the question of takin? the block compulsorily. The law did not permit of the compulsory taking of the Natives’ interest. Their representatives, however, stated that they were willing to sell their interest to the Government for the sum of £22,500. It only remained, therefore, to exercise the power conferred upon the Crown of determining the interest of the lessee in the lands The Government found itself faced with these difficulties : (a) It was advised that it should not pay more than £35,000 for the whole estate in land, (b) Assuming the leases to bo good, the respective actuarial values of the interests of the lessors and the lessee were £14,300 and £20,700. (c) It could not purchase the Natives’ interest for less than £22,500 —that is, £B2OO more than .its value, assuming lease to be good, (d) If it purchased the Natives’ interest for £22,500, it had then to determine the lessees’ interest in the land, and, having done so, it must either have admitted the leases as good (in which case it bad paid the "Natives £BOOO too much) or entered upon litigation of an extraordinarily difficult nature: and, more important still, it would have had to face a claim by the lessees not only for loss of occupation rights, but also for the loss of the right ! to work the Coal on the property for a period of nearly 30 years, for which a very large sura would probably be claimed, and as to which it was impossible to accurately estimate what compensation might he The Government was forced to the conclusion, thsiefore. that it could not acquire the property. At this stage the ' position was as follows ; —Expensive and prolonged litigation appeared necessary to determine the relative rights of the Natives and the lessee in the land. Claims for large sums against the Land Transfer Assurance Fund were threatened, both by the Natives and the lessee, and an area 53,000 acres of which had never been developed and had blocked the settlement of the lands behind it would continue to he locked up for an indefinite time until these disputes could he settled. On September 20 Mr Skerrett, on behalf of the Natives, wrote to the Native Minister asking for authorisation of the acquisition by Mr LeMs. He said Mr Jones’s interest had become vested in Mr Lewis, and the latter’s leasehold interests were mortgaged to the Flowers Estate to secure the sum of £14.000 and interest, and subsequent mortgages to Daksiell for £IOOO and M'Carthy for £25,000. Thus amounts were owing totalling £40,000. The letter further stated that if the registration of Mr Jones’s leases gave him an indefensible title, the Natives would claim a large sum against the insurance fund for improper registration. Mr Skerrett also stated that after negotiations between himself and Mr Dalziell, representing Mr Lewis, ho thought an arrangement could be made for the Natives to sell their interests for £25,000, to be paid in cash within three months, making it a condition that Mr Lewis should within three years subdivide and sell the land in areas not less than prescribed by section 12 of the Native Lands Act. Mr Skerrett concluded by stating that Mr Lewis and his mortgagees agreed that the proceeds of the sale of the block should be held by them subject to any claim or. right thereto established by Mr Jones in a court of law' or equity. The Government, continued Sir James Carroll, finally decided to agree to Mr Skerrett’s proposal, and on December ( 5, 1910, Cabinet resolved that an Order-in-Council should issue permitting the lessee to purchase the Natives’ interest in the land. In arriving at this conclusion the Government was influenced by the fact that unleiss it took it compulsorily there was no .means by which the settlement of the land in email areas could be secured during the remaining term of tlie leases (about 30 years) without the consent both of the Natives and the lessee. With regard to the proceedings subsequent to the Cabinet resolution, these were purely departmental, and were carried out in every respect, strictly in accordance with the procedure of the Native Department. All the necessary notices were given and the provisions of. the Native Land Act and the regulations were fully complied with (see New Zealand Gazette, par. 4319, in which the president of the board publicly notifies that the board would consider applications for recoimnendations to His Excellency the Governor to authorise the acquisition of areas under section 203 of “ The Native Land Act, 1909.”) The Order-in-Council was not issued until after the meeting of assembled owners, because it was not deemed advisable to issue it until the lessee had, after that meeting, entered into an arrangement securing the settlement tin small areas «pf the block. Ihe issue of the Order-in-Council at that time was plainly valid, and could not prejudice the rights of anyone. The gazetting of the Order-m Council was delayed owing to the absence of his Ex-, ceilency the Governor from Wellington, but that delay did not .and could not affect the rights of any of the* parties concerned. The Government was not in, any way concerned with the negotiations between the Natives and the lessee as to the terms of the purchase of the interest of the Natives. This is a matter purely within the jurisdiction of the Maori Lan'd Beard. There can be no doubt, however, that the price received by the Natives is greatly in excess of tire actuarial value of their interest, subject to the leases, and the question of a fair price for a compromise of the threatened litigation as to the lessee’s title was one very difficult to determine. A fresh valuation of the block was made by the Valuation Department at the instance of the Maori Land Board, and the value Avas certified to be a little oyer £40,000. With regard

to Mr Jones’s, claims to the block, the Goveraniient, as his solicitor will no dou acknowledge, did all in its power obtain for Mr Jones some interest m this land, bub it was finally driven to the conclusion that as our courts bad held that he had no claim of any kind to the leases and the Crown could not acquire the land it could do nothing for him. The position to-day is that the title to the Mokau block is vested in the chairman of the Maori Land Board. The land is being surveyed and roaded, and must be sold in areas nob exceeding 400 acres of first-class or equivalent areas of second or third-class land to persons making the necessary statutory declaration. If it is not so sold within three years the Maori Land Board is empowered to conduct the sale. It has been sugKted that the Order-in-Oouncil should re been issued so as to permit anyone to acquire the interest of the Natives in the block .and not merely the lessee. The answer to this suggestion is simple—namely, that if this course had been adopted the land transfer assurance fund would have been left open to attack, and further, the lessee would have been under no obligation to subdivide the land during 30 years of his term. To summarise the position, there were three separate interests involved ; —(a) The Native owners; (b) the lessee; (c) the Crown, on account of the threatened attack on the ' assurance fund and the desirability of securing the settlement of the block in small areas. The alternative courses open to the Government were :—(1) To d<r nothing in the matter; (2) to purchase the land; (3) to purchase the interest of the Natives and take compulsorily the interest of the lessee; (4) to permit the Natives and the lessee to come to an arrangement under which the claims against the assurance fund would disappear, and a settlement of the block in small areas could be secured. If (1) had been adopted the assurance fund would probably have had to pay a considerable sum of money either to the Natives or the lessee, and the settlement of the land would not have been secured. The Government did not adopt (2) because the best advice it could gat was to the effect that it should not pay more than £35,000, and the parties would not sell for less than £53,000. If (3) had been adopted the Crqwn would have had to pay the Natives what may have been very much more than half of their interest. . It would have been involved in very serious and expensive litigation, and would have had to meet a claim for a large sum for the lessee’s interest in the coal rights. By adopting (4) the Government has obtained the immediate settlement of the block in small areas, without the risk of a penny to the State, and has saved the assurance fund from a serious attack. In adopting this course it relied upon the fact that the interests of the Natives were protected by their counsel (Mr Skerrett). and that, with the full knowledge of the circumstances, Mr Skerrett applied for an Orderdn-Council to permit thismethod of settlement. This statement probably gives sufficient information to enable the Government’s part in this very complicated matter to be understood. There is no reason, however, why every detail of the transaction should not have the fullest publicity, and the Government will be very glad to assist so far as it can in this direction.

Mr MASSEY asked that the report be referred to a committee other than the Native Affairs Committee, which was not a fair one to refer the matter to, as it was composed of 13 members, 10 of whom were Government supporters. Sir Jas. CARROLL said he wished to meet Mr Massey in any way he could. The Native Affairs Committee was quite competent to deal with the matter. Mr MASSEY asked that a committee consisting of Messrs Allen, Herries, Herdman. Okey, Jennings, Millar Macdonald, Ngata, Hogg, and himself deal with the report. Sir Jas. CARROLL said he failed to see the necessity for a special committee. Mr MASSEY said that not a single important statement which he had made in connection with the Mokau lands had been challenged in the statement which Sir Jas. Carroll had read. What the Crown should have done was to have set up a compensation court as provided by the Native Lands Act, which court could have fixed the amount to be paid to the owners of the leasehold, interests- He would like to know how many Native owners were present when the meeting of assembled owners took place. The amount paid to Mr Lewis when he sold the land to the syndicate should . come out. The Mokau Company did not intend to sell the land in the ordinary way to intending settlers. It intended reserving the mineral nights. He was not satisfied with the tribunal to which it was proposed to refer the matter, and he moved as an amendment that the special committee named by him be set up to consider and report on the statement. Mr JENNINGS pointed out that all the committee had to do was to consider the statement and report to the House.

Mr LUKE supported the amendment, as the country was entitled to all the information obtainable concerning the deal. He did not wish to disparage the Native Affairs Committee, but he thought a special committee was necessary. Mr TAYLOR objected to the reflections cast upon the committee work of committees, and he also strongly resented the innuendos made regarding the Native Affairs Committee. Mr FISHER said he thought the matter should go before some tribunal outside the House. He asked Sir Jas. Carroll if he did not think the outcome of the inquiry would be a most important factor in the forthcoming election. The Hon. Mr NGATA said the only charge really was that the interests of the Native owners had not been safeguarded. The objects of the committee which went into the matter would be to elicit the facts brought up under the charges made by Mr Massey. If it was the facts of the Mokau case that Parliament wanted, the Native Affairs Commit-

tee would bring them out just as well as any other committee. The four Native members should be on the committee to safeguard the interests of the Natives. Dr TE RANGIHIROA asked what was the use of the Native Affairs Committee if it was not to deliberate on matters such as the one under consideration.

Mr M‘LAREN said he thought the matter should go to a special committee, though lie did not favour the committee suggested by Mr Massey. Mr OKEY supported the appointment of a special committee.

Mr WRIGHT stated that the Government could have purchased the freehold of the whole 53,000 odd acres of Mokau lands from the Natives for £15,000, but it had let the chance slip through its fingers. He supported the appointment of a special committee. - Mr LANG said the Government was on its trial in this matter. It had allowed private people to get hold of the land instead of settling it. Mr FIELD said he was of opinion that the Native Affairs Committee could deal with the matter better than anyone else. The House would have an opportunity of discussing the committee’s findings when they came down. Mr STALL WORTHY supported the Native Affairs Committee.

The motion was carried by 33 votes to 26.

Sir Jas. CARROLL stated that he had given all the information in possession of the Government in regard to the case. A plain and pure exposition of the facts had been given, and he was sure it would prove satisfactory to the people of the country.