1.—7.

6. In pursuance of the last mentioned Act a contract, dated the third day of August, one thousand eight hundred and eighty-eight, was entered into between Her Majesty the Queen and the company, and the company thereupon entered on the construction of the works referred to in the contract, and actually completed various sections of the line of railway, including the sections from Stillwater to Reefton, from Stillwater to Jackson's, the Springfield Extension of six and a half miles, and the Belgrove Extension of six miles, at an actual cost to the company in New Zealand exceeding the sum of seven hundred and fifty thousand pounds. 7. In order to enable them to pay such construction expenses, the company raised large sums of money by the issue of shares and debentures, and in particular, during the year one thousand eight hundred and eighty-nine, the directors of the said company created a series of five per cent, first mortgage debentures for the nominal amount of two million two hundred thousand pounds; and of such creation the said directors made a first issue of the said series for seven hundred and forty-five thousand pounds, and offered the same for subscription, during the year one thousand eight hundred and eighty-nine, upon the terms and conditions set forth on the prospectus of the said company, published on the twelfth day of April, one thousand eight hundred and eighty-nine; and of the debentures so offered for subscription, debentures for seven hundred and forty-three thousand eight hundred pounds and no more were actually issued. 8. The said series of debentures was secured by a trust deed, dated the second day of August, one thousand eight hundred and eighty-nine, and made between the said company and Beaumont William Lubbock, Edmund Charles Morgan, Roderick Pryor, and Sir Frederick Aloysius Weld, as trustees for the debenture-holders, whereby the said company charged with repayment to the holders for the time being of the said debentures the principal money secured by the same debentures, with interest thereon at five per cent, per annum, all and singular the undertaking, assets, and real and personal property of the company, set out in the second schedule to the said deed, until a further issue of debentures of the said series was made ; and upon such further issue the said company charged all and singular the undertaking, assets, and property of the company, with the due repayment of all principal moneys and interest payable in respect of the whole of the debentures of the said series. The said trust deed also provided that if the company should commit any breach of or incur any forfeiture or penalty under the terms of the said contract, or under the terms of the Acts of Parliament recited or referred to in the said contract, then the trustees might enter upon and take possession in their names, or in the name of a Receiver, of the railway and of lands, timber, and all the property of the company thereby charged. 9. That a further issue of eighty thousand pounds debentures of the said series was created in December, one thousand eight hundred and ninety-four, and January, one thousand eight hundred and ninety-five, which your petitioner understands was pledged in block as collateral security for a sum advanced to the said company. 10. That a further issue of ninety-three thousand one hundred and twenty-five pounds debentures of the said series was made in October, one thousand eight hundred and ninety-five, which your petitioner understands was issued to cover past, due, and accruing interest on the said first issue, in pursuance of an arrangement made some time previously. 11. That on or about the twenty-fifth day of May, one thousand eight hundred and ninety-five, the Governor, purporting to act in exercise of the powers conferred on him by "The Railway Construction and Land Act, 1881," took possession of the completed sections of the company's line, which then formed part of the mortgage security of the debenture-holders, and has ever since that date retained possession of the same, in consequence of which your petitioner is unable to obtain possession thereof. 12. The company petitioned Parliament, during the year one thousand eight hundred and ninety-two, for the appointment of a Committee to consider certain proposals made by the company for the modification of the contract of one thousand eight hundred and eighty-eight; and during that year and the two following years Committees were appointed, and took evidence with regard to the said proposals. 13. During the session of one thousand eight hundred and ninety-four, a Bill was brought down by the Premier, embodying the recommendations of the Committee of that year, modifying the original scheme and its scope, which, was rejected by your honourable House; and the company gave notice of its desire for arbitration. 14. Arbitration proceedings were commenced during the year one thousand eight hundred and ninety-five, but the debenture-holders were not represented at the same, and the said proceedings were concluded in December last, when the Hon. E. Blake, M.P., published his award, by which it was decided that the company had no claim against the Government in respect of the withdrawal of the large area of mining reserves from the area of land available for selection, or of the seizure of the line by the Government; but no question as between the debenture-holders and the Government was raised or decided. 15. Immediately the trustees of the trust deed mentioned in paragraph 7 hereof became aware of the result of the arbitration proceedings, they appointed your petitioner to be their Receiver, agent, and attorney in his own name, or in the names of the trustees, as he might think fit, to receive, take possession of, and hold, all and singular, the property and assets, both real and personal, of the company, subject to the said trust deed. As there was at this time no interest in arrear, and the company had arranged for capitalising interest in advance until one thousand eight hundred and ninety-seven, no grounds arose for the appointment of a Receiver until the said arbitrator had found that the company had committed a breach of its agreement with the Queen. 16. That, under the circumstances, your petitioner is advised that the debenture-holders have no distinct, independent, and direct redress in the ordinary course of law against «the Crown, nor have they the right to claim to proceed to arbitration ; but that any remedies which may be open to them are indirect, and only to be sort at great expense, and subject to great delay. 17. In exercise of the powers vested in him by the said trust deed, and the appointment made thereunder, your petitioner, with the consent of the company, has taken formal possession of the company's offices in London and Christchurch, and has caused formal notice of his appointment to be served on the Government, and has since taken possession in New Zealand of such of the company's property as he could so take and receive.

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