3

G.—7,

does not admit that the Native owners are either legally or equitably liable for any part of it. That the company had not the means to carry out the contract, that it showed extreme want of business ability in the management of its affairs, and that it overvalued its rights where purchasers were concerned was no fault of the Native owners, and the company has no right to claim anything from them on that account. A great deal has been made of the fact that the Duncan syndicate was not allowed to go through with its proposal. It appeared, to the Board, however, from what little it knew of the matter, that the syndicate's proposal amounted to an entirely new project, and that the moribund Tongariro Timber Co. was simply used as an instrument to enable it to get some hold on the timber. For this it was prepared to pay something like £100,000 to the company's creditors. This £100,000 was to come out of the timber and was reflected in the price offered for it by the Syndicate —that is, that the Native owners would have had in the end indirectly to pay the company's creditors. There is no doubt, I think, but that included in the £300,000 is a claim for refund of the royalties, amounting to £52,000-odd, paid by the company. The Board looks upon this sum as being paid merely to keep the agreement alive, and in most cases of payment with the object of obtaining some concession. It regards it as compensating the Native owners to an extent, but to an extent only, for their disappointment, the hardships they have had to undergo, and the inconvenience they were put to through their lands being tied up by the agreement for so long and the failure of the company to carry out its part of the contract. In addition they were forced by the circumstances in which they were placed by the company to sell about one-third of the area affected by the agreement, at a price much less than its real value, and, as before mentioned, have had a considerable portion of the balance of their bush damaged by unauthorized cutting, which the company only had power to stop, and which it neglected to do, although it knew well that the cutting was going on. Jas. W. Beowne, President. Enclosures : — (1) Copy of the opinion of the Board's Solicitor. (2) Copy of letter to the Board's Solicitors from Luke, Cunningham, and Clere with respect to claims by Armstrong, Whitworth, and Co. and the Anglo-French and Belgian Corporation. (3) Claims numbered one to nine. RE TONGARIRO TIMBER COMPANY.—MEMORANDUM RE CLAIMS RECEIVED. Fob the purpose of this opinion I adopt the facts as set out in the memorandum by the Hon. Sir Apirana Ngata to the House of Representatives in 1929, printed as No. 1-3 a. The provisions of section 29a 6 (a) of the Native Land Amendment and Native Land Claims Adjustment Act, 1929, leaving out the parts unnecessary for the present purpose are as follows : — " The Board is hereby constituted the lawful agent of the Native owners . . . with the consent of the Native Minister to settle, adjust, compound, submit to arbitration or compromise all actions, accounts, claims, or demands arising out of the agreements . . • which are now or hereafter shall be depending between the said owners or any of them and any other person or persons whatsoever in such manner as the Board shall think fit." The section is somewhat involved, but it apparently makes at least one condition essential before the Board can consider any claim —viz., the claim must arise out of the agreement between the Board and the Company. The next point to be considered is by whom may these claims be made. There is no doubt the company may make them, and the company would include its assigns, but not its mortgagees. It would also appear that any other person may make a claim contemplated by the Section provided it is a claim (a) arising out of the subject-matter of the agreement, and (b) it is in regard to some matter in which the owners or any of them are interested as distinct from the Board. I think that the Board is entitled to disregard the legal aspect of any claim and treat it from the equitable point only. I do not think that the Board can consider any claims by creditors of the company as distinct from a claim by the company itself. I cannot conceive that Parliament has given to the Board, with the consent of the Native Minister, authority to pledge the Native owners to a liability to pay any moneys to a person simply because that person is a creditor of the company. To do so would place the Board in the position of having to decide upon the rival claims of the creditors of the company inter se, and plainly it is not in a position to do that. That would involve the Board deciding whether the moneys advanced by creditor A of the company were expended by the company to more advantage to the owners than the moneys advanced by creditor B. The Board cannot be in a position to decide such a point as this. In view of my opinion in regard to what claims the Board can deal with, I will now review the various claims made, and when I denote the words " claim against the company only " I mean that they are not claims that should be considered by the Board at all, but may be considered if put in as part of the company's claim.