MUNICIPAL CONTRACTS

Dominion, Volume 3, Issue 860, 5 July 1910, Page 3

MUNICIPAL CONTRACTS

—. —■ g DISCUSSED BY CONFERENCE. At the Municipal Conference yesterday afternoon, the following remit was sent forward by tho Wellington Council:— "That paragraph (h) of Section 42 of the Municipal Corporations Act, 1908, relating to the disqualification of councillors should be amended so that the exception therein contained shall road as follow.', viz: 'Other than as a shareholder in an incorporated company which contains more than twenty members, and is not a private company, ami of which such person is not a director or the general manager Dr secretary, or in an association or partnership consisting of more than twenty members. 1 " In moving the remit, Mr. J. J. Devine (Wellington) said that, as the law now stood, a man, his wife, and office boy could form themselves into a private company. A company of this kind could tender for municipal contracts, although it had a shareholder on the council. This seemed ail oversight. Probably in drafting tho Act it had been forgotten that an alteration of the law had been made under which this form of company was allowed. A great number of such companies were represented in councils, and thus gave rise to an impression that tendering was a cut-and-dned affair. The Wellington remit was intended to bring municipal law into line with the Hospitals and Charitable Institutions Act. Mr. J. . Brown. M.P. (Napier), in seconding, said it was quite wrong that small companies should be permitted to tender white shareholders in larger concerns, although their interests might be infinitesimal, were allowed the opportunity. P rcs ' ( ' e nt (Mr. T. 51. Wilford, M.P.) cited Mr. W. .Tollifte, the Parliamentary law draftsman, who said, in his annotated edition of the statutes relating to local government: in boroughs: , , PT° y i ft ioft that a councillor should not be disqualified by reason of a company of which he was a shareholder entering into a contract with the council was doubtless a sufficient safeguard so lone: as the law required that the shareholders of a company should not be less than seven in number. The Companies Act, 1903, however, introduced a jv?y; of com Pauy, which illicit consist ot tho councillor and his wife or of two councillors. A contract between a council and a private company of such > a kind would be manifestly improper, but ife not contrary to lnw. It is verv desirable that legislation should be" parsed declaring that private companies under I art v. of the Companies Act, 1008, do nor come within the meaning of 'incorporated company* for the purposes of this section. The only, question that had to be 0011sidered carefully by delegates, continued Mr. Wilford, was what ought to be the strength of a company. It would be for the delegates to say what would be the right number,' provided they approved the remit. Mr. W. Fraser, M.P. (Queenstown) complained that the remit as it stood excepted private companies altogether. He took it that this was not the intention of tue conference. H was agreed to strike out the words fl vr 1S no *\ a P r i v ate company." Mr. J. Wilson (Dunedin) sa'id he knew of a company where some shareholders ° nl • v ~, one share. Where 19 or ''0 shareholders in a company held onlv one share the spirit of the Act was liable to bo violated. The remit was passed, amended as stated.