COURT OF APPEAL.

Dominion, Volume 3, Issue 832, 30 July 1910, Page 14

COURT OF APPEAL.

A PUBLIC WORKS ACT PUZZLE. '. : .JUDGES'DIFFER," The Judges of the' Court .of Appeal, .hold different views..as to the interpretation of one of the compensation clauses of the Public Works Act, and consequently the"decision'which was' announced from tho bench yesterday in tho case' of James O'Brien v. Mr. Justice Chapman and others..was a.majority decision with the Chief Justice dissenting. ' The bench'was occupied'by the Chief Justice (Sir Robert Stout), Mr'. Justice Williams, Mr, Justice Edwards, and Mr. Justice Cooper, f The case was one which had been brought before the Chief Justice in the Supreme Court,. and removed by consent "to the Court of Appeal. Tho plaintiff was James O'Brien, settler, formerly of Ngahere, but now of Wellington. Tho defendants were: Mr. Justice. Chapman, George Thomas • Moss, auctioneer, of Greymouth, and Joseph Prime Maxwell, civil engineer, of-Wellington, being respectively the president. and assessors constituting a •Compensation Court, under the Public Works Act; and the Minister for Public Works. ■ . • ■ ' :' O'Brien ■ had moved for a writ of mandamus, directed'to tho threo first-named defendants, commanding them, as a Compensation Court, to hear his compensation claim against the Minister for Public .Works for alleged injurious affection of plaintiff's land, through ■ the construction of the NgahereBlackball railway, including a rail- . road embankment from the town of Ngahere to the bank of the Grey ; : River. It. was alleged that , tho ; erection of the embankment had blocked up" certain outlets for water,' with the result that ; O'Brien's land had been injuriously affected. . Tho works ■ were com- ■ meiiced in 1906, and a claim for £1000 compensation was made upon'. • the Minister for Public Works in ■ September, 1909./ The motion for a writ of mandamus was based upon the ground that the Compensation Court had unlawfully refused to ■ adjudicate upon the claim, 'having wrongfully ■ declined jurisdiction. The Court had, in fact, held that' O'Brien's claim was lodged too late. Mr. CVP. Skerrett, 1 K,C, with him Mr. H. F.' Johnston, appeared for the plaintiff O'Brien; Mr. J. W. Salmond (Solicitor-General), and, Mr.. T. Nea.ve : afguod defendant's case. The crux of the Case. The judgments delivered yesterday, like tho argument at the hearing, turned mainly upon tho meaning of tho words, "the execution of the works,", as used in Section 37 of tho Public Works Act. 1908, The sootfon provides that no claim for compensation under the Act shall bo made in respect of any damage dene after a period of twelvo months after "the execution of the works" out'of Which such claim has :anscn,' and all right and title to any compensation for damago arising out of the execution of such works shalL. after

such period, absolutely cease. Twelve months had elapsed between the completion of the embankment and the making of the claim by O'Brien, but the railway itself had not been completed, nor had tho embankment itself been completed so as to form a part of tho railway more than twelve months before the claim was made. Opinion of Chief Justice. The Chief Justice, in his judgment, said there were- three possible meanings to' the above, section, as to tho period within which a claim for that kind of damage may be made: (1) Twelvemonths after the total railway work authorised is completed; '.(2) twelvemonths after a section of the railway work is completed; (3) twelve months after the execution of tho'part of tho work that does the damage is completed, and when no additional work will add to the damage. In his Honour's opinion, if Sections 35 (giving the right to compensation) and 37 stood alone, •the third of these interpretations/would conform most to the words of the sections. The claim arose immediately the damage was done, and the claimant could take'action without waiting any longer. It seemed to him that tho twelve' months' period must run from the sumo point of- time. Section b'9 (directing tho Compensation Court to take into consideration "by way of deduction from the amount of compensation to be awarded, may increase in the value of such lands likely .to be caused by the execution of such works") did not seem to him to militate against.this view, because the increase could'bu estimated, perhaps, just as well twelve months after tho damage was done as twelve months after tho first train was" run, It was not the execution of the works, strictly socalled, that .increased.- the value, but the running of the trains. The phrase therefore used in Section 69 must have a modified meaning to what it bad iu Section 37. ■ . "In my opinion," concluded his Honour, "the mandamus should be refused.. I may add, however, that seeingithat this is only a test case, - no 'doubt the Minister, for Public "Works might consider -It-he- special reasons Mr. O'Brien gives for his not making his claim earlier, and that might be permitted to have his' claim adjudicated on if his reasons are correct."

Mr. Justice Williams Differs. Mr. .Justice Williams--took a different view. He held that the embankment was not a separate and distinct work, but part of an'entire work., it was not in respect of the embankment that Section 35 gave a claim. Section 33 having given the. right to compensation, Section'37'limits the time within which, tho- claim must be made. Whijre a particular work had' been authorised by the. Legislature, and- a claim was mado, in respect of land injuriously affected by such work, it seemed to him that the works'which-'had been authorised (e.g., the Ngahere-Blackball railway) were the works out of- which the claim arose: His Honour , also thought that any difficulty in the construction of Section 37 was removed by Seot-ion 69, the Full Court having interpreted the words, "the execution of such works"; in that .section, when applied to a tramway, as meaning the tramway when in operation ; as a going concern. • His Honour thought . that the , phrase "the execution of such works" in Section 37 had the same meaning as the. same phrase'in Section 69. The' plaintiff's claim was not out of. time, and he was entitled to have his claim heard by . the .Compensation Court. The writ of mandamus should be issued. Mr. Justice Edwards and Mr. Justice ' Cooper agreed that the writ of mandamus should be issued. ;■' "The difference which has arisen m ithis case shows, in my opinion," said Mr. Justice Cooper, "the necessity for the Legislature defining in reasonably exact terms the moaning of the words 'execution of the works.' " The Court thus decided, .by a majority, that the mandamus should ho issued. Costs were allowed against the Minister for Public,'. Works.-' . • • . Mr.' Justice Edwards said he agreed with what.Mr. Justice Cooper had said.

WHAT IS A PROSPECTUS? SHORTLAND FLAT SHAKES CASE. . Points of interest-in connection with tho 'flotation of companies were dealt with yesterday in delivering judgment' on the appeal relating;.to the Shortland Flat Goldmining Company, Ltd. Tho Chief Justice (Sir Robert Stout) and Justices- Williams, .' Edwards, and Cooper were on th'o Bench. This case had 'been commenced in tho Supreme Court, Auckland, by John Dawson, gentleman, of Mount Roskill; who called on'tho . company to show causi .why his : name should not bo removed from the register" of members of the company,, and''why he should not recover the sum of. £50, which he had paid to the company, after' alleged misrepresentation, by William Gray. Mr. Justice Sim had found conliict of evidence as Ho tho alleged mis-. ' representation, but ruled that Dawson was entitled to succeed on tho ground,of non-compliance with statutory requirements, in connection with the issue of a prospectus. •. Ho' had, therefore, ordered that the'•company's register should bo rectified by the deletion of Dawson's iiumi;, and that tho company ' should repay the £50 to Dawson with interest at 5. per cent, from September, 1909, until tho date of .. payment. It was against this judg-. ment that the company appealed. At the hearing of the appeal tho company was represented by Mr.- C. P.Skerret't, K.C., with him Mr. C. b. Morison, and tho respondent by Mr. E. W. Burton, of Auckland, and Mr. M. Mycro. . . \ The Judgment. The Chief Justice, in the judgment which lie delivered yesterday, said that two important questions wore raised:— (1) 'Whether a certain form of application for sliares with or without two other documents called "particular's" and "report" was a prospectus in the •meaning of the Companies Act, 1908. (2) Whether tho provision of Section 95 of the Act applied: to the appellant company? There had been other subsidiary questions raised, but the decision of the appeal turned ou these two. What was done in connection with the floating of the company and tho allotment of the shares was not in dispute. Certain gentlemen who owned a mining property at the Thames, were desirous of forming a "public- company to exploit it. .To get shareholders they employed a broker (Mr. William Gray) who, as their agent, issued threo documents: (a) Tho application form; (b) a document headed "Particulars," and (c) a report of one of the promoters. In his Honour's opinion, Mr. (3 ray was acting within his authority in issuing all three of 'the documents. Tliero had been no repudiation of his authority, at all events, to issue the application: forms. The company, was registered on August 26, 1909, and tho shares were allotted on the same day. Not more than 55,000 shares were, allotted, and tho terms of Section 9ft were, it was admitted, not complied with. Was tho application form by it-self-a prospectus, as denned as Section 2 of the 190S Act, viz.: "/Prospectus' means any prospectus, notice, circular, advertisement, or other invitation offering to the public for subscription oi purchase any shares or debentures of a company?" Sections 74 and 73 enacted that a, prospectus must contain much more than, was contained in this

application form, but in his opinion tho non-compliance with tho provisions of these sections would not mako it less a prospectus. 'J'lio namo prospectus was of no moment. The words of Section 03 showed that what was■ required to bring the company- under its provisions was that the share capital was offered to the public. After discussing tho terms of the application form and noting that it was distributed broadcast, his Honour said that the document "Particulars" and "Report," were issued with the application and it could not be questioned, and in fact, it was not disputed, that tho three taken together wore an offoring to the public of 80,000 shares of tho capital of the proposed company. Company's Appeal Fails. Tho main arguments of counsel for tho appellants had, however, been addressed to'the second question. Suppose this invitation was made by tho promoters; suppose what is a prospec.tus was issued by the promoters, still (they had contended) as no such invitation and no such prospectus were issued after, the incorporation of tho company, Section 95 did not apply, and 'the company conld proclaim itself a no-prospectus company, and proceed under Sub-section 7, Section 99, which said: '.'Whore a company does not, before .it commences business, issue a prospuctus offering shares to the public, it shall, etc." The contention was that the company had issued no prospectus, and that it could come under this Sub-section. Discussing this contention, his Honour arrived at the opinion that the words of Section 95, road in their ordinary and plain moaning, covered this company. To give tho meaning asked to bo given by the appellants' counsel to Section 95, they would have to insert some words. The Section was obviously intended to control tho action of promoters aH well as companies, 'and the Legislature assumed that a prospectus might be issued before incorporation. In his opinion the appeal should be dismissed, with costs. Mr. Justice Williams and Mr. Justico Edwards concurred in'separate judgments. The latter said that there was nothing before the Court to suggest that there had been any wrongdoing on tho part of the directors, but ho thought there had been an attempt to evade the provisions of the statute. The judgment of Mr Justice Chapman, agreeing,with the others, was read by the Chief Justice. Mr. Justico Cooper said that as he was.not. present, during., the .last., day. of argument he would not deliver any judgment. . The appeal was dismissed with costs. AN HABITUAL CRIMINAL. WAS HE RIGHTLY DECLARED SO? The case of the King v. Thomas John Lewis, which came before tho Court of Appeal yesterday, was concerned with tho interpretation of tho law as to habitual criminals. Tho Chief Justico (Sir Robert Stout) and. Justices Wil.Harris,' Edwards, Cooper, and Chapman were on 'the bench.

, Lewis was convicted at Auckland in February, 1908, on two indictments— (1) forgery and uttering and attempted false pretences, and (2) theft. It was. stated that ho had previously been convicted four times on indictments 1 of offences within Class 2, as defined by Section 29 of tho Crimes Act. Prisoner admitted these offences, and was declared an habitual criminal by Mr. Justico Edwards. It w r as afterwards discovered that owing tn an error in the preparation of the calendar two previous convictions of the prisoner before a magistrate for theft had been entered as convictions on- indictment, and that when the prisoner was declared an habitual criminal he had not been convicted upon indictment on four, occasions of any ■of the offences mentioned in Class 2. Ho had, however, been convicted four times of such offences— twice before a magistrate and twice upon indictment. Mr. Justice Edwards, therefo'rn. stated » case for tho Couit of Appeal, putting the question whether, in the above circumstances, the prisoner was " lawfully declared an habitual criminal.

The Solicitor-General (Mr. 3. W. Salmond) appeared for tho Grown. The prisoner .was not represented. '■ ■ Mr. Salmond argued that the conditions under which a prisoner might.be, declared an • habitual criminal did not require that, the previous convictions must have been convictions. under tho Crimes Act, nor that they must have been convictions on indictment. The words of the Crimes Act, Section 2D (habitual criminals), were ' intended to .indicate, not the procedure that might have been followed,'but-the nature of the offences' that had been committed. The offences and convictions might have taken place,in another country, where our Crimes Act did not apply, or where procedure by indictment was not customary.

During the argument, tho Chief Justico remarked that there .was meant to bo a distinction between greater and minor offences.

Mr. Justice' Edwards observed that Lewis had received two sentences oi 1U months each in the Magistrate's Court. The offences must, h'avo.'been' serious. There was no real distinction between those cases and cases of conviction on' indictment. <

Decision was reserved. The Court adjourned until next Wednesday.