THE COUNCIL INQUIRY.

Dominion, Volume 4, Issue 963, 2 November 1910, Page 8

THE COUNCIL INQUIRY.

THE NAI NAI PURCHASE. "A WHITE ELEPHANT.'' A QUESTION OF VALUATION. SOME INTERESTING EVIDENCE. There was a further sitting last night of the Special Committee of the Legislative Council which has been set up to ' inquire into a charge brought by Mr. Hine, M.P. for Stratford, against the; Hon. T. K. Macdonald, M.L.C., as> under: — "That Thomas Kennedy Macdonald, in or about the year and subsequent years, while a member of tlie Legislative Council, either alone or in conjunction "with his then partner (a'land agent), .conducted the sale to the Government of the property of one John Motley Leigh, of Nai r*ai, and the properties ot, two other persons, and received from the said John. Motley Leigh and the ■ vendors of such other properties commission or other sums of money, or alternatively the said T. K. Macdonald and his said partner received the said commission 'ar other sums, and divided the same." • Mr. Myers appeared on behalf of Mr. Hine and Mr. Skerrett, K.C. (with him Mr. Sharp) for- Mr. Macdonald. When the .proceedings tagan, Mr. Myers said tliat the first witness, whom he had intended to call was Mr. Leigh. It had been ascertained, however, that Mr. Leigh .was at. present in Christchurch. A wire had been ' dispatched' to Mr. Leigh and it was hoped that .it would reach him in time to enable him to leave for Wellington that night. In the circumstances he would proceed to call other evidence. A Petone Witness. Mr. Thos. W. Caverhill, settler, of Petone, ■ was the first witness. He stated that until June 11, 1909, he had been in the Government service. _ For ten years he -held the office of.district valuer for the Hutt County, part of the Horowhenua County, and various boroughs. The property of Mr. Leigli at' the Nai Nai was in .his district. In 1904. he was asked by the.ValuerGeneral to value the property on behalf of the Land Purchase Department. ,He was told that the land might ;be acquired for' the purpose's of workers'" homes. He valued the land at £80 or £85 per acre. Mr. Macdonald had a conversation with him outside his office. He was told by Mr. Macdonald that he t had valued it too low; that his valuation was absurd. Mr. Macdonald asked him if he could not increase the value. Witness declined "to do so.. He advised against the purchase to a certain extent, as the land' was not first-class, and no industries were near it. The property wa.s four miles from the Hutt Railway Station. Mr." Myers: Notwithstanding your, recommendation, the purchase was completed ?—Witness: "I believe -so." . Do you know the price?—"l heard at £150 per acre." Mr. Skerrett: Were you present when the Purchase Board went over the property ? Witness: "No. I went over it with the board on a previous occasion when a previous owner offered it." . You have always been on good terms with Mr. Macdonald Always on very good terms." ... In reply to ■ further questions, witness said that he was rather annoyed with Mr. Macdonald.. in the matter. He-did not know whether Mr. Macdonald was interested or not, hut he (Mr. ■ Macdonald)' wanted him to put on a higher value, and he would not do so.' At the time he had delivered his valuation, but, of course, lie might have made a further recommendation. •

Was anything moro than argument used'by Mr. Macdtinald? —"No." You have differed with him on other occasions? —"Yes."'.

. And honestly'so?—"Yes." You have been mistaken on numbers of occasions?— I "Yes." .

And you: hold.to. your -view?— I "And the. Goyernment paid too much for the property." . . Dr. Findiay: That is your opinion?— "Well, the property is lying there as a white elophant." ' Is Mr. M'Kerrow a man who took an .optimistic view of values'? —"No; he'was very'cautious." And Mr. Barron?—"He' same."

"Would Stick to his Cuns." Continuing, in . reply to Dr. Findiay, witness said thai previously tie Government 1 had purchased properties at his valuations, and other properties which he had condemned were not purchased. He would stick to his guns in regard to this valuation. Both Mr. M'Kerrow and. Mr. Barron were thoroughly competent valuers. They would not allow any influence to be brought to bear upon them. He did not'know how they came to make a mistake. Certainly, he had not made a mistake in this case'.

If your value was £85, and that of Mr. Barron was £1-50, the matter would resolve itself into an honest mistake on the part of ono of you?—"lt was moro serious—it-was a mistake." .

Do you dispute it was an honest mistake?—" No."

To Mr. Samuel: I don't say that he asked me to value it higher. It is your impression he wanted ■ you to value it higher?—"lt is not an impression; it is a certainty.'' The position is that Mr. Macdonald found fault with you?—" Yes." .

Replying to further questions, witness said that he tried to put a fair, oommon-sense value on the property, so that the Government should not lose by it. There were other properties in the district more suitable ,for workers' homes. Things were booming at the time. Mr. ■ Leigh would be lucky to sell for £85 to %ny purchaser at the time.

Did you consider its value to the Government for the purpose of. workers', homes? —"I endeavoured to take all the circumstances into consideration."

To Mr. Luke: It was a fact that a lot of people gave too much for land in the Hwtt district at the time.

So the Government was not an exception?—"As I said before, file property was not suitable for workers' homes."

To Mr. Jenkinson: The land on the opposite side was bettor. It did not require draining. The Government had spent- a lot on the land in the way of draining. At about the same time land was sold for £100 per acre. Mr. Leigh's property was always looked upon as swampy and unhealthy. In the mornings there was always a mist hanging over the property. • To Mr. Bigi*: He had only a very slight acquaintance with Mr. Kensington.

Is he a man of. integrity ?—"As far as I know. But the question is not fair.' . I don't know."

l , Have, you heard anything to his credit? —"Neither one way or tho I other. So far as I know, lie, is a man of probity." 1 Would you regard him as a competent valuer? —"I don't know sufficient of him to answer that question." \ Evidence, of Mr. J, D. Ritchie. Mr. J. D. Ritchie, Land Purchase Inproduced the files-ielaimg to.

the purchase of the property. - In April--1904 Mr. Leigli offered: the property to the Government. He stated that- the land was level and admirably adapted for sub-division. Further, Mr.' Leigh said that the. land, was of exceptional quality. It had recently been thor- : oughly drained and improved in various ' ways.. There was (Mr., Leigh continued) no more desirable property to be obtained in the district, and none waa well..adapted for workers' homes. " His price was £200 per acre and he was prepared to take the whole sum in Government debentures. . Witness went on. to say that in August, 1904, the Department wrote to.Mr. Leigh that ; it had decided not to proceedfurther with the negotiations. Mr. llyers: By whom was the valuation made? . ; - Witness: "I don't know that I ought to say—it is confidential." ' , Dr. Findlay: If it could, be given I' should like it to be done. The chairman:. How is it ■Witness: "There is notjiing more con-fidential.-t-han-t-hat it is a confidential Departmental report." Continuing, witness said that the : valuer- was Mr. Cavorhill. .In his report the valuer said .that there were no industries in-the district. Mr. Caverhill went on to say that one4hird was poor to medium. It would carry about 45 cows. Portions of the land which he had seen cropped had done well! He did not think .the. climate any .too good as it was foggy in the mornings. The. place was fairly well, watered, but he, doubted if it would be sufficient after the place was cut. up. There was a fair demand for small farms of from two to five acres in. the vicinity. - Con-. tinuing his report, " Mr. ' Caverhill said that after land on' the opposite side was sub-divided and roaded £300 was asked and upwards. His value was £80 per acre. ..Seme .drains-were -required.' ) Originally the. property was a swamp ' and. part of it. was rich. Witness then ' said that the board finally considered it' on August 5. There was a' letter' from Mr. Leigh on June; 27, in which he "''informed the Government that hewas now offering the property to otherß at the greatly reduced 1 price of £150. per acre, that- it was only half the price • of the .land and that he thought it only right to let the Government, know of - the reduction. '•• On June' 22, he should mention, Mr. Leigh, withdrew - the property' in order that he might' offer it to others. Any letter, sent by : Mr.: Leigh or a member of Parliament to. a Minister would not appear on the Departmental file unless it were ultimately referred' back to the . office. • Dated April 13, 1905, there was a telegram from Mr. Seddon : to 'Mr. Bar-■ ron. It was as follows":— "Messrs. Macdonald, Wilson,' and Co. . wire me that " they have a section of land for sale suitable • for workers' homes. Inspect and: ■report, as the Government desire to purchase land for workers' homes in that locality before the l Hutt railway, is straightened." The telegram sent by Mr., Seddon ' was- not ..on the file. : On, April IS, 1805, • the - board made , a recommendation that : . the property should be bought. A memorandum from ■ Mr. Barron to the Minister was to the : effect that the board had had under consideration the offer made by Messrs. Macdonald, Wilson and • Co. of , Mr. Leigh's ,property to, the. Government. , The property (it was stated) was nearly lOvel, a rich'swamp, and' nearly afl cleared. .The Government, decided to take .'no action in 1904. . The oommis- : sioiiers visited the .land, ■ and fully considered it. They reoommended the: Government to offer.. £120 per acre for it. .That offer (continued witness) was not on the file. The board consisted of Messrs. Barron, . Marchant, and Kensington. No further" valuation was obtained.' . Was It Usual?

. Was it usual for the board to purchase merely 'on their own inspection? —"Usually a separate valuation waa obtained. It was unusual."

Witness went on to.- say that the ■recommendation was, on April 19, the following day, considered by Cabinet, which approved that an offer of £120 per acre should be made. That offer was transmitted to Messrs. Macdonaldi Wilson and Co. on April 25, and was signed by Mr. Barron. On April 26 Messrs. Macdonald, Wilson and Co.. replied that they were instructed by Mr. Leigh to express surprise that only £120 was offered, as land..opposite was being sold for £300, and that the offer must bo declined. On April 28 the board reconsidered the matter, and agreed to increase the price to £160 per acre." The board said it increased the- price in.view of the probability of t|ie estate, being taken compulsorHy. The recommendation was signed by Messrs. .Barron, Eees, Strauchaa, and Kensington. There was a covering memo, to the Prime Minister to the effect that the agents of Mr. Leigh, having refused the offer of £120, the' board reconsidered the. matter, and in view of the probability of' the case being taken into the Compensation Court, it recommended that it be purchased at' £150 per acre. On May 1 Mr. Leigh wrote to the Premier to. the effect'that' he considered the Government's offer of £120 was ridiculous. He .was, however, prepared to submit the question of price to a Compensation Court. If that were done, he would relinquish his right to retain any part of the. pro-, perty. Witness (proceeding) said that no record was kept of an interview by the Department unlesis an offer was made. On May 5 Cabinet resolved to offer £150 per acre; this was final. He could not see any letter to Messrs. Macdonald, Wilson and Co. on the file oonfirm» ing the offer of £150. .

The Offer Accepted. On May 12, however, a letter war received from the firm accepting the offer on behalf of Mr. Lomh. They stated that as agents for Mr. Leigh they begged to confirm the sale. Mr. Barron was chairman at the time. There was no record on the file of any other member of Parliament having interviewed the board or any Minister in connection with the estate. If sucli had been the case, there would have been no record on the file. On May 15 there was a telegram' from Mr. Barron, who had been out of town, stating that he would see Mr. Macdonald in Wellington. Mr. Levi, of Messrs. Wit ford and Levi, prepared ,tho ance. -There, was a minute from the Premier to employ Mr. Levi for the purpose. He had nGver seen or heard of any Ministerial file in regard to the matter.

To Mr. Skerrett: On May 5 Sir. Barron wrote to the- Premier that- there were two properties at Lower Hutt under offer. One was Leigh's, and-the other Hay's and M'Cauley's. As regards Mr. Leigh's laud, Mr. Barron said that it was nearly all level swamp land,- and was dry and suitable for intense cultivation. If it were purchased (continued Mr. Barron).. it could be divided into 16 quarter-acre allotments and 21 allotments of from three to five' acres. The rental per quarter acre, if the purchase money were £140, would be £2 10s. It was further' stated that ultimately tho land would become very valuable. Mr. Barron added that at £200 per acre'the prico was, ho thought, too hiVh. If it could be quoted at £140 per acre negotiations might be proceeded with.

No intlepondent File. He (witness) would gather from this that ivlr. Barron inspected tho property.. This letter was referred to Cabinet," which let the matter stand -over for two months. Up till April 13, 1905, Mr. Leigh conducted his own negotiations. On April 26 (it appeared) Mr. Barron telephoned to Messrs. Macdonald, Wilson and Co., asking Mr. Leigh's lowest price, and Mr; Macdoiiald had replied tliat he would wife to- Ms,

Leigh. Messrs. Bell, Gully, Bell, and Myers acted as solicitors for Mr. Leigh. To Dr. Findlay: He had no reason to .Suspect that there was ail independent .file; Therfe was nothing to prevent the board : from making " a recommendation as to quality and price. They were not bound to get a valuation fidm a local man. All the members of the board bad had a lot of experience. It .would be quite a" reliable body to value the land." Owing -to tlie fact that the contutions had changed there was nothing Unusual iii-Mr. Cavorliill having valued the ' land at £65 less than the board. On several occasions the board had offered more than tlio valuer's figure. Mr. Myers: How much lias the Government spent on tlio property since its acquisition, and has it' been.cut up for workers' homes? —"I can't say; it is in. the hands of the Lands ment." Thb Government Valuations.

Mr. F.' W. Flahiiagan,. Valuer-Gen-iral, said that in 1897 tho property was'divided into two area's —47 . acres and 95 acres. In 1897"the 47 acres."was valued as under: Unimproved value, £1420;" capital value, £1700; and tho 95 .acres were valued: : Unimproved value, - £3250; 'and the capital value, £3650. v The'values, ill 1902 were: For the 47 acres Unimproved value; £1450; capital value, £1760; and for the 95 ' acres: Unimproved value, £3250;, and the, capital . value, £3650. In 1905, when the ." .two properties V were combined into .one . area/ ~..it was , valued . as . under: . Unimproved value, £11,870;' capital" Take £12,860._: There ■ was ho alteration in the values iifc 1909. He could not say that the land was now Set-only for. grazing, purposes.;. . Mr. Win.' l'hos. Strand, timber mer- .'. chant and'. building contractor, at Lower Hutt, '.then gave , evidence.' 1 He Eaid that'he once had .a third interest in . ■ tho properly, with Mr. Leigh. In 1903 Mr.' Leigh" acquired' tho "property' from 3lr. Jounax. .While he'had an interest Ihe believed that Mr. Leigh offered the to ~tho~ Government at,,'£loo , iper acre.' ''.A," ', . - To Mr.. Skerrctt: It was true, that Mr. SLeigh. disputed his. claim to an interest sn. ,tne property. He was informed that the. Government had declined the offer. He ragreed to buy 43 acre's, from Mr. , Leigh, at the!.price Mr., Leigh' bought from Mr. Jouhax. He believed it was ' £50 per aero. .... Dr. Findlay: You were to pay £70 per ,ccre. ... ...t

To Mr. Lulco: Ho had shared in tho enhancement of land values in the distinct.. .The bridge and station a± Mel2ings Lad increased tho.- value 0f... all property in the district. ,

Evlderica by Mr. A. L. Wilson. Mr v A. LV Wilson, "fonnerly inpartjnorsliip with Sir. Macdoaald,"tleri gave evidence. He said ;that the partneruship lasted 10 years and ended in March, 1908.' Witness saw Mr. Barron about the matter on several occasions, also, the late ilr. Rocs who was ono of the board, with the view to the Government acquiring it. Mr. Maodonald also took part in the ; negotiations. ». ..The total timount paid to his office in regard to the matter was, as far as ho recollected, £536. ' Who paid you that amount. —"I could £ofc tell I did not collect it.". Mr. Skerrett (to Mr. Myors): It went through your office: : . Mr. Myers: I don't know anything about it. ~ • Continuing) witness said that no other jnoneys were paid into liis offloe. The commission -was 2} per oent on £21,000. Did it go into , the ordinary 'hank account of the firm? —"I don't know." Was:it divided between Mr. "Macdon-. bid-and yourself?—" Yes.".' So it would go' into the common £und? —"Yes." • ■ ■ Continuing witness said that he had iooked up the books recently to see the mature of the transaction. He could not, say. if the commission appeared in the. cash.-book., ,V To Mr. Skerrett: The only,.sum\which" •the firm received, .was the one which 2io. had mentioned.. ..She insinuation, is that a sum iwas received'from Mr. Leigh _and paid io tlio 'firm.. .V'.'j Mr. Myers: I never made that "sngges-. tion. Witness: If any. other sum had been received-he would have known it;-'--... . .Continuing, witness, said, he saw : Mr.' Rees, Mr. Barron, and Mr. John H'Gowan. He never pressed the.matIter oa . any Minister. . The Committee then adjourned till to-night. . \ ALLEGED BREACH OF PRIVILECE. v ; MOTION IN THE HOUSE. In the House of Representatives yesterday, the Premier moved as fol-' low; .... . . - ''Piat_ a message ,bo transmitted-to the Legislative ■ Council acknowledging the. receipt of a message from the Legislative Council regarding, .the-.alleged brpacjb of, privilege in .connection with a charge against, a member of the Council." . . . -j . Mr. Masseyy . who seconded the mo- 1 tio'n, ■ , said • that he thought the ■ Premier was.. adopting the proper courso. It would be recalled that the. Council sent a reply.. worded similarly in regard to a.pomplaint of breach of privii®ge by. the _House. last session. .Tne Premier said that ho had noticed Hie reply in question by the Council to the. House. ; ...... lie motion was then.adopted..