WADESTOWN TRAM

Dominion, Volume 10, Issue 2886, 26 September 1916, Page 9

WADESTOWN TRAM

COURT'S DECISIONS NOT A SEPARATE UNDERTAKING JUST AN EXTENSION Tes.-terday morning tho Court of Appeal gave judgment in the oase tmoim. as the Wadestown tramway case. Tho judgment road was that of the Chief Justice (Sir Robert Stout), and in whidh tho other members or tlnQ Bench ooncurrod. There, were two quostions for tho Gssnt to decide: 1. Whether the Wadestown tramway is a separate undertaking and public work requiring that a separate account of its income and expenditure shall be kept. . 2. Whether an annual amount 'equal to 2£ per cent, of the cost of construction of this tramway should be debited as expenditure end kept in a trust account for future contingencies. In the coarse of his judgment, His Honour said that in 1902 'Wellington CSty raised a £225,000 loan for its electric tramway system. Tho main route defined was from Newtown to Government Station, and seven branch lines woio defined. Subsequent Orders-in-Counoil authorised extensions to Island Buy, Lyall Bay, Miramar, Seatoun, and Karori. For some of those extensions loans were raised on the security of special rates. In. 1910 it was decided to extend the tramway to Wadestown. Mentioning the ground covered by the route, the judgment observes: "All the extensions wore in the City." In the authorising Order-in-Council there was nothing treating tho "extension to Wadestown ns a, separate and independent undertaking. There was a separate loan raised amounting to £33,000 to pay for tho construction of the extension, and the loan was guaranteed by a soparate rate on that portion of the (Sty that had formerly been the south ward of the Borough of Onslow. There was no etatoment in the notice concerning the raising of the loan, nor in the Order-in-Council, that a separate account of the income and expenditure on the undertaking would be kept. The Order-in-Council did not treat tho Wadestown extension as a separate tramway. Also, the. tramway net ro:venuo uccount included the earnings of tho Wadestown extension. The City Council had, however,- created a separate account by charging, the miles run _on the Wadestown extension as coating so muoh per mile. Tho electric power on all tho tramways was one, and that assessment was a more guess. No such account had been made out regarding tho extensions under tho special loans of the lato Melrose Borough. The account might bo fair, but it wis not an account of income and expenditure on" the Wadestown section by* itself as a distinct undertaking. It might be that tho Wadestown section, taken by itself, did not pay, and the Molrose sections might be in the same position, but the ratepayers of Wadestown were not asked to voto on that question. The expenditure was assented to by tho whole City, a 6 the Order-iu-Council showed, and the vote cast by the Wadestown ratepayers was a vote for a special rato to guarantee tho loan, interest, and sinking fund. If tho_ tramways as a whole could not pay loans, interest, • and sinking fund this rato must bo lovicd and paid, but tlio tramways as a whole did pay all charges and had a' balance, though no separate rates wero lovicd on Melroso and Wadestown. "In my opinion, therefore," said His Honour, "tho first question must bo answered in the negative. If it had been intended that the extension to Wadostown was to be deemed a separate undertaking with separate accounts, then there should have been due provision mado for this in tho Order-in-Coitnoil, and the proposal submitted to the ratepayers sliould have mado that intention plain. It. therefore, becomes unnecessary to deal witli tho second question. A depreciation account has been opened, and this account has at present a sum of £138,038 to its credit. This sum has. not, however, been set aside as a sinking fund with the Sinking Fund Commissioners, nor has it been kept as a trust account. There is only some £20,792 on hand on fixed deposit. The balance has been spent in constructing further oxtensions of tramways/etc. If it is wise to set asido a depreciation account—and the authorities cited by counsel for the Corporation show that it is a wise and prudent thing to do—t-lien it should be . so sot aside, and kept as a separate fund, obtainable when the need arises, and not invested in Corporation undertakings. That is what the works of tho expert accountants seem to advise. Whether, the Corporation can create new accounts not provided''for in the Tramways Act or other statutes it is unnecessary to discuss. It would, if this depreciation fund is to be continued,- be wise to have statutory authority for it's existence, and for the mode- in which it i' s to bo administered."