COURT OF APPEAL

Dominion, Volume 10, Issue 3058, 20 April 1917, Page 4

COURT OF APPEAL

A NAPIER MATTER | SAFETY OF A LOAN Tho Court of Appeal yesterday delivered judgment in a case in which tho Attorney-General appealed a decision of His Honour Mr. Justice llosking. In tho Supreme Court, before .Mr. Justice llosking, the borough of Napier proceeded" against tho Australian Mutual Provident Society on an application for a declaratory judgment determining'the following questions:—(l) Tho Napier Borough Council, having in 1912 raised a special loan under Section 16 of the Municipal Corporations Act, 1910, ar.d having thereby paid off its overdraft as it existed on March 31; 1910, and the Borough of Napier and the Napier South Town District having, on April 13, 1915, been constituted ono uiiited borough of tho name of tho Borough of Napier, did it become legally competent to the plaintiff corporation' as tho corporation of tho same united borough to overdraw its bank account after tho said union to tho full extent permitted by Section 96 of the Municipal Corporations Act', 1908, without regard to the amount imposed by the proviso of Section 97 of tho sauio Act? (2) Can the amount of the overdraft of £5500 herein bo legally raised under a poll of ratepayers taken under tho Local Bodies' Loans Act, 1913? (3)" Having regard to the -provisions of Sectiou 252 of tho Municipal Corporations Act, 1908, can tho. item of £4000 for the purchase of two motor fire-ongines ... be

raised by means of a special loan under tho Local Bodies' Loans Act, 1913? (4) If both or either, of- the said items . . . cannot be legally _ raised, can tho sinking fund and speoial rate proposed to bo pledged for the whole loan of £27,500. bo lawfully pledged for so 'much of' tho said loan as may be lawfully raised? .(5) Or, can portions of the said sinking fund and special rate proportionable to the legal part of tho said loan be raised? (6) Having regard to the points raised in the preceding . questions . . . can the defendant society safely advanco to the plaintiff corporation the amount of the proposed loan of £27,500 or any parts of such loan? , : In his judgment Mr. Justice Hosking decided that tho borough could raise:» special loan under ijho Local Bodies' Loanß Act, for the purpose of paying off the existing overdraft. It was against affirmative answers to questions (2) and (6) that the, 'At-torney-General appealed. The Court decided that the appeal must bo allowed. ,