THE CORPORATION AND THE DUNEDIN WATERWORKS COMPANY.

Evening Star, Issue 3152, 27 March 1873, Page 3

THE CORPORATION AND THE DUNEDIN WATERWORKS COMPANY.

At a meeting of the City Council, last evening, the Waterworks Committee brought up the following report and correspondence :

Your Committee has the honor to report having corresponded further with the directors of the Dunedin Waterworks Company relative to the negotiations for the purchase of tho Company’s works. The substance of such correspondence will be readily apprehended upon a perusal of the attached copy of a letter under date March 20, 1873, forwarded to the ('ompany’s directors by your Committee. Your Committee recommends that the Honorable the Colonial Secretary he asked to introduce a Bill into the Assembly at the next session, to enable the City Council to issue fifty-year debentures under the “ Municipal Corporation Waterworks Act, 1872.”

The correspondence referred to comprised the two following letters City ('ouueil Chambers, Dunedin, March 20th, 1873. "Sir, —T am directed by the Waterworks Committee of the City Council, to reply to your two letters of tho 20th ult. My letter to you of tho 18th ult. intimates a desire on the part of the members of the Committee of the City Council to have An interview with your directors, in reference to the ; question of the currency of the debentures, which, by the draft agreement for the sale and purchase of the works, was to be fifty years, but which, by the Municipal Corporation Waterworks Act, 1872, was limited to thirty years. This request, according to the first of your two letters, which was intended as a reply to mine of. the 18th ult., was interpreted by your directors to mean that its (Council were unable to carry out their part of the agreement, by reason of this supposed legal difficulty. My letter was not intended to, and, it is submitted, docs not carry any such meaning. Should it, however, have done so to the minds of you.! directors, the Council Are at a loss to see why’it was not nut. forward in your two icttcra, ns the single ground upon winch your directors desired to consider any past negotiation for a sale of the works at an end, instead of which they allege, as an additional reason, that the resolution was passed oidy by a small majority. The ('omicil are advised that, whether the majority was a large or a small one, is of no importance, if the meeting was duly convened and held, and the voting was in accord ■ a,nee with the provisions relating to meetings contained in the Companies Clauses Consolidation Act, )H 15 ; but that if the proceedings were not regn’iir, tho defect should bo cured by calling another meeting. As to the supposed legal di’liicnlty, the attention of the meeting was distinctly called in the directors’ animal report, to the. faet that, so far as the. sale was concerned, the shareholders were called together in consequence of fresh legislation upon the subject, so that both they and Lite directors must lie supposed to have been acquainted with all tho piovisions of the Acts, and that the contract must be carried out as modified by the I .legislature. I lie ('ouncil arc, of course, a ware that tho directors have no power to alter the terms already agreed upon, nor have tho Council suggested that they should do so. 'The Council are advised that the resolution was an adoption of the terms of the original agreement subject to the Act. The Council are unwilling to attribute to your directors, and tho shareholders who voted fOr tho wjfy a'defciro to withdraw from the contract au

constituted by the original agreement, the Act of Parliament, and the resolutions, but conclude that your directors fo 1 some doubt as to the legality of the meeting and the interpretation of tho contract; the Council would, therefore, suggest that the contract should be perfected so far as it can bo, by being engrossed, and having the respective common seals of the Company and the Corporation affixed, making it conditional on its being sanctioned by Parliament next session; that the Company should get a short Bill introduced, notice of the application for which being freely advertised, would afford every dissentient shareholder an opportunity of opposing its passing. The Legislature could then deal with the question of the currency of the debentures as it might think fit. This course the Council venture to suggest would occasion but little or no expense to the Company, if they go to Parliament, as they probably will have to do, for an Act to wind np their affairs, they not corning under the provisions of the Joint .Stock Companies Act. One Act would be sufficient for both purposes. An arrangement might be made for securing the payment by th° Corporation to the shareholders of interest until the sale could be completed.-—I have, Ac., J. M. Massey, Town Clerk.

Sir, —I have the honor to acknowledge receipt of your letter of the 20th inst.. which has been laid before my directors. They feel that, however unwillingly, they have no alternative but to adopt the following resolution, viz.— ‘ That iu the opinion of the Directors of the Dunedin Waterworks Company, the whole of the negotiations for the sale of the works are at an end, and that any further negotiations for the sale of the works must be commenced afresh.’— I am, &c., Thos, Dick.