AMMUNITION CONTRACT

Hawke's Bay Herald-Tribune, Volume 81, Issue 13, 8 October 1937, Page 12

AMMUNITION CONTRACT

-I'ress Atsociation.)

■ii » -ea- — » Exchange Rate Leads To Litigation LEGAL ARGUMENT HEARD

(By Telegraph -

WELLINGTON, Last Night. The difference between the value of the English pound and the New Zealand pound sinco the exchange rate was raised to 25 per cent. formed the basis of an action brought before Mr Justice Keed in the Supreme Court when the Colonial Ammunition Company, Limited claimed £6193 from the- New Zealand Government. Mr Richmond appeared for plaintiff and Mr Meredith for the Crown. The company 's claim was founded upon a contract made to take effect on January 1, 1925, in which plaintiff was to supply ammunition to tho Government for 15 years at a price equal to the current War Oliice cost, ascertained yearly in London. The Crown case was that the Government was entitled to pay with the samo j number of pounds as would be paid in London by the War Office. Mr Bichmond opened hi& case by saying that it was within a very narrow compass. The question was should the New Zealand Government pay a price in the Dominion equivalent to thht payable by the War Office or should the Government pay the same number of pounds as was paid by the War Office. His Honour said the issue would be clearer if the company had to purchase in England the goods it supplied to the Government in New Zealand. All the company did, said Mr. Richmond, was to supply the labour and niant. The materials — brass, nickel, cad, paper wads, etc., were iinported md the cordite was imported througb he Government. The contract stated !iat the Government sihould pay to he company a price equal to the curjnt War Office cost. The price thereore meant its equivalent in value and Ihe cost was the real cost, not any' particular unit of aecount. Mr. Meredith claimed that the exchange hnd nothing to do with the fixing of the price to bo paid by the Government to the company. The contract was in respect of goods made, delivered and paid for in Ncw Zealand. Coungel submitted there were no references to show that payment was to be made at English prices nor was there any provisioh for payments to be in Now Zealand money in terins of English money. There was no difference between the New Zealand and English pound when oue spoke of them as units of account and the price was simply a measure expressed in the commonly accepted units of account, His Honour reserved hiB decision.