BREACH OF CONTRACT?

Sun (Auckland), Volume III, Issue 771, 18 September 1929, Page 11

BREACH OF CONTRACT?

EDUCATION BOARD AND DEPARTMENT LOAN MONEY EXPENDITURE Asked fay the Education Department this morning to forego interest amounting to more than £3,000 on a loan made by the Auckland Education Board from its rebuilding fund seven years ago, the board objected to what several members regarded as a breach of contract. Protests were made against the department’s suggestion to advise the board ori the expenditure of its loan money. A memorandum from the department said Cabinet had approved of the sum of £9,32S advanced by the board in 1922 from its rebuilding fund in connection with the purchase of the Training College hostel. The department said interest had not been included and considered it reasonable that the board should forego the amount of the interest. The department said it could not see that any good object "would be attained if the refund were paid from the public account to the board's rebuilding account. Such money, it said, could be expended only with the approval of the Minister. The department asked the board to approve of the expenditure of the sum on several urgent building requirements, applications for -which were before the department. The department preferred this method to the expenditure of the whole sum on large rebuilding works such as Parnell and Richmond Road schools. It hoped negotiations over the new Parnell site would be advanced sufficiently to justify approval of a grant this financial year for the rebuilding of the school. Such a grant would be considered independent of the refund money. SEVEN-YEAR-OLD LOAN “The department accepted our loan for the purchase of the hostel seven years ago,” Mr. A. Burns, the chairman, explained to the board. “The debt to us was ’ acknowledged in an Act, and the loan carried five per cent, interest. Now, instead of honouring the contract, the department seems to wish to confiscate the amount. It is not fair. The board should be asked how to spend the accumulated money.” "The money is really overdue to the board two years. This is our money, but I do not think we need quibble over the interest. The main sum must concern us. There are works on which we could pay half cost with our money—the Government could provide the other half.” Mr. H. S. W. King thought the board should exert its rights. “The money was advanced to the department when it was short of funds in a time of financial stress,” he said. “The idea of the rebuilding fund has been to meet sucb cases as Parnell and Richmond Road schools. The department now wants to take part in the expenditure of our money, and, further, wants the approval of the Minister. “NOT PLAYING THE GAME” “X can hardly call it interference, but it is not playing the game.” In agreeing with the remarks by Mr. King, Mr. T. U. Wells said he estimated the interest due to the board to be over £3,000. “If, at the time of the loan, the department thought we should not have the interest,” he said, “it should have said so. Surely it is a breach of contract.” Mr. Burns; And we have not pressed the department for payment. Mr. F. A. SDell: The money should be handed back to the board unconditionally. Mr. E. C. Banks thought the department should adhere to its contract, and Mr. Burns remarked that the suggestion seemed, to him, to be confiscation. He mentioned that the grants for rebuilding were cancelled years ago. The board will ask the department to proceed in the terms of the contract, and the position will be re-stated by the board.