LOAN ADJUSTMENT CASE.

Taihape Daily Times, Volume 7, Issue 222, 8 June 1915, Page 4

LOAN ADJUSTMENT CASE.

COMMISSION AT TAIHAPE. At the Court House, Taihape, on Friday last, Mr Short sat as a Commission to hear evidence in respect to a claim by the Upper Wangaehu Road Board for a contribution or adjustment by the Waimarino County in respect of its-Special Loans, part of the rating areas of which have become merged in the County. The several bodies concerned were represented as follows: Upper Wangaehu Road Board, Mr Loughnan, Waimarino Conty Council, Mr Harris; Treasury, Mr Miller;' Ratepayers of the Special Rating Area, Mr Ongley. Mr W. S. Short read the statement of the claim to be considered, Mr Short said he thought the crux of the matter was contained in the second question of the statement, the basis on ■which the amount should be considered. The decision to he arrived at was whether the basis should be that of the land values ruling at the time of the raising of the loan, or at the time of merging into the Waimarino County Council Mr Loughnan stated that the . loans in question were raised between 1887 and 1902 by the Wangaehu Road Board and special rating areas were duly constituted. The loans were obtained from the Treasury and the money spent in various ways. Since these loans were raised the territory of the Road Board had been curtailed and on 31st March, 1908, the Mangama.hu Road District was created and negotiations took place between thes. 8 two bodies. In 1910 an opportunity was taken to endeavour to enter into an agreement with the Waimarino County Council with respect to an adjustment, but nothing resulted. Mr . Mannington took a prominent part in these matters at that time. The Wangaeihu Road Board, rightly or wrongly, collected special rates from the ratepayers in the merged area and were thus able to keep up them interest pay. ments to the Treasury. That continued until two or three years ago, when a ratepayer objected to paying. The case was brought to Court and Mr A. D. Thompson, S.M., decided that it was wrong for the Road Board to collect special rates from these people. Up till then the Wangaehu Road Board took no action to get the Waimarino County Council to come to an agreement r e an adjustment. Until the passing of the Local Bodies Loan Act, 1906, it was not permissible for a road board to compel a county council to make an adjustment. In an Act passed in 1901 merging bodies were given authority to make special rates, Previous to this.disputes between road boards were referred to county councils for decision. It would be seen that the Wangaehu Road Board had no,t been doing wrong in collecting these rates and until 1906 it had not been possible for it to do otherwise. The speaker then quoted statute to show that the Commission had power to award 'back payments of interest for 4 years and he applied for that interest. The attitude of the Board was that it was compelled in its own interests and in that o fthe ratepayers, to collect the special rates from the ratepayers in the merged area, for while they were doing so they were able to pay the interest which fell due, but when it was found .that they could not collect these special rates from these areas, it placed the Board in a difficult position It still had to pay the interest and it was an injustice to. the ratepayers in the Road Board District I if the special rates were increased and ! unfair to increase the general rates. In reply to Mr Harris, the speaker said he could not give details of values which were in vogue many years ago, as the books had not been kept in a thorough manner and they were thus handicapped. In. the statement of claim, they went on th e basis of present day values as they had no data of earlier rates and values, Mr Harris said the value of land in the merged area had increased and it would not be fair to go on present values. They should use those which were existing at the time of the loan or of the date of merging. Mr A, C. Mannington, clerk of the Wanganui County Council, in evidence said he was chairman of the Wangaehu Road Board about 1900, and was clerk of the Board from 1902 to 1908, when the separation of the Mangamahu Road Board took place. With regard to the five loans which were raised, the first comprsied the whole of the Wangaehu Road Board District. When asked if he could give the particulars of all the values, Mr Mannington replied that he could if given a little time. With regard to the adjustment, the witness said if the adjustment was made on the basis of value at the time of raising the loan, the Waimarino County Counoil would take too large a proportion. Witness then gave an example, to explaun his meaning more clearly. H e showed that their apportionment at present was £l6 7/10, while the rest was paying . £9O 1/10, and stated that if the appor.itonmen was made at the time of of at the time of the - merger, the Waimarino CountyCouncil : .would* actually have to ■ pay more thJin ’ Sir. Loughnan ■ Mr. "-Mahf nington coultl compile a table of relative Values. Mr. Mapfiipftofl said he could com’

pilo a table giving the values of rate* able land at the time of merging if had a copy of the special roll. Up 1902-03, the year of merging, them wore three ratepayers, viz., J. P. Donald, John Studholrac, and Craig. After that date they continued to pay rates. After 1907 he collected rates although the occupier;? hod changed. In reply to Mr. Harris, qdtness stated that after date of the land mostly became Crown land and only some of it was unoccupied'. In 1910 the Wangaehu Road Board wasprepared to make an adjustment on the then values. Asked what benefit the merged area to-day received’ from the loan, the witness said the first loan gave no special benefit at the present day. When the No. 2 loan was' raised there was no rateable property in the Waimarino County. Shortly after the merging took place, the basis of valuation was> altered, and it considerably reduced the valuation of Waimariao County. A great number of the rated areas were now not benefitting from the loa&s. The first loan was for wofA that was absolutely necessary. If they carried out the adjustment on the basis' of values at the time of raising the loan, the Waimarino County Couaeir would have to shoulder half of it. But if they took it from the time of the merging, Waimarino would take le?s than one-fifth.

Mr. Harris asked whether the people who had the say should not bear the burden.

Mr. Mannington said he did not think that was necessarily so. Under the present conditions none of these loans benefitted the Waiinarino district. The No. 1 loan benefitted only one man.

Mr. Mannington then submitted a table of figures, giving the rateable value of the merged area at the time the loan was raisd and at the time of tliemerger.

William Craig, called by Mr. Harris, said he was the owner of property near Karioi. He knew the district thoroughly and knew the merged portion. He’ was there at the time when several of the loans were raised. In his opinion, the merged portion was not benefittingThe loans had been raised for certain purposes but had been spent in other ways. The money was spent in thelower portion and was of no benefit to the part now known as the Wairaarino County. The outlet for the merged portion and which he' had had to us» was Field's Track. He believed’he the only original ratepayer in the upper portion. Mr. Loughnan asked'if there was not' a Hale’s Track.

Mr. Craig said there was, but he had’ always used Field’s as the other was no good to him. He was only aware of one loan being raised. He and Mr. Studholme were the only two affected" and their holdings totalled 130,000 acres. They did not oppose the loan because there were only two of them.

Mr. Miller said lie would like to mention that an outstanding payment -of' the Wangaehu Road Board for interest, amounting to £59 1/ 4, being interest to, 15th August, 1915, was due to the Treasury. He mentioned the matter as he took it that it would be settled by this Commission.

Mr. Harris, addressing the Commission, submitted that there should be no adjustment, on the ground that there had been, neglect in tlie matter of applying for the adjustments the Waimarino Council. The question of adustment was first mooted in 1910. But Mr. Loughnan had endeavoured to show that it was not proposed until a decision of the Court prevented the Upper Wangaehu Road Board from collectingrates from the Waimarino County Council. But it was not until 19.12' that this decision took place. When they asked for an adjustment they did it in terms unfair to the merged area. Between the time when the adjustment should have been asked for and wasasked for there had been considerable change in the merged area. The adjustment should have been applied for at the time of the merging, or, at any rate, not later than six months afterwards. Mr. Studholme r s lease had expired and the Government had purchased the land from the Natives and thrown it open for settlement, with theresult that it was taken up in various areas by people who were not aware of' any special rate. , He contended that, the negligence of . the Wangaehu Road" Board had placed these settlers in theposition of having to pay these special rates with no benefit resulting to themselves. He was going on thegrounds of equity. Therefore, with respect to the interest, he submitted that it should not have to be paid by the W T aimarino County Council, If any adjustment has to be made it should be on the basis of the rateable value of property at the time when the loan was raised.

Mr Loughnan said lire previous speaker had proposed that the basis should be on the rateable value of property at the time the loan was raised, But in his opinion Mr. Harris had given no reason at all why this basis should’ Bo employed. He was of the opinion that? the basis should bo taken from th©, time of the merging. He thought the' analagy of a partnership put by a speaker during the morning waggery applicable- Supposing a partner-/

ship/was being dissolved, they would'; wind up affairs onthe basis of presents ' time values. Therefore, he contended that they should.deal with this matte? from the time of merging or dissoltt*

fijon, which was when the Act was passed in 1902. Mr. Short questioned this reasoning and put forward other analagies to one party dissolution might be at. a disadvantage if an agreement was not arranged for a quid pro quo. ‘ % Mr. Loughnan said it was a thousand pities that the Waimarino County Council had to cn agreement before. The Road Board had written to the Council but the latter had never done anything iu the matter. The ratepayers affected at the time the loan was raised had time to make objections, and, although there were only two of them, a settler with 120,000 acres would have some weight. They were apparently hoping that some improvement would result to their property. If there had been no Waimarino Council these settlers would still have to pay these rates It would be unjust to other ratepayers in the Wangaehu Road Board District if they were to exempt Mr. Craig from paying rates. It might not seem fair to Mr. Craig to have to pay rates when he derived no benefit, but it would be equally unfair to make other ratepayers pay his share. .The reason the Wsrgaehn Road Board had not made application up to 1912 was because they were collecting the rates from the Waimarino County Council and were able to keep np their payments for interest. But when a Court case arose in 1910 the decision of the Court was that they could not legally collect from these ratepayers in the merged area. So that up till then had nothing to ask for and nothing to object to. An adjustment was proposed in 1910 but the Waimarino County Council turned it down. With refornce to the overdue interest, Mr. Loughnan read a clause giving the Commission power to make adjustments retrospective for a term of four years. He submitted that about £59 odd would be the interest on the merged area. He therefore made application for it. Mr. Harris submitted that .the adjustment of the interest did not come within the jurisdiction of the Commission. The Act stipulated that written notice must be given and they had not received any such notice. Mr. Miller, in refrence to the apportionment, said that if none was made, the security of the Treasury would be affected. He thought an apportionment should be made. Mr. Short asked if any further evidence was to be submitted, but as there was not, he declared the Commission closed. His decision will be communicated to the parties affected.