COMPENSATION COURT.

Taranaki Daily News, Volume XLVIII, Issue 81918, 13 February 1907, Page 3

COMPENSATION COURT.

AX IXTJfcIfiESTIXG CASE. COMPANY y. MUNICIPALITY. A QUESTION OF RIPAIHAN BIGHTS. The Compensation Court sat ai New ■l'ljfmoiUu on Tuesday morneny to hear the claim of the llaweia'pllectriCompany, Ltd.. v. the Ellliam Borom'h Council for ,um compensation Jls Ilonor Mr Justice Cooper was on the jjt'Heh, supported by Messrs David Peat, of W'angamii, and Bradshaw B.ve, of Eltliam. assessors. Mr Cotter, of Auckland, ami with mm Mr Halliwcll, of Ilawera appeared tor claimant cuinpanv; and ))r .1 () Findlay, \vith hi,,, Mr I). Seme, of ].; i tham. for the respondent Council Before proceedings opc.ic.l. Dr Findlay .said there had been a uue,ij, m rais cd as to the validity of a series of -i 1 jouriiments which had taken place He wished to reserve any imlits his clients' might have arising from the dill'erent adjournments. His Honor made a note of the nut-

ter. Mr Cotter read fee statement claim wh.ch set out llmt CMIO was clamicd on account of injury done lo the c■ mpany in- the con-truction of a rcer loir awl waterworks by the lloruimh Council on the Waingon'gora river. Mr Cotter wished to amend the amount to .12400. but his Honor re erved the point. .Mr Cotter said it would 1.0 ne. cessary to refer to the "Municipal Corporations Act. ]!)00," and the "Com-

panies Act, ir,(i2." There would be no contention that the council Was not fully within its statutory power, for it had a perfect right to extract water from the stream for Hie present pur poses and the other purposes proposed for the future. }(<, further quoted the "Ilawera County Kle.trie Company Act.'' ]{y the provisions of this there was a contract between the Government and the company that the latter should in three years commence to supply electrical energy. It was never intended that tlie company should pay the compensation to the riparian owners and then allow the borough to take, if neecssarv, the whole of the water from the'river without payment of compensation. The borough waterworks intake was higher than the company's pipe head, and the borough did not return to the

river all tlic water taken from it, although the Oilier side would contend that the whole of it was returned. Mr Cutter contended that in the dry season of the year no appreciable portion of the' water used for street watering and gardening purposes could he returned to the river. ,So far as trie evidence was concerned, it would be shown that the company would re quire the whole of the water in the river, and that tin; river wou!d soon he unable to supply the power required for the company's business. The loss at the company's intake by reason of the loss of water was 6'/ 3 break horsc-power. and at the power house y horse power, and consumer's door i h.p. Each unit of horse power was worth .-£3O per annum licit, and the four horsepower was therefore worth tl2o per annum, which, being capitalised, gave £2400, the amount of am ended claim. It might be suggested this loss could be made up by the introduction of additional power, but that would mean additional expen-e. which would be an actual loss. Mr Cotter then read the report of Messrs Climie and Fairhall (tiie engineers who devised the Elt-h.m borough water scheme) to the Borough Council. The Conn cil adopted the 0-ineii pipe, which would supply 1,123,200 gallons of water in 24 hours, and from that the claim was computed at €4200, but, seeing that the borough did not have at the end of the pipe an open bore of nine inches, but required to keep a pressure of from 40 to 50lbs, the volume of water abstracted from the river was only half tine figures abovementioned. Mr Cotter also noted that the Council in its scheme wanted to sell water not only for drainage and domestic serrice, but also to sell water for power purposes in competition with others who iiad power for sale. His point was that a nine inch pipe having been constructed, and the company having been compelled to put in its claim within twelve months of the

completion of tee municipal works luu-t claim for danage likely to be done at any time liv the abstraction of that water for the Kltham borough tor drainage, power, or domestic purposes, lie would produce" evidence that two thirds of the water taken to the town for domestic purposes would be taken to the outlet, and one third lost; of street-watering and. power oner-tenth would be returned to the river; absorption, percolation, and f'vaporation would account for the other nine tenths. He referred, of course, to tire summer months, when the company was in most need of the water. Documents were put in. l)r Kindlay admitting the printed copy was a correct copy of the lejioit >.■* Messrs Climie and Fairhnli, but did ::"t necessin: ..Iniit its accuracy. The liist 'v.dcnee. ci.i'jd was :hat ..1 lid win I'ayne, (or two years chairman ot directors of the Hawera lilectrii . c.iipiiny,. who stated that the com pany had erected works at a cost of some thousands of pounds, and had spent large also in compensation for riparian rights. He knew the Eli .team Borough Council had erected waterworks on tin; Waingongoro River. In April, l!)0o, the directors went to the river powerhou-e, an.l found the river lower than witness had ever seen it before—the two turbines could use up the whole How. The engineer told them about 00 h.p. was be iug generated. The directors then decided to dam the river. Previous to the construction of the dam there was a fall of 40ft, and now there was JOft. A shortage of water would limit the amount of ligiiis and power the company was able to .supply to consumers. If this occurred in any

onc month of the year, it was just as though there were a shortage lor the whole year, for customers would not take the power unless they could re ly on it right through tiie year. Jle

was stive that a large percentage of I water supplied to the Jiilham liorough i would be last to the river. Assuming that the loss was 4 h.p. effective. < the loss to the company of CI2U per 'I annum. Tor this would supply lii c.p. lights, or their equivalent. J J-iieli Hi c.p. light was worth .CI net ' pt'i- annum to the company. in house lighting about 00 per cent of the. ' light, in the house were used at one time. Thus the company could safely wore oO per cent, more houses than tiie current would supply if all lights were burning at one time. The com pany charged at per month, whether the "current -.--as „sod ~r not. In ihe day time power was Jet out for motors, and that 4 h.p. would earn CIS per i year. The V.72 for lighting and the US for power would -make U120,. the annual value of -J h.p., and that eapi talised at 5 per cent, yave .C2MII. the amount of the claim. ' These were not fanciful prices, hut those actually char «cil to customers now. Thev had nut had (o refuse cnsromors on accouat of shortage of water p.iw ,er The ..mpany first, turned on the lights i;, September. ltlOl. The income for last, January was 40 per cent, more than that of January. IHOK. From this in crease of busine-H he thotiehl ill,, output wou',l not be limited' bv the do :n I. but bv the slipplv of c,-aI.T. and any water laic, fr 'the river was a direct 10-s <„ the companv bv lessen iug \h ■ earnimr-power. The' -riling vali f the company'- busi,,,--. as a going' concern had al-o In en redie-.-i In- this los-- of water. lb- did uol think it would pay to introduce other motive power to suppl.-iueiil the present power in order to get that. I h.p. Vac!;. The p'ant was prxlucin o 117 \o. now-.w-iti: a capacity of :mn 1,.p. The company was drawing from if■lani at present. | To llr. Findhty: The nominal capital

was .t'.'iO.nnn. but only alioul CH.fltii) had been called up. He lived at TCa. baramoa. about 27 miles from Eltliant. Took ii.. interest in th* company's in .option. At the time of the passing of the llaw-in Connlv Electric Com „:,nr Aei Hi" K'Tluiiti" borough wat-r -imply was talked about. The dec -ric wa-!. • wye compMcd in S-ptnn-lu-r. mm. and tiie waterworks in October, lfifi-i. lie did not know if ihe c.iinpany had ever intimated to the Council diiriu? vlie eou-druction of il< work- that tie. Council , V; ,. .linodiiiewater iliat would he lvriuirod by tic company. Knew the Eltham Bar hukli offered no opposition to the pa ,s flill. ft didn't all'ecl them. TBf. Findlay: Don't you know that

if they had opposed it your Kill wouM , not have got through before Booms- : day; ) 'Witness: Perhaps it would have been as well, then, if they liatl. Br. Findlay: So you have a company that is going to lose money? Witness: No, we are going to make it byaud-by. Br. Fiiidl-.iy: Oh, there are so many companies that aie going to make a lot of money in the sweet byamlby. Kxaminalion continued: Roughly, the company had spoilt about ;C25,000 in eonstruetion wor.ts and i ; 1 th... p ): v chase of land, etc. The company had no prolits in its. first or second ■ year, expected none this year. Init thought there should be some next year. The expenses were practically the same whether the company sup Illicit M h.p. or SW) li.p., so no part oi the wages or interest should lie debit ed to the earning of the 4 li.p in lines timi. For a large ])orlion of ilie year there was more v.ater in the river than .lie company required, hut for one or two moulds in the year there was a Collage. lie had not ligured out the cos! of installing supplementary oil engine and working it for two or three months in tit.' suiuiu-r. A: 1 o'clock the Court adjourned till -1 p.m. After lunch en..,, examination of Air J'ayne was continued: j|e had made no exact examination of the si renin io enable him to estimate the volume of water. The company was at present using more . liau tlie'natu rat How of the stream. The greatest load was carried between 7 and s o'clock.

Itccxamined: There would be no more expense in dealing with the disputed 4 li.p. Ti:e .Chio mentioned, therefore, was clear prolif. Genll'rey Trevithiek, engineer at the company's works, said that in April. 1'.i0.1, he took the directors to th • works and made certain experiment.-; lo demonstrate the shoriage of water. Four months' drought had been experienced. Had the borough nol been using the river the company would iuive been able to utilise another (!<,<. li.p. At a moderate estimate there was about 201) li.p., and the average load was about 50. The highest out put was at S o'clock in the summer and 7 o'clock in winter. As a r.isult of the directors' visit, a dam was constructed to enable the company to get more power out of the same* water. The present maximum load was ]l7 li.p., which losses brought down lo !17. Twenty it.p. was requiiv! /or street lighting and 10 li.p. for free lighting. -About 07 h.p. was available for private sale. The gross revenue for lighting was about 111470, and. without street lighting, CI 170. The value per h.p. was .LIS gross tor do nieslie lighting. The 4 h.p. in qucs tion would be. worth £72. If the 4 h.p. ivrrc being utilised tne cost of production would not be increased ni> penny piece. 'The 04 (07) li.p. at the works supplied 1)7 h.p. according to the complin,; s books* The present pi ice Has 'about. iareepenc» per unit of actual supply, or about a quarter of 'what the company was entitled to under Hie Act, with the idea that when, tne custoineis had found ,<,■ many ad ".adages they would be pie pared to pay a little more. Considered the anticipated loss lo the company no loss than .00 per year per horsepower. The company' was now proposing to meet lartlu'r motors, bringing in iIJUO per annum. To His Honour. Even without the Kltham waterworks some steps to get extra power on a special occasion would then have been necessary. Could not supply this 4 or 5 li.p. in any known way in order to make it, of commercial value. His Honour: But if your business is going to increase as you suppose, you would have to put in an auxiliary power whether the Eltham waterworks were there or not! Witness: i hope so. The time must come, but I want lo keep that expense as far oil' as possible. Ili's Honour: ,So that this 4 or 5 h.p. is neither 'here nor there?

Witness conlmuc|l|: JWith Jsmall plants oil or gas engines would lie difficult to work to synchronise with water power. It would have to be of large horselpcwer and cxtremo'y steady running. It would not be commercially a sound transaction to supply energy at the present rates and pay for the production of power. Cross-exa mined: The coinpauv could light th> town of Kltham wi'h out installing extra plant. Ilawora, with 2000 people, consumed 70 h.p.. so Kltham, with 1000, would consume :.."» h.p. So that the company was st 1. »~> h.p away from the maximum water power available. It might lake seven or eight years before the company could utilise the whole of the power in the river. If Klthani were includ ed in the company* working the maxi mum would be reached almost at once Ilul the river was a gamble, and on some .me dav ihev might be ■I u,p. sliorl. Dr. h'iudlay: Quite so; so I would suggest we pay vou onlv for that day's loss. Examination continued: Could not say what form of auxiliary power lie would recommend, if needed. Knew that negotiations hail been entered into I'e.ween the company and the Kltham fioi'ough Council for the supply of electrical energy. The company would transmit for a distance up to seven or eight miles. Dr. Kindlay showed that the company expected to collect this ;LII2O per annum and iiave the principal of ,12400 as well Witness did not know that in April, IIJUo, the river was lower than at any time in the memory of the residents. Kxpecled that on the previous evening at 7.50 there would be water (lowing over the weir four inches deep for a width yf forty feet. Dr. Findlay said lie would produce evidence that there were six inches Mowing o\ cr the weir. Wines*: Had tested tin- How on Monday, and one turbine at 40 h.p. and two running light used the whole How of the river and lowered Hie dam by two inches. Unexamined: The dam cost about

C:!.) 00. There was nothing to com pel tlie company to inslal an additional source of power in case of tlie water-power being all utilised. To Dr. Findlay: The dam lull in, creased the power from the river to 'tne extent of •!"> per cent. Henry Illilbert Alelcul'f. u civil engineer, had been engaged ill water works const ruction for tiie past !)"> year*. 'Had vi.sitM it ho Kltham waterworks intake and oulllnw. .\t a mean pressure of oOlhs. to the sipmi'e inch the water delivered by the nine inch pipe would l.c 7i;.yi(li> gallon,, but 1.12:1,0011 gallons would How from the pipe on a ground level without anv pressure. It was obviouslv impossible for the whole of their water ■i.i run back inlo the stream. Of water used in donrsetie sii|iply a third would he lost, and in extraordinary supplie-

.'"aniens, motors, and greets pmhably tin- whole would l,e lost-he. would reckon nine-tenths as a fair 'thing. On a population basis of 4200 (present population MOO) Hie total kiss would he 017,000 gallons out of l.7li"i.00O gallons in 2d hours, his figures lieim: appliealih' to the dry sea son of the vear. that 017.1 KM) gallon, of wa.er. 'with a fall of .10ft to Hie turbines, would mean a loss to the eompany of -I li.p cli'cclive. All oil enirine would be a ".ood auxiliary. ].ro\-i.|..il thai oil wa- the dominant pow.-r. lor oil was not a -toady power. It would not pay in put in additional Ci'ij.s-oxainineil: Ti.iM'e was no method of eonvetly estimating Hie amount of water u.,ed in Klthani. hut 252.D00 gallons a dn\ v.n- a fair esiimafe. and mi lhat 'a-,ii;M|itiou the loss of poiirr wuil.l be onlv 11-:, h.p. lbhad not (rac'd the How of wu-t • valor from it,., ,„,.:„■,■-. ||,. ( .„„| ( | ~„( a,'.!'... ~lth the toen of l-:i1 liilin. liilli its lo.finil -.piaie varis of asphallod ,-1 reels. ~,„[ ii- I'."'!'-, i !„■:.„• i,,(„ (|„, ~ji-er more v.aid- lli.m was |o-t in evaporation.

| James Stewart, mil engineer, wi(h| ■lfi years' experience in (he Auckland I di-tricl, saal lie had visited Hi" 1..,- ; ,li-1 ties in company with Mr Motcaif and j agreed in 'the main with hi, eonckl ' sious. lie thought that even h— i than a tenth of water used in extraor ' dinnry supply would find its way back ' to the river. j Charles Edward fiilwon. secretary j fa tiie company since its ineepiion, i gave evidence as to the company's j charges and finance*, IJeinembercd i Hie Public Trustee's claim for eompau. j sntion for diversion of iiie stream ' Could not say whether the company! ' claimed then to be leaving ample

i | I water llowing in the bed of the stream. It was here agreed that if any evi--1 deuce were led to show that the claim was not made within twelve months, Mr Cotter sisould be allowed to call evidence in rebuttal. IXTKItESTING LAW POINTS. JJr. Findlay opened tk ease for ii;e respondent council, an.l l'toe'cl Tilt Honour to the case Fitzgerald v. Keli'lirui! and. \\: rori Trai-.v.ij campauy. The facts weie similar lo those cl.selosed in toe pie-ent action, aim ie Hint case His Honour a,,d tal.d thai the claimant could only succeed where .there was injury lo land, the taking o: land, or the injurious all'ccUon of lard, and furlier, that a claim for compensation could only be sustained where but for (he statutory right to iany out su h works an action could lie at common law. He quoted Engl.sh and ol her cases to show that I claimants were not entitled to com peii-ation where tney claimed injury

lo trade or injury caused by the u-er and not by the construclor of any work. The way to arrive at a true estimate of the 'loss sustained by the claimants here was to ask if any syndicate desirous of buying out the company as a going concern would ;;ive any" less becau.-e of the fact that I lie. Borough of Eltliam was abstracting I .this inlinLcsiuial quantity of v. alert from the river. They would not con

sidcr that at all, but would ruliwj look to the immediate prospects of the company a- a trading concern; they would not treat this loss of water ad iiiliiiitmi). but only for a reasonable length of tune. Mr Trevithiek had admitted that in seven or eight years the company would have us al up lo the. maximum quantity of water in the river. The company had been proved in evidence to be a losing con-

cern, and even if they iuul the whole of the water of the river it would stili be idle to pretend that they could make a prolit. He hoped His Honour would not adopt the claimant's method of converting this 4 h.p. into electric light and power and treating it. as all prolit. And even if the company had it, iiwy would still be losing money. That for the question of compensation'. Dr\ Fintllay submitted that the claimants had no claim in law. They could succeed on only one of two legal grounds—either they were the riparian owners or they had a claim for compensation by virtue of their Act of 1002. A riparian owner was entitled to have the volume of a stream coining down to him uiidimin, isiied, and if this claim was to be supported on the ground of riparian ownership, then that argument must cease. Hut if the riparian owner led water from the bank where it joined Ins bank, through land that did not belong to him, and delivered it on to other land belonging to him, he could not claim to have lieo water coming on to the second piece of land by virtue of his riparian rights. The company had the right only to water being delivered in a natural channel, and not to the water running through a tunnel cut through the iVonnanby-road. Of course the owner had no properly in the water, but only in the llow—there was no property in the water itself. As soon as the water left the riparian owner's property his interest in it censed. In this ease the company had purchased land between the river and the roncl on one Mue, and another piece immediately opposite, also lying 'between the river and the road. 'The distance was but a few chains, but the river had doubled and wound a mile and half, and Ihe bed of the stream on one side of the road was 40ft higher than the bed on .he other. ]JerAl(o water passed under the road in a tunnel, and at that point ceased to be the company's property. His Honour said the company had power to break up roads for their purposes. Br. Findlay argued that this right applied only to the distribution of the! '■nergy, but not to obtaining water for

power. As a mutter oi fact there was nothing in t he world to prevent tile Stati' stepping in to prevent tlieni taking «■ drop ot water under that road. His Honour said that, the claimant illicit rely on seel ion ."> of the Aet. iJr. Kindlay contended that that fccciion gave power only to dum hack water on privnie property. At this slagc it uas agreed that (he Omit -liontl decide on matters of fact mid li'u.l ;he President should .-nhmil ■' ea,e cniilaiiiine. tin- diluted inatiuis »f law to tl„. Supreme CouU. k neios'J'li:' Court i-"si. „l (i o'clock and resumes at 10 this inorninu'.