29

B—No. 5

But Lord Grey cannot consent to having that sum charged on the Crown Lands themselves, of which the Company has now the controul, so as to be liable to be defrayed out of such monies as Her Majesty's Government may receive from the sale of them, after the Company's dominion over them has ceased. He will however have no objection, if the Directors wish it to allow the £2000 to be deducted from sums which the Government will have to pay the Company, in the event of the discontinuance of its operations for the surrender of its own estate under See 20 of the Act." Ist February, 1850.—The Secretary to the Company in a letter to Earl Grey, acknowledges " the considerateness by which Mr. Hawes's reply was dictated" and transmits a copy (of same date) of a letter written to Mr. Fox, in which he points out to that gentleman the irregularity of his proceedings, that measures were in progress for obtaining the opinion of the Law Officers of the Crown, and bringing the case by appeal before the Provincial Council " that there was an obvious contradiction in stepping in, believing as he did the Government to be liable without the consent of the Government, a proceeding which involved risk of weakening the Company's claims on the Government." That they have accepted the bill for £2,076 11s. 7d.; but withhold their decision, as to whether they will or will not confirm the arrangement till the question of liability has been determined. "Meantime they instruct him to draw no more bills." During the interlocatory correspondence, the Draft Case remained in the hands of the Company. 6th February 1850.—The Company returns the Draft Case, with a letter from their Secretary to Earl Grey, with some remarks, the object of which appears to be to show, that Governor Hobson's arrangement continued in force ; That Lord Stanley's arrangement was in fact a renewal or confirmation of it, and that, under it, the Company were entitled to have an absolute Grant of the disputed land, discharged of Scott's Title, " who would better have had no claim whatever to compensation, or a claim to such land only as might have been recommended by the Commissioners of claims under the Local Ordinance of June 1841." 19th March, 1850.—The Case, as prepared by the Land and Emigrant Commissioners, is submitted to the Law Officers of the Crown. Now I have to notice an omission, which I submit, is very material, in the statement laid before the Law Officers of the Crown. The facts disclosed in the recent correspondence, particularly in Mr. Foxs's letter should have been made part of the case. The absolute and unconditional purchase by the Company through their Agent, of Scott's Grant, altered the whole status of the question. The Company seem to have loaded, as far as possible, the responsibility imposed on them by this Act of Mr. Fox, by an indirect attempt to obtain Lord Grey's sanction and adoption of it, and by withholding their express confirmation of it, and instructing Mr. Fox to draw no more bills. But the fact, that their Agent had bought up Scott's claim, precluding all possibility of appeal, could not be altered by the Company refusing , to sanction this act of their Agent, even had they refused to sanction it, which they did not. They left it to its operation. Scott ceased to have an interest in the question ; and his remedy for the unpaid balance of purchase money would obviously have been against the Company. By this act of the ; r Agent, they assumed two most important responsibilities ; —one that of precluding appeal, the other that of measuring the quantum to be paid ; fixing that as Sir George Grey points out) at its most extravagant rate, of which Sir George Grey expresses his absolute disapproval. This arrangement was come to, in the Colony, without consultation with the Colonial Government, upon whom it was afterwards sought to cast the burthen. 16th April, 1850. —The Law Officers report to Earl Grey their opinion on the case submitted to them. " They cannot with propriety, advise an Appeal from the judgment of the Court in New Zealand, without seeing the judgment and a Copy of the proceedings upon which the judgment was founded. 3 " But assuming the judgment to be sustained, Messrs. Grace, and others, are entitled to com- ' pensation ; and such compensation ought under the circumstances to be paid by the Government." This opinion of the Law Officers points directly to the question of appeal; and shows how material i to the right consideration of the case, was the fact of Scott's Grant having been bought up hy Mr. ii Fox, on behalf of the Company, whereby an appeal was precluded. If on examination, there had ap j: peared grounds of appeal, that course would have been advised. But were there such grounds ? That question has been decided by the Privy Council in the case of the Queen v Clarke (Moores Rep. ) i. The charge made ag-ainst the Government is, that they issued a Crown Grant to Scott improperly, in a contravention of the Local Land Claim's Ordinance. The Privy Council decided, in the case of the Queen v a Clarke, that such a Grant was invalid. The decision in that case has in principle reversed the decision v of the Supreme Court in Scott v Grace ; and, but for the act of Mr. Fox intercepting the course of Law, the same rule would have been applied to Scott's case. The case then stands simply thus ; —that, (pending the question of appeal, and whilst the principle of the judgment of the Colonial Court was yut sub-judice) the Company, through their Agent, interposed, without the sanction of the Colonial Government, bought up Scott's Grant at an extravagant rate and precluded an appeal, which if prosecuted, would according to the decision of the Queen v Clarke, have been successful. I cannot under these circumstances think that the Colonial Government is chargeable with this loss. To proceed.—3lst July, 1850.—'Earl Grey directed the Governor of New Zealand, "to report the steps he might take for closing the claim of Grace, and others similarly circumstanced, and further to report, whether the cost of settling the claims appeared properly to form a charge against the Local Government or against the New Zealand Company."

Had they seen it in connexion with the decision of the Privy Council in the case of Queen v. Clarke, they would doubt ■ less have giver an opinion in accordance with that j u<!; ment,— H. S