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of rod over the Messrs. Brogden if the G-overnmeiit could not get the proceedings conducted in the way they wished. Hon. Mr. Johnston : Why did not Messrs. Brogden go on as they began ? Mr. Gave: Supposing they had begun proceedings, and the Solicitor-General had pleaded clause 31. Hon. Mr. Johnston: They could then have come here in 1877, instead of coming here in 1882. Mr. Cave: If it could.have been foreseen that the Judges would have held that the Act ousted the jurisdiction of the Supreme Court, of course it would have been much better to come here then than now. Mr. Montgomery : What about the last clause of Mr. Ormond's letter ? Mr. Gave : That carries the thing no further. It reads thus : "To the course formerly proposed on your behalf, and assented to on behalf of the Government by the Solicitor-General, I am prepared to adhere; but I cannot consent to such terms for conducting the references as would preclude the Government from having a thorough investigation of the matters alleged to be in dispute." That letter is written in reply to one explicitly asking for a waiver of clause 31. Mr. Montgomery : No, I think not. Mr. Gave : At all events there is nothing to my mind throughout the whole correspondence except that letter to Mr. Travers in reply that can in any way be said to show an intention on the part of the Government to allow the arbitration to proceed. Mr. Sell: May I suggest an answer to what my friend has said, that, before any question arose between Messrs. Brogden and the Government as to who was the proper person to give a final certificate, four notices to arbitrate were given, so the elements of the dispute were not considered by Messrs. Brogden in 1876 as a necessary preliminary to arbitration. Mr. Gave: There were certain matters in dispute then, but by the alleged final certificates the elements of the dispute were entirely changed at once. The Chairman : By the letter of the Bth June from Messrs. Brogden, in London, to Mr. Brogden, here, I see they appear to consider that the Act does not interfere with them. Mr. Gave : They were so advised by counsel in London —that the Act did not interfere with their ordinary rights. They were advised all through that they hail Wo remedies—the ordinary remedy of the Courts of law, and the remedy the Act gave them, provided it was taken advantage of within six months. Unfortunately, by the oversight of everybody, the limitation in the Act was not discovered until after the six months had gone by with respect to most of the contracts. Of course, when one petition of right was filed, it was always assumed that that would decide the question of jurisdiction on all the contracts, which it practically did. Hon. J)r. Pollen: Do you contend that these sums which you assert to be due and unpaid on the Engineer's certificates have not been carried to the general account ? Mr. Cave: I have never investigated the general account; but I should say from the figures it is absolutely impossible, because certain amounts were paid on progress certificates, and no further payments whatever have been made on two contracts. On the contrary, Messrs. Brogden were surcharged with £4,000 odd, so that there is positive evidence that some of the items of work previously paid for on progress certificates were not included in the final certificates. Hon. Dr. Pollen: I understand you to take up your position very strongly on the legal ground that progress payments in excess on some contracts cannot be considered in respect to the others. Is it in that view that you say it is clear these amounts have not been paid even if they have been carried into the general account? Mr. Cave: I still contend they have not been, because no further payments whatever have been made. Hon. Mr. Oliver: But do you contend that overpayment on one contract cannot be set off by the Government as to underpayment on another. Mr. Gave : Except there is a special contract, that is clearly the law. The Chairman: Then, in the event of a final settlement of accounts, the Government would have to proceed against you for overpayments ? Mr. Cave : The Government could bring their action, and when they got judgment they would be entitled, on a proper order, for an attachment perhaps. But at all events such an action would have afforded opportunity for an investigation. The Chairman: Tour contention is, I believe, that, if there were some other account between the parties, the state of the accounts generally between the parties would not justify the Government in deducting overcharges. Mr. Cave : Certainly, that is the law. Mr. Bell: It has been so decided. Mr. Gave: If Government brought an action to recover overpayments that would have afforded an opportunity for investigation of the question generally. Mr. Bell: The Government would certainly have taken that point to the Privy Council had they not succeeded on another point. In the immigration contract there was an agreement that moneys might be deducted, and therefore we succeeded. If we had not we should certainly have taken it to the Privy Council. The Chairman : You mean the law as to the New Zealand Courts. Mr. Bell: Yes. Mr. Cave : At Home there is a special Act giving a right of set-off, which does not exist in New Zealand. Hon. Mr. Miller : On what point has that been tested here ? Mr. Cave : The Government have deducted £20,000 on the Moeraki contract. The Court decided they were entitled to deduct that; but I say they were not entitled to deduct the further £7,000. Certainly not. Hon. Mr. Miller: At the time the dispute as to this contract took place was it then the correspondence was going on with regard to a meeting between Mr. Carruthers and Mr. Henderson ?