t>.— 4a

46

total is £96,790 in respect of applications not dealt with, owing to the action of the Government. The area covered by their applications was about 97,500 acres. Sir B. Stout: There are inside mining reserves and outside mining reserves. Applications for 10s. were put in for £1. I would like you to give a list of the applications and the dates. Mr. Hutchison: We will be able to do that too. The amount mentioned is, as I have indicated, the damage in respect of applications sent in to the company, and not dealt with, owing to the obstruction of the Government. The company, besides, claims £122,000 as damages in respect of the consequent loss of traffic to the railway constructed, and on probable future dealings under clause 33, supposing the company had not been prevented, through this and other causes, from continuing its enterprise. The grievances under clause 33 will also come in under the head of general damages. Sir C. Lilley : I suppose a million and a half covers all, but these are the particulars ? Mr. Hutchison : Yes. As I have mentioned before, all the various heads under the particulars of claim, with the exception of timber alone, come in under the claim of general damages as affecting the company; the claim in respect of timber alone stands apart from the claim for general damage. The operations of the Government complained of under this head, and every other head except timber, affected the finance of the company. I now come to deal specifically with the fifth head of the particulars, that dealing with taxation. The proposition of law which I would advance in connection with this matter is from Storey's Commentaries. The paragraph is 1330, second volume, which reads as follows : "As there are incidental powers belonging to a State in its sovereign capacity, so there are incidental rights, obligations, and duties. These are to be ascertained by the law of nations. The same general rights, duties, and limitations which the common law attaches to contracts of a similar character between private individuals are applicable to contracts of the Government." This rule would, I submit, bring this contract under the same rules of interpretation, as nearly as possible, as are applicable to contracts between private individuals, and that an act of one party to a contract affecting the consideration of a contract is matter of claim for damages by the party aggrieved. - Sir B. Stout: Do you sue the Queen for what Parliament did ? Mr. Hutchison : We do not impugn at all the legislative right of any colony to impose taxation. Sir C. Lilley : Have you any law here on the question of suing the Queen ? Sir B. Stout: Yes; " The Crown Suits Act, 1881 " : the case of Williams v. The Queen. Sir C. Lilley : She can be sued for negligence and for unliquidated damages ? Sir B. Stout: We deny the applicability of Boyal instructions. It was raised by the late Justice Higginbotham. It is not known to our Constitution, any Boyal instructions of that sort. Sir C. Lilley : The Governor's position is that of an agent, and is bound by the other. Sir B. Stout: But we say he is not a mere agent; our Constitution provides that he is not a mere agent. Mr. Hutchison: Under the Boyal Instructions the Governor is directed to form an Executive Council " to advise and assist him in the administration of the government of the colony." Sir B. Buenside : Would you inform me which is the Constitution Act of the colony ? Mr. Hutchison : 15 and 16 Victoria, "An Act to grant Constitutional Bepresentation to the Parliament of New Zealand." The Governor is empowered by a Commission from the Queen. Sir C. Lilley : The Queen's commission could not override the Constitution Act of the colony. Mr. Hutchison : No, it recites it. Sir B. Burnside : The evidence will be the authority she has delegated to the Governor. Mr. Hutchison: Perhaps I may be permitted to read the 6th clause of the Boyal Instructions : " There shall be an Executive Council for the colony, and the said Council shall consist of such persons as are now or may at any time be members thereof in accordance with any law enacted by the Legislature of the colony, and of such other persons as the Governor shall from time to time, in our name and on our behalf, but subject to any law as aforesaid, appoint under the Public Seal of the Colony to be members of our said Executive Council." I believe that the Executive Council has uniformly been the Ministry of the day. On the resignation of Ministers they are expected to also resign their positions as members of the Council. Sir C. Lilley : This is a complaint respecting- taxation ? Mr. Hutchison: Yes. The change in taxation of land went in the direction of reducing the value of the contract by seriously increasing the taxation on the lands the company were entitled to select. As indicating the spirit of fairness which should prevail in such matters, I would refer to the Customs and Excise Duties Act which was passed in 1888, and which considerably increased the Customs duties on goods imported into the colony. Section 18 provides, " (1.) Until the expiration of the time provided for the completion of the railway mentioned in the contract which, has been entered into between Her Majesty and the New Zealand Midland Bailway Company (Limited), or which may be entered into under ' The Midland Bailway Contract Act, 1887,' or until the completion of such railway (whichever shall first happen), the law existing prior to the date when this Act is deemed to have come into operation shall continue to apply to the railway plant and materials which may be specially imported by the said company for the construction of the said railway." The rest of the section is not material; it merely provides that certain formalities must be complied with. This legislative exception recognises the right of the company to be considered under the contract by making an exception in its favour when increasing duties upon articles imported for the purposes of the railway. Sir C. Lilley : If they had not passed it, it might have given rise to damages ? Mr. Hutchison : If such an exception had not been inserted, the effect of the Act of 1888 would have increased the duties which the company would have had to pay on its engines and other materials, for the railway. The contention of the company is that if the Legislature alters the position to the prejudice of a foreign contracting party, the Crown must make good the injury