Monday, 24th August, 1868.

The Committee met pursuant to notice.

Present:—Major Atkinson, Mr. Cargill, Mr. Carleton, Mr. Rolleston, and Mr. Tancred.

The minutes of the two previous meetings were read and confirmed.

The Chairman, in accordance with the terms of the resolution proposed by Mr. Carleton at the last meeting of the Committee, submitted in the form of a draft report an abstract of the evidence, also of the circumstances under which the Bill of last Session was lost; and the same was read as followeth:—

Your Committee have directed their inquiries to the circumstances under which the Bill to authorize the payment of the sum of £6,031 18s. 9d., being the rents which have accrued from the Dunedin Princes Street Reserve, to the Superintendent of Otago, was lost in two consecutive Sessions of the General Assembly, and also to the manner in which the money was finally paid to the Provincial Government in the month of September last.

A Bill intituled "An Act to declare the Superintendent of the Province of Otago to be entitled to certain Rents received on account of a Reserve situate in Princes Street, in the City of Dunedin," was introduced into the House of Representatives by Mr. Stafford in the Session of 1866. The Bill was committed and reported without amendments on the 20th of September, 1866, and was read a third time on the same day. It is described in the Journals of the House of Representatives as having "lapsed in the Legislative Council." A reference to the Journals of the Legislative Council shows that on the 28th September "it was ordered to be read a second time that day six months."

On the 30th July, 1867, Mr. Dillon Bell obtained leave in the House of Representatives to bring in the same Bill that had been rejected in the previous Session in the Legislative Council. Mr. Speaker expressed his opinion that the Bill was of a private character, and on his suggestion a motion was carried that it should be referred to the Joint Committee on Private Bills to inquire into its nature.

On the 6th August, on motion of Mr. Bell, it was ordered that the Bill should be laid aside; Mr. Bell stating that the Government had taken the matter up.

On the 7th August, the Hon. Mr. Stafford obtained leave to introduce the same Bill, stating that the Bill had no other object than to enable the moneys held by the Colonial Treasurer to be paid to the Superintendent of Otago, in trust for certain purposes.

On the 23rd of August, the House went into Committee on the Bill, and amendments were introduced in the preamble, and in one of the clauses of the Bill, the words "to declare the Superintendent to be entitled to the said sum of £6,031 18s. 9d. subject to the trusts expressed in the said grant and" being omitted in the preamble, and the words "it is hereby declared that the Superintendent of the Province of Otago and his successors are entitled to the said sum of £6,031 18s. 9d. and" being struck out in section 3 of the Bill. The amendments appear to have been made from the belief that the words struck out would have validated the grant. The Bill was read a third time and passed on the 10th of September, and is described in the Journals of the House of Representatives as having lapsed in the Legislative Council. The Bill was read a first time in the Legislative Council on the 12th of September, and is described in the Journals as having lapsed.

The loss of the Bill appears to be attributable to the following circumstances:—

On the 22nd of August a petition from a Native chief, named John Topi Patuki, claiming to be interested in the reserve, was presented to the Legislative Council. Its prayer, as described in the Journals, was that "the Dunedin (Princes Street) Reserve Bill be not passed, but that the whole question be dealt with by a judicial tribunal." The petition refers to the Bill as one "whose effect, if it became law, would be to deprive his tribe of the funds which have accrued from the letting of this said reserve in Dunedin;" and the words of its prayer are, "That your honorable House will refrain from passing a Bill relative to the Dunedin Princes Street Reserve or its rents." The petition was referred to the Select Committee on Public Petitions, which, on the 12th of September, brought up a report recommending that, "inasmuch as the question referred to them in the petition of John Topi Patuki appears to be one which can only be equitably and satisfactorily decided by the Supreme Court, in which it is shown that an action in relation to it is already pending, the prayer of the petitioner be acceded to, and that no measure in any way affecting the question should be entertained until such decision shall have been given." On the 17th of September, on the motion of the Hon. Mr. Menzies, it was resolved that "the report of the Petitions Committee on the petition of John Topi Patuki be adopted." It would seem that the passing of this resolution was practically a rejection of the Bill, which does not appear to have been again brought under the consideration of the Council.

On the 24th of September, 1867, the accrued rents, amounting to £6,031 18s. 9d., were paid to the Superintendent of Otago, on his giving an undertaking in his official capacity, and on behalf of the Province, that in the event of the grant of the reserve as to the whole or any part of the land being declared invalid in any court of competent jurisdiction or by the Legislature, he would repay such amount as was decided to be payable to the Colonial Treasurer. His letter further guarantees the Government against all claims which may be made against the Crown or Government of New Zealand, in consequence of the rents being paid over to the Province.

Your Committee has not been able to satisfy itself that this undertaking would be a good security in the absence of an appropriation for the purpose by the Provincial Council of Otago.

It is noteworthy that "The Provincial Lawsuits Amendment Act, 1867," was not in force at the time the undertaking was given.

On the manner in which the money in question was paid out of the Treasury, your Committee has taken the evidence of the Comptroller, the Assistant Treasurer, and the Accountant of the Treasury. Their statements differ in some particulars, but the facts of the case appear to be as follows:—

On the 29th of June, 1867, an account of moneys determined to be Trust funds was made up by the Colonial Treasurer after conference with the Comptroller. The total sum, amounting to £24,431 2s. 2d., which included the item of £6,031 18s. 9d., was by requisition on the Comptroller withdrawn page 163from the Public Account, for the purpose of being placed as a fixed deposit bearing interest in the Bank of New Zealand.

In the Comptroller's words, "This sum was withdrawn from the Public Account under the distinct assurance that it should not be operated upon, but merely for the purpose of obtaining interest." This assurance was required because the Comptroller considered the requisition not strictly in accordance with the provisions of the Act; but he gave way from a desire that interest might not be lost on the deposit.

After the passing of the Public Revenues Act, the Comptroller called upon the Treasury to pay the whole amount into the Public Trust Fund, as constituted by that Act, and was informed generally that it was paid in on the deposit maturing.

The Comptroller, at the time of giving his evidence, entertained the belief that it had been paid in, in accordance with the assurance which was given to him. What actually happened, however, appears from the statement of the Assistant Treasurer.

The deposit was originally made for three months, maturing on the 29th of September. On the 24th of September, the sum of £6,031 18s. 9d. had been paid to the Superintendent of Otago out of the Colonial Treasurer's balance, and this amount was recouped out of the deposit when it matured on the 29th of September, leaving a balance of £18,399 3s. 5d. for deposit at that date. This sum remained in deposit till the 3rd of January, 1868, together with a sum of £6,000, of the existence of which the Comptroller was unaware, and which was omitted from the account given by the Colonial Treasurer of the sums placed in deposit in his Financial Statement of August, 1867. It will be seen, therefore, that this round sum of £6,000 apparently restored the original £24,431 2s. 2d., less £31 18s. 9d., but did not do so in reality, being a sum derived as already stated, from a different source.

It appears from the evidence that a requisition was made on the Comptroller for this in common with other items at the time the sum of £24,431 2s. 2d. was invested in the Bank of New Zealand, and that the item appeared subsequently in a covering requisition made for the purpose of adjusting accounts, which had necessarily been in an unsettled state since the coming into operation of the Public Revenues Act. This item was disallowed by the Comptroller in his requisition, but nothing further appears on record in respect of the payment.

Moved by Mr. Tancred, and agreed to by the Committee, That the following paragraph be added and incorporated with the draft report submitted by the Chairman:—

That, with regard to the manner of the payment of the sum of £6,031 18s. 9d. to the Superintendent of Otago, the technical irregularity which attended it might not have required special notice in the transition state of the law affecting the Public Account had the assurance of the Treasury to the Comptroller, that the Deposit Account would not be operated upon, been adhered to—a point to which prominence is given by the fact of the Comptroller having declined to countersign the covering requisition which contained the item; and that, under all the circumstances of the case, special reference being had to the loss of the Bill which was introduced for the purpose of authorizing the payment, the money ought not to have been paid.

On motion of Mr. Carleton, the Chairman was directed to report accordingly.

The Committee adjourned sine die.