CO885-(15-16) — Page 304

| PUBLIC RECORD OFFICE

Reference :-

PERC.O. 885

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15 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO

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difference to the Board mentioned in Section 33 which, in the event of

should decide on the reason- between the Commissioner of Mines and the "owner ableness of the Commissioner's demands and, in arriving at that decision, should be authorised to have regard to the various physical obstacles to working which might from time to time occur, to scarcity of labour, strikes, and other labour difficulties, and to the limitation of the diamond market resulting from operations carried on within or without the Colony. That a section should also be added imposing heavy penalties on any owner failing to work a mine in accordance with a decision of the tribunal.

That another question of vital importance to the Government was, whether, by virtue of its undivided co-ownership with a mining land-owner, it could be made responsible for a share of losses resulting from the working of any mine, or liable to the creditors of any person or mining Company failing or going into liqui- dation.

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That it would appear that such liability existed only if the Ordinance created the legal relation of partnership or that of principal and agent between the Govern- ment and the person or Company carkying on mining operations. That as common ownership of property or sharing of profit was not per se sufficient to create partner ship, and there was nothing under the provisions of the Ordinance amounting to “carrying on a business in common on the part of the Government and the mine- worker with the consequent power for each partner to bind the firm in all trans- actions properly incidental to the business the relation of partnership would appear to be excluded. That there remained the question whether the relation of principal and agent existed between the Government and the mine-worker, and that this was submitted for our report.

That he was to request us to take the Ordinance, Sir R. Solomon's report, and his letter into our consideration, and, having regard to the time which had already elapsed since the Ordinance was enacted, to report at as early a date as possible:

(1.) What is the true construction and effect of Section 35 of the Ordinance? (2) Whether Sections 32-35 or any other and, if so, what provisions of the Ordinance give the Government proper security for reasonable and continuous work- ing of the mines?

(3.) If the answer to the last question is in the negative, in what respects the Ordinance should be amended?

(4.) Whether the Government is liable under the Ordinance for a share of any losses resulting from mining operations, and, if so, whether as partner or princi- pal of the mine-worker, or how otherwise?

(5.) If the Government is so liable, in what respects the Ordinance should be amended so as to exclude such liability?

(6.) Generally.

That he was to request us, in answering the third and fifth questions submitted to indicate as fully as possible the nature and substance of any amendments which might be necessary.

We have taken the matter into our consideration, and, in obedience to your commands, have the honour to

Report-

That in our opinion, upon the true construction of Section 35 of the Ordinance, No. 66, of 1903, the Lieutenant-Governor and the owner fail to agree as to the Lerms of the lease mentioned in the section there would be no power to refer the matters in dispute to the Board under Section 33. Section 35 contemplates a lease by voluntary agreement, and, indeed, it is difficult to see how an owner could be compelled to take a lease and work the mine against his will.

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(2.) In our opinion Sections 32-35 provide some security for the reasonable and continuous working of the mine.

If the mine prove successful it is hardly to be contemplated that the owner would refuse to work it provided he was able to procure the necessary capital subject in the case of his default to the conditions of Section 34, and, on the other hand, it is difficult to see how if the mine is likely to prove, or has proved, a financial failure or the owner cannot provide the necessary capital he could be compelled to continue the working of the mine, and we do not see how if your suggestion con- tained in paragraph 8 of the above letter was carried out the owner could be com pelled to continue the working of the mine. Of course penalties could be imposed

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for the discontinuance of work without reasonable excuse, but it is questionable whether (particularly having regard to the fact that the Ordinance has now been for some time in force) it would be worth while to provide for such penalties, and to attempt to define what would be such reasonable excuse.

We think upon the whole that it would be better to give the Ordinance as it stands a fair trial, and should amendment subsequently appear necessary a further Ordinance could be passed.

(3.) Does not arise.

(4.) According to English Law no such liability is incurred, but this is a question for the legal authorities at the Cape to advise upon.

(5.) Does not arise.

(6.) We have nothing to add.

The Right Honourable

Alfred Lyttelton, M.P.,

&c..

&c.,

&c.

We have, &c.,

R. B. FINLAY. EDWARD CARSON.

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