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B, and C had agreed to try the issue at law, as to C's rights 10 213 action between A and Benly, there would of course be no difficulty. But if B and C stand in a peculiar relationship, B conferring the rights on C by his contract with A, then it seems to me that as B is in a position to bring an action against A in order to have C's right declared, this in itself will determine the area of opera- tion of the judgment, and that it includes C. If the judgment is given in favour of B that C had rights, A could not afterwards be heard to say that had no rights: and if the judgment is in favour of A that C had no rights, C could not afterwards be heard to say that he had rights. The area of the operation of the judgment seems to be determined by the self-created relationship between the parties, and we get an excep tional form of judgment in personain, binding on a third person not actually a party, because his rights fall within the scope of the judgment. It seems to me that this is all the stronger in this cree where C, that is Yiu Chow, was merely a passive acceptor of the rights which B the Government endeavoured to force upon him through the medium of A. Chu Chuen. What is true of the action by B against A, C being bound by the judgmeat, must also be true of an action by C against A, B being bound by the judgment.
On this ground also I am of opinion that the Government is bound by the judgment in the former action, because that action was brought to determine the question whether Yiu Chow had any rights under an agreement which professed to give him rights which it was as- sumed he had under the Ordinance, and that is the question in this action. The first judgment has inter alia decided that he bail no right under the Ordinance, and therefore none under the agreement. It is therefore immaterial whether the first action was brought by Yiu Chow or by the Government. It has been decided that he has none, and both Yiu Chow and the Government suing for Yiu Chow are bound by that decision.
On all possible grounds, therefore, I am of opinion that the action fails, and I have only a few more remarks to add, which the action of the Government seems to render necessary.
The mistakes into which the Governinent has fallen are in the main two. I have dwelt, with much insistence on account of its great constitutional importance, on the fact that the Government of the time acted throughout independently of the Ordinance, and independently of the Council of Government of the Colony. It is unnecessary to say more on the subject.
The second mistake is of almost equal importance. Assuming the views then hold by the Goverumem, to be as is now alleged, those which they hold now, it is manifest throughout that there must have been divided counsels in the Government, and that Mr. Bruce Shepherd, the Land Officer, heid views which were not those of the Governmeut whica he served. Mr. Shepherd's letter of 14th May, 1991, which bears out his views as explained in his evidence in every way, Is in my opinion sufficient to carry Chu Chuen's contention to a. successful termination. I do not quite understand the gap between 1899 when Clm Chuen's correspondence seems to have come to an end, and May, 1891.
But this letter of Mr. Shepherd's shows what his view was, and confirms in every way what he said in his evidence. Moreover it is coupled with Mr. Lister's of 6th December, 1889, from which it is to be inferred that he also held the same view. I passed by without comment the attempt to impugu Mr. Bruce Shepherd's evidence. The fact is that I am very doubtful whether there was any attempt to impugu Mr. Shepherd's evidence, as that term is usually understood. What was really attempted was, I think, to shew that Mr. Shepherd's views were erroneous and that he did not act as he ought to have acted, that is, to conform to what were said to be the Government's views on the matter. But the idea is all wrong, and it can't be done. The Land Officer was the officer deputed by the Government to conduct the negotiations, a it cannot afterwards throw him over and say he acted on his own, and not on the Government views. It was the business of the Government to ascertain his views, and if they did not coincide with those of the Government he should have been directed to abandon his own; and if he would not he should have been removed from his office. Instead of which he seems to have gone on his own way, and the Government is bound by what he has done. But 1 ask myself, as one who for many years has filled the office of Law Officer in a Colony, what was the Attorney General doing throughout all these proceedings? The import. ance of that office cannot be exaggerated, and in a matter of so com- plicated and important a nature as was this undertaking, not one single letter should have been written or step taken without the advice of the Attorney General. It is his business to keep the threads of all such negotiations in his hands; if he is not allowed to, and if the Departments act without him they must inevitably ravel those threads, and will land the Government as has been the case here, in inextracable difficulties.
And lastly the Colonial Secretary's letter of 8th January, 1907, which started the Government on these unfortunate proceedings, was more than a mistake in its half-appreciation of the judgment of the Privy Council.
What is to happen? Perhaps an appeal to the Privy Council with its attendant costs. In view of the possibility of further litigation I shall venture to indicate what I conceive to be the rights of the parties,
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