- 7 -
M
31
by Mr. Kwik in respect of the alteration of the
design of the sea wall would seem to be in the
neighbourhood of $1,000,000.
11.
Mr. Davidson impliedly asks for the payment
of the whole of this increased expense, but I think
that that is an unreasonable request. In the first
place, Mr. Kwik entered into the 1923 agreement with
his eyes open. Perhaps his eyes were not
sufficiently open to all the risks, but the
Government, who have also been disappointed in their
hopes, can scarcely be asked to bear all the burden
of his optimism and bad judgment. In the second
place, Mr. Kwik has got in the vertical sea wall a
potential asset which may be conceivably become
actually valuable at an earlier date than seems
probable at present. In the third place Mr. Kwik
obtained the "blue" area at a price far below its
market value. This is a most important consideration
and it is completely obscured in Mr. Davidson's letter
and in Mr. Kwik's letters. It is obscured because
of Mr. Kwik's strange and untenable theory that he had
an "inherent right" to a frontage on the new 100 foot
road. The Director of Public Works in his letter
of 10.10.23 estimates the market value of the "blue"
area to have been about $11.50 a foot, or ten times
what Mr. Kwik was asked to pay. If this estimate
was correct Mr. Kwik was virtually given a present of about $500,000, as the area was 58,000 square feet.
On the other hand it must be borne in mind that the
land