Sec.13/736/47.
SAVINGRAM
To the Secretary of State for the Colonies.
From the Governor, Hong Kong.
Date
29th October, 1951.
No.
1197
REGIO
- 6 NOV 1951 COLONIAL OFFICE
44:7
15
20
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(3)
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Your savingram No.962 of the 25th September, 1951.
Refund to Anglo-Iranian Oil Company of premium for land and remission of crown rent.
I fear that my savingram No.146 of the 5th February, 1951 has not been clearly understood.
2.
The position is that this, Government, on payment by the Company of an initial premium and of annual crown rent, undertook to lease to the Company an area of land, after certain conditions of sale had been fulfilled. The Company duly paid the premium but made no attempt to comply with certain of the conditions of sale within the time limit. Thus they broke the contract. This Government would have been prepared to extend the time limit, but the Company expressed their wish to be relieved of their obligations, or, as perhaps somewhat unfortunately expressed in my savingram No.146, to "terminate the contract.
3.
The question then arose whether the Company had the right to the return of any part of the premium they paid. I was advised that in law they had no such right. Neverthe- less I felt that some repayment, purely as an act of grace, was justifiable and I felt that 75 per cent was a reasonable compromise.
4.
The provision of such a sum cannot be made without your approval and the approval of the Hong Kong Legislature. The prime purpose of my savingram No. 146 we therefore to set forth to you the circumstances and to a your approval of the supplementary expenditure. I indic clearly in paragraph 8 that Finance Committee had not be approached for their approval.
5.
I had no reason to suppose that the unofficia members of Council would raise any objection to providin the necessary funds, but when the matter was first broug up in Finance Committee, strong opposition was at once r evident. The question was deferred for further conside) and at a later meeting the unofficial members expressed themselves in unmistakable terms as being unwilling to provide the necessary funds unless a legal liability exi
6.
As set forth above, it is clear that any paym to Anglo-Iranian would be ex-gratia. The unofficial membe were not prepared to agree to this, largely on the ground that they felt that the real reason for the abandonment by the Company of its local plan was a lamentable lack of faith in the future of the Colony, and that the Company therefore deserved no exceptional consideration.
7.
It is most unfortunate that in your communications with the Company you have made no reference to the point that provision of the necessary funds had still to be approved. The Law Officers have however drawn my attention to the judgment of Lord Haldane in The Auckland Harbour Board v The King (1924) A. C. 318, which reads as follows :
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