CO129-422 - Governor Sir May - 1915 [5-6] — Page 426

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enemy subjects should not be relieved from the performance of their contracts merely on account of the expulsion and internment. The case therefore differs from a winding up in bankruptcy which results in a discharge of the debtor from all debts provable in the bankruptcy. With the possible exception of the case of leases, the practical position does not seen to call for a power of dis- -claimer. The great bulk of current contracts consists of import and export contracts and taking the former for fuller explanation the position works out as follows. Even if the liquidator con- -siders that to take up the goods may result in a small loss he will endeavour to carry out the contract if he can make the

necessary financial arrangements, as a breach of the contract by him would probably result in a much larger liability and a greater loss both to the other party to the particular contract and to the general body of existing unsecured creditors. If he is unable for financial reasons to import the goods, as may happen, or if he is satisfied that the loss would probably be greater if he carried out the contract than if he refused to carry it out, he will give notice to that effect to the other party who will then have a claim for damages. It may be pointed out that this claim in some cases would be against a buying agent in England in the first instance, and the contract between the exporter and the buying agent would in any case be outside the jurisdiction of the legisla- -ture of this Colony.

The one case in which a power of disclaimer might possibly be advisable is the case of leases. A power of dis- -claimer would throw on the lessors the burden of estimating and proving their loss and so would enable a distribution of assets to be made at an earlier stage than would otherwise be possible. The

objection is that the loss would be most difficult to estimate at

present, in view of the uncertainty as to the duration of the

war, and it seem advisable to avoid being too precipitate in the

matter.

3.