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On the 18th July, 1918, the Shipowners Protection Association, of which Messrs. A. R. Burkill & Sons were members, put the following questions:--
1. "In the event of a vessel being damaged or lost through any act of war on
part
of an enemy raider, what compensation or redress would an owner be liable to receive from the Government?
the
2. "Does war risk insurance as covered by the Government include loss or damage to a vessel occasioned by an enemy raider and would owners receive the full insurance?
On the 23rd July, the Government replied:-
"Referring to your letter of the 18th July, I am directed to invite your atten- tion to Sections 11 and 12 of my circular letter of the 13th March, which read as follows:
11. The Government will accept all war risks (vide Clause 19 of Charter Party T. 99) but, where it has been your practice to incur this expense in the past, you are authorised, for the present, to continue the expenditure on Government account, whether in the form of premium or call in respect of Policies on hull and machi- nery, including the continuance of any excess value insurance hitherto maintained by you, on the understanding that you will hold the Government absolved from liability in respect of the amount for which insurance was effected under insurance poli- cies; but when any policy on a vessel lapses it should not he renewed.
12. If the war risk insurance above authorised is vitiated by your obedience to Admiralty instructions, other than those of loval navigation, or by your obedience to instructions of the control Committee, the Government will indemnify you against the con- sequences.
Clause 19 of Admiralty Charter Party T. 99, which is referred to above, reads as follows:-
19. The risks of war which are taken by the Admiralty are those risks which would be excluded from an ordinary English policy of marine insurance by the following, or similar, but not more extensive clause:—
Warranted free of capture, scizare, and detention and the consequences thereof, or of any attempt thereat, piracy excepted, and also from all consequences of hostilities or warlike operations, whether before or after declaration of war.
Such risks are taken by the Admiralty on the ascertained value of the steamer, if she be totally lost, at the time of such loss, or, if she be injured on the ascertained value of such injury.
Should a dispute arise as to the value of the steamer the same shall
be settled as laid down in clause 31.
This reply relates of course only to ships under Government requisition under the scheme laid down in the above circular letter."
As the owners knew exactly their rights and the Government's liabilities in respect of war risk; namely that their ships were fully covered in a value which would be settled by agreement, or, failing agreement, by arbitration, and on appeal by the Courts; it did not occur to the Government to notify them individually as to the precise manner in which the risk was being carried. Detailed information was open to any one who might enquire. A similar practice obtained in respect of vessels under Imperial requisition.
The Government received no claims for a refund in respect of war risk expenditure incurred by owners, nor did any owner state that he was insuring against war risk.
34. Mr. Burkill wrote also:-
"Further as the Honourable Mr. A. G. M. Fletcher is still trailing the red berr- ing re Imperial Government and the Naval Commodore, etc., being respon- sible--may I remind him that this also was a Government secret, and if he
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will look up a certain notice of Requisition and Control dated 13th March, 1918, and headed "Colonial Secretary's Office, Hongkong" he will see that it was signed by the Honourable Cland Severn and stated that the Governor of Hongkong, etc., etc.
Under this document how does he inake out that the actual requisition was
carried out by the Commodore?"
On the 10th December, 1917, the Solicitors for the Wollowra Steamship Company, in which Mr. Burkill was interested, wrote to the Commodore :-
"S.S. Wollowra. The above ship has been requisitioned by the Admiralty"
and they proceeded to ask for certain information.
Messrs. Burkill's steamer Patriot was requisitioned under the following letter addressed separately to each owner:-
"H. M. DOCKYARD.
With reference to the letter of the Colonial Secretary dated 13th March, 1918, I am directed by the ominodore to inform you that your vessel is requisi- tioned and will be brought under the Hongkong Liner Requisition Scheme."
On the 19th April, 1918, Solicitors, definitely stating that they represented the owners of the S.S. Manapouri, Castlefield, Wollowra, and Patriot, wrote:-
Hongkong Shipping Control Scheme. Our clients are at present unaware under what legislative authority the above Scheme is being carried out and would be grateful for some enlightenment on the subject."
The Government replied;
4
As to the question of legal authority, the ships have been requisitioned on behalf of, and under instructions from, His Majesty's Government, who have instructed this Government to superintend their management. In these circunstances this Government must refer you to His Majesty's Government on the point of the legal authority for the requisitioning. This Government has definite instructions that the remunera- *tion to vessels under the local scheme is to approximate to that paid to the larger and more important class of vessels on the China Coast which are under the Imperial Liner Requisition Scheme."
35. At the meeting in Shanghai, which has been referred to, Mr. Moller said :---
"In December, 1919, a test case was instituted against the Government in the
Hongkong Courts.
Immediately upon legal action being taken the Colonial Secretary approached the owners through the Shipowners Protection Association with a view and a request to stay such legal pro- ceedings for such period as would give him time to communicate with the Home Government with a view to settling the matter amicably, pointing out that it was inadvisable to continue expensive litigation when it was possible to settle the matter otherwise. Unfortunately your Chairman and Mr. S. T. Williamson (The Chairman of the Shipowners Protection Asso- ciation) agreed to this request. This was an unfortunate mistake on their part as it gave the Hongkong Government time to prepare and put into effect an effective counter-move to frustrate and forestall the owners' claim. This took the shape of the Indemnity Ordinance, 1922.”
Mr. Burkill said :--
"After agreeing to postpone the case instituted against the Government because the Shipping Controller was going ou leave and because we were given to understand it would help materially an amicable settlement we found that the postponement was merely used to enable an Indemnity Act to be framed and passed which put us out of Court".
Mr. Moller subsequently, in view of cominents in the Hongkong Press, wrote to the North China Daily News:-
"Mr. Fletcher has seen fit to remark to the Press that many of my statements
are untrue, to wit
That my statement "That the Colonial Secretary at Hongkong obtained a stay of legal proceedings, and later the
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