CO129-595-5 Validity of registration of land during Japanese occupation 1-1-1945 - 31-12-1946 — Page 29

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Date to be fixed would be date when it may be presumed that it was general knowledge that Japanese currency would be worthless after the liberation of the territory. (Thers 18 some doubt whether this situation was ever reached in Hong Kong, where Japanese currency remained in use for a brief period after liberation.) Debts in these cases would remain as undischarged pre-occupation debts. We are considering La connection with draft legislation means of reinstating so far as may be possible security and relative priority enjoyed by creditor. For the purpose of determining whether payment was "demanded" within the meaning of thie sub-paragraph, legal agent would mean the person who was the recognised legal agent who continued to act as euch, but would not include the Japanese custodian or liquidator, It is recognised that this is not in accordance with the ordinary law whereby agency would be terminated, principal and agent being divided by the line of war,

Exception under (s) above does not call for comment. As regards (b) we feel that there is justification for considering any repayment of capital debts other than where repayment was obligatory or requested by the creditor as suspect since it may be presumed that in many such cases the debtor was taking advantage of the abnormal conditions favourable to him. It seems equitable that these cases at least should be adjusted. Furthermore where repayments were made by the debtor to the liquidator, presumption 1s equally strong in favour of revaluation of such payments unless repayment on a fixed date is of the essence of the contract. Sliding scale on which revaluation would be based would take account of true value of Japanese currency at the time of payment, based on then current prices, and might also take into account the fact that while the creditor will still suffer the loss of that part of the payment which is validated, the debtor vill bear no real loss unless the value of Japanese currency at the time of payment is designedly under-assessed in the sliding scale.

(3)