CO129-606-5 Hong Kong Loan- Financial settlement 2-3-1948 - 4-10-1948 — Page 44

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outstanding liabilities from the war, the Acting Financial Secretary, after dealing "So far as can with all liabilities for which there is financial provision, said:- be seen, (legal) liability only exists in the case of requisitioned vessels for damage or loss occuring during the period of requisitioning, and the question whe U.K. Service Departments can properly accept charges arising out of such claims only be shown after examination of the facts in each case and of the existing practive of respective Departments. Thisexamination is now taking place in consultation with this Government". The maximum claim was set at H.K. $25,000,000. It would be difficult, if not impossible in view of this statement and at this stage, whatever the moral factors, for the Hong Kong Government to repudiate primary liability for If the claiments were the requisitions made in accordance with the Defence Plan. now to proceed against the Hong Kong Government in the courts, their claims would succeed and it seems to me that the Hong Kong Government gain nothing by delaying settlement any further, At least one claimant Co., (the Hong Kong, Canton and Macao Steamboat Co.), the major part of whose assets is tied up in this claim, has reached a stage of exasperation where it is seriously considering recourse to law. There have been no public or private commitments in relation to denial action, and apart from any moral arguments there would seem at present to be no obligation on the Hong Kong Government to meet these claims, but it is conceivable that eventually

Up to the such cases might be taken to court (for instance by the Moller group). present there does not seem to have been public pressure to meet claims in the case of denial action over ships. Service Departments have hitherto admitted no

or as a result of denial liability for requisitions effected under the Defence Flan action, but in two instances, where their connection with the plan was not recognised, the Navy have paid. for the requisitioning and loss of launches actually requisitioned by the Harbour Master.

(b) Since the liability in the first instance rests with the Hong Kong Government other Departments, if they ultimately accept any liability, are in decency bound to stand by the settlements made by the Hong Kong Government, who can be relied on to There should be no difficulty in make the most economic settlements practicable.

obtaining the consent of Service Departments to accept such settlements, without any admission in principle of liability; and, if they do so, there seems no reason why the H.K. Government should delay further the settlement of its requisitioning liabilities. I strongly recommend that a very early start be made on assessing claims, as delay only makes it more difficult to collect and evaluate the facts.

(c) As regards the liability of Service Departments, it does not seem to me possible to assemble detailed facts in each particular case, which would show with any degree

This due partly to of accuracy for which Service any ship was requisitioned. destruction of records..and partly to death and disappearance from the East of the persons involved. The Hong Kong Government's information comes primarily from the claims registered by ship-owners and from the personal recollections of the Harbour Master, and in most cases is not based on documentary evidence or confirmed from other sources. Quite part from this, however, it is very questionable whether the sinking of particular block ships (which represent. the greater part of the liability) by particular services can be taken as a fair basis for dividing responsibility between the Services, all of which were in their respective measures

In the case of ferries, interested in the purpose for which these vessels were used... the only outstanding claim is that for loss or damage, which, though legally enforceable because of the requisition, was properly in the category of denial action and as such of interest to all Services. It is only in the case of launches, which were used by particular Services, that clear departmental responsibility can be shown, and in this case the records of craft requisitioned and the use to which they were put are virtually non-existent.

With regard to the

(a) In Schedule 1 are given particulars of the cases recorded. nine block ships, which constitute by far the largest part of the claim, the main facts are as follows:-

(i) Four river ships were reuisitioned for scuttling by the Harbour Department at the entrances to the Yaumati Junk Shelter to keep junks out of the way, as they were

The ships were duly scuttled. masking the line of fire, both naval and military.

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