CO129-628-13 Compensation- requisitioned railway materials and stores 1-2-1950 - 30-4-1951 — Page 57

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(ix) Explosion at Argyle Street in 1946 (my despatch

No. 261 of 1st November, 1949, refers).

(b) Claims in connection with which no point of principle

is involved and facts only are in issue.

(i)

Requisitioned railway materials (your

savingram No. 974 of 25th November, 1949 and my savingram No. 284 of 20th March, 1950 refer). (ii) Operation of Electricity Companies during

military Administration (my Savingram No. 314 of 23rd March, 1949 refers);

(iii) Sale of relief Stores; See paragraph 2 of this

telegram.

2. The question of sale of relief stores affects to some extent the questions of "hangover stores" and" Siamese free rice". A Separate communication is being sent on these three questions.

3. With regard to item (a)(ix) in paragraph 1 above you should know that the War Office have adopted the view that they have no legal liability to meet claims for damages caused by the explosion and that, although they recognise that no liability rests on the Hong Kong Government, ex gratia payments in respect of damages should be made by Hong Kong Government. It appears that the question as to whether there is a legal liability for payment of damages is a matter only the Courts can decide; one solution of the issue would be for both the War Office and the Hong Kong Government to continue to deny liability and refrain from making any payments, leaving it for any claimants to take the matter to the Courts. This solution has obvious disadvantages and the matter will in any case of course be for discussion at the Conference. I will address you further on this matter before

the Conference.

4. No reference has been made in paragraph 1 above to the Admiralty flour claim (your despatch No. 195 of 17th November, 1949 refers) as it has now been agreed here that this claim should be met in full; it will not therefore be necessary for this to be discussed at the Conference.

5. I should be grateful to learn as soon as possible whether you agree with the classification of claims in paragraph 1 and also whether there are any matters of importance additional to those listed which you propose to raise at the Conference.

6. We hope that Follows will come to the Conference fully briefed on all these matters and empowered to reach a final settlement in respect of them.

Copies sent to:-

Treasury War Office

Mr. Marris

Mr. G. R. R. East