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hi tatutory power to do; since the statutory powers are adequate for the purpose (see paragraph 7 above)
it is possible to direct the Governor-General not to admit refugees or only to admit limited numbers. However the power has not, to my knowledge, been used since 1945 and in this case it would be controversial and not in accordance with precedent in HMG's dealings with the Colony.
Contracts to supply ships
14. On the final question, about the legal consequences of cancelling the contracts, it would be helpful for you to see the attached letter of 29 May from the FCO to Bryan Cartledge. It summarises the facts which we have obtained so far about the contracts.
15.
The ongoing contracts, four in all, are between Austin and Pickersgill, a subsidiary of British Shipbuilders, and an organ of the Vietnamese Government. If cancellation is decided upon there is an immediate problem in getting British Shipbuilders under Section 4 of the Aircraft and Shipbuilding Industries Act 1977 but I am extremely doubtful whether it would be a valid or proper exercise of the power to direct the repudiation of the contracts.
16.
The alternative course is to consider issuing a new amending Order under Section 1 of the Import, Export and Customs Powers (Defence) Act 1939 which would obtain the result that the ships in question or ships of their class could not be exported without a licence; licences could then be refused and in consequence British Shipbuilders could probably claim that the contract was frustrated. In that event, no damages would be payable. However, I must add the cautionary note that this would amount to a very unusual use of powers under the 1939 Act and would require careful study of its implications, legal or otherwise, before being adopted.
5.
CONFIDENTIAL
/17. I will
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