On 8 June 1921 the Comptroller-General of Customs forwarded the following letter from Mr Peick for advice:

In reply to your letter of 1st instant I beg to thank you for acquainting me of the decision of the Crown Law authorities.

I respectfully beg to submit that the partial execution of the above contracts with the Company in Hamburg was suspended on account of the declaration of war as the salary was not paid in full, and that the claim therefore comes within the terms of paragraph 2, Article 296, of the Treaty of Peace.

The fact that the salary was only partially paid on account of the declaration of war seems to have been overlooked in the decision of the Crown Law authorities, and as the payment of the salary is an essential part of the contract, I shall thank you if you will kindly submit the point to the Crown Law authorities at your earliest convenience, and advise me the result.

As I have come to Melbourne specially from Caroda, N.S.W., I shall be glad if you can expedite this matter while I am here and available to give any further information which may be desired.

On 10 June the Comptroller-General forwarded a copy of a letter from Messrs Sly and Russell dated 7 June 1921, and written on behalf of Mr Tadsen whose claims are similar to those of Mr Peick.

Messrs Sly and Russell's letter is as follows:

We have been again consulted by Captain Julius Tadsen with regard to his claim through the Clearing House against the Deutsch Australische Dampfschiffs Gesellschaft Hamburg. That, of course, is the same company as the German Australian Steamship Company, which for convenience we will now call it.

Captain Tadsen has received word through his late colleague, Mr Peick, that you have decided that his claim did not come within the scope of the Clearing Office. We wish, however, to bring the following matters before you.

Captain Tadsen was born in one of the Schleswig islands just immediately after those islands became attached to Prussia by conquest. He spent some time in Iceland, and there became naturalized as a Danish subject. On returning to Germany, intending to come to Australia, he found that his Danish naturalization was not effective because he had never been released from German nationality. He then took the necessary steps and cast off his German nationality and came out to Australia and was naturalized on 24 September 1912, having been then in Australia about four years.

He came to Australia under agreement with the German Australian Steamship Company dated 26 November 1907, whereby he was appointed the Company's Marine Superintendent for Australia, managing the business of loading, discharging, receiving and delivering of cargo, victualling, coaling and repairing of ships, and incidentally was the Managing Secretary of the Stevedoring and Shipping Company Limited, the bulk of the shares of which were owned by the German Australian Steamship Company.

That original agreement was made for three years and thereafter was to continue until twelve months' notice was given by either side to terminate the same, but only on 31 March in each year. Notice of termination was given on 20 February 1920, to terminate the agreement on 31 March 1921.

During the war while the general agency of the German Australian Company was not declared an enemy firm the Company itself and also the Stevedoring and Shipping Company Limited were declared enemy firms, and accordingly various licences were given to carry out certain permitted business as follows: [Details omitted].

The Company was moreover engaged in assisting in various general average adjustments for the benefit of Australian consignees, and the continuance in business of the Company for the limited purposes for which licences were given was of vital interest to Australian consignees; and there was therefore no illegality in Captain Tadsen's continuance in the employment of the Company under his existing contract, because all this was done under licence from the Crown.

Captain Tadsen's contention is that his present claim is one arising out of a contract made before the war, and therefore that it comes within the scope of the Clearing Office. Captain Tadsen is further under the impression that his claim has been sent to the Clearing Office in Berlin and has been admitted by the German Australian Steamship Company.

If that is so, then the amount of his claim will be credited to the Australian Clearing Office, and it seems to us only his legal right that under the circumstances the money should be paid to Captain Tadsen.

We shall be glad if you will reconsider the matter and submit it to the Crown Law authorities for their further advice with the view that the claim should be admitted.

In a further letter of 9 June 1921, to the Comptroller-General of Customs, a copy of which has been forwarded to me, Messrs Sly and Russell emphasise the fact the claims have been accepted by the Australian, British and German Clearing Offices.

The application of Article 296 of the Treaty to the claims of Messrs Peick and Tadsen was dealt with in my opinion of 30 May 1921.⁽¹⁾

I have given further consideration to the matter in the light of the above-mentioned letters from Messrs Sly and Russell.

While I am not satisfied that the contracts were partially suspended on account of the declaration of war, yet in view of the fact that the claims were made to the Australian Clearing Office (which is the Creditor Clearing Office) and were accepted by the Debtor Clearing Office, the Annex to Article 296 does not appear to contemplate the raising of objections at this stage. The Annex requires inter alia that a debt shall be deemed to be admitted in full and shall be credited forthwith to the Creditor Clearing Office unless within three months from the receipt of the notification or such longer time as may be agreed to by the Creditor Clearing Office notice has been given to the Debtor Clearing Office that it is not admitted.

Further, paragraph 9 of the Annex to Article 296 requires the Creditor Clearing Office to pay to the individual creditor the sums credited to it out of the funds placed at its disposal by the Government of its country and in accordance with the conditions fixed by the said Government, retaining any sums considered necessary to cover risks, expenses or commissions.

[Vol. 17, p. 382]

(1)Opinion No. 1068.