Opinion Number. 1443



Key Legislation

EXPROPRIATION ORDINANCE 1920 (NG) s 4B(1): TREATY OF PEACE BETWEEN THE ALLIED AND ASSOCIATED POWERS AND GERMANY done at Versailles on 28 June 1919 [1920] ATS 1 (Treaty of Versailles) Annex Part X, s IV para 4

The Auditor-General, Audit Office

I have received from the Auditor-General the following memorandum requesting advice:

Now that the expropriated properties of ex-enemy nationals in the Territory of New Guinea have been disposed of, the question arises of dealing with the net proceeds of the sale of the properties and of the result of trading since 10th January 1920.

Various opinions have been received on the proceeds of the general question of the treatment in the accounts of the sale of the properties and of the trading results since 10th January, 1920, but I am still not quite clear as to whether the Commonwealth or Germany (for the expropriated person or firm) is to receive credit for the trading profits, or be debited with the trading losses incurred by an expropriated asset during the period of the Custodian’s administration of that asset as a going concern from 10th January, 1920, to the date of the sale.

Section 4B(1) of the Expropriation Ordinance 1920–1927 concludes with the following words:

and the Custodian shall be entitled to all income, profits, and increment to value earned by, arising out of or accruing to such property, rights, and interests since the 10th day of January One thousand nine hundred and twenty.

In the opinion given by you dated 23rd February, 1928,(1) it is understood that, in respect of the expropriated asset, it is the actual net proceeds of the sale thereof that should be taken into account in computing the account to be credited to Germany.

With regard to the profits earned or losses sustained in trading by an expropriated asset from 10th January, 1920, to the date of realisation, as, for example, the net profit earned by a plantation during this period for the sale of copra, I should be glad of your advice as to whether the account of such profit or loss as the case may be, should be credited or debited to Germany.

In view of the fact that my opinion of 23rd February, 1928, is referred to in the above memorandum it would seem that a copy of that Opinion has been made available to the Auditor General. The matter has in that Opinion been exhaustively dealt with and I stated on page 5 that the question to be determined in this connection is not what amount the Custodian is entitled to, but what amount is to be credited to Germany. That amount is determined by reference to Part X, section IV, paragraph 4, of Annex of the Treaty as being