I refer to your memorandum, dated 11th April, 1949, in regard to the application to the abovementioned claim of the Agreement between the Australian and Netherlands Governments for the settlement of claims arising out of the 1939–1945 War (See Treaty Series 1949, No. 11).

(2)  It appears that the claimant firm, Messrs. A-B, of Batavia, supplied foodstuffs to the A.I.F. in Java and were given a cheque drawn on an A.I.F. Bank Account for 552.65 guilders. This cheque was handed over on 4th March, 1942, and the payee was unable to present it for payment owing to war developments.

(3)  You ask for advice firstly, whether the Agreement is designed to cover the payment of an unpresented cheque; and, secondly, whether the claimant is to be advised to present the cheque to the Government of Indonesia for payment as a result of the Agreement.

(4)  The position before the signing of the Agreement was that—

(a)  the Commonwealth had an amount standing to its credit in a bank in Batavia; and

(b)  the supplier had a simple contract claim against the Commonwealth for the amount mentioned above.

(5)  I cannot find any provision in the Agreement which amounts to an unequivocal assumption by the Government of Indonesia of the obligation to pay all claims which Indonesian subjects may have against the Commonwealth. The only relevant provision appears to be paragraph 6(i) which states that the Government of Australia is not responsible for nor under any obligation to satisfy claims for compensation, damages or otherwise arising from enemy action or acts or omissions by members of the Australian Forces …

(6)  In Grein v. Imperial Airways Ltd. (1937) 1 K.B. 50 there are dicta to the effect that the words ‘act, neglect, or default’ in Lord Campbell’s Act are wide enough to include a negligent breach of contract and it would seem to me that, on the reasoning of this decision, the words ‘enemy action or acts or omissions’ imply some element of tortious conduct.

(7)  Moreover, the whole tenor of the Agreement is directed to a final settlement of claims and counter claims between the two Governments. I think that the Agreement could affect a claim by a private citizen of Indonesia against the Commonwealth Government only if it were a class of claim which a Government would, on behalf of its Citizens, advance against another Government.

(8)  For these reasons, I do not think that, as a matter of construction, paragraph 6(i) extends to a simple contract debt such as that now in question.

(9)  I may add that, in interpreting inter-Governmental agreements of this kind, the ordinary rules of construction applied by English courts to the interpretation of statutes are not conclusive and documents and other materials upon which the Agreement was based may be referred to.

(10)  I therefore made inquiries of the Departments of External Affairs and the Treasury as to whether the Commonwealth possessed any material showing whether it was the intention of the Governments to cover simple contract debts.

(11)  The Defence Division of the Treasury has advised that the question of claims by private individuals for simple contract debts was not mentioned at any time during the negotiations. I gather that it was the intention of the Commonwealth government to exclude such claims from the scope of the Agreement.

(12)  Accordingly, in my view, the claimant firm can only look to the Commonwealth for payment and, as there is no apparent reason to doubt the correctness of the claim, the Commonwealth should pay the claim.

[Vol. 39, p. 48]