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Colonial Cases

I Lin Yue and Chang Ping Wa v. Birt and Co., 1890

[banking]

I Lin Yue and Chang Ping Wa v. Birt and Co.

Supreme Court for China and Japan
Rennie CJ, February 1890
Source: North China Herald, 21 February, 1890


LAW REPORTS.
H.B.M.'S SUPREME COURT.
Shanghai, 14th February.
Before Sir Richard Rennie, Chief Justice.
I LIN-YUE & CHANG PING-WA v. BIRT & Co.
The hearing of this case was resumed. Mr. Wilkinson again appeared for the plaintiff, and Mr. Wainwright for the defendants.
  Chang Ping-wa, recalled and cross-examined by Mr. Wainwright - The compradore's office in defendant's hong where I waited on 24th October is in a small room upstairs.
  Gordon Thomas How, examined by Mr. Wilkins, said - I have examined the current account of Wm. Birt & Co. at the Hongkong and Shanghai Bank. I find that Tls. 5,000 were paid into the account on 24 October by native bank order. On the 15th and 16th November, Tls. 1,500 each day were paid to the credit of their loan account by native bank orders.
  By Mr. Wilkinson - The paying-in slips were written by one of the Bank Portuguese staff. I produce a letter from the defendants accompanying the bank orders and dated 12th November. There were two paying-in slips on account of Tls. 1,500 payable on 15th November, and Tls. 1,500 on 16th Nov.
  Wo Dick-lang, examined by Mr. Wilkins, said - I am head Shroff of the Hongkong and Shanghai Bank.  I have examined the Chinese books in relation to payments on 24th October to the credit of Birt & Co. I identify the Tls. 5,000 in the paying-in slips produced with the Tls. 5,000 order on the Li-dah Bank. It was paid the same day. I find two entries respecting the same account on 15th and 16th November, being receipts on mortgage account of W. Birt & Co., each Tls. 1,500. On the 15th the Tls. 1,500 were composed of four orders of the Shen Yu Bank. On the 16th eight orders were paid in (of which witness gave particulars.)
  Zau Zay-zu, examined by Mr. Wilkins, said - I am compradore to Mr. Alex. Bielfeld. On the 24th October, I received from the Yin Shen-fu several bank orders of different amounts. He requested me to exchange them all for one of Tls. 5,000 and another for Tls. 1,000 odd. I got the order for Tls. 5,000 from the Li-Dah Bank in exchange for some of the orders Yin She-fu gave me, and another order in exchange for the balance.  He told me that he could not pay all the small orders into the Hongkong and Shanghai Bank, so to oblige him, and as I was busy at the time, I gave him my pass-book to take to the Li-Dah Bank and get the two orders. Yin Shen-fu subsequently brought back the pass-book.
  Cross-examined by Mr. Wainwright - It was about half past two in the afternoon when Yin Shen-fu came with the orders. Yin Shen-fu had no transactions with the native banks.  I was not very intimate with him, but I agreed to let him have two orders for the others. It was about three o'clock when he brought the pass-book back. I heard that Yin Shen-fu was going to be Birt's compradore. I sent him a pair of congratulatory scrolls, as is the custom when a friend becomes compradore. My name was on the scrolls.
  Re-examined by Mr. Wilkinson -  I have known Yin Shen-fu for some time. I knew him when he was a shroff in Carlowitz & Co.'s. He had been at Birt's about two years, and did no business outside that firm's.  When he brought the bank orders I thought it was in connection with becoming Birt's compradore, and that he was paying money in as security. Before that time Yin Shen-fu was in a respectable position having  had charge of all the import cargoes at Birt's.
On resuming, after the interval,
  I Lin-yih was called and examined by Mr. Wilkins. He said - I remember Chang Ping-wha consulting with me about the post of compradore at Birt's. That was on 15th October. Chang Ping-wha told me that Birt & Co. Wanted a compradore, and he asked me if I would like to take the berth. He also said Yin Shen-fu had asked him if he would take the berth.  Chang Ping-wha told me that Tls. 10,000 would be required. I promised to give him an answer in three days. He said if I liked we could each advance Tls. 5,000 and divide the profits. He said Tls. 5,000 would have to be paid down, to Birt & Co. as a guarantee. We paid Tls. 5,000 on the understanding that we should begin work in a fortnight. On 17th October Chang PIng-wha came to me and said that he had to pay the Tls. 5,000.  On 6th November Chang Ping-wha told me that Birt & Co. wanted to meet the new compradore.  Next day I went to the hong with Chang Ping-wha and I Wei-chen. Chang Ping-wha did not go into the office. I Wei-chen , Yin Shen-fu and myself  went into the office to see the master, whom I recognize in Court. I Wei-chen, who could speak a little English, began the conversation, by asking Mr. Liddell how long he had been in business in Shanghai. I Wei-chen told me that Mr. Liddell, who replied in English, said he had been in business there twelve years.  Yin Shen-fu then came into the room and acted as interpreter. Mr. Liddell said through Yin Shen-fu, that the old compradore's accounts were not yet settled, that it would be a few days before the new compradore could come, and that he (the new compradore) three or four thousand taels to Mr. Liddell to settle the old compradore. We said we would pay on the 19th of the moon (Nov. 11th).  The master suggested that we should pay it on that day. On Nov. 11th, I went with I Wei-chen to the hong and saw Yin Shen-fu there. We went with him to Mr. Liddell's office, where I gave Tls. 3,000 to I Wei-chen, who handed it to Mr. Liddell. The money was in the form of twelve bank orders, (as specified in the second schedule), some falling due on the 23rd day of the moon and some on the 24th. We received a receipt, the body of which was filled up by a writer and the signature added by Mr. Liddell. I did not know at that time that Yin Shen-fu's name was on the receipt. I did not know it until the day after Yin Shen-fu ran away, Nov. 28th.  I then learnt from other people to whom I showed it that Yin Shen-fu's name was on it.  After my last visit to Birt's I did not go again until Nov. 16th.  I Wei-chen, Yin Shen-fu and myself saw Mr. Liddell. Through Yin Shen-fu I said I had come to act as compradore.  Mr. Liddell said he was very busy and I had better come back in two days. I did so and saw Mr. Liddell again. He said through Yin Shen-fu that he was very busy. I was a little suspicious of Yin Shen-fu and I pressed for a definite date on which I was to commence. Mr. Liddell then said, (through his office boy, who also interpreted) that I could come in a week's time. On Nov. 25th I sent I Wei-chen to the hong.  On Nov. 28th I went there with I Wei-chen. We did not see Yin Shen-fui there, and went down to see Mr. Liddell, who professed to know nothing about it. I asked about the money I had paid, and Mr. Liddell said the money had been paid him by Yin Shen-fu, who owed him Tls. 10,000. I asked to see Yin Shen-fu, and Mr. Liddell said he was not there. Mr. Liddell also said he knew nothing about me as compradore. I said Yin Shen-fu must be found, to clear the matter up, and Mr. Liddell said he was looking for him. On the 30th I went to Mr. Wilkinson's office.
  Cross-examined by Mr. Wainwright - I am 40 years of age, and am engaged in the bean-oil and junk trade. I am the master of a hong, and have been in that position for two years. On account of business being bad it was shut up this year. At the beginning of this business it was not shut. I did not then know Yin Shen-fu. The first time I met him was on November 7th. The first time Chang Ping-wha spoke to me about this business was on October 15th, and from that time till Nov. 7th I did not see Yin Shen-fu. On October 17th Chang Ping-wha told me the compradore would get Tls. 30 a month wages and about Tls. 2,000 a year commission. The wages and commission were to be divided equally between Chang Ping-wha and myself.  I have never been compradore or in the employ of a foreign hong. I have never been in Birt & Co.'s premises before. I do not know their former compradore. I relied entirely upon Chang Ping-wha. I never advanced money to a foreigner before. I Wei-chen was to be accountant under me. Yin Shen-fu was not to be paid anything. I heard Yin Shen-fu say that Birt & Co. were to give me 8 per cent interest on the money advanced. That was on 7th November.
  Yin Shen-fu said in Mr. Liddell's presence that 8 per cent interest would be paid. The money was really not to have been paid until commencing business, but I advanced the Tls. 3,000 on the representation that Birts wanted to clear up accounts with the old compradore. I understood I should have charge of the godown and of the import cargoes. I did not know what Yin Shen-fu was going to do. On November 28th I went with a friend named Tsa Zu-zung to Birt's.  I took my friend to interpret because the office boy would not do so. He never told me that it was no business of Birt's, and that I must go to Yin Shen-fu for my money.  I never met Chang Ping-wha at any time while I was at Birt's & Co. It was my intention to carry on my own trade after becoming compradore. I told some of my hands that I was going to be compradore. No one presented me with a congratulatory scroll, because the day was not known.
  Re-examined by Mr. Wilkinson - I was willing to act on the same terms as the old compradore.
  The Court adjourned until Monday at 10 o'clock.
.  .  .  .  
17th February.
  The hearing of this case was resumed.
  I Wei-chen, examined by Mr. Wilkinson, said - I am at present unemployed. I was formerly employed in the Chen-ta-fung piece-good shop as an accountant. I know I Lin-yih; he is my cousin. About the end of the ninth moon I met I Lin-yih and we had a conversation about the compradoreship of Birt's.  He said he was being recommended by Yin Shen-foo. He also asked me to go as accountant. I said I would see if I could leave my piece-goods firm, and on the 9th of the 10th moon I received a note from I Lin-yih asking me to go. I went to see I Lin-Yih that day and it was settled that I was to be the accountant from that day to I Lin-yih in Birt & Co.'s business. On the 14th, I was told by I Lin-yih to see the master of the hong next day. Next day I went with I Lin-yih to Yin Shen-foo's own office at Birt & Co. but did not see Mr. Liddell till four o'clock. I know little English. Yin Shen-foo introduced us, the one as the new compradore and the other as the accountant. I asked Mr. Liddell what was his name and how long he had been in Shanghai. He said, 12 years. I Lin-yih asked Yin Shen-foo to ask Mr. Liddell when we could commence work, to which Mr. Liddell replied that he required Tls. 3,000 or Tls. 4,000 to clear up with the old compradore first. We proposed the 9th of the moon for the payment of the Tls. 3,000. Mr. Liddell agreed to this.
  On the 19th of the moon (11th November) myself, I Lin-yih and Yin Shen-foo went and paid the money to the foreigner, in orders, half payable on the 23rd and half payable on the 24th.day. I myself handed the money to Mr. Liddell, I got it from I Lin-=yih. When I gave it to Mr. Liddell he asked one of his clerks to write out a receipt, which he placed on the table. I handed it to I Lin-yih, who through the interpreter asked when he could begin to work.  He was told by Mr. Liddell to come on the 24th of the 10th moon (16th November). We went on that day to Yin Shen-foo and went in to see Mr. Liddell together. I asked if we could commence work that day, to which Mr. Liddell replied that he was very busy and had not settled with the old compradore yet. I asked for a date to be fixed when we could commence work, and Mr. Liddell named the 26th of the moon. On that date I Lin-yih, Yin Shen-foo and myself went again to Birts and saw Mr. Liddell, whom we asked if we could come in
to work. He again said he had no time. I Lin-yih then asked how it was that every time we came we were put off. Mr. Liddell said he was very busy and called his office boy in and told him to tell us that he was very busy, but that he would work up the compradore's accounts in a week. We were satisfied and left. I went back alone on the 25th November, and went in with Yin Shen-foo to see Mr. Liddell. I asked Yin Shen-foo to tell him t
hat the week was up.  Mr. Liddell said he had been ill for three days and had only come into the office that day, that the compradore's accounts were still in the hands of the clerk, but if I would wait three days I could go to work. I asked Mr. Liddell to put that in writing, but he said it was not necessary and that it would be alright if I came in three days to work. I asked Mr. Liddell if some arrangement could not be made for the new compradore to come in and take over the work. Mr. Liddell said the custom of the hong was that the old compradore should not meet the new one.  On the 7th of the 11th moon (28th Nov.) I went with I Lin-yih and waited nearly the whole day to see Yin Shen-foo, but could not see him. In the evening we went with the office boy and saw Mr. Liddell and asked if we could go to work. Mr. Liddell said he did not know what we had come about. We said we had paid in Tls. 8,000 to become compradore and asked him to call Yin Shen-foo to prove this. Mr. Liddell said he did not know where Yin Shen-foo was.  I then went and called Tsa Zu-sung, a teacher of English, with whom we went again to Birt & Co.'s office, and through him asked Mr. Liddell if he had not received Tls. 8,000 from us, and if he did not know that we were coming in as compradore. Mr. Liddell said he did not know anything about it. Then we left, and Mr. Liddell sent the office boy to call us back. We went back, and Mr. Liddell then told us that he had received the Tls. 8,000 and he wanted to know if we had the receipt with us, but we said we had left it at home. Mr. Liddell said he had received this money, but it was because he had promised to give the compradoreship to Yin Shen-foo. We said the money belonged to us and that we were to be the compradore. We asked him how he could give the compradoreship to Yin Shen-foo when the money belonged to us, and said that if he did not believe us he could call Yin Shen-foo to prove it. Mr. Liddell said he did not know about it. I asked how it was that a person in charge of a godown could leave the place. Mr. Liddell did not make any reply. Then I said that if the man had any deficiency Mr. Liddell could find his (Yin Shen-foo's) guarantee. I could not understand everything said by Yin Shen-foo and Mr. Liddell.
  Cross-examined by Mr. Wainwright - I did not know Yin Shen-foo previous to the 15th day of the 10th moon (7th Nov.) The date when I Lin-yih first talked to me about the business was about the 20th of the 9th moon. I gave up my former situation to help I Lin-yih in his business.  My wages were to be settled when I went to work. My wages in the Chen-ta-fung hong were ten thousand cash a month. I did not ask I Lin-yih what my wages were to be, on account of our being cousins. I went to Birt & Co.'s hong on the 7th November because I Lin-yih asked me. We went into Yin Shen-foo's office first when we went to see Mr. Liddell the first time. There were some people there whom I did not know. The office boy was not there the first time. I heard from I Lin-yih that the wages were to be Tls. 30 a month, but I did not hear I Lin-yih ask Mr. Liddell through the interpreter anything about wages. I do not know Birt & Co.'s former compradore. I took the receipt for the Tls. 3,000 from the table and handed it to I Lin-yih, Mr. Liddell being in the room at the time. I could only read the figures upon it, not the writing. I can write foreign figures myself. Mr. Liddell did not ask in whose name the receipt was to be made out.
  Re-examined by Mr. Wilkinson - Chang Ping-wha showed me the receipt. It was for Tls. 5,000.
   Mr. Wilkinson - That is my case.
  Mr. Wainwright, in opening his case for the defence, said his clients' case was pretty well disclosed by their answer. His contention was that his clients never for one moment believed they were treating with any person to be a compradore except Yin Shen-foo, after a certain date. On one or two occasions Yin Shen-foo came into the office with one or two or three Chinese whom he represented to be his friends who were going to assist him in his office when he became compradore; but Mr. Liddell and others in the office would state that the two payments were made by Yin Shen-foo himself; that nobody, as far as they could see, had any interest in the money except himself; and that the receipts were handed to him. The defendants' position was that if the money belonged to the plaintiffs, they had lent it to Yin Shen-foo, and the story about their being persons who were to be appointed compradore and Shroff was an ingenious afterthought and a desperate attempt to get hold of this money. There had been a good many transaction between Yin Shen-foo and people who assisted him in his depredations, and the defendants could not undertake to say if the plaintiffs were deserving of sympathy or not.
  Mr. Wainwright then proceeded to call evidence.
  George Harris Purcell, a clerk in the employ of the defendants, said that up to Oct. 16 there had been negotiations between Mr. Liddell and a man named Ta La-ping, with respect to the latter becoming compradore. Subsequently Yin Shen-foo negotiated for the post. On Oct 24 witness, at Mr. Liddell's request, made out a receipt for Tls. 5,000 in favour of Yin Shen-foo. This receipt was signed by Mr. Liddell and handed to Yin Shen-foo in witness's presence. He did not remember seeing Chang Ping-wha there. On 11th November he made out a receipt   for Tls. 3,000 for Yin Shen-foo which Mr. Liddell signed and handed to Yin Shen-foo. The other Chinese, whom witness did not know and did not now recognize in Court, were then present.
  Cross-examined by Mr. Wilkinson - On the first occasion Chang Ping-wha might have been outside the native office.
  After the interval, the defendant, Mr. Liddell, was called. He said he had a conversation on 21st October with Yin Shen-foo about the latter becoming compradore. Some arrangements were made, and Yin Shen-foo promised to pay Tls. 5,000 on 24th October. He did so, alone. It was arranged that as the firm had about Tls. 2,000 of Yin Shen-foo's money, he had only to pay Tls. 3,000 more to complete the Tls. 10,000. On 11th November Yin Shen -foo brought him a number of bank orders amounting to Tls. 3,000, and defendant had just begun to add them up when two Chinamen walked into the office. Yin Shen-foo said one of them was his friend and the friend's brother, and that one of them was going to assist him. Witness motioned them to a seat and went on with what he was doing.  Yin Shen-foo received a receipt which, witness believed, Yin Shen-foo put up his sleeve. Witness did not see him hand it to anyone. While the receipt was being made out, one of the Chinamen asked witness something in broken English as to how long he had been in Shanghai.  Witness answered, but discussed no business with them. Next morning Yin Shen-foo voluntarily admitted that some goods had been taken away from the goodowns. After going into the matter it was found that, after taking into account the Tls. 10,000 paid by Yin Shen-foo, there was still a loss to the defendants of about Tls. 2,000.
  Cross-examined by Mr. Wilkinson, defendant said he was positive the plaintiffs were not present when Yin Shen-foo handed him the money. Yin Shen-foo on the second occasion talked to the two Chinamen.
  Re-examined by Mr. Wainwright - Yin Shen-foo did not appear to repeat what witness said to the Chinese and then repeat their answers to him, like an interpreter. Yin Shen-foo said a very few words to them, and witness had no idea that Yin Shen-foo was repeating to them what witness was saying.
 At the conclusion of this witness's examination, the proceedings were adjourned until Wednesday.
.  .  .  .  
19th February.
The hearing of this case was resumed today.
  J. Oswald Liddell said - I recollect a sum of Tls. 5.000 being paid to my brother on 24th October. I did not see the money paid, but my brother showed me the receipt. The money was paid to my brother on account of Yin Shen-foo becoming compradore. Previously there had been negotiations with Ta-la-ping.  On 11th November I saw Yin Shen-foo and some Chinese in my brother's office. I could not recognize them. On the evening of the 29th November I remember three Chinamen coming to the office and pressing for payment of a large sum of money. One of them said he was a schoolmaster.
  By Mr. Wilkinson - If my brother said they were there on two other occasions, I should not be surprised.
  Tong Ping-qua (previously described as Ta-la-ping) said - In October I was in negotiation for the position of compradore at Birt & Co.'s. The negotiations were broken off on 19th October. I afterwards heard that Yin Shen-foo was to be compradore. I do not know Chang-Ping-wha.
  By Mr. Wilkinson - It was known on 21st October that Birt & Co. had decided that Yin Shen-foo was to be their compradore.
  Yin Chin-chee said - I have been compradore at Birt & Co.'s about three years. Last summer there was some talk about my ceasing to be compradore, on account of my being ill. I do not know the plaintiffs or I Wei-chen. I never talked to Chang Ping-wha at any time. I asked Mr. Liddell who was going to be compradore, and he said Yin Shen-fu was going to be compradore.
  By Mr. Wilkinson - I have never seen a stranger at Birt's.
  Liu Fung-heng said - I am manager of the Ta-kay foreign goods store. I know Yin Shen-fu. I heard from outside that he was going to be compradore, and he himself said so. I sent a pair of complimentary scrolls (produced), one bearing his name, and one mine, that was about 10th November.
  Thomas Harold Vale said - Until the end of last year I was in the employ of Messrs. Birt & Co. and had charge of their imports department. I had charge of the godown in which the imports were kept. There was some talk last year about having a new compradore there, and Yin Shen-fu asked me to mention him to Mr. Liddell for the post, which I did. Mr. Liddell did not agree to that, as he was negotiating with Ta-la-ping.  Afterwards, Mr. Liddell told me the negotiations with Ta-la-ping had fallen through, and he was disposed to entertain Yin Shen-fu's offer. Some days afterwards Mr. Liddell told Yin Shen-fu had deposited Tls. 5,000. Subsequently, Mr. Liddell and Yin Shen-fu together brought Tls. 3,000 to me. Yin Shen-fu had about Tls. 2,100 in the business. He offered it for carrying on the business of the department. I was to take over the import business from Birt & Co. at the end of the year, and work it on my own account; and Yin Shen-fu suggested that he should become my compradore, and volunteered to place Tls. 5,000 in my hands. Mr. Liddell consented. About the second week in November, on the 12th if my memory serves me, Yin Shen-fu admitted to me that certain goods had been surreptitiously removed from the godowns.  Afterwards Mr. Liddell brought Tls. 3,000 to me and told me what goods to place against them. I paid the money into the Hongkong and Shanghai Bank with the form produced. I recognize the bill of lading (produced). It is for a case of velvets.
  A discussion here took place as to the admissibility of evidence on the question brought in by the bill of lading. Mr. Wainwright said his object was to show that the Tun-yuen hong was mixed up in transactions with Yin Shen-fu, and it was believed that they had got hold of these velvets.
  His Lordship said there was not the slightest evidence to show that the Tun-Yuen hong was the plaintiffs' hong. There had been no cross-examination on the point, and Mr. Wainwright was not entitled to spring a mine on the plaintiffs in the way he had done.
  Mr. Wainwright said the matter had only come under his client's notice, accidentally, the day before. He was at that moment expecting further information on the point, but he would leave the witness in his learned friend's hands for cross-examination without reference to the point in question.
  At the conclusion of Mr. Wilkinson's cross-examination, the court adjourned till two o'clock.
  On resuming, the defendant was recalled by Mr, Wainwright, and stated that he had had no conversation with Mr. Bielfeld on the subject of the case.
   Si Ching-fong said: I am office boy in the employ of the defendants, and do not know Chang Ping-wha, but could recognize him. Last autumn I knew Ta La-ping had applied for the office of compradore, and that Yin Shen-fu had afterwards applied. In the 10th moon I remember on one occasion seeing two strangers in the office with Yin Shen-fu. I Wei-chen was one of them. I saw Yin Shen-fu go into Mr. Liddell's office leaving the door partly open, and after waiting a minute or two the other two men opened the door and went in.  They shut the door after them and I did not hear what took place. I never heard Mr. Liddell say anything to Yin Chen-fu in the presence of these two men; but on another occasion, when a man in spectacles was there, I did hear something. I never told either of the men that Mr. Liddell was very busy and would see them in a week's time or anything to that effect. On the third occasion they did not go away and then come back, and I was not told to tell them to come back. I did not hear anyone come to the office and press Yin Shen-fu for money; I should not have heard them if they came to Yin Shen-fu. He had a box at the office, in which he kept papers.  I looked inside the box about a month ago.  I examined some of the papers, among them the Chinese accounts (produced).  I put them back in the box. I few days ago I gave them to Mr. Liddell.
  A long discussion took place on the admissibility of the accounts.
  Mr. Wainwright said the papers purported to be an account between somebody - the name he believed was fictitious being substituted for Yin Shen-fu 's - and the Tun-yuen hong, and containing a payment of Tls. 5,000 on the day the plaintiffs said they paid the same amount. He proposed to connect the plaintiffs with this hong and to show that they were intimately connected with Yin Shen-fu.
  His Lordship having characterized the proceeding as irregular, Mr. Wainwright said he would not proceed with the point.
  Witness, continuing - The account produced is one between Yin Shen-fu and the Tun-yuen hong. I know the manager of that hong, but not the partners. I did not see Chang Ping-wha at the office on the 1st day of the 10th moon. Chang Ping-wha came to the office and asked me to go to an opium shop opposite the Shanghai Road hospital that evening. I did not go. On another day, I Wei-chen invited me to go to an opium shop and said that after the case was finished he would give me a cumshaw. I did not go.
  Cross-examined by Mr. Wilkinson - I am sure the two men were not there more than twice. I am positive Chang Ping-wha asked me to go to an opium shop. When I found the papers in Yin Shen-fu's box I put the Chinese papers into my own desk after reading them. I kept them for more than a month. I made a mistake before when I said I gave the accounts to Mr. Liddell three days ago; I gave them to him yesterday.
  Mr. Wilkinson - Did you hear Mr. Wainwright say "yesterday?
  The Interpreter - No, he says he did not hear Mr. Wainwright say so, but he "remembered wrong."
Mr. Wilkinson then formally applied for an adjournment to enable him to examine the accounts in question.
  In Lee-long was called and stated that he made a translation (produced) yesterday afternoon of the accounts in question. As far as he could say the translation was a correct one. The name of the hong is "Tack-yuen" and of the other party "Shin Kee."
  At the close of the defendant's case, Mr. Wilkinson proceeded to call testimony to rebut evidence of the rumour that Yin Shen-fu was to be compradore.
  Eu Su-wong, in the employ of Messrs. Reid, Evans & Co., 9said it was common knowledge on the 1st day of the 10th moon that I Lin-yue was to be compradore at Birt's.
  By Mr. Wainwright - I heard it at Way-tah Bank. I know Yin Shen-fu was a godown-keeper at Birt's.
  Shu Ta-fung, Manager of the Tai-fung hong, said he had known I Wei-chen over ten years.  He heard from I Wei-chen, in the early part of the 10th moon, that I Lin-yue was to be compradore.
   Pau Yun-sung, employed at the Yue-ta hong, said he knew Chang Ping-wha by sight and by name. In the early part of the 10th moon he heard from the piece-goods dealers that Chang Ping-wha was going to be compradore at Birt & Co.'s in conjunction with I Lin-yu.
  By Mr. Wainwright - It is customary for a man to be compradore at a place though he may not go there himself. One man is sometimes compradore to more than one hong.
  Chung Liang-yu, manager of the Tung-yu piece-goods hong, said he had heard at the piece-goods guild that I Lin-yih and Chang Ping-wha were going to be compradores at Birt & Co.'s. He heard this on the 3rd day of the 10th moon.
  By Mr. Wainwright - He heard that the compradores had to advance Tls. 8,000.
  Ho Tien-sun, compradore to Messrs. Barlow & Co., said he heard in the 10th moon that I Lin-yih and Chang Ping-wha were going to be compradores to Birt & Co. He had heard of Yin Shen-fu, but never that he was going to be compradore.
  At the conclusion of the evidence, some further argument took place on the admissibility of the accounts already referred to, and his Lordship said he would decide on the point after the adjournment.
The Court then adjourned.
.  .  .  .  
20th February.
The hearing of this case was resumed.
  Mr. Wainwright, in opening his address for the defendants, first drew attention to the position Yin Shen-fu occupied prior to the commencement of the proceedings. Yin Shen-fu was really poor, as was shown by his defalcations, but nominally had credit, as was shown in the evidence. Supposing the plaintiffs' story was true, Yin Shen-fu, being in this positon, was content to efface himself entirely. According to the evidence of the plaintiff Chang Ping-wha,"If the compradore made profits I and I Lin-yuh were to divide them. Yin Shen-fu was to get no share of the profits. He was not to be employed in any way under us.  If I took the berth I do not know what he would have done." Was it conceivable that Yin Shen-fu, being in a comfortable position, and at the same time a somewhat dangerous one, should have been content to efface himself entirely, and to precipitate the discovery of his defalcations, which the appointment of a new godown man would have done? It was grossly improbable. If Mr. Liddell, his brother, Mr. Vale, and Mr. Purcell were to be believed, they had no idea whatever that anyone but Yin Shen-fu was to be their  compradore. He himself applied for the position and talked about it for a long time before; and supposing the arrangement in which the plaintiffs would have the Court believe had come into effect, Mr. Liddell would have found out that an arrangement had been made behind his back, and he would have turned out the new compradore and his friend to follow Yin Shen-fu. Was it conceivable that Mr. Liddell would turn over the management of the business to two people whom he knew nothing whatever about? They were not asked any questions about their experience and fitness; he was to discharge two tried servants and confide the business to a man who was an oil and bean-cake merchant, and be quite content to do so for the paltry sum of Tls. 8,000 or Tls. 10,000, a very small proportion of the value of the cargoes in the godowns, or else Yin Shen-fu would not have been able to take away so much without being discovered. Mr. Wainwright then proceeded to comment on the plaintiff Chang Ping-wha's evidence, and drew attention to the evidence of Mr. Liddell, Ta La-ping and Mr. Vale that negotiations for the compradoreship were going on with Ta La-ping up to the 19th October, while the plaintiffs said they were going to work on the 18th October, - before the negotiations with Ta La-ping fell through.
  His Lordship said that that did not coincide with his notes, whereupon Mr. Wainwright waived the point.
  Further reviewing the evidence, he said that the plaintiffs' evidence as to what took place at the interview of the 7th of November ought to be discarded at totally different from Mr. Liddell's evidence as to the conversation on that occasion.
  His Lordship said he did not gather from Mr. Wilkinson's cross-examination or his opening statement that he charged Mr. Liddell with making certain statements at that interview, but that he held Mr. Liddell responsible for the statements of Yin Shen-fu as interpreter.
  Mr. Wilkinson - Quite so.
  Mr. Wainwright, continuing, proceeded to point out discrepancies in the evidence of I Lin-yih and I Wei-chen as to the manner in which the receipt was given to the former by Mr. Liddell, and which was totally different from the statement of Mr. Liddell and Mr. Purcell.  He drew attention to the contradiction of the evidence of I Wei-chen, as to what the office boy had told him, by the office boy himself, who said he never told him that Mr. Liddell was too busy to see him. It was highly improbable that I Lin-yih who knew nothing whatever about Birt & Co. 's business was to be engaged as compradore, and his story altogether was an unreliable one and self-contradictory. According to the plaintiffs' story, the defendants engaged a man as compradore about whose capabilities or experience they knew nothing.
  His Lordship said that the other side never charged Mr. Liddell with knowing that Yin Shen-fu proposed I Lin-yih to him as compradore.
  Mr. Wainwright said his theory was that the plaintiffs lent money to Yin Shen-fu to become compradore, and that he went to them and got the money, having first heard from Ta La-ping that he would not take the position unless the godowns were given into his charge, and very probably Yin Shen-fu promised them, in addition to the 8 per cent, Tls. 30 a month out of his profits, which would bring the interest on the money they advanced up to 12 per cent. He submitted that I Wei-chen was to be put in by I Lin-yu and Chang Ping-wha to be a check or spy upon Yin Shen-fu, and act as Shroff to him and not to I Lin-yu. It was an exceedingly impossible thing that Mr. Liddell would instruct his godown man, Yin Shen-fu, to go out into the highways and byways and engage a compradore for him, which was against all business routine. A master was responsible for the act of his agent only so far as the agent might be implied to have authority, and here he contended that Yin Shen-fu had no authority to engage a compradore, and it was not within his province. In support of that Mr. Wainwright cited a passage from Evans on Principal and Agent. Mr. Liddell never asked Yin Shen-fu to act as interpreter for him, and he thought that I Wei-chen was merely a hanger-on who wanted to get some small post under Yin Shen-fu. He submitted that a master could not be bound by the statements of his servants which he did not understand, particularly if he told him nothing to say, as Mr. Liddell had done in this case. Mr. Liddell was told by Yin Shen-fu that these men were friends of his and one of them was trying to get a place under him. Yin Shen-fu was considered by Mr. Liddell to be settled in the post of compradore when he paid over the Tls. 8,000 and his agreement was being written out.
  His Lordship said it was very dear at this price, and he did not consider that Yin Shen-fu was actually compradore, because his agreement was being written out and he was told he would get the post, for it was immediately revoked.
  Mr. Wainwright - Because of subsequent acts.
  His Lordship said was it not for prior acts, or the discovery of prior acts.
  Mr. Wainwright submitted that the plaintiffs were not entitled to recover the Tkls. 8,000 which was given by Yin Shen-fu to Mr. Liddell for a valuable consideration, namely, the debt he owed him, though the money was given by I Lin-yuh and Chang Ping-wha for a particular purpose, and with the understanding that he should tell Mr. Liddell that it was in consideration of their becoming compradore, but Yin Shen-fu never told Mr. Liddell that. In support of thos contention he quoted the c sse of Russell v. Watson (34 L. J. A. B. p. 93).)
  His Lordship - Suppose in this case the plaintiffs told the true history, and suppose it had subsequently been proved that the Tls. 8,000 had been deposited by them with Birt & Co. as security for Yin Shen-fu becoming compradore, and that then the circumstances that have occurred arose, namely, of Yin Shen-fu being appointed compradore first for a day and then dismissed or displaced on the defendnts being discovered. In such a case do you say that the plaintiffs are entitled to get their money back?
  Mr. Wainwright said - If they said "We advance this money to you on the condition of your giving Yin Shen-fu the appointment and he becomes your compradore," then I would say they have a better case than they have now. But I say that here they did not give the money to Birt & Co. at all, but to Yin Shen-fu. In my theory he borrowed the money from the plaintiffs before he negotiated the compradoreship with Mr. Liddell, and went to his friends seven days before the negotiations took place and got them to lend him the Tls. 8,000 in the expectation of getting something out of the profits. I submit that it is against the probability that the money was lent to him in Birt & Co.'s office; and the office boy, who is constantly there, would have seen them, and he certainly would not have forgotten a man of Chang Ping-wha's appearance sitting in the office for three and a half hours; besides, I think other members of the staff would have seen him. Then with regard to the others, no doubt they were anxious to see that the money got into Mr. Liddell's hands, they wanted to see what sort of man he was, and curiosity partly brought them there, particularly as one of them was going to enter the service of Yin Shen-fu. The money was given to Yin Shen-fu as a loan, and with no such conditions attached to it as the plaintiffs allege, and was given by Yin Shen-fu to Birt & Co., who, having a claim on Yin Shen-fu are entitled, I submit, to keep the money.  Concluding, the learned counsel said it was a matter of accounts which unfortunately his clients were not able to prove at the moment, whatever they might be able to do afterwards, and he trusted his Lordship would in deciding upon the probabilities of the case take into consideration that the story of the plaintiffs had been found to be untrue in many respects.
  The Court adjourned till 2 p.m., and on its resuming
  Mr. Wilkinson proceeded to reply on behalf of the plaintiffs. He said he did not think that he need say much in reply to the case of Russell v. Watson cited by his learned friend, as in that case an antecedent debt was actually due at the moment the money was paid, and in the present case there was no antecedent debt. The money was paid as a guarantee of good faith on the part of the compradore, whoever the compradore was to be, whether Yin Shen-fu or the plaintiffs, and neither of them had been compradore, so that the conditions upon which the money was advanced were never fulfilled. He did not attribute bad faith to any of the witnesses on either side except the office boy, who, he admitted, should not be believed. In the evidence for the defendants he pointed out discrepancies which were very similar to those in the evidence for the plaintiffs, upon which Mr. Wainwright asked his Lordship to disbelieve the whole story for the plaintiffs.  He pointed out that the story of the plaintiffs as to the number of times they were at Birt & Co.'s was substantiated by Mr. Liddell's evidence. On the 30th, a letter was written to Mr. Liddell asking for the payment of this money, which showed that they were very prompt in the matter, this being immediately after their first interview with him. Even upon Mr. Wainwright's theory his (Mr. Wilkinson's) clients were entitled to recover, as he would show later on. He did not charge Mr. Liddell with all the statements charged, and rightly charged, in the petition; these were the statements made to his clients by Yin Shen-fu. The statements of the plaintiffs as to what they were to receive from Mr. Liddell for the Tls. 8,000 coincided with Mr. Liddell's intentions, except the Tls. 30. If there had been any allegation of collusion with Yin Shen-fu, his clients would have been ready with their answer. Yin Shen-fu might have represented one thing to Mr. Liddell and another to the plaintiffs.  The interpretation which he put upon the plaintiffs' statements with regard to Yin Shen-fu was that they had entered into an arrangement with him, and could dispense with him if they liked, but Yin Shen-fu no doubt thought that if he could get in his friends as compradore he would not be deprived of his position as godown-keeper.  It would be remembered that when Yin Shen-fu went to them he had entered into some arrangement with Mr. Liddell as to the compradoreship.  As to the improbability of Mr. Liddell handing over charge of his godowns to men of whom he knew nothing, it should be remembered that these men had deposited a very substantial sum as a guarantee of their good faith. He pointed out with regard to the discrepancies between the evidence for the plaintiffs and the defendants as to the length of time that elapsed between the payment of the money and the issuing of the receipt, that Chang Ping-wha said it was in three or three and a half hours, but there was no reason for fixing that time, and if he had been making up a story he would have said he gave the money and got a receipt for it in a few minutes. After referring to other points, the learned counsel went on to say that the law was very clear upon the case. It lay upon Mr. Liddell to show that he had given a valuable consideration for the money, which it was admitted he received.  It was evident that the plaintiffs believed they were paying the money to Birt & Co. as distinct from Yin Shen-fu, as if it had been an ordinary chattel and not a negotiable instrument as these bank orders were. But even in the case of bills, under the new Bills of Exchange Act of 1882, the holder of bills, accepted, issued or negotiated with fraud, was bound to show that value had been given in good faith, as decided in the case of Tatam v. Hasler, L.J. 23 Q.B.D. page 345.
  His Lordship said he would have to take time to consider his decision, which he would deliver this (Friday) afternoon if possible.

 

Source: North China Herald, 28 February, 1890

LAW REPORTS.
H.B.M.'S SUPREME COURT.
Shanghai, 21st February.
Before Sir Richard Rennie, Chief Justice.
I LIN-YIH and CHANG PING-WHA v. BIRT & Co.
  Judgment in this case was delivered.
  His Lordship said - In this suit the plaintiffs demand the return of a sum of Tls. 8,000 which they allege that they advanced to the defendants as a loan or deposit in consideration of I Lin-yih being appointed compradore to the defendant's business, which he has not been. The defendants reply that they never contemplated any such appointment and that the sum of Tls. 8,000 to which they understood the plaintiffs to refer was in point of fact advanced to them by one Yin Shen-fu in view of his being appointed compradore, and that they did not in any way know the plaintiffs in the matter. (His Lordship here mentioned that he had not written a judgment, as he did not consider it necessary, but that he had made some notes of the evidence, which he would now read.)
  In support of the plaintiffs' case the plaintiff Chang Ping-wha went into the witness box and deposed that having been informed by Yin Shen-fu that Birt & Co. were in want of a compradore, or would appoint one who could deposit Tls. 10,000 with them for the purpose of their business, he (Chang Ping-wha) consulted with I Lin-yih, and agreed with him that he should be produced as compradore, that the two of them should advance Tls. 10,000 and share the profits, if I Lin-yih got the berth.  He then says that understanding from Yin Shen-fu that the matter was going through, he went himself to the defendant's office with Tls. 5,000 in bank orders and gave the money to Yin Shen-fu for the purposes of the deposit. He did not see the defendant, Mr. Liddell, but after waiting some time Yin Shen-fu brought him out a receipt signed by Birt & Co. and made out to Yin Shen-fu. He says he cannot read English, but was satisfied on seeing that the figures, Tls. 5,000, which he could make out were on the receipt, and that having asked for and been unable to see the master when he first went to the office, he was content and left with the receipt. Subsequently and in consequence of a communication from Yin Shen-fu, he, together with I Lin-yih and I Wei-chen, who was to be their Shroff in the business, went again to the defendants' office and stood outside with I Lin-yih and I Wei-chen. He did not see Mr. Liddell on that occasion either. I Lin-yih confirms Chang Ping-wha's evidence as to the consultation and agreement to advance Tls. 10,000 on consideration of his being compradore to defendants - this was about the 18th October - and also as to going to defendants' office on the 7th November. He says he then saw Mr. Liddell, that Yin Shen-fu acted as interpreter, and that he (I Lin-yih) asked through him when he could come in and begin work as compradore; that Mr. Liddell said, always through Yin Shen-fu, that he had not settled his accounts with the old compradore, that it would be some few days yet before this would be done, and that he (I Lin-yih) must advance some Tls. 3,000 or Tls. 4,000 more to square up with the old compradore; and he agreed to pay and did pay Tls. 3,000 on November 11th, going for that purpose himself to the defendants' office. He says, and in this he is confirmed by I Wei-chen, that he gave the money in bank orders to Mr. Liddell, who then had a receipt made out, signed it, and out it on the table and when they were leaving gave it to him. He also says he cannot speak English, but could make out the figures of Tls. 3,000 and thought all was proper. He says he went again to the defendants' office on the 16th and 18th, but was each time put off, and that he went again on the 28th when he learnt that Yin Shen-fu had disappeared, and saw Mr. Liddell, who repudiated having received any money from him, and said that he had received some from Yin Shen-fu and that Yin Shen-fu owed him over Tls. 10,000.
  The evidence of these two men is in a manner confirmed by certain witnesses who connect the bank orders which the plaintiffs allege to have paid to the defendants with certain bank orders subsequently paid into the defendants' account at the Hongkong and Shanghai Bank; and I Wei-chen, their alleged shroff, also gives confirmatory evidence of the arrangement with him and the visits he made with them to the defendants' office.
  On the side of the defendants, Mr. Liddell says he is the sole partner in the defendants' firm; that he never thought of engaging the plaintiff I Lin-yih as his compradore and had no dealings with him. He admits having seen I Lin-yih and I Wei-chen twice or three times at his office, but absolutely denies having had with them through Yin Shen-fu the conversation to which they depose. He admits having on one occasion exchanged, as I Wei-chen had also alleged, a few words in English with that person which had no reference to business. He says that the only negotiations he had at this time with any person as to his becoming compradore were with Yin Shen-fu.  He agrees that he did purpose to take Yin Shen-fu as his compradore, and required Tls. 10,000 deposit from him.  Yin Shen-fu produced to him Tls. 5,000 on the 24th October and he gave a receipt for it to him in his name but knew no one else in the matter. Again, on 11th November he received Tls. 3,000 from Yin Shen-fu himself in bank orders, and when making notes of the numbers and amounts of these, two Chinamen walked in whom he now recognizes as I Lin-yih and I Wei-chen but he did not then, nor did he think that they had anything to do with the business, although Yin Shen-fu told him they were friends of his.
  From first to last and until after the disappearance of Yin Shen-fu, whose appointment as compradore was then being made out, Mr. Liddell says he has no idea of any other applicant for the post of compradore than Yin Shen-fu, and that he took the Tls. 8,000 as coming from him and waived payment of the balance of Tls. 2,000 because they had at that time already in their hands that amount of money belonging to him. Mr. Liddell's evidence is confirmed to a certain extent by that of his brother, his compradore, Mr. Vale, and others, but Yin Shen-fu having absconded, and not since been heard of, his evidence is of course wanting. Mr. Liddell stated in addition that just before Yin Shen-fu absconded, it came to light by his own admission that many goods were missing from the godowns which he, Yin Shen-fu, had had in charge, and he says that he, at Yin Shen-fu's suggestion, applied the Tls. 3,000 to discharging advances made by the Hongkong and Shanghai Bank upon certain of the missing goods.
  There has been much evidence regarding the prevailing rumour in compradore circles as to who was to be compradore. Yin Shen-fu, it is said, was going to be compradore; and then rebutting evidence was called to show that in the piece-goods world everyone believed that the other man was to be compradore. There the evidence rests, and it is by no means so satisfactory as it might be, as of course must be in all cases where the most important witness is missing; and we are left to conjecture what his evidence would be.
  Now I find at any rate that certain facts are tolerably clear.  I find the defendants have certainly received, whether directly or indirectly, the sum of Tls. 8,000 from the plaintiffs, either on deposit or lent on interest as a guarantee or inducement to take into their employ a new compradore. They have not done so, and have devoted the money to a totally different purpose. The evidence of the plaintiffs and their witnesses satisfies me that they actually did advance the money in China bank orders, which have been clearly traced; and although I must say their story as to having been led to believe that I Lin-yih was to be the new compradore is not a very probable one, there is very little in the defendants' evidence to render it incredible. It is difficult to see why the plaintiffs should have invented their story if it be an entire fabrication, when it would seem to have been just as good for their purposes to allege that they gave the money to Birt & Co.  as security on his being appointed; and it certainly seems they did not take any great length of time to invent the story, because, as it appears from Mr. Wilkinson's letter, they went to him the very day or the day after they failed to obtain payment, and told him their story. I confess the story is to me not a wholly satisfactory one, but however it seems to be difficult to understand why they should have invented that particular story, and as I say, they seem to have brought it forward at once. Well, then, being satisfied as I am that they did actually advance the money, and so far have received no consideration for it, what I really have to consider now is whether the defendants have or have not shown that they have a right, either legal or equitable, to retain it. Now it has been urged on their behalf that they are entitled to retain the money on the ground that Yin Shen-fu may have persuaded the plaintiffs to lend him personally the money, and, I presume, on his personal credit while he was negotiating with the defendants  to be their compradore, and that as an extra inducement he promised them an interest in the emoluments of the office, and I think Mr. Wainwright added further that, having induced them, the plaintiffs, to lend him the money he re-lent it to the defendants who knew only him in the matter. With regard to this contention, I think it may be very well answered that it is a mere hypothecation and there is actually no evidence to support it, while on the other hand there is support for the plaintiffs' contention n that the advance was made to procure the appointment of a new compradore.  I am satisfied that is so; they did advance the money.  It is clear from the evidence of Mr. Liddell himself that the money was made over to him on the day they paid it, and that they did attend at the defendants' office for the payment, while it is also asserted that Yin Shen-fu did hand over to them the receipt for the money.  I do not see why if as a matter of fact they were lending the money to Yin Shen-fu personally they should have taken from Yin Shen-fu Birt & Co.'s receipt; they obtained Birt & Co.'s receipts and produced them.  One would have thought they would have been satisfied with Yin Shen-fu's receipt, but they demanded and obtained one from Mr. Liddell. Under these circumstances it does not occur to me that the defendants have an equitable right to retain this  money as against the plaintiffs.
  I put it to the defendants' counsel whether he could show me any authority which would go to establish an equitable right on the part of the defendants to retain this money; and the only authority Mr. Wainwright cited in support of such a right was the case of Watson v. Russell. With regard to that case, as Mr. Wilkinson I think very justly pointed out, it is really no longer an authority at all, because by the later Bills of Exchange Act and the construction put upon it in the case of Tatam v. Hasler, the whole authority in that case is done away with; but even looking at the principle enunciated in that case under the then existing state of the law, there was a clear distinction between it and the present case. In that case the defendants received the money and applied it to the purpose for which it was given. In the present case it is clearly admitted that the defendants did not apply the money to the purpose for which it was given. Even taking their own version of the case, the money was given them by Yin Shen-fu as a loan in consideration of their appointing him compradore. I cannot agree with Mr. Wainwright that he was appointed compradore; if he were, it was an appointment of the most nominal description, and he was never put into office. I think it is clear that the consideration there fails, and supposing it is shown that the plaintiffs really advanced the money for that purpose, it seems to me, that consideration having failed, they have just as good a right to recover the money as if nothing had happened, because the defendants had omitted to appoint a compradore. The evidence as it stands may be unsatisfactory, but the evidence of the plaintiffs with regard to the object which they had in depositing the money and the way in which they paid it clearly outweighs the negative evidence given on behalf of the defendants. I do not wish in the least degree to discredit Mr. Liddell's evidence; he gave it well and very fairly, and I did not even understand Mr. Wilkinson, either in his cross examination or statement, attempted to cast any discredit on Mr. Liddell's evidence or to suggest that Mr. Liddell was at all aware of the source from which the money came, or that it was in contemplation that I Lin-yih should be appointed compradore. What Mr. Wilkinson contended, and rightly I think, was that the plaintiffs had been misled, and that they had taken such reasonable precautions as were incumbent upon them by going to the office with the money themselves, and seeing as far as they could the application of it and getting receipts for it, and establishing their case against Mt. Liddell without any knowledge on his part at the time. Mr. Wainwright argued that the plaintiffs should not have given much credit to Yin Shen-fu, as he was only a godown-keeper and not a compradore and was not authorized to engage a compradore, etc. But it is quite clear from the evidence given on behalf of the defendants themselves that at the time Yin Shen-fu was very much trusted by the defendants, that they were on the eve of appointing him compradore, and that Mr. Vale, who was going to separate from the business, contemplated appointing him compradore also.  It is clear he was in a position of much trust and responsibility, and by common rumour in compradoric circles, he was a person whom the defendants very much trusted.  Upon the whole, looking at this as a case in which one or two comparatively innocent parties suffer by the act of a third, I think the loss should fall on the defendants, and not the plaintiffs. Other circumstances may be brought out hereafter, and it may be there are matters in the background of which we know nothing, but of that I have nothing in my notes and I am bound to proceed on the evidence as it stands.  I am clearly of opinion there must be judgment for the plaintiffs.
 Mr. Wainwright, on the question of costs, submitted the improbability of the plaintiffs' story and the fact that both parties had been deceived, as grounds for costs not falling ion the defendants.
  His Lordship said that although he had arrived at his decision without hesitation, he was not at all satisfied with the way in which the plaintiffs gave their evidence, or whether they had told a strictly true story.  He wished to impress upon Chinese plaintiffs who came to that Court that they were much more likely to obtain speedy justice by telling a true story.
  After some further discussion it was agreed between counsel to arrange costs. His Lordship, after giving judgment said he thought it was a case in which some allowance should be made; but as the costs would be considerable, he thought the arrangement was a reasonable one.

Published by Centre for Comparative Law, History and Governance at Macquarie Law School