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Colonial Cases

Pootung Dock Co. v. Simpson, 1889

[breach of covenant]

Pootung Dock Co. v. Simpson

Supreme Court for China and Japan
Mowat ACJ, 21 January 1889
Source: North China Herald, 25 January 1889

LAW REPORTS.
H.B.M.'s SUPREME COURT.
Shanghai, 21st January 1889
Before R. A. Mowat, Esq., Acting Chief Justice.
THE POOTUNG DOCK CO. v. JAMES SIMPSON.
  Mr. H. S. Wilkinson and Mr. C. Dowdall appeared for the plaintiffs.
  Mr. R. E. Wainewright, with whom was Mr. A. Robinson, for the defendant.
  The hearing of this suit, which had been several times postponed, commenced this morning.  The plaintiffs are the Pootung Dock Company and Robert Francis, Edward Jenner Hogg and Edward Ward, and the defendant is James Simpson, who at the time the suit commenced was a partner in the firm of S. C. Farnham & Co., generally known as the "Old Dock."  The amount claimed is for breach of covenant in connection with the alleged neglect of the plaintiffs' premises, the Pootung Dock, by the defendant and his co-lessees.
  Mr. Wilkinson in opening the case said that it had been instituted on the 17th February last.
  His Lordship - Is it confined to the case against the defendant Simpson?
  Mr. Wilkinson - Yes.
  Mr. Wainewright asked if his learned friend meant to say that the other suit was to stand untouched by the present case.
  Mr. Wilkinson replied in the affirmative.
  Mr. Wainewright said that the questions in the other suit ought to be determined by this one.
  Mr. Wilkinson - There has been no application made to do this, and the other case should stand on its own legs.
  Mr. Wainewright - I now apply to have the two cases consolidated.
  Mr. Wilkinson - Well I cannot consent to that proposition at the moment.  I have no brief in the other case.
  Mr. Wainewright - The learned legal adviser to the Dock Co. has received intimation from me to that effect with the hope that he may have to pay the costs in the other suit.
  His Lordship said he supposed that some points would be raised in this case which would enter into the discussion of the second suit.
  Mr. Wilkinson said he could not say at the moment, not having received a brief in the other case.
  His Lordship -If we ever come to the second case I take it that the points determined in this case will stand.
  Mr. Wilkinson - I am not prepared to admit that, your Lordship.
  Mr. Wainewright then proceeded to read the petition and answer which were as follows:-
- The Plaintiffs are the Pootung Dock Company (herein after called the Company) are an unincorporated Company having their office and carrying on business at Shanghai, and the Plaintiffs Robert Francis, Edward Jenner Hogg and Edward Ward are British subjects residing at Shanghai and the Directors of the company and the Plaintiff Robert Francis was sole Director of the Company at the date of the Deed hereinafter mentioned.
- The Plaintiffs [named] sue in the character of Directors of the company and the Plaintiff Robert Francis sues in the character of a former and present Director of the company and Covenantee named in the Deed herein after mentioned.
- The Defendant is a British subject residing at Shanghai and at the time of the making of the deed hereinafter referred to was carrying on the business of Shipwright in partnership with Frederick William Galles a German subject under the firm or style of S. C. Farnham & Co.
- By a deed dated the 30th day of June 1884 and made between the Plaintiff Robert Francis acting for and on behalf of himself and the Shareholders of the Company of the one part and the defendant and the said Frederick William Galles of the other part for the considerations therein mentioned the said Robert Francis leased to the Defendant and the said Frederick William Galles (hereinafter called the lessees) the piece of land situate on the Pootung side of the River Whangpoo nearly opposite the Native City of Shanghai and registered in the British Consulate at Shanghai as lot number 483 and the Dock constructed thereon and also all the buildings pumps boilers and shears then erected or which might during the term thereby granted be erected thereon and all the appurtenances thereto belonging from the 1st day of July 1884 for the term of ten years.
- The said Deed contains a joint and several covenant on the part of the lessees that they the Lessees should within two years from the  1st day of July 1884 expend a sum of not less than Tls. 20,000 bin renewing the pumps boilers and shears and in rebuilding and repairing the buildings then on the said property and should at all times during the  said term well and sufficiently keep and repair the said Dock pumps boilers shears and buildings with their appurtenances which then were or should at any time thereafter be erected as therein before stipulated in ordinary good repair (the bursting of the Dock from any unforeseen cause only excepted.)
- The Lessees did not within two years from the said 1st day of July 184 expend the sum of Tl. 20,000 in renewing the said pumps boilers and shears and in rebuilding and repairing the said buildings and the said Dock and its appurtenances at various times during the said term were not and they are not now in ordinary good repair although there has been no bursting of the  said Dock from any unforeseen cause and the said term has not yet expired and it would require the expenditure of a large sum of money to reinstate the said Dock and its appurtenances in ordinary good repair.
- The plaintiffs claim Tls. 50,000 for damages for the said breaches of covenant on the part of the defendant.
- The said Dock is now being neglected to such an extent that it is in danger of bursting or sustaining other serious damage.  The plaintiffs allege that the neglect thereof amounts to willful waste.
The plaintiffs therefore pray:-
-That the defendant may be decreed to pay to the plaintiffs the sum of Tls. 50,000 and costs.
- That the defendant may be restrained by order or injunction of this Court from leaving the said Dock out of repair to such an extent as to be in danger of bursting or sustaining serious damage.
- That the plaintiff may have such further or other relief as the nature of the case may require.
  The defendant to the petition is James Simpson of Shanghai shipwright.
  The answer of James Simpson the above named defendant to the petition of the above named plaintiffs.
  In answer to the said petition the said James Simpson says as follows:-
- The defendant admits the truth of the allegations contained in the 1st, 3rd, 4th and 5th paragraphs of the petition but says that the deed referred to in the said 4th and 5th paragraphs contained in addition to the provision in the said paragraphs set forth certain further provisions (amongst others) namely a provision or agreement that in case the Dock mentioned in the petition should during the term granted by the said deed be rendered useless for the docking of vessels by earthquake bursting in or other unavoidable cause  the rent reserved by the said deed should be remitted or superseded from the time of such accident until the remises so injured should be repaired by the lessor mentioned in the said deed their respective executors administrators and assigns and a provision or agreement that if at any time during the  said term repairs occasioned by the giving way of the entrance side or flooring of the said dock should be repaired costing more  than the lessor his successors or assigns should be authorized by the shareholders for the time being of the company mentioned in the said deed to expend thereon then and in such case the said lessor his successors or assigns should be at liberty to terminate the lease created by the said deed forthwith.
- With reference to the 6th paragraph of the petition the defendant says that he and his co-lessee mentioned in the petition did within two years from the  1st day of July 1884 expend more than the sum of Tls. 20,000 in renewing the pumps,  boilers and shears and in rebuilding and repairing the buildings respectively mentioned or referred to in the petition and he denies that the said Dock or its appurtenances have at any time during the said term been or that the same now are not in ordinary good repair and he says, that the defects and want of repair now existing in and about the  said Dock are caused by the bursting of the sad Dock from an unforeseen cause or otherwise that the same are the result of an unavoidable cause  or of unavoidable causes and that according to the terms of the said Deed the defendant is not bound to make good such defects and want of repair and that the said Dock having by reason of such defect and  want of repair become useless for the docking if vessels he is entitled to a remission or suspension of the rent reserved by the said Deed until such defects, and want of repair are made good by the plaintiffs.
- With reference to the 8th paragraph of the petition the defendant denies that the said Dock is now being neglected by anyone save the plaintiffs.
- And further in answer to the Petition the defendant says that at the time when the said Deed was executed it was the intention of all the parties thereto that in the event the said Dock becoming useless for the docking of vessels from any cause other than neglect on the part of the defendant and his co-lessee to do such repairs as are ordinarily done by tenants it should not be incumbent upon the defendant and his co-lessee to make good such defects, and he claims that if the said Deed is not framed so as to express such intention he is entitled to have the said Deed rectified in such manner as will suffice to express such intention and he prays that the said Deed may be rectified accordingly.
R. E. WAINEWRIGHT, Counsel for defendant.
  His Lordship observed that he did not understand paragraph 4 of the answer very clearly.
  Mr. Wainewright - We say that the present state of the dock is not the result of want of ordinary repairs.  We affirm that it is in good ordinary repair and if it is not I say it is caused by something not under our control and not by negligence or act of my clients.  I do not press for a rectification of the deed.
  Mr. Wilkinson applied that paragraph 4 be struck out of it was not to form part of his friend's case.
  Mr. Wainewright said what he had in intimated was that he would not press his claim for a rectification of the deed.  It was well understood between himself and Mr. Dowdall.
  In reply to his Lordship, Mr. Wainewright intimated that he was willing to abandon the part of his claim under discussion.
  Mr. Wilkinson - Of course Mr. Wainewright abandons the claim not through any friendliness to us, but because he cannot sustain it.
  Mr. Wainewright - That is an ex parte statement which I am not prepared to admit.
  Mr. Wilkinson - This is a claim in which the burden of proof rests with my learned friend.  It is for him to bring evidence to sustain it and for us to rebut it.
  His Lordship - Is that with reference to the whole case or to the 4th paragraph?
  Mr. Wilkinson - With reference to the 4th paragraph.  Your Lordship will observe that there is also a claim for remission of rent by the defendant.  I will take the opportunity now to say that in this petition there is no claim for rent, and that therefore this is no answer to the petition, and as my friend has not filed a cross petition I submit that the claim for rent does not arise in the petition at all, and ought not to be gone into.
  His Lordship - Your contention is that I cannot make any order in that matter?
  Mr. Wainewright - We do not ask for any order.
  Mr. Wilkinson - My learned friend has put in an alternative that if the dock is not in ordinary good repair it is from some cause over which they had no control.  It could not be in ordinary good repair to require all the repairs that have been and that are being done to it.  Now the real point to go to the Court is whether the Dock at the time this suit was instituted, or at a later date, to which I will refer, was in ordinary good repair.  The defendant covenanted to keep the dock in ordinary good repair, the bursting of the dock from any unforeseen cause or natural convulsion alone excepted.
  His Lordship said it would be as well to read the lease.
  Mr. Wilkinson having read the lease said his contention was that Messrs. Farnham & Co. had not spent the sum of taels 20,000 on repairs to the dock, within the time specified in the lease.  This however was not the most important part of the claim though it was a considerable portion.  A certain account had been rendered to his clients by Messrs. Farnham & Co. to show that the sum of taels 20,111 had been spent on the   dock.
  Mr. Wainewright - No such account has been rendered by us.
  Mr. Robinson - The amount is Tls. 25,700.
  Mr. Wilkinson - I hold in my hand a statement of accounts which seems to be for Tls. 25,756.22, and we are asked to admit its correctness.  We say we will admit it, if it is admitted to be the whole amount spent on the Dock during the whole time.,  It commences in 1883 and contains items for 1888.
  His Lordship - It is contained in the lease that they shall spend Tls. 20,000 within two years?
  Mr. Wilkinson - Yes my Lord, and they furnish us with this statement which we will admit if they will admit that the amount has been spent during the whole term.
  Mr. Wainewright - I have not asked you to admit that.  I simply asked you to admit that the statement was a correct transcript of what appears in our books, to save us bringing the books into Court.  That is what we claim to have spent in pursuance of this covenant, but I do not say that we have not spent a great deal more.  We have spent a considerable sum of money in repairs to the caisson though the lease does not cover the caisson.  We have been constantly repairing the dock.
  His Lordship - Have you spent Tls. 20,000 within the two years?
  Mr. Wainewright - From the 1st July 1884? No, we have not, but we have spent it sooner or later.
  Mr. Wilkinson - In connection with that we say that evidence will be given to show certain items should come off, as not coning under covenant of repairs at all, and reducing the amount to Tls. 20,111.
  His Lordship - That would be sufficient in pursuance of the covenant if within two years.
  Mr. Wilkinson - Yes. But there are two or three items which even upon their own showing ought to be eliminated from the account.  One an item of Tls. 2,300 and the other Tls. 725.  These two items were before the lease came into operation and there is also a small sum of Tls. 100.  There is a further sum of Tls. 5,355, for insurance money received by them for premises burnt down subsequent to the lease, and rebuilt by them. There is a covenant in the lease by which they are bound to expend this.
  Hos Lordship - It is your contention then that they have no right to take credit for the Tls. 5,355?
  Mr. Wilkinson - Ys, that makes considerably over Tls, 8,000 altogether showing that they spent Tls. 11,000 odd instead of Tls. 20,000,
  Mr. Wainewright asked how much did Mr. Wilkinson admit they have spent.
  Mr. Wilkinson - Tls. 11, 631.  There are two covenants in the lease.  One I have already read, and the other is in reference to insurance.  We did not put that into the petition because we have no complaint about it.  We deny that they have carried out the covenant as to repairs; and we say that there has been no bursting of the dock through any unforeseen cause.  This is the covenant we go upon, and we say it has nothing to do with any other covenant in the lease. And we say that there is no connection between the two covenants in the lease, but we say that the 6th paragraph strengthens the paragraph with regard to the covenant for repairs, for it shows what sort of bursting-in is meant. Namely that caused by earthquake or some such unforeseen cause.  Here we say there was no bursting in from such a cause at all.  
  There was a clause about the termination of the lease.  The object of that clause was very clear.  It was to determine the position of the lessor if by some convulsion of nature, such as the Hangchow bore coming veer the barrier, the dock should be rendered useless for the purpose for which it was let, they might be able to deal with the property; as no rent would then be obtainable under the lease.  Therefore to put him in a proper position it was so stipulated to enable them to get rid of their property.
  His Lordship - It was for the protection of the lessor?
  Mr. Wilkinson - Yes, and I may refer your Lordship to the case of the Manchester Bonded Warehouse Co. v. Carr (5 C.P. Div. page 507) on the point, though I do not intend to enter upon an argument on the case.
  The learned counsel read a summary of the case and the comment of Lord Coleridge thereon.
  Continuing, the learned counsel said - The judgment in that case bears upon the question of the inevitable and unforeseen, and I submit that it bears upon the construction of the present documents.  In that case there was no implied warranty; here there is no implied warranty.  In that case the tenant was bound to keep the place in repair without notice, and in this case I will show you that we received no notice to put the place in repair, until we received notice about the state of the dock.
  His Lordship - Do you not think it will be better to give your evidence first?
  Mr. Wainewright - Yes, your Lordship, but I merely thought it would be right to state some of the cases on which I relied, for the convenience of my leaned friend.
  Mr. Wilkinson in reference to the second paragraph of the answer said that the plea of bursting through an unforeseen cause was a right and proper plea, but there was also an endeavor to raise some other issue which he held did not arise at all upon the deed.  If there was no exception in the lease at all with regard to a covenant to put in repair, then it was clear that no matter what happened the lessee would be liable to put the Dock in repair and be liable for damages whether caused by earthquake, tempest or any other overwhelming convulsion of nature.  When there is an express covenant to put in repair, the lessee is bound to put in repair notwithstanding the cause of want of repair.  Therefore he said that any plea other than a plea of exception in the lease of damage from an "unforeseen cause" was a bad plea.  He did not need then to go into the plea of remission of rent.  The whole point they had to decide was whether the Dock was in bad repair from an unforeseen cause, and then they would go to the question of damages.  His clients claimed Tls. 4,500 for a new coffer dam.
  His Lordship - Has a new coffer dam been built?
  Mr. Wilkinson - Yes. The works are estimated to cost Tls. 32,275, minus an allowance for extra strength of the work.  That was to say Counsel's clients were putting in stronger material, which meant an extra cost of Tls. 3,000, leaving the amount of Tls. 28, 275.
  His Lordship - You are repairing?
  Mr. Wilkinson - We have entered into a contract with Messrs. Farnham & Co to repair, but without in any way prejudicing the case.  In addition to the amount stated there are repairs inside, Tls. 3,000, engineer's fees, Tls. 2,419.
  His Lordship - Those are the amounts which you seek to recover?
  Mr. Wilkinson - Yes, for the total of these items.
  Mr. Wainewright - What about the non-expenditure of Tls. 8, 369?
  Mr. Wilkinson - We claim for that also.  I make the total Tls. 47,563.
  His Lordship - In the second paragraph of your prayer you ask for an injunction?
  Mr. Wilkinson - Yes, that is to say we claim we have the right to apply for an injunction; but things have happened since that render an injunction unnecessary.  I wish to state very briefly what the history of the Dock is.
  I understand that the Dock was built about the year 1862.  It is what is called a mud dock.  I understand that it was built by Mr. Muirhead.  Mr. Simpson, the defendant, it appears, was in the employment of Mr. Muirhead, but at what time he entered it we do not know.  We do not say her was there at any particular time, or that he was in the employment of Mr. Muirhead when the dock was built.  In 1872 the dock was sold by Messrs. Farnham to us, Messrs. Farnham having acquired it in the meantime.  On the 6th December, 1872, they transferred the dock to us.  The defendant Simpson was in Messrs. Farnham & Co.'s at the time, but he is not mentioned in the deed.  On the same date, 6th December, we under an arrangement, leased the dock to Messrs. Farnham & Co., and this arrangement has been continued since.  Mr. Simpson's name did not appear on the lease, and he is not bound by that deed, but before the lease made by us to Farnham & Co. had run out a new lease was made on the 17th May 1875, which was to run from the 1st October 1874 for 12 years.  In that lease of 1875 Mr. Simpson is mentioned as a partner in Messrs. Farnham & Co. and he had been the lessee ever since.  
  The next lease is the lease under which we are now suing. That was terminated under very peculiar circumstances.  The first of the two leases bound the lessees to keep the place in perfect repair.  A new lease was made on the 30th June 1884.  That is the present lease.  This lease was in exchange for a prior lease.  I understand, to get the new lease, Mr. Simpson applied to the sole director (Mr. Francis), the present plaintiff, to call a meeting of the Pootung Dock Company to consider whether the new lease should be granted.  But the director did not think such a step necessary, and suggested that if the shareholders thought it necessary to call a meeting to grant a new lease they could take steps under the Deed of Settlement to call a meeting. They wrote back to say that they did not think they would get enough shareholders for that, and also that they wanted to pull down certain buildings on the premises and put them up new, leave for which was granted. This was in the middle of 1883.
  In January 1884 they had obtained the signatures of a number of the shareholders to a requisition calling upon the director to convene a meeting.  This requisition contained the signatures of several shareholders who had obtained their shares not later than the 10th of the preceding month.  The meeting was held and by manipulating the shares, the defendant was able to carry out his wishes, and in a few months, the shareholders transferred their shares again to the partners in Messrs. Farnham & Co., and also to defendant's wife.  Therefore the lease of 1884 was a lease imposed upon us, dictated by Mr. Simpson, so that he is not entitled to any equitable claim under it.
  At the time when that lease was made it was customary for one of the partners in Messrs. Farnham & Co. to be at the annual meeting of the shareholders in the plaintiff co. and to make a statement as to the condition of the dock, and this statement was so relied upon, that the shareholders did not keep any special watch on the Dock but left it to Messrs. Farnham & Co.
  In 1888 a meeting of the shareholders was held, and Messrs. Fanham did not attend.  Some movement in the shares caused the director to enquire what the condition of the dock was, and a letter was written to Messrs. Farnham & Co, on the subject.  Then for the first time he learned that the dock was in bad repair.  A great deal of correspondence passed as to who ought to make the repairs.  We say that from that time, we have not lost a moment, and have done all we could to repair the property.
  His Lordship - What was the date of the plaintiff's application for information as to the state of the dock?
  Mr. Robinson - 23rd January, 1888.
  Mr. Wilkinson - It was in reply to that they informed us it was not in good order.  I have here to refer to the cause of the dock being in bad order, and that has a very important bearing on the case.  Now if there had been any burst owing to any convulsion of nature we should not have had to write to then for information; they would have informed us of it at once.  Showing that their knowledge that the dock was in bad repair they gradually got rid of their shares from time to time.  We say that the want of repair of the dock has been caused by its being allowed to wear away without the repairs being done, which the defendant was bound to execute.
  A great deal of correspondences was then gone through by the learned Counsel and put in evidence.
  Mr. Wainewright admitted that his client was responsible for the repairs to the inside of the Dock and the altars, but they did not admit that any repair were necessary.
  After some further remarks by the learned Counsel on both sides as to the correspondence between the parties, the first plaintiff named in the petition was called.
  Mr. R. Francis, Sworn and examined by Mr. Wilkinson, said - I am a British subject and first came to Shanghai in 1852.  I am plaintiff in this suit.  I first became a shareholders in this Company in 1881; and have held shares ever since.  I hold 160 shares in it now.  At the last meeting of the company in September I held 258 shares in addition to my own - 250 proxies and 8 as trustee.
  Mr. Wilkinson - The date was 10th September.
  Witness - There are 950 shares in all.  I represented nearly half the Company. IWas sole director in January, 1883, and remained sole director till the beginning of 1888.  At a meeting held on 10th Feb., that year two other directors were elected, Mr. E. J. Hogg and Mr. E. Ward.  They were appointed at my suggestion.  That was after these difficulties arose.  I then became Chairman of the Board and remained so ever since.
  I remember the Pootung Dock pretty well from the beginning.  I believe it was built by Mr. Muirhead.  It was generally called, I think, "Muirhead's Dock." I think it was built about 183.  I produce a deed of conveyance dated December 1872 of the Dick from S. C. Farnham and C. P. Blethen to the Directors of the Pootung Dock Co.  I also produce a lease, same date, from the Pootung Dock Co., to S. C. Farnham & Co.  I believe Messrs. Farnham & Co. have ever since been lessees of the Dock.  I produce a copy of a Report from Mr. H. Lester to Messrs. Farnham & Co., dated 30th January 1873.  I don't remember the exact year Messrs. Farnham & Co. constructed a breakwater to protect the premises.  I know they did.  I produce the minute book of the Company.  I recognise the minutes of 23rd January 1877.
   Witness read an extract from the minutes in which Mr. Blethen explained the work done by Messrs. Farnham & Co. to the Dock in connection with the construction of the breakwater and asked the shareholders to contribute something towards the expense, the shareholders approving of his proposition and giving the sum of Tls. 600 towards the cost of the breakwater. Witness produced an account from Messrs. Farnham & Co. to the Pootung Dock Co. showing the cost of the breakwater which was Tls. 1,701.17.
  Mr. Wilkinson - At the end of that deed on the 17th May is a surrender, dated 30th June, 1884.  At the same date as that surrender a new lease was granted; it is under that lease we are now suing.  I need not now repeat the clauses in it.  It is admitted that Mr. Simpson signed these leases which he purported to sign and I need not prove them.
  Mr. Wainewrighr assented.
  Examination of Witness continued - I first took shares in the Dock in 1881.  I was acquainted with the dock in a cursory way before that.  I took more notice of the affairs of the dock after I took shares in it, and after I became sole director.  I am also the sole director of the Shanghai Dock Co.  They have only one dock at present, commonly known as the "Old Dock." I have no objection to produce the lease (Lease produced).  The dock is leased to the defendants Messrs. Farnham & Co.
  Mr. Wilkinson - The lease produced contains the covenant to repair which appears in the last lease between the parties in the present suit, and it also contained the other two covenants mentioned in the present lease between the parties.
  Witness identified a note in his handwriting on a letter from Messrs. Farnham & Co., giiving them the permission to pull down certain old buildings and erect new ones instead.  Continuing, he said - I am not sure that Messrs. Farnham & Co. or the partners in the firm were shareholders in the Dock Co. at the time.  I don't think they were.  Mr. Galles was at the meeting of 16th January, but as the representative of Mr. Stanley.  The register is here, but it would take a long time to find out if Mr. Galles was not a shareholder.
  A letter from Messrs. Farnham to the Dock Company dated 16th January 1884 was read by Mr. Wilkinson. Also a requisition dated 18th January, 1884, from the defendant James Simpson and eleven other shareholders of the Pootung Dock Company to the Directors to call a meeting to consider Messrs. Farnham's proposal.
  Examination of witness resumed - I did not take any steps to call a meeting.  I did not consider it in the interests of the Company to call a meeting.  I communicated with Mr. Ringer one of the signatories to the requisition.  I told Mr. Ringer the circumstances affecting the Company at the time.
  Mr. Robinson objected.
  Witness resuming - Mr. Ringer's shares were transferred to Mr. Gebhardt a very short time afterwards.  In consequence of my refusal to call a meeting, a meeting was convened for the 6th March by certain of the shareholders by a circular dated February 1884, three of the shareholders being Messrs. James Simpson, G. Galles and W. F. Galles, to consider Messrs. Farnham's proposition.  Mr. Ringer's name did not appear on this notice, most of the others were the same as appeared on the former requisition.  The meeting was held.
  (The minutes of the meeting were identified by witness.)
  I had only 26 votes at the date of that meeting.  A letter by me dated 29th Feb., 1884, was read at the meeting.
Shanghai, 22nd January, 1889.
  The hearing of this case was continued this morning.
  Mr. Wilkinson read the address of Mr. Simpson to the meeting of shareholders on 6th March, 1884, as follows:
  On the 16th January my firm (Farnham & Co.) addressed a letter to your director and Chairman asking a special meeting to be called in order to discuss the proposition made by us.  Mr. Francis, your director, failed to call this meeting, so under sec. 41 of the Deed of Settlement, this meeting is called by some of the shareholders.
  Now before putting any motion before this meeting I should like to call your attention to certain facts.  You would probably like to know in what condition your property was when first leased to Farnham & Co. in Oct. 1872, as I suppose few, if any, of you know anything about it.  I have here a survey report made out by Mr. H. Lester in January 1873 which, with your permission, I will read.
  You will see from this report that at that time, nearly eleven and a-half years ago, a certain portion of your property was in a very bad state of repairs, and according to the lease has to be handed back to you in the same state, at the expiration of the present lease, about two and a-half years more.  With reference to the pumping engine and boiler, I may state that it takes from 12 to 13 hours to pump the dock dry - a thing quire unheard of in the present day.  The style of the pump is obsolete, the pumps being the old-fashioned coalpit style.  We are now pumping out the old dock in 3 to 4 hours and the lower dock in about the same time.
  In regard to Mr. Francis' circular of 28th February, I am of the opinion that the same does not altogether state the facts.  Mr. Francis says that the Dock property cost the original owners over Tls. 300,000. It ought not to have cost one third of this amount if it had been built properly at first.  The sides burst in twice and the dock entrance once owing to the defective material and workmanship.  It is true we were asked once if we would cancel the lease and the sum of Tls. 20,000 for doing so was suggested to us, but no amount was ever offered and even if it had at that time it was not possible for us to do so, as we were under contract with certain ship owners in Shanghai to dock all their vessels whenever required and for this reason we could not dispense with the dock. Some of those contracts have expired now. Messrs. Boyd & Co.'s dock was at that time under repair and we had not bought the Lower Dock then.
   Mr. Francis further states that taking into consideration the great want in experienced of Dock accommodation, this want has not been experienced in Shanghai for the last 15 years.  You may look round yourself and you will find that nearly all Docks have been empty a good deal lately.  We used the Pootung Dock for three months for lengthening the steamer Haeting, and the Lower Dock has been used since July, 1883, for the building of a new steamer.  Both these works could have been done out of dry dock and had we any use for these docks.  Messrs. Boyd & Co.'s Dock has also been empty a good deal. As far as Dock property being worth more than formerly as Mr. Francis states, this is simply an error.
  When we leased the Pootung Dock for Tls. 10,000 a year there was little or no opposition.  Messrs. Boyd & Co. have built a far superior Dock tan the Pootung Dock, several feet deeper and wider and nearly twice as long.  Dry Docks have also been built at Nagasaki, Taku, Foochow and Amoy.  It is true more steamers are running out of Shanghai now than 11 years ago but considerably fewer sailing vessels, and whereas we used to get35 cents per ton for dockage we now receive 25 cents per ton and sometimes even less.  It is perfectly certain that the Dock rates charged for vessels docking do not pay for rent and maintenance of the docks either here or elsewhere, and it is quite certain the dock property in Shanghai stands at a lower rate today than it did when the present lease was granted.  Few of the larger steamers between Europe and Shanghai can be docked at the Pootung Dock on account of length and draught.
  The dock itself is in good order, if not better, than when first leased to us, having always been kept in repair at a considerable expense.  We have paid to the Company Tls. 117,000 for rent, and the only amount we every sked you for was to contribute to the cost of a breakwater which we built in 1876 at a cost of over Tls. 1,700, and of which the Company refunded us Tls. 600.  This breakwater was built by us for the protection of the Dock property as the tides washed the land away.
  I believe it is understood by many of you that my firm is asking for the new lease to include all repairs to be done at the expense of your Company.  This is a mistake. We are asking for a similar lease as we have from the Shanghai Dock Co. for the Old Dock. This lease says:-
  "And also that they the said lessees their respective executors and administrators shall and will at all times during the said term well and sufficient repair and keep the said Dock and buildings with their appurtenances in ordinary good repair (the bursting of the dock "from any unforeseen cause" only excepted) and we undertake to deliver all buildings, dock and machinery in as good order as we receive them, usual and reasonable wear and tear exceted.
  What we now propose, viz., to put in new pumps and boilers, rebuild the old and from beginning badly constructed houses and godowns, will improve your property, and if you accept our proposition we will be paying then even at the rate of Tls. 11,000 per year as we have to divide the Tls. 20,000 to be expended now over the 10 years, and even if a small reserve is formed to meet such an emergency as the bursting in of the Dock you will still receive a good return on the original capital, and even with usual wear and tear the machinery and buildings will be in good condition at the expiration of the 10 to 13 years now asked for.
  You may ask "Why not wait till the present lease expires?" As I have said before the boiler and pumps require to be renewed and the houses to be rebuilt now, and as I am going homer to England at the end of this month I can look up the best pumping gear in the market and have it out here and erected without delay.
  I shall now conclude leaving the matter entirely in your hands, trusting you will see your way clear to grant us what we ask, but before putting our proposition to the vote I shall be glad to answer any further questions you may like to ask.
  Witness continuing his evidence said - That agrees with my recollection of what Mr. Simpson said at the meeting.  There was some discussion on that point of the meeting and Mr. Hart said he knew more about it than anyone else, and that the cost of the Dock was Tls. 238,000.  Interest was very high at the time which might bring the cost up to Tls. 300,000.  There was some conversation after Mr. Hart's statement, between Mr. Simpson and the shareholders, which I, being at the other end of the table, did not hear.  Neither of the Messrs. Galles said anything in contradiction of what Mr. Hogg had said about the manipulation of the shares at the meeting by Mr. Simpson; what Mr. Hogg said was not disputed.  I have satisfied myself of the correctness of Mr. Hogg's assertion by ascertaining that 225 shares were transferred to the name of Mr. Galles on 14th or 15th March after the meeting, and the same number were transferred to the name of Mrs. Simpson within three months after the meeting - on the 10th June 1884 - making  503 shares with 29 shares which were in Mr. F. W. Galles' name at the meeting.  Mr. F. W. Galles acquitted those 25 shares on the December 13th, 1883.  In March 225 shares were transferred to G. Galles by eight gentlemen who had acquired them between 10th December and the date of the meeting.
  The names of the gentlemen and the number of shares held by them were:- Messrs. Taumeyer 30, D. Glass 30, W. H. Anderson 30, F. Gebhardt 30, C Beurmann acquired 30 and transferred 15 of these to F.W. Galles. These shares had been acquired by the gentlemen named within 3 months before the meeting.  The earliest of them were acquired on the 10th December, 1883. Mr. Ringer did not acquire his earlier than the 10th December.  Mrs. Simpson is the wife of defendant.  [Part omitted.]
  The names in the requisitions calling the two meetings include these gentlemen just mentioned.  I produce the deed of settlement of the Pootung Dock Company.  Clause 51 says "Every shareholder shall vote for every share up to 30 shares, and an additional vote for every ten shares beyond 30 shares."  So that thirty shares gave the best distribution of shares for the purpose of voting.
  Mr. Wilkinson read the rule of the company for calling a meeting by the shareholders, who must not number less than one-fifth of the total number.  They had not only enough to call the meeting but also to carry whatever proposition they wished.
  Witness resuming - Two hundred shares were at that time more than one-fifth the total number and always have been.  The total number of votes at he meeting was 859.  Mr. Simpson's party had 475 votes.  The motion of Mr. Simpson was carried unanimously.  I had suggested in my letter that the Company should get Tls. 15,000 per annum, and Mr. Simpson's motion which was carried gave only Tls. 10,500 a year.  I accepted this simply because there was no use in resisting manifest force, and while I would have resisted his offer of Tls. 9,000 a year, I thought it was better to make the best of the Tls. 10,500 the opposition being too strong for us.  
  I cannot explain what was in Mr. Simpson's mind when he have us the Tls. 1,500 additional, but my surmise was that it had something to do with the remark made by one of the shareholders, namely that the shares had been distributed in a disagreeable way and which remark called forth no contradiction from the other side.
  Mr. Wainewright - The extra Tls. 1,500 was in fact conscience money (laughter),
  Witness - There was some conversation between Mr. Simpson and the shareholders at the other end of the table which I did not hear.  Mr. Simpson may have thought that the gentlemen who had taken those shares might not have liked the way they were used to cram down an unpalatable proposition at the meeting.  The meeting was on the 6th March 1884, and the date of the lease 30th June 1884. I don't remember having any discussion with Mr. Simpson with regard to the lease.  I think no draft of the lease was shown me before I signed the agreement.  I had nothing to do with the wording of the lease which was arranged by Messrs. Myburgh and Dowdall,
  M. Wainewright - They simply copied he covenants on the Old Dock lease.
  Witness -The Company had no regular surveyor, and no periodical survey of the dock. I received statements from the lessees at various meetings, with regard to the dock.  They told the shareholders that the dock was in good order.  The last occasion of their so doing was in 1886.
  Mr. Wilkinson - Reading from the minute book. - I see at the meeting of the 13th Jan., 1887, you said the dock was in good order.  Upon whose authority did you make that statement?
  I suppose it was made upon my own examination of the dock.
  Mr. Wilkinson, still reading, - At the meeting of the 14th January, 1886, Mr. Simpson said the Dock was then in very good order and he did not think any repairs would be necessary for some time to come.
  Witness - Yes.
  Mr. Wainewright - Will you read what the Chairman said in full.  He also said that the works at the dock have been finished in a most satisfactory manner.
  Witness - That refers to the pumping machinery, & which had been inspected.  I did not think it necessary to have a surveyor.
  Mr. Wilkinson - Why?
  Because Farnhams were people eminent in their business and I thought they would take care of the dock for their own sake.  And at any rate under the lease we thought they would keep it in perfect order.
  How many shares are now held by Mrs. Simpson? None.
  And by Mr. Galles? Not any.
  Can you state at what time they got rid of them?
  Mr. Galles parted with his shares in 1885-86.  Mrs. Simpson parted with nearly all hers in 1885-86, the last six in September 1887.
  Examination continued - No shares, except 5, are now held by the partners on Farnham & Co., these are not in the name of the firm.  I believe there are no shares held by the individual partners.  None of the partners attended the meeting of 13th Jan., 1888.  I think they attended by proxy.
  Did they make any communication to you on the subject of the dock?
  No they did not.
  Had your attention up to this time been called by the defendant to the state of the repair of the dock, - that it was not in very good repair?
  No, not to the dock itself.
  Was your attention called to it in any way before the meeting? No, but if I was asked was it in very good order I should have said the bunding was not in very good order.
  His Lordship - When did you observe the bunding?
  I have been frequently in t habit of looking at the Dock and building, and observed that it was not in very good order.  I cannot really say when I noticed it first, I did not think it was in very bad repair.  I did not think it was so bad as to call the attention of the defendant or lessees to it.
  Examination of witness resumed. My attention was not called to the state of the dock till I asked the lessees about it after this meeting.  That was in consequence of the shares going down very rapidly soon after the meeting.  Then I directed the Secretaries to write enquiring as to the state of the dock.
  Mr. Wilkinson then read the following letter:-
21, Foochow Road,
Shanghai, 23rd January, 1888.
POOTUNG DOCK.
DEAR SIR, - In reference to your lease of the above dock, dated the  30th January, 1884, and to the following clauses contained therein, viz. that the said Lessees, their respective executors and administrators shall and will within two years from the 1st July, 184, expend a sum of not less than Taels 20,000 in renewing the pumps boilers and shears and rebuilding and repairing the buildings now on the said property and shall and will during the said term keep the said dock pumps boilers shears and building  with their appurtenances which now are or shall at any time hereafter be erected as hereinbefore stipulated on the  said property in ordinary good repair (the bursting of the dock from any unforeseen cause only excepted) "and shall and will at their own expense  forthwith insure all the buildings on the said premises hereby demised to the full value thereof in some respectable Insurance Office at Shanghai in the names of the said Lessees their executors administrators or assigns and of the Director for the time being of the said Pootung Dock Co., and keep the  same insured during the said term.""
  We shall be much oblige if you will kindly inform us whether the money so agreed to be expended in repairs has been expended and if so you will furnish us with a statement showing the different items, and also inform us the amount for which and the office in which the buildings are insured.  We shall also be glad to know if the Dock is now in good working order and repair.
We are, Dear Sirs, &c. Myburgh & Dowdall, Secretaries.
Mr. Wilkinson was about to read the answer to the above but Mr. Wainewright objected as it was not written by the deft.
  Mr. Wilkinson - There was a meeting on the 16th Feb. 188 at which Messrs. Simpson, Galles and Twentyman attended as representing Messrs. S. C. Farnham & Co. and there certain proposals were discussed?
  Witness - Yes.
  Mr. Wilkinson - And on the 17th February Messrs. Myburgh and Dowdall wrote to Messrs. Farnham & Co. repeating the proposals to the defendant' company to make arrangements to do the work at once, required to put the dock into repair, without prejudicing the question in any way?
  Witness - Yes.
  Mr. Wilkinson then read the following letter:-
Shanghai, 9th Feb., 1888.
Messrs. Myburgh and Dowdall,
Secretaries Pootung Dock Co.
DEAR SIRS, - We beg to acknowledge receipt of your letter of yesterday's date addressed to Messrs. James Simpson and F. W. Galles, giving us notice to amend certain decays defects and wants of reparation in the Pootung Dock premises, mentioned in a  report furnished to you by Mr. G. J. Morrison.
  In reply we beg to say that the principal defects mentioned by Mr. Morrison are, in our view, defects which ought to be remedied by our landlords, the Pootung Dock Co.  They are defects which no ordinary repairs could obviate and to remedy them will require an outlay which it would be manifestly unjust to impose upon tenants holding upon terms such as those of our lease.  The Dock has in fact "burst" within the meaning of the exception in our covenant to repairs contained in the lease.
  On the other hand we claim that we [are] entitled to suspension of our rent inasmuch as the  Dock has become useless for the docking of vessels by reason of an unavoidable cause, and we give you notice that we decline to make any further payment of rent in respect of the period between the  1st of the current month, and the date when the substantial repairs recommended by Mr. Morison shall be completed, and that we claim that the rent already paid in advance shall be applied accordingly, or that if the Company exercise their option of terminating the lease a proportionate part of the amount so paid shall be refunded to us.
(Signed) S. C. FARNHAM & CO.
  The cross-examination of the witness by Mr. Robinson was then proceeded with, but his direct evidence was not broken down, after which Mr. E. J. Hogg was called to testify to the fact that his remark about the manipulation of the shares at the meeting referred to was not contradicted.
22nd Jan.
  Cross-examined by Mr. Robinson - I was the sole director of the "Old Dock Company." I think from some time in 1862. I have continued as sole director till now.  I was a shareholder before I became director.  I became a shareholder in 1881.  At that time I was not aware that the dock had burst several times or any time. It would recall nothing to my mind if I heard the dock burst in 1879.  I had a general idea that the shareholders in the company paid for sundry repairs to the dock.  I suggested that if the shareholders wished they could call an extraordinary meeting to consider Messrs. Farnham's latter [letter] of the 19th May, 1883.  I did not think it was in the interest of the shareholders to call a meeting in January 1884 to consider the proposition.  I simply though it would not be for their interest, and I exercised my judgment against theirs.  I did not think that they were bona fide shareholders. I man by a bona fide shareholder a man who buys the shares on his own account.  I would probably consider all shareholders on the list as bona fide shareholders.
  I may have passed the dock between the middle of 1887 and the end of that year, in daylight when I could see the premises.  I do not think I had been past it for some weeks prior to the general meeting in the beginning of 188.  I am almost sure I went up country about the end of 1887 and passed the dock, but that would be at night I think. - Referring to the minute book - the words "the chairman stated that the works had been executed in a most satisfactory manner" referred to some works on the pumps, &c., which Mr. Simpson, Mr. Geo. Lewis, myself, and some others and a gentleman with red hair from an evening newspaper, had inspected. That was Jan. 1886, a year and a half after the new lease had been made.  The impression which I meant to convey to the shareholders was that the work at the dock which I had seen, had been executed in a most satisfactory manner. I meant only to refer to what I had seen, that is the works in connection with the pumping hear.  I should say that the minute looks somewhat bald as it appears in the minute book.  And coming from me, it was calculated to have reference to the works mentioned in Messrs. Farnham's letter of the 16th Jan. 184.  I have not seen the ledger of the company.  The Hongkong and Shanghai Bank book forms a sort of cash book from which the half yearly statement is made up.  I do not know whether a cash book or ledger is kept by the company.  On the 31st December 1885 the company had a deposit receipt for Tls. 1.200 for the first time within my knowledge.  I should not call that the commencement of a reserve fund to meet accidents to the dock, though it might ultimately be used for that purpose. I should no say that such was the idea with which this deposit was made.  It was made for the sake of obtaining interest on the amount which there was no immediate prospect of using.  We did not distribute it amongst the shareholders because we usually paid 10% which generally left a small balance that was paid away for various things.  None of the shareholders suggested that the taels 1.200 should be divided.  Seven hundred Taels was further deposited on the 1st Feb. 1886. About the 31st Dec. 1887 we placed a further sum of Taels. 1,000 on deposit.  We had then a deposit of Taels 2,900.  A reserve fund must be ordered by the shareholders.  I had no authority to start a reserve fund for repairs in case of accidents to the dock. I have no doubt that if it was not called for any other purpose it could have been used as a reserve.  I ordered it to be put on deposit, with the sole idea of drawing interest upon the sum named.  If it had occurred to me to form a reserve fund I would have asked the shareholders to put by a larger deposit. It never occurred to us to divide this Tls. 2,900 amongst the shareholders.  It subsequently became necessary to erect a coffer dam for the repair of the dock.  We paid Tls. 2,250 for this, and that amount was taken from the deposit of Tls. 2,900.
  I cannot say if at the meeting of the 6th March, 1884, Mr. Simpson proposed to increase the rent by Tls. 500 a year to form the nucleus of a reserve fund. Supposing Mr. Lewis said that Mr. Simpson made such a statement, I would believe it.  I don't say he did not make it.
  You remember the letter of the 16th Jan. 1884, in which Messrs. Farnham & Co. proposed certain works to be done on certain conditions? - Yes.
  That letter contained their suggestion that certain works were absolutely necessary? - Yes.
  The old and worn-out pumps, boilers and houses to be taken down and to be replaced with new ones, in a satisfactory manner? - Yes.
  Did you understand those words to mean that the godown and dwelling house were to be pulled down and rebuilt by us in a satisfactory manner? -Yes.
  Did you understand that work to have been already done?  I think so.
  Mr. Robinson - That is with reference to the expenditure of the Tls. 20,000.  The godown and house to be rebuilt by us in a satisfactory manner - "already done by us" is in parenthesis?
  That I understood to have been done.
  Cross-examination continued - I cannot say who wrote the minutes of the meeting.  They were written up in the secretaries' Messrs. Myburgh and Dowdall's office.  The secretaries took the minutes.  They were entered in the minute book and signed by me at the following meeting.
  Mr. Robinson handing witness the minutes of the meeting of the 6th Match, 1884, asked him if it as correct to say as there stated, that he reiterated the statements made in his letter of the 28th Feb. to the shareholders, which had been circulated.
  Cross-examined continued - I did not go through the letter at the meeting, so that it is a mistake to say I reiterated the statements of the letter, Mr. Simpson having corrected me in his speech.  I said I did not think the bunding of the dock was in good repair.  I cannot say when I first observed this - I think it was some time about the middle of 1887, but it may have been before or after that.  I cannot be precise on the point.  I saw the dock from my boat as I passed up and down the river. I should estimate the depreciation of the dock by the fall in the price of shares, namely 50 taels per share on 950 shares, which gives Taels 47,000.  At the end of 1887 before the dock was known to be out of repair, the price of the shares was 130 - 132 ½ . The last quoted price is 80.
  Re-examined by Mr. Wilkinson - The Tls. 2,250 for the coffer dam were paid to Farnham & Co. on July 16th, and the deposit receipt was cashed on July 17th, all but Tls. 782 which would be for interest.  Messrs. Farnham and Co. were paid out of our general account.  The extra Tls. 600 mentioned by Mr. Simpson would take about 100 years to pay for the repairs to the dock, but with interest it would never overtake it.  I did not contemplate that we should ever be called upon to pay for such repairs as these.
  The witness then left the box.
  Mr. E. J. Hogg was hen sworn and examined by Mr. Wilkinson said - I was present at a meeting of the Pootung Dock Company on the 6th March 1884.
  Mr. Wilkinson read from the minute book an abstract of Mr. Hogg's remarks at the meeting calling the shareholders' attention to the manner in which the shares were manipulated by the partners of Messrs. Farnham & Co. and asked of that entry was correct.
  Witness - It is.
  Mr. Wilkinson -= I believe that Mr. Simpson was present at the meeting? He was, and Mr. F. W. Galles and Mr. G. Galles also.
  Was any objection made to that statement?
  No, none whatever.
  This concluded the examination of the witness who was not cross-examined, and the Court adjourned till 10 a.m. next day.

 

23rd January.
Mr. Wilkinson put in further correspondence between the parties.
  Mr. Francis recalled - Since I was in the box my attention has been called to the fact that I was away from Shanghai in Japan from the 15th Dec., to the 26th Dec., 1887, and that I did not see the dock after my return, before the meeting in January.
  Mr. Wilkinson drew his Lordship's notice to a point in connection with the meeting spoken of in the correspondence of February 1888.  Such a meeting was actually held on 23rd Feb., 1888, between all the parties, but nothing came of it.
  Mr. Dowdall put in as evidence five photographs of the dock taken by Mr. Olsen on the 10th Sept. 1888, Mr. Wilkinson agreeing that it would not be necessary to call Mr. Olsen.
  Mr. GABRIEL JAMES MORRISON sworn deposed - I am a civil engineer.  I was admitted to the Institute in 1870 and was transferred to the higher class of members in 1874.  I spent 6 years with Mr.  Niel Robson in Glasgow and went to London in 1863, and entered the office of Mr. Brunlees afterwards Sir Janes Brunlees, President of the Institution, with whom I remained 11 years.  The works I saw in Glasgow were principally connected with the dredging of the Clyde.  Towards the end of my time with Mr. Brunlees, I was his principal assistant.  He had a very large general business including pier, harbor, and dock work. I was connected with the Dock at King's Lynn in Norfolk and another at Avonmouth, near Bristol.  These were floating docks, both constructed in soil very similar to the soil here.  The water in the case of the Lynn Dock was kept out by a timber and clay coffer dam, and the Avon Dock by a mud embankment.  They are not dry docks. I did the whole of the drawings in the case of the Lynn Dock and a large portion in connection with the Avon Dock.  There is a very large rise and fall of tide - 40 feet - at Avon, which necessitated careful work. I also at this time visited a number of dock in London, and watched the construction of the opposition dock very closely - Portishead Dock.  There is a very large coffer dam at Portishead, and also one at Lynn very similar, generally speaking, to the one at Pootung.
  I consider that in Mr. Brunlees' office I had a very large experience in general and dock work.  After I left his employment I was a year in business on my own account in London, at the expiration of which term I came to China.  I have been called in here to arbitrate where there was some difficulty, by Boyd & Co.  I have also done work of this kind for Jardine, Matheson & Co. and for the Shanghai and Hongkew Wharf Co. and also for the China Merchants who had some trouble with their bunding which had fallen three times and which I rebuilt.
  I knew that Mr. Simpson and Mr. Galles were named in the lease as lessees in the case of the Pootung Dock Co. Messrs. Farnham & Co. are now the lessees.  In Jan., 1888, Messrs. Myburgh and Dowdall wrote to me asking me to report on the condition of the Pootung Dock.  [Witness produced three plans of the dock and immediate neighbourhood which were put in as evidence.] When I received the instructions I examined the dock.  It is an old mud dock with a wooden entrance.  It is intended for a dry dock.  It was in a generally dilapidated condition.  I made a report on the subject.  After I made the report I was asked to make out a list pf he principal defects, with a view, I believe, of notice being served on the trustees.  This is a copy of my schedule of necessary repairs. (Schedule put in.) I specified them for the purpose of enabling the Dock Coy to serve a plain notice of what was wanted on the lessees.  It contained nothing more and nothing less than was necessary to put the dock into repair. Early in March I made a fuller specification.  That was on the 17th March, and at the request of the plaintiffs.  The works which are now being carried out are generally in accordance with the firs specification.  That specification included a coffer dam, and recommended a special design for the coffer dam.  The coffer dam was afterwards made, but with some modifications. Some of these repairs I would consider would fall upon the tenants.  In certain cases I would have permitted the use of Oregon pine instead of hardwood and I would not have asked for so much woodwork, a smaller number of piles in the construction of the entrance.  I saw another specification of a coffer dam prepared by Capt. Roberts on behalf of S. C. Farnham & Co.  It provided a cheaper one, and was not to be constructed at the same stage of the works as the one proposed in my specification. I proposed to renew a considerable portion of the bunding before making the coffer dam and to build the coffer dam against the new bunding.  The specification of Capt. Roberts was submitted to me to see if I would approve of it.  It is the usual practice in England to allow the contractors to submit specifications for the coffer dam.  This was a cheaper coffer dam than mine, but as it is usual to allow the contractors to submit their own coffer dam, provided it will stand, as it probably would, during construction it did not make much difference.  And if it does stand so much money will be saved by putting in a cheaper one.  The present coffer dam is as I foresaw weak at one of the ends.  It was begun at the end of May and finished on the 4th July.  If they had done the work as I specified the cost would have been much less, as some of the bunding fell in afterwards.  
  After July I revised my specifications. I modified my plan by altering the bunding where the coffer dam had originally been designed to abut against the building.  I reduced the length of the bunding on the southern side of the entrance.  It was then suggested that the mud should be taken from the side of the entrance and the   whole of the timber work exposed to view.  
  At this time I had instructions from the Pootung Dock Company to apply for tenders for the construction of the work.  The suggestion to take away the mud was made by Messrs. Farnham with the object I suppose of showing the condition of the timber.  I did not think it necessary, at least I did not think it advisable.  It would have had an effect upon the people tendering, and a delay would have been made, the whole of the outer structure towards the river having to remain open all the rime. I applied to people whom I thought could do the work.  I received tenders from several people and Messrs. Farnham's was the lowest.  I advised the Pootung Dock Co. to accept it.  A contract was entered into with them dated 27th October, 1888. I produce the contract and he specification, (put in evidence). Morrison and Grafton are superintending the works under the contract.  More than half the work is now done.
  His Lordship asked what was the amount of the contract.
   Mr. Dowdall - Thirty-two thousand and odd taels, but the defendant is not bound by the sum stated as he may say there is a great deal more work done than is necessary under the contract.
  Mr. Wainrwright - No, but we say we are not liable to put the dock into three times as good a state as it ever was before, and that as the work is being done, the dock will be a much more valuable property than ever it was.  We are not liable for that amount.
  Witness resuming his evidence, explained the various parts of the work which had been finished, namely the caisson and the sill, and the bunding along the lower sides as far as could be done until the coffer dam is removed. - Most of the main piles have been driven on the other side, and the water tight bulk head across the entrance is completed.  When I say the sill is laid, I mean that the platform of the dock entrance is nearly ready.
  These works were finished about the date in the contract, the middle of November within twenty weeks with a slight allowance for bad weather.  I think the amount mentioned in the contract fairly represents the cost.  Practically a coffer dam was necessary.  If I had been told that the work was to be done without a coffer dam, I could have done it, but the cost would have been more.  The cost of the coffer dam was Tls. 4,500.  The amount of the contract is Tls. 32,275 of which sum Tls. 26,275 is for dock and bunding and 6,000 is estimated for wharves.  The engineers of the company are named to fix the final sum.  The Tls. 6,000 is only an approximate sum, and I still think Tls. 6,000 is a fair sum, but it is a little difficult for me to go closer - that is as far as I can see at present.  The proportion for the bunding is about Tls.12, 600.  Approximate sums were put in the contract fo convenience as it might be that old materials could be utilized when the works were uncovered.  I think that the effect of these provisions for reducing the contract will not be very much either way.
  The Court then adjourned till 10 o'clock next m morning, to allow time for the inspection of Messrs. Farnham's books by the Counsel for the plaintiffs.
24th January.
  Mr. Geo. Morrison examined by Mr. Dowdall - When I saw the dock in 1888 it was in a very delapidated condition.  The piles under the altars were rotten.  The Company could not have put the inside of the dock into repair for Tls. 3,000, but I do not say that the lessees could not have done it for that sum.  The lessees could have put it in order for less, because they keep a staff of men who would be available for such work and besides they have a great deal of waste material, which would have been suitable for the repairs.  The beams are all that they would have to put in anew.  In the old construction all the main piles were hard-wood, but many of the subsidiary portions were Oregon pine - the entrance and bunding, the part which is now being repaired. Nothing has been done by the company, with regard to the repairs in the inside of the dock.  The caisson chase is all made of hard-wood, as was the old one also.  In the works which are being constructed now, I assume that about Tls.  5,000 are being spent on hard-wood where Oregon pine might be substituted in the repairs to the entrance.  The saving in this case if Oregon pine were substituted would be about 20 per cent, say about Tls. 1,000.  
  As regards the entrance proper the caisson chase, and the platform on which the caisson rests, the work might have been executed in a less substantial manner, and yet might have been accepted by the Dock Company and passed by me as sufficient.  These are the only two items in which I think there could be a saving effected. I put the possible saving down at Tls. 2,000.
  When I inspected the dock first the bunding on
both sides of the entrance had given way by slipping towards the river.  That was in January 1888.  The water was leaking through the sides of the entrance into the dock, and also in considerable quantities under the sill.  Likewise in considerable quantities between the caisson, and the sill.  These latter leaks were being remedied by caulking on each occasion the caisson was out of use.  
  That was the condition of the dock when I saw it, and it appeared to have got into that condition by gradual giving way of the structure which was manifestly weak originally, and has been kept in bad repair.  I refer to the whole of the dock entrance.
  Would you say there was a burst of any sort from any unforeseen cause?
  If I was asked I would say that there did not appear to have been a burst of any kind at all, and further I would not consider that the dock got into the state in which I saw it from any unforeseen cause.  When I saw the dock I consider it would have been impossible to put the entrance in repair by any ordinary patching.  Had the leaks through the dock heads been attended to they could have stopped the leaks through the sides.  When the coffer dam was put in, and I had an opportunity of examining it, I found that the caisson chase was out of plumb, the top being more than two inches forced into the dock.  The caisson itself go pressed out of shape.  The giving way of the caisson arose principally from weak construction, and partly from its not having been kept in as good repair as I might have been kept in.  It would have been a work requiring some care to keep the caisson chase in its place, if attended to from time to time, but mot a work of any extraordinary difficulty.  I should not describe the accident, or the state of affairs existing, as a burst, but should say that the dock had reached an unserviceable stage by gradual giving way extending over a long period.  It was not a case of the work standing for a time and then suddenly giving way.
  Could anything you saw be called owing to an unforeseen occurrence in 1882 or 1883, by people understanding docks?
  I feel perfectly confident from what I saw in 1888 that the condition of the dock must have been well known in 1883 and 1884.  Tenants in possession for five years must have known its condition.  The attention of the tenants ought to have been first attracted by the movement of the sides over bunding as a whole into the stream, and not in small portions.  That does not refer to the dock proper, but it would be an indication of the state of the structure.  I consider that had no direct effect upon the dock.  I mean by that I do not consider the giving way of the chase was caused by the giving way of the bunding.  
  Leaks through the mud in a dock like this were almost sure to begin gradually, being very small at first, but mud here is such that it is quickly washed away once a leak begins.  Manifestly they could be stopped much more easily if attended to at first.  Their tendency is to get worse and worse.  They affect the wood work indirectly, by depriving it of support. There was concrete inside the sill in January which was absolutely useless.  It must have been very bad at the beginning, and then was little better than mud.  After the coffer dam was in place I found some concrete outside the sill in such good condition that I determined to leave it.  What concrete was inside the sill could be seen whenever the dock was dry.  There was some planking on the top of it, but it could be lifted up in two minutes without interfering with the structure of the dock.  Ordinary graving docks in England and elsewhere are built of stone and brick, and require little watching, but timber docks in mud must be watched constantly, and require weekly looking after.  
  About a dock of that class there are usually a large number of workmen, who in their spare time are employed in keeping the dock in order, and when they are too busy, other men must be employed to keep the dock in repair.  I should say that the dock might sometimes be comparatively dry and at others leak very much, from the shifting of the structure.   The leaks would be greater at high tides and lower at neaps.  If I was considering on behalf of the tenant a repairing clause in a lease, I should say that one month would not suffice for the repairs necessary, I should have looked forward to bigger repairs than could have been made in a month.  I would say that three months would have been sufficient.
  I have been frequently at the dock during the repairs and saw all the old work as it was exposed.  I still think from what I saw during this last year, that the character of the dock must have been known in 1883 and 1884, and I saw nothing during the repairs that would lead me to alter that view.  That answer comes very nearly to that there was nothing in general which could not have been foreseen four or five years ago.  I produce two accounts from Messrs. Farnham & Co. to the Pootung Dock Co. one of which is dated 22nd January, 1889, and headed "Detailed expenditure re Pootung Dock." I have made an analysis of these accounts and have been to Farnham & Co., on the subject. These accounts fairly represent certain items in Messrs. Farnham's books, and contain items which may be fairly included under the expenditure of the Tls. 20,000 and also some large items not connected with the maintenance of the dock including monthly pay to the foreign foremen of about $130 more and wages to workmen and otherwise connected with the docking of ships and not altogether with the maintenance of the dock.  I consider that putting dates out of the question they have spent Tls. 20,110 on works under the covenant.  The total amount of this account is Tls. 26,360 which shows in round nunbers Tls. 6.250 spent in maintenance to be added to that as their proportion of the monthly expenditure of $250 of which there is no note, and which from special information I would put down at Tls. 20 a month from July 1884 to 31st Dec. 1887, which would make about $840 expended in maintenance. Including this Tls. 6,250 the total spent on maintenance would be Tls. 7,000 in 3 ½ years or about Tls. 2,000 a year which would not be a proper amount to expend on such a dock as this, which is subject to decay and knocking about from use.  I would think that Tls. 1,000 a year would have been sufficient to meet the last item.
  The wharves, except the planking or flooring were in very bad condition in January.  The lower wharf was in the worse condition of the two.  I attribute that condition to the ordinary decay of timber in the first instance, and secondly to the original shortness of the piles which had never been long enough. There is a breakwater immediately below the dock, and the river bank has been here washed away to a great extent. (Witness explained the damage by aid of the photographs of the place, before mentioned.) I have been informed and believe it to be true that these piles about two years ago showed the low water mark.  On the outer line on Plan B is the present law water mark; from that to the next line is deposited mud from the river which took place after the building in 1877 of the large breakwater further down.  The flood tide has much more influence than the ebb tide along that part of the shore.  When I saw the dock in January the end of the breakwater was broken away, but with some modification. The stringers showed signs of rottenness.  Both of these defects have since been made good by the lessees.  It had had the effect of protecting the lower end of the property, but not the upper part of the wharf.  I should have liked to have seen it twenty-five feet longer, when it would have been more effective, and long enough to protect the whole of the dock property.  The document (produced) describes the action of the tide, and the effect of the breakwater.
  Mr. Dowdall read the following report:-
  Shanghai, 10th June, 1878.
To the Chairman and Shareholders of the POOTUNG DOCK COMPANY.
Gentlemen, - In accordance with the resolution assed at an Extraordinary meeting of the above Company on the 10th instant appointing the undersigned a Committee to report on the works now in progress on the water frontage belonging to Mr. J. F. Twombly next adjoining the Company's Dock above and below with a view to settle how much the company shall contribute towards the cost of the work undertaken by Mr. Twombly, having respect to the benefit likely to accrue to the Dock premises by such works, we have now to report:-
On the 12th inst., during the flood tide, we visited the Dock premises and personally examined the River Bank for a mile on either side, and find that at all times, but more especially in winter, the flood tide leaving the Shanghai shore about the French Police Station, strikes with great force on the opposite shore, commencing about a mile below the Docks, and is continued along Mr. Twombly's ground and attacks the Dock premises, and the shore being concave the tide scours out the land to an alarming extent, the River Bank for hundreds of feet having been washed away during the past two or three years, and is now being washed away, while the depth of water is always increasing.
  Some two years ago Messrs. Farnham & Co. built a breakwater at the lower end of the Dock premises which has deflected the current from the Dock, and as a consequence the land is now gaining above this point sensibly.
  Mr. Twombly's works are of similar nature, but much stronger, and at the lower Shanghai end of is property; he is also building a jetty between this point and the lower end of the Dock, which will act as another Breakwater, and we believe from what we see of the effects of Messrs. Farnham & Co.'s works, that Mr. Twombly's works will greatly benefit the Dock's premises and will not only prevent any further eating away of the Bank but will cause the land to fill in through deposit and back eddies, and thereby secure the Dock property from any further encroachment by the river.
  In view of the benefit we consider the Dock will receive from Mr. Twombly's construction, we recommend that the Dock Company should contribute Tls. 1,500 towards the cost of such repairs.  We would also strongly recommend that Mr. Twombly should sheet pile the lower face of Shanghai side of the small jetty above mentioned, which in our opinion would greatly increase the efficacy of a Breakwater.
We are, &c.
(Sd) C. Blethen, F. G. White, Richd. W. C. Brown.
  Witness - I don't consider that there is any connection between damage to the wharves and damage to the dock.  In the bunding the old ties were far enough back.  I did not consider when I saw the dock in January 1888 that the damage to the entrance was connected with the damage to the bunding. The wharves might have been carried away bodily and the dock remained unaffected.  No defect in the dock would have any effect on the bunding or the wharf. A copy of Mr. H. Lester's Report on the Dock in 1873 was handed to the witness. Parts of this report were read and stated that the whole of the bunding generally was in a very delapidated condition, but that the dock entrance and wharves did not require any repairs just then.
  Witness - That report shows quit clearly that the dock was one which frequently required repairs, which had some weaknesses about it.  I have seen no general specifications by Capt. Roberts about repairing the dock.  If the caisson was docked by Messrs. Farnham & Co. in 1886 they must have seen that it was defective and of weak construction.  I know - I have frequently heard - that he caisson was docked, but I never saw it myself. If it was docked as early as 1883 these defects would have been apparent.  The bunding and the wharves could have been kept in repair. If these repairs had been done from time to time reconstruction would have been rendered unnecessary.
  Messrs. Farnham & Co.'s account as rendered to the Pootung Dock Co., was handed to the witness who went through the items seriatim marking those which he thought did not come within the covenant to repair.
  One of these was Tls. 2,197.93 for "repairs to wharf," which he did not think came within the covenant.  The next item was Tls. 3,000 for building a house - commencing in Sept. and ending in Dec., 1885 - which was in order, except as to a question of insurance.  The house was burnt down about the end of 1884 and the insurance money Tls. 5.355 was paid by the Hongkong Insurance Co. for which he was surveyor.  The endorsement of Payment to Messrs. S. C. Farnham & Co. was on the 31st Dec. 1884.  The next item "expended on Dock, Wharves, Caisson, etc." Tls. 1,335, he did not consider should come within the covenant though the work was done within the proper time and the amount was a fair sum for the work.  Nor did he think that the next item of five hundred and odd taels for overhauling the caisson, should come within the covenant to expend Tls. 20,000.
  A sum of Tls. 100 to which the plaintiffs objected in the early part of the day was allowed.  The witness struck out altogether the sum of Tls. 2,197, Tls. 1,155 and Tls. [?] making in all Tls. 3,843, which reduced Messrs. Farnham's account from Tls. 28,855 to Tls. 20,012.
  Witness, continuing, said - If the property had been put up to auction in 1888 as it then stood I feel confident no one would have bid Tls. 50,000 for it.  I consider that the maximum price to be put upon it.  If the dock was then in a state of ordinary good repair, my opinion is that the value of the shares represented the fairest value of the dock, the value of the shares which at 130 was then Tls. 123,500.  I believe the shares passed from hand to hand under the belief that the dock was in perfect repair.  I have been consulted on the value of various properties in Shanghai for a number of years.
  To His Lordship - The small breakwater was 110 feet long and 15 feet or about a seventh of its length was broken away.
  Cross-examined by Mr. Wainewright - In Glasgow I saw works in connection with the dredging of the Clyde.  I had no experience of dock work in Glasgow; my first dock experience was at King's Lynn in 1886-87.  That dock was constructed of brick and concrete, with a small amount of granite about the gate.  The soil in which the dock was constructed was of mud very similar to that at Shanghai.  The soil at the dock at Avonmouth was also mud, but there were got down to a fairly hard ground at the foundations, to the entrance.  The coffer dam at King's Lynn was very similar to the coffer dam designed by ne for the Pootung Dock.  The King's Lynn coffer dam was butted against the dock heads as I intended to put mine here in the case of the Pootung Dock, against the piling.  I was called in in a case by Messrs.  Boyd & Co. and reduced the amount of the contractor for faulty construction to such that he would have been very nearly ruined except that pressure was brought to bear to get him a larger sun.  My work for the China Merchants' was building at the lower wharf.  I think the longest piles I used there were about 38 - under 40 - perhaps 35 feet.  The bunding I put up there was nearly as heavy as that I am putting up now, except the piles.  The sheath piling was not so heavy, only consisting of one plank, - here there are two. The bunding I am using now is two layers of plank 3 inches thick.  At low water at the China Merchants' Wharf there is very little water so that it is possible to get at the back of the piles and nail strips of wood to cover any joint that looks open, but at the Pootung Dock there is too much water to do this.  I made a separate report to the plaintiff's solicitor, when I first visited the dock.
  Mr. Wainewright asked for a copy of the report.
   Mr. Wilkinson objected.  The report was made with a view to litigation and was privileged.
  His Lordship did not think that privilege extended that far.
  Mr. Wainewright asked how could the report be privileged when no litigation was contemplated at the time the examination was made, but the tenants were only to be called upon to repair.
  His Lordship intimated that he thought the report should be produced and the further hearing of the case was adjourned till Monday next.

 

Source: North China Herald, 30 January 1889

LAW REPORTS.
H.B.M.'s SUPREME COURT.
Shanghai, 28th January, 1889
Before R. A. Mowat, Esq., Acting Chief Justice.
THE POOTUNG DOCK CO. v. JAMES SIMPSON.
  Mr. H. S. Wilkinson and Mr. C. Dowdall appeared for the plaintiffs,
  Mr. R. E. Wainewright, with whom was Mr. A. Robinson, for the defendants.
  The hearing of this suit was resumed this morning.
  His Lordship - The point was as to the production of the report.
  Mr. Dowdall - Yes my Lord, Mr. Wainewright asked the witness, who is our engineer, whether he had made a report and the witness replied that he had.  Then Mr. Wainewright called for this report, and it was not produced, whereupon Mr. Wainewright proceeded to ask him what was in it.  The witness replied that he was instructed by the company to inspect the premises, and had reported the result to the Company.  Now I submit that the report should not be produced, and that the witness should not be compelled to answer any questions as to that report.  And further that he should not be compelled to answer as to the result of his investigations made under instructions from the Company for the purpose of informing them as to their position in an impending suit.
  His Lordship - Upon what date did he get the instruction [to make a report]? He said he received instructions in Jan. 1888.
  Mr. Dowdall - The instructions were on the 27th January 1888, and the report is dated the 3rd Feb. 1888.
  His Lordship - And what about the impeding suit?
  Mr. Dowdall - The suit was commenced on the 17th Feb. and I would refer your Lordship to Roscoe's Nisi Prius 13th Ed. Page 186.
  His Lordship - All that appears to have been done in Jan. was that Mr. Frances, the Director of the Dock, having observed that the shares were going down could not understand it, and wrote to the lessees as to the state of the dock.  That was in the letter of the 13th Jan.  It was the answer to that letter, that for some reason was not put in, and then there was nothing done apparently until Mr. Morrison received instructions to inspect the dock on the 27th January, 1888.
  Mr. Dowdall - Yes, your Lordship, but a meeting was held in the meantime.
  His Lordship - That I have not had.
  Mr. Wainewright - The Dock Company were called to repair on the 8th February.
  His Lordship - Yes, and on the 9th they declined.  There was no application to the Dock Company to do anything as far as I can see till the 8th February.  Up to 3rd February these was no dispute.
  Mr. Dowdall - But I hope I will satisfy your Lordship that even if no litigation is apprehended the Company may ask for a report from the engineer which even then would be privileged.
  His Lordship - Would it not be better to give me some authorities for that?
  Mr. Dowdall referred his Lordship to the case of Curry v. Walter at page 159 of Roscoe in support of his contention that an engineer's report was privileged in the same way as the statements of an interpreter or attorney's clerk, and that the engineer in the present case was in the position of an agent.
  His Lordship said Mr. Morrison could hardly be described as an agent.
  Mr. Dowdall in support of his contention referred his Lordship to the note on privilege at page 955 Daniell's Chancery and to the case of English v. Tottie [1 Q.B.D. 144] the note commencing "papers prepared by agents in view of litigation," in Baxter's Judicature Act and Rules, 5th Ed., 330, and to Taylor on Evidence, 5th Ed. 2nd Vol. pages 810-11 the latter of which said "It may be hereby laid down as a general proposition that wherever a party is justified in refusing to produce an instrument he is justified in refusing to discover its contents." The same authority laid down that the report of an accountant employed to report upon a client's books to a solicitor is privileged.
  Mr. Wainewright said that he had a later edition of Taylor in which the paragraph mentioned by Mr. Dowdall was entirely omitted.
  His Lordship corrected Mr. Wainewright on the point.  The paragraph was retained in the edition before him.
  Mr. Dowdall next referred his Lordship to the case of Greenhough v. Gaskell, reported at page 102 and of Mylne and Keen and read the judgment of the Lord Chancellor thereon.
  Mr. Dowdall said it showed that they might get confidential evidence without the suit being commenced and even then it would be privileged.
  His Lordship - That was a case in which the solicitor was asked to produce certain books which he said he had in his possession, but he said they were received in his confidential capacity.  What has that to do with the present case? There it was a case against the solicitor himself.
  Mr. Dowdall said in this case proceedings were not immediately apprehended.  The greater number of those cases were against solicitors; but he took it that the same privilege applied to persons who were no solicitors. He referred his Lordship to the judgment of Vice-Chancellor Bacon in the case of Wheeler v. Lemarchand, [17 Chan. Div. p. 676.]
  His Lordship - Vic-Chancellor Bacon's judgment was reversed on appeal, and it would therefore be more satisfactory to take the judgment on appeal.
  Mr. Dowdall read Vice-Chancellor Bacon's judgment which held that the documents should not be produced.
  His Lordship - The answer to that is that the Court of Appeal said they should be disclosed.  The head note to the case is "Held on appeal that the defendant must produce letters except those that the defendant states in affidavit were obtained in confidence after the dispute had arisen."
  Mr. Dowdall said there was practically a dispute here.
  His Lordship - There was no dispute till you called upon the deft to make repairs on the 8th February, and the report was made on the 3rd February.  The owners of the dock wanted to know what condition the dock was in and they sent their engineer to make a report.
  Mr. Dowdall said it was a case in which they apprehended litigation; he then quoted the case of Turner v. the London & S. W. Ry. Co. [L.R. 7 Q.B. p. 766] in support of his argument.
  His Lordship pointed out that all that appeared here was that Mr. Francis imagined that there must be something wrong with the dock and told the engineer to see it and make a report thereon.  His Lordship was of opinion that the report was in answer merely to Mr. Francis' enquiry and that it could not be privileged.
  Mr. Dowdall said the Company having no regular engineer employed Mr. Morrison to make a report, he argued that there was a distinction between the report of a regular employee and a report made by an outside engineer.
  His Lordship said that the present case was analogous to a case in which a storm passed over a place, and the landlord of a house, not having an architect of his own, called in an architect to look at his house after the storm, and after the report of the architect requited the tenant to make repairs.  He did not think the case of Turner v. the London S. W. Rlwy Co. bore out Mr. Dowdall's contention.
  Mr. Dowdall then referred his Lordship to the cases of Wooley v. Pole [32 L.J. C.P. p. 263 and 266]; Wooley v. the N. L. Rlwy Co. [L.R. 4 C.P.p 602[; Wilson v. Rastin [4 Durnford & East, P. 753[; English v. Tottie [1 Q.B.D. 144[; Bustros v, White [1 Q.B.D. p 423[; and the Southwark & Vauxhall Water Works Co. v. Quick p3 Q.B. W. p. 315]. He might mention that the other side claimed privilege for their reports in the same way as he did for his clients.
  His Lordship said it would have been better had the question of privilege been dealt with on an interlocutory summons.  He thought the more regular course was where production was withheld to make an application before the hearing.
  Mr. Wainewright said now that he was in Court he claimed his rights, but he did not ask for privilege for documents on his side, and was ready to produce everything bearing on the case.
  After some further argument his Lordship asked Mr. Dowdall would he say that on the 27th January there was an intended action.
  Mr. Dowdall - Yes, certainly.  My clients had not the remotest idea of spending Tls. 30,000 or Tls. 40.000 on repairs.
  His Lordship - You cannot tell me wat the defendants will do till you have made your [..........] matter.
  Mr. Wainewright - I have no knowledge that any litigation was intended.
  His Lordship said he did not think it was necessary to go further than the case of Wheeler v. Lemarchand.  He thought that disposed of the case.  This report was made before the dispute arose and he could not see how there could be any dispute at the time.  Until the plaintiffs received the report from the surveyor they did not know anything about it; after they received the report, no doubt they took matters into consideration and considered whether in the state of disrepair which he assumed the dock was in, that they could call upon the defendants to repair the dock, and consulted their lawyers about it.  And the report was made on the 3rd February, and it was not until the 8th February they called upon the defendants to repair.  This did not prove that there was a foregone conclusion when Mr. Morison was asked to make his report, that there would be litigation.  Therefore His Lordship did not think that was any ground for protection to the report, though to subsequent ones there might be, but not to this one made on the 3rd February under instructions of the 28th January.
  Mr. Dowdall asked permission to put in the latter of instructions, but his Lordship would not allow it at that stage of the case.
  Mr. G. J. Morrison cross-examined by Mr. Wainewright - This is my report dated 3rd February 1888.
  Mr. Wainewright - Said he would read the report to his Lordship.
  Mr. Wilkinson - Mr. Wainwright is going to read the report and so make it his own evidence.  As I believe this is the proper time, I now object to his reading the report.
  His Lordship asked why Mr. Wainewright could not make the report evidence.
  Mr. Wilkinson said it would be only going over again the ground they had just traversed.  He objected to the report on two grounds, first, to the whole of it, and second to portions of it.  Firstly that it was a privileged communication, - but his Lordship would understand that he only made the objection pro forma, - secondly he objected to it because portions were irrelevant, as being expressions of opinion on the merits of the suit.
  His Lordship enquired whether Mr. Wainewright had read the report.
 Mr. Wainewright said no, that he had only just received it, and it was a very long document.
  His Lordship asked Mr. Wainewright could he not proceed with the cross-examination of the witness on some other points in the meantime.
  Mr. Wainewright replied in the affirmative, and the cross-examination was then resumed.
  Cross-examination continued - I originally made parliamentary plans and working drawings for the King's Lynn Dock.  I was senior to the gentleman in Sir Jas. Brunlees' office and I was from time to time down at the dock giving instructions and advice to the resident engineer on certain difficulties about the gates. It was a junior who was superintending the construction of the dock.  Sir James Brunlees, my chief, went down to the dock too, from time to time.  I was instructed by a senior as to what sort of coffer dam was required.  When I made the drawings I was not senior in the office.  I have looked up notes in the case of the China Merchants Lower Wharf and I find that the piles are specified at 40 feet long.  I gave as a reason for having such long piles the fact that the building had fallen down three times by reason of the bottom of the piles coming out, only twelve feet of the piles was above the mud.  I reconstructed the bund in that case for a considerable length, I believe about 250 or 300 feet.  The piles in that case were driven at a single [???]
  You said in your opinion a coffer dam for the purpose of repairing or reconstructing the dock was necessary - practically? Yes.
  I understood you to say the work could have been done without a coffer dam?
  Mr. Dowdall put to me a hypothetical question and that was my answer.
  Then you would have had to employ drivers? - No.
  Do you mean you could have made the bulkhead without using a coffer dam or drivers?
  I certainly never intended to convey that I would have repaired the dock in the way I am now doing it.
  His Lordship asked was all this technical matter necessary.
  Mr. Wainewright - Yes, I want to show that the witness could not have done the work without the coffer dam.
  His Lordship - The witness said "I could have done the work without a coffer dam, but it would have been more expensive."
  Witness - I think it may be assumed at once that no such work as that would have been impossible, but I still adhere to my evidence that a coffer dam was practically necessary.
  Cross-examination continued - I should never have dreamt of dispensing with a coffer dam in doing the work.  There might have been some legal reason for doing the work and dispensing with a coffer dam.  If it had been put to me I should have said yes and I would have tried to carry it out.  The contractor is the proper person to construct he coffer dam, at least that is the practice in England. In case of faulty construction then the practice in England is to make the contractor pay for the damage.  The design of the coffer dam prepared by the contractor would be submitted to the engineer for his approval.  I have brought some minutes of the Institute to prove that this is the practice at home.  I said I foresaw a weakness in the end of Capt.  Robert's coffer dam.  It has turned out that there is a weak spot one end.  The binding extends a considerable length on both sides and now this coffer dam is being renewed.  The weakness is not in the coffer dam itself, but at the end or dock heads.  I foresaw there was a certain risk, but one has to accept risks in temporary works, and no damage has resulted, and there need not be any leakage.  My intention was to complete the construction of the dock heads and then make the coffer dam, without any earth connection between the filling of the coffer dam and the earth in the pier head.  I certainly consider that I could have made the ends of the coffer dam water tight although there was no connection.  And there are some remarks on my first specification on this point.
  To his Lordship - I adopted the only possible plan where the coffer dam abuts on masonry, which I adapted with some modifications in case of woodwork.  Capt. Roberts adopted an exceedingly good plan where only woodwork is used.  I have no fault to find with it.
  Cross-examined - I proposed to leave out two of the walings until after the coffer dam was made so as to leave a smooth surface.
  I have seen this report (produced) of Capt. Roberts dated April 2nd.
  I have accepted a more inexpensive coffer dam than that referred to in paragraph 4.
  His LORDSHIP read the following ruling which he had made in writing, on the point argued on the morning, as the case might go further:-
  The recent case of Wheeler v. Le Marchand (L.R. 17 Ch. Div. p. 675) is conclusive on the point.  There are only such letters between the solicitor and the surveyors were protected from production has been prepared confidentially after dispute had arisen between the plaintiff and the defendants.  In the present case the report which it is sought to withhold, is a report dated the 3rd February 1888, and prepared by the surveyor under instructions from the plaintiffs.  There could be no dispute then between the parties, for until the report was received it was not known by the plaintiffs whether the dock was put of repair or not.  Nor after was it ascertained to be out of repair, could a dispute arise before the plaintiffs had come to the conclusion to hold the defendants responsible for such non-repair, and had in pursuance of such determination, called upon them to repair, and the defendants had repudiated their liability. The plaintiff's formal demand was not made till the 8th February, and the defendant's reply was made on the following day.  There is therefore, no privilege attaching to the report of the 3rd February, and it must be produced.
  Mr. Wainewright was about to read Mr. Morrison's report when Mr. Wilkinson asked his Lordship to make a note of his objection to the whole report  firstly being a privileged communication, and secondly to so much of it as was irrelevant, as being a legal opinion.
  His Lordship - Quite so, but I do not take Mr. Morrison's law. (To Mr. Wainewright) Are you going to read the whole of it, or are you going to leave out the legal opinion?
  Mr. Wainewright said the question of facts was so mixed up with legal opinions that he could hardly separate them.  But his Lordship would not pay any attention to the legal opinions of the witness, although he (M. Wainwright) had the greatest respect for everything it contained.
  Mr. Morrison said that if he was to be cross-examined on the report he would prefer the whole of it to be read.
  His Lordship - Yes and I will disclaim, of course, anything in the nature of a legal opinion.
  Mr. Wainwright then [proceeded to read the document which was as follows:-
Secretaries Pootung Dock Co.
  Gentlemen, - I duly received your letter of the 27th January, and in compliance therewith I inspected the Pooting Dock and premises on Saturday the 28th January, and again on Tuesday the 31st., in the forenoon at low water and in the afternoon at high water.  On the first occasion the dock was nearly empty but there was too much water in the bottom to allow of a complete inspection, on the second and third occasions the dock was as dry as it can be got.
  In your letter after giving me the particulars of the Lease under which the dock is held you ask me to report upon the facts bearing upon the question whether the repairs now required ought to be done by the Lessors or by the Lessees which is a distinctly engineering matter, and you further ask me to give my opinion on this point, which involves not only engineering but law, on which latter subject I cannot claim to speak with any authority, but I cannot exclude it altogether if I am to give any answer to the second part of your question.
  In replying to the first part of your question I shall as far as possible refer to the various points in the order adopted by you in your letter to me.
  As regards the expenditure of Tls. 20,000 by the Lessees as required in the Lease, I have inspected the buildings and machinery referred to in Messrs. S. C. Farmham & Co.'s letter and although some of the prices attached to the various items in the Schedule appear rather high I have satisfied myself that a careful estimate would give for the items included in that Schedule a total value of Tls. 20,000 or thereabout, but there are two points requiring attention.
- Certain of the buildings replace others destroyed by fire some months after the commencement of the lease, and it is a question of law whether the amount received from the insurance company (say Tls. 5,000) should not be accounted for in some way even if the original buildings were old and required reconstruction.
- The last items includes repairs to the wharf.  The responsibility of these repairs I shall refer to further on, but in any case I do not consider that they are included in the class of works to be paid for out of the Tls. 20.000 which was to be expended on buildings, machinery and appliances but not as I understand it on the structure of the dock or wharves.
  As regards repairs, I must separate the dock from the remainder of the property but omitting the dock, I consider that the buildings, pumps and premises generally are in a fair condition, as good as they can be expected to be during the currency of the lease.  If they had to be yielded up a few repairs might be required, but the lessees could not reasonably be asked to execute them while the Lease continues, and as regards all the premises above referred to they have been kept in the state of repair required by the clause No. 4 in your latter.
  The same remarks apply to the interior of the dock.  A timber dock in mud can never be kept like a masonry dock, but taking everything into consideration, I believe that it is in fair repair, though a few things might be asked for if it were being yielded up in the ordinary manner at the end of the lease.
  The dock and wharves are certainly not in the condition in which they ought to be either during the lease or at its termination.  The water is leaking badly into the dock between the caisson and the sill, through the dock heads, and under the sill, in large quantities.
  The actual condition of the dock is such that whereas formerly it could be pumped dry in four hours or less, it now required at least twelve hours.  This indicates an average leakage during the time of pumping sufficient to fill the dock in 6 hours.  If this average rate were increased 50 per cent, the dock could not be emptied at all, and as it is, at high tide (when the leakage is much above the average) the pump cannot gain on the water although it is of ample size. After the dock has been pumped dry the leaks round the caisson have of late been caulked with oakum or wedged with wood and leaks through the dock heads where possible have been treated in the same manner. This was at my request very thoroughly done before my last visit on 31st January as that I might see the leaks under the sill clearly, yet in spite of this when pumping was stopped the water rose in the dock to a height of 6 ft. 3 in. in 8 hours.
  In addition to the defects of the dock entrance the wharves at both sides are in a very bad state, the building behind them having slipped down and cracked.
  The repairs necessary for the dock are the construction of works which will prevent the water from leaking through the heads, or under the sill (which is in other words the reconstruction of the principal part of the entrance) and the fitting of the caisson so as to be watertight, but this last mentioned work will be a simple matter after the others are completed.
  The repairs required for the wharves on each side of the entrance, after the construction of new building (where it has not already been done) properly tied back with iron tie rods, and the repair and partial removal of the wharves themselves.
  After the description I have given of the dock it will readily be understood that in my opinion it is useless for the purpose of docking vessels.  I do not of course say that it is impossible to dock a vessel there, but that within what seems to be to be the reasonable meaning of the words it is useless for the purpose of docking.
  In asking me to give my opinion as to the origin of these troubles you refer me to clause 8 of your letter from which I infer that you consider the application of Clause B purely a question of law.
  Clause 8 refers to the dock being rendered useless "by earthquake, bursting in, or other unavoidable cause."  
  From reference to sides and other portions of the dock in other parts of the lease, I assume, that the bursting in here mentioned refers solely to water, at all events in includes it, and I consider such a bursting in to be a state of affairs arising either by degrees or suddenly where the water has free access to the dock.  It may be argued with much force that the present state of affairs amounts to a bursting in, and it may also be argued (though I think with little force) that a bursting in is coupled with earthquake is taken as an example of an unavoidable cause or failure of the dock, and that therefore one of the unavoidable causes contemplated by the clause had occurred.  I consider, however, that a more reasonable interpretation of the clause is that it refers to earthquakes, unavoidable bursting in, or some other unavoidable cause, and if this be so, it does not matter whether the present disaster is a bursting in or not, but it only has to be considered whether or not it arose from unavoidable causes.
  I consider the leakage to have arisen from a gradual giving way of the entrance to the dock.
  As far as can be seen the sill had been laid on a bed of concrete extending some distance inside the caisson and presumably carried some distance round the piles in the dock heads.  The concrete which is inside the sill and which probably is a fair specimen of the bulk is of a very inferior quality; and in one place near a large leak an iron bar went down easily into it more than two feet.  The water is now finding its way in large quantities both under and through this concrete.
  Leakage through the dock heads seems in construction to have been guarded against solely by planks laid horizontally behind the piles forming the front of the dock heads.  It is impossible to say how deep this planking was carried but it could not have been carried as deep as sheet piling would have gone and there is no evidence of the existence of piling of that description. The water is now finding its way either under or through the joints of the planking and it has made channels through the md, and is flowing into the dock.  Any channel of this sort once opened grows larger very rapidly, and there is one very bad leak near the up river end of the caisson arising evidently from this cause. The river in front of the dock is now very deep as is shown by the annexed sketches.
  I have no evidence as to the exact depth of the river in former times, but I have god evidence that it was much less than at present.  It is to the deepening of the river that I principally attribute the failure of the wharves and building, but I do not attribute the leakage at the entrance to this cause, or at all events I believe this cause to have played a very small part in casing the leakage which as before stated I attribute to the gradually giving way of the structure which has lasted for many years, but was not of a character to last for ever.
  The tie rods of the wharf building run a long way back into the dock heads and it is possible if the whole place were excavated (which of course is not possible at present) that some signs might appear of the dock head near the caisson being slightly injured by the movement of the piles, but even if this was the case it could not account for the leakage under the cill which is the most difficult to deal with and is of itself sufficient to render the dock useless.
  The repairs of the wharves I am inclined to look upon as Lessees business.  Though involving a certain amount of reconstruction, they may in my opinion reasonably be called repairs and I consider that all repairs should be done by Lessees.
  The leakage is a very different mater.  It could not have been prevented by an ordinary repair nor indeed by what I should consider repairs of any sort.
  Nothing could have been done and nothing can be done now to prevent leakage short of a reconstruction of a great part of the entrance, and where damage to or failure of a work of this sort can only be avoided by a reconstruction, reconstructing a great portion of it, my opinion is that the failure may reasonably be called unavoidable in the sense intended in the lease, and I consequently look upon the repairs to the entrance as belonging to the class of repairs referred to in Clause 8 of your letter as repairs to be executed by the Lessor.
  It is impossible at present to estimate the exact cost of repairing the entrance because the exiting works may, to some extent, interfere with the construction of the new works., and the depth of water in front makes the temporary works both difficult and expensive.  Moreover any estimate not founded on tolerably good drawings must be rather uncertain because there may be doubt as to the amount of work to be executed.  I would certainly advise the repair of the dock heads at the same time as the renewal of the entrance proper, and the work which I think should be carried out would cost somewhere about Tls. 25,000, though the entrance might be made watertight for a considerably smaller sum.
  If the works I advise were carried out there would I consider be a claim against the Lessees for the value of so much of the work as could be considered repairs, and possibly (though his is a minor point (some allowance for reducing cost of repairs during the remainder of the Lease.
  To conclude, there are two views of the case which I have not overlooked, but consider the decision as to which is the most correct so purely a matter of law that I shall offer no opinion on the point.
  It may be urged on the part of the company that the Lessees were well acquainted with the dock, that they must have known its condition and the condition of the entrance, and that it was this dock and this entrance which they undertook to keep in repair, and that parties who knowingly undertake to keep in order an old and somewhat worn out structure must not only be expected to do many things that a party could not be expected to do who undertook to keep in repair a new and apparently sound structure which suddenly developed some flaw, but must be understood to have agreed to go so far as to reconstruct all portions which failed, save only in the occurrence of the description designated as an Act of God )a sort of occurrence tolerably well understood though somewhat difficult to define).
  On the other Hand the Lessees may urge that the Lessors knew the condition of their own property and hat the insertion of clauses in the lease referring to repairs by the Lessors, and providing for the cancellation of the Lease in case the repairs to be carried out by the Lessor cost more than they cared to spent on their property, showed that accidents or even a total failure of the dock was foreseen and that the intention was that heavy repairs should be executed by the Lessors and slight repairs by the Lessees and subject to those the Lease was intended to last as long as the dock would last with a maximum of ten years.
  Should either of these views be held to be correct, the question at issue may be decided without any reference to the facts and opinions stated in the forgoing report.
  I have not given any answer to the question whether it would be profitable to the Company to undertake the repairs which I consider they ought to execute or not, because I consider it not only a question for the shareholders as a matter of right, but in order to leave none of your questions unanswered I reply that I consider it would be profitable.
I am, &c., G. James Morrison, Member of the Institution of Civil Engineers.
  The cross-examination of the witness by Mr. Wainewright was then proceeded with.
  Mr. Wainewright - Is there anything you would like to modify in that report?
  Witness - Yes, there are some statements which I would have to explain; the principal one is with regard to the question of repairs to the interior of the dock.  I think it fair to draw your Lordship's attention to the fact that I was asked on the 27th January to make a report, which I did on the 3rd February, in response to a request to let the report be given as soon as possible.  I do not think there is anything wrong in mentioning that the letter upon which I made the report was a draft letter.  With regard to the buildings there is nothing more to say.  With reference to the interior of the dock what I have there said is, I repeated again, too favourable for them.
  His Lordship - That is to say it is not fair as stated in the report?
  Witness - Yes, I satisfied myself at the time that it was not necessary to construct any works at the moment for repairing the dock, and I still hold to the opinion that repairs are not absolutely necessary at the present moment, - I mean expensive repairs.
  His Lordship - That is with regard to the interior of the dock? - Yes.
  His Lordship - The Report speaks of 1888?
  Yes, but there is practically no difference as regards heavy repairs, some slight repairs have been done since.  I stated in my examination in chief that it would take about Tls. 3,000 to put the interior of the dock into a proper condition, a condition in which to hand it over.   I say now, at the same time that - it would cost a very much smaller sum to the lessees.
  Mr. Morrison, cross-examined - I said in one place - "The leakage through the dock head seems to have been guarded against by planks."  On taking the dock to pieces I found that this was not actually correct.  I saw some planks, but they went down only a very short distance.  The leakage was not prevented by the planks; I found that the planking under the front played a really important part in keeping the water out.  I saw at the time a certain amount of planking which went down, one or two planks at the top, and formed the conclusion I have stated and which was wrong.
  His Lordship - And in that way your report was more favourable to them?
  Mr. Wainewright - You said ----
  Mr. Morrison - I know the point you are going to make, Mr. Wainewright. You are going to say that I did not know my business.
  Mr. Wainewright - No, not at all, I am only going to say that you say we should have known everything about it, and you, yourself, did not see when you went  to examine it.  Have you any other modifications to make now in your report?
  Witness - No, I would rather not modify it in detail.  I admit I made a mistake on one case, but it is on a very immaterial point.  I have nothing to modify.
  Mr. Wainewright - Do you adhere then to that report? - Yes.
  Mr. Wilkinson - Perhaps Mr. Wainewright would make the question plainer to Mr. Morrison.
  Mr. Wainewright - What question? I asked him no question.
  Mr. Wilkinson - You asked him did he adhere to the report.
  Mr. Wainewright to witness - Do you adhere to the report, save in so far as you have mentioned?
  I think I do.  What I particularly want to know is does it come now to a question of wording, as his Lordship of course leaves the opinion of the law out.
  Me. Wainewright - I do not refer to any question of law, but to a question of engineering.  There is very little law in it.
  The witness said he had nothing to modify.  Of course, the water had not free access to the dock, but he counted on the company being prepared for a bursting in, although he did not know whether there was a bursting in at the time.  He had said once or twice that he attributed the leakage to the gradual giving way of the structure, which he thought was about right, with the exception of the interior, he thought the report was a fair one on the condition of the dock.
  His Lordship to Mr. Wainewright - Had you not better call his attention to any particular view that you wish, so as to give him an opportunity of saying whether or not it is correct?
  Mr. Wainewright - I do not wish to do that, as it may interfere with some of my other questions; but I nay do it hereafter.
  Cross-examination resumed - I think we should have saved a considerable portion of the wharf on the northern part and made use of a considerable portion of the bunding if the work had been taken in hand when I made my report.  Piles could have been added to strengthen the building.  I think we could have treated the bunding on the northern side of the entrance as we have treated the bunding on the southern side, if we had started within a month after making my report.  I do not recognize the model produced as a model of some of the old buildings.  I recognize the other one (produced) as being a representation of some of the bunding.  I would have driven new long piled between every second pile in that, tying the old building back, to repair the building. To exemplify what I mean, I may say that buttresses may be built against a weak wall, as it had been done with good effect on some buildings on the French side.
  His Lordship - The Consulate for instance?
  Witness - No, but in some godowns. I should have driven the new piles between the old ones, making use of the old tie rods which I could have taken out.  But I am not prepared, without going into it, to say ow much of the northern bunding I could have treated in that way, or how much expense would have been saved.  By the time the work was taken in hand, I say that treatment had become quite impossible.  If I had repaired it in the way I suggest, it should have lasted as long as the timber, or till the timber decayed.  I have a similar expectation of the new bunding, I am not nervous about it slipping in.  I do not remember saying that the whole of the mud should be taken away from the sides of the entrance, and the timber work exposed.  I don't remember using the word "whole." It may have been in the question and I said yes.  I recollect seeing a passage in a letter saying that Capt. Roberts' idea was to open up the entrance to the dock more to make specifications for repairing it.  It was my opinion that this was not necessary.  If it had been done it would have enabled the contractors to form a closer estimate as regards one small portion of the cost of the works.  When I said "it would have left the structure exposed to the river" I meant that I did not consider it would make any difference in the carrying out of the work to remove the mud from the dock head, and besides it would have involved the risk of water getting in and I did not think it was worth the risk.  
  When I said the beams under the altars were rotten I meant the beams of "struts" traversing the altars and dividing them into section.  I had not tested all the large beams, but I saw several indications of their being rotten, one of which was that the sides were bulged which is a certain sign of the beams underneath being rotten.  I examined the beams very soon after my report and had a very good opportunity of seeing the large beams and piles, I saw some piles pulled up while repairs to the altars were going on.  I examined them, and the piles I saw were rotten.   It is a fact that the heads of the piled often present an appearance which would indicate that they were rotten and which could not be correct.  The Tls. 26,000 which is being spent on repairs or reconstruction, Tls. 5,000 is being spent in hard wood where Oregon might have been substituted. I should have been very sorry to pass it as the company's surveyor, if the piles of the building had been Oregon instead of hard wood.  A great deal more wood is being used than is absolutely necessary looking at it from the point of view of the repairing lessee.  I cannot see how the repairs can be cut down, without making another plan.  There is no other double sheet piling in Shanghai that I know of.
  His Lordship - It was single sheet piling before? - Yes.
  His Lordship - And it was built in 1862 and lasted twenty-five years.
  Cross-examination - I suppose single sheet piling would have been a matter of Tls. 700 or Tls. 800 difference.  Probably two rows of walings would have been sufficient, and would have satisfied me.  Two tows of tie-roads of the same thickness would not have satisfied me, but really it is not-worthwhile going into the small things.
  Mr. Wainewright - Oh, yes it does matter.  These small matters will pay our costs.  I have gained seven or eight hundred taels in the last minute.
  Cross-examination resumed - I don't think that if you had repaired, you would have been bound to put in anything like thirteen piles in each chase.  Less than that would have sufficed.  I did not see how to do it with less than eleven and I put in the two extra ones for additional security.  They are worth about 60 taels each.   Possible a smaller bulkhead might have been accepted, but it would not have been much lighter.  I allowed it to be carried in 30 feet, but I would have passed 20 feet on each side.  The old chase seems to have five piles. The old bulkhead ran in less than 15 feet, - from 12 to 16 feet.  The old bulkhead was in front of the caisson which was no proper place for it, and admitted of leakage, the new one comes up right to the chase, twenty feet above the surface of the dock, and 22 feet below. The timber about the bulkhead chase is very much heavier than before.  The old chase abutted on the bulkhead or ended on the floor, the new ones go as far as the foot of the bulkhead.
  I did not think that the dock entrance could have been made watertight for a very much smaller sum.  I do not think that if the tenants had come to me I could have made out specifications for a very much smaller sum.  I still adhere to my statement that Tls. 3,000 is about the margin.  I am not a good man at working out specifications for cheap work.  I could have out in a new bulkhead without a coffer dam, by making a circular watertight sill, instead, but it would cost more.   Practically the tenants to put in a new bulkhead must put in a new coffer dam, but it could be done without if required as an engineering feat.  The old bulkhead was not properly fastened into the side of the building, letting the water through.  It was too shallow and in a wrong position and not properly secured to the side of the entrance.  
  The lessees could have prevented the leakage through the side of the entrance, by excavating, sheet piling, and plugging with clay.  I have seen much more difficult leaks stopped in this way.  These leaks at the side would not have involved the reconstruction of the dock, and could have been kept down by mumping.  There were blocks of concrete under the chase which had apparently been put down after the reconstruction of the dock, through which the water forced its way, principally however through the clay on which they rested.  Without such a thorough overhaul as involved the laying of a new coffer dam, I think the dock might with care, have been kept in order for a great many years.
  The leaks at the end of the caisson could have been prevented by keeping in first class repair the bunding between the chase and the enner end of the bulkhead.  The chase had shifted a little.  It may have been better if the caisson had not been in so far.  I consider that the deflection of the chase was not due to there not being sufficient support inside.  If I had been in the position of the tenant I should have prevented the shifting of the chase by diagonal strutting behind.  In my first specification I suggested strutting.  I am quite sure that this plan would have had a very great effect and I think it would have been sufficient.  It would have given strength where strength was wanted.  If I had been the tenant it would have cost very little and I would have done it.  I do not think that the tenant could have prevented the leaks under the sill, but if everything had been kept in very good order, I don't think they would have appeared so soon - I allude here to the working of the timbers.  It was proposed to me by Captain Roberts before the work was done to remove the chase, but there was a very good block of concrete which might have gave a good deal of trouble to move it, and besides I did not see any reason for moving it I did not move it.  I do not see how there would have been any saving in expense in putting the caisson near the river.
 

Tuesday, 29th Jan.
  The cross-examination of Mr. Morrison was resumed this morning.
  Witness - I consider that there ought to have been some diagonal struts against the chase as well as horizontal strutting for additional strength.  They could have been placed behind, where the effect would have been somewhat the same.  I have put in four inch planks diagonally behind the horizontal struts.  I avoided going to the Old Dock when I was putting up the entrance of the Pootung Dock because I did not want to take anyone else's ideas, but at the same time I made use of the experience gained there.  I had an idea of how the Old Dock was constructed.  A large number of bolts put in as fastenings of the sill which were driven through the three inch planks of the bed into the mud, were consequently quite useless for want of timber to hold them, underneath.  That accounted for the leaks at the sill.  I ascribe the giving way of the sill to the want of a good timber foundation.  If I had to put in a curved sill, in case the keel of the caisson does not answer, I have made provision to have very heavy timber work below, so that when a bolt is driven through it will have something solid to hold it, - about 24 inches of timber.  Where there was only the thickness of three inch planking before, I am taking care to have two tows of four inch planking, and wherever the bolts will go there will be twenty inches of timber also.
  It was from weakness of construction that the sill gave way?    That was the greatest difficulty from the beginning.
  Cross-examination continued - Practically a coffer dam was necessary to remedy the defects.  If I had been asked to repair it, I should have certainly used a coffer dam.  The whole of the entrance was weak and some parts were of bad construction.  I think that a tenant of experience in these matters, like Mr. Simpson, must have known that the dock was weak and badly constructed when he saw the leaks.  If no leaks appeared until shortly before I was called in, say in December 1888, I really cannot say how Mr. Simpson would know that the dock was weak.  I thought there was planking behind the piles at the entrance.  In the course of the work when the mud was removed, I found that there was no planking.  The absence of planking behind the piles was not a defect.  I have not put planking in there myself.  I did not see my way to doing what ought to have been done without making a new entrance.  When I saw the condition of the entrance I did not see my way to repairing it so as to make satisfactory work of it.  But by continuous and extensive repairs, if they had been commenced earlier, the entrance might have been kept so as to last some time longer.  The construction of the caisson was bad to begin with.  Had I seen the caisson when it was new I could have told at once that it was of weak construction.  For one thing, it had not enough knees.  It might have been easily seen by inspection of the inside, by the removal of a few planks.  The want of knees and of bracing to keep it in form, which was the great defect, would have been at once apparent to anyone conversant with such work.
  I don't think there are any other defects which I can specify. (Handed a plan representing the caisson when new, and also when out of shape.)  I believe that to be a correct plan.   In my first specification, I said the bunding forming the sides of the entrance had moved very little.  I have strengthened it, and I now believe it has not moved at all for many years. I made a rather carful survey of this bunding and found that it was not straight, which agreed on comparison with Mr. Lester's plan on which it is also not straight.  I considered it advisable to strengthen this part of the bunding because I was strengthening all the rest of the dock and making what I considered a good job of it, and I thought it a pity  to leave it incumbent on the tenant however to do this.
  His Lordship - What would that cost?
  Witness - These questions at a moment's notice are very difficult.  I should say about Tls. 35 or Tls. 40 each.  There are fourteen piles here, seven on each side, and the costs of the ties, etc., would come to as much again.  I have not included this amount in the Tls. 3,000 for extra strength.
  Mr. Wainewright - I made Tls. 1.120 there.
  Cross-examination continued - If I had to describe the state of the dock I should not have called it a bursting.  I gave a definition of what a bursting is, and one which I still adhere to. Namely where the water had free access to the dock, a rush.
  His Lordship - Then it is a question of rapidity?
  Witness - Yes, if it dribbles in as it does in nine dock out of ten it is hardly a burst.  When it comes in in such quantity as to be unmanageable it is a burst.  I still say that I did not think it was coming in in such quantities into the dock when I saw it.
  To His Lordship - The figures in the report bear out the statement that if the dock was empty the leaks would fill it in 6 hours, if the pumps were not worked.  It would be one sixth full in one hour and one third full in two hours.  The pumps formerly pumped the dock dry in 4 hours, now it takes 12 hours, that is to say they pump out three dockfuls in 12 hours.  That does not come up to my idea of bursting, but it would if the leakage was fifty per cent more.  It is a little hard to pin me to answers where it is a matter of quantity.  They were always able to caulk the leaks when the dock was dry.
  Cross-examined - The dock nigh be useless for the purpose of docking vessels and yet might not be said to have burst.  The word "burst" is used in many different ways.  A water pipe, a river bank may burst, or financially a bank may burst.  I gave it as my opinion that the amount of leakage may varied have from day to day, but if it got very bad, it would go on fairly increasing.  The movement of the timbers from the pressure on the outside might cause more leakage one day than another.  The length of the old piles was about 32 feet.  I consider the new piles the proper length, I could not say that shorter piles might not do, but I put in the length I thought proper.  I never cut anything down so small in my life, that I could not have cut it a little finer.  The piles are 13 in. square; ten inch piles would not have done.  I believe I am right in stating that the bunding at the western side of the Hongkew creek is made of piles 13 in. square. I had nothing to do with putting them down either as engineer or member of the Municipal Council, but I was interested in putting up some very heavy buildings close by.  The bonding of the China Merchants' wharf on the French side (which I question can be called the China Merchants) has a great deal more pressure to bear than that at Pootung, and I should certainly have put in 13 inch piles at least there. Possibly I should put in18 inch piles if I could get them.  I have not heard of piles 46 feet long and 10 inches square.
  Mr. Wainewright - I will probably show that these piles are only 10-in. square.
  Witness - I think I am safe in saying that there are no piles so small as 10 inch in the building at the China Merchant's Lower Wharf at Hongkew which I put down.  I think they are all 10 inch and upwards.  They are 46 feet long.  The contractors (in the case of the Pootung Dock) I consider, have carried out the work exactly as I specified on the wharf.  Messrs. Farnham & Co. have done excellent work in the new building.  I consider the old building was badly constructed and insufficiently secured in the beginning.  I presume the old piles were driven slantingly.  The new piles are driven slightly bottom outward.  In driving where there are old piles I is difficult to say exactly where the piles will go.  The piles now are 3 feet 4 inched from centre to centre.  I cannot say if the tenants had done the work that I would have accepted piles five feet apart, but I would have accepted what they offered 3 feet 6 inches apart, and if they had offered single sheet piling up the back, instead of double I should have accepted it.  If I remember aright some of the old piles in the bunding down the river, were rotten, and some were sound.  We are not repairing the bund below the drain.  I do not quite agree with your note that this bunding is immaterial to the preservation of the property, and might very well be dispensed with altogether.  I am under the impression that my tie rods are a little shorter.  The old ones were quite long enough.  The wharves were in fair condition, but the timbers and the stringers under the planking were many of them in a decayed condition.  I refused a day or two ago to walk over one of them because I do not think it was safe.
  There has been some bunding put up on the upper side of the wharf within the last few years, I presume by Messrs. Farnham.  It was in a fairly good state, better than the other bunding.  We are leaving about some fifty feet of this binding that is behind the shears.  I don't think we have taken away a hundred feet. The total length of the newer part of the bunding was about nine hundred and ten feet.
  I saw a report by Capt. Roberts dated 27th August to Farnham & Co. in my second specification.  I think I am correct in stating that I made no modification in my specification in consequence of Capt. Roberts' first report dated 2nd April.  [The reports which were put in as evidence are as follows:-
Shanghai, 2nd April, 1888
Messrs. S. C. Farnham & Co.
DEAR SIRS, - In compliance with your request, I have examined the plans and specifications prepared by Messrs. Morrison and Gratton for work recommended by them to be done in the premises of the Pootung Dock, at Tung-ka-doo, and find -
1st. - The specification though stated to be for "Work to be executed in repairing the entrance and other portions of the Pootung Dock| is principally for a new bund 290 feet long, and a new entrance or gateway, both to be constructed entirely different from the present manner (Vide paragraphs marked).  The specification for new bunding, and for a portion of the new entrance or gateway calls for materials and labour largely in excess of what is necessary, while for other portions of a new entrance the requirements are insufficient.
2nd. - The only portion of the bund facing the river that is specified to be repaired is at the north end of the property. The greater part of this is half buried in a mud bank that has formed outside of it since the construction of the breakwater or groyne north of it;' the said bank being above water at low tide on a line extending from 20 feet south of the pump drain to within 40 feet of the outer end of the groyne.  As this portion of the property is used for building and launching vessels, hauling out boats, timber, &c., the bunding is an obstruction, and not being required to preserve or define a boundary, it can well be dispensed with.
3rd. - After stating "The bunding forming the side of the entrance has moved very little, if at all, Messrs. Morrison & Gratton knowing nothing of the internal structure of the piers, specify very extensive additions to the existing construction, giving as the sole reason therefore that "the planking back of the piers appears not to be sufficiently tight to prevent the earth from being washed away."  The repair of the gateway or the construction of a new one will remedy that defect.
4th. - The Coffer dam if constructed in accordance with the plan and specifications recommended, would be unnecessarily expensive, and decidedly unsafe. The proviso that the contractors will be allowed considerable latitude in constructing it, is one that I am surprised at, but in the present instance it will undoubtedly be availed of.
5th. - The present entrance is summarily condemned, notwithstanding the possibility that it may be found advisable to repair it, and details are given for constructing a new one, regarding which I have stated my opinion.  Should a new one be decided upon I think it will be for the interest of all concerned to construct it outside of the old one.
6th. - The idea of fitting and fastening a false keel to the bottom of the caisson is not practical, and its execution would be contrary to the rules for naval construction.
7th. - "The sides of the entrance inside the caisson not having given way" the additional piles, bracing and stay rods specified as being required to strengthen them seem unnecessary.
8th. - The three groynes come under the heading of new constructions.
9th. - In order to construct the new building as specified, the wharves will have to be almost entirely removed and subsequently rebuilt.
10th. - If cost is to be considered Oregon Pine is preferable to Malava for all wood work exposed to the air on account of being cheaper, longer, straighter, more uniform in required sizes, more easily worked, and probably more durable.  The sizes specified are in some instances unusual, and can only be obtained at a high price.
Yours faithfully.
J. P.  ROBERTS.
Shanghai, 27th August, 1888
Messrs. S. C. Farnham & Co.
  DEAR SIRS, - I have at your request carefully examined the plans and specifications for the new constructions at the Pootung Dock, drawn by Messrs. Morrison and Gratton, and report on them as follows -
  In constructing new bunding, I think it will be unwise not to extend it the full length of the present bund south of the entrance.  I am also of opinion that the piles should be driven slating instead of vertically:- That two rows of tie rods and walling are sufficient, and that double sheet piling at the back of the bund face is unnecessary.
  The three groynes as specified are also unnecessary for the reason that the new bund piles will be driven about fifteen feet deeper than the old ones, thus obviating all danger of their being washed out, whereas groynes may cause eddies that will cut away the mud in places along the bund face and weaken it.  In lieu of the three groynes I recommend that the present groynes at the north end of the property be extended at least fifteen feet.  As regards the "sides of the entrance" Messrs. Morrison & Gratton state "This bunding appears to consist of a row of piles with planking at the back, which planking appears to be not sufficiently tight to prevent the earth from being washed away."
  The washing away of the earth was caused by the leakage through the gateway into the dock, and will cease when the gateway is made watertight.  The bunding has neither given way nor started nor is it likely to do so for many years to come, as the depth of the water in the dock entrance midway between the piles is never below the level of the dock sill, while at the sides the mud is banked up several feet against the bunding.
  As regards the Caisson bed and the sides of the entrance forming the gateway, I think the proper course to pursue is to find the leaks and stop them, which can be done at much less cost than that which a new gateway will involve.  If however the shareholders decide to build a new gateway, I would advise them to lower the caisson bed and apron outside of it, at least two feet.  This will not add greatly to the cost, and will enhance the value of the property if the bed of the dock should subsequently be correspondingly lowered.
  I disapprove of the plan and specification for a new gate for the following reasons:- The proposed keel for the caisson should have at least three inches more siding - the tongue and grooved bulkhead is forty feet longer than is necessary and is on the wrong side of the keel groove, and insufficient provision is made for securing to the bed, a sill along the inner bottom edge of the caisson, which sill will have to be provided.  Where there is alluvial deposit, a caisson bed sometimes gets caked with hard mud that prevents the caisson from fitting closely, and therefore a sill is indispensable, as it always affords a caulking seam that can be easily closed.
Yours faithfully, &c., J. P. ROBERTS.
  Cross-examination continued - The bund is fifty feet shorter than intended in the original specification.  The fixing of the keel on the caisson has been carried out as originally specified, fastened on to the structure of the caisson.  The word "false" when applied to the keel is misapplied, and arose from my faulty knowledge of naval construction. When Captain Roberts criticized the proposal to put in a false keel as impracticable and contrary to the principles of naval construction, I thought he meant that the keel could not be put on at all.  The mistake was due to my erroneous use of the term "false."  I know that you are going to say Mr. Morrison is not an able engineer because he uses the term "false keel."  I never built a caisson.  I still consider a few groynes on the bunding an advantage, and I do not consider they would have the effect of creating scours or eddies.  There was one of the same dimensions which we are repairing and we are making two others.  In my opinion it would not have been groynes to keep the river from eating too far into the bund.
  I consider the statement in paragraph 10 of Captain Roberts' report as to the comparative merits of Oregon pine and Malava hardwood true except as to the question of durability, but I consider it only general fault finding.  None of the suggestions in that report recommended themselves to my judgment, and only made me angry.  There is one suggestion in it, which had it been adopted would have caused me to throw up the whole job.
  Mr. Wainewright said that Captain Roberts had since said that the suggestion referred to was a mistake.
  Cross-examined - When it was proposed by Captain Roberts to extend the breakwater twenty-five feet it was decided not to do it as that was a matter which ought to have been kept distinct, being a separate matter.  A narrowing of the river below the dock, would tend to deepen the river and increase the scour.  I believe that when the works are completed the dock will be a more valuable property than when the defendants took it in 1884.
  Re-examined by Mr. Dowdall - The bunding of the dock in Belfast which I examined in 1870 and 1874 is very similar to the old bunding of the Pootung Dock.   I have here a report of the proceedings of the British Association in Belfast in 184 at which I happened to read a paper and from the annexed plan your Lordship will see that the bunding at the Belfast dock is very similar to the one at Pootung.  There have been two or three bundings at Pootung Dock - at least two.  There are now practically two bundings.  In the new works by having single sheet piling instead of double, as proposed by Capt. Roberts, about Tls. 500 or Tls. 600 would have been saved, some allowance would have to come off that for single pieces of planking to be nailed at the back of the joints in the sheet piling.
  By Mr. Wainewright, through his Lordship, - This five hundred taels is not included in the allowance of Tls. 3,000 for additional strength, nor is it one of the things I should like to leave out either.
  Re-examined - I do not know of any instance in England where the engineer designed the coffer dam.  All the godowns at Kin-lee-yuen show signs of weakness and the further ones, those nearest the city, have slipped down perceptibly towards the water.
  This concluded the examination of the witness who had been in the box for four days, and the further hearing of the case was adjourned till Tuesday next.

 

Source: North China Herald, 8 February 1889

LAW REPORTS.
H.B.M.'s SUPREME COURT.
Shanghai 5th February 1889
Before R. A. Mowat, Esq., Acting Chief Justice.
THE POOTUNG DOCK CO. v. JAMES SIMPSON .
  Mr. H. S. Wilkinson and Mr. C. Dowdall appeared for the plaintiffs.  Mr. R. E. Wainewright, with whom was Mr. A Robinson, for the defendant.
  On the assembling of the court this afternoon, Counsel for the plaintiffs was about to call Mr. Thos. Kingsmill when
  His Lordship said - By arrangement with Counsel I inspected the dock this forenoon in company with the plaintiff's surveyor and one of the defendant's partners, and had the benefit of their explanation on the spot of any points on which I asked for explanation.  I now wish to say something to the parties and their counsel that has been, in the interval since we last met, borne upon my mind in connection with the suit.
  It is this - The question between the parties is simply how much of the cost of the work now being done to the dock is to be borne by each party.  It is a question of amount and nothing more.   Now the work consists of two things - ordinary repairs and what has been called "reconstruction."  Of that reconstruction so much is described by the expression "extra strength;"  as to the ordinary repairs and the extra strength there is no dispute.  The tenants admit their liability for ordinary repairs, and the landlords admit that they must pay for the extra strength.
  What remains (that is, reconstruction apart from extra strength) is the only part in dispute, and who is to pay for that is the question.  Now that will depend on the construction of the lease - which is a question of law.  Why, then, not come to that question at once without spending days on technical evidence which does not bear on that subject? The question of how much of the work is to be put down to ordinary repairs, and how much to extra strength, can afterwards be determined, I imagine, with little or no difficulty, and, I should say, far more satisfactorily to the parties, by their own surveyors, than by a decision in this Court or anywhere else.   Any difference between them (and it would probably be only a trifling one) could be settled, if need be, by referring it to some third person with the requisite practical knowledge.  
  At present we are proceeding, it seems to me, in the wrong  way - much as if in an Admiralty suit for damage by collision the question of the cost of repairs were gone into as the hearing of the principal suit - and we are proceeding at great length and enormous consequent expense to the parties.  I make this suggestion for the consideration of the parties and their Counsel, and I hope they will see their way to act on it.
  Mr. Wilkinson said his Lordship would recollect that at the opening of the case he was prepared to cite certain authorities.
  His Lordship - Quite so; but I did not know then what the case was at all, and now six days have been taken up with the evidence and cross-examination of some only of the plaintiffs' witnesses.
  Mr. Wilkinson said he did not exactly make the suggestion his Lordship referred to.  He (counsel) was going to refer to a number of authorities, when he (his Lordship) said it would be better to have the facts first; otherwise they might have been quoiting the law as to a state of facts never proved.  It might have been that they could have settled the question of law first, and then stated what facts ought to have been gone into.  He said that they were going under a certain covenant in the lease, and that there was only one covenant under which they met.  But his learned friend for some reason said that he wished to import two other covenants into the lease.
  His Lordship asked could they not first construe the meaning of the whole lease.
  Mr. Wilkinson said he was about to explain why that course had not been adopted.  The covenant was a covenant by which the tenants bound themselves to keep the dock in a state of ordinary repair, the bursting of the dock from any unforeseen cause only excepted.  It occurred to him (Counsel) that in order to determine the meaning of that covenant in the lease, it was necessary that his Lordship should be aware of something which could not be got from the dock's books, so that his Lordship  would be able to determine how the question turned upon the term "unforeseen."  His Lordship would see how difficult that would be without going into the facts - with regard to the meaning of the tern "unforeseen." It was not only a question of damage to the dock, but of how far that damage might or might not be unforeseen.
  His Lordship -But are we confining it at all to that?
  Mr. Wilkinson - Not at all, my Lord.
  Mr. Wainewright - No.
  Mr. Wilkinson said evidence might be taken on that point, and they had brought evidence to show what ought to have been foreseen and what ought not. He thought that it would be unfair to the other side to stop the evidence at the present stage.
  Mr. Wainwright - It would be unfair.
  Mr. Wilkinson said that without conferring with his learned friend, at the present moment he could not see how the two questions could be separated.
  His Lordship asked how much evidence had been given in cross-examination which had no bearing on the question of law.
  Mr. Wilkinson said he thought it possible that some understanding might be arrived at regarding His Lordship's suggestion, but he could not at the moment hold out any hopes as to what evidence would be stopped.
  His Lordship said he did not mean to say that all the evidence should be stopped at the present moment, but that enough only should be taken to enable the question of the construction of the lease to be first dealt with, matters of detail and figures should be meanwhile left to the surveyors of both sides to see if these could not be so settled.
  Mr. Wilkinson said he did not think he was in a position to argue the construction of the lease with justice to the other side; but if his learned friend thought it could be gone into then, he was quite prepared.
  His Lordship - You have called a surveyor on your side; now (to Mr. Wainewright) why cannot you call yours?
  Mr. Wainewright said it did not seem to be a convenient way to work his case.  He entirely agreed with what his learned friend had said, and thought it would be impossible to deal with the case as it then stood, without bringing forward further evidence as to the construction of the lease.  He had been expecting some intimation from his learned friend, or from his Lordship, that the question of amount would be dealt with at a later date; and not having any information on that head, he was anxious to get all he could from the witnesses.  He thought that all the circumstances of the bursting in required going into on both sides, and that he should being as many surveyors as he could to prove that it was from an unforeseen cause, and the same way on the other hand with the plaintiffs.  But as to the question of ordinary repairs, reconstruction and extra strength it was not for him to suggest.
  Mr. Wilkinson said his Lordship would recollect that he stopped him (Counsel) when he was citing a case on the legal question that arose.
  His Lordship - You know how that arose.  I do not think it is advisable to cite cases before the case is gone into.
  Mr. Wainewright - I think it has been the practice in this Court, your Lordship.
  His Lordship observed that there was nothing to prevent Counsel giving the other side a list of the cases he relied on, if he chose, but it was not the practice at home to cite authorities before a case was opened.
  Mr. Wainewright said it was necessary that he should know upon what cases the other side relied, in order to meet every point which might be raised by an ingenious advocate.
  Mr. Wilkinson said he was bound in this case to make every point that could be made.  He thought at the same time that they might perhaps after consultation see their way to fall in with his Lordship's  suggestion.
  His Lordship - Here we have been six days making an elaborate comparison of the old plans and the new.
  Mr. Wainewright said if the time of the hearing were put into hours it would not really be so very long, and the whole question of damage would have to be gone into sooner or later.
  His Lordship - How can that turn upon the lease?
  Mr. Wainewright said it did turn upon the lease.  He had three covenants to go upon.
  Mr. Wilkinson thought that it might be well to consider how far they could suspend evidence in furtherance of his Lordship's suggestion, but he did not think the whole case could be settled without further evidence.  In the fourth paragraph of the defendant's answer, he (Counsel) said, was raised a point of law which might be very well argued before going into the facts.  Intention was there pleaded, and it was a question whether that could be done after the defendant had abandoned the plea of rectification.  As it stood the question was purely one of law, and they could decide upon that.  But at present he was quite prepared to fall in with his Lordship's suggestion.
  His Lordship - I see you have a witness (Mr. Kingsmill) there.
  Mr. Wilkinson said it would be highly inconvenient to begin his examination at that stage.
  After some further argument Mr. Wainewright said he thought they might leave out for the present all that had been done at the dock, but of course his Lordship's suggestion was altogether unexpected.  Paragraph 4 of the answer had been strengthened by the other side giving evidence to show that the lease was forced upon them, and they had gone into it more fully than he had done.
  His Lordship said he did not anticipate that they would have any more evidence on that point.
  Mr. Wainewright said he believed that the other side were going to call a share broker on that pint.
  His Lordship - As I have said a couple of surveyors of your own could settle the case much better than I could.
  Mr. Wainewright - Scarcely, your Lordship.
  His Lordship - They are practical men, and have the knowledge that I have to get very slowly from them with your assistance.  I dare say that if two surveyors met and went into the question of how much was repairs, how much was extra strength and how much was reconstruction, they would only take minutes where we take hours.  Nor can I consoled myself with the reflection that in the end my decision, or that of the Court of Appeal will be satisfactory.
  Mr. Wilkinson said that he was in favour, as also were his clients, of doing everything to fall in with his Lordship's suggestion.
  His Lordship - You admit that you will have to pay for extra strength, and they admit they will have to pay for ordinary repairs.
  Mr. Wainewright - We don't admit that they are ordinary repairs.  We contend that one of the most important matters for which the plaintiffs claim, the bunding, has been ruined by causes over which we have no control, and should be paid for by the landlord.
  Mr. Wilkinson said he thought that was a point which might be settled by the surveyors.
  His Lordship - The surveyors are far better able to deal with that than I am.
  Mr. Wainewright - I think not.
  His Lordship - You are bringing them here to inform my mind on it.  How much is extra strength and how much is ordinary repairs they can very well settle, and as much as they cannot agree upon can be referred to a third person.
  Mr. Wilkinson said he thought it was desirable to have any disputed points brought before his Lordship in chambers, where he would be able to decide by aid of the light that had been thrown upon them during the hearing in Court.  The time to resume the argument on the question of law could then be settled in chambers.
  His Lordship - My feeling in the matter is purely to get the case settled in the best manner at the least expense to the parties, and they could do good in that way by leaving the questions which were not questions of law, to the surveyors, and the questions of law to the Court.  But as it is I look forward with alarm to the case as it has gone on.  
  I was informed when the case started that it would last four days, and it has now reached the seventh, and we have not finished the plaintiffs' case, and the decision will never be so satisfactory as the decision of a practical man, and then after all you will go home with the case.
  Mr. Wilkinson asked what form would the order for adjournment take.
  Mr. Wainewright said they would adjourn by mutual consent.
  Mr. Wilkinson asked would Mr. Wainewright make out a statement saying what he considered a proper amount for extra strength.
  M. Wainewright said he could not undertake o do that.
  His Lordship - Cannot you leave that to the surveyors?
  Mr. Wainewright observed that he did not think either parties were afraid of their lawyers, and he thought they had better put questions to the surveyors.
  His Lordship said that Mr. Morison had given the answers to the questions put to him in the fairest way and that he would have given the same answers to another surveyor
  Mr. Wainewright said their figures did not always agree.
  His Lordship in reference to the question of new piles said that Mr. Morrison had stated their cost to be Tls. 40 with Tls. 40 for something else in addition.
  Mr. Wainewright - The cost is over Tls. 100 each, and the cost for a lawyer a day is nothing to the cost of these piles (laughter).
  The further hearing of the case was then adjourned by mutual consent.

 

Source: North China Herald, 20 April 1889


LAW REPORTS.
H.B.M.'s SUPREME COURT.
Shanghai, 11th April, 1889
Before R. A. Mowat, Esq., Acting Chief Justice.
POOTUNG DOCK CO. v.JAMES SIMPSON.
  M. H. S. Wilkinson and Mr. C. Dowdall for the plaintiffs.
  Mr. R. E. Wainewright for the defendants.
  (The following evidence had to be omitted from our report of last week owing to pressure on our space.)
[Not transcribed.]
  Mr. Wilkinson said he would have to apply for an adjournment as an important witness for the plaintiffs was ill, and would not be able to attend for a fortnight.
  His Lordship said that these frequent adjournments made the suit even more difficult in picking up the threads of the case, and he should like very much to go on if it was possible.
  Mr. Wilkinson said he regretted that he did not see his way to going on with his case till the witness referred to was able to attend, as he would give important evidence on some new points.
  Mr. Wainewright did not oppose the application, observing that his Lordship would have an opportunity of refreshing his memory, when he (Mr. Wainewright) came to his part of the case, as he would be obliged to travel over pretty much the same ground as that already gone over.
  The next hearing was then fixed for Wednesday week (24th).    
 



Source: North China Herald, 27 April 1889


LAW REPORTS.
H.B.M.'s SUPREME COURT.
Shanghai, 24th April 1889
Before R. A. Mowat, Esq., Acting Chief Justice.
  Mr. H. S. Wilkinson and Mr. C. Dowdall for the plaintiffs.
  Mr. R. E. Wainewright for the defendants.
  Mr. Wilkinson stated that the witness referred to at the last hearing was still unable to attend, and he (counsel) did not feel justified in asking for another adjournment, and his case was now closed.
  Mr. Wainewright having opened his case called
[Not transcribed.]
We will continue our report in Monday's issue.



Source: North China Herald, 4 May 1889


LAW REPORTS.
H.B.M.'s SUPREME COURT.
Shanghai, 26th May 1889
Before R. A. Mowat, Esq., Acting Chief justice.
POOTUNG DOCK CO. v. JAMES SIMPSON.
...
29th April.
.  .  .   
The court then adjourned until 10 o'clock tomorrow morning.



Source: North China Herald, 11 May 1889

 


LAW REPORTS.
H.B.M.'s SUPREME COURT.
Shanghai, 2nd May.
Before R. A. Mowat, Esq., Acting Chief Justice.
POTUNG DOCK CO. v. JAMES SIMPSON.
.  .  .   
7th May.
  On the opening of the court this morning the agreement between the parties to accept His Lordship's decision even after the return of the Chief Justice, any application for rehearing to be made to the Privy Council, was signed and handed to His Lordship.
.  .  .   
8th May
Mr. Wainewright then addressed His Lordship, and intimated that he was not prepared to go on with the argument in any way that would be of use to the Court, and he preferred that it should stand over till next Monday.
.  .  .   
The Court then adjourned till Saturday at 10 a.m. when the arguments will be opened.



Source: North China Herald, 18 May 1889


Before R. A. Mowat, Esq., Acting Chief Justice.
POOTUN DOCK CO. v. JAMES SMPSON.
.  .  .   
The following is the evidence of Mr. Henry Lester which was taken March 4th, and which we have been obliged by pressure on our space to hold over since Wednesday last.  .

 

Source: North China Herald, 25 May 1889


LAW REPORTS.
H.B.M.'s SUPREME COURT,
Shanghai, 22nd May, 1889
Before R. A. Mowat, Esq.
POOTUNG DOCK CO. v. JAMES SIMPSON.
Adjourned till 10 a.m. Saturday.

 

Source: North China Herald, 1 June 1889


LAW REPORTS.
H.B.M.'s SUPREME COURT.
Shanghai, 25th May 1889
Before R. A. Mowat, Esq.
POOTUNG DOCK CO. v. JAMES SIMPSON.
  Mr. H. S. Wilkinson and Mr. C. Dowdall for the plaintiff.
  Mr. R. E. Wainewright for the defendants.
  The hearing of this case was resumed at 10 'clock this morning, and Mr. Wainewright continued his address on behalf of the defendant; he said that he would now call the attention of the Court to the evidence on the subject of scour.  [Also follows a sequence of letters from 1888.]
.  .  .   
  In conclusion M. Wainewright said that the facts of the case were all in favour of the Defendants, and he ventured to think that his Lordship would come to the conclusion that the law was also.
  Mr. Wilkinson said that as Mr. Dowdall was not able to be present, owing to indisposition, he should be glad to have the case postponed for a few days.
  Adjourned till Monday at 10 a.m.
 

Source: North China Herald, 8 June 1889



LAW REPORTS.
H.B.M.'s SUPREME COURT.
Before R. A. Mowat, Esq.
POTUNG DOCK CO. v. JAMES SIMPSON.
.  .  .   
  Mr. Wilkinson in opening his argument on behalf of the plaintiffs this morning, said there were three subjects dealt with in the pleading, the first of which was the undertaking of the defendants to the expenditure of taels 20,000, then the undertaking with regard to the expenditure of money received for insurance; and lastly the undertaking with reference to repairs.
[Not transcribed.]
Wednesday.
  Mr. Wilkinson concluded his speech this afternoon, and his Lordship intimated that he would have to take a little time for his decision on the case which extended over thirty hearings.
 


Source: North China Herald, 15 June 1889
 


LAW REPORTS.
H.B.M.'s SUPREME COURT.
Shanghai, 4th June.
Before R. A. Mowat, Esq.
POOTUNG DOCK CO. v. JAMES SIMPSON.
.  .  .   
  The hearing of Mr. Wilkinson's argument was resumed this morning.
.  .  .   
June 5th.
.  .  .   
  His Lordship as we have already stated intimated that he would have to take time to consider his judgment, and the Court adjourn


Source: North China Herald, 13 July 1889


LAW REPORTS.
H.B.M.'s SUPREME COURT.
Shanghai, 16th July.
Before R. A. Mowat, Esq., Assistant Judge.
POOTUNG DOCK CO. v. JAMES SIMPSON.
  Mr. H. S. Wilkinson and Mr. C. Dowdall for the plaintiffs.
  M. R. E. Wainewright for the defendant.
  The Assistant Judge at 3.30 this afternoon delivered the following
JUDGMENT.
  The plaintiffs in this case are the owners of a timber dock on the Pootung side of the Shanghai river.  They leased it in May 1875 to the defendant and three other persons who were together carrying on business as shipwrights here under the style of S. C. Farnham & Co. Under that lease the tenants were bond to keep the dock in a perfect state of repair.  During its currency, however, they were able to carry a resolution at a meeting of the shareholders of the Company, under which the lease was surrendered and a new one, on terms as to repair more favourable to the tenants, granted for ten years from the 1st July 1884. On February 3rd, 1888, the Company ascertained from the report of their surveyor that the wharves and bunding were in a state of gross disorder, while the dock itself had from extensive leaking become useless for the docking of vessels..  The tenants were formally called upon by letter of the 8th February to repair these defects.  They replied next day repudiating any liability in respect of the condition of the dock. A few days later the Company proposed to Messrs. Farnham & Co. to undertake the necessary repairs at once without prejudice as to who should ultimately be held responsible for them.  This Messrs. Farnham & Co. refused to do, but offered to execute the repairs for the company at cost price - a proposal which the Company in turn rejected. Ultimately the company undertook to have the work done at their own expense, without prejudice as to the question of liability.  The tender of the defendant's firm of contractors for the reconstruction and repairs was accepted, but the contract was not signed nor the wok begun till October.
  It was agreed between the parties that for the purposes of the suit the dock and premises and all circumstances relating thereto should have remained in the same state in which they might be at the date of a formal agreement which was to be drawn up.  None such was ever prepared. The parties, however, proceeded at the hearing, as I understood, in the tacit assumption that he question of liability for all the repairs, including even the additional work which it was found necessary to do during the hearing, should be determined in the suit, and I have acted on what I supposed was the understanding.
  The petition was filed as far back as the 17th February, 1888, and the answer on the 8th March 1888.  The defendant is sued alone, inasmuch as the only other member of the firm of S. C. Farnham & Co., at the date of the lease of 1884, is a German subject, and therefore not under the jurisdiction of his Court.  The case was not brought on for hearing till January 1889, in consequence mainly, I believe, of the premises being still under repair.  It was adjourned for sundry reasons from time to time, and after having occupied in all 28 days or part days, the hearing closed on the 5th June.  The repairs, I understand, have been since completed and I have now to give judgment on the various points raised in the case.
  The action is one for damages.  The plaintiffs claim Tls. 50,000 in respect of three alleged breaches of covenant in the lease.  The defendant denies the two of the alleged breaches set up in the original petition.  He admits the facts set out in the amendment to the petition which are relied upon by the plaintiffs as constituting the third breach, but contends that such facts do not amount to a breach of covenant.  The covenants which the defendant is alleged to have broken may for the present be shortly described as - (1) a covenant to expend certain insurance money; (2) a covenant to expend Tls. 20,000 in improvements, and (3) a covenant to  repair.
  I will deal with these in the order named.
  The first is one by which the defendant is bound to lay out, in rebuilding or repairing such of the buildings or parts thereof as should be burnt down or damaged by fire, the whole of the money which should be received  from the insurance office in respect of such loss or damage. The admitted facts on this part of the case are that one of the plaintiffs' buildings which the defendant was bound to insure and which was insured for Tls. 5,500, was in the end of 1884 totally destroyed by fire; that the insurance office paid to the defendant (after deducting Tls. 145 as estimated value of the salvage) Tls. 5,355 in respect of the loss; and that the cost of the building which the defendant erected in its stead was only Tls. 3,600.  On these facts the plaintiffs contend that the defendant has broken his covenant, inasmuch as, even giving him credit for a saving of 20 per vent on the cost of the building which he effected by having the work done by his own workmen instead of employing a contractor, the amount of the money expended falls short of the money received by Tls. 855. The defendant, on the other hand, contends that all that he was bound to do under the covenant was to reinstate, and that as a fact he has done so.  It was admitted by plaintiffs' counsel that the defendant was not bound to more than reinstatement, and the question is whether defendant did as a fact replace the building with one equally good.  The plaintiffs do not seem to have at first attached any importance to the matter, for though they knew from the letter of the defendant's firm of the 28th January, 1888, the amount expended in the rebuilding of the building, and though their attention was expressly drawn to the point by their own surveyor in his report of Feb, 5th, 1888, who further then informed them approximately of the amount received by the defendant from the insurance office, no mention of the covenant in question was made in the petition, which was dated 17th Feb., that is fourteen days after.  Not till April 11th, 1888 (the 9th day of the hearing), did the plaintiffs ask leave to amend their petition by inserting two paragraphs setting out the covenant and alleging its breach - their surveyor having meanwhile, on the 24th January, 1889 (the 4th day of the hearing), given evidence of the precise amount paid by the insurance company.  Now it appears from the report of Mr. Lester of the 30th January, 1873, which was put in evidence y the plaintiffs, that the original building then required repair, and in Messrs. S. C. Farnham & Co.'s letter of the 14th May, 1883, also put in by the plaintiffs, it is described as being in a ruinous condition.  Further, the plaintiffs made no complaint about the new building from December, 1885, when it was completed, till April 1889, - during the last fourteen months of which period they knew everything, with the single exception of the precise amount paid by the insurance company, that they know now.  Under such circumstances, and having regard to the proved condition of the old building, I should not, it seems to me, be justified in finding as a fact that the defendant had not reinstated it.  I attach no importance whatever, as against the defendant, to the circumstances that the building had been insured for Tls. 5,500 - and for this reason.  We do not know either when the first insurance was made, nor for how much, nor who furnished the estimate of the value of the building.  The matter was commented upon by the plaintiffs' counsel as if the defendant had effected the insurance on his own estimate of Tls. 5,500 upon the execution of the present lease, and under the covenant in it.  The fact is that the policy was effected in December 1883 -that is, during the earlier lease of 1875 to the defendant's firm, which, like the still earlier one of 1872 to their predecessors, contained covenants for insurance precisely similar to the covenants in the present lease.  The inference that I should be disposed to draw from that state of things is that the tenants kept the insurance on foot from year to year probably at the original figure, by whomsoever it was fixed, being content to pay the amount without concerning themselves as to the value of the property - for it was the plaintiffs' property - and that in all probability, fort the reason just given, the amount of the insurance was in the first instance fixed by the plaintiffs, and not by the tenants at all.  I should also certainly presume that the amount, by whomsoever fixed, was a correct value, having regard to the cost of labour and materials at the time.  I have dwelt somewhat on this matter of "over-insurance," because the point was unduly pressed against the defendant firm, as I think, a want of exact appreciation of the matter.
  The second covenant which the defendant is alleged to have broken is one requiring him to "within two years from the 1st day of July, 1884" to "expend a sum of not less than Tls. 20,000 in renewing the pumps boilers and shears and in rebuilding and repairing the buildings now on the said property." The plaintiffs admit that the defendant did within the specified period spend a sum of Tls. 13,386.71 in performance of his covenant, but no more - that is to say, there is an alleged short-coming of Tls.  6,613.29. The defendant, on the other hand, contends that he spent more than the Tls. 20,000, but, to make good that contention, he has to rely upon disbursements by him of at least two out of three sums, none of which, however, according to the plaintiffs, are properly referable to the covenant in question.  The three sums are: - Tls. 3,0234, expended in 1883; Tls. 3,600, the money already referred to as having been received from the insurance company, and spent in rebuilding the building burnt; and Tls. 3,843.40, expended in repairs to the dock, caisson, and wharves.  It will be observed that if the defendant can make out his contention to reckon two of these sums as part of the Tls. 20,000 he will have performed his covenant.
  I will take first the Tls. 3,600.  The money was unquestionably expended in rebuilding one of the buildings, the subject of the covenant.  But side by side with that covenant, there is the other covenant already quoted, binding the defendant to insure the buildings generally - of which the building burnt was one - and with the money received in the event of fire to reinstate he building destroyed; and it was argued on behalf of the plaintiffs that the defendant was not entitled to treat the money which he received from the insurance company and which he applied in reinstating the building, as a pro tanto discharge of his covenant to expend Tls. 20,000 in repairs.  At first it might seem that the defendant could not, by what was in effect one act or payment, discharge what would appear to be two separate and independent covenants.  But the two covenants are not really independent except in so far as the time over which they extend is not identical, and so far as the buildings to which they relate nay not be the same; during a part of the time and for certain buildings they are identical in their scope and operation.  The question is not, - Whence did the money to rebuild come? Have the plaintiffs got what they stipulated to get? They stipulated for an expenditure of Tls. 20,000 within 2 years for (among other things) the rebuilding of a particular building by the defendant, and within that time the building was rebuilt by him.  Had the fire not taken place, the defendant must have before the 30th June, 1886, at his own expense rebuilt the building; the facts of the fire having taken place, and the defendant thus being able, at no outlay beyond the premium, to restore the building, cannot make any difference to the plaintiffs.  He is in this way, no doubt, a gainer by the fire, but that is a matter altogether outside his covenant with the plaintiffs and one with which they have no concern.  On the other hand, to accede to the plaintiffs' contention would be to increase the sum of Tls. 20,000 named in the covenant to Tls. 23,000. For these reasons I am of opinion that the defendant is entitled to add the Tls. 3,000 to the Tls. 13,000 odd admitted by the plaintiffs.
  Next, as to the Tls. 3,025, which is made up of two items, viz. Tls. 2,000 for a new godown, and Tls. 725 for the repairs and roofing with iron of a blacksmith's workshop. These amounts were expended in the latter Part of 1883 - prior, that is, to the date named in the covenant - and therefore do not in terms fall within it.  The defendant contends, however, that such prior expenditure was intended by both parties to form part of the Tls. 20,000 and was in fact so considered by them.  The facts on which he relies on this branch of the case are as follows: - On the 16th May, 1883, at which time his firm were in occupation of the premises under the lease of 1875 - which was to  expire on the 30th September, 1885, and under which they were bound to keep the premises in a perfect state of repair - they wrote to the director of the company suggesting that he should submit to the shareholders a proposal for the execution by them (Messrs. Farnham & Co.,) of certain urgently needed renewals and repairs (amongst which this godown and workshop were included) on the terms that the Company should either (1) bear one-half of the total estimated cost of Tls. 20,000, or (2) cancel the existing lease and gran a new lease from the 1st July, 1884, on the conditions, as to repairs, of the lease under which they (Farnham & Co.) held another dock at Shanghai, known as the Old Dock.  On the director declining to submit either proposal to the shareholders, the defendant's firm proceeded to build the godown and to repair the workshop.  In a letter of the 16th January, 1884, they returned to the question.  They described over again the repairs, etc., mentioned in their earlier letter (adding, however, that they had by that time built the godown and repaired he workshop), and asked the company to pay one-half of the Tls. 20,000 and grant them a new lease. On the 28th February an extraordinary general meeting of the shareholders was summoned "to consider the proposition of Messrs. S. C. Farnham & Co.  per their letter to the director of the Pootung Dock Co,., dated 16th January, 1884, for an extension of the lease of the Company's premises to them upon different terms to those upon which the premises are now leased, and for a special allowance or arrangement in respect of repairs." The director, who was opposed throughout to the proposals of the lessees, issued to the shareholders a circular explaining his views.  In it he says "Messrs. S. C. Farnham & Co. now requite the proprietors to find half the cost of putting the dock in good order and purchasing such additional machinery estimated [i.e. estimated in all] at Tls. 20,000 of which the proprietors have to pay Tls. 10,000, *   *   *   The meeting was duly held on the 6th March.  The defendant, who was a shareholder in the company, attended the meeting, and his remarks on the point under discussion are thus summarized in the minutes: "The reason why they [i.e., his firm] don't wait till the end of the present lease is that the pumps etc., are worn out, and as he was proceeding to England shortly he could make the necessary arrangements.   He then read the letter which had been addressed to the Chairman [i.e., the letter of 16th January], and *   *   *   *   *   concluded by showing the way in which they proposed to spend the Tls. 20,000 which the repairs are estimated to cost."  The resolution unanimously come to at the meeting was one proposed by the defendant himself, viz. "That Messrs. Farnham & Co.'s proposition as per letter of 16th January be accepted with the alteration hat Tls. 10,500 rent be paid instead of Tls. 9,000, they, S. C. Farnham & Co. spending Tls,. 20,000 for pumps, buildings, &c. The lease to be for ten years from 1st July, 1884, on terms of the Old Dock lease.  All improvements to become the property of the Company at the end of the term"- this last clause being the reproduction in somewhat different language of another of the terms of Messrs. Farnham & Co.'s letter of the 16th January. A letter was signed accordingly, bearing date the 30th June 1884, and containing the covenant already set out.  At the annual general meeting of the shareholders in January 1886, the directors stated that the works at the dock had been finished in a most satisfactory state.   In the witness box he explained that this had reference only to the pumping gear, which was all he had personally taken notice of, though he admitted that as the passage stood in the minutes, his statement would have been calculated to have the effect of making the shareholders think that all the works referred to in Farnham & Co.'s letter of the 16th January had been carried out satisfactorily.  He further admitted, on cross-examination, that he understood from the words "already done by us" in the letter, that the work in question had been done, and that he further understood that work to be included in the estimate of Tls. 20,000.  Such are the facts on which the defendant bases his contention to have the Tls. 3,025 allowed as part of the Tl. 20,000. He has shown, I think, beyond any reasonable doubt that the expenditure on the godown and the workshop was intended by both parties to form part of the Tls. 20,000, and that in fact it was so understood by them. But he question is whether in law on the construction of h lease - for that is a mater purely of law - he has thereby improved his position under the covenant.  Probably every one will feel that the plaintiffs in suing under that covenant under the circumstances - I mean of course in respect only of the Tls. 3.025 - are acting, to say the least, harshly.  They have, according to the evidence of their own director, had that amount expended for the very purpose for which it was, as explained in the director's circular, to be expended, viz. towards putting the dock in order, but because it was expended a few months earlier than the date named in the lease, they now claim to have it disregarded altogether, and seek to make the defendant liable for a breach of covenant to the extent of the amount of such earlier expenditure.  The plaintiffs' counsel, it is true, suggested that something of which we are ignorant may have passed between the parties on the subject in the interval between the 6th March and the date of the lease,  and he based that surmise upon the fact that there are some variations between the new lease and the Old Dock lease.  But if here were anything in the way of fact that could justify, or even support, the claim, the director must have known it, and he would no doubt have stated it, if not in his evidence-in-chief when he produced Franham & Co.'s letter of the 16th January, certainly on cross-examination.  However, the question is one of law, as I have said, and the rule on the point is explicit.  Where a contract has been reduced to writing and its terms are plain and unequivocal, I am not at liberty to construe the covenant by antecedent acts of the arties, by their presumed intention, or even by their understanding of it. It is to their language, and to their language alone, that I must look.  The result, therefore, is that the defendant is not entitled to reckon as part of the Tls. 20,000 the sum of Tls. 3,025, because such sum was not expended "within two years from the 1st day of July 1884." When, however, sitting as a jury, I have to assess the damages on that head. I am entitled to look at all the circumstances of the case, and for such a purely technical breach of contract I assess the damages at a purely nominal sum.
  Having thuds far held the defendant is entitled to reckon the Tls. 3,600 as part of the Tls. 20,000, and that the damages in respect of the non-expenditure of the Tls. 3.025 are nominal, I might dispense with any reference to the 3rd sum, viz. Tls. 3,843.40, the expenditure on dock, caisson, wharves, etc. But as I have considered that subject also, it may be of advantage to the parties if I state shortly the conclusions at which I have arrived on this had.  I do not accede to the contention of the defendant's counsel that the covenant to expend Tls. 20,000 and the covenant to repair are co-extensive as to their subject matter; on the contrary, I think the two branches of the covenant quite distinct.  But I agree that the wharves fall under "buildings," in the first clause.  I do not think they are "appurtenances" in the 2nd clause as argued by the plaintiffs' counsel; that term in my opinion is intimately connected with the words immediately preceding, and they are to be read together, "buildings with their appurtenances." Nor do I think "buildings" in the 1st clause is necessarily limited to the "buildings" that are referred to in the covenant to insure.  The word might perhaps be considered ambiguous and the letters of the 18th May 18834 and 16th January 1884 would be admissible to show that repairs to wharf were to form part of the Tls. 20,000 repairs.  In the same way, the letter of the 14th May 1883 would, by comparison with these letters, show, if it were needed, that repairs to the dock and caisson were not included in the estimate, but I do not consider hem "buildings" within the first clause ay all, as the dock is expressly mentioned in the 2nd (which, I have said, I hold to be quite distinct from the first) and the caisson I consider, so far as this covenant is concerned, to be a part of the dock.  The result of all this is that in my judgment the defendant is entitled to reckon as a part of the Tls. 20,000 the sum of Tls. 2,197.93 expended upon the wharf. So much of the Tls. 1.135.44 expended on dock, caisson and wharves, as is referable to the wharves, and nothing of the Tls. 510.03 expended on the caisson.  (These three sums make up the amount already mentioned of Tls. 3,843.40.) It does not appear, as far as I can make out from the particulars furnished on the 2nd of these accounts, that the defendant can bring up his total expenditure under his covenant to the Tls. 20,000. If as much as Tls. 815.36 of the Tls. 1,135.44 were referable to the wharves, it would be so, but the point is immaterial, for the damages are, as I have said, minimal for the reason I have given.
  I come now to the third and last alleged beach - that of the covenant to repair.  This is the main question in the case, and it is one of very considerable difficulty.  The first material provision in the lease on the subject of repairing is as follows: [The lessees] "shall and will at all times during the said term well and sufficiently repair and keep the said dock, pumps, boilers, shears and buildings with their appurtenances which now are or shall at any time hereafter be erected as hereinbefore stipulated of the said property in ordinary good repair (the bursting of the dock from any unforeseen cause only excepted)." This covenant comes comparatively early in the lease, and quite at the end are the only other two provisions which I think material on the subject. The first of these follows immediately upon the usual covenant for quiet enjoyment so long as the rent is paid and the covenants are performed, and runs thus:
 "And it is further agreed that in the case the said dock shall during the said term hereby granted be rendered useless for the docking of vessels by earthquake bursting in or other unavoidable cause the rent herby reserved shall be remitted or suspended from the time of such accident until the premises so injured shall be repaired by the said lessee his successors and assigns and made fit for the use of the said lessees their respective executors administrators and assigns."
  Then comes the other:-
  "Lastly it is agreed by and between the parties hereto that if at any time during the term hereby granted repairs occasioned by the giving way of the entrance side or flooring of the dock should be required costing more than the said lessor his successor or assigns shall be authorised by the shareholders for the time being of the said company to expend thereon then and in such case the said lessor his successors or assigns shall be at liberty to terminate this lease forthwith."
  What is the effect of these three provisions?  For the rule of construction is that, if possible, the whole of a deed, or the whole of its provisions on a particular subject, is to be so construed as to give effect to it, or them, as a whole without sacrificing any part - in other words, to make the whole, if possible, harmonious and consistent. Some difficult in doing this arises here from the varying language of the deed.  Prima facie of course where we find the language differing, we should expect that the idea sought to be conveyed is different, but this is only a presumption, and must at times give way to other considerations.  In these three provisions we have three different expressions.  There is, first, the bursting of the dock from an unforeseen cause; next, the dock being rendered useless for the docking of vessels by an unavoidable bursting in; and, lastly, the giving way of the entrance, sides, or flooring of the dock. Contrasting the language of the first and second provisions, and taking the language of the second literally, it would seem as if  it were supposed that there might be a bursting in of the dock which would nevertheless not render the dock useless for docking vessels - otherwise why was the new expression employed? But a bursting of the dock to my mind imports ex vi termini as a necessary consequence of the dock being rendered useless for docking vessels, and therefore I come to the conclusion that the contingency contemplated in the two provisions is the same (except in so far as there may be a difference between "unforeseen" and "unavoidable"), and that the words "rendered useless for the docking of vessels" were added merely to explain the condition of things which would exist when the dock might be said to have "burst" or "burst in." So, in the same way, I understand the expression in the third provision - "the giving way of the entrance, sides or flooring of the dock" - to be only another description of the state of things which shall amount to a "bursting" of the dock; if the entrance, sides, or flooring of the dock have given way, the dock will have burst.  Indeed, "giving way," it will be seen, is the proper expression when one is speaking of the passive framework, so to speak, of the dock, while "burst" is that which has reference to the active cause.  One speaks, for example, of the embankment of a canal or the banks of a river giving way, but of the canal or river bursting its banks.  So far, then, all is clear enough, but the defendant goes further and contends that the definition in the last provision - the "giving way of the entrance sides or flooring of the dock" - applies not merely to a bursting of the dock from an unforeseen cause, or an unavoidable bursting in, but extends to and includes the case of a collapse of the dock from any cause or of any kind. I cannot agree in such a construction.  It is true that neither "unavoidable" nor 'unforeseen" precedes the words giving way, and so far it may be argued that only bursting is contemplated by that clause.  But the answer to the contention is that while such would be the undoubted effect of that clause if there were no others in the lease on the subject, the rule of construction which I have referred to- viz. that a consistent meaning must be arrived at from the document as a whole -excludes that contention. Such a construction would create an actual conflict (as distinguished from an apparent inconsistency) between the different provisions of the deed. The proper construction is one that will reconcile the provisions, and the following reasoning effects that simply enough: that the two latter provisions contemplate repairs being done in what is substantially one certain event by the landlords; the first particularises the one case where the tenants have not to repair, and where, therefore, it is the plaintiffs who have to repair; it follows, consequently, that the event contemplated in the latter provisions is the same contingency as that provided for by the first.  Read thus, the stipulations are not in conflict at all, while any other construction would have the effect of striking the words "from an unforeseeable cause" and "by unavoidable cause" out of the deed.  The true construction therefore of the three provisions is this: the defendant is liable for repairs unless the dock should burst from an unforeseen cause or from an unavoidable cause; should it do so, he is not liable for the repairs, and should the cause be an unavoidable one (as distinguished from an unforeseen cause, if there is an substantial distinction), he cannot be called upon to pay rent till the dock is again fit for his use; on the other hand, the landlords are not bound to repair even in the excepted cases if the cost of repairs should be more than the company thinks fit to expend upon them.  The question, then, is - Has the dock burst from an unavoidable or from an unforeseen cause? The defendant contends that it has; but the plaintiffs say that it has not. They deny even that it had burst at all, but on this point - which, however, is not material to their case - I find as a fact that it has.  Engineers were called on either side to support the respective views that what had occurred was or was not a "bursting." As to this, I may say in the first place that, as I have pointed out, the lease contains within itself a sufficient explanation of what a bursting is.  In the next place, the term is not one which, as it seems to me, requires any expert evidence to understand. Without attempting an exact definition of the word as applied to a dock, I should say that when an influx of water into a dock takes place in such quantities that it is found practically impossible to cope with it by the use of the ordinary appliances for keeping a dock dry, and the dock thereby becomes unserviceable as a dry dock, such a state of affairs is correctly described as a "bursting" of the dock.  Then did the dock burst from an unforeseen or unavoidable cause?  It is first necessary to ascertain with as much certainty as pissible what the cause of the collapse of the dock was.  It is common ground that there were certain serious defects in the original design of the dock - such as that the bulkhead was wrongly placed, that it was not continuous, that it did not enter far enough into the earth at the sides or wings, that it was not carried high enough and that the chase-piles only rested on the floor of the platform instead of going down through it.  It is also common ground that the existence of these defects was neither known to nor suspected by the tenants, who could not have ascertained the existence of some of them except by digging up the sides of the entrance, while the existence of others could only have been ascertained by constructing a coffer dam (thereby closing the dock) and then pulling the entrance to pieces.  Hi
How serious these defects were may be inferred from the fact that while the original bulkhead went only 10 feet above the level of the platform and 10 feet into the wings, it has been thought necessary to carry the new ne 20 feet below it (how far the original one went down has not been ascertained, but probably it was on the same scale as in other dimensions), and 30 feet into the wings.  So the new chase-piles, instead of resting on the platform as the old ones did, are now carried down through it 22 feet. Again - to mention another defect - there was no timber under the bed of the three-inch planks to receive the bolts, now there is 28 inches of timber for that purpose.  But, on the other hand, we have the facts that the dock was built in 1862, that from that date down to the end of January 1889 it continued to be a serviceable water-tight dock, and that it then within a day or two, passed, as from some uncontrollable cause,  from that condition into one of being practically useless.  Now it is evident that neither mere lapse of time nor the original defects of construction could of themselves have brought about that change with such suddenness and irresistibleness.  The explanation must therefore be looked for in some other direction.  The plaintiffs say it was because the defendant did not repair.  I find no evidence of such want of repair as would or could have led to a break-down of this nature. Then what is the explanation? The evidence satisfied me that the proximate cause of the accident was the change at that point in the course and depth of the river - a tidal one - which, it has been shown, had for some years been gradually taking place.  The opposite shore having made out, the tide had been impinging with constantly increasing force on the side where the dock is.  The channel too just below the dock had narrowed within a few years from 1,120ft to 975ft., and the depth of water had as a consequence largely increased.  We know, for example, that two months after the date of the accident, the depth of water, a few feet outside the bulkhead, increased from 30 feet to 35 feet. Then as a further result of the narrowing of the river and change of direction of its tide, the scour at the dock had become enormously greater. How great the effect of the scour in this river can be, may be inferred from the fact that although the piles of the new  bunding were driven 25 feet into the mud (instead of an average of ten, which the old ones had), and has tie-back rods and mooring-piles of corresponding strength, the whole of the north bunding began shortly to sllip, and within a month or two its lower end had gone outwards as much as 4 feet, and had sunk nearly 2 feet.  Strengthening piles, of 70 feet in length, which went 50 feet into the mud, had accordingly to be employed, and these were tied 80 feet in shore by the tie-rods to mooring piles, 25 feet long, driven into the ground till their tops were 10 feet under the surface. What was taking place then, in January and February 1889, had been taking place on a small scale for some considerable time before the dock gave way.  The scour was soon washing away the foundation of mud from the foot of the piles, and leaving them without any support. The bank thus became gradually undermined, and once the water had formed a channel, it was only a question of time when the river should reach the woks at and under the entrance of the dock, and attack the weak or defective part of the structure.  The process was of course a gradual one, but its manifestation would be sudden.  Till the river had found or forced its way through the earth to the neighbourhood of the bulkhead, there would be nothing to indicate that there was anything wrong.  Nor would the dock have been in danger even then, according to the evidence of the surveyors, if the bulkhead had been properly constructed and were of sufficient dimensions, but when once the water did reach that part and the defences proved insufficient, the dock would

gfom anbd aandce. This appears to me to be the explanation of the collapse of the dock. If such is the correct explanation, then it will be seen that the cause of the bursting was the change in the direction and force of the river at that point, acting upon a structure bot fitted to resist the great increase in the volume of water.  Can such a cause be fairly described as "unforeseen?" To answer that question, we must consider what "unforeseen" means.  It clearly does not mean that was wholly impossible to be foreseen.  That would be "unforeseeable," and to construe the word in that way would be in effect to strike out the exception from the clause, because, given sufficient time and ingenuity, it would be possible I suppose, to imagine all the possible causes or combinations of causes that could lead to the destruction of the dock. The word means in my opinion no more than something which was not as a fact anticipated and which could not reasonably have been anticipated. Now what was there in March 1884, when the meeting of the Company was held, to suggest to the minds of either the shareholders or the tenants that it was not at all probable that what has taken place would take place and in the way in which it has taken place?  The dock had stood then for 22 years, and the presumption was that with ordinary repairs it would last many years more.  The tenants certainly thought so, for, instead of allowing their existing lease to run out (which it would do in a little over two years), they wanted a fresh one for 10 years, and agreed to spend Tls. 20,000 in improvements in order to get it.  They even desired to have the option of a further term of three years after the ten, but this was not conceded to them by the Company - a circumstance which certainly does not point to any suspicion in the shareholders' minds as to the durability of the dock or its value after the 10 years.

 

Source: North China Herald, 13 July 1889


THE POOTUNG DOCK CASE.
MR. MOWAT has given his judgment at last in the great Dock Case, and when we say 'at last,' it must not be inferred that we consider that there has been any more than a perfectly reasonable delay; it was obvious that some time must be taken for the consideration and preparation of a judgment in a case whose hearing occupied twenty-eight days or parts of days, and which involved the study of a number of reports and other documents, themselves sufficient to occupy the mind of an ordinary mortal for weeks rather than days or hours.  In most even heavy cases laymen who give attention to them during their progress are able to say when they are finished, that they know how the judgment ought to go; but the Pootung Dock case, though it has been argued at every dinner table in the settlement, and at every place where a few men were gathered together, ad nauseam, has not, until Wednesday afternoon, found a solution satisfactory to the public.  This alone shews the great difficulty under which Mr. Mowat laboured, to which was added the knowledge that both parties to the suit had given out that they should appeal it, if the decision went against them.
  We need not recapitulate the facts, on which, if they stood alone, it might not be so difficult to come to a decision; but the legal effect of the lease signed by the defendant, and under which he held the dock, had also to be considered.  The judgment, which we print in full today is a remarkable clear and very able document, and we should be inclined to doubt whether, after considering it, even the party that thinks itself dissatisfied, will be so anxious to appeal against it; for the Court of Appeal from want of local knowledge alone, cannot possibly have the grasp of the matter that Mr. Mowat shews himself to have acquired.  Out of the mass the judge brings to prominence three covenants which the defendant is alleged to have broken, and for the breach of which the plaintiffs claim Tls. 50,000 damages; 1 - a covenant to expend certain insurance money; 2 - a covenant to expend Tls. 20,000 in improvements; 3 - a covenant to repair.
  The first breach arose out of the burning down of the house at the dock, which was insured for Tls. 5.500, and on the rebuilding of which the defendants only spent Tls. 3,000.  But it was not denied that the house was fully reinstated for the lesser sum, and so it would seem that the dock company at any rate were not damnified, and that if any one had to complain, it should be the insurance company.  As regards the second breach, the plaintiffs claim that only Tls. 13,400 had been actually spent on improvements, the defendant making up the full amount by counting in Tls. 3,000 spent before the lease was signed, the Tls. 3,000 spent on reinstating the burnt house, and a sum of Tls. 3,800 spent in repairs to the dock caisson and wharves. The sum spent in rebuilding the house Mr. Mowat allows on grounds that seem to us insufficient; the defendants were bound by a separate covenant to reinstate the burnt house, and we cannot see that they can fairly call this a part of the improvements on which they were to spend Tls. 20,000.  As to the Tls. 3,000 spent before the lease was signed, Mr. Mowat, though he considers it "harsh," feels himself bound by the letter of the lease to decide against the defendant, because the money was not actually expended "within two years from the 1st day of July 1884," but previously'; but as he only gives nominal damages for this purely technical breach, the defendant practically wins on the second as well as the first point.
  It is in considering he third point, the repairs, that Mr. Mowat's grasp of the subject, and reasoning powers are best evinced.  His examination of the meaning of the term "unforeseen" is lucidity itself, and he finds that the dock did "burst in" from an unforeseen, if not unforeseeable cause, or causes, which are the scour of the river and the originally faulty construction of the dock.  From the repairs to the dock itself he therefore absolves the defendant, but he makes him liable less an allowance of one-third, "new for old," for the repairs to the lower bunding, wharves, caisson and one groin, and for a portion of the rest of the repairs to the upper bunding, and a proportion of the engineers' fees.
  The net result is a verdict for the plaintiffs for Tls. 14,175, which means apparently a heavy loss to the shareholders, who estimated their damages at Tls. 50,000, and they must be sorry that they allowed the Directors to take the case into Court.  No costs are given on either side, as neither party succeeded completely.
  A careful perusal of the judgment cannot but confirm the first opinion of its substantial justice, though we think the finding as to the insurance money is open to question.  The defendant at any rate is not likely to appeal against it; and it is for the shareholders in the Dock Company to decide whether they will throw even more good money into the deep hole that the river had made at Tunkadoo.


Source: North China Herald, 27 July 1889


THE POOTUNG DOCK COMPANY.
  A special meeting of the shareholders in the Pootung Dock Company was held at the company's office on Thursday, Mr. R. Francis in the chair, to consider the question of appealing from the recent decision of the Supreme Court in the case of the Pootung Dock Company v. Simpson.  The Chairman and the Secretary, Mr. Dowdall, explained that the judgment ought not to be maintained, and that they had the best local legal advice in favour of appealing. Mr. Twentyman told the shareholders that Messrs. Farnham & Co. had originally offered to dot the work for cost price, which would have saved the Company about Tls. 10,000, while the work itself would have taken at the most six instead of eighteen months, if there had been no legal proceedings.  It was asked why Mr. Morrison's celebrated report was not submitted to the shareholders at the meeting at which it was decided to go to law, and the Chairman explained that it was on the table, and any shareholder could have seen it who wanted to.

 

Source: North China Herald, 17 August 1889

MISCELLANEOUS.

LANDSLIP AT TUNGKADOO.

   A good deal of interest was manifested in the Settlements on Wednesday morning when it became known that a catastrophe had occurred on the premises of the Pootung Dock Company at Tungkadoo, and numerous enquiries were made as to the nature of the damage.  We paid a visit to the Dock on Wednesday morning before noon and saw from a distance a pile of debris in the water.  On closer inspection, we noticed that the gigantic shear legs no longer occupied the position they did before, but had toppled over and were practically in the water. On landing on the lower side of the Dock entrance, we found that all was intact there, but that there was water in the Dock.  This we were told had been admitted after the accident, so that so far as appearances go, the dock itself is all right. On crossing the caisson, we noticed that the grounds was cracked in several places in front of us, and beyond that in the direction of the river, the foreshore had disappeared entirely.  Up to a certain distance out the foreshore had been bunded, and filled in, the surface being some twenty feet above the water.  Outside this again had been a wharf.  All the filled in foreshore for a distance of some hundred and fifty feet extending up the river from the wooden bunding at the upper end of the dockhead, had entirely disappeared.  The wooden building at the one end remained intact, as did also the piles driven in at right angles to the river at the upper end of the wreckage.  In front of this, in the water, was the wreck of the wharf in an indescribable mass. The piles of this wharf and the upper and lower ends remained standing, but at an angle of some twenty degrees, and sloping inwards, while the centre of the mass of debris extended some distance outside he original line of the wharf.  Where the land has slipped - and this extends some thirty feet back - there is now fifteen feet of water at low tide; in fact there is now more water than there was outside the wharf before the accident.  A small steam engine and boiler belonging to the mud dredger disappeared leaving no trace whatever behind, though the place over which it had stood has been thoroughly dragged.  The gigantic sheer legs which are 26 inches in diameter and 90 feet long with their solid T piece lie low.  The sheers had rested on piles driven through the wharf, but when the landslip occurred, these sheers fell too, the top falling inwards and the heels outwards.  One of the legs is broken, having snapped and been splintered twenty feet from the T piece, the splinters being some twenty feet long.  The piles that have disappeared with the rest of the bunding were driven 35 feet into the mud.  At the time of the accident, namely 9.30 p.m. on Tuesday, Mr. Oelkers, the foreign overseer of the Dock was in bed, when he felt the house which is close to where the landslip occurred shake as if it were swayed by an earthquake.  He then felt a second shock, and on getting up, heard a crash, and on looking towards the sheers, he saw them swaying, and then in less than three minutes from the time he felt the first shock, the collapse occurred.  The accident happened while the tide was running ebb and was very strong.  The chase of the dock itself appears to have started, and there is no knowing where the injury will stop. The destruction on Tuesday night involves an  expenditure of some ten to twelve thousand taels, and unless measures are promptly taken, there is great fear for the entrance to the dock itself.


 

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