7.
Hong Kong -
Conf. Desp. 218 ref. (2) //p
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144
~9.9.48
I have shown in pencil on enclosure 1 to (1) the amendment of, and the addition to, paragraph 4 which are proposed respectively in paragraphs 1 and 7 of (7). It seems to me that, while they remove one ambiguity, they introduce another i.e. they confuse premium with rent. Paragraphs 1 and 2 of (2) are quite clear and paragraph 1 of (7) specifically says that paragraph 2 of (2) correctly interprets what is intended, i.e. that Crown rent should be charged in accordance with current practice at a conventional figure and a premium be required in addition which will represent the balance of the undeveloped value of the land over and above that rent. If that is so, should not paragraph 4 of the draft announcement end with the words "at that time"? And do not the true tão references to calculation based on "the value of the land exclusive of the buildings thereon" both refer to calculation of premium (as indeed one of them says in terms) and should they not therefore both appear in a somewhat amended paragraph 5?
If my understanding is correct, paragraph 5 would then read somewhat as follows:
Payment of a premium would be required based on land values prevailing in the locality at the time of the application. Such premium would represent the balance of the value of the land (exclusive of the buildings thereon) over and above the Crown rent. It would be payable in one lump sum on acceptance of the application or (at the option of the lessee) by instalments over an agreed period of years or over the unexpired residue of the existing term, together with the whole of the new term: in the case of payment by instalments, an addition would be made to allow for interest in respect of the deferred payments, such interest to be calculated at the rate of 5% per
annum.
The calculation of the premium on the value of the land exclusive of the buildings thereon is a concession arising from the special circumstances following on the war which will not constitute a precedent for dealing with the renewal of other types of leases.
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2. As noted above, paragraph 1 of (7) purports to clear up the ambiguity in the proposed announcement to which we drew attention in paragraph 1 of (2) and confirms the interpretation of intention which we advanced in paragraph 2 of (2). The remainder of (7) (including its paragraph 7 already referred to) is devoted to justifying the intention to base the premium on the undeveloped, instead of on the developed, value of the land. It was this proposal which drew our fire in paragraph 3 of (2) and for which we asked for the justifying reasons.
We now have to decide whether we are going to accept the Governor's proposal or not. The reasons
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