CO129-587-8 Crown leases 18-4-1940 - 17-3-1941 — Page 37

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"It is obvious that a lessee desirous of extending his lease of premises which have an improved value be- yond the rent reserved, has to compensate the lessor for such extension and the method adopted is by the payment of a cash sum, called premium, on the grant of the new lease, or by payment of an increased rent, or partly by one and partly by the other. In a cal- culation of this kind it is important to remember that the lessee must be allowed the benefit of the improved value for the unexpired term of the existing lease. The rule may be stated as under:

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"Rule. To find what sum ought to be given for renewing any number of years lapsed or expired in a lease (or for the grant of a new lease of any length), deduct the value of the unexpired part of such lease from the value of the whole term of the lease to be granted. In other words, the person concerned estimates the difference between the interest he now possesses and that which is proposed."

6.

This, we are assured by the Government Valuer, is the

method of arriving at renewal terms which is approved by the Charter-

ed Surveyors' Institution and, if the circumstances were normal,

there would be nothing more to be said.

But we maintain that the circumstances are far from normal

and that the holders of 75 year leases have a moral right to

special consideration.

To make good that contention we shall have

to enter at some length into an historical survey.

8.

In the early days of the Colony, leases were granted for

pirpetuity

:

75 years, but in Despatch No. 76b of 4th December, 1848, Earl Grey

authorised the Governor to take the necessary measures for granting

these leases in virtus?

for the term of 999 years".

(Report of the Land Commission, 1886-87.) Thereupon, a Government

Notification of 3rd March, 1849, announced that "under Instructions

from Her Majesty's Principal Secretary of State for the Colonies,

all Crown Leases heretofore granted for a term of 75 years may be extended for a further term of 924 years" and all tenants of the

Crown who might be desirous of availing themselves of the above

concession were informed that they would, on application at the

Surveyor General's Office, receive the directions necessary to en-

able them to obtain a prolongation of their respective leases.

they obtained was a free extension to 999 years.

9.

In a Despatch of 2nd January, 1851, Earl Grey made the significant statement that, "as regarded the system of selling

What