5.
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The Chairman agreed that the Arbitration Board would not be concerned with the policy. The Government would put a valuation on the property and the lessee might contest it. The Board would decide which valuation was fair.
Mr. Richardson said that lessees were asking for special consideration in regard to terms of renewal, and he did not see how they could ask for an Arbitration Board in those circumstances.
In further discussion, it was explained that the procedure is that the Government Valuer makes a valuation for lease renewal purposes. This is regarded as final, but if the Government valuation is too high in the opinion of the lessee, he has the opportunity of buying the property back at the auction. If the Government proved to be wrong and had put too high a value on it, the lessee might buy it back for a lower figure. That would have the disadvantage of disturbance. A further complication was that so many leases would be falling in within a comparatively short time.
The Hon. Mr. Caine remarked that it was the usual procedure in England, if a ground landlord and a lessee could not come to terms, for the latter to surrender the lease and go elsewhere.
Mr. Landale remarked that in Hong Kong the lessee had only one ground landlord to deal with, namely, the Government.
The Hon. Mr. Caine agreed that, in Hong Kong, there was some- thing to be said for a different procedure and for something in the nature of arbitration, because so many properties would be falling in together and there would be many special cases.
In further discussion, the Hon. Mr. Caine said there had really been no change in Government policy. It had always been the intention to increase the rental to the full value, which was what the Government was proposing to do now. He, personally, would not insist on taking any premium if people preferred to pay it in Crown rent.
Mr. Blake asked, if the premium was $20,000 and the Crown rent $1,000, what extra Crown rent would be charged in lieu of premium.
The Hon. Mr. Caine: It would be a matter of calculation of the annual value of the premium at some agreed rate of interest.
That might be three or four per cent?
Mr. Blake :
The Hon. Mr. of seven or eight
Caine : I think property owners think in terms per cent.
Mr. Armstrong asked if the practice of fixing Crown rents at an arbitrary figure was in force in 1898.
The Hon. Mr. Caine said he did not know.
If,
Mr. Armstrong suggested that the Hon. Mr. Caine's interpre- tation of the Secretary of State's Instructions was strained. in 1898, the practice had then been adopted of fixing Crown rents at an arbitrary figure he thought that, on the proper interpretation of the Instructions "the then value of the land" was intended to mean, not its full economic value, but the fixed Crown rental.
The Hon. Mr. Caine : It means the economic rent.
The Chairman asked what was going to be the position of the 75 plus 75 leaseholders. Had they to pay the increased value of the land but not the increased value of the buildings, at the
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