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on the lessee to approach the Government; never the less, it was agreed that it would be advisable for a warning notice on the subject to be sent with their next Crown rent demand note to the 1,400 leaseholders concerned.
It was also suggested that the Chamber of Commerce could issue a statement to the newspapers on the subject.
The Chairman mentioned the case of lessees who had re-built extensively on sites the leases of which were near expiry.
The Hon. Mr. Caine said that the legal position of such lessees was that when the lease expired the property belonged tò the Government.
The Chairman: That seems very unfair. They have increased the rateable value so that the Government receives far more in rates.
The Hon. Mr. Caine:
doing.
Presumably they knew what they were
Sir Vandeleur Grayburn: I re-built two houses some years ago with no idea that anything like this was coming along.
The Hon. Mr. Caine : The terms of the renewable 75 year leases, it seems to me, were intended to be something of a con- cession. As already pointed out, they were being introduced as the standard form of lease when the Instructions of 1898 (already quoted) were issued. They provided that, in due course, at the end of the first 75 years, renewals should be granted on payment by the lessee of the increased value of the land only, and by M increased value of the land" I understand an increase not merely to the standard Crown rent which might happen to prevail at the moment but an increase to the true economic value of the land. It seems to me clearly implied that, if that was a concession, leases then existing for 75 years only would be renewed if at all on payment of the value of the land plus the buildings upon it. I agree that is not the view people have had in their minds.
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Sir Vandeleur Grayburn: We thought it would be quite simple when the time came: we never bothered about it.
The Hon. Mr. Caine : If those who re-built on expiring leases were to be charged the increased value of the land only, we should be treating the old 75's exactly as if they were 75 plus 75.
Sir Vandeleur Grayburn: You mean that lessees who have re- built will have to pay so much more premium on renewal?
The Hon. Mr. Caine : The Government is legally entitled to take that view. The thing that might be argued is that where a property has been developed beyond the point contemplated at the time of the lease, beyond what is required by the building covenant, that that excess development, as it were, might be ignored. I am thinking of the Union Flats: that is develop- ment far in excess of what was contemplated when the lease was entered into, and it might perhaps be argued that all the Government should take account of is the building required to be put up by the terms of the lease. The average lease says that the lessee has to spend, say, $20,000 on rateable improvements and to keep the property in good condition, and at the end of the lease hand it over to the Government.
In further discussion it was explained that to arrive at the amount of the premium the lessees' interest in the present
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