TNAG-0752-FCO40-956-Future-of-Hong-Kong-1979 — Page 112

SECRET

10.

so-called sub-lessee an estate as great as

or purporting to be greater than, his own)

he from that moment is a stranger to the

land, in the sense that the relationship of

landlord and tenant, in respect of tenure,

cannot any longer exist between him and the

so-called sub-lessee. That relationship

must depend on privity of estate.

I myself

find it impossible to conceive of a relation-

ship of landlord and tenant which has not got

that essential element of tenure in it, and

that implies that the tenant holds of his

landlord, and he can only do that if the

landlord has a reversion. You cannot have

a purely contractual tenure.

Tenure

exists by reason of privity of estate".

The consequences of such a purported under lease

operating as an assignment are patently unacceptable.

In order that the lease covenants may be enforced by the

Crown, it is essential that the landlord/tenant relationship

continues. The sanction of re-entry is vital to the Crown

interest. Any course of action which might have the effect

of making the Crown a stranger to New Territories land is

unthinkable.

11.

It follows that the purely contractual consequences

between the parties are not really significant. The

objection is fundamental.

SECRET

-3-

/12.