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9. There is a precedent of sorts for leases for such period as the Crown may occupy the leased territories in leases for the
duration of the war - the Validation of War-time Leases Act 1944, 7 and 8 Geo 6 c.34; but the context was of course very different. I am not aware of any legislation providing for perpetual leaseholds. Such legislation will therefore be somewhat novel and may not be easy to draft. However it should be possible to produce something that will work and stand up in the courts.
10. As between the alternatives, a lease terminating when the Crown ceases to occupy the leased territories is obviously less advantageous to the tenant than a perpetual leasehold, since he will be deprived of his interest the moment the Chinese walk in.
The whole notion of making leases terminate just before
1 July 1997 or on whatever date the Crown gives up possession seems perverse and in spite of the novelty of perpetual leases
these seem preferable in a political context where the Government is inhibited about the grant of freeholds or long leaseholds (if it is) notwithstanding the need for legislation. One could wish that the Chinese might be persuaded to acquiesce on the grant of normal leases for normal terms regardless of 1 July 1997; if however this is not feasible then perpetual leases seem to be the next best thing.
11. This note attempts to summarise the advice I gave at Mr Murray's meeting with the Governor earlier to-day in the light
of their respective comments. Before the meeting I had the benefit of reading Mr Thornton's helpful opinion as annexed to Sir Denys Roberts' letter of 6 July. While my views of the United Kingdom's position under the Convention of 1898 differ
from his, there is no disagreement between us about the need for
legislation to sanction perpetual leases, which are not permissible at common law.
17 August, 1978.
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A R Rushford
Deputy Legal Adviser
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