TNAG-1166-FCO40-1446-Future-of-Hong-Kong-1982 — Page 23

(MR RUSHFORD'S MINUTE OF 17 AUGUST 1978)

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HONG KONG: CROWN LEASES IN THE LEASED TERRITORIES

Up to the present it has been the policy of the Hong Kong Government to ensure that leases of Crown land situate in the territories that form part of the Colony of Hong Kong by virtue of the Convention of 9 June 1898 ("the leased territories") expire three days before 1 July 1997, when the leased territories are due to revert to China in accordance with the terms of the Convention.

2. The advice given to the Hong Kong Government is that a relationship of landlord and tenant subsists between the United Kingdom and China as respects the leased territories and that the Crown, as a matter of law, may grant leases of land within the leased territories only for terms expiring before 1 July 1997.

I do not believe this view to be correct. As I see it, the Sonvention is not a lease governed by municipal law but a treaty governed by international law. I would assert that, by virtue or the Convention, the United Kingdom possesses rights of Sovereignty over the leased territories and accordingly that the Hong Kong Government is free to grant leases of any duration over land in the leased territories in accordance with the common law and any relevant statutory provisions in force in the Colony just as it can över land in the rest of the Colony, since there are no provisions in the constitution nor, so l'ar as I am aware,

in any other law to prohibit this. This view appears to be borne out by the terms of the Order in Council or 20 October 1898 providing for the government of the leased territories. It would follow that no fresh grant of jurisdiction from the Chinese Government would be needed to enable the Hong Kong Government to grant leases expiring after 1 July 1997, likewise no fresh legislation by Hel Majesty in Council or the Hong Kong legislature.

4.

On this view, various forms of lease could be devised to take account of the fact that the United Kingdom may continue to administer the leased territories after 1 July 1997, e.g.

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(a)

for (say)