TNAG-1587-FCO40-2171-Future-of-Hong-Kong-British-Consulate-General-1986 — Page 40

Mrs Hymn Cr Jur batta This Shitt

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tres.

Mr Savage, OED

CONFIDENTIAL

pa 78's (20

trouber

(An elementary frown which 486 have been making needlen taula ves. I have exfpied to the Peina, bloubing out the P.S., asking him

office

to shipur to CS.)

Thayden 1/5

FROM: PAUL FIFOOT

DEPUTY LEGAL ADVISER DATE: 30 APRIL 1986

cc: Mr Layden, HKDE

CONSULATE GENERAL AND RESIDENTIAL ACCOMMODATION IN HONG KONG AFTER 1997

1. I have a feeling that there is some confusion about the earlier minuting. Let me make it clear that there are two factors:-

(i)

The problem is not so much a matter of the continuance of the title as of state succession

and

(ii) it is a problem which is solvable, but we need Chinese help to solve it.

Succession

2.

When an individual dies, his property (including any title to land which he owns for an interest other than his life) passes to his heirs. Similarly when a state loses sovereignty over territory, its property in (and in some respects relating to) that territory passes to the successor sovereign. That is to say British state or Crown property in Hong Kong passes to the successor of the British state namely the CPG or the Hong Kong SAR as the CPC's surrogate. Although we may make a distinction between property of the Crown in right of Hong Kong and property of the Crown in right of the United Kingdom, international law would not necessarily make that distinction so far as property situated in the relevant territory is concerned.

3.

The problem therefore is that, even though the Crown in right of the United Kingdom is granted a title to land before 1997, when the UK ceases to have sovereignty over Hong Kong that title passes with the rest of the property to the CPG or the SAR. The Chief Secretary refers to paragraph 3 of Annex III to the Joint Declaration. There is no question but that a title granted in accordance with that paragraph may persist after 1997, but that is not the point no more than it is the point that a 999 year lease in this country will persist on the death of the grantee. The point is in whom the title is vested.

Solution

4.

However, there is nothing to prevent arrangements being made to make exceptions to this general proposition and, as pointed out in my previous minutes, the way to do this is by paying attention both to matters of form and to matters of substance. As to form, we need to attach a label to a transaction (or title) which we wish to exclude from the general proposition which will distinguish it from the more general labels to which the universal succession of the successor state will apply. This means that it would be desirable

CONFIDENTIAL

NHH 40611

RECEIVED IN REGISTRY

- 8 MAY 1986

DESK OFFICER

INDEX

PA

REGISTRY

Action Taken

to