ONSOW DEVELOPMENT LTD v. JASON BROCKWELL

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 15114 OF 2000

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JUDGMENT

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1. This is an application for summary judgment.

2. This action arises out of a tenancy agreement. The Plaintiff complains that the Defendant has not paid the outstanding rent and so it brings the present action against the Defendant to claim for the same.

3. At first, I find that the figures supplied by the Plaintiff confusing. According to paragraph 5 of the Statement of Claim, the Plaintiff alleges that the Defendant failed to pay the balance of the rent due on 18 December 1999 and refused to pay any further rent at the rate of $27,000 per month since 18 January 2000. In fact, the Defendant did make part-payment from time to time as specified in the schedule contained in the letter exhibited as "LTM3" to the affirmation of Lau Tak-ming, Dominic, but the Plaintiff applied the part-payment to satisfy the previous unpaid rent leaving the present claim of the Plaintiff unsatisfied. The said schedule certainly helps me to understand better the nature of the Plaintiff's claim.

4. To oppose the Plaintiff's claim, the Defendant puts forward two defences. Firstly, the Defendant alleges that there was an agreement made by the parties under which the Plaintiff agreed to reduce the monthly rent from $27,000 to $21,500 starting some time from July and August 1999. The Defendant alleges that there has been previous discussion about the reduction of rent. In order to attract the Defendant to stay on because the Defendant was only occupying as a monthly tenant by that time and also because of the poor condition of the premises, the Plaintiff offered to reduce the rent to $23,000 a month. In response to that, the Defendant paid a lesser sum of $21,500 and the Plaintiff accepted the same without any immediate complaint.

5. Undoubtedly in law, the mere fact that a tenant tenders a lesser rent and the acceptance of it by the landlord without immediate protest is not sufficient to constitute a variation of the contract. However, taking into account the background of the negotiation as suggested by the Defendant above, I am of the view that the Defendant has managed to establish an arguable defence in this regard.

6. The second defence relates to the counterclaim by the Defendant for the Plaintiff's failure to repair the premises. For the purpose of Order 14 application, I do accept that there were indeed defects in the premises. Indeed, Mr Lam for the Plaintiff apparently accepted the same in the e-mail communications between the parties. The Defendant managed to particularise his loss in paragraph 29 of the Defence and Counterclaim and so the Defendant should at least be given leave to defend up to that amount of loss.

7. Mr Chan for the Plaintiff argues that by virtue of clause 3(c)(i) of the Tenancy Agreement, the Plaintiff would not be liable to rectify the defects until it had received written notice of the same. However, there had been e-mail communication going on between the parties, and so it is clear that the Plaintiff did have knowledge about the same after these communications. It was also possible that the Defendant suffered loss after the e-mail communications, and so I am of the view that the Defendant should not be barred from pursuing the counterclaim at this stage simply because of the said clause 3(c)(i).

8. Based on the aforesaid, it is still quite possible for the Plaintiff to enter judgment for a relatively small amount. However, as the figures supplied by the Plaintiff are quite confusing at this stage and the Plaintiff still retains a rental deposit of $54,000, I am of the view that it is not appropriate to enter any judgment for the Plaintiff now. The Plaintiff's application for summary judgment is therefore refused.