CHAN YUK WAH v. RICHARDS, CAMERON KEITH

LDPD 1380/2004

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Part IV Possession Application No. LDPD 1380 of 2004

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J U D G M E N T

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The Background

1. The Applicant of the captioned application is the landlord of a property at No.67B. 10th Street, Hong Lok Yuen (on SS 847 of S.H. of Lot No.1945 in D.D. 7). The property is a semi-detached house leased to the Respondent since 6th September 2002. The application seeks to recover the arrears of rent and possession of the above-mentioned property.

The Dispute

2. The Applicant was represented by her husband and the Respondent appeared in court in person. The Applicant 's representative advised the Tribunal that the Respondent had since the 6th October 2003 failed to pay the full rent stipulated under the tenancy agreement. The rent stipulated under the tenancy agreement is $18,000 per month whereas the amount the Applicant received each month since 6th October 2003 fell short by $2,500 to $6,840. The total amount she received since 6th October 2004 up to the Respondent's last payment in April 2004 fell short by $21,840. By the amount of $104,160 she received to set off the amount the Respondent needs to pay each month, she reckoned that the arrears emerged in the month of March 2004 (i.e. from 6th March 2004 to 5th April 2004). The amount of arrears for this month is $3,840. Thereafter, the Respondent owed her $18,000 per month.

3. The Respondent disagreed to all the above pleading of the Applicant's representative. He considered that he had paid all the required rent. He ceased to pay for the month of May 2004 because of the Applicant's legal action. He, nevertheless, has no financial problem to pay it any time. The Tribunal, in the absence of evidence regarding the payments made, had once felt puzzled as to whether there was outstanding payment. Upon further inquiry, the Tribunal understood that the Respondent's pleading was based on an agreement for reduction of rent from $18,000 down to $15,500 per month effective in October 2003, whereas the Applicant's reckoning was based on no such agreement.

Agreement for Rent Reduction

4. To substantiate the agreement, the Respondent took out two letters between the Applicant and himself. These are the letter sent from the Applicant to the Respondent on 21st May 2003 and the Respondent's reply on 10th October 2003. The Applicant's letter in brief proposed to the Respondent a reduction of rent from $18,000 to $15,500 per month. The Respondent's reply is an acceptance of the offer. The Respondent considered that he was obliged to pay only $15,500 per month with effect from the 6th October 2003. Other allegations against the Applicant included the Applicant's threatening and evasive manner, and the Applicant's failure to implement structural repairs to up-keep the safety of the property.

5. The Applicant's representative denied that there was agreement on rent reduction. He advised the Tribunal that by a letter to the Respondent dated the 17th October 2003, the Applicant's stance that there was no promise to reduce the rent was clarified. The Applicant's representative had attempted to block the Respondent from submitting the letter dated 21st May 2003. He said that the letter on 21st May 2003 was marked "Without Prejudice". His solicitor advised him before the trial that the Tribunal should not accept its submission.

Conclusion

6. The Tribunal first of all does not accept that the outstanding repair works are good defence for not paying rent. The decision of the court higher in hierarchy than the Lands Tribunal in this respect is quite clear and binding upon the Tribunal. The Respondent should first establish the nature of works required and the responsibility for the repair. Only if the Applicant is responsible and she refuses to undertake the responsibility on request, the Respondent is entitled to kicking off the legal action.

7. The Tribunal does not agree that the letter of 21st May 2003 was not an offer for reduction of rent. The gist of the letter is clear. The gist of the Respondent's letter of acceptance is clear, too. There was an agreement between the Applicant and the Respondent. The third letter from the Applicant on 17th October 2003 attempted to repudiate or withdraw the offer. The intention of this letter is clear, too. The point central to the issue is whether the third letter from the Applicant can validly overturn the agreement reached.

8. For an agreement to be valid, there must be consideration passed from one party to the other. The consideration passed from the Respondent to the Applicant in the present case is as the letter of 21st May 2003 stated that the Respondent has to give up his right (under Clause 4 in Schedule II of the tenancy agreement) to determine the tenancy earlier than the stipulated tenancy expiry date. By this, the Tribunal considers that there was consideration passed and therefore a binding agreement between the two parties. The third letter of 17th October 2003 cannot invalidate the agreement reached.

9. The Tribunal must now tackle the Applicant's view concerning the term "Without Prejudice". The Applicant's view was correct that the contents of the letter marked "Without Prejudice" should not be disclosed to the Tribunal. The Tribunal is supposed not to have knowledge about the existence of the offer. The Applicant's intention was quite clear. If the contents were not to be disclosed, the Tribunal would have no evidence of an offer on rent reduction. The Applicant's representative had attempted in court to block the Respondent's submission (of the letter) on this ground (not appropriate to disclose the contents). The Tribunal did not accept his move because the Tribunal was totally not aware the background of the issue. Without knowing the contents of that letter, the Tribunal would have to guess the full picture of the issue from the pieces of information provided in piecemeal. The Tribunal's refusal to view the contents (of the letter) therefore may result in injustice to the Respondent. The Tribunal's view is that it should see the contents of the letter in order to have a full picture of the case but since the letter should be barred, it should ignore this part of the information in arriving at its decision for the case.

10. Having said so, the Tribunal's conclusion is that there is no agreement on rent reduction. The Respondent must pay back the arrears of rent as claimed.

Orders: