A DISPUTE over the return of a couple's deposit of $67,900 on their flat is unresolved - despite a multi-million-dollar legal odyssey through the judicial system to the Privy Council. Tenants Mr and Mrs George Liu and landlord, Take Harvest Limited, must start all over again in the District Court, the Law Lords ruled in a recent judgement delivered by Sir Christopher Slade. The Privy Council held the case had been argued wrongly before Deputy Judge Bharwaney in January last year. Deputy Judge Bharwaney had ruled that $12,833 of the deposit should be refunded to the tenants. The Privy Council also ruled the case had been argued wrongly before the Court of Appeal, which overturned the judge's decision and ordered the couple to pay the landlord $44,354 in rent arrears. But because the landlord had succeeded on a point that his counsel had expressly declined to argue, the court ordered he should pay most of the tenants' costs. The landlord then appealed to the Privy Council against the costs order and the tenants cross appealed. ''Regrettably, due to errors on both sides, these proceedings have taken a wrong course more or less from the beginning and even now can not be finally disposed of by this board,'' the judgement said. As the errors could not be blamed more on one party than another, and neither side won the case, the Law Lords held that each side should pay its own costs for each hearing, including the Privy Council. Costs are likely to run into millions of dollars. The dispute arose after the Lius sold their flat in Wilfred Apartment, 110 Repulse Bay Road, to Take Harvest in October 1990. But they agreed to lease it back for one year at $55,000 per month while Mr Henry Lau, a director of the landlord, found a tenant. They were prepared to move out at short notice and when, in November 1990, Mr Lau said a prospective tenant had been found, it was arranged orally that the tenancy would finish by the end of the month. But when the prospective tenant changed his mind Mr Lau asked the Lius not to vacate. But the Lius decided to move out on December 10. Mr Lau refused to accept the key and Mr Liu sent a fax the following day asking for his deposit to be refunded less the outstanding rent of $42,167. The Lius then sought a court order for the return of the deposit. A substantial cause of the wrong course taken in the proceedings, the Privy Council held, was the fact that the landlord failed to argue before the Hongkong courts that under section three of the Landlord and Tenant (Consolidation) Ordinance the agreement must be written before it can be enforced by a court. The tenants also failed to plead estoppel - that they had acted upon the agreement to their detriment and the landlord should not be allowed to go back on it. In all the circumstances, they said the tenants should be given a chance to rebut the landlord's new argument, based on section three, in a new hearing in the District Court.
