Excellency's letter of 28th August, 1907, which appears to have been overlooked). The refusal of the exemption on this ground would clearly have been bad in law, for it makes the exclusion under the Ordinance absolute in the case of this part of the Peak. It is therefore by no means certain that the majority of the Council would have been against granting the exemption.

With regard to the other members of the Council who were in favour of refusing the exemption, there is every reason to believe that, through inadvertence, the terms of the request were not fully before them. There were two special points in the application which I made which seem to have been overlooked.

First, that Dr. Ho Tung desired to rent the house for the benefit of his health. I have already pointed out that for health purposes the position of the Bungalow is far superior to that of Dr. Ho Tung's own house on the Peak. In his interview with Dr. Ho Kai, the Colonial Secretary did not allude to this fact, which Dr. Ho Kai considers all-important. As the Colonial Secretary was desirous of testing the accuracy of my original statement of Dr. Ho Kai's views, I must assume that he himself had overlooked, or was ignorant of, this condition of the application for exemption, or he would obviously have referred to it.

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