HU YUNG CHUEN AND ANOTHER v. WEALTH SHARP CO. LTD

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JUDGMENT

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Nazareth, J.A. (giving the judgment of the Court):

1. The Plaintiffs/Respondents, who are husband and wife, were the owners of Flat 4 on the 22nd floor of Block A Shatin Plaza, Shatin ("the Plaintiffs' flat"). They used to let it out for the income on which they depend.

2. The Defendant/Appellant was the registered owner of the flat immediately above, i.e. Flat A on the 23rd floor.

3. About September 1989 the then tenant of the Plaintiffs' flat terminated his lease and returned possession to the Plaintiffs. On inspecting it, the Plaintiffs discovered that there were serious signs of leakage on the ceiling of the flat. The Plaintiffs took the view that the leakage was from the flat above. They took all sorts of measures to rectify the matter, reporting it to the Defendant, the building management office, the Water Authority, the Regional Services Department and so on.

4. The evidence given to the court below was that shortly after the discovery of the leakage, the management office was informed and a joint inspection was arranged about the end of September 1989. It was thought that the kitchen washbasin in the Defendant's flat was leaking, and water might be seeping through cracks between the wall and floor. The Defendant's plumber who had fixed the drainage piping refused to do any masonry work, and with the consent of the Defendant, the Plaintiffs engaged a worker to cement the cracks on the floor and wall of the kitchen in the Defendant's flat.

5. However, the water leakage did not end. In September and October the management office conducted several water tests and checked both the bath tub and washbasin, finding no indication of any leakage of the drainage pipes.

6. The management company also engaged the Chi Fung Plumbing Company to carry out certain works and tests at the Defendant's flat. The toilet and the walls and floor of the kitchen were checked. Pressure tests were carried out on the freshwater and drainage piping. All this was done in mid-October 1989. No leakage was discovered in the freshwater and drainage piping.

7. Early in October the Defendant caused remedial work to be carried out to the drainage of the washbasin and removed the toilet for inspection, but the problem persisted.

8. Inspections were carried out by the Water Authority and Urban Services Department and tests by the former, but the cause of the leakage was not discovered. In mid-November 1989 Inspector Chung of the Water Authority conducted further tests of a fairly crude sort, notinvolving any pressure tests, and concluded that the problem was caused by the leakage from freshwater pining in the Defendant's flat, and the Defendant was given 14 days to rectify the situation. However that may be, in December 1989 Kammon Plumbing and Electrical Engineering Company was instructed by the Defendant to change all the freshwater piping. The work was commenced on 5th December 1989 and completed in one week's time.

9. On 12th January 1990 Water Authority Inspector Chung again visited the premises and considered that there was no sign of water leaking from the freshwater piping.

10. Finally, in February 1990 one of the Defendant's workers discovered water entrapped above the floor slab on digging a hole through the kitchen floor. It appears to be accepted on all sides that this was the source of the leakage into the Plaintiffs' flat. In his judgment the Judge stated:

"It is clear that at the material times the floor slab of the Defendant's premises was flooded with water which found its way into the ceiling of the Plaintiffs' premises through some 'weak spots'.

It is not clear as to why water was entrapped on the floor slab of the Defendant's premises."

The Judge went on to reject Water Authority Inspector Chung's opinion that the leakage was from freshwater piping in the Defendant's flat. He then referred to one of the letters written by Mr. Hu to the Defendant which he thought might provide a clue to the cause of the leakage.In it Mr. Hu claimed that:

"Because of water had accumulated on the floor level of the bathroom for a long time caused by your staffs (sic) when using the bathroom inevitably water gradually seeped to the floor down below".

He referred also to Mr. Hu's evidence that the Defendant's premises were used as a dormitory for workers, that many people went there to take showers, and that the floor was always wet. The Defendant ran an amusement centre in the Shatin area and many of its workers had to work shift duty. There was evidence that the Defendant's flat was used as a dormitory so that workers who finished early in the morning could have a place to rest. The premises could accommodate ten odd people although it was disputed how many in fact did use it.

11. The Judge then pointed out that "there was no evidence to show why Mr. Hu came to the conclusion as he did although it might not be difficult to understand his attitude". Nonetheless he went on to say:

"The Court can well imagine what it would be like when a group of workers finishing work in the early morning and all returning to a dormitory with only one washroom to share.

It was highly possible that such workers might use the toilet or kitchen in a way which would result in water flooding the floor slab if one were allowed to speculate. The Court accept that there was in fact no direct evidence on this aspect. But then the Plaintiff could not be in a position to adduce any such evidence".

12. The Judge noted that the Defendant had not responded in any way to the Plaintiffs' suggestion nor called any evidence in rebuttal, adding that there was no suggestion in the pleadings as to the source of the water seepage. He concluded:

"In any event the Court is firmly in the view that the doctrine of Res Ipsa Loquitur applies. The Defendant's premises must be   sole management and control of the Defendant or its agent or servant and the fact that its floor slab was flooded with water was such that it would not have happened without negligence".

He then again referred to the Defendant not having adduced any evidence to refute the probability that the damages suffered by the Plaintiffs were caused by the negligence of the Defendant, and that there was no evidence that the Defendant had taken any steps to get rid of the water entrapped on the floor slab. He rejected the argument that there was any breach of any contractual duty under the Deed of Mutual Covenant on the part of the Defendant, on the basis that it was a contractual document between the developer, the management company, and the owner of each individual unit, and that there was accordingly no privity of contract between the Plaintiffs and the Defendant. He concluded "on the other hand, the court is satisfied that the Plaintiffs had successfully proved a case of negligence of the Defendant" and awarded the Plaintiffs 2¹/² months' rent at $10,000 a month, i.e. $25,000.

The Defendant's main ground of appeal is:

"That the Judge was wrong in applying the res ipsa loquitur principle in the circumstances".

Miss Chih for the Defendant cited numerous authorities on res ipsa loquitur. However, we do not find it necessary to refer to more than the following passages from Charlesworth & Percy on Negligence (8th Edition) which work was also cited in the skeleton argument produced by Mr. Hu, which had been prepared by the Plaintiffs' former legal advisers:

"5-103     Meaning of res ipsa loquitur. Kennedy L.J. explains the meanings of res ipsa loquitur as follows:

'The meaning, as I understand, of that phrase ... is this, that there is, in the circumstances of the particular case, some evidence which, viewed not as a matter of conjecture, but of reasonable argument, makes it more probable that there was some negligence, upon the facts as shown an undisputed, than that the occurrence took place without negligence. The res speaks because the facts stand unexplained, and therefore the natural and reasonable, not conjectural, inference from the facts shows that what has happened is reasonably to be attributed to some act of negligence on the part of somebody; that is, some what of reasonable care under the circumstances. Res ipsa loquitur does not mean, as I understand it, that merely because at the end of a journey a horse is found hurt, or somebody is hurt in the streets, the mere fact that he is hurt implies negligence. That is absurd. It means that the circumstances are, so to speak, eloquent of the negligence of somebody who brought about the state of things which is complained of." Later, he adds: "Res ipsa loquitur in this sense; the circumstances are more consistent, reasonably interpreted without further explanation, with your negligence than with any other cause of the accident happening."

5-104     When maxim comes into operation. The maxim comes into operation: (1) on proof of the happening of an unexplained occurrence; (2) when the occurrence' is one, which would not have happened in the ordinary course of things without negligence on the part of somebody other than the plaintiff; and (3) the circumstances point to the negligence in question being that of the defendant, rather than that of any other person.

5-105     The third requirement is usually fulfilled by showing that the instrument, causing the damage, was in the management and control of the defendant, at the time of the occurrence, but this is not essential?"

13. As to the first of the foregoing three requirements, it is not in dispute that the source or cause of the water coming into the Plaintiffs' flat is unknown. Proceeding to the second requirement, this was, of course, not addressed by the Judge. There was no evidence that water would not have accumulated or been trapped under the floor slab of the Defendant's flat in the ordinary course of things without negligence, or indeed without negligence on the part of anybody other than the Defendant. On the contrary a Mr. Hau of Chi Fung, who are said to be experienced contractors, gave evidence that water might possibly have seeped from leaking pipes on upper floors of the building down to the floor slab of the Defendant's flat, and even the Plaintiffs' flat. That evidence was not referred to in the judgment, and there is no suggestion or implication that it was rejected. Mr Hu himself appeared to accept it, for before us he stated that "the floor slab is common to all floor premises, so water can go from one part to another". In addition, in the many authorities cited by Miss Chih for the Defendant, there are examples of leakages of water which, it was accepted, occurred without negligence on the part of anybody, and in the absence of evidence to exclude it, that possibility remained open. It follows, in our view, that not only is the second requirement not met, but also the third since the circumstances do not point to any negligence, or if such there was, to it being that of the Defendant rather than of any other person. In addition the material question of possession or control of the floor slab was not addressed by the Judge. Reference to material provisions of the Deed of Mutual Covenant, which we do not think necessary to set out here, suggests that the Defendant did not have exclusive control or possession of the floor slab below its flat, also that it is very doubtful whether it even shared joint control or possession with the management company, which, in addition, appeared to be responsible for maintenance of such non individually owned parts and apparatus. We do not find it necessary to put it any higher.

14. In the result, the circumstances do not suggest nor is there evidence that makes it more probable that there was negligence or, if there was, that it was negligence on the part of the Defendant. Accordingly, we have no hesitation in concluding that the Judge was wrong in holding that res ipsa loquitur applied. That was the sole foundation of his finding of negligence. The Plaintiffs' assumption that the leakage was the Defendant's fault is entirely understandable, and we have considerable sympathy for them. We do not propose to speculate upon what the result might have been had experts been able to trace the source and cause of the accumulation of water, or if the Defendant and the management had been jointly sued, or indeed upon whether the sort of risk in question in practical terms may not have to be guarded against by insurance. However, those matters may be, the appeal must be allowed and the judgment below set aside.

15. As to costs, the Defendant originally counterclaimed for an amount of $104,000 in respect of the damage done to the kitchen in its flat by the Plaintiffs' workmen and in respect of remedial works. That amount exceeded the amount of the Plaintiffs' claim which now fails. The Judge rejected the counterclaim, rightly in our view, and it was not pursued before us. In the light of these and the other related circumstances, we think that in broad terms the costs below should follow those events, and that such a result could be achieved expediently by ordering that there be no order as to the costs below. As to costs of the appeal, clearly the Defendant should have these.

16. Accordingly we allow the appeal, set aside the order of the Judge, and order nisi that there be no order as to the costs below and that the Defendant is to have its costs of the appeal.