KO PUI YEE v. JONES LANG LASALLE MANAGEMENT SERVICES LTD

HCSA 26, 27, 28, 30 & 31/2020

(Heard Together)

[2023] HKCFI 1156

HCSA 26/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 26 OF 2020

(ON APPEAL FROM SCTC NO 18453 OF 2019)

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HCSA 27/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 27 OF 2020

(ON APPEAL FROM SCTC NO 18454 OF 2019)

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HCSA 28/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 28 OF 2020

(ON APPEAL FROM SCTC NO 18456 OF 2019)

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HCSA 30/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 30 OF 2020

(ON APPEAL FROM SCTC NO 25215 OF 2019)

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HCSA 31/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 31 OF 2020

(ON APPEAL FROM SCTC NO 25507 OF 2019)

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J U D G M E N T

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INTRODUCTION

1.  These are the defendant’s appeals against the decision of Mr David Fong, deputy adjudicator of the Small Claims Tribunal, made on 31 August 2020 in SCTC 18453, 18454, 18456, 25215 and 25507 of 2019.

2.  The adjudicator found in favour of the claimant in each of the actions. (The claimant in SCTC 18453 and 18454 of 2019 applied for a review of that decision. The adjudicator made a decision upon review on 18 September 2020. The latter decision is also appealed against. But nothing material turns on that.) The defendant is the same in the five actions. Leave to appeal was granted to it by G Lam J on 3 February 2021.

3.  On 16 September 2018, typhoon Mangkhut (山竹) struck Hong Kong. It caused sea water intrusion in the area of South Tseung Kwan O. The roads and some of the residential estates were flooded with sea water. Twin Peaks (嘉悅) was one of the affected estates. Its underground car park at B1/F and B2/F were heavily flooded. The flooding damaged the vehicles which were parked on those two floors. When the flooding was at its most severe, the B2/F was completely flooded and the B1/F was flooded up to about 0.8m.

4.  The claimants were the owners of some of those vehicles. The defendant was the property manager of the estate.

5.  In each action, the claimant claimed against the defendant for loss and damage to his or her property.

6.  The trial took place in August 2020. At the end of the trial, the adjudicator delivered his oral judgment. On 16 October 2020, he handed down written reasons for his decision.

7.  These appeals concern liability only.

THE BACKGROUND FACTS

8.  As set out in the adjudicator’s written decision, the following background facts are undisputed or indisputable.

9.  In 2017, super typhoon Hato struck Hong Kong. Car parks in Hang Fa Chuen were flooded due to sea water intrusion.

10.  Typhoon Mangkhut was a super typhoon.

11.  One week before typhoon Mangkhut arrived, the Hong Kong Observatory had issued warnings advising the general public to take precautionary measures.

12.  Twin Peaks is located approximately 350 metres away from the Tseung Kwan O Promenade at the seaside.

13.  At about noon, sea water flowed from the seaside promenade to the street where Twin Peaks is located.

14.  At about 1 pm, sea water began to flow into Twin Peaks.

15.  At 2.10 pm, the B2/F of the car park was flooded up to the height of a car tyre.

16.  The defendant did not take any step to stop the sea water from flowing into the estate. That was found by the adjudicator to be undisputed or indisputable: see para 10(i) of the decision. At the hearing before me, Mr Simon Wong, appearing with Mr Warren Suen for the defendant, accepted this finding only to the extent that the defendant took no step to stop the sea water from flowing into the entrance of the car park.

THE PARTIES’ CASES

17.  The claimants’ case was that the defendant took no action to stop the car park from being flooded. They contended that it should have placed sandbags or other water barriers to prevent the flooding, or should have alerted the owners to move the vehicles out of the car park. The defendant’s inaction amounted to negligence, which caused the damage to the claimants’ properties.

18.  On the other hand, the defendant raised three grounds of defence. First, typhoon Mangkhut being a super typhoon, the flooding was an Act of God. Second, the flooding was in any event unforeseeable since no similar incident had happened to Twin Peaks before and that it is located 350 metres away from the seaside. Third, the defendant had taken sufficient precautionary measures to mitigate foreseeable risks.

19.  In respect of the third ground of the defence, the defendant specifically relied on the following measures which it had taken. I extract them from para 8 of the decision:

“· All the drainage channels were cleared

· Putting sandbags at the gate door of the passenger lift on G/F.

· Putting sandbags at clubhouse near Banquet hall door

· Typing up all the furniture at clubhouse and common area

· Tapes being stuck on windows at clubhouse

· Tapes being stick on the doors in tower lobby

· Gondola at roof floor in fixed position”

THE ADJUDICATOR’S DECISION

20.  The adjudicator took the view that there were no material factual disputes between the parties. He accepted the evidence of the witnesses of both the claimants and the defendant.

21.  In gist, he found that the defendant was in breach of its duty of care owed to the claimants by failing to take any preventive measure to stop sea water from entering the car park, including the placing of sandbags or other water barriers, that the breach caused the claimants’ losses and that the losses were not too remote.

22.  More specifically, the adjudicator found that the defendant owed a duty of care to the claimants to prevent flooding. He drew support from an internal document of the defendant entitled “仲量聯行物業管理部香港區管理項目颱風防護工作指引”. It contained guidelines on preventive measures for typhoons. The relevant parts read:

“… 所有總部負責人及大廈管理人員都已經熟悉香港天文臺發出颱風警告信號並採取以下防疫措施保障大廈財產業戶及員工的安全

…

3) 8號9號或10號風球懸掛時大廈管理人員須執行的預防及保護措施

· 於大廈範圍內水浸範圍高的地方放上沙包或安裝擋水板

· 加密檢查地下電機房設施及地庫停車內預先放置的抽水裝置 (例如: 潛水泵) ”

(underline added)

23.  The above guidelines were repeatedly referred to and relied on by the adjudicator in his decision. I shall refer to them as “the internal guidelines” below.

24.  The adjudicator next found that the defendant was in breach of the duty of care. The standard was that required of a reasonably competent manager of a property located near the seaside who had the skills to deal with flooding caused by various reasons, eg, weather. It was the defendant’s own evidence that when sea water started to enter the street in which Twin Peaks is located, it did not take any step to stop the sea water from entering the estate. The defendant’s inaction was in violation of the internal guidelines.

25.  This is how the adjudicator put it, at para 21:

“但被告人面對海水淹至至善街，將會流入該物業，仍然採取一種不作為的方式，明顯地違反被告人制定《颱風防護工作指引》的第3點：

“於大廈範圍內水浸範圍高的地方放上沙包或安裝擋水板” ”

26.  On causation, the adjudicator found that the breach had caused the losses to the claimants.

27.  More specifically, he rejected the defendant’s argument that any sandbags placed would not have prevented the flooding in view of the intensity of the force of the sea water. The adjudicator pointed out that the defendant had adduced no expert evidence to support its contention. In this regard, he once again highlighted the internal guidelines which suggested the use of water barriers. He said:

“27. 然而，被告人的證人劉智恒先生認為：

“就算在屋苑入口放了沙包，以我現場觀察之海水沖力，相信一下就會沖散。”

28. 本席理解，被告人實際上是在指出，原告人所遭受的損失沒有通過事實上因果關係的 “但非” 測試。

29. 本席不同意被告人證人的辯解。沙包是否會被沖散是一個物理問題，取決於放置的包包的重量。劉先生是一名事實證人，被告人沒有提供任何專家證據，支持她的看法。此外，《颱風防護工作指引》建議可放置安裝擋水板。” (underline added)

28.  As regards the defence of Act of God, the adjudicator was of the view that the defence only applies where there was no “human intervention”, applying The Star Ferry Co Ltd v The Owners of the ship or vessel “Argonaut” (Greek Flat) [1980] HKLR 921. He found that the underground drainage system installed by the government had a design problem in that the drainage outlet at the seaside promenade was positioned below the sea level recorded on the day of the typhoon. This amounted to “human intervention”.

29.  In any event, if he was wrong on this, the adjudicator considered that the flooding of the car park was foreseeable and could have been avoided by taking reasonable steps, including placing sandbags in accordance with the internal guidelines.

30.  In this regard, he took into account the fact that residential estates in Hang Fa Chuen and other residential estates in South Tseung Kwan O which are located nearer to the seaside than Twin Peaks, suffered much less damage from flooding, according to newspaper reports.

31.  Accordingly, he rejected the Act of God defence.

GROUNDS OF APPEAL

32.  The defendant raises three grounds of appeal.

33.  Ground 1 concerns causation. Ground 2 concerns the adjudicator’s duty to investigate under section 16(3) of the Small Claims Tribunal Ordinance, Cap 338. Ground 3 relates to the defence of Act of God. I reproduce the grounds below.

Ground 1(a)

34.  The adjudicator failed to appreciate that B1/F and B2/F would still have been flooded even assuming effective measures could have been taken to avoid water from flowing into the car park through the entrance on G/F, because a huge volume of water had been leaking from a rain water pipe located at the ceiling of B1/F which was connected to the drainage system, and thus the sea water also entered the car park through the leaked pipe when the sea level rose beyond the position of the drainage outlet. I shall refer to the pipe below as “the B1 pipe”.

Ground 1(b)

35.  The adjudicator made a finding that had there been sandbags and/or water barriers placed at the entrance of the car park, the flooding at the car park would have been avoided without any or sufficient factual or expert evidence.

Ground 1(c)

36.  The adjudicator wrongly reversed the burden of proof on the defendant to show by expert evidence that the sandbags and/or water barriers placed at the entrance of the car park could not have withstood the flow of water, while the burden of proof should be on the claimants to show that the sandbags and/or water barriers could have withstood the flow of water and effectively avoided the flood.

Ground 1(d)

37.  The adjudicator took into account and gave weight to irrelevant matters relating to the hearsay evidence on the alleged precautionary measures adopted in other residential estates in Tseung Kwan O and Hang Fa Chuen and the damage caused to those estates.

Ground 2(a)

38.  The adjudicator failed to inquire into the cause(s) of the flood in the car park and whether the flood could have been avoided, and did not sufficiently or at all remind the parties to obtain and adduce expert evidence on the issue.

Ground 2(b)

39.  The adjudicator failed to inquire into the question as to whether the sandbags and/or water barriers placed at the entrance of the car park could have withstood the volume and the strength of sea water flow, and did not sufficiently or at all remind the parties to obtain and adduce expert evidence on the issue.

Ground 3

40.  In considering the defence of Act of God, the adjudicator erred in holding that the defence has no application on the grounds that the design of underground drainage system by the government constituted human intervention and that the flooding incident could have been avoided.

LEGAL PRINCIPLES

41.  The principles governing appeals from the Small Claims Tribunal are not in dispute.

Findings of facts

42.  It is trite that finding of facts by the tribunal is generally immune from challenge as it involves no error of law, unless the finding is perverse or irrational, or where there is no evidence to support the decision or where the decision is made by reference to irrelevant factors or without regard to relevant factors: see, eg, Chow Mee Yee Millie v Hong Kong Mediation Services Limited HCSA 17/2011, 16 February 2012 at para 25.

The adjudicator’s duty to investigate

43.  Under section 16(3) of the Ordinance, the tribunal “shall inquire into any matter which it may consider relevant to a claim, whether or not it has been raised by a party”.

44.  On the duty to investigate, I adopt the principles set out in A Workshop Communications Ltd v Tam Heung Man [2018] HKCFI 332 at paras 35 to 42. Relevantly, they are:

(1)  The manner of investigation is a matter of discretion to be exercised by the adjudicator in view of the facts of the case.

(2)  The adjudicator is only duty bound to investigate matters that are relevant to the claim.

(3)  If the adjudicator discerns relevant matters which the parties have not explored, he is obliged to look into it and should invite the parties to comment and guide them to produce further evidence or documents.

(4)  The duty to investigate does not mean that the tribunal should take over the role of an advocate for a litigant. It must remain neutral and impartial.

(5)  Not every failure to adequately investigate a relevant matter will give rise to an appeal for a failure to discharge a statutory duty. The failure must be of such a nature that the lack of investigation will give rise to injustice in that a fair and proper determination of the claim cannot be attained. All the circumstances of the case as well as all other findings must be given all due regard before such a complaint can be upheld.

(6)  The appellate court should not interfere with the discretion of the adjudicator merely because it would have exercised it in a different manner.

45.  The adjudicator is required in appropriate cases to remind parties to adduce expert evidence where such evidence is reasonably required. This is an aspect of the adjudicator’s duty to investigate: see 徐永德 對 德民大厦業主立案法團 HCSA 29/2016, 8 June 2017 at para 15.

DISCUSSION

Ground 1(a)

46.  Ground 1(a) concerns the B1 pipe.

47.  The B1 pipe was not mentioned at all in the adjudicator’s decision.

48.  There was, however, evidence before him that a large amount of water was leaking from the B1 pipe at or about the time when sea water was about to or was entering the car park from the street level. The evidence came from the written statements of the defendant’s two witnesses, namely, Mr Wong Kwok Wai, an assistant customer service supervisor, and Mr Lau Chi Hang, a director. There were also video recordings showing water gushing out from the B1 pipe. I set out the evidence below.

49.  First, in his statement, Wong said that at around 12.50 pm, he discovered that there was massive leakage (“大範圍滲流”) from the B1 pipe.

50.  Secondly, Lau said in his statement that he noted at around 2.09 pm, large volume of water was leaking from the B1 pipe and B1/F was already flooded, but the ground floor remained relatively dry with no flooding. He also noted at 2.10 pm that B2/F was flooded and one of the walls on that floor was knocked down by water.

51.  According to Lau, the B1 pipe was to drain rain water away from Twin Peaks and was connected to a drainage outlet at Tong Chun Street. He was told by the Drainage Services Department afterwards that typhoon Mangkhut caused the sea level to rise beyond the position of the drainage outlet. As a result, sea water entered the rain water pipe.

52.  Thirdly, in his oral evidence, Lau referred to the burst pipe as a cause of the flood. He had the following exchange with the adjudicator:

“答： 咁我 -- 有張相片，嗰度有個水喉就斷裂咗，就有啲水湧出喇，係喇，咁我喺上面嘅文字，我都有寫到話呢個係接收地面雨水嘅水喉，係喇，就跟住會接駁出去唐俊街嘅渠務署排水口嘅，係喇。

官： 唔。

答： 咁根據番D171 -- D171 嘅時候呢，其實當時地面都係冇水嘅，同埋當時個雨都唔大嘅，咁但係嗰條水喉都會咁樣爆裂呢，所以我就認為嗰時個渠 -- 個排水喉已經發生海水倒灌，係呀，咁所以嗰條喉就斷裂咗，咁所以嗰度都係另一個即係因為渠務署嘅排水喉、海水倒灌而令到嘉悅水淹嘅一個原因嚟嘅，係呀。

官： 法庭個困難喺邊度呢？其實法庭都留意到，但係雙方都冇引用專家證人去搵出以一個專家證人嘅角度，水浸嘅原因，咁呢個就係法庭面對到嘅困難喇。當然，理解到雙方個 -- 雙方個別嘅睇法可能係海水倒灌，浸咗入去，但係實際上點解 -- 個停車場點解會水浸呢？其實冇一個專家證人提供一個專家證供，幫助法庭參考，咁呢一點有少少困難。但係劉先生，法庭注意到你所 -- 剛剛所提嘅證供，嗄。” (underline added)

53.  Fourthly, the video recordings show that water was gushing rapidly from the B1 pipe like a strong waterfall.

54.  Notwithstanding the evidence adduced before the adjudicator, he made no mention of the B1 pipe at all in his written decision.

55.  Under this ground of appeal, the defendant now argues that on the basis of the evidence before the tribunal, even if the defendant had taken effective step to stop sea water from entering the car park from the street level, the car park would still have been flooded because of the leakage from the burst B1 pipe. Hence the “but for” test was not satisfied and causation not proved.

56.  On the other hand, Mr Albert Chan, counsel for the claimants, submitted that the extent of the water leaking from the B1 pipe was limited, especially when compared with the entire area of the car park. Furthermore, the claimants needed only to show on a balance of probabilities that but for the failure of the defendant to take proper step, the damage to the claimants’ properties would not have occurred. He contended that they had adduced sufficient evidence to that effect. The evidence showed that sea water entering the car park from the street level was a substantially contributing cause of the flooding.

57.  I have to say that the leakage from the B1 pipe as shown in the video recordings appeared to be serious. The visual effect was quite remarkable. Water was seen bursting from the pipe with intensity and force. In addition to that, the defendant’s factual witness recounted that when water was bursting from the pipe at B1/F, the ground floor remained relatively dry with no flooding yet.

58.  All these evidence go to support the defendant’s contention that the burst pipe had caused the flooding of the car park. Whether that was indeed the case and, if so, to what extent the burst pipe had contributed to the flooding was clearly a matter which the adjudicator ought to have resolved. This is because if the car park would have been flooded by reason of the burst pipe, the defendant’s failure to take any step to stop sea water from entering the car park from the street level could not be said to have caused the flooding as a matter of law. The “but for” test would not be satisfied. Analysed that way, the burst pipe was plainly a relevant factor which the adjudicator ought to have taken into account when answering the “but for” question.

59.  Yet, he did not touch upon the evidence on the B1 pipe at all and he made no finding on this matter. In my view, the inescapable conclusion is that in arriving at his conclusion on causation, the adjudicator had failed to take into account a relevant factor. His finding on causation cannot therefore stand.

60.  That said, I do not agree with the defendant that I should make the factual finding in this appeal that the car park would still have been flooded because of the B1 pipe even if sea water had not been entering the car park from the street level. The proper course is instead for me to remit the claims back to the tribunal for the issue to be properly determined.

61.  For the above reasons, the defendant succeeds under Ground 1(a).

Grounds 1(b) and (c)

62.  Grounds 1(b) and (c) can logically be dealt with together.

63.  In my view, when the written decision is read as a whole, it is clear that the adjudicator had applied the burden of proof correctly.

(1)  In para 14, he expressly stated that it was for the claimants to prove causation.

(2)  In para 21, he specifically referred to the internal guidelines which provided that sandbags or other water barriers should be deployed to prevent flooding at times of typhoon. He pointed out that when sea water was about to enter Twin Peaks from the street, the defendant still took no action (“仍然採取一種不作為的方式”). He therefore concluded that the defendant was in breach of its duty of care.

(3)  It is plain that he attached great weight to the internal guidelines. He stated that the defendant’s inaction was in plain violation of the guidelines. He was clearly unimpressed by such violation.

(4)  In para 29, he rejected the defendant’s argument that the sandbags would not have been effective to stop the flooding. He reiterated at the end of that paragraph that the internal guidelines suggested the use of water barriers. See the underlined extract in para 27 above.

(5)  He concluded that causation was proved.

(6)  Later on, in para 36 when he dealt with the Act of God defence, he reiterated that if the defendant had followed the internal guidelines, the flooding could have been avoided.

64.  It is true that the claimants had not adduced any expert evidence to show that the sandbags or other water barriers could have withstood the flow of sea water and avoided the flooding. However, it is tolerably clear from the adjudicator’s reasoning that he found that to be the case because those were the very measures which the internal guidelines suggested to be deployed in order to prevent flooding in cases of typhoons.

65.  In other words, the evidential basis for the adjudicator’s finding was the internal guidelines.

66.  In this regard, the observations of Hodson LJ in McWilliams v Sir William Arrol & Co Ltd [1962] 1 WLR 295 at 306-307 apply:

“If general practice or a regulation requires that some safety appliance shall be provided, one would assume that it is of some use, and that a reasonable man would use it. And one would assume that the injured man was a reasonable man. So the initial onus on the pursuer to connect the failure to provide the appliance with the accident would normally be discharged merely by proving the circumstances which led to the accident, and it is only where the evidence throws doubt on either of these assumptions that any difficulty would arise. Normally, it would be left to the defender to adduce evidence, if he could, to displace these assumptions. So in practice it would be realistic, even if not theoretically accurate, to say that the onus is generally on the defender to show that the man would not have used the appliance even if it had been available. But in the end, when all the evidence has been brought out, it rarely matters where the onus originally lay, the question is which way the balance of probability has come to rest.” (underline added)

67.  In my view, the adjudicator was entitled to make the finding that the use of sandbags or other water barriers would have been of use to prevent flooding, solely based on the internal guidelines. After all, those guidelines were compiled by the defendant itself, who is a professional property manager and the apparent purpose of the guidelines was to set out what step should be taken by the manager to prevent flooding of the estate in cases of typhoons.

68.  Another adjudicator might have come to a different view on this issue because, for instance, he might not have attached as much weight to the internal guidelines as the adjudicator did in the present case. However, I am of the view that the adjudicator’s finding is within the range of reasonable findings that can be made on the evidence. There is no room for an appellate court to intervene in this finding. The burden therefore shifted to the defendant to prove otherwise.

69.  The next question is whether the adjudicator was wrong to hold that the defendant failed to discharge that burden because it had not adduced any expert evidence to show that any sandbags or water barriers would have been washed away because of the intensity of the incoming sea water.

70.  The relevant passage is para 29 of the decision (as quoted in para 27 above). In my view, the adjudicator did not commit any error in holding that the factual witness did not have the expertise to comment on the effectiveness of sandbags. He was entitled to reject the defendant’s argument for that reason. (Whether the tribunal had a duty to advise the defendant to adduce expert evidence in the first place is another matter. See the discussion in relation to Ground 2 below.)

71.  For the above reasons, I reject Ground 1(b). There was sufficient evidence in the form of the internal guidelines justifying the finding that the use of sandbags or other water barriers would have avoided the flooding of the car park. I also reject Ground 1(c). The adjudicator did not make any error as regards burden of proof.

Ground 1(d)

72.  Ground 1(d) is a complaint that the adjudicator wrongly took into consideration and gave weight to the alleged precautionary measures adopted in other residential estates in Hang Fa Chuen and South Tseung Kwan O.

73.  I reproduce below the relevant paragraphs of the written decision:

“36. … 本席應為水浸事件是可以預見的，只要盡一切合理的技能和謹慎， 例如像杏花村物業管理 人的防禦措施，或根據《颱風防護工作指引》的第3點，放上沙包及/或安裝擋水板，水浸事件是可以避免。

…

38. 申索人從“蘋果動新聞網站”列印一份2018年9月21日的新聞報導，該新聞報導顯示將軍澳南鄰近地區的物業因山竹而遭受不同程度的破壞。但在將軍澳南海濱長廊旁邊的物業，其受損程度甚至比該物業輕，只有公眾地方輕微水浸。

39. 雖然審裁處席前沒有證據顯示這些物業的管理人具體採取了什麼措施，但可以合理推斷，上述物業的物業管理人確實採取了措施，以防止海水流人物業，因為從地理位置上考慮，海水是從將軍澳南海濱長廊海岸邊開始流上街道的。” (emphasis added) (footnotes in the original text omitted)

74.  These paragraphs formed part of the discussion of the Act of God defence in the written decision. However, both Mr Wong and Mr Chan proceeded on the basis that the discussion formed part of the adjudicator’s reasoning on causation.

75.  Mr Wong submitted that the alleged measures adopted in other residential estates should not be a relevant consideration when considering whether the flooding of the car park at Twin Peaks could have been avoided.

76.  He contended that the effect of typhoon Mangkhut on other residential estates must depend on a wide range of factors specific to the estate in question. They would include, eg, the location, design, and orientation of the buildings and the surrounding environment. Save that the other estates in South Tseung Kwan O cited in the decision are closer to the seaside than Twin Peaks, the adjudicator had no other information on them. He did not have any information on what preventive measures were actually adopted by the managers of those estates. The finding that those managers must have taken some steps which were effective in preventing flooding was not based on evidence.

77.  On the other hand, Mr Chan submitted that what happened at the other residential estates was not outright irrelevant. It would be a matter of weight. An appellate court should not intervene on issue of weight. Furthermore, the adjudicator was entitled to draw the inference that effective preventive measures had been adopted in those other estates based on the fact that they suffered only minor flooding.

78.  I agree with Mr Wong’s submissions. The adjudicator’s finding on the steps taken in the other estates was not based on evidence. Furthermore, without further evidence on the physical conditions and surrounding landscape of the estates, the fact that they suffered only minor flooding was an irrelevant consideration when determining whether the flooding at Twin Peaks could have been avoided.

79.  In the premises, Ground 1(d) is made out.

Grounds 2(a) and (b)

80.  Under Ground 2, the defendant contends that the adjudicator failed to inquire into the cause of the flooding and, more specifically, he did not remind the parties to obtain expert evidence on whether the sandbags or other water barriers could have withstood the volume and the strength of the sea water coming in from the street level.

81.  Mr Wong highlighted the remarks made by the adjudicator at the trial in which he acknowledged that the tribunal was having difficulty in determining the cause of the flood as neither party had adduced any expert evidence on the issue. See the extract in para 52 above.

82.  Furthermore, in the written decision itself, in the context of causation, the adjudicator rejected the defendant’s argument that sandbags would not have avoided the flood because of the intensity of the force of the sea water. He did so because the defendant had not adduced any expert evidence to support that argument.

83.  Mr Wong submitted that merely pointing out and recording that no expert evidence was adduced by the parties and proceeding on that basis to make factual findings was insufficient. The adjudicator ought to have alerted the parties to the need to adduce expert advice. He had failed to discharge his duty to investigate under section 16(3) by omitting to do so.

84.  At the hearing before me, it was Mr Chan’s submission that at a call-over hearing on 13 June 2019 before another adjudicator, the tribunal had in fact alerted the parties that expert evidence might be needed in the present case and informed them to consider adducing the same. Mr Chan highlighted that the call-over hearing took place more than one year before the trial. The parties had been informed at an early stage. Hence he submitted that there was no breach of duty to inquire on the part of the tribunal in the present case.

85.  At the hearing before me, there was some slight disagreement between the parties as to what had been said by the adjudicator about expert evidence at the call-over hearing and to whom he had been speaking at that time. I therefore directed the claimants to obtain a transcript of the relevant parts of that hearing and granted leave to parties to submit short submissions to address these specific points.

86.  According to the transcript, at the call-over hearing, the adjudicator gave a fairly lengthy speech on the need for calling an expert to opine on the cause of the flooding and the reasonableness of the defendant’s action, if any. However, he did so when he was addressing the claimants, not the defendant. He started off by telling the claimants that in these actions they had to prove the three elements of negligence, namely, duty of care, breach and causation. Later on, he told the claimants that they bore the burden of proof. He then said to the claimants that in order to discharge the burden, they ought to find an expert to give evidence on what a reasonable management company would have done in severe storm or flooding situations.

87.  It is true that the defendant was all along present at the call-over hearing. It must be taken to have heard what the adjudicator said about the need for expert evidence.

88.  What is equally true here, however, is that the speech about the expert evidence was directed at the claimants when the adjudicator was in the course of explaining to them their burden of proof and the evidence needed to discharge that burden. At the end of the speech, I do not think that, objectively speaking, the defendant would be alerted to the fact that it itself might also need to adduce expert evidence in order to support its own defence.

89.  In sum, I think I can fairly conclude that (1) the adjudicator did not at any stage advise the defendant that it might need to adduce expert evidence in support of their defence, and (2) at the conclusion of the hearing, the defendant was not made aware of that need.

90.  The question before me is therefore this – did the failure of the tribunal to alert the defendant to the need to adduce expert evidence to support its defence fall short of the duty imposed on it under section 16(3)?

91.  I remind myself that the duty under the section is not an absolute one. The material consideration is whether the failure to alert was unjust to the defendant because the claims and the defence were not disposed of fairly and properly as a result.

92.  I think the answer is yes. The defendant’s argument at the trial was that the sandbags or other water barriers, if placed, would not have prevented the sea water from entering the car park. The adjudicator rejected the argument because the defendant had adduced no expert evidence in support. He refused to accept the contention made by the factual witness. The expert evidence in this regard was clearly a matter directly relevant to the defence. The tribunal had a duty to advise the defendant of the need to call an expert. It had not done so.

93.  Grounds 2(a) and (b) are therefore made out.

94.  For this reason too, the five claims should be remitted back to the tribunal for fresh determination. The tribunal should raise with the parties the need to adduce expert evidence on the effectiveness of sandbags or other water barriers in the prevention of flooding of the car park. The tribunal may also need to explore with the parties whether any expert evidence is needed in relation to the B1 pipe, as discussed under Ground 1(a) above.

Ground 3

95.  As regards the Act of God defence, the adjudicator made two rulings. First, the flooding was not an Act of God because the incident involved human intervention in the form of a design problem with the government’s drainage system. Second, as an alternative, the flooding could have been avoided by taking reasonable steps.

96.  I agree with the defendant that the adjudicator erred in making the first ruling.

(1)  The adjudicator did not explain why he found that there was a design problem. All he said was that the sea level recorded on that day went beyond the position of the drainage outlet. However, the fact that this happened does not necessarily mean that the drainage system suffered from a design problem.

(2)  There was no evidence before him that the drainage system was not designed in accordance with recognised standards.

(3)  Hence, his finding that there was a design problem cannot stand as it was arrived at without sufficient evidence.

(4)  It follows that his ruling that there was human intervention is not valid.

97.  As regards the second ruling that the flooding could have been avoided by taking reasonable steps, the adjudicator arrived at it by two alternative routes: see para 36 of the decision. First, the defendant could have adopted the precautionary measures used at Hang Fa Chuen. Second, it could have followed the internal guidelines. See the extract in para 73 above.

98.  The first route cannot be upheld. What I have said above in relation to Ground 1(d) applies here. The second route cannot be faulted with. What I have said above in relation to Ground 1(b) applies here.

99.  On the whole, Ground 3 is not made out. The adjudicator was entitled to hold that the Act of God defence did not apply because the flooding could have been avoided.

Summary

100.  In summary, based on the evidence before the adjudicator, he did not commit any error of law in holding that the use of sandbags or other water barriers could have withstood the incoming sea water from the street. (Hence, Ground 1(b) is not made out.) However, he erred in failing to take into account the effect of the burst B1 pipe. (Hence, Ground 1(a) is made out.)

101.  At the same time, the tribunal had not duly advised the defendant of the need to adduce expert evidence to support its defence. In my view, this omission has resulted in injustice to the defendant in that its defence was as a result not fully explored, investigated and properly adjudicated upon at the trial. (Hence, Grounds 2(a) and (b) are made out.)

102.  Overall speaking, therefore, I consider that the correct outcome of these appeals should be for the claims to be remitted back to the tribunal and for the tribunal to guide both parties on the need to adduce proper expert evidence on such cause or causes of the flooding as are relevant to their claims and defence.

CONCLUSION

103.  To conclude, the defendant has successfully made out Grounds 1(a) and (d) and Grounds 2(a) and (b).

104.  Accordingly, I set aside the adjudicator’s orders made on 31 August 2020 and 18 September 2020. I remit the five claims back to the Small Claims Tribunal for fresh determination by any adjudicator, who shall investigate the issues highlighted in this judgment.

105.  I further make a costs order nisi that the defendant’s cost of these appeals, including all reserved costs, be in the cause of the retrial. I grant a certificate for one counsel.