CHAN YIP CHEUNG AND ANOTHER v. FONG CHOW WO AND ANOTHER

DCCJ 4478/07

 IN THE DISTRICT COURT OF THE 

HONG KONG SPECIAL ADMINISTRATIVE REGION 

CIVIL ACTION NO. 4478 OF 2007 

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ASSESSMENT OF DAMAGES

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1.  This is a case concerning seepage of salt water from the Defendants’ premises to the Plaintiffs’ premises on 19, 26 and 27 of September 2006 causing damages to the Plaintiffs’ premises.  Interlocutory judgment in default of filing of intention to defend was entered on 17 December 2007.

2.  The Plaintiffs were and are registered owners of the premises situate at Flat D, 12^th floor, Block 3, Wonderland Villas, No 9 Wah King Hill road, Kwai Chung, New Territories (the Plaintiffs’ premises).  The Defendants’ premises is immediately above the Plaintiffs’ premises. 

3.  The Plaintiffs now claim for damages for i) costs of reinstatement of the Plaintiffs’ premises, ii) loss of rental, iii) loss of convenience, and iv) surveyor’s fees.

Background

4.  Apart from the present seepage case, there had been previous water seepage from the Defendants’ premises to the Plaintiffs’ premises since 1998, which was the subject matter of a previous civil claim (the previous action) by the Plaintiffs against the Defendants (case no DCCJ 3574 of 2005).  In that case, the Plaintiffs had been awarded damages under the judgment of Deputy Judge A Chow dated the 19 July 2006 for loss and damage suffered by the Plaintiffs as a result of leakage of water from the Defendants’ premises.  Amongst the damages awarded was a sum of $75,820 under the head of “Costs of remedial works” to reinstate the condition of the Plaintiffs’ premises, which was based on a surveyor’s report dated the 14 January 2006 of one China Hong Kong Valuers (International) Ltd. 

5.  Many of the items of damage described under that report coincide with the items of physical damage claimed in the present action.

6.  The Plaintiffs started to renovate the Plaintiffs’ premises in July 2006 and completed the renovation works in August 2006. However the renovation works were only performed to the extent that most damaged items (including the major items for timber floor tiles and skirting and bathroom wall ceramic tiles) were only renewed instead of being replaced as was claimed necessary in the previous surveyor’s report.  The Plaintiffs only actually expended an amount of $29,500.

Plaintiffs’ case 

7.  At the material times of water seepage in the present action, the Plaintiffs had moved out from the Plaintiffs’ premises which were left unoccupied and intended to be sold or rented out. 

8.  On19 September 2006, the 1^st Plaintiff was informed by the management office of Wonderland Villas that there was a burst of salt water inlet pipes in the Defendants’ premises and the water had escaped to the Plaintiffs’ premises.  The 1^st Plaintiff went to his premises with the staff of the Management office to inspect the premises. He found that water was dripping from the ceiling of the bathroom the Plaintiffs’ premises through the sealant along the edges of the bathroom and the floor tiles of the Plaintiffs’ premises.

9.  On the next few days, the Plaintiffs had to attend the Plaintiffs’ premises to clear and clean their premises.

10.  At about midnight of 26 September 2006, the 1^st Plaintiff was informed by the Management office that the salt water inlet pipe of the Defendant’s premises had burst again causing flood in the Plaintiffs’ premises.  The 1^st Plaintiff attended his premises immediately late at that night to do the clearing and cleaning work.

11.  On 27 September 2006, when the Plaintiffs attended their premises they found water seepage again from the Defendants’ premises through the sealant along the edges of the bathroom and the floor tiles of the Plaintiff’s premises.

12.  On the next few days, the Plaintiffs had to attend their premises to clean and clear the premises.  Thereafter, they needed to visit their premises from time to time to view the state of their premises.

13.  As a result of the incidents, the following damages were found in the Plaintiffs’ premises:

- the timber floor tiles in the living room, corridor, servant’s room and child’s room were extensively soaked with water and the affected floorings were swollen;

- water stains, damp patches with blistered paint and peeling off of paints and plaster layer were found on the ceiling and walls of the corridor as well as walls of the child’s room;

- the concrete walls and floorings completed with ceramic tiles in the bathroom of the Plaintiffs’ premises were saturated with water;

- the timber skirting of the Plaintiffs’ premises was soaked with water.  The void between the marble floor-barrier and the floor at between the said bathroom and the living room had filled with water;

- the timber cabinet underneath the marble with water basin, marble attaching to the large mirror, water heater and one socket were damaged.

14.  There were negotiations between the parties over the reinstatement of the Plaintiffs’ premises.  In March 2007, the Plaintiffs and the Defendants agreed through their lawyers to jointly retain a surveyor, namely Simon Sham Appraisal (HK) Ltd (the surveyor), to conduct a survey in respect of, among other things, the source and cause of water damage, extent of loss and damages in the Plaintiffs’ premises, the necessary repair works to be done in the Plaintiffs’ premises and estimate the costs of doing so.

15.  The surveyor estimated in their Report of Quantum Assessment dated 18 April 2007 and Supplemental Report of Quantum Assessment dated 7 June 2007 that the total costs of reinstatement should be about $96,750. The Plaintiffs had paid the professional fee to the surveyor in the sum of $3,500.

16.  The Plaintiffs also obtained a quotation from Hong Wah Interior Design Co. Ltd (Hong Wah), a decoration company introduced by the Defendants to the Plaintiffs.  In the quotation, the cost of reinstatement was $93,240, not including the costs of installation of sockets.

17.  When the Plaintiffs were about to engage Hong Wah to do the reinstatement works, the Defendants, through their then solicitors, objected to the costs of reinstatement under the quotation.

18.  The 1^st Plaintiff estimated that the length of time to complete the reinstatement works would be about 2 months.

19.  The 1^st Plaintiff explained in court that in August 2006, he had to pay mortgage installments of two premises.  As the Defendants had not paid the judgment sum, the Plaintiffs were in financial difficulty and therefore, doing the best they could, did not carry out full reinstatement as recommended by their surveyor.

20.  In August 2006 after the Plaintiffs had renovated the Plaintiffs’ premises, the Plaintiffs put their premises in the property market for sale or letting out for rent.  The Plaintiffs claimed that due to the severe damage to the Plaintiffs’ premises and the Defendants’ hindrance to reinstate the Plaintiffs’ premises, the Plaintiffs were not able to let their premises out since September 2006 up until now. 

21.  The Plaintiffs’ premises have not been reinstated. The 1^st Plaintiff is of the opinion that the reinstatement would be meaningless when the Defendants still fail to repair the salt water inlet pipe in the Defendants’ premises.  Up to now, the Defendants have not confirmed whether they have repaired the salt water inlet pipe or not.  The Plaintiffs therefore claim loss of rental since then for 24 months.

22.  The Plaintiffs have produced statistics of the Centaline Property Agent to show that the market rent of the Plaintiffs’ premises in August 2006 was not less than $9,750/month.  In May 2008, the market rent was no less than $11,900/month.

23.  Since the Plaintiffs had to make time to attend the premises to inspect and clear and tidy up their premises and to make sure that their premises were in good order, their efforts have caused inconvenience.  Relying on a few previously decided cases involving claim for inconvenience, the Plaintiffs claim for $12,000.

The Defendants’ case

24.  In the 1^st Defendant’s witness statement adopted as evidence in court, he said the judgment debt with interest accrued in the previous action was paid to the Plaintiffs on 3 November 2006.

25.  After the incidents of water leakage in September 2006, the salt water pipe was fixed and water stopped seeping onto the Plaintiffs’ premises.  Since then there has been a long negotiation between the parties on the Plaintiffs’ claim for damages as a result of the water leakage.  There is no dispute that Hong Wah was recommended to the Plaintiffs.  However the 1^st Defendant says the Defendants did not insist only to appoint Hong Wah as contractor for reinstatement works, whose quotation was found to be excessive and not accepted by the Defendants.  The supplemental report of the surveyor was also unacceptable because it was obtained without their notice and obtained subsequent to their objection to the repairing items suggested by Hong Wah.

26.  The 1^st Defendant suspected that the water dampness or marks as shown in the photographs contained in the surveyor’s report were not new and doubted whether the Plaintiffs had really carried out repair or renovation to their property.  Repeated demands were made to the Plaintiffs’ solicitor for proof of the reinstatement but the requests were not met. 

The issues

27.  There is no material dispute of facts in this case.  In my view, the simple issues are:

i)   What were the damages to the Plaintiffs’ premises caused by the water leakage in the incidents on 19, 26 and 27 September 2006?

ii) What is the proper compensation for the damages?

iii)   Extent of Defendants’ liability for loss of rental?

iv)   What is the proper compensation for the inconvenience caused to the Plaintiffs?

What were the damages caused by the water leakage?

28.  Having seen the photographs taken by the Plaintiffs and the Management Office, I am satisfied that the Plaintiffs’ premises was seriously affected by the water leakage and the items referred to in the Plaintiffs’ surveyor’s report and supplemental report were damaged as a result of the water leakage in September 2006.  I accept that the Plaintiffs incurred $29,500 for renovation in August 2006.  I will later deal with the extent of Defendants’ liability for each of the damaged items in the surveyor’s reports.

29.  The main argument of Mr Vaughan, counsel for the Defendants, is that many of the items of damage described in the Plaintiffs’ surveyor’s report for the previous action coincide with the items of damage claimed in the surveyor’s reports in the present action.  The court is in an extremely difficult position to find that the damage presently seen was actually caused by the incidents in the present case, as opposed to the water leakage in the previous action.  This is especially so in the case of the timber floor tiles, and the ceramic tiles in the bathroom.  The Plaintiffs were awarded for replacement of these items.  However the timber floor tiles and the ceramic tiles in the bathroom have not been replaced.  The Plaintiffs only spent $3,500 on polishing the floor tiles.  If they are awarded again on the basis of replacement costs, the Plaintiffs will benefit twice.

30.  Mr Vaughan has kindly prepared a Scott schedule setting out the items of claims and the extent they are disputed, in particular, whether they have been covered by the damages awarded in the previous action.

31.  On the other hand, Mr Sit, counsel for the Plaintiffs, submits that the Plaintiffs have honestly admitted that they did not carry out all the reinstatement works recommended by the surveyor in July/August 2006 because when the renovation works were performed, they were yet to receive the judgment sum.  At that time, they had two mortgages to pay off resulting that they did not have much money left for the works.  However they have done their best that they could afford at that time and cannot be blamed.  Despite some items were not done in accordance with the recommendations of the surveyor’s report, the Plaintiffs’ premises were found to be in good and proper condition after the renovation in August 2006.  It is wrong for the Defendants to question the Plaintiffs as to how the Plaintiffs utilized the damages awarded in the previous action.  Even the courts have no control over the utilization of the damages awarded.

32.  I would with respect agree that the courts have no control over the utilization of the damages awarded.  However when there is a new action, the court can look at the whole circumstances of the case including the fact that the Plaintiffs had previously claimed and were awarded full costs for replacement of some damaged items, which were not subsequently replaced as the Plaintiffs had claimed they would do in the previous action.  It would be unfair to order the Defendants to pay for loss that the Plaintiffs have not suffered.  Take the timber floor tiles and timber skirting as an example, the costs for replacement of them were $23,000 and $2,600 respectively as stated in the surveyor’s report in the previous action.  The total costs for reinstatement of the premises was stated in the surveyor’s report as $75,820 which was exactly the same as the “costs of remedial work” awarded in the previous action.  It is therefore apparent that the judge in the previous action awarded on the basis as claimed by the Plaintiffs for replacement of the items stated in the surveyor’s report.

33.  The Plaintiffs claimed they lost the whole timber floor tiles and skirting in the previous action and were awarded damages for the loss on full replacement basis.  If the timber floor tiles had been replaced and damaged again, the Plaintiffs would have been entitled to compensation for full cost of replacement.  When in fact the Plaintiffs have not replaced the timber floor tiles as they claimed they would in their previous action, they have not lost the timber tiles.  They have only lost the cost of repair in the sum of $3,500 for polishing of the floor tiles, as stated in the invoice and quotation of Chun Lee Loong, the contractor employed for renovation of the Plaintiffs’ premises. 

34.  Mr Vaughan submits that as the court is in a difficult position to find which part of the damage was caused by the leakage in the previous action and which part was caused by leakage in the present action.  I agree.  However I cannot agree that because of this difficulty, no damages can be awarded.  The court should, doing the best it can, award a reasonable compensation.  In the case of the timber floor tiles and skirting, the Plaintiffs have lost the costs for repair and polishing of the floor tiles at $3,500.  That is the compensation I would award.

35.  On this basis of measurement of damages, I will now deal with each of the damaged items as claimed.

Timber floor tiles and skirtings

36.  These items have been awarded in the previous action.  The Plaintiffs only lost the costs of repair in the sum of $3,500.

Ceilings/walls plaster and painting

37.  No issue taken.  I find the damage caused by the leakage and the amount claimed being reasonable.  $12,000 is awarded.

Bathroom wall ceramic tiles

38.  Replacement cost of this item has been awarded in the previous action.  No replacement has been made.  Plaintiffs cannot benefit twice.  No evidence of any cost of repair has been adduced by the Plaintiffs.  No compensation can be awarded.

Bathroom floor ceramic tiles

39.  No issue taken.  I find the damage caused by the leakage.  It is reasonable to replace the floor tiles and the amount claimed being reasonable.  $6,000 is awarded.

Bathroom marble (wash basin)

40.  This item has been awarded in the previous action and no replacement or repair have been done.  No compensation is awarded.

Bathroom mirror

41.  No issue taken.  $1,000 is awarded.

Bathroom aluminium ceiling strips

42.  No issue taken.  $2,600 is awarded.

Bathroom ceiling plaster/painting

43.  No issue taken.  $1,600 is awarded.

Bathroom door frame

44.  No issue taken.  $400 is awarded.

Marble floor barrier

45.  No issue taken.  $200 is awarded.

Timber cabinet underneath the wash basin

46.  No issue taken.  $4,500 is awarded.

Marble attaching to the large mirror

47.  No issue taken.  $3,200 is awarded.

Water heater

48.  No evidence that it is not working.  There is evidence that the hose underneath the heater was damaged.  Reasonable amount for replacement of the hose is assessed at $500.

Sockets

49.  Parties agreed compensation at $500.

Toilet bowl with accessories

50.  I am not satisfied that the replacement of toilet floor tiles would necessarily cause damage to the toilet bowl.  I award $500 as extra labour cost for keeping the toilet bowl in good shape during the replacement of the floor tiles.

Standing-type bath tub with screens etc

51.  I am not satisfied that the replacement of toilet floor tiles and wall tiles would necessarily cause damage to the bathtub.  I also award $500 as extra labour cost for keeping these items in good shape during the replacement of floor and wall tiles.

Debris removal

52.  No issue taken.  $1,800 is awarded.

53.  Total award for damaged items is therefore $38,800.

Loss of rental

54.  It appears that the defence is not challenging the appropriateness of this claim.  They are only challenging that the period of time for loss of rental income is excessive.  I agree.

55.  The Plaintiffs are under a duty to mitigate.  Though the contractor was recommended by the Defendants, the Defendants were still entitled not to agree with the quotation.  Despite the Defendants’ objection to the quotation of Hong Wah, the Plaintiffs could still proceed with the renovation and reinstatement works to be performed by Hong Wah or other contractors.  It cannot be said that the objection by the Defendants to the quotation and extent of works amounted to hindrance of the work.

56.  There had been negotiation between the parties on the reinstatement.  It is therefore not unreasonable that the Plaintiffs did not immediately instruct their own contractor to start the reinstatement works.  However from the correspondence between the solicitors representing the parties, such negotiation was clearly ended the latest by the end of June 2007.  Whether or not the Plaintiffs have asked and the Defendants have confirmed that they have fixed up the leakage problem are irrelevant.  It was a fact that there was no longer any further leakage after the incidents in September 2006.  In any case, there was no correspondence between the parties to suggest that the Plaintiffs were waiting for the Defendants to complete repairs before the Plaintiffs could start the reinstatement works.  The Plaintiffs ought reasonably to take steps to reinstate the property and let it out as soon as practicable after the negotiation.  The Plaintiffs were not reasonable in not commencing the reinstatement works up until now.

57.  Having considered the extent of reinstatement works which have to be done, I find that the opinion of the 1^st Plaintiff as to the time for completion of the works a reasonable one.  There is no evidence that the Plaintiffs had found any tenant to start a tenancy agreement in October 2006.  It is more reasonable to award loss of rent from November 2006.  I find that the Plaintiffs are entitled to damages for loss of rental from November 2006 up to end of August 2007 (10 months).  I estimate that the premises could have been rented out at $9,750.  I award the Plaintiffs $97,500 for this head of loss.

Loss of convenience

58.  I have considered the previously decided cases referred to by counsel for both parties.  Each case has to be decided on its own merits.  Taking into account the time spent by the Plaintiffs in cleaning and visiting the premises, I award $10,000 for this item of claim.

Professional fee of surveyor

59. I find the surveyor’s fee caused by the seepage and the amount a reasonable one.  $3,500 is awarded.

The Judgment

60. The Plaintiffs’ damages are therefore assessed at $149,800.  The judgment will carry interest at judgment rate from date of writ until the date of handing down of this assessment and thereafter at the judgment rate until full payment. 

61. I also make costs order nisi that the Defendants do pay the Plaintiffs costs of this assessment, to be taxed if not agreed.  This costs order shall become absolute 14 days after the handing down of this judgment.  I also order certificate for counsel.