KINGDOM POWER DEVELOPMENT LTD v. JUDY KANT and YOUNG, DANSON t/a KAN CONSTRUCTION CO (a firm)

DCCJ 3925/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3925 OF 2007

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JUDGMENT

1.  In this action, the Plaintiff claims against the Defendant for the following damages done by the Defendant in breach of a written agreement dated 28.2.2004 (“the Agreement”) for performing defective works to different parts of its building located at No. 22 – 24, Russell Street, Causeway Bay, Hong Kong (“the Building”) in early March 2004, and completed in late April, 2004:-

(1)  Leaking cistern installed at the 4^th floor toilet of the Building, due to inferior and/or defective quality of cistern provided by the Defendant and/or inferior craftsmanship of the Defendant’s workman.

(2)  Drainage pipe blockage caused by the Defendant’s unused cement, causing overflow of water to the floor of the flat roof of the 1^st floor of the Building, damaging the gypsum board ceiling of the ground floor shop of the Building.

(3)  Water leakage at the rooftop to the ceiling of the 5^th floor of the Building, caused by the Defendant’s defective waterproofing works.

2.  Clause 5 of the Agreement provided that for the roof top waterproofing works, counting from the date on which such works were completed, checked and accepted, the Defendant shall provide 5 years maintenance period free of charge.  The damages occurred within the 5 years maintenance period.  To avoid liability, the Defendant purported to rely on the terms of a certificate of warranty dated 1.6.2006 issued by the Defendant.  But it simply cannot do so as the certificate of warranty terms did not form part of the Agreement, as the Agreement was signed and completed in February, 2004.

The leaking cistern

3.  In around July 2004, serious water leakage occurred in the cistern of the toilet in the 4^th floor unit (“the Unit), and flooded that unit.  Ho found out that water was leaking from the bottom of the cistern at the Unit, which was supplied and installed by the Defendant pursuant to the Agreement.  The Defendant then repaired the toilet soon after the water leakage.  The water leakage occurred within 2 months of the works completed by the Defendant.  Mr. Boris Wong (“Wong”), the project manager of the Defenant from 2001 to April, 2004, conducted a site investigation.  Wong confirmed that the connection joint at the bottom of the cistern of the toilet was broken, and this caused the water leakage.  The Defendant then immediately replaced the connection joint.  It is obvious that the Defendant provided a defective cistern.

4.  The Unit had been vacant since the completion of the renovation works done by the Defendant in March, 2004.  In or about late June or early July 2004, the Plaintiff agreed to let the Unit to a new tenant for a term of one year, commencing from 16.7.2004 to 15.7.2005 at a monthly rental of $19,000.  The water leakage prevented the new tenant from carrying out the renovation works in the Unit during the period from 16.7.2004 to 23.7.2004.  By an email dated 22.7.2004 from the new tenant, the new tenant indicated that the renovation work on the 4^th floor could not be carried out because the floor had not been dried up.  Because of this, the Plaintiff agreed to and did grant an additional rent-free period from 31.7.2004 to 2.8.2004 to the New Tenant.  Hence it suffered a loss of rental income in the sum of $1,838.71 ($19,000 x 3 ÷31).

5.  The Defence Counsel said that the Plaintiff is not entitled to recover the alleged loss of rental income as the same is not foreseeable by the Defendant.  It is the Plaintiff’s business to rent out that unit.  It was foreseeable that the water leakage would prevent the Unit to be used until the water dried up and the water stains removed.  So there must be a loss of use of the Unit to the tenant for that period.  This loss of use was shouldered by the Plaintiff.  The Defendant must be liable for such loss of use which would be assessed in terms of money.  In this case the loss of use is represented by the rent-free period, borne by the Plaintiff as the landlord, in the sum of $1,838.71.

The drainage pipe blockage

6.  Since about April 2004, the tenant of the ground floor shop of No. 24 of the Building (“the Shop”) started to make complaints to Mr. Ho Siu Lun (“Ho”), the property officer of the Plaintiff until October 2006, over the phone about water leakage at the ceiling of the Shop, which caused damage to the gypsum board ceiling of the Shop.  In or about late May, 2004, the tenant made a complaint to Ho about the serious water leakage at the ceiling of the Shop.  On 24.6.2004, the Plaintiff engaged a contractor, Sing Kee Works Co. (“Sing Kee”), to conduct a site inspection at the Building.  Sing Kee confirmed that the drainage pipe near the flat roof on the 1^st floor of the Building was blocked, and had to be replaced.  The blockage of the drainage pipe caused an overflow of waste water to the said flat roof which caused the water leakage at the ceiling of the shop underneath.

7.  On 29.6.2004, the Plaintiff engaged Sing Kee to replace the blocked drainage pipe.  After renewal of the blocked drainage pipe, it was discovered that there was a lot of cement coming out from the drainage pipe.  This caused the blockage.  The technician of Sing Kee asked Ho if there was any recent construction or renovation works at the Building.  He told him that there were renovation works conducted at the 4^th and 5^th floors of the Building in March and April 2004.  The Plaintiff did not engage any other contractor to conduct any renovation or construction works around that period of time.  The technician confirmed that the cement should be the unused material left in the course of the said renovation work.

8.  After drying up of the water at the ceiling of the Shop, Sing Kee carried out remedial works for the gypsum board ceiling of the Shop to reinstate the same in or about 22^nd and 23^rd July, 2004.  The Plaintiff settled the cost of the remedial works done by Sing Kee at $5,000.  By a letter dated 27.8.2004, the Plaintiff informed the Defendant about the blockage of the drainage pipe caused by the cement left by the Defendant in the course of the renovation works and the water leakage caused thereby.  The Plaintiff demanded the Defendant to settle the sum of $5,000.  But the Defendant refused to make payment.

9.  The Plaintiff’s expert, Mr. Gary Chung (“Gary Chung”), explained that the blockage was caused by the cement, which is not a soluble material.  The overflow pipe was functioning like a sedimentary tank.  All the heavy particles would settle to the bottom of the pipe and the overflow water would be clear.  Around that time and subsequent to the completion of the renovation work done by the Defendant, water leakage occurred.  Around the period of time in question the Plaintiff did not engage any other contractor to conduct any renovation or construction works.  The cement sand must be the cement sand from the cleaning of tools used by the Defendant’s workmen.  The pipe blockage was caused by used cement during the construction of the cement sand screeding by the Defendant at the roof.  Hence the Defendant should be liable for causing damages to the ground floor ceiling by water overflow from the drainage pipe.

Water seepage at the 5/F of the Building

10.  In early July, 2006, the Plaintiff engaged Well Engineering Development Limited (“Well Engineering”) to carry out waterproofing works at the external walls of the 3^rd to 5^th floors of the Building.  The waterproofing works at the external wall commenced in around early July, 2006.  In or about August 2006, when the waterproofing works at the external walls were still in progress, it was discovered that there was water seepage around the edge adjoining the ceiling and the upper part of the interior wall of the 5/F of the Building, immediately underneath the Rooftop where waterproofing works had previously been carried out by the Defendant.

11.  One day in late August 2006, Mr. William Chan (“William Chan”) of Well Engineering and Ho attended the rooftop to carry out a test.  William Chan directed water jet at the edge adjoining the surface of the Rooftop and the parapet wall of the Rooftop immediately above the location of the water seepage, but within the area where waterproofing works had been carried out by the Defendant.  After the spraying of water, there was apparent water leakage on the outer side of the parapet wall and the external wall below.  William Chan told Ho that the test revealed that the waterproofing works carried out by the Defendant at the Rooftop were defective, especially at the edge adjoining the surface of the Rooftop and the parapet wall of the Rooftop.

12.  On 1.9.2006, Wong, William Chan, and a Mr. Chan of another contractor (“Macnotta Limited”) did a joint inspection.  During the joint inspection, William Chan carried out the same water jet test.  After the spraying of water, there was apparent water leakage on the outside of the parapet wall and the external wall immediately below.  Well Fung and Macnotta Limited confirmed that the test revealed that the waterproofing works carried out by the Defendant at the Rooftop were defective.  They opined that if the waterproofing layer were done properly there should not be any water leaking out to the outside of the parapet wall or the external wall below after the water test.  Wong made no comment on the opinion expressed by them.

13.  On 8.9.2006, the Plaintiff issued a letter to the Defendant, demanding the Defendant to carry out remedial works to resolve the water leakage problem on or before 15.9.2006, failing which the Plaintiff would instruct a contractor to complete the remedial work at the Defendant’s costs and expenses.  But the Defendant refused to do so.

14.  According to the report of Gary Chung, there are two possible causes for the leakage: (1) the roof waterproofing was defective, or (2) water seeped through the parapet or external wall, because the repair to the external wall was not carried out comprehensively.  After the water jet test, Gary Chung was able to conclude that the water proofing was defective and not performing properly.

15.  Leakage to the 5/F ceiling still occurred in December 2006.  The Defendant promised to repair the waterproofing after a site inspection in January, 2007, but it did not honour its promise.  Then the Plaintiff engaged Well Engineering to repair the roof waterproofing.  After Well Engineering had completed the repairing works in July 2007, there was no further water leakage to the 5/F ceiling.  Accordingly, one of the above two causes stated in Gary Chung’s report could be eliminated.  Hence the roof leakage was caused by the defective waterproofing works done by the Defendant.

16.  According to Gary Chung, the waterproofing at the skirting was found discretionary rather than continuously attached to the parapet wall.  This was because the waterproofing installed by the Defendant was defective, in that some of the waterproofing had been detached from the parapet wall within 2 or 3 years after installation.  After reviewing the construction method of waterproofing given by Wong during cross-examination, Gary Chung gave his expert evidence to explain the problems involved in Wong’s construction method.  Firstly, there was no base preparation to the concrete surface after the old screeding had been removed.  Secondly, there was a bonding agent applied between the concrete surface and the cement sand screeding below the waterproofing to hold the screeding in position with the concrete surface.  Accordingly the waterproofing laid immediately above the screeding would crack together with the base screeding.  Thirdly, steel mesh installed between the 2 layers of screeding installed on top of the waterproofing separated the two layers as these layers were not poured in at one go.  They did not form one integral structure.  The screeding was 25 – 50 mm thick.  It is likely to crack when exposed to weather.  Fourthly, when the top screeding cracked, the tiles attached to it also cracked just as wall tiles cracked when the brick wall settled.  Such explanation was not challenged by the Defendant.  I accept the above explanation given by Gary Chung.

17.  Wong said that there was a key installed at the skirting of the waterproofing which would stop water from penetrating between the parapet wall and the waterproofing.  But Gary Chung did not see such key when he inspected the roof skirting.  There is no reason for Gary Chung to lie.  I accept his evidence.

18.  Wong also stated that there was a layer of 6 mm diameter steel mesh installed between the 2 top layers above the waterproofing.  The steel mesh would help the structural strength of the two layers screeding and prevent cracking.  Mr. Chan Fai Ching, a witness for the Plaintiff, testified in Court.  He said that when he removed the old waterproofing skirting of the roof parapet wall, he saw that there were only discretionary signs of some old waterproofing installed; he could not find any such steel mesh at all.  There is no reason for him to lie.  I accept his evidence.  I find that Wong caused the waterproofing system to be defective by not installing the steel mesh and the key.

Quantum

The leakage cistern

19.  The defence expert estimated that the assessment for the loss of rental income was zero because the Plaintiff had not disclosed any information relating to the basis of the rental income.  The lease for the 4/F of the Building included in the document bundle shows that the monthly rent for the period from 16.7.2004 to 15.7.2005 was $19,000.

20.  It is a normal course of thing that it would take time for the floor to be dried before the tenant could commence his renovation work.  The damages of 3 days’ rental of $1,838.71 suffered by the Plaintiff is a natural consequence of the Defendant’s defective works.

The drainage pipe blockage

21.  The Plaintiff fully backed up its claim by including in the document bundle the quotation, the invoice and the cheque payment to Sing Kee.  The cost of the repairing works is $5,000.

22.  The Defendant’s expert, Mr. T T Cheung (“Cheung”), estimated that the cost for replacing the blockage pipe is $3,850.  But there is no back up document or information for estimation.  It would take 3 days to complete the repair works.  He estimated that 3 man-days (at $900 per man-day) would be required to do the work.  It would require 2 persons to replace the 11 feet long drainage pipe for the 1^st day.  The estimation of 3 man-days for the 3 days work to do the repair work is wrong.  At least 4 man-days are required, i.e. 2 man-days for the 1^st day and 1 man-day for the following 2 days respectively.

23.  The difference between the Plaintiff’s actual payment and the Defendant’s estimate is $1,150.  The payment by the Plaintiff in the sum of $5,000 is reasonable.  Therefore the Defendant should compensate the actual damage suffered by the Plaintiff.

Defective roof waterproofing

24.  The Plaintiff spent $110,000 in doing the remedial waterproofing works.  The Plaintiff fully backed up its claim by including in the document bundle the quotation, the contract, invoice, cheque payment and receipt from Well Engineering.  The Plaintiff also included in the document bundle the invoice, cheque payment record, and receipt in relation to the $4,000 costs for the surveying charges.

25.  Cheung assessed the remedial work to be $22,078.  He used the 2003 Edition ASD Schedule of Rate (“2003 Schedule of Rate”) to work out the quantum.  He agreed that the 2003 Schedule of Rate was on large quantity of government works for a long period of time (e.g. a 3 year term contract).  It was based on tender prices in or before 2003.  The rates contained in the 2003 Schedule of Rate are inapplicable to the Plaintiff’s one-off private job on a small scale which only involves a small economical scale.  The rectification of waterproofing works was performed by Well Engineering in mid 2007, the use of costs of 2003 Schedule of Rate to estimate the value of the works performed in 2007 is simply inappropriate, because the economic conditions in 2003 are different from those in 2007.  The 2006 ASD Schedule of Rate was available.    If the ASD Schedule of Rate is applicable, the 2006 Edition Schedules and not the 2003 ASD Schedule of Rate is more appropriate to be used.  This is obvious, but Cheung did not use it.

The qualification of the Defendant’s expert

26.  The Defendant challenges the qualification of Chung.  I directed that the parties’ challenge to the qualification of the expert witness of the other party to be dealt with in the parties’ final submissions.  There is no such challenge in the Defendant’s closing submission.

27.  Cheung is a qualified quantity surveyor.  He is largely involved in matters relating to cost in construction projects such as the measurement of quantities, approval of payments, administration of construction contract, attending site meetings, site inspections and contacting supplies for quotations.  At one time he was a project manager for a developer, overlooking 20 projects, which included the construction of new development and renovation of old buildings.  But he relied on architects for design and drafting of specifications for waterproofing works in project.  The last time he was involved in a waterproofing work was 3 years ago, when he was involved in a factory building work in China.  It was the architect in his project term who controlled the design and specification of waterproofing.

28.  Cheung stated that his report was mainly based on (1) the inspection report of Messrs. Ie, Siu & Chung Architects Ltd., (2) the inspection report of Perfect Construction Engineering Co., (“Perfect Engineering”), and (3) his inspection of the roof of the Building on 10.1.2008.  He adopted the comments in the above 2 reports as the cause of the leakage.  He concluded that there is no conclusive evidence to prove that the Defendant is liable for the water leakage.

29.  His inspection of the roof of the Building on 10.1.2008 was more than one year after Well Engineering had completed the rectification work for the roof waterproofing system.  The condition of the roof was not the same as that in mid 2006 when water leakage occurred.  The condition of the roof in January 2008 cannot help the investigation of the cause of water leakage.

30.  When he prepared his first report (dated 28.5.2008), he ignored the fact that the parapet or external wall had been rectified by Well Engineering in about November, 2006.  He also ignored the fact that more than 1 year after Well Engineering had rectified the roof waterproofing system, there had not been any water leakage to the 5/F ceiling.  Accordingly his conclusion about the possible cause of water leakage was not reliable.

31.  In the Well Engineering report, it opined that the cause of water leakage at the junction of the roof and the parapet wall was due to defective waterproof.  Cheung admitted that he had seen this report prepared by Well Engineering.  But he did not disclose this fact in his expert report.  In his expert report, he mentioned that he had not seen other documents when he prepared the report in May, 2008.  Hence he did not disclose all relevant matters to this Court, and was in breach of his duty as an expert.

32.  Cheung formed his expert opinion upon the “facts” and the finding of Perfect Engineering.  But the author of the Perfect Engineering report did not testify in Court.  Thus such “facts” had not yet been proved as facts.  So such “facts” cannot be relied upon by Cheung.  His opinion founded on such “facts” are of no or little value.

33.  Cheung does not have the qualification and experience to be an expert witness relating to the construction and design of waterproofing system.  His opinion is of no value to this Court.  According to Gary Chung’s report, there might be two possible sources of water leakage, it is certain that the improperly performed roof waterproofing done by the Defendant is a source causing the water leakage.  I accept this conclusion.

34.  As Wong is not an expert, he is not entitled to express opinion.  He is only a witness on facts.  But he gave a lot of opinion evidence, relating to the reason of the pipe blockage at the 1/F flat roof, the possible cause of the water leakage, the possible damages that may be caused by the installation of tiles the possible damages caused by the removal of tiles during rectification works and that the waterproofing layer would be deteriorated if there was water accumulated on the top.  I exclude all such opinion evidence.

35.  Judy Kant is one of the Defendant’s witnesses.  She never attended the site.  Her evidence is only hearsay evidence which was reflected to her by her colleagues, especially Wong.  Hence I attach no weight to her evidence.

36.  I find that the Plaintiff has proved its case against the Defendant.  The Defendant is liable to pay compensation to the Plaintiff in the sum of $120,838.71 ($1,838.71 + $5,000 + $4,000 + $110,000).  I order that the Defendant do pay, within 14 days from today, the Plaintiff the sum of $120,838.71, with interest thereon, at judgment rate, commencing from 27.7.2007 until satisfaction.

Costs

37.  I make an order nisi, that the Defendant do pay costs of this action to the Plaintiff, to be taxed, if not agreed, with certificate for Counsel.