UNION PACIFIC INSURANCE AGENCY LTD v. THE INCORPORATED OWNERS OF NAN YUEN BUILDING

DCCJ 781/2016

[2020] HKDC 140

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.781 OF 2016

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JUDGMENT

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1.  This actionstarted off in Feb 2016 as aseepage case.

2.  The plaintiff company was at all material times the owner of shop B, G/F (the Shop), Nan Yuen Building, Nos.12-14 Cedar Street & Nos.44-62 Tai Nan Street, Kowloon (the Building). The Shop is rectangular in shape, has its entrance at one side facing Tai Nan Street and an “open” courtyard or backyard (the Yard)^[1] opened to an alley at the opposite side (the Alley).

3.  At all material times, the defendant was the incorporated owners of the Building (the IO)responsible for its common parts under a deed of mutual covenants made in 1974 (the DMC) and the Building Management Ordinance, Cap.344 (BMO).

Plaintiff’s claim

4.  Mr Stephen Ma Cheuk Ka (Stephen),plaintiff’s manager and shareholder, gave evidence of tenants’ of the Shop suffering from seepage since 2012 at, inter alia, the walls and ceiling of the Shop on the side of the Yard (collectively the Affected Area)[2] and his complaints of the same to the IO and the authorities, including the Joint Office (the Joint Office) of the Buildings Department (BD) & the Food & Environmental Hygiene Department, since about Oct 2012 and Mar 2013 respectively.

5.  It is undisputed, and I find, that: -

(1)  the plaintiff had let the Shop to one medical centre[3] (the Centre) for a fixed term of 4 years from 2 Dec 2010 (the 1^st Tenancy);

(2)  before the Centre could lawfully terminate the 1^st Tenancy earlier by notice, it sought its earlier termination for seepage to the Shop and the plaintiff allowed it on 23 Sept 2012;

(3)  it was not until 27 Apr 2013 that the plaintiff re-let the Shop to one constructions materials company[4] (the Materials Co) for a total term of 3 years from 3 June 2013 to 2 June 2016 (the 2^nd Tenancy);

(4)  on ground of seepage to the Shop, the Materials Co on 2 May 2015 sought earlier termination of the 2^nd Tenancy as from 2 June 2015 and Stephen gave plaintiff’s approval on 4 May 2015; and

(5)  by a written lease dated 8 June 2015 (the Lease), the plaintiff re-let the Shop to one Mr So Chi Fu (Mr So) to run a restaurant[5] at the Shop (the Restaurant) for a term of 5 years as from 23 July 2015 (the 3^rd Tenancy).

6.  Seepage to the Shop, said Stephen, only ceased after plaintiff’s contractor, Po Wah Construction & Waterproofing Engineering Co[6] (Po Wah), had carried out alleged waterproofing works to exterior wall of the Building facing the Alley at about the level between 1/F and the Shop (the Subject Exterior Wall) in about June 2015 (the Po Wah Works), allegedly evidenced by an “invoice” (發票) of the sum of $50,000 dated 8 June 2015 issued by Po Wah to the plaintiff (the Po Wah Invoice).

7.  Mr Ricky Li appearing for the IO (Mr Li) disputed the Po Wah Invoice and had put to Stephen that the Po Wah Works had never been carried out. Stephen, of course, disagreed.

8.  Stephen, however, confirmed on cross-examination that the plaintiff received no more complaint of seepage to the Shop (and I find on this and other evidence below there was no longer any seepage to the Shop) after Mr So started running the Restaurant at the Shop.

9.  The plaintiff’s expert witness, Ms Lau Shan La (Ms Lau), gave evidence of having inspected the Shop on 4, 12 & 26 May 2015(the 1^st, 2^nd & 3^rd Inspections respectively), performed 5 types of tests at the Shop, took records, observed and detected seepage at, inter alia, the Affected Area. In May 2015, the Affected Area was then situated within a cockloft of the Shop which Ms Lau could only reach by climbing internal staircases.

10.  On the 1^st Inspection, Ms Lau observed sign of repair to the Subject Exterior Wall in the form of a grey concrete patch thereon (the Grey Patch) and had taken photo of it.

11.  In Nov 2017, Ms Lau revisited the Shop and took further photos of it.

12.  Ms Lau opined in her expert report dated 27 Aug 2015 (Lau’s 2015 Report) and in a 2018 joint expert report (the Joint Expert Report) that seepage to the Affected Area (the Subject Seepage) originated from the Subject Exterior Wall (and was effectively caused by rainwater). In the box, she marked the seepage path in Exh.P3 by way of yellow highlighting and red arrows (Lau’s Path).

13.  The plaintiff says it had suffered from various alleged losses, including loss of rental, as a result of the Subject Seepage and that the IO should be held liable to pay damages to it in negligence, nuisance, for breach of the DMC and breach of BMO. Plaintiff’s solicitors had sent their letter before action to the IO on 10 Dec 2015 (P’s Pre-Action Letter).

Defence of the IO

14.  The IO does not dispute the Subject Seepage or that the Subject Exterior Wall was common parts of the Building. It disputes, however, the source of the Subject Seepage.

15.  The expert witness of the IO, Mr Jacob Tsang Tat Ming (Mr Tsang), does not dispute photos and test results of Ms Lau. Neither does he dispute rainfall records she had retrieved from the Hong Kong Observatory (I therefore accept all these photos, records and results). What Mr Tsang disputes is her interpretation of these records and results, and reliability of specific tests made by Ms Lau.

16.  Mr Tsang opined instead that the Subject Seepage had its origin with defective floor waterproofing system of the toilets of the 1/F units immediately above the Shop. In the box, he marked the seepage path in Exh.D2 by way of red arrows.

17.  At all material years since 2008, Hong Kong Shin Yat Tong Moral Association[7] (the Association) was the owner of Offices Nos. B, C & D on 1/F of the Building immediately above the Shop (collectively the Upper Floor Units).

18.  Mr Ho Kwong (Mr Ho), management officer[8] of the IO, agreed that he had, since about Oct 2012, received from Stephen complaints of seepage to the Shop.

19.  Mr Ho and the chairman of the IO, Mr Law Wai Ming (Mr Law), both gave evidence that Stephen had visited the Upper Floor Units with Mr Ho in 2012. The person-in-charge of the Association, said Mr Ho, had met him and Stephen, agreed to investigate plaintiff’s complaint, and had about one month later informed him that repairs had been carried out to Office No.B on 1/F of the Building. Mr Ho said he later had so informed Stephen. Stephen, however, denied ever visiting the Upper Floor Units in 2012 at all.

20.  Mr Ho further admitted that Stephen had complained to him in about 2013 about “broken” (爆裂) external wall of the Building.

21.  In response to Stephen’s complaint above, Mr Law and Mr Ho said that the IO had, in Mar & July 2013, arranged repairs to external wall, and drainage pipes, of the Building. Mr Law produced ledgers of the IO as proof. Stephen, however, doubted whether such repairs shown in the ledgers were related to seepage to the Shop or not.

22.  Mr Ho also admitted that he had again, in about Mar 2015, received complaint of seepage to the Shop from Stephen and it is agreed that the two had afterwards visited the Upper Floor Units (the 2015 1/F Visit) with another person.

23.  According to Mr Ho, he observed in the 2015 1/F Visit that the Upper Floor Units had been converted into one single large unit for religious purpose. There was one large washroom, within which there were 7 to 8 shower cubicles-cum-toilets, where drains were found everywhere. He and Stephen further noted one pipe extending out from the Upper Floor Units to the external wall of the Building for discharging shower water (the Shower Pipe).

24.  Under cross-examination, Stephen said he forgot whether or not there were as many as 7 shower cubicles inside the Upper Floor Units during the 2015 1/F Visit. He admitted, however, entering one shower cubicle and found shower overhead and drain on the floor. In his 2^nd supplemental witness statement, he also said finding several pipes on the wall inside one cubicle. He, however, denied observing the Shower Pipe or discussing with Mr Ho about it.

25.  Mr Ho added that, one Mdm Wong, the representative of the Association, had agreed during the 2015 1/F Visit to arrange test to investigate plaintiff’s complaint and he also required Mdm Wong to fix the Shower Pipe as well. After about 10 days, he had enquired with the Association and was told by a lady thereof that it had arranged contractor to repair defective pipes. Mr Ho said he afterwards relayed the same to Stephen.

26.  Thereafter, said Mr Ho and Mr Law, the IO received no more seepage complaint from the plaintiff.

27.  Mr Law said (and I accept) that the Association had later received a letter from the Joint Office in Aug 2015 advising stoppage of seepage to the Shop[9] .

28.  Mr Ho said that, after this action was brought, he had on behalf of the IO, retrieved from the Association in Aug 2017 an invoice dated 28 Apr 2015 issued by one Hong Lok General Store[10] (Hong Lok) addressed to the Association (the Hong Lok Invoice), evidencing that Hong Lok had carried out on behalf of the Association alleged waterproofing works to the toilets of the Upper Floor Units in about Apr 2015 (the Hong Lok Works).

29.  Both Mr Ho and Mr Law testified that seepage to the Shop had been solved by the Hong Lok Works. Mr Billy Ma appearing for the plaintiff (Mr Ma) had put to Mr Ho that the Hong Lok Works was general repair works only. Mr Ho disagreed.

30.  In Sept & Oct 2017, Mr Tsang visited the Shop and the Upper Floor Units, took their photos and interviewed their occupants. He did not carry out any test. He observed no more seepage to the Shop and heard no more seepage complaint from its occupant. He further observed that the Upper Floor Units were occupied as a religious worship place. He found its washroom to have expanded in size compared against their building plan and sub-divided into 3 toilet cubicles with drains. The location of this washroom was immediately above the Affected Area[11] . Mr Ma does not dispute, and I accept, these observation and photos made by Mr Tsang during his 2017 visit.

31.  Mr Tsang opined in his expert report dated 18 Sept 2017 (Tsang’s 2017 Report) that there was no seepage to the Shop and that the “previous” Subject Seepage should have been solved upon the repair works at floor space above the Shop.

32.  Mr Ho and Mr Law further testified that Stephen had, since Mar 2013, been invited by the IO to attend its meetings to discuss plaintiff’s complaints of seepage to the Shop but that Stephen did not attend between 2013 and 2015[12] . Stephen, they said, only attended meeting of the IO for the first time in 2016.

33.  In contrast, Stephen said that, over the years, Mr Ho had adopted delaying tactics[13] in dealing with him. Though he once received a call from Mr Ho after Mar 2013[14] to invite him to attend IO meeting, that was given 2 days in advance and he was too busy at work. He therefore did not attend or arrange others to attend for him. Save for that, he never received IO’s invitation between 2013 and 2015. He said he received invitation letter from Mr Law to attend IO meeting in May 2016 only after this action was brought.

34.  All in all, the IO also argues that it had reasonably handled plaintiff’s seepage complaints and properly discharged its duties owed to the plaintiff.

The IO’s counterclaim

35.  On 13 May 2016, the IO raised 2 counterclaims against the plaintiff by filing its Defence & Counterclaim. It complains of: -

(1)  alleged conversion of the Yard from an “open” yard to a “covered” one by the erection of an unauthorized shelter (the Shelter) attached to the external wall of the Building facing the Alley at about the level between 1/F and the Shop (1^st counterclaim); and

(2)  alleged sealing or blockage of the manholes at the Yard (the Manholes) and denying the IO of its access to underground drainage underneath the Manholes (2^nd counterclaim)

and alleges that the plaintiff is thus liable to pay it damages for breach of the DMC.

36.  Much of what happened on the 1^st and 2^nd counterclaim was, I think, recorded by contemporaneous documents, including photos, referred below (whose contents I accept), admissions made by Stephen in his witness statements (which I give full weight) and opinion (which I also give full weight) of plaintiff’s expert, Mr Remus Wong Wai Kong (Mr Wong), set out in a condition survey report of the Shop dated 18 Aug 2016 and the Joint Expert Report[15] .

1^st counterclaim

37.  I find the Shelter had by 4 May 2015 already been erected at the Shop converting the Yard into a covered one, as was captured by Ms Lau’s photos taken on the 1^st Inspection.

38.  On 25 Feb 2016 i.e. 6 days after this action was brought, Mr Law complained on behalf of the IO to the authorities of the Shelter as an unauthorized building works (UBW) at the Yard.

39.  Staff of BD inspected the Yard in Mar 2016 and BD found the Shelter an UBW (and so I find), issued letter to plaintiff to demand its demolition and so advised the IO by its letter in Apr 2016.

40.  On 5 May 2016, solicitors for the IO sent their letter before counterclaim to plaintiff’s solicitors (IO’s Letter before Counterclaim) demanding removal of the Shelter within 7 days[16] . On 9 May 2016, the plaintiff wrote to Mr So advising him of its receipt of letters from BD and from IO’s solicitors about UBW at the Yard and demanded Mr So for clarification or rectification.

41.  Mr So replied on 7 June 2016 to confirm with the plaintiff that the said UBW had been demolished by 3 June 2016 and so I find. Such removal was later confirmed in writing by BD to plaintiff after BD’s inspection of the Yard on 2 June 2016. It was also supported by photos taken by Mr Wong in June & July 2016.

42.  Nevertheless, Mr So, as admitted by Stephen in his 2^nd supplemental statement and as I find, later re-erected the Shelter at a height lower than its original one such that it was discovered (and captured on photos taken) by Mr Tsang in his visit to the Shop in Sept & Oct 2017 and by Ms Lau in her re-visit to the Shop in Nov 2017.

43.  On 2 May 2018, the plaintiff again wrote to Mr So to reserve plaintiff’s right for breach of the Lease due to such UBW re-erected at the Yard. By his letter to the plaintiff dated 30 May 2018, Mr So admitted enclosing the Yard by UBW and advising the plaintiff, by enclosing contractor’s quotation dated 2 May 2018, that works to remove the Shelter would commence on 2 July 2018 (such works in fact, according to Stephen, began later than 2 July 2018).

44.  The Shelter was, I am satisfied, removed again by Oct 2018 on the following evidence that I accept or give full weight: -

(1)  BD had written to the plaintiff on 1 Nov 2018 to withdraw its order dated 31 July 2017 requiring removal of UBW at the Shop;

(2)  Stephen had produced some black-and-white photos of the Yard taken in Oct 2018 proving the said removal of the Shelter; and

(3)  Mr Ho had agreed in the box that the Shelter had been removed by trial.

45.  What remains to be resolved on the 1^st counterclaim is, I think, whether or not

(1)  the plaintiff had allowed the Shelter to be or continue erected and/or re-erected;

(2)  the plaintiff was in breach of the DMC as alleged; and

(3)  the IO had suffered any loss as a result so as to recover damages from the plaintiff.

2^nd counterclaim

46.  As early as on 19 Jan 2016 when Mr Law replied on behalf of the IO to the plaintiff on P’s Pre-Action Letter, the IO had already complained of Mr So “sealing”[17] 2 manholes within the Shop allegedly on report from its contractor.

47.  Mr Law also complained of “covering”[18] of manholes when he reported to the authorities about UBW at the Yard on 25 Feb 2016 but BD replied the IO in April 2016 that the Yard was private property of the owner of the Shop (which Mr Law agreed in the box).

48.  In IO’s Letter before Counterclaim dated 5 May 2016, solicitors for the IO also complained of the Manholes having been sealed or blocked, denying the IO access to underground drainage pipes for repair, and demanded the plaintiff reinstating them to their original state within 7 days.

49.  On 9 May 2016, the plaintiff also wrote to Mr So demanding clarification or rectification of alleged “covering” of the Manholes. On 7 June 2016, Mr So replied the plaintiff denying “covering” any manhole since renting the Shop.

50.  In June & July 2016, Mr Wong made his site visit. He found no “coverage” of the manholes in the Shop and all 3 manholes identified by him were “accessible" on inspection. He produced photos of the Yard and the manholes taken by him in his condition survey report and in the Joint Expert Report. On these photos, the manhole cover could, one observes, be taken out or removed. In other words, the manholes could be opened if required.

51.  A year later, in Oct 2017, Mr Tsang visited the Shop and took 4 photos of 3 foul water manholes and 1 storm water manhole at the Shop. Mr Tsang agreed with Mr Ma (and I accept) that they captured various items being placed on top of 4 closed manhole covers and that, save for one foodstuffs cupboard[19] , all the remaining items[20] could easily be removed to allow the manholes to be opened. For that cupboard, Mr Tsang never said that it was impossible for it to be removed. With sufficient manpower and tools if required, I am sure it could equally be removed.

52.  After the plaintiff wrote on 2 May 2018 to Mr So to reserve plaintiff’s right for breach of the Lease for alleged blockage of manholes of the Shop, Mr So replied on 30 May 2018 and said, in relation to IO’s allegation that the surroundings of the manholes being obstructed[21] , all miscellaneous items[22] had already been removed with photos taken in mid-2018 as proof[23] .

53.  What remains to be resolved on the 2^nd counterclaim is therefore, I think, whether or not

(1)  Mr So had at any stage sealed or blocked any or all of the Manholes;

(2)  the plaintiff had allowed the same;

(3)  the plaintiff had been in breach of the DMC; and

(4)  the IO had suffered any loss as a result of such breach so as to recover damages from the plaintiff.

Discussion

Mr Law

No personal knowledge or investigation

54.  Mr Law’s evidence is, I think, of limited assistance to the IO on the issues in dispute for the following reasons.

(1)  Mr Law[24] did not participate in, and had no personal knowledge of, the daily management of the Building. Though the IO employed no professional property manager, it left the daily management of the Building to 2 security guards on shift[25] and one aged management officer i.e. Mr Ho (who was burdened with many different duties, including making ledger entries).

(2)  Mr Law became the chairman of the IO in about June 2013 and thus he had no idea about events in dispute prior to such date.

(3)  Mr Law said or agreed under cross-examination that: -

a)  he never visited the Upper Floor Units and had no clear idea about the source of seepage to the Shop;

b)  it was Mr Ho who handled plaintiff’s seepage complaints, liaised with the Association and arranged repairs to be made to common parts of the Building (and thereafter reported to the IO);

c)  he had never investigated whether or not the Manholes had been sealed but relied on information from contractors and reports of Mr Ho; and

d)  he had not investigated whether or not there was UBW at the Yard.

55.  As Mr Law largely relied on Mr Ho’s knowledge and information, his evidence adds, I think, nothing to that of Mr Ho. For such information he obtained from contractors, as they are not called and no documents prepared by them are produced, I give no weight to such hearsay evidence of his, including his evidence that the Manholes had been “sealed”[26] since 2016.

Improbable for Stephen to reject meeting invitations

56.  Moreover, I find Mr Law’s (and Mr Ho’s) evidence of inviting Stephen to IO meetings improbable.

57.  Given that Stephen saw fit to seek IO’s assistance (through Mr Ho) since about Oct 2012, I find it unlikely as claimed by Mr Ho without documentary proof that Stephen elected not to attend IO meetings despite he was allegedly invited between 2013 and 2015. After all, it is common ground that Stephen did attend IO meeting in 2016 after this action was brought.

58.  And, notwithstanding the recommendation made by the District Office in its letter dated 12 Jan 2015, Mr Law agreed that the IO had not held meeting to discuss, nor engaged qualified professional to investigate, seepage to the Shop. That also causes me to doubt whether or not the IO had invited Stephen to its meetings to discuss seepage of the Shop as it claimed between 2013 and 2015.

59.  I prefer Stephen’s evidence that, save for one meeting in 2013 that he was given short notice and too busy to attend, he was not invited between 2013 and 2015.

Mr Ho

60.  As shall be demonstrated below, I do not find Mr Ho entirely credible or reliable. I do not accept the entirety of his evidence.

Alleged 2012 visit to 1/F Units disbelieved

61.  I do not believe Mr Ho’s evidence of his alleged visit to the Upper Floor Units in 2012. My reasons are as follows.

(1)  Such alleged visit does not appear in Mr Ho’s witness statement in Aug 2017. It appeared for the first time in his supplemental witness statement in May 2018.

(2)  Mr Ho was as old as 79 at trial. If not for memory reason, had this 2012 visit taken place as alleged, one would have expected him to have referred to such material event in his witness statement earlier, and not later, in time.

(3)  In his supplemental witness statement, Mr Ho claimed that Stephen had “concluded” (認為) in Oct 2012 that the Upper Floor Units were the source of seepage to the Shop. But such claim is, I think, contradicted by plaintiff’s writing in its complaint letter to the IO dated 26 Mar 2013 that the said source “had not been ascertained” since “following it up with Mr Ho from Oct 2012”.

(4)  Indeed, Mr Ho admitted in the box that he has no professional knowledge or qualification about water seepage and he repeatedly said that it was his “speculation” (靠估) that the Upper Floor Units were the source of seepage to the Shop. Stephen has no such knowledge or qualification either and, one thinks, is in no better position than that of Mr Ho to so “conclude” in 2012 as he claimed.

(5)  When Mr Ma later put to Mr Ho that Stephen had not so “concluded” in 2012 and 2013, Mr Ho changed his answer to: “I think he speculated” and “we both speculated (大家靠估)”.

62.  I prefer Stephen’s evidence in his 2^nd supplemental witness statement that: -

(1)  he never visited the Upper Floor Units in 2012;

(2)  Mr Ho had said to Stephen that he himself i.e. Mr Ho had “suspected” the Upper Floor Units to be source of seepage to the Shop in about Oct 2012 and promised Stephen to follow it up with the Association;

(3)  he later claimed to Stephen that the person-in-charge of the Association could not be reached, giving the excuse that he/she stayed most of time in Mainland China; and

(4)  As seepage persisted, Stephen repeated plaintiff’s complaints to Mr Ho, who afterwards “claimed” that the Association had carried out repairs to the Upper Floor Units.

63.  The above account given by Stephen was, I think, supported by plaintiff’s conducts of making complaints to the Joint Office as from Mar 2013[27] and writing its first written complaint letter directly to the IO on 26 Mar 2013. These escalated steps were apparently taken as Mr Ho, said Stephen and I agree, gave no positive feedback to his repeated oral complaints.

Alleged repairs by the Association in 2012 not proven

64.  Absent documentary or other oral evidence proving that repairs were made by the Association to Office No.B on 1/F of the Building in 2012 as alleged by Mr Ho, I give no weight to such bare assertion of Mr Ho.

One ledger entry of repairs in 2013 related

65.  For similar reason, I give no weight to the 22 Mar 2013 entry of $22,000 in IO’s ledger referred by Mr Law. This entry itself[28] does not show that it was related to the Shop or its seepage[29] . And no quotation, invoice or receipt was produced to prove completion of the said works, its details and location.

66.  However, the other 15 Jul 2013 entry of $2,750 in IO’s ledger referred by Mr Law is, I note, supported by a receipt of the same date and of the same amount chopped and signed by one Wing Ming Water Electrical & Renovation Co. (Wing Ming)[30] addressed to the “shop at No.46 Tai Nan Street” (Wing Ming Receipt). But its wordings[31] do not, I agree with Mr Ma, entirely match the description of Wing Ming Receipt[32] .

67.  Stephen claimed in his 2^nd supplemental witness statement that the person-in-charge of Wing Ming told him that, since Mr Law became the chairman of the IO, Wing Ming had not performed any “works” for the IO. I give no weight to such hearsay. In any event, the description of Wing Ming Receipt refers to “works materials”[33] . And Mr   Ho never said in his supplemental witness statement that it was Wing Ming who carried out repair works.

The IO repaired Subject Exterior Wall in 2013

68.  For reasons below, I find it likely that, Mr Ho had, as he said, arranged repairs to the Subject Exterior Wall, and leaving behind the Grey Patch, in about July 2013 after, and as a result of, Stephen’s complaint of “broken” external wall of the Building in the context of his complaints of seepage to the Shop. Save as aforesaid, I give no weight to the rest of Mr Ho’s evidence on this point.

(1)  Stephen did agree with Mr Li that the IO had arranged repairs to be done in 2013 after his complaint[34] ;

(2)  When Mr Ma questioned Mr Ho about the Po Wah Works by reference to Ms Lau’s photo of the 1^st Inspection capturing the Grey Patch, Mr Ho instead answered that it showed the said pipe works and repair works to external wall of the Building carried out by the IO in Mar & July 2013 said by him in his supplemental witness statement; and

(3)  The Grey Patch captured by Ms Lau on the 1^st Inspection is, I think, ample proof of repair works having been carried out at the Subject Exterior Wall prior to 4 May 2015.

Observations & request to the Association during the 2015 1/F Visit

69.  Stephen’s “limited” observations of the Upper Floor Units during the 2015 1/F Visit and Tsang’s undisputed observations therein during his 2017 visit corroborated, I think, with Mr Ho’s observations during the 2015 1/F Visit such that I find it likely that: -

(1)  the Upper Floor Units were, at all material times, converted into one single large unit and occupied for religious worshipping purpose by the Association;

(2)  the washroom of the Upper Floor Units had, at all material times, been expanded in size to accommodate several shower cubicles-cum-toilets with overhead showers, pipes installed on the walls and drains on the floors; and

(3)  Mr Ho had, during the 2015 1/F Visit, related plaintiff’s complaint of seepage to the Shop to one Mdm Wong of the Association to investigate and handle.

Save as aforesaid, I give no weight to the rest of Mr Ho’s evidence on the 2015 1/F Visit and I find it likely that Stephen had not discussed with Mr Ho, or observed, the Shower Pipe during the same.

Hong Lok Works related & carried out

70.  Considering the contents of the Hong Lok Invoice, I disagree with Mr Ma that the Hong Lok Works were mere general repair works. As Mr Li submitted, the works therein were stated to be “waterproofing works” at “toilets” at a no small total sum of $49,000. They included “replacing old tiles on the floor with new ones” (items 2 and 4) and adding “water-proofing protective layer” (item 3).

71.  Though Mr Ho and Mr Law had no personal knowledge of the Hong Lok Works, for reasons below, I attach full weight to the Hong Lok Invoice and find that the Hong Lok Works had been “carried out” by Hong Lok in about Apr 2015 by way of response to plaintiff’s complaints of seepage to the Shop.

(1)  Mr Ho had, as I find above, requested the Association to investigate and handle plaintiff’s seepage complaint in the 2015 1/F Visit;

(2)  Mr Ma did not, I note, challenge the carrying out of the Hong Lok Works; and

(3)  According to letter dated 19 Jun 2015 from the Joint Office to Stephen, staff of the Joint Office had visited the Upper Floor Units on 24 Mar 2015, was told by the person-in-charge that “repair works would be carried out” and, afterwards, relayed the same to Stephen. That message from person-in-charge of the Upper Floor Units to the Joint Office in Mar 2015 is, I think, consistent with the Hong Lok Works said to have been carried out in about Apr 2015.

72.  Nevertheless, the Hong Lok Invoice recorded no “pipe works”. Hence, I do not feel able to find for any “pipe works” carried out by Hong Lok in about Apr 2015, including any alleged work relating to the Shower Pipe as claimed by Mr Ho in his evidence of the 2015 1/F Visit.

Replies given by Mr Ho to Stephen

73.  Mr Ho disagreed with Mr Ma of his adopting delaying tactics with Stephen’s seepage complaints. But he did admit to have replied Stephen asking Stephen to wait for reply on grounds that time was required to inspect and/or report to the chairman of the IO. I give full weight to all such answers.

Sealing of the Manholes not proven

74.  Mr Ho agreed (and I accept) that the IO had, from 2015 to 2017, arranged plumbing contractor to open the covers of the Manholes to clear drainage underneath. He, however, insisted that one of the covers could not be opened as a heavy object like refrigerator was put on its top such that the clearance could not be carried out. But he admitted that he did not know what happened afterwards as he received no further report from the contractor. He finally conceded that the matter ought to have been resolved or else the contractor would have reported to him again. I give full weight to all such answers and give no weight to Mr Ho’s claim of the Manholes having been “sealed”[35] .

75.  All evidence considered, I do not think the IO has proven that the Manholes have at any material times been sealed or blocked by Mr So. One cannot find any motive or advantage for Mr So to do so. I do not consider Mr So’s conduct of placing “removable” items, even heavy ones, on the covers of the Manholes constituting their “sealing” or “blockage”. After their removal, the covers can still be opened and access obtained to the underground drainage.

No allowing of sealing of the Manholes

76.  Given that the Manholes had never been sealed or blocked, the plaintiff cannot, I think, be held to have approved or allowed Mr So sealing or blocking them.

Stephen

77.  As shall be demonstrated below, I do not find Stephen entirely credible or reliable either. I do not accept his evidence entirely either.

Allowing the Shelter to continue erected as illegal structure

78.  I disbelieve Stephen’s claim in his supplemental witness statement that the plaintiff did not know of the erection of the Shelter before IO’s counterclaim. The Shelter has already been erected by 4 May 2015 i.e. before the 3^rd Tenancy and, hence, it could not have been erected by Mr So as alleged. It was a large and conspicuous structure converting the Yard into an enclosed one. On his own evidence, Stephen himself visited the Shop on 3 May 2015. I find it likely that the plaintiff let the Shop to Mr So knowing of the erection of the Shelter and its potential use by Mr So for the Restaurant.

79.  However, it is unclear on the evidence before me whether or not the plaintiff knew of the Shelter as an UBW (or illegal structure) liable to enforcement action by the authorities before Mar/Apr 2016 and the same has not, I think, been proven.

80.  But, after BD issued its letter in Mar/Apr 2016 to the plaintiff demanding demolition of the Shelter, there cannot, I find, be any doubt about such knowledge on the part of the plaintiff.

81.  But the plaintiff took no action nor wrote to Mr So to demand rectification or clarification until over 1 month later on 9 May 2016. During this 1-month period, the plaintiff had, I think, approved and allowed continued erection of the Shelter as an illegal structure at the Shop.

Allowing the Shelter to continue re-erected as illegal structure

82.  I am mindful that: -

(1)  the plaintiff had written to Mr So on 2 May 2018 to reserve its right for breach of the Lease due to such re-erection and the Shelter was finally removed by Oct 2018; and

(2)  Mr Law had agreed with Mr Ma that he had not notified the plaintiff about re-erection of the Shelter once he discovered it and that he disclosed such re-erection for the first time in his supplemental witness statement dated 10 May 2018.

83.  However, Mr Law has in fact already pointed out such re-erection in his witness statement dated 18 Aug 2017. More importantly, the BO had issued its order dated 31 July 2017 to the plaintiff requiring removal of UBW at the Shop (which order was withdrawn by BD’s letter dated 1 Nov 2018 to the plaintiff).

84.  Hence, I find it likely that the plaintiff had knowledge of re-erection of the Shelter as an illegal structure since, at least, Aug 2017 but took no action like writing to Mr So to threaten breach of the Lease until early May 2018.

85.  I therefore find that the plaintiff had approved and allowed continued re-erection of the Shelter as an illegal structure at the Shop from Aug 2017 to Apr 2018, and reject Stephen’s evidence to the contrary.

Failure to disclose the 2015 1/F Visit

86.  Stephen was, I think, economical with the whole truth in omitting from his witness statement the material event of the 2015 1/F Visit, his observations of the Upper Floor Units, and Mr Ho’s request to the Association to investigate and handle plaintiff’s seepage complaint, during the same.

Another seepage spot at entrance

87.  Stephen further failed, I note, to disclose in all his witness statements that the Shop at all material times also suffered from seepage at another spot other than the Affected Area, namely, at the ceiling near the signboard at the main entrance of the Shop (the Entrance Spot). He gave, I think, a misleading picture of the Shop suffering from the Subject Seepage alone in all his witness statements.

88.  That the Entrance Spot also suffered from seepage at the material times was confirmed by Stephen on being cross-examined by Mr Li on the following 3 pieces of evidence, namely: -

(1)  Ms Lau’s visual observation of water dripping from the Entrance Spot, and photos taken by her capturing the Entrance Spot, on the 3^rd Inspection;

(2)  Reference to water “sewage” (I believe it is typographical mistake for “leakage”) at the Entrance Spot at Schedule 9 of the Lease that he signed with Mr So; and

(3)  Reference to 2 seepage spots in a letter dated 31 Oct 2014 the Joint Office wrote to Stephen, who confirmed in the box that seepage at Entrance Spot was, said in the said letter, “suspected to have been caused by rainwater coming down from canopy/flat roof on rainy days”.

Subject Seepage once stopped in 2014

89.  As such, I find it likely that the Subject Seepage had once “stopped” as Stephen himself had phoned up the Joint Office to so report on 21 Oct 2014 and as the Joint Office had so recorded in its letter dated 31 Oct 2014 to Stephen.

District Office not dealing with Subject Seepage

90.  And I find it likely that the District Office had, by its letter dated 12 Jan 2015, recommended the management committee of the IO to convene meeting to discuss, and to engage qualified professional to investigate, seepage at the Entrance Spot, said in the said letter, “suspected to have been caused by rainwater coming down 1/F canopy[36] on rainy days” and not the Subject Seepage.

Subject Seepage still material cause of rental loss

91.  Nonetheless, I find it likely for reasons below that the Subject Seepage was still the reason for the Centre and the Materials Co to request and obtain earlier termination of the 1^st and 2^nd Tenancies and one of the material reasons that caused Mr So to seek and obtain rent-free period for the 3^rd Tenancy.

(1)  Though no photos of seepage site were produced by the Centre and the Materials Co, they both used the words “seepage at wall and ceiling near the Yard”[37] in their respective letters dated 20 Aug 2012 and 2 May 2015 to the plaintiff seeking earlier termination of the 1^st and 2^nd Tenancies.

(2)  For the 3^rd Tenancy, the Lease provides in its Schedule 9 that rent-free period was given to Mr So for water “sewage” (I believe it is typographical mistake for “leakage”) at both the Entrance Spot and, I stress, the Yard.

(3)  Quotation in sum of $50,800 dated 26 May 2015 (MC Quotation) issued by one Many Colour (Lok) Waterproofing Painting Contactors (MC) to the plaintiff also recorded waterproofing works (MC Works) at, among others, “walls and ceiling near the Yard” (item 1) to be done.

Subject Seepage recurring from 2012 to 2015

92.  Save for “stoppage” of the Subject Seepage once reported by Stephen in Oct 2014, I think it likely for the following additional evidence that the Subject Seepage had recurred from time to time from about Oct 2012 to May 2015.

(1)  In view of the contents of termination letter dated 20 Aug 2012 from the Centre to plaintiff, I think it likely that Stephen did complain to Mr Ho about Subject Seepage as early as in about Oct 2012 as he said.

(2)  If not supported by the contents of plaintiff’s first written complaint letter to the IO dated 26 Mar 2013, Mr Ho agreed that Stephen had complained in 2013 of seepage at the Affected Area situated at a cockloft of the Shop which he had access in 2013 by climbing staircase.

(3)  If not supported by plaintiff’s complaints to 1823 hotline and the Joint Office since Mar 2015[38] , Ms Lau’s inspection and test results in May 2015, contents of Schedule 9 of the Lease and of item 1 of MC Quotation, Mr Ho also confirmed in the box that Stephen made same complaint in 2015 relating to same cockloft that he had access in 2013.

Omission of Po Wah Works & Po Wah Invoice

93.  Among all his omissions, Stephen, I think, most significantly omitted from his witness statement, supplemental and 2^nd supplemental witness statements the Po Wah Invoice and the Po Wah Works that allegedly put an end to the Subject Seepage.

94.  Stephen raised for the first time the Po Wah Works in his 3^rd supplemental witness statement dated 12 Feb 2019, which purported to “clarify” para 25 of his witness statement dated 8 Aug 2017. And the plaintiff formally disclosed the Po Wah Invoice in its supplemental list of documents filed 12 Feb 2019.

95.  Stephen previously said at para 25 of his witness statement that the plaintiff was introduced by estate agent to re-let the Shop to Mr So on about 8 June 2015. As the Subject Seepage persisted and as the plaintiff earlier obtained MC Quotation costing $50,800 and requiring about 1.5 month to be completed, the plaintiff, said Stephen, agreed to pay Mr So $50,000 and allowed rent-free period in the Lease from 8 June to 22 July 2015 to allow Mr So to arrange MC to carry out works within the Shop to resolve the Subject Seepage.

96.  Stephen “clarified” to say in his 3^rd supplemental witness statement: -

(1)  Mr So had later required the plaintiff to arrange repair works on his behalf;

(2)  MC had only performed repair works within the Shop;

(3)  After MC had completed waterproofing works near the Yard, seepage to the Shop did not cease;

(4)  Hence, the plaintiff instructed Po Wah to carry out waterproofing works at the Subject Exterior Wall at the location of the Grey Patch; and

(5)  After the Po Wah Works was completed, seepage to the Shop ceased altogether.

Stephen’s explanation for omission

97.  On Mr Li’s cross-examination, Stephen purported to explain in the box that: -

(1)  MC completed waterproofing works within the Shop within 7 days after 27 May 2015 and was paid $50,800 by the plaintiff;

(2)  As seepage to the Shop persisted, the plaintiff and Mr So reached an understanding for the plaintiff to instruct Po Wah to carry out further works;

(3)  Po Wah had spent 1 month from 8 June 2015 to complete the Po Wah Works;

(4)  As it was Mr So who supervised the repair works, all documentations were kept by Mr So (and the plaintiff kept no copy);

(5)  Mr So could not find the Po Wah Invoice earlier and the plaintiff therefore retrieved, and produced, it very late; and

(6)  he had all along “forgotten” about the Po Wah Works and, hence, omitted to mention it at all in all witness statements prior to his 3^rd supplemental witness statement.

Discrepancies in explanation

98.  Compared against contents of para 24 & 25 of his witness statement and of Schedule 9 of the Lease, Stephen’s explanation in the box gave rise, I note, to considerable discrepancies in terms of dates, time, amounts and persons under cross-examination.

Explanation most unlikely

99.  More importantly, Stephen’s explanation must, I think, be considered against the following background.

(1)  Stephen was, he agreed with Mr Li, an experienced businessman with the plaintiff carrying on an insurance agency and property investment business.

(2)  The plaintiff was represented by lawyers from the very 1^st moment of P’s Pre-Action Letter dated 10 Dec 2015.

(3)  In P’s Pre-Action Letter and Statement of Claim, the plaintiff had already relied on expert opinion of the Subject Exterior Wall as the source of Subject Seepage and particularized its various losses, including, I think, $50,800 paid to MC for MC Works.

(4)  At para 26 of his witness statement dated 8 Aug 2017, Stephen said that the Subject Seepage “could only be resolved if the IO makes repair to the Subject Exterior Wall as it is the source of seepage on the opinion of plaintiff’s expert”.

(5)  At para 36 of the same witness statement, Stephen also particularized various losses allegedly suffered by plaintiff caused by the Subject Seepage and produced documentary proof thereof, such as MC Quotation as annexure 12 thereto.

(6)  As early as in their witness statements filed on 21 Aug 2017, Mr Law and Mr Ho had both alleged that seepage to the Shop was solved by the Hong Lok Works undertaken by the Association in about Apr 2015 and that Mr Ho had on 12 Aug 2017 retrieved the Hong Lok Invoice from the Association as proof.

(7)  Ms Lau set out and ultimately completed the Joint Expert Report by about April 2018 (but Stephen admitted in the box that he had never told her about the Po Wah Works nor, one could add, retrieved the Po Wah Invoice for her to consider and to include it into her report).

(8)  Mr Ho and Mr Law obtained leave of the court after a contested hearing on 4 May 2018 to file and serve their supplemental witness statements filed on 10 May 2018. They repeated therein that the Upper Floor Units were the source of seepage to the Shop, which was resolved by the Hong Lok Works, with Mr Ho producing the Hong Lok Invoice as annexure 1 to his statement.

(9)  On 12 June 2018, Stephen made a 12-page supplemental witness statement consisting of 58 paragraphs & 9 annexures in reply to the various allegations of Mr Law and Mr Ho in their supplemental witness statements.

100.  Against the above background, had the Po Wah Works paid by the plaintiff in the sum of $50,000 and purportedly evidenced by the Po Wah Invoice been completed by early July 2015 as claimed to put an end to the Subject Seepage, I find it most astonishing and most unlikely that Stephen could have “forgotten” to raise this crucial allegation on liability earlier than he did in Feb 2019, “failed” to make this substantial claim in terms of quantum, “failed” to keep plaintiff’s own copy of the Po Wah Invoice, and “failed” to retrieve the Po Wah Invoice from Mr So and to produce it earlier than he did in Feb 2019.

Po Wah Invoice unreliable

101.  For reasons below, I also find the Po Wah Invoice unreliable.

(1)  I agree with Mr Li that the contents of its remarks (providing for payment of deposit before, and variation of price after, work commencement) are more often than not found in a “quotation” than in an “invoice”.

(2)  Its date of 8 June 2015 (i.e. the very 1^st day of a one-month-long period on Stephen’s evidence in the box for Po Wah to complete the Po Wah Works) caused one to doubt whether or not it was an “invoice” as it says. More often than not, “invoices” are issued after work completion to require payment and not on 1^st day of work.

(3)  No document (e.g. receipt) was produced to prove payment of $50,000 from the plaintiff to Po Wah for the Po Wah Works purportedly recorded by the Po Wah Invoice.

Evidence, if any, of carrying out of Po Wah Works

102.  More evidence was, I think, adduced to disprove carrying out and completion of the Po Wah Works than adduced to prove it. And I find Stephen’s evidence of them being carried out incredible.

(1)  Both Mr Law and Mr Ho gave evidence that they (and the IO) had not been informed of the commencement of the Po Wah Works (and Stephen agreed). Given that the Subject Exterior Wall was common parts of the Building, one imagines that the plaintiff ought to have so informed the IO had the Po Wah Works been carried out at all.

(2)  Mr Law and Mr Ho also said that they did not notice carrying out of the Po Wah Works. Had the Po Wah Works been carried out for as long as 1 month and that items 1[39] and 4[40] recorded in the Po Wah Invoice been carried out as Stephen claimed, one thinks it likely that Mr Law and Mr Ho should have noticed of the same.

(3)  But Mr Law and Mr Ho could have, during that 1 month, focused on their own or other business, or could have mistaken the Po Wah Works as decoration works for the Restaurant. Workers could also have obtained access to the Yard (and the Subject Exterior Wall) through the entrance of the Shop or the Alley, instead of passing the management counter of the Building. And scaffolding was, said Stephen, not erected for the Po Wah Works.

(4)  However, no documentary proof (e.g. completion notice or photos) was produced, nor was Po Wah called, at trial to prove completion of the Po Wah Works.

(5)  Mr Li invited this court to compare photos of the Subject Exterior Wall (and the Grey Patch) captured by Ms Lau on 1^st Inspection (before the Po Wah Works allegedly began) and on her Nov 2017 re-visit (after alleged completion of the Po Wah Works).

(6)  I agree with Mr Li that, on such comparison, the Grey Patch remained more or less the same in terms of appearance, shape, color, size and border between May 2015 and Nov 2017 (indeed, Ms Lau also agreed with Mr Li that, save for the addition of one set of U-shaped drainage pipe connected to the Upper Floor Units to be discussed below, there was “no change” on the Subject Exterior Wall between May 2015 and Nov 2017[41] ).

(7)  The above maintenance of status quo is, I agree with Mr Li, a powerful pointer against carrying out, or completion, of the Po Wah Works at Subject Exterior Wall from June to July 2015.

(8)  I also find Stephen’s evidence that item 6 of the Po Wah Invoice (repainting latex) had not been done by Po Wah in order to avoid possible complaint by the IO incredible. One fails to see any reason for the IO to complain as suggested by Stephen and Po Wah was supposedly to be paid by the plaintiff to complete item 6 as well. That seems more, one thinks, an excuse to explain away the “same” Grey Patch found on photos taken in May 2015 and in Nov 2017.

Po Wah Works not proven

103.  For above reasons, I reject Stephen’s wholly unconvincing explanation for his omission of the Po Wah Works and the Po Wah Invoice prior to 12 Feb 2019, give no weight to the unreliable Po Wah Invoice and decline to act on his incredible evidence about carrying out of the Po Wah Works.

104.  The plaintiff has thus not proven carrying out, or completion, of the Po Wah Works before me.

MC Works proven

105.  But, having regard to receipt dated 17 July 2015 issued by MC for $50,800 received from the plaintiff produced at trial and provision of Schedule 9 of the Lease, I find it likely that the MC Works as recorded by MC Quotation had been carried out by MC within the Shop in about May-June 2015 (and paid by the plaintiff) to allow Mr So running the Restaurant.

Plaintiff’s claim

Plaintiff’s burden to prove source of the Subject Seepage

106.  It is well established in dispute between upper and lower floor owners that there is no presumption that water leakage was necessarily caused by the flat above.  The plaintiff bears the burden of proof to establish, on a balance of probabilities, that the source of water was the defendant’s flat.  It is not for the defendant to find out or identify the correct source of the water leakage or to prove that its origin did not come from his property: Hui Ling Ling v Sky Field Development Ltd, unreported, HCA 35/2007, 8 May 2012, para 23.

107.  Applying the above principles to our different context, I hold that there is no presumption either the origin of the Subject Seepage lies with the Subject Exterior Wall. It is incumbent on the plaintiff to prove on balance that the Subject Seepage originated from (or had at least one of its origins with) the Subject Exterior Wall and that it is not for the IO to disprove the same or to find out or identify the correct source of the Subject Seepage.

A source of the Subject Seepage suffices

108.  I agree with Mr Ma that it suffices for the plaintiff to prove that the Subject Exterior Wall was one of the sources of the Subject Seepage: Ma Kam Har Annie v Tang Lai King, unreported, DCCJ 3884/2014,29 Nov 2016, para 91. That said, Ms Lau never gave such an opinion on plaintiff’s behalf.

Stoppage of all seepage to the Shop from July 2015

109.  Mr Ma in his submissions relies on Mr Tsang’s agreement with him with caveats that the Subject Exterior Wall was the source of seepage to the Shop on assumptions of, inter alia, completion of the Po Wah Works. As the Po Wah Works was not proven, such agreement does not, I think, assist the plaintiff.

110.  Subject to cause of stoppage of seepage at the Entrance Spot to be discussed below, stoppage of the Subject Seepage from about July 2015 tends, one thinks, to suggest that its origin lied elsewhere than with the Subject Exterior Wall, or else it should not have stopped as the Subject Exterior Wall, on my findings, had not been repaired in 2015 at all prior to July 2015.

111.  Mr Li had asked Ms Lau if she would alter her opinion as to source of the Subject Seepage if there was no more seepage complaint after July 2015 but that no repair was done to the Subject Exterior Wall after May 2015. Ms Lau could, I note, only answer “uncertain”, finding it “very strange”.

112.  The above inexplicable circumstances and answer from Ms Lau must, I think, be considered together with the rest of the evidence to see if the plaintiff can discharge its burden on this issue.

113.  As shall be seen below, the plaintiff, I think, adduced no direct or conclusive evidence on this issue but to invite this court to draw an inference in its favour as Ms Lau did in giving her opinion in Lau’s 2015 Report and the Joint Expert Report.

114.  Seepage to the Shop, as I find above, occurred in 2015 at 2 spots before the Lease was granted i.e. the Affected Area and the Entrance Spot and seepage at both spots ceased after Mr So started running the Restaurant. Seepage at the latter spot likely stopped, I think, from waterproofing works carried out to the flooring of 1/F canopy by the IO before 24 Aug 2015, as was evidenced by an invoice dated 24 Aug 2015, and a receipt dated 3 Sept 2015, both issued by one Wah Sang Electrical[42] to the IO[43] .

115.  For the Subject Seepage, Mr Li contended that its stoppage from about July 2015 was explainable by carrying out of the Hong Lok Works in Apr 2015, thus tending to show that the origin of the Subject Seepage was with defective floor waterproofing system of the toilets of the Upper Floor Units.

116.  Mr Ma submitted to the contrary by pointing to, inter alia, continuing seepage to the Shop in May 2015 as observed by Ms Lau. He further relies on another Mr Tsang’s agreement with his question with caveats that the Upper Floor Units were not the source of the Subject Seepage on assumptions of, inter alia, continuing seepage to the Shop after the Hong Lok Works.

117.  But Mr Tsang’s agreement with Mr Ma was not unqualified. He gave caveats that the Hong Lok Works might not have been “fully” or “properly” completed in Apr 2015. In support of that, he pointed to discovery (and photos taken) by Ms Lau in her Nov 2017 revisit to the Shop of a new set of U-shaped drainage pipe connected to the Upper Floor Units that appeared for the first time (and thus installed, I accept) after the 1^st Inspection on 4 May 2015 (the New Pipes).

118.  Mr Ma was at pain to stress that the above evidence of the New Pipe had not been specifically pleaded by the IO or included within the factual evidence of the IO’s witnesses. Nevertheless, I do not think I should ignore such evidence or decline to make findings, if any, arising therefrom.

(1)  On legal principles I set out above, the IO bears no burden to prove its different case on source of the Subject Seepage.

(2)  The said piece of evidence of the New Pipes has been adduced by plaintiff’s own expert in the Joint Expert Report as part of the overall evidence adduced at trial.

(3)  While Mr Ho and Mr Law both claimed “completion” of the Hong Lok Works in Apr 2015, they could not tell the same from their personal knowledge and could only point to the Hong Lok Invoice dated 28 Apr 2015 that Mr Ho had retrieved from the Association afterwards in Aug 2017.

(4)  And while Mr Ho claimed that the Hong Lok Works were completed “in about 10 days” after the 2015 1/F Visit, I have not accepted such evidence.

119.  Considering their size and shape on photos, I accept Mr Tsang’s opinion that the New Pipes are for discharge of freshwater used in basin and showers, and not for foul water in toilet flushing. And I find it probable that the Association had, after Apr 2015, carried out further works related or consequential to the Hong Lok Works leading to erection of the New Pipes after 4 May 2015.

120.  Hence, the said caveats of Mr Tsang are, I think, well founded on the evidence before me. And I find it probable that the Hong Lok Works had not been completely or fully completed in Apr 2015 as he suggested.

121.  Following on the above, Mr Li submitted that the Subject Seepage “started to stop” after carrying out of the Hong Lok Works in Apr 2015 and that such continuing Subject Seepage observed by Ms Lau in May 2015 was just “previously leaked water” remaining or trapped (水尾) in the concrete slab at the subject ceiling after the said works. Such works done thereafter to the toilets of the Upper Floor Units, including installation of the New Pipes, he argued, contributed to the ultimate or complete stoppage of the Subject Seepage. Mr Li thrice put this suggestion of “previously leaked water” to Ms Lau.

122.  Mr Ma for his part cross-examined Mr Tsang extensively to challenge such suggestion of “previously leaked water”. Among others, he argued that it should not have lasted as long as 26 May 2015 i.e. the date of the 3^rd Inspection.

123.  On being cross-examined about lower moisture content at 110mm depth nearest to the Upper Floor Units as compared to higher moisture content for the 2 shallower depth of 30mm and 70mm obtained by microwave scan on the 3^rd Inspection of 26 May 2015, Ms Lau had once agreed with Mr Li in defence favour that the same could represent “previously leaked water” if repairs had earlier been “completed” at the Upper Floor Units. That, I think, in turn makes Mr Ma’s challenge to such suggestion based on “prolonged” seepage continuing until 26 May 2015loses much force.

124.  All things considered, the above defence suggestion of “previously leaked water” cannot, I think, be brushed aside and must be considered together with the rest of evidence to decide whether or not the plaintiff has discharged its burden on this issue.

Microwave scan

125.  In gist, Ms Lau used 3 sensors to measure the moisture content of the entire ceiling of the cockloft in question[44] at 3 horizontal levels at the respective depth of 30mm, 70mm and 110mm and mapped the results in 3 rectangular charts[45] . It was discovered that the moisture content of 110mm level closest to the Upper Floor Units was the lowest among all 3 levels[46] .

126.  Ms Lau agreed with this court that she has used the above scan results to eliminate the possibility of the Upper Floor Units being the source of the Subject Seepage. Hence, in Lau’s 2015 Report, she said she   found “no obvious seepage path from the Upper Floor Units to the Shop” on these results.

127.  Mr Tsang specifically challenged the reliability of the 110mm scan result by: -

(1)  reference to thickness of concrete slab of the subject ceiling being only 100mm on building plans. He, however, agreed with Ms Lau’s reply that such thickness is minimum building requirement[47] and that, had his objection been valid, the 110mm sensor should have displayed no data or result (but in fact it gave reading).  This objection is, I think, without merit.

(2)  claiming that it might be affected by “metal” at building services or flooring of the Upper Floor Units. But there is no evidence of such alleged metal. Though Mr Tsang had access to the Upper Floor Units in 2017 and produced in Tsang’s 2017 Report many photos of them, he produced not a single one of the floor of its toilets to support his claim. This speculative objection fails, I think, for want of evidence. In any event, I accept Ms Lau’s evidence that the scanning mode of “moisture content” she adopted[48] is “independent” of metal[49] .

(3)  saying for the first time in the box that the result might be adversely affected by electric interference (弱電) from, say, loudspeaker. Again, there is no evidence to that effect before me. It is, I think, most improbable for one to place or to find electrical wires or equipment at the flooring of toilets of the Upper Floor Units, though they have been expanded in the past. This late objection is also, I think, speculative and lacking in evidential foundation.

128.  Accordingly, I find the said 110mm scan result reliable, give it full weight and decide to consider it together with the 30mm and 70mm results as a whole (in other words, I do not find it appropriate to consider the latter 2 results alone as opined by Mr Tsang).

129.  On the interpretation of these 3-level scan results, I think it is open to the plaintiff to rely on them to invite this court to draw an inference in its favour. But, given Ms Lau’s answer of the 110mm result possibly revealing “previously leaked water”, it is, I think, equally open to the IO to rely on them to invite the drawing of a different inference.

130.  The moisture content at 30mm and 70mm levels was, Mr Li stressed and Ms Lau once agreed with him, “evenly” distributed. Mr Li argued, had the Subject Seepage had its origin with the Subject Exterior Wall, the 3 horizontal cross-sections should have shown “reducing” moisture content from their respective sides near the Yard[50] towards the opposite sides near entrance of the Shop[51] . Ms Lau agreed it is possible but denied it necessarily the case.

131.  I do not entirely agree with Mr Li either.Looking at Lau’s Path in Exh.P3[52] , it is, I think, possible as she opined for rainwater that had entered into the Building through the Subject Exterior Wall at 70mm level to spread around at 70mm cross-section of the ceiling before seeping downwards to the Shop below.

132.  At the same time, I am doubtful of Ms Lau’s another claim of these scan results revealing moisture spreading from the Subject Exterior Wall or from the Yard. This appears to me not to be the objective of this scan. As she explained in the Joint Expert Report, the original intention behind it is to ascertain whether or not moisture spreads from upper to lower levels so that 3 sensors of 3 different depths of the ceiling are used to compare the moisture contents of the 3 levels. This scan was thus employed by her in order to eliminate the Upper Floor Units as possible source of the Subject Seepage.

133.  Had Ms Lau not been denied access to the Upper Floor Units, and were she able to observe[53] and/or conduct tests within them, in May 2015, one thinks she might not have employed such scan or such scan alone to eliminate the said possibility.

134.  At any rate, Ms Lau also agreed with Mr Li that, on 30mm cross-section chart, the blue color at the side near the Yard is lighter than that at the side near the entrance of the Shop. That concession of her is, one thinks, not indicative of moisture spreading from the Subject Exterior Wall or from the Yard at the said 30mm level as she claimed, if indeed such scan can be so employed as she claimed.

Electrical conductivity sensing

135.  Mr Li sought support for defence suggestion of “previously leaked water” by referring to lower humidity reading of one testing point at the ceiling of the Affected Area on the 3^rd Inspection[54] than that of another of similar location on the 1^st Inspection[55] . He put to Ms Lau that the reduced ceiling humidity on the 3^rd Inspection was suggestive of “previously leaked water”, to which Ms Lau did not disagree but answered “I don’t know”.

136.  Mr Li further stressed that, on the 1^st Inspection, the humidity reading of one testing point at the ceiling of the Affected Area is higher than those of remaining points, including those on the walls of the subject cockloft. He argued that Ms Lau had agreed with him that it is indicative of seepage from ceiling to wall. But that, I think, does not advance IO’s case of the source of the Subject Seepage. It cannot resolve the rival contentions of whether or not it originated from the Subject Exterior Wall or from the Upper Floor Units.

137.  In fact, Ms Lau never, I note, put forward these results as indicative of the Subject Seepage originating from the Subject Exterior Wall or not originating from the Upper Floor Units in the analysis section of Lau’s 2015 Report or in the Joint Expert Report. She relied on them to prove merely seepage at the Affected Area (and Mr Tsang gave the same view when he was asked by Mr Ma).

Visual inspection & correlation, if any, with rainfall

138.  Mr Li prefaced his submissions here by pointing to complaint of the Centre of seepage at, I find, the Affected Area on both “sunny” and rainy days in its letter dated 20 Aug 2012 seeking earlier termination of the 1^st Tenancy, the former being, he stressed, inconsistent with rainfall entering through the Subject Exterior Wall.

139.  I decide to give limited weight to the above hearsay as I do not have the dates of these so-called “sunny” days nor rainfall records around these dates to consider them in their proper context.

140.  The position is different in May 2015 when Ms Lau visited the Shop and made her visual inspection. She also retrieved rainfall records for comparison purpose.

141.  After cross-examination by Mr Li, Ms Lau confirmed in the box that she observed at the Affected Area 1) water mark (水印) on the 1^st Inspection; 2) continuous water dripping on the 2^nd Inspection; and 3) no water dripping on the 3^rd Inspection.

142.  By comparison, the rainfall records Ms Lau retrieved showed: 1) minimal (微量) rainfall on the day of the 1^st Inspection; 2) zero mm rainfall on the day of the 2^nd Inspection; and 64.6 mm rainfall on the day of the 3^rd Inspection.

143.  Ms Lau purported to explain in the Joint Expert Report her observation of “continuous dripping” at the Affected Area compared against zero rainfall recorded on the day of the 2^nd Inspection by reference to a) 20.1mm rainfall recorded 2 days ago; b) 51mm rainfall recorded the day before; and c) raising of amber rainstorm warning for 2 hours odd the day before.

144.  But Ms Lau had to admit in the box (when Mr Li put to her) that there were a) 4 amber and 1 red rainstorm warnings 3 days before; b) 1 amber rainstorm warning 2 days before; and c) 2 amber, 1 red and 1 black rainstorm warnings totaling 2 hours odd[56] on the day of the 3^rd Inspection[57] , on which day she observed no water dripping at all at the Affected Area (and detected a less humid[58] ceiling of the Affected Area on electrical conductivity sensing).

145.  Giving no explanation of these, Mr Li argued, contradictory data for the 3^rd Inspection in the Joint Expert Report in the first place (had the Subject Seepage had its origin with rainfall coming from the Subject Exterior Wall as she opined), Ms Lau explained such discrepancy for the first time in the box by wind direction and rainfall distribution.

146.  In the box, both Ms Lau and Mr Tsang gave competing views on the extent wind direction and rainfall distribution may affect results obtained by Ms Lau on her inspections. I am afraid sufficient evidence had not been adduced at trial for me to decide this related dispute that arose for the first time in the box.

147.  However, I agree with Mr Li that Ms Lau’s data and observations are, on their face, not entirely consistent with her opinion as to the source of the Subject Seepage being rainfall coming from the Subject Exterior Wall. These inconsistent circumstances must, I think, be considered along with other evidence to decide if the plaintiff manages to discharge its burden on this issue.

Infrared scan

148.  In the Joint Expert Report, Ms Lau opined that, on the 1^st Inspection, abnormal low temperate was found to concentrate on the wall and not on the ceiling of the Affected Area, thus suggesting that seepage did not spread from the ceiling to the wall.

149.  The reliability of this so-called “abnormal low temperate” of the wall is, I think, doubtful. Ms Lau agreed with Mr Li that existence of pipes could affect the scan result and denied such pipe existence at first. On further cross-examination, she contradicted herself by admitting that the wall that she scanned was the inner side of the Subject Exterior Wall, on whose surface many pipes were installed on photos she took, and that her scan result may thereby be affected.

150.  Moreover, Mr Li rightfully submitted, and I agree with him, that Ms Lau did, over the course of time in the box, gave different answers (and different reasons[59] ) as to whether or not her scanned result gave temperature reading of the ceiling of the Affected Area as well. That, I am afraid, caused one to doubt the reliability of her scanned result allegedly of both wall and ceiling.

151.  During cross-examination, Ms Lau also agreed with Mr Li that such result cannot tell whether seepage spread from the Upper Floor Units to the Shop or not (which is, I think, different from that of spreading from the ceiling to the wall). Indeed, she put forwards such result in analysis section of Lau’s 2015 Report as tending to show merely seepage at the Affected Area.

152.  While Mr Tsang once agreed with Mr Ma that this scan result alone may show that the source of Subject Seepage lied with the Subject Exterior Wall, he disagreed with such conclusion by pointing out that it was obtained on a day when no[60] rainfall was recorded (similar discrepancy can, one thinks, be said of humidity recorded on electrical conductivity sensing conducted on the 1^st Inspection when only minimal rainfall was recorded).

Water sample

153.  The fact that sample of droplets taken from the Affected Area on the 2^nd Inspection showed freshwater is, I think, neutral and cannot assist us to resolve which of the 2 sources of the Subject Seepage contended before me is the right one[61] .

The Grey Patch

154.  Ms Lau relied on the Grey Patch observed on the 1^st Inspection in the analysis section of Lau’s 2015 Report and in the Joint Expert Report to indicate that source of the Subject Seepage was with the Subject Exterior Wall.

155.  But there is, I think, one marked difference between the two.

(1)  In Lau’s 2015 Report, Ms Lau made no reference of crack on the Grey Patch/Subject Exterior Wall. She merely took the Grey Patch as a sign of the Subject Exterior Wall having been repaired.

(2)  In the Joint Expert Report, she for the first time mentioned of “cracks” (裂紋) over the Subject Exterior Wall.

156.  Had there been cracks observed on the 1^st Inspection, one wonders why Ms Lau did not mention it in the Lau’s 2015 Report at all. Her photos of the Grey Patch taken on the 1^st Inspection do not, I think, capture any conspicuous crack either.

157.  I therefore cannot find for cracks on the Grey Patch on the 1^st Inspection on the evidence before me.

158.  Moreover, Mr Li argued, I agree, forcefully that such past repair of the Subject Exterior Wall evidenced by the Grey Patch could equally have been properly done to have stopped the seepage. Ms Lau, I agree with him, had never elaborated in the 2 reports to explain why the Grey Patch found on the 1^st Inspection could lead one to infer that the source of the Subject Seepage she observed in May 2015 was or remained with the Subject Exterior Wall.

159.  Though Ms Lau had conducted as many as 5 types of tests within the Shop in May 2015, she never conducted any test over the Subject Exterior Wall. Had she conducted proper test(s) (e.g. water pressure and/or dye test) over the Subject Exterior Wall in May 2015, she might, one thinks, be in a position to confirm whether or not that it was the source of the Subject Seepage.

160.  Without any crack proven or confirmatory evidence obtained in May 2015, the inference that one can draw from the Grey Patch is, I think, by no means one way as Ms Lau may suggest.

Subject Exterior Wall repair in 2013

161.  The Grey Patch was left behind because the IO had repaired the Subject Exterior Wall in about July 2013. On Mr Law’s admission, the Building is 40 years old and has undergone no major renovation since 1979. Is that repair in 2013 suggestive of the Subject Exterior Wall being source of the Subject Seepage prior to May 2015?

162.  Stephen had once reported to the Joint Office that the Subject Seepage had stopped by Oct 2014. Such stoppage timing does not, one thinks, match the said repair carried out to the Subject Exterior Wall as long as ago in about July 2013.

163.  It must be pointed out the plaintiff led very limited evidence to prove the source of the Subject Seepage prior to May 2015.

(1)  No expert was instructed by the plaintiff (and thus no record or test was made by plaintiff’s expert) prior to its instructions of Ms Lau in May 2015.

(2)  No photo of seepage or of the Subject Exterior Wall, if any, taken prior to May 2015 was produced.

(3)  Though Stephen has complained to the Joint Office as from Mar 2013, no test report, if any, arranged by such office was produced. All that was produced at trial is correspondences with the Joint Office, whose investigation on the source of seepage was inconclusive (I give no weight to such alleged dye tests it had carried out at the Upper Floor Units as I have no details of them to consider them properly. In any event, they do not point to the Subject Exterior Wall as the source as claimed by the plaintiff).

164.  Thus, there is, I think, very little evidence that allows one to draw the inference that the source of the Subject Seepage prior to May 2015 was with the Subject Exterior Wall.

165.  Had the Subject Exterior Wall been the source of the Subject Seepage since 2012, repairs having been made to it in about July 2013 and the Subject Seepage once stopped by Oct 2014, why did the Subject Seepage recur again in early 2015, there being no crack on the Grey Patch in May 2015?

Plaintiff not discharged its burden

166.  All the evidence adduced at trial, including results of all 5 types of tests conducted by Ms Lau in May 2015, having been considered, I cannot conclude that the plaintiff has proven on the balance of probabilities that the Subject Seepage had its origin, or at least one of its origins, with the Subject Exterior Wall during the period from about Oct 2012 to May 2015.

Plaintiff’s claim not made out

167.  According to the Statement of Claim, plaintiff’s claim is solely premised on the source of the Subject Seepage with the Subject Exterior Wall as the common parts of the Building under the control of the IO and on no other basis. The said source not having been proven before me, the plaintiff has not made out its claim.

168.  I therefore find it unnecessary to consider or to rule on parties’ remaining submissions on liability and their submissions on quantum.

1^st counterclaim

169.  Though I find that the plaintiff had allowed the Shelter to continue erected and re-erected, I do not think the plaintiff had thereby breached clause 4(k)(iii) of the DMC as claimed by the IO. The reason is that I disagree with Mr Li’s construction of the said clause.

170.  In my views, properly construed, the said clause merely gives the Manager as defined in the DMC (including its successors like the IO after its incorporation) the power and authority to remove illegal structure and to receive from the owner who erected such structure the costs of such removal. In other words, it does not prohibit an owner from erecting such structure or allowing such erection.

171.  Moreover, as Mr Ma rightfully submitted, the IO had not engaged any contractor to remove the Shelter and could not have relied on the said clause to receive from the plaintiff the costs of such removal the IO had expended.

172.  Had Mr Li’s constructions of the said clause been correct and were the plaintiff held liable for its breach, I would not have considered safety problem of falling objects suffered by occupants of the Yard complained by Stephen and admitted by Mr Law affords lawful excuse for the plaintiff for the said breach.

173.  And, were the plaintiff held liable for breach of the said clause, the IO has not, I think, produced any evidence to prove that it had suffered any loss as a result thereof and the IO is, I think, at best entitled to nominal damages from the plaintiff.

2^nd counterclaim

174.  As I hold above, the IO has failed to prove that the Manholes had been sealed or blocked. Notwithstanding “removable” items placed over the Manholes, their covers could at all material times be opened and the IO had all along access to underground drainage underneath them. And the plaintiff had never allowed any alleged sealing or blockage of the Manholes. The Yard being part of the Shop, the plaintiff was, I agree with Mr Ma, entitled to allow its tenant to make lawful use of its private property.

175.  Furthermore, I do not think clause 4(k)(v) of the DMC relied by the IO prohibits the plaintiff from sealing or blocking the Manholes or prohibit the plaintiff from allowing such conducts. Again, such clause, properly construed, merely gives power and authority to the Manager as defined in the DMC to repair, renew, maintain and clean common facilities of the Building (such as underground drainage underneath the Manholes) and to engage contractors for such purpose.

176.  The IO had, I think, also not produced any evidence to prove such loss, if any, it had thereby suffered. Again, it is at most entitled to nominal damages from the plaintiff.

Disposition

177.  Accordingly, I dismiss both plaintiff’s claim and defendant’s counterclaim.

Costs

178.  I make an order nisi that there be no order as to costs on both plaintiff’s claim and defendant’s counterclaim. It shall become absolute if none applies to vary within 14 days.

179.  Finally, it remains for me to thank Mr Ma and Mr Lifor their submissions.