TOP VICTORY (ASIA) LTD v. KONG SHUI SUN AND ANOTHER

DCCJ 3967/2018

[2023] HKDC 1697

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.3967 OF 2018

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J U D G M E N T

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BACKGROUND

1.  This is a water seepage case happened at the plaintiff’s (“P”) flat in Happy Valley known as flat 7, 6^th floor, block C (Landwood Court) Villa Lotto, No.18 Broadwood Road, Hong Kong (“P’s Flat”). At all material times, the 1^st and 2^nd defendants (“Ds”) were the joint tenants and occupiers of the flat situated immediately above P’s Flat, ie, flat 7 on the 7^th floor (“Ds’ Flat”) of the same building, until they sold it in 2021.

2.  It is P’s pleaded case[1] that water seepage was first spotted in or about December 2017 at the following locations of its flat:

(a)  some areas of the ceiling and wall around the drainage pipes extending from Ds’ Flat of the guest bedroom;

(b)  tracks of water seepage all over the wardrobe in the guest bedroom;

(c)  water damages over the wardrobe, the adjacent wall and the wooden floor where the wardrobe was located; and

(d)  ceiling of the guest bathroom.

3.  Upon receipt of P’s complaint about water seepage on 3 December 2017, staff of the management office of Villa Lotto (“MO”) attended P’s Flat on 5 December 2017 to inspect and took some photos.

4.  P issued the first letter of complaint to D on 15 December 2017 with photos indicating the affected areas in P’s Flat. In the letter, P pointed out the affected areas and quoted allegedly the findings of MO technicians that D’s toilet was immediately above P’s affected guest room. The source of seepage was either the defective water-proof layer of D’s Flat or those pipes serving exclusively D’s Flat. P requested D to conduct repair works immediately to resolve the problem.

5.  D responded by letter dated 19 December 2017, referring to the unresolved blockage problem in D’s Flat since 2015 and P’s refusal to allow Ds’ access to P’s Flat to fix the blockage problem. D ended the letter by requesting access to P’s Flat to fix the blockage problem within 7 days.

6.  Parties then began a lengthy discussion of arranging a joint inspection/test in both flats by parties’ contractors in the following months by exchange of correspondence (more than 20 letters from both sides by the end of February 2018) and a telephone conference held on 23 February 2018. However, parties could not agree on a joint test to be conducted at both premises.

7.  In the meantime, P engaged its own building surveyor, Mr Simon Cheung Wai-sum (“SC”), who eventually became P’s nominated expert witness in this case, to conduct water seepage investigation at P’s Flat on 3 occasions: 18 January, 26 January and 28 February 2018, and visual inspection of D’s Flat on 28 February 2018.

8.  Eventually SC compiled a report dated 11 May 2018 (“the Investigation Report”) and his conclusion[2] was pleaded in paragraph 9 of the Statement of Claim as follows:

“(a) the water leakage in form of water droplet / leakage on the structural ceiling of Guest Bedroom and Guest Bathroom at the Lower Floor Premise [i.e. the Plaintiff’s 607 Flat] are caused by (i) the defective and /or damaged waterproofing system on the floor; and (ii) the defective, damaged and/or broken embedded waste drainage system at the guest bathroom of Upper Floor Premise [i.e. the Defendants’ 707 Flat];

(b) Prolonged water leakage on the structural ceiling at the Guest Bedroom and Guest Bathroom of the Lower Floor Premise [i.e. the Plaintiff’s 607 Flat] caused physical damages to the Guest Bedroom and Guest Bathroom of the Lower Floor Premise [i.e. the Plaintiff’s 607 Flat], causing rotten / damage of the timber built-in wardrobe at the Guest Bedroom.”

9.  P instructed its then solicitors Li, Kwok & Law (“LKL”) to issue the first demand letter to Ds on 29 March 2018 demanding Ds: (a) to confirm in writing within 7 days that they will perform necessary repair works; and (b) to complete the proposed work to rectify the water seepage problem to the satisfaction of P within 21 days.

10.  Ds replied to LKL by the letter dated 3 April 2018 in which Ds stated that P has not proved that the seepage problem in P’s Flat was caused by Ds. Although Ds acknowledged that it was their responsibility to repair any part of their drainage / waterproof system if such part was proved to be defective, they held P liable for the loss and expenses associated with the repair to that defect which is connected to P’s refusal to allow access for Ds to maintain their system.

11.  Having replied to the above letter of D on 17 April 2018, LKL wrote a second demand letter to D on 16 May 2018 enclosing the Investigation Report. P’s demands as stated in previous letter dated 29 March 2018 were reiterated in this letter with a warning that LKL have standing instruction to commence legal proceedings against Ds if non-compliance.

12.  In the Ds’ reply letter dated 23 May 2018, Ds criticised the methodology of the Investigation Report for being “unable to tell where the cause of leakage/seepage was or which drain was the root problem”. Ds blamed P for failure to cooperate to do their proposed water test. Ds strongly suggested P to approach Food and Environmental Hygiene Department (“FEHD”) for assistance. Ds also mentioned their intention to commence proceedings at the Lands Tribunal.

13.  Shortly after the above letter on 25 May 2018, Ds did commence proceedings under LDBM115/2018 in the Lands Tribunal, seeking an injunction order requiring P to: (i) liaise with FEHD for the purpose of carrying out water test to ascertain the source of water seepage in the guest bathroom of P’s Flat and (ii) render all necessary assistance to FEHD or its authorised agents in relation to the carrying out of water test.

14.  P then instructed LKL to take out a summons on 12 July 2018 to strike out Ds’ Notice of Application on the grounds that such application discloses no reasonable cause of action and it is scandalous, frivolous or vexatious (“P’s Summons”). Parties were directed to file affirmation evidence for substantive argument of P’s Summons returnable on 20 September 2018 where the tribunal disposed of P’s Summons by granting leave to Ds to amend the Notice of Application and leave to P to make consequential amendments to its Notice of Opposition to Application with costs of the P’s Summons to P summarily assessed at HK$43,000.

15.  Prior to the substantive hearing of the striking out application, P commenced the present District Court action on 9 June 2018, relying on the findings as per the Investigation Report, to seek (a) damages for costs and expenses of remedial works, rental loss and further and consequential loss, and (b) mandatory injunction to order Ds to take all necessary and adequate remedial works to stop and prevent water seeping from Ds’ Flat to P’s Flat, based on the following causes of action:

(i)  negligence

(ii)  nuisance and/or annoyance;

(iii)  breach of the Deed of Mutual Covenant of Villa Lotto[3] and/or breach of s.34H of the Building Management Ordinance Cap.344.

16.  Ds filed their defence (known as “The Defence Statement” according to Ds) on 16 October 2019. The gist of their defence is as follows:

(a)  Denial of liability to all of P’s claims in the Statement of Claim and put P to strict proof;

(b)  Failure of P to prove the source of water seepage;

(c)  Rejecting the Investigation Report as it has not proved the water seepage problem, and it is biased, defective and inconclusive;

(d)  Ds have exercised reasonable care and efforts to address/resolve the water seepage problem but P has been uncooperative by denying Ds access to P’s Flat to conduct the test proposed by Ds;

(e)  Failure of P to implement measures to stop water seepage to mitigate its loss;

(f)  Failure of P to provide proof to substantiate P’s claim for loss and damages.

17.  In light of the parallel proceedings in LDBM115/2018, P instructed LKL to apply to the Lands Tribunal for transfer of the LDBM115/2018 proceedings to the District Court for consolidation with the present proceedings by letter dated 25 February 2019, but Ds opposed such application and proceeded on the Amended Notice of Application until the conclusion of such proceedings on 25 April 2019 when leave to discontinue was granted by consent of the parties with no order as to costs.

18.  The turning point of this case came in when Ds engaged Dr Nelson Chan (“NC”) to carry out colour water test to the drainage inlets of washbasin, floor drain and shower tray and water closet of the guest bathroom of the Ds’ Flat on 16 April 2019 accompanied by SC observing the whole process. As SC was not allowed to take any photos during the test, he could only draw sketches to record the proceedings of the test.

19.  Both NC and SC attended P’s Flat to observe the test results on the day of test and afterwards on 24 April 2019. Positive results of the test were observed on both dates and the details are now reported by SC in the later Joint Experts Statement dated 23 November 2020 as follows[4]:

“35-40 minutes after the commencement of the testing on 16 April 2019, Fluorescein Sodium colour dye (45350) (test at proprietary shower tray) colour dye dripping was clearly observed on the concrete ceiling and the edge of fixed orange colour metal access panel at the Guest Bedroom of 6/F Premises (Please refer to the Record Photo P13 – P 18 of the section for record photos taken on 16 April 2019 in Appendix B3).

Also, during the result monitoring stage as conducted on 24 April 2019, orange red colour dye was also observed and recorded on the structural ceiling and internal walls of Guest Bathroom of 6/F Premises. (Please refer to the Record Photo P1, P3, P4, P5 and P25 of the section for record photos taken on 24 April 2019 in the Appendix B3) . Such orange red colour dye could be Rhodamine B colour dye (45170) (test at wash hand basin of the Gust Bathroom at 7/F Premises) or Eosin Yellowish colour dye (45380) (test at floor drain of the Guest Bathroom at 7/F Premises).”

20.  As a result of the above test results, Ds finally admitted that the drainage in their flat was the source of water seepage to P’s Flat[5], and repair works at the guest bathroom of Ds’ Flat were carried out from 20 May to early June 2019[6]. According to Ds’ response to P’s request for interrogatories dated 1 April 2021, the repair works include the following:

“• Pulling down the shower cubicle originally above the concerned drainage pipe

• Digging the concrete slab to expose the drainage pipe and the connection point above bend pipe in unit C607

• Removing the broken pieces of concrete and drainage pipe

• Installing new drainage pipe from the connection point to the new shower cubicle

• Building up new concrete slab for the new shower cubicle

• Applying tiles to the areas affected by the repair work

• Installing a new shower cubicle”

21.  Leave to adduce expert evidence on liability and quantum[7] was obtained thereafter on 4 July 2019. P engaged SC but Ds nominated Mr Alex Hui (“AH”) instead of NC to be their expert[8]. Pursuant to the said expert directions, both experts jointly conducted tests at the guest bathroom of Ds’ Flat, including (a) dye water ponding test of drainage inlets; (b) colour dye water spraying test to perimeter of shower cubicle on 18 & 19 February 2020; and (c) potable water spraying test to tiled external walls between parties’ flats on 13 March 2020.

22.  Both experts returned to P’s Flat on 28^th February 2020, 13^th March 2020, and 25^th March 2020, ie more than 8 months after Ds’ repair, to observe the test results and they agreed that no water seepage at the P’s Flat could be observed. Their Joint Experts Statement dated 23 November 2020 was filed subsequently.

23.  In fact, prior to the release of the Joint Experts Statement, P has already engaged a contractor to carry remedial works at its flat for the period of May to July 2020. As water seepage has stopped and repair works have been done, P does not insist on seeking any injunction order but claiming the following heads of damages only:

1.	Cost of remedial works at the P’s Flat:
	(a)	for the removing the damaged wardrobe		HK$5,800
	(b)	for the actual remedial / reinstatement works		HK$163,750
2.	Rental loss (or loss of enjoyment):
	(a)	for the period from 15 December 2017 to April 2020: HK$51,500 × 28.5 months		HK$1,467,750
	(b)	1 month for completion of works		HK$51,500
3.	General damages for inconvenience and discomfort			HK$80,000 _____________
Total:				HK$ 1,768,800 ============

ISSUES

24.  Mr Ma for P summarised the following issues in disputes in his opening submissions:

(a)  whether there was water seepage at P’s Flat;

(b)  whether the water seepage was caused and/or originated from the Ds’ Flat;

(c)  if so, whether Ds should be held liable; and

(d)  if Ds are liable, the appropriate relief to be granted.

25.  After trial, it appears that the first two issues are no longer in dispute. Firstly, Ds do not dispute there was water seepage at P’s Flat at least for the period from December 2017 until the completion of repair work at Ds’ Flat. Secondly, Ds did admit the results of the colour water test done by NC which confirmed that the water seepage at P’s Flat originated from Ds’ Flat.

26.  Despite the above admission, Ds are still contesting liability on the basis that they have acted promptly to carry out the repair work at their flat after they knew about NC’s test result. Therefore, they contend that they were not negligent or in breach of any duty and should not be held liable for P’s loss and damages caused by the water seepage.

27.  It appears to me that the remaining issues are as follows:

(a)  When were Ds put on notice of the source of water seepage;

(b)  Whether Ds have acted promptly and reasonably to rectify the water seepage problem since they have knowledge about it;

(c)  The quantum of damages if Ds are to be held liable.

KNOWLEDGE OF THE DEFENDANTS

28.  The Ds cited the definition of “knowledge” in the context of water seepage case in Chiou Hsin Ying (邱欣瑩) v Wong Shing Yu Byron (黃盛愉)[9] as per Deputy District Judge Charles Wong:

“15. “Knowledge”, in the context of water seepage cases, be it an actual or constructive one, is not the mere knowledge of one’s neighbour experiencing water seepage problem or the aftermath of water seepage but is in reference to knowledge of the source of water seepage.”

29.  In Yan Wing Fai Rick & Another v Century One Ltd[10] Deputy District Judge Harold Leong (as he then was) explained under what circumstances should a defendant be regarded as having knowledge of the source of water and what his duty is thereafter:

“85. Once that the Defendant was made aware that there was a water leakage the source of which could reasonably be identified to be from its property, it has the duty to investigate, locate and repair such water leakage in a prompt and reasonable manner.”

30.  Ds denied P’s first letter of complaint to Ds dated 15 December 2017 could reasonably identify Ds’ Flat to be the source of water seepage. The letter quoted the findings by the MO technicians which allegedly MO technicians told P’s witness, madam Chu (the wife of the sole director of P), on the day of inspection. However, the MO report seems to contradict P’s letter, as it only recorded the observation of MO technicians but it did not have the alleged findings of the MO staff. It stated that P suspected Ds’ Flat was the source of water seepage rather than what MO technicians told P.

31.  I agree with Ds that the said letter attached with the photos only showed the affected areas in P’s Flat but failed to reasonably identify the source of seepage to be from Ds’ Flat.

32.  It is undisputed that Ds received P’s Investigation Report annexed to LKL’s first demand letter on or about 16 May 2018. Ds (mainly D1 who is a well-educated engineer with two master degrees and a law degree) maintained their denial of liability and rejected the Investigation Report on various technical grounds which I am not prepared to discuss them in details.

33.  Notwithstanding D1’s strong academic qualifications and professional background, D1 was not giving evidence as an expert witness but a factual witness in this trial. His criticisms about the Investigation Report are only his own opinion with no evidential value.

34.  It is worth to note that despite D1’s vigorous attack on the methodology and conclusion of the Investigation Report, AH (Ds’ expert) did not make any adverse comment on P’s Investigation Report which has been incorporated into the Joint Statement of the experts and it was relied upon by SC to draw his conclusion stated in the Joint Statement.

35.  Above all, the test done by NC later in 2019 eventually confirmed SC’s findings as stated in the Investigation Report that the embedded waste drainage system at the guest bathroom of D’s Flat was defective, damaged and/or broken.

36.  Having considered the Investigation Report, I find that SC has carried out the investigation scientifically and applied his professional knowledge to reach logical conclusion. I am satisfied that the Investigation Report has reasonably identified Ds’ Flat to be the source of water seepage. Therefore, when Ds had received the Investigation Report, they could no longer deny knowledge of the source of water seepage.

37.  Since the Ds are no longer disputing that the source of the water seepage at P’s Flat originated from Ds’ Flat, it is not necessary to discuss the expert opinion on the source of water seepage in details. But for the sake of completeness, I do find in favour of SC’s opinion in relation to the differences in opinion regarding the source of water seepage expressed by the two experts in the Joint Experts Statement, as I have accepted P’s reasons stated in paragraphs 57 to 63 of P’s Closing Submissions.

38.  The next issue is whether Ds have acted promptly and reasonably as they alleged in the following 12 months, ie from they had knowledge of the water seepage on or about 16 May 2018 until they engaged NC to do the test at their flat on 16 April 2019.

CONDUCT OF THE DEFENDANTS

39.  Shortly after the Ds were put on notice of the source of the water seepage being their flat by LKL’s demand letter dated 16 May 2018 enclosing the Investigation Report, the Ds commenced the Lands Tribunal proceedings on 25 May 2018, seeking mandatory injunction order compelling P to engage FEHD (in fact the proper office should be the Joint Office for Investigation of Water Seepage Complaints (the “Joint Office”)) to ascertain the source of water seepage[11].

40.  Since then Ds have discontinued discussion with P to arrange water test to be done at Ds’ Flat for about 10 months. Such discussion only resumed in or about March 2019 when Ds provided certain details of test method to P[12] and later agreed to carry out dye water test in Ds Flat which has been proposed by P for more than a year ago in January 2018[13]. Dye water test at Ds’ Flat was eventually carried out by NC on 16 April 2019.

41.  These Lands Tribunal proceedings brought about by Ds last for about 11 months, which eventually came to an end by the consent order dated 25 April 2019 to discontinue such proceedings with no order as to costs.

42.  It is well-known that the FEHD and the Buildings Department set up the Joint Office to handle complaints of water seepage through a one-stop service to the public. Members of the public are under no obligation to use such public service. They are free to choose to use such public service or similar service provided by the private sector.

43.  Besides, Ds are always at liberty to carry out test unilaterally to ascertain the alleged source of water seepage at their property even without the participation of P. Suffice to say, the said Ds Lands Tribunal application is nothing but wholly misconceived and unnecessary satellite litigation. It is sensible for P to apply for striking out of Ds’ Notice of Application, as Ds’ application for injunctive relief is obviously without merits.

44.  As I have found that Ds have been put on notice of the source of seepage by LKL’s letter dated 16 May 2018, the fact that Ds took 11 months to take action to liaise with P to carry out proper test and to complete repair works in June 2019, could hardly be considered as responding in a prompt and reasonable manner.

45.  The delay was first caused by Ds’ unreasonable rejection of the Investigation Report and Ds then took a turn for the worse when they commenced the plainly wrong satellite litigation in the Lands Tribunal.

46.  In light of the above, I find that Ds’ delay in taking action to investigate and to carry out the necessary repair when they were made aware of their property being the source of P’s water seepage problem is no doubt a breach of duty on their parts according to Yan Wing Fai Rick & Another v Century One Ltd[14].

LIABILITIES OF THE DEFENDANTS

47.  When Ds were made known of the source of water seepage by the Investigation Report, they knew or ought to have known that in consequence of their delay in taking action to investigate and to carry out necessary repair, continuous harm to their neighbour (P) was reasonably foreseeable. In such case Ds are liable because they are considered negligent in relation to their neighbour (ie P), and here nuisance and negligence coincide[15].

48.  Besides, Ds are also liable for breach of Section IV, Clause 12 of the DMC[16] for failing to maintain in good repair and condition of their guest bathroom’s drainage system causing loss, damage, nuisance or annoyance to P.

MITIGATION OF LOSS

49.  P claims that it has suffered loss and damage because of D’s breach of duty and is now seeking 3 heads of damages: (1) remedial works expenses; (2) rental loss; and (3) general damages for inconvenience and discomfort.

50.  Ds pleaded that P has failed to exercise reasonable measures to mitigate its loss and damages[17] as follows:

(a)  failing to conduct the so-called “injection work” (“打針工程”), ie to stop the water seepage by injecting building material at the location of seepage;

(b)  failing to list P’s Flat for rent upon the expiry of the last tenancy on 30 November 2017;

(c)  failing to cooperate with Ds to conduct test at the initial stage.

51.  In Yik Yuen Ling v Tso Wing Yan[18] Deputy District Judge Simon Ho cited the legal principles regarding mitigation of damages as summarised by Deputy District Judge Lawrence Ng in Lam Kit Yee v Lam Shuk Lam & Another[19]:

“190. In Lam Kit Yee (supra), the learned Deputy Judge succinctly summarized the principles on mitigation in the context of a water seepage case, which I respectfully agree and adopt here. At para 99 of the judgment, the learned Deputy Judge said:-

99. "The legal principles regarding mitigation of damages can be summarized as follows:-

(1) The law requires a victim to take all reasonable steps to mitigate the loss consequent on the defendant's wrong: McGregor on Damages (2014) 19^th Ed, §9-014;

(2) Whether a loss is avoidable by reasonable action on the part of the claimant is a question of fact not law: McGregor, §9-016;

(3) Although often called "a duty to mitigate", the expression is somewhat loose because there is no actionable "duty" which is actionable or which is owed to anyone by the claimant: McGregor, §9-017;

(4) The onus of proof on the issue of mitigation is on the defendant. If he has failed to show that the claimant ought reasonably to have taken mitigating steps, then the normal measure will apply: McGregor, §9-019;

(5) In assessing reasonableness, the victim must act with the wrongdoer's as well as his own interest in mind: McGregor, §9-076."”

52.  Ds are relying on Kan Wan Chung v Leung Man Kon & Another[20] where such injection works were mentioned in paragraph 10(3). However, Ds did not adduce any expert evidence on the effectiveness of such injection works to abate the water seepage at P’s Flat. It is doubtful whether the water seepage problem could be resolved by the injection method alone without dealing with the source of seepage. In the circumstance, Ds have failed to show that P ought reasonably to have employed the injection method in mitigation of loss.

53.  It is P’s case that the persisting water seepage has made P’s Flat unsuitable to be let out. P’s witness, madam Chu did contact an estate agent to enquire about leasing out P’s Flat, but she was told that a flat troubled by water seepage could not be rented out even if the landlord agrees to lower the rent.

54.  There is no dispute that Villa Lotto is a prestigious estate in Happy Valley with many senior government officials residing there. Further, even D1 did agree that no one would like to rent a flat with water seepage problem under cross-examination. It is therefore quite unrealistic and unreasonable to expect P to list its property for rent before the water seepage problem having been resolved.

55.  Regarding the alleged failure of P to mitigate its loss by cooperating with Ds, it is quite obvious that Ds’ allegation could not be right. In fact, the voluminous correspondence of the parties from the first letter of complaint dated 15 December 2017 until the commencement of Lands Tribunal proceedings on 25 May 2018 do suggest the opposite.

56.  No doubt both parties have been actively discussing the possibility of conducting a joint inspection or test at both flats during the first 3 months since the complaint. P in fact has proposed test methods and test dates but Ds have turned down all of P’s proposal and insisted on their own way by seeking an injunction at the Lands Tribunal.

57.  Certain behaviour of the Ds indicating their condescending and uncooperative attitude is highlighted below:

(a)  The alleged refused access to P’s Flat – Ds have all along been complaining of P’s refusing Ds’ entry to P’s Flat to conduct test. In fact, P has never refused D’s request to enter P’s Flat. In P’s letter dated 26 December 2017, P only asked 4 questions to clarify some details of the works proposed by Ds to expedite the matter. However, Ds refused to answer those questions and accused P of “uncooperativeness” by asking “unnecessary questions[21]”. LKL later reiterated P’s position to request for such information so as to make arrangement for Ds’ access to P’s Flat[22] but Ds have failed to reply.

(b)  Calling off the test proposed by P to be conducted on 10 February 2018 – Ds called off the proposed test[23] because of his rejection of the method statement and diagrams provided by SC, alleging that such information deviated from P’s previous position stated in its letter dated 7 February 2018.

(c)  Calling off the test proposed by P to be conducted on 28 February 2018[24] – this time Ds called off this proposed test for two reasons. Firstly, Ds rejected the proposed ponding test to be conducted on the entire floor of their guest bathroom. (Ironically, Ds allowed SC & AH to conduct the same ponding test covering the entire bathroom floor on 18 & 19 February 2020.) Secondly, Ds alleged that the material safety data sheet of the dye to be used for ponding test failed to satisfy their safety and health concerns, notwithstanding the assurance by SC that the same dye has been used by FEHD.

(d)  Disregarding LKL’s letter to Ds dated 7 June 2018 urging Ds to discontinue the Lands Tribunal Proceedings – LKL explained the jurisdiction of Lands Tribunal and rightly pointed out that the Lands Tribunal would not direct a person to liaise with a government department for such purpose requested by Ds. LKL also reminded Ds that it is their duty to find out the precise damage and carry out the necessary repair works, and their application is bound to be struck out.

(e)  Ds’ refusal to provide the report of NC’s test done on 16 April 2019 as requested by LKL’s letter dated 5 June 2019.

58.  For the above reasons, I find that Ds have failed to discharge their burden of proof on the issue of mitigation of loss and I reject the plea of P’s failure to mitigate its loss.

DAMAGES FOR REMEDIAL WORKS

59.  P engaged C&H Studio Limited (“C&H”) to carry out the remedial works from May to July 2020 and incurring the following two sums:

(a)  HK$5,800 for removing the damaged wardrobe;

(b)  HK$163,750 for remedial and reinstatement works.

60.  P is now claiming the two sums that had been paid to the contractor totalling HK$169,550 which is less than the total sum of HK$172,300 estimated by SC in the Joint Expert Report.

61.  Regarding the issue of quantum of damages for repair costs, Ds rely on the opinion of their expert, AH, who suggested HK$26,500. Ds submitted that AH’s estimate shall be preferred because some unnecessary items of works have been excluded.

62.  SC gave his reasons for the assessment reinstatement costs in sections 6.3 and 7.1 of the Joint Experts Statement. I find SC’s assessment to be more meticulous, reasonable and professional.

63.  Whereas AH’s quantum assessment simply replicates every item in a quotation dated 11 November 2020 given by a contractor known as “Le Blanc”. It is stated on the said quotation that the prices were quoted based on the photos provided to Le Blanc. It remains a mystery as to what photos have been provided. Since SC’s quantum assessment based on his inspection at the scene and his expertise, his assessment should be preferred to the quotation made by an unknown contractor based on unidentified photos and without site inspection.

64.  Therefore, it is rather suspicious that AH has failed to exercise independent judgement and failed in his duty as an expert witness as per the Code of Conduct for expert witnesses in Appendix E of the Rules of the District Court which he has declared to comply with. I thus reject AH’s assessment on quantum

65.  I find that the reinstatement or remedial works proposed by SC are reasonable and necessary in the circumstances and I accept his expert evidence on quantum assessment.

66.  As the quotation of C&H has been considered and accepted by SC as necessary and reasonable, I allow in full such costs in total of HK$169,550.

RENTAL LOSS

67.  It is the P’s case that the continuing water seepage at the material times made the flat unsuitable to be let out and P had been unable to let out its flat since December 2017, leading to P’s loss of rental income.

68.  It is trite law that P is entitled to damages for loss of rent consequential to the injury to the property by nuisance[25].

69.  I accept that there are various contemporaneous documents[26] in support of the existence of tenancy at P’s Flat and Ds’ knowledge of the same. There is no dispute that Ds had been informed by P of the subject water seepage causing rental loss to P and its intention to hold Ds liable for such loss.

70.  As I have found that the source of water seepage was reasonably identified and made known to Ds by LKL’s letter dated 16 May 2018 enclosing the Investigation Report. The damages for loss of rent shall be counted from such time.

71.  Parties have agreed to adopt HK$51,500 as the monthly rental value for the purpose of computing the rental loss. However, Ds argue that there should be a 15% discount of the agreed rental value representing the property tax chargeable on P’s rental income. Mr Ma disagrees with such proposed deduction, as all judgment sums received by P are taxable. As Ds have not disputed such contention, I accept P’s submission and hold that there should be no discount on such sum.

72.  Regarding the length of rental loss award, P submitted that it should last until April 2020 when SC confirmed with P of the cessation of water seepage, plus one month of decoration period. According to Chan Yip Cheung & Another v Fong Chow Wo & Another[27] the period of remedial work was included in the assessment of rental loss.

73.  It is not in dispute that Ds carried out their repair works from May to June 2019 and by their letter dated 19 August 2019 Ds informed P the completion of the repair works. However, I am unable to agree to adopt the date of such notice as the end date for computing the rental loss award for the reason as follows.

74.  Pursuant to the expert directions given by Mr Registrar Dick Ho on 4 July 2019, parties’ experts jointly conducted ponding test on 18 & 19 February 2020 and they returned to observe the test result on 28 February 2020, 13 March 2020 and 25 March 2020. Therefore, it is rather unrealistic to expect P to start its repair works prior to the completion of all tests and post-test surveys, ie works should not commence earlier than 25 March 2020.

75.  The quotation of P’s contractor was dated 2 April 2020. Assuming that P’s remedial works were to commence immediately, it should take 25 days to complete according to SC’s time estimate. For the aforesaid reasons, the rental loss award should be computed from 16 May 2018[28] until end of April 2020[29], ie approximately 23.5 months in total.

76.  Therefore, the award for rental loss is computed as follows:

HK$51,500 × 23.5 months = HK$1,210,250

GENERAL DAMAGES FOR INCONVENIENCE & DISCOMFORT

77.  So John & Anor v. Lau Hon Man & Ors[30] has been applied to award general damages for discomfort and inconvenience to corporate claimants affected by water seepage in various cases including my previous judgment Crystal Bright Holdings Ltd v Allen Industries Ltd[31]following Well Force Co Ltd v Boomway (Hong Kong) Ltd[32] and Century Way Investment Ltd v Willbert Ltd & Another[33].

78.  According to Gwong Leung Property Holdings Ltd v Wong Kwok Tsoi[34], P is entitled to claim both loss of rentals and general damages.

79.  Mr Ma submitted that HK$80,000 should be the appropriate award under this head, having regard to the duration of over 2 years, the seriousness and extent of the water seepage as reflected by the photos taken on various dates from 2017 to 2019.

80.  In Leung Yung Chun v Chan Wing Sang[35], $80,000 was awarded for damages for inconvenience caused by water seepage lasting nearly 2 years. The plaintiffs and their family in Leung Yung Chun were troubled by water dripping from the ceiling and wetting of the carpets and it required them to replace wet cloth and buckets of water to hold the dripping water.

81.  Ds have not submitted any authorities on the issue of quantum of general damages for comparison, but reiterated their objection to any award of general damages to P in their Closing Submissions that “P had yet to prove that it suffered the inconvenience personally to the extent similar to the appellant of So John case.”[36] In light of the above authorities and the evidence before me, I reject Ds’ submissions.

82.  I accept that the water seepage problem in Leung Yung Chun was more serious but the duration of water seepage was shorter than the present case.

83.  Having considered all the circumstances, I agree with P’s submission that an award of HK$80,000 for general damages is appropriate in this case.

CONCLUSION & ORDERS

84.  For the above reasons, P succeeds in its claim. Judgment is entered against the Ds who shall pay P damages in the sum of HK$1,459,800 consisting of the following items with interest and costs:

(i)	Remedial Works Expenses		HK$169,550
(ii)	Rental Loss		HK$1,210,250
(iii)	General Damages		HK$80,000
			HK$1,459,800       =========

INTEREST

85.  I agree with P’s submissions on interest and award pre-judgment interest on the judgment sum at 1% above HSBC best lending rate from the date of the writ, ie 6 September 2018, until the date hereof, and post-judgment interest at judgment rate from the date hereof until full payment.

COSTS

86.  Costs should follow the event. I therefore make an order nisi that Ds shall pay P costs of the entire action, to be taxed if not agreed, with certificate for counsel. This order nisi shall become absolute after 14 days from the date hereof, unless parties make any applications by way of inter-partes summons to vary it within such time.