WONG HUEN MIN v. WONG-KONG CHONG-KAM-SAU TONG CLANSMAN ASSOCIATION LTD AND ANOTHER

DCCJ 6455/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6455 OF 2004

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DECISION

Background

1.  This is the Plaintiff's application for summary judgment made by summons issued on 25th February 2005. I have already expressed dissatisfaction with the lack of progress of the application since. An Amended Statement of Claim was filed on 25 April 2007, and I gave leave for the summons issued on 25 February 2005 to be amended to seek judgment against the 1st Defendant for the sum of HK $19,084 plus damages to be assessed, interest and costs.  Leave was also granted to the Plaintiff to file a further affirmation to verify the claims made in the Amended Statement of Claim.

2.  The Plaintiff's claims in the action against the 1st Defendant are  based on nuisance, negligence and breach of covenants contained in a Deed of Mutual Covenant.  The Plaintiff is the registered owner and occupier of Flat No. 36, first floor, Man Cheong Building (" Building"), 25 - 47 Man Cheong Street & 26 - 48 Man Wai Street, Kowloon ("Plaintiff's Property").  The 1st Defendant is the registered owner of Flat No. 36, second floor, ("Defendant's Property") directly above the Plaintiff's Property.  The 2nd Defendant was the sub-tenant of the 1st Defendant, who occupied the  Defendant's Property with the 1st Defendant’s knowledge and consent, according to an affirmation filed on behalf of the 1st Defendant on 23 March 2005.  The Plaintiff claims that since 21 August 2004, the 1st Defendant had left the Defendant’s Property and could not be traced since then.

3.  The Plaintiff alleges that on 10 August 2004, the Plaintiff discovered water seeping from the ceiling in the living/dining room of the Plaintiff's Property and immediately reported the matter to the 2nd Defendant and to the management office of the Building.  The management reported the complaint of water seepage to the 1st Defendant in about August 2004.  An inspection took place at the Plaintiff's Property, and it is alleged that the 2nd Defendant admitted liability for the water seepage and promised the Plaintiff that he would arrange for workers to rectify the defective state of the Defendant's Property to stop the water leakage, and to do remedial works to reinstate the Plaintiff's Property.  Interlocutory judgment was in fact entered against the 2nd Defendant on 13 April 2005. 

4.  The 1st Defendant does not deny the fact of water leakage into the Plaintiff's Property.  On receipt of the complaint from the Plaintiff in August 2004, the 1st Defendant had referred the management to the 2nd Defendant and to the 1st Defendant's solicitors.  When the leakage problem deteriorated, government departments and even the police were brought in.  On 14 September 2004, the Buildings Department issued a letter to the 1st Defendant, advising the 1st Defendant to contact the Plaintiff to investigate the cause of water leakage immediately, and if it should be discovered that the source of water leakage was from the Defendant's Property, the 1st Defendant should take immediate appropriate action to stop the water leakage problem.  Finally, when the Plaintiff threatened the institution of legal proceedings, the 1st Defendant engaged a surveyor, Infrascan (HK) Limited ("Infrascan"), and representatives of the 1st Defendant and of Infrascan attended an inspection and survey of the Plaintiff's Property.   Infrascan produced a report dated 22 November 2004 in respect of its inspection and survey of the Plaintiff's Property.  According to this report, the moisture which had penetrated into the Plaintiff's Property was leaking from the Defendant's Property.   However, no mention was made in the report and no conclusion drawn as to the cause of the moisture penetration.  The report prepared by the surveyors engaged by the Plaintiff was clearer in its findings, that the cause of water leakage in the Plaintiff's Property was due to water discharged from the water tap and the shower to the floor of the raised platform in the additional toilets installed at the Defendant's Property, and such water had penetrated the concrete slab between the Plaintiff's Property and the Defendant 's Property, through a crack found in the concrete slab identified in the ceiling of the living room of the Plaintiff's Property. The Plaintiff's expert report was not sent to the 1st Defendant until after the commencement of these proceedings, on or about 20 December 2004, when the parties exchanged expert reports.

Legal principles on O.14 application

5.  The principles applicable to an application for summary judgment are clear.  The Defendant must satisfy the court that it has a fair or reasonable probability of showing a real or bona fide defence, i.e. that its evidence is reasonably capable of belief.  If the evidence of the Defendant is incredible in any material respect, it cannot be said that there is a fair or reasonable probability that the Defendant has a real or bona fide defence and judgment will be given to the Plaintiff.  The issue is whether the Defendant's assertions are believable.  The Defendant should also condescend to particulars in support of the defences raised.  If a point of law arises, however difficult it is, once it is understood and the court is satisfied that it is really unarguable, it will give judgment ( para 14/4/12, HK Civil Procedure).

6.  The 1st Defendant's case is that the water leakage was caused as a result of the  renovation works carried out at the Defendant's Property by the 2nd Defendant, which renovation works were neither known to nor authorized by the 1st Defendant.  The 1st Defendant says that the water leakage constituted a nuisance, but as it was not caused by the 1st Defendant, it should not be liable in respect of the Plaintiff's damage sustained as a result of the leakage.  The 1st Defendant claims that it is not liable for the nuisance created by the 2nd Defendant, nor is it liable in negligence since it had already taken reasonable and adequate steps to stop further water leakage once it had discovered same.  The 1st Defendant further claims that it is not liable for breach of any of the provisions of the Deed of Mutual Covenant as it has discharged its obligations thereunder by entering into a tenancy agreement with its principal tenant and consenting to the terms of the sub-tenancy agreement made between its principal tenant and the 2nd Defendant, whereby both the principal tenant and the 2nd Defendant are contractually bound to observe the terms and conditions of the Deed of Mutual Covenant.

7.  The evidence shows that the 2nd Defendant had caused partitions to be made at the Defendant 's Property for the purpose of subletting the premises.  The 2nd Defendant had caused additional toilets to be made, and arranged for additional drainage pipes to be laid on the floor and protected with raised platforms in the toilets and in the corridor.  According to the surveyors engaged by the Plaintiff, the cause of the water leakage into the Plaintiff's Property was water being discharged onto the floor of the raised platform of the additional toilets and then penetrating through the concrete slab into the ceiling of the Plaintiff's Property.  The 1st Defendant has not put in any evidence which contradicts the conclusions drawn by the Plaintiff's expert.

Is the 1st Defendant liable for the 2nd Defendant's nuisance?

8.  The 2nd Defendant had made alterations to the 1st Defendant's Property, as a result of which water was allowed to accumulate on the floor in the additional toilets and in the corridor and allowed to escape through the concrete slab into the Plaintiff's Property.  The 1st Defendant says that the alterations were made in breach of the terms of the tenancy agreement made between the principal tenant of the 1st Defendant and the 2nd Defendant.  The principal tenant is Huang Gang Chong’s Association Limited, the board of which is comprised of the board members of the 1st Defendant, with one exception. 

9.  The authorities are clear that in respect of premises which become a nuisance, even if a landlord neither knew nor ought to have known of the disrepair or other dangerous condition of the premises at the time of the letting, the landlord may nevertheless be liable for such conditions arising during the tenancy if the landlord has retained a measure of control over the premises, and the landlord is in no better position by virtue of having taken a covenant from its tenant.  The landlord retains sufficient control either because he has a duty to repair, or a power to repair. ( Clerk & Lindsell on Torts, paragraph 19-58； Heap v. Ind Coope and Allsopp Ltd. [1940] 2 K.B. 476 )  The basis is that since the landlord has the right to enter and remedy the nuisance, the proximity is there to find liability.

10.    The approach adopted by the Hong Kong Court of Appeal in the case of Leung Tsang Hung & Anor v. The Incorporated Owners of Kwok Wing House CACV 196/2004 was to consider “the sufficiency of control such as to render it reasonable to impose upon the person in whom there reposes that control responsibility for the consequences of his failure to exercise it”.  The Court of Appeal accepted that the liability of the non-occupying owner of property depends on the degree of control exercised by the owner, in law or in fact, for the purposes of repairs.  The measure and the content of the owner’s duty depends on the extent of his control over the property, “the importance of control being that it affords the opportunity to know the premises, to become aware of dangers, and to remedy them…” (cited by Hon Yuen JA from the judgment in Duncan v. Cammell Laird [1943] 2 All E. R.).

11.  The 1st Defendant seeks to argue that it has no right or power of control in respect of the Defendant's Property by virtue of the occupation thereof by the 2nd Defendant and/or the 2nd Defendant's unlawful subtenants ("Occupiers").  This assertion has no basis.  Under both the tenancy agreement made between the 1st Defendant and the principal tenant as well as the tenancy agreement between the principal tenant and the 2nd Defendant, the 1st Defendant and its principal tenant had the express contractual power to enter the Defendant's property and to carry out repairs.  Under Clause 2 (l) of the principal tenancy agreement, the principal tenant agreed with the 1st Defendant as landlord to "permit the landlord and all persons authorized by him at all reasonable times upon prior notice to enter and … view the state of repair of the said premises” and “carry out any works or repairs which may be required to be done".   Under Clause 2.21 of the agreement of the sub-tenancy made between the principal tenant and the 2nd Defendant, the 2nd Defendant agreed to "permit the landlord and all persons authorized by him at all reasonable times by prior appointment to enter into the premises to view the condition thereof and to give or leave notice in writing … of all defects and want of repair there found for which the tenant is liable and within 15 days after every such notice well and sufficiently to repair and make good such defects and want of repair … provided always that if the tenant shall not within 15 days after service of such notice commence and proceed diligently with the execution of the repairs and works … it shall be lawful for the landlord to enter upon the premises and execute such repairs … ".

12.  The 1st Defendant clearly has retained the right and the power under the aforesaid tenancy agreements to enter the Defendant's Property, to inspect the works erected by the 2^nd Defendant within the Defendant’s Property, and to do any necessary repairs and works.  As landlord, the 1st Defendant has retained a sufficient measure of control over the Defendant's Property, such that it cannot avoid liability to a party who has sustained damage as a result of the defective or dangerous condition of its property, at the excuse only that it was not the occupier of the property.  The 1st Defendant cannot be in a better position by virtue simply of having taken a covenant from its tenant to repair and maintain the Defendant's Property. 

13.  The 1st Defendant sought to argue that practically, it was not able to gain entry to the Defendant's Property because of the occupation by the Occupiers.  On the evidence, this is unbelievable as the Occupiers had in fact permitted other parties such as the Plaintiff, the Plaintiff's surveyors, representatives from government departments and solicitors for the Incorporated Owners of the Building to enter the Defendant's Property for inspection at different times.  The 1st Defendant attempted on two occasions to gain entry, but without making any prior appointment, such that there was no one within the Defendant's Property to permit the 1st Defendant to enter.  I do not accept such evidence as proof of the 1st Defendant's alleged practical inability to gain entry into its own property.

14.  I am therefore satisfied on the evidence adduced that the 1st Defendant had sufficient control of the Defendant's Property by virtue of the powers contained in the tenancy agreements, and bearing in mind the measure of the 1st Defendant's control, by not taking the necessary action to enter the Defendant's Property to carry out the necessary repair works to stop further leakage until October 2005, the 1st Defendant is in breach of duty towards the Plaintiff.  I am not satisfied that the 1st Defendant has a fair or reasonable probability of showing a real or bona fide Defence on the basis of its being a non-occupying owner and should not be liable for the 2nd Defendant's nuisance .

Is the 1st Defendant liable for breach of covenant in DMC?

15.  The Plaintiff claims that the 1st Defendant is in breach of clause 10 (c) of the Deed of Mutual Covenant, by which each owner of the Building covenants not to "do or permit anything" in the Building or upon the Building which "may be a nuisance or annoyance to or may cause damage or inconvenience to the other occupiers" of the Building.  In answer to this, the 1st Defendant claims that its liability is discharged by entering into its tenancy agreement with its principal tenant and consenting to its principal tenant entering into a tenancy agreement with the 2nd Defendant, requiring the principal tenant and the 2nd Defendant respectively to abide by the terms and conditions of the Deed of Mutual Covenant.  It says that it did not itself cause the nuisance or inconvenience so should not be liable. 

16.  The word "permit" in clause 10 (c) means either to give leave for an act which without leave could not be legally done, or to abstain from taking reasonable steps to prevent the act where it was within a man’s power to prevent it (Realty Harvest Ltd. v. Gold Margin Development Ltd. [2001] 1HKC 234).

17.  From the time when the 1st Defendant knew of the Plaintiff's complaint of water leakage in August 2004, it had done nothing until 20 November 2004, when it engaged its surveyor to inspect the Plaintiff's Property, which led to the issue of Infrascan's report dated 22 November 2004.  The 1st Defendant claimed that it was only when it received the letter dated 27 October 2004 from the Plaintiff's solicitors that it knew of the alterations made by the 2nd Defendant at the Defendant's Property and the fact that the Occupiers were occupying the Defendant's Property.  It was also on 20 November 2004 that the 1st Defendant’s representatives paid a visit to the Defendant's Property, but was not able to gain access because one of the Occupiers was in a hurry then to go to work.  It was only until early February 2005 that the representatives of the 1st Defendant made a second visit to the Defendant's Property and attempted to gain access.  On that occasion, no one answered when the doorbell was rung.

18.  Although it was recommended in the Infrascan report of 22 November 2004 that repair work was required at the Defendant's Property in order to prevent further leakage into the Plaintiff's Property, no repair work or any other work was carried out by the 1st Defendant at the Defendant's Property until October 2005.  The evidence from the Plaintiff is that despite complaint being first made in March 2004, water seepage was still continuing at the Plaintiff's Property as at 18 July 2005.

19.  By 22 November 2004, at the very latest, the 1st Defendant should with reasonable diligence have known or been put on inquiry as to the cause of water leakage into the Plaintiff's Property being seepage of water from the Defendant's Property.  Its own surveyors had produced a report which recommended repairs to be carried out at the Defendant's Property to prevent further leakage.  Although the Infrascan report was not entirely clear as to the cause of the water seepage from the Defendant's Property into the Plaintiff's Property, a reasonable person would have made further inquiries at that stage with Infrascan, if necessary, or otherwise made further investigations in order to ascertain the cause of water seeping from the Defendant's Property.  By failing to make such inquiries or investigations, and otherwise by failing to take any step to effect the repairs recommended by Infrascan to stop the leakage until October 2005, the 1st Defendant had abstained from taking reasonable steps to prevent the water leakage which constituted the nuisance, annoyance, or inconvenience within the meaning of clause 10 (c) of the Deed of Mutual Covenant.  For the same reason, I would find the 1st Defendant negligent.

20.  In considering the Plaintiff's claim of nuisance on the basis of seepage of water into the Plaintiff's Property, I have borne in mind the test set out in the case Cheung Sau Ling and Ng Bing Hong v. Cheng Lai Chong CACV 268/98 (unreported, 9 April 1999).  It is not for the 1^st Defendant to find out the source of the water leakage claimed to be constituting nuisance, nor to prove that the leakage did not come from the Defendant’s Property.  The 1st Defendant must be shown to have actual or constructive knowledge that the leakage of water into the Plaintiff's Property originated from the Defendant's Property, although "knowledge" can be what the 1st Defendant actually knew, or what the 1st Defendant should have known with normal and reasonable diligence.  On the facts of this case, when the 1st Defendant received the Infrascan report on 22 November 2004 at the latest, by which time the 1st Defendant had received notice from the Buildings Department of the complaint of water leakage and advising it to investigate the cause of the leakage, the 1st Defendant should with reasonable diligence have either made further inquiries with Infrascan or otherwise carried out further investigations to ascertain the cause of the water leakage.  Since it failed to do so and failed to take steps to rectify the leakage then, the 1st Defendant is liable in adopting the nuisance.

Is the 1st Defendant liable in negligence?

21.    I have already considered the 1st Defendant's defence to the claim of negligence in paragraph 14 and 19 above.

22.  The 1st Defendant sought to argue that it had taken all reasonable action when it commenced legal proceedings against the 2nd Defendant for forfeiture of the tenancy on 4 October 2004 and to obtain possession of the Defendant's Property.  However, no evidence was adduced as to what further steps the 1st Defendant had taken after commencement of the forfeiture proceedings, which were in fact discontinued in February 2005 without possession having been obtained then.  Possession proceedings were also commenced against the 2nd Defendant and the Occupiers on 15 March 2005.  Again, no evidence has been adduced by the 1st Defendant as to the status of these proceedings.  The 1st Defendant's inactivity in processing those proceedings does not assist its claim of taking all reasonable action.  The 1st Defendant could easily have made appointment with the Occupiers to exercise its right to enter the Defendant's Property for the purpose of effecting repairs to rectify the water leakage problem, and it has failed to show that it has made attempts to do so in this regard.

23.  The 1st Defendant's claim that it did not forcibly enter the Defendant's Property for fear of committing an offence under section 119V of the Landlord and Tenant (Consolidation) Ordinance has no basis.  Section 119V does not apply if the 1st Defendant should take steps to enter the Defendant's Property for the purpose of carrying out necessary repairs to avoid water leakage which was giving rise to a legitimate complaint made by the Plaintiff and the management of the Building.

24.  Counsel for the Defendant sought to argue that it was reasonable for the 1st Defendant not to take action in view of the 2nd Defendant's admission of liability for the water leakage and his promise to effect the necessary repairs when the Plaintiff first made complaint.  However, this alleged reliance has not been raised in any of the affirmations filed on behalf of the 1st Defendant, nor was it alleged in any of the 1st Defendant's affirmations that the 1st Defendant knew of the 2nd Defendant's admission.

25.  Counsel for the 1st Defendant also argued that it is a matter for the trial judge to decide whether the 1st Defendant had taken all reasonable action in the circumstances of this case.  However, as counsel for the Plaintiff has rightly pointed out, the burden is on the 1st Defendant to condescend to particulars of its defence, and the 1st Defendant should in its opposition to the Order 14 application set out what steps and all steps it alleges to be the reasonable steps taken to stop or remedy the leakage complained of.  There is nothing else in the affirmations or the draft defence of the 1st Defendant which I consider can amount to reasonable steps.

26.  For the above reasons, the 1st Defendant has failed to show that it has a fair or reasonable probability of showing a real or bona fide defence to the Plaintiff's claims.  Summary judgment should accordingly be entered against the 1st Defendant for damages and interest thereon to be assessed, and for costs of the action, including this application with certificate for counsel, to be taxed if not agreed. The sum of HK $19,084 sought by the Plaintiff should be properly assessed, and it is not appropriate at this stage to give judgment for that sum.