WONG HON SAN v. MAK YIU KEUNG AND ANOTHER

HCA 2985/2018

[2021] HKCFI 1313

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2985 OF 2018

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DECISION

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1.  This is the application of Mak Yiu Keung (“D1”) and Lui Yuet Sim Femella (“D2”) (collectively “the defendants”) to set aside the default judgment granted to Wong Hon San (“the plaintiff”) pursuant to an order dated on 7 July 2020 of DHCJ To (“the order”) and filed on 2 September 2020 (“the judgment”).

Preliminary  

2.  At the outset of the hearing, the defendants sought and were granted leave (a) to amend their summons by adding a reference to O. 13, r. 9 to the indorsement of the reference to the Rules of the High Court; and (b) to file and serve the affirmation of Tsang Pui Yee, the costs to be paid by the defendants. 

Procedural background

3.  The plaintiff’s action concerned water seepage from defendants’ premises, being Flat E on the 1^st floor of Cambo Mansion in To Kwa Wan, Kowloon (“Flat E”), to the plaintiff’s shop (“Shop 1”) situated directly beneath Flat E.

4.  Between June 2017 and November 2018, there were WhatsApp exchanges between the plaintiff and D1 relating to the plaintiff’s complaints of water dripping from the ceiling of the shop.

5.  The plaintiff engaged Hong Kong Survey Limited (“HKSL”) to prepare an expert report which is dated 15 August 2018 (“the HKSL report”).

6.  BD/FEHD Joint Office for Investigation of Water Seepage Complaints (“the Joint Office”) to whom complaints had been made carried out a test and reported on 16 October 2018 that it did not show that the water leakage was due to the drainage pipes of Flat E but would consider conducting a professional investigation since the problem persisted.

7.  The Joint Office then arranged for Modern Testing Consultants Limited (“MTC”) to conduct a professional investigation. MTC carried out site inspections and testing in Flat E and Shop 1 on 4 occasions, namely, 2 November 2018, 27 November 2018, 13 December 2018 and 16 January 2019. Its Inspection Report (“the MTC report”) provided to the Joint Office is dated 29 January 2019.

8.  While MTC’s investigation was still ongoing, on 27 December 2018, the plaintiff commenced the present proceedings.

9.  D1 filed an acknowledgement of service and notice of intention to defend but did not file any defence. The plaintiff then filed a notice of intention to enter judgment on 13 March 2019 but there was no follow up action.

10.  On 10 April 2019, the Joint Office advised the parties by letter that as the root cause for the water seepage could not be ascertained after all necessary and different non-destructive tests had been performed it would cease to follow up on the case.

11.  A year later, on 27 April 2020, the plaintiff filed his notice of intention to proceed. This was followed, inter alia, by his summons for default judgment dated 11 June 2020 and served on 11 June 2020.

12.  The defendants do not dispute that the judgment was obtained regularly although they claim that they only came to know about the order and judgment upon receipt of the letter dated 14 September 2020 from the plaintiff’s solicitors enclosing the order and judgment by way of service.

13.  At that stage, D1 was acting in person and, on 21 September 2020, filed a notice of appeal and a notice of setting down an appeal.

14.  After being informed on 27 October 2020 that the Court of Appeal would not handle his appeal and that he should obtain legal advice, the defendants retained their present solicitors on 18 November 2020 who, on the same day, informed the plaintiff’s solicitors of the defendants’ intention to set aside the default judgment and requested relevant documents from plaintiff’s solicitors. 

15.  On 25 November 2020, the plaintiff’s solicitors refused the defendants’ request to allow the defendants’ expert Trusty Surveyors (HK) Ltd (“TSL”) to carry out a site inspection and tests.

16.  The report of the defendants’ expert dated 2 December 2020 (“the TSL report”) was thus made without being able to conduct any tests but on a visual inspection of Flat E and the surrounding area. It contains an analysis of the HKSL report.

17.  The real issue that arises is whether the defendants have shown a defence on the merits that has a real prospect of success.  

The defence

18.  The defence raised is that the plaintiff has failed to prove that Flat E is the source and root cause of the water seepage.

19.  It is well-established that there is no presumption that water found at the flat below must have originated from the flat above and in a water seepage claim, the burden to prove the source of water seepage falls squarely on the plaintiff: see 張秀玲 訴 鄭禮莊CACV 268/1998, 9 April 1999 at §21; Hung Luen Kwan v Shiu Lin Fong & another [2018] HKDC 872 at §12; and Leung Yung Chun & another v Chan Wing Sang & others [2000] 1 HKLRD 456.

20.  It is not for the defendant to identify the source of leakage or to prove it did not come from the defendant’s flat: see per Kwan JA (as she then was) in Hui Ling Ling v Sky Field Development Limited, CACV 122 of 2012, §42; and Mohan Selvaraj v Grace Ka Man O’Brien [2020] HKCA 698, §17.

21.  In assessing whether the defence has a real prospect of success, the expert evidence is critical.

The expert evidence

22.  The plaintiff relies on the HKSL report and the HKSL’s supplemental report dated 19 February 2021 (“the supplemental report”) made in response to the TSL report.

23.  The MTC report which the defendants obtained from the Joint Office is exhibited to D1’s 2^nd affirmation.  In his written submissions, Mr Wong Hok Yan, counsel for the plaintiff, took issue with its admissibility.

24.  At the outset of the hearing, the Court remarked that such an approach is very much at odds with common sense. In his oral submissions, Mr Wong sensibly conceded the admissibility of the MTC report. 

25.  The areas under inspection by HKSL consisted of the ceilings of the kitchen and the toilet as well as 3 small rectangular areas in the ceiling of the office shown on the floor plan of Shop 1 in the HKSL report.

26.  The layout plan of Shop 1 in the MTC report shows 4 encircled seepage areas, namely, the ceilings of the kitchen and toilet of Shop 1 and 2 office areas, only one of which “Area 1” corresponds to one of the 3 rectangular areas on HKSL’s floor plan.

27.  That the affected areas are not identical is inexplicable. It is relevant in so far as it explains why MTC did not conduct a particular test that HKSL conducted[1].

28.  The defendants’ kitchen and laundry are situated directly above the kitchen and toilet of Shop 1.

29.  The defendants’ kitchen and laundry and the area immediately adjoining used to be a flat roof (Roof B) which has been enclosed. Roof B is accessible from a bedroom. It has been erected with a raised platform of approximately 135 mm in height above the level of the living and dining area. At the far end of Roof B near the service lane, the area is subdivided by a partition wall with part of it used as a kitchen and the other as a laundry. The level of the kitchen and laundry is lower than the central area of Roof B.

30.  Apart from visual inspection, both HKSL and MTC carried out fluorescent dye or colour water tests (“CWT”) and ponding, electrical conductivity sensing (the pin-in type) which checks the moisture content (“MC”) of the affected area, and a water sample test.

31.  HKSL but not MTC also conducted microwave scans and infrared scans.

32.  HKSL concluded that water seepage in Shop 1 was caused by the failure of the water-proofing layer of the floor slabs of the kitchen and laundry room and the bathroom of Flat E.

33.  MTC concluded that notwithstanding the tests, the source of seepage could not be ascertained. MTC considered the possibility of drainage leakage and floor slab leakage to be “uncertain”.

(a) CWT and ponding at the floor slab of the kitchen and the laundry   

34.  MTC conducted CWT to the drainage inlets (in September 2018) and at the floor drains of the kitchen and laundry room (on 2 November 2018) and ponding tests at the floor slab of the kitchen and of the laundry room. No colour dye was detected at the seepage areas.

35.  HKSL conducted similar tests at the floor slabs of the kitchen and laundry room on 28 June 2018 and also did not find traces of toner and fluorescent dye in the ceilings below those areas.

36.  Despite reaching similar results, HKSL opined that the absence of toner and dye was due to “the water usage habit of the residents of the upper flat” and possible filtration of dye by the concrete[2]. HKSL considered that the raising of the floor slab made it easier for the dye solutions to be absorbed and filtered.  

37.  However, there is no elaboration or explanation by HKSL of what “usage habits” it took into account and how and in what respects they were relevant in arriving at HKSL’s conclusion. As matters stand, that aspect is nothing more than conjecture and not a factor in establishing the root cause of water seepage.

38.  MTC (which must have been aware of the Professional Guidance and the raised platform) considered floor slab leakage to be “uncertain” and that the source of leakage could not be ascertained.

 (b) CWT and ponding of the defendants’ bathroom on 28 June 2018

39.  The defendants’ bathroom is located roughly above the midpoint of Shop 1 where HKSL detected “slight water damage”. It noted that the dye for ponding immediately leaked from the nose of the front door of the bathroom and as there was generally no waterproof layer in the living room, HKSL considered that the water “might” seep into Shop 1 below.

40.  MTC did not carry out a corresponding test. The 4 affected areas[3] are shown on the layout plan of Shop 1 at §5.1 of the MTC report and none of them corresponded to the area of “slight water damage” described in §4.9 of the HKSL report.  

(c) MC tests

41.  HKSL’s test results taken before and after the fluorescent dye test showed that the humidity readings of the ceilings of the kitchen and toilet of the Shop increased significantly[4] after the fluorescent dye test.

42.  The MTC test results are markedly different: specifically, control photos A1 and A3 relate respectively show the checkpoints on the ceilings of the kitchen and bathroom of Shop 1. 3 sets of readings at 5 minute intervals were taken before and after ponding. All the readings at the various checkpoints were below 20° except for CP 1 (which is in the kitchen) which showed a reading in excess of 35°. Further, there was no significant difference in temperature before and after ponding.

(d) Water sample analysis

43.  Rainwater and water supply are free of chloride and ammonia. HKSL’s sample collected from the ceiling of the kitchen showed a small amount of chloride and ammonia. According to HKSL, they are the composition of the sludge, suggesting that it would have come from beneath the floor slab.

44.  MTC’s sample of water collected from the ceiling of the kitchen on 13 December 2018 returned a negative laboratory test result[5].

45.  TSL opined that the water test result cannot reflect that there had been leakage from Flat E.

(e) Microwave scan

46.  This detects and measures the humidity of different structural layers in the ceiling at depths of 30 mm, 70 mm and 110 mm. After conducting a scan of the ceilings of the kitchen and toilet of the shop, HKSL concluded that the waterway ran vertically from 110mm and seeped down to 30mm through 70mm, with water leaking from the wetter part layer to the wetter part of the surface.

47.  Pages 23-24 of the HKSL report contained 3 diagrams recording readings at the 3 different levels. In view of the description indicating the location of the external walls, the orientation of the diagrams appeared to be problematic. The plaintiff was unable to provide an explanation and submitted that typographical errors must have occurred. What information is to be derived from the diagrams remains unclear, including the location of the affected area.

48.  That aside, the plaintiff was unable to explain why the moisture content of the 70mm depth test had dropped as compared to that of the 30mm depth test if water was indeed seeping downward to Shop 1.

(f) Infrared scan

49.  Pages 10-13 of the HKSL report concern the infrared scans performed on the ceilings of the kitchen, toilet and office of Shop 1. It is stated that abnormal low temperature zones were found in those locations, indicating a sign of water seepage but there is no photo, diagram or chart illustrating the point sought to be made. The photos on those pages are blurry and not readily intelligible in the absence of any explanation as to how they are to be read/interpreted.

50.  The supplemental report referred to the readings recorded on page 18 of the HKSL report. Those readings do not provide the answer in view of §§41-42 above.

Other considerations

51.  The TSL report makes the point that to avoid interference with the test result especially where affected locations are near the external walls, surveys of water seepage problems are usually carried out in fine weather conditions preceded by 3 fine days with no rainfall recorded.

52.  The Case Summary shown in the MTC report shows that relevant entries under §1.3 include “weather condition” and “raining in past 2 days” and to that extent supports TSL’s understanding stated in the preceding paragraph.

53.  The TSL report noted that while no rainfall was recorded on 28 June 2018 the date of HKSL’s first inspection, according to the Hong Kong Observatory records, continuous rainfall had been recorded one week before that inspection.

54.  The other matter to be mentioned is that cracks were observed on the external wall of the laundry room and photo recorded[6]. TSL opined that the external wall was highly likely to have been the source of water seepage.

55.  Although MTC concluded[7] from MC readings obtained on the 4 inspection dates (between November 2018 and January 2019) that MC was not correlated with weather conditions and considered external wall rainwater leakage was unlikely, it is to be noted that renovation work to the external wall was completed after the inspections conducted by HKSL[8]. That may possibly explain the significantly different MC readings noted in §§41-42 above.

Provisional view on the defendants’ case

56.  MTC is an independent third-party and its impartiality is unquestionable. The fact that (i) despite similar results of a particular test, MTC and HKSL reach different conclusions; (ii) similar tests yielded different results; and (iii) the ‘other considerations’ must put into question the reliability and correctness of HKSL’s conclusion. In the present case, the additional tests carried out by HKSL are problematic and certainly not determinative.

57.  Having considered the various expert reports and given that the burden of proving source of leakage is on the plaintiff, for the reasons set out above, I am of the view that the defence has a real prospect of success. It follows that the default judgment must be set aside.

Whether setting aside should be on terms

58.  The plaintiff submitted that appropriate terms should be imposed. It was submitted that the defendants have ignored the court process and deadlines and caused substantial delay and accordingly it would be appropriate to impose a condition that the defendants provide security for the plaintiff’s costs by payment into court to ensure the defendants’ future procedural compliance.

59.  This is not a case where there is clear evidence that the defendants knowinglyignored the court process. In any event, the delay involved is no more than a few months.

60.  It is not apparent why an order for security for costs is considered appropriate. Since the defendants are the registered owners of Flat E, there is no danger of the plaintiff being out of pocket at the end of the day should he succeed at trial. 

61.  It is also not apparent to the Court why the present proceedings were commenced in the High Court rather than the District Court. Mr Wong was unable to provide an explanation.

62.  In the circumstances, I do not consider it appropriate to impose any terms for setting aside the default judgment.

Order

63.  Accordingly, I make orders in terms of the defendants’ summonses dated 18 December 2020, 27 April 2021 and 29 April 2021.