LANDTOWN GARDEN LTD v. THE INCORPORATED OWNERS OF FU NING GARDEN

DCCJ 569/2019

[2024] HKDC 1920

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 569 OF 2019

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BETWEEN

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JUDGMENT

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I. INTRODUCTION

1.  This is a trial of an action commenced by the plaintiff against the defendant on water seepage. It involves a question of the ownership of the rooftop of the plaintiff’s property in question.

II. DEFAULT POSITION BEING SINGLE JOINT EXPERT

2.  This action was commenced back in 2019.  The amount of damages claimed by the plaintiff was only in the sum of HK$483,361.85 plus the monthly rental loss of approximately HK$50,000 for 12 months. However, 6 experts were involved. Each side appointed its own expert on the sources of water seepage. The experts then quarreled over how to conduct the tests and even over which consultant to appoint for carrying out the tests. Their way to resolve this quarrel was, unfortunately, not applying to Court for further expert directions but instead, to engage respectively their own consultants for carrying out tests for water seepage, without the leave of the Court. Further, each side appointed its own valuer for valuing rental loss as a result of the water seepage. Expert reports of 1,126 pages in total (prepared in 2020, 2021, 2022 and 2024) were adduced. Probably because of the volume of the expert reports, counsel’s estimates as to the length of trial added up to 7 days, and so 7 days had been reserved for this trial. Eventually, the trial was only 4 days long, and almost 2 out of 2.5 days of oral evidence in the trial were spent for the experts. It is fair for me to say that the experts not only took up most of the time in the proceedings, they also took up most of the time of the trial.

3.  I repeat my observation in §§2-7 of Cheng Suk Lai v Wong Man Fai [2024] HKDC 1500, adopting Rai Chandra Kala v La Creperie 8 Ltd [2023] HKLRD 1477, that the default position in water seepage cases in respect of expert evidence should be single joint expert, on liability and quantum. The brief account above only reinforces my observation.

4.  Further, I should add that in the event that the Court thinks fit to allow each party to have his or her own expert, and that the experts take the view that certain tests have to be carried out by some other third party expert, and if the parties cannot agree to appoint a single joint expert for such tests and/or how the tests should be carried out, the parties should make an application to the Court for further expert directions. One of the purposes of requiring the parties to apply for expert directions is that the Court would be able to consider, among others, the proportionality in terms of costs and time, and further, if the Court considers it justified to have such third party expert to carry out such tests, to consider whether only one single expert should be appointed for such purpose and how such tests could be carried out proportionally.

III. BACKGROUND NOT IN DISPUTE

5.  In 1990, the plaintiff purchased as the first-hand purchaser, and has since been the registered owner of, the kindergarten premises (the “Kindergarten”) adjacent to Block 1 (“Block 1”), Fu Ning Garden (“Fu Ning Garden”), No 25 Po Ning Road, Tseung Kwan O pursuant to an assignment dated 22 June 1990 (the “1990 Assignment”). The purchase was from the developer of Fu Ning Garden, namely, Sebasto (“Sebasto”). The Kindergarten is defined as “Kindergarten” and designated by the Deed of Mutual Covenants of Fu Ning Garden (the “DMC”) as “Kindergarten” for the purpose of operating a kindergarten.

6.  The defendant is the incorporated owners of Fu Ning Garden, incorporated on 17 December 1999.

7.  A more detailed description of the Kindergarten is worthwhile. On the assignment plan attached to the 1990 Assignment (which is also the building plan (the “Building Plan”) referred to in the DMC for defining “the Kindergarten”), annexed as Annex A1 to this judgment, the Kindergarten is the area shaded in pink. Some explanation is required:-

(1) This building plan is a floor plan.

(2) The Kindergarten is comprised of (a) the structure in irregular shape (the “Kindergarten Structure”), which I marked in thick black line in Annex A1; and (b) the open area surrounding the structure (the “Kindergarten Open Area”). Along the boundary lines I marked in green in Annex A1, there have since the outset been fences erected with metal gates on each side.

(3) Part of the Kindergarten Structure is within the area of Block 1, and of such part:-

(a) Some are beneath the first floor of Block 1. In other words, immediately above these parts are the residential units of the first floor of Block 1.

(b) The remaining area forms part of the Rooftop mentioned in subparagraph (6) below.

(4) The Kindergarten is therefore enclosed by the fences and the walls of the Kindergarten Structure lying within the area of Block 1.

(5) There are also four residential units on the ground floor of Block 1. For those walls of the Kindergarten Structure within the area of Block 1, they are either facing common area of Fu Ning Garden, or are partition walls shared with those units on the ground floor of Block 1.

(6) A subject matter in the present case is the rooftop (the “Rooftop”) “which is situated immediately above [the Kindergarten Structure]”, as defined in §2 of the statement of claim. The Rooftop is the open area immediately above the Kindergarten Structure.

(7) On the Rooftop has been stood a water tank (the “Water Tank”), and some pipes (the “Pipes”)[1] were connected to the Water Tank.

(8) On the Rooftop, towards Block 1 but still well within the Rooftop, there is an expansion joint (the “Expansion Joint”).

(9) On the Rooftop are seven skylight windows (the “Skylights”) which have been exclusively used by the plaintiff and its tenant for the Kindergarten. They are marked in red in Annex A1.

8.  Back in 1991, when water seeped from the Rooftop to the ceiling of the Kindergarten Structure, the plaintiff lodged a complaint to Sebasto and Sebasto carried out repair work to stop the water seepage. Water seepage still occurred intermittently, and upon the plaintiff’s complaints, Sebasto carried out repair work to address the problem of the seepage.

9.  In a letter dated 19 March 1992 issued by Sebasto to one of the shareholders of the plaintiff Mrs Wong Li Pak Yee (or Ms Li Pak Yee), who also operated the tenant of the Kindergarten at that time, namely, Junk Bay Kingsland Kindergarten (“Kingsland Kindergarten”), Sebasto stated that:-

“Dear Madam,

PSPS Junk Bay Town Lot No. 10

Building Defects at Kindergarten, Fu Ning Garden

We refer to your letter dated 4 March 1992.

Upon receipt of your above mentioned letter, our Miss Susanna Ha have visited your premises on 11/3/92 with representative of the contractor and the Estate Management Office…

We have explained to your Assistant Principal that the damaged area concerned is the expansion joint and the leakage is due to the incorrect use of the roof by unauthorised persons as planting area…

Please note that the repair works to the damages of the expansion joints have been previously carried out for several time[s] [sic] although we should not be responsible for the damages, in order to show our sense of responsibility and to maintain a good relationship.

…

Yet, we would like to confirm that this would be the last time we could entertain your request.

You are advised to liaise with the Estate Management office to erect signboard where appropriate to advise the residents that the roof area is not open for public use and they will be held liable for any damages caused if they are found on the roof. Moreover, another protective cover to the expansion joint is advisable to prevent future unauthroised trespassers from damaging the roofing system.”

10.  In 1992, a signboard was erected on the Rooftop, warning:-

“此平台是屬幼稚園私人物業 嚴禁擺於任何雜物”

11.  On 14 May 1993, Kingsland Kindergarten wrote to the then manager of Fu Ning Garden in relation to the fencing on the Rooftop that:-

“Re: Kindergarten Fencing

Dear Sir,

We would like you to confirm in writing that the fencing surrounding our Kindergarten is part of our property, and that we are solely responsible for its repair and maintenance.

This is because we are planning in the near future to demolish this severely broken fence and change into a brick-layed fence. We would also like to hear your opinion on this proposal.

If we do not hear from you within two weeks… we would assume that you have agreed to this and that we would go ahead to carry out the job.”

12.  In 2012, the plaintiff leased the Kindergarten to its tenant Bilok Creative Kindergarten (“Bilok”) for a term of 10 years commencing from 1 August 2012 and expiring on 31 July 2022 for a monthly rent of HK$150,000.00 for operating a kindergarten.

13.  According to the plaintiff, in early 2016, water seeped from the Rooftop into the Kindergarten Structure again. According to the plaintiff, shortly after the seepage started, water dropped down from the ceiling, the surface of the ceiling swelled, peeled off, small pieces of concrete flakes and some large pieces of concrete cracked and fell off from the ceiling, and as a result, rusted steel bars inside the ceiling were exposed. Further, water seeped on all rainy days.

14.  On 1 August 2016, the plaintiff and Bilok entered into an agreement by which they agreed that the monthly rent should be reduced from HK$150,000 to HK$100,000 at the request of Bilok made due to the long-lasting water seepage in various places (“天台長期出現多處漏水，故本園要求業主減收租金”).

15.  That said, on 12 September 2017, at the request of Bilok, the manager caused waterproofing injection work to be carried out at the jamb of the entrance to the Kindergarten Structure to prevent water dropping or flowing to the common sidewalk adjacent to the entrance.

16.  Water seepage problem in the other parts of the Kindergarten Structure continued, and Bilok kept complaining to the manager.

17.  Subsequently, on a date not clear from the evidence, the matter was referred to the Buildings Department, which carried out inspection and found that various places on the external wall of Block 1 had been lightly damaged and were loose, but that there was no imminent danger, according to the letter issued by the manager to Bilok dated 20 August 2018.

18.  On 19 September 2018, the matter was referred to the Joint Office of the Building Department and Food and Environmental Department (the “Joint Office”). The Joint Office carried out colour water test limited to the drainage pipes (but not any other parts). The limited test did not reveal the source of the water seepage. On 29 October 2018, the Joint Office inspected the ceiling of the Kindergarten Structure again, and found that it was dry. Thus, as stated in its letter dated 14 November 2018 issued to Bilok, the Joint Office concluded that there was no longer any water seepage, and ceased any investigation.

19.  There is no evidence of any works to stop the water seepage since 2016, save and except for the injection work carried out on 12 September 2017 at the jamb of the entrance to the Kindergarten Structure mentioned in §15 above.

IV. PLAINTIFF’S CASE

20.  The crux of the plaintiff’s case about the water seepage is set out in §13 of its statement of claim:-

“(a) the ingress water seeped into the [Kindergarten Structure] was originated from the discharged water of the Pipe[s] and rainwater;

(b) The ingress water then escaped through the defective waterproofing membrane (“the Membrane”) of the Rooftop and seeped into the [Kindergarten Structure];

(c) the Rooftop and the Membrane were and are the common parts and/or common areas of [Fu Ning Garden]… that the Defendant had the duty to maintain the same in a state of good, serviceable, repair and clean condition;

(d) the Defendant had the duty to effect all necessary remedial and/or repair works to cease the Water Seepage Problem once the Defendant acknowledged the Water Seepage Problem.”

21.  Therefore, as usual in water seepage cases, the plaintiff claims against the defendant for damages based on nuisance, breach of common law duty, breach of the DMC and breach of the Building Management Ordinance (Cap 344). The plaintiff does not particularise any items of damage and loss, but no issue has been taken on this lack of particulars. The evidence then unfolds as to what the items of the damage are.

V. THE DEFENDANT’S DEFENCE AND COUNTERCLAIM

22.  The defendant does not dispute that there have been water seepage.

23.  The defendant puts forward a positive case on the source of the water seepage, at §18A of its amended defence:-

“(1) The causes of water seepage into the [Kindergarten Structure] are as follows:-

(a) Natural wear and tear of the Roof Top and skylight windows;

(b) Natural wear and tear of the external wall of the [Kindergarten Structure];

(c) Lack of maintenance of the canopy of the [Kindergarten Structure];

(d) Aging of the expansion joint between the roof floor of the [Kindergarten Structure] and the residential block floor;

(e) Indoor and outdoor temperature differences resulting in condensation at the ceiling of the [Kindergarten Structure];

(f) Defective sealant and grouting between the window openings and the windows frames;

(g) Defective sealant and grouting between air-conditioner and the air-conditioner opening at the wall;

(h) Aging of the finishing works at the [Kindergarten Structure];

(i) Defective flooring of the individual residential flats on top of the [Kindergarten Structure].

(2) Most of the causes of water seepage including but not limited to the lack of maintenance of the canopy, condensation problem, defective sealant and grouting and aging of the finishing works at the [Kindergarten Structure] are due to poor design, poor maintenance and/or poor installation works carried out by the owner of the [Kindergarten Structure] and/or contractors employed by the owner of the [Kindergarten Structure], including the poor interior finishings and poor installation works carried out by the Plaintiff and/or its employees an/or agents and/or contractors at the [Kindergarten Structure] .”

24.  In respect of the ownership of the Rooftop, the defendant claims that the Kindergarten Structure is an independent structure on its own, and that the Rooftop is part and parcel of the Kindergarten owned by the plaintiff and not a common part.

25.  As an aside, Mr Harrison Cheung, counsel for the defendant, argued at one point during the trial that not all the surface “immediately above” the Kindergarten Structure was the Rooftop but there was a boundary demarcating a small part of the surface as a common area. However, such argument is contrary to the pleaded defence in §19 of the amended defence and counterclaim, which does not dispute the definition of Rooftop in the statement of claim but instead simply avers that the Rooftop is owned by the plaintiff. Although §19(7) of the defence avers that the Expansion Joint is “situated on the boundary between the Rooftop and the common area on the 1^st Floor of Block 1”, this averment is not clear when the Rooftop is actually all the surface “immediately above” the Kindergarten Structure as agreed in §19. Further and in any event, there is no clear evidence before me as to where the boundary would lie – one of the defendant’s factual witnesses in his witness statement alleged that it was the Expansion Joint, while the other factual witness in his witness statement alleged that it was the fence erected on the Rooftop. As such, Mr Cheung subsequently fairly conceded that he was bound by the pleadings and thus if I were to determine the ownership of the Rooftop, it is the whole surface immediately above the Kindergarten Structure, with no carving out.

26.  In respect of the Membrane, the defendant’s stance is that because the Membrane covers only the Kindergarten Structure but not any other flats or units or other portions of Fu Ning Garden, the Membrane only serves the Kindergarten Structure and so is, likewise, part and parcel of the Kindergarten Structure and not a common part.

27.  The defendant raises a counterclaim that the Water Tank was an unauthorised building work erected or permitted to be erected by the plaintiff on the Rooftop in breach of the DMC, and should be removed.

28.  Further, the defendant counterclaims that if the Rooftop is a common area, the Water Tank was erected in trespass.

VI. PLAINTIFF’S REPLY TO THE DEFENCE

29.  In reply to the defendant’s defence in §18A of its amended defence and counterclaim that there were various sources of water seepage, the plaintiff’s reply is set out in §14A of its amended reply and defence to counterclaim:-

“(a) without admission of the causes of water seepage into [the Kindergarten Structure] as alleged… it is averred that by the Defendant’s own admission at least some of the causes are relating to the common part and/or common facility of [Fu Ning Garden], including but not limited to expansion joint, Rooftop and Membrane and the Plaintiff shall rely on the matters pleaded hereinbelow;

(b) the Plaintiff shall rely on its expert opinion in this regard.”

30.  From the plaintiff’s statement of claim and its amended reply and defence to counterclaim, the plaintiff’s case is that the water seepage came through the Rooftop and the Membrane into the Kindergarten Structure. The plaintiff’s reliance on §14A of its amended reply and defence to counterclaim to enlarge its claim in the statement of claim to include, for example, water seepage (if any) from the external walls of the Kindergarten Structure is misplaced, because first, the plaintiff has to make its claim in its statement of claim, and second and in any event, §14A of the amended reply and defence to counterclaim is just a non-admission, and at most specifically mentioned the Expansion Joint, the Rooftop (which includes the Expansion Joint) and the Membrane. Lastly, the reliance in §14A(b) on the expert opinion is too general and adds nothing.

VII. ISSUES

31.  Therefore, the agreed issues are:-

(1) Whether there was/is water seepage into the Kindergarten Structure.

(2) Whether the Rooftop immediately above the Kindergarten Structure was/is the origin and/or the source of the water seepage problem; Alternatively, what were/are the source(s) and/or causes of the water seepage, if any?

(3) Who are/is the respective owner of the (a) Membrane, (b) the Rooftop, (c) the Water Tank, (d) the Pipes and (e) the Skylights?

(4) Who, the plaintiff or the defendant, has the duty to maintain and repair the Membrane, the Rooftop, the Water Tank or the Pipes under the DMC or the Building Management Ordinance (the “BMO”)?

(5) If the defendant has the duty, whether the defendant has breached the duties and/or has been negligent?

(6) Whether and against whom an order shall be made against for rectification works to prevent the water seepage.

(7) Whether the plaintiff is entitled to the costs of repair works and damages against the defendant. If so, what is the quantum.

(8) Whether the defendant is entitled to damages against the plaintiff arising from the alleged failure on the part of the plaintiff in maintain the Membrane, the Pipes, the Water Tank and the Roof as alleged and counterclaimed by the defendant? If so, what is the quantum.

(9) Whether the plaintiff should be ordered to remove the Water Tank and the Pipes.

VIII. WHETHER THERE WAS/IS WATER SEEPAGE INTO THE KINDERGARTEN STRUCTURE

32.  There is no dispute that there has been water seepage. I also find that as the plaintiff pleads in its amended statement of claim that the water seepage started in early 2016. Although in cross-examining the defendant’s witnesses, Ms Margaret Chan, counsel for the plaintiff, suggested, with reference to a letter of 12 July 2013 issued by the manager to the kindergarten mentioning the latter’s complaint of water seepage on 10 July 2013, that the water seepage started back even in 2013, it is not the plaintiff’s pleaded case and thus one can only understand that the water seepage in the present proceedings started in early 2016.

33.  I note that in the plaintiff’s witness statements, in explaining why the plaintiff signed a memorandum agreeing with Bilok for a reduction of rent on 1 August 2016, the witnesses referred to the water seepage starting in “late 2016 and early 2017”. However, there is no challenge to the authenticity of the memorandum. Considering this together with the pleading and that there had been water seepage complaint back in 2013, I find that the water seepage started in early 2016.

IX. SOURCES OF WATER SEEPAGE

34.  To address the water seepage issues, expert evidence was adduced. The plaintiff’s expert Mr Kung Sui Lun, Andrew (the “plaintiff’s liability expert”) and the defendant’s expert Mr Chiu Chi Pun, Edmund (the “defendant’s liability expert”) prepared a joint expert report on liability dated 8 May 2020 (the “2020 Joint Liability Report”) upon their joint inspection of the Kindergarten Structure on 27 February 2020 (the “2020 Inspection”). Unfortunately, this inspection was a visual inspection only; the experts carried out no tests at all.

35.  In the 2020 Joint Liability Report, the experts agreed on the locations of water seepage. For easy reading, I set out in Annex B to this judgment the locations numbered 1 – 26 used in the joint report [C3/756-762]. Other than the locations, in this report, the liability experts basically disagreed with each other on everything. Upon their mere visual inspections, each liability expert somehow was able to form an expert opinion on the source of the water seepage.

(1) The plaintiff’s liability expert opines that the damage in the Kindergarten Structure was caused by water seepage from both the external wall and the Rooftop, and the condition of the Rooftop was poor and the waterproofing layer should have failed. The plaintiff’s liability expert saw some minor water seepage at the window frame of a few classrooms and he emphasised his belief that the water seepage was minor in nature.

(2) The defendant’s liability expert opines at §3.3.4 that the sources of water seepage were:-

“(a) Natural wear and tear of roof floor and skylight at the [Kindergarten Structure]

(b) Natural wear and tear of the external wall

(c) Lack of maintenance… for the canopy at the entrance of the [Kindergarten Structure]

(d) Aging expansion joint between the roof floor of the [Kindergarten Structure] and the residential block floor

(e) Condensation at the ceiling due to the temperature difference between the interior area of the [Kindergarten Structure] and the roof

(f) Defective sealant and grouting between the window openings and the windows frames

(g) Defective sealant and grouting between air-conditioner and the air-conditioner opening at the wall

(h) Aging of the finishing works at the [Kindergarten Structure]

(i) water seepage at the defective flooring of the individual flat of residential block”

(3) The defendant’s liability expert also gives his opinion on the percentages of the damage to the various areas attributed by the above causes of water seepage he observed:-

“(i) Damaged roof of the [Kindergarten Structure], 3.3.4 (a) and (d): 30%

(ii) Damaged external wall of the [Kindergarten Structure], 3.3.4 (b): 18%

(ii) Damaged flooring at individual flat of residential block, 3.3.4 (i): 9%

(iv) Damages other areas of the [Kindergarten Structure] involving responsibility of Plaintiff, 3.3.4 (c), (e)-(h): 43%”

(4) The defendant’s liability expert said that “the causes of damage at 3.3.4(c), (e) – (h) are liabilities of the plaintiff himself since those defects are generated under the plaintiff’s exclusive areas and usage.”

36.  During the cross-examination, the plaintiff’s liability expert had to accept that his opinion in this report carried value not as much as an opinion formed upon proper testing rather than a mere visual inspection. Mr Cheung fairly accepts that the same applies to the defendant’s liability expert opinion in this report. That said, even in such primitive way to form an opinion, how the experts did so may shed light on their credibility. In this respect, during cross-examination, Ms Chan (for the plaintiff) took the defendant’s liability expert to review several floor plans, as a result of which he had to concede that for the water seepage he opined to have come from the units of Block 1 above, he was completely wrong because actually there was no unit above those areas of water seepage but only the Rooftop. Thus, the defendant’s liability expert also had to concede that the 9% apportionment to “damaged flooring at individual flat of residential block” as a source of water seepage should not be there, and that mathematically, all the percentage apportionments he had in his opinion were wrong. Also, he alleged that he was able to work out the percentage apportionments so precise to, for example, 9%, 18% and so on because he had actually measured or estimated the areas of the water seepage, although he did not have any such record of measurements or estimation. That said, the plaintiff’s liability expert suffers this latter problem, exposed when asked how he came up about the areas for the estimated costs of repair – he said, similarly, he measured the areas himself but the records were not produced. I bear these in mind in assessing the reliability of the liability experts’ opinion.

37.  After the May 2020 Liability Joint Report, the defendant’s liability expert attempted to conduct an inspection of the Kindergarten Structure on his own but the plaintiff denied him access. Without any inspection after the May 2020 Liability Joint Report, the defendant’s liability expert then prepared his own supplemental report dated 28 May 2021 to elaborate on certain points in the 2020 Liability Joint Report. After that, the plaintiff’s liability expert conducted his own inspection of the Kindergarten Structure and then prepared his own supplemental report dated 24 June 2021 to supplement his opinion expressed in the May 2020 Liability Joint Report.

38.  These separate reports precipitated another joint inspection and joint report, that is, they conducted another set of joint inspections in 2022 (the “2022 Inspection”), namely:-

(1) On 31 August 2022, they conducted a joint visual inspection.

(2) From 31 August to 3 September 2022, they conducted water ponding test on the Rooftop (with the Skylights and the Expansion Joint excluded) and then checked the results at the locations listed in Annex B to this judgment. Further, location numbered 27, being the external walls of the Kindergarten Structure, in Annex B was added.[2]

(3) From 31 August to 3 September 2022 and 17 September 2022, in the presence of the parties’ respective liability experts, Reachable Engineering Consultants Ltd (“REC”) engaged by the plaintiff and Modern Testing Consultants Ltd (“Modern Testing”) engaged by the defendant carried out infrared thermography and surface moisture content measurement of various parts of the external wall of the Kindergarten Structure.

(4) On 17 September 2022, they conducted a follow-up joint visual inspection for the water ponding test as carried out in §(2) above.

39.  The liability experts then prepared a second joint expert report on liability dated 29 December 2022 (the “2022 Joint Liability Report”).

40.  Before I turn to the contents of this joint report, I should mention that REC and Modern Testing used their own respective devices to conduct the tests, and then prepared separate reports on the test results, which are then relied upon by the respective experts and annexed to this joint report. I would have thought that the results of such tests should be objective enough and would not yield to any dispute. However, this is not the case here – there was even argument over whether REC or Modern Testing was better equipped and up to standard, and even whether some dots of colours shown in the thermographs actually meant anything. However, the makers of these test reports were not called to evidence. Nor are these reports verified by any statement of truth or any declaration of duty to Court.

41.  The report prepared by Modern Testing, for the defendant, is unsatisfactory and contains problems even according to the defendant’s liability expert.

(1) First, there was no annotated location plan with reference to photos (like those in the report prepared by REC) to show where the tests were carried out and the reading records of the tests. There were just descriptions of the location with reference to photos only. However, not all the photos were shown, and thus it is not clear whether the locations were really the described locations. For example, in the record sheet for the reception at [C4/1249], four points of moisture contents measurements were recorded, but the corresponding photos at [C4/1263] show one point only. Those points not shown were said to be no water seepage, but since Modern Testing was not subject to cross-examination and did not sign any statement of truth or declaration of duty to the Court, such way of presentation of the records is entirely unsatisfactory.

(2) Second, while showing the thermographic images (from the infrared test) before and after the water ponding test, in an attempt to show a comparison so that one can know whether there was more water moisture, REC simply did not show photos of the same location (for example, [C4/1167] and [C4/1168]). During cross-examination, when Ms Chan, for the plaintiff, pointed this out to him, the defendant’s liability expert had to concede that this was a mistake.

(3) Third, as the Modern Testing report is not verified by any statement of truth and a declaration of duty to the Court, but as the report was annexed to the joint report and relied upon by the defendant’s liability expert, I would have thought that the defendant’s liability expert would be able to explain Modern Testing report and testing rationale. However, for example, in respect of the thermographic images at [C4/1191] and [C4/1192], Ms Chan, for the plaintiff, asked him to explain why certain blue dots (representing low temperature) were not included in the red frame interposed onto the image to represent water seepage, the defendant’s liability expert’s answer was that he had no expertise in interpreting such images but had to rely on Modern Testing.

42.  The above are a few examples of the problems in the Modern Testing report listed out in Ms Chan’s written closing submissions. I do not need to list out all of these here. Suffice to say that I have considered them all. I note that the REC report does not suffer any such problems at all.

43.  Mr Chueng (for the defendant), for the first time, in cross-examination of the plaintiff’s liability expert, suggested that REC was not a laboratory up to a standard prescribed or managed under the Hong Kong Laboratory Accreditation Scheme (known as HOKLAS) but Modern Testing was. However, when Ms Chan (for the plaintiff) asked the defendant’s liability expert whether he would agree that that if Modern Testing’s report was prepared in accordance with HOKLAS, there would be a chop or a stamp stating the same, the defendant’s liability expert did not answer this question direct, but then mentioned that Modern Testing was up to some other standard called Class 2 which he said was an American standard completely unrelated to HOKLAS. So, I do not pay any regard to whether REC or Modern Testing was or was not up to HOKLAS or Class 2.

44.  Having considered both the REC report and the Modern Testing report, I should disregard the Modern Testing report. As such, I have the results of the various tests added to Annex B to this judgment.

45.  How the defendant’s liability expert treated the Modern Testing report is also unsatisfactory. For example, for the problems set out in §41(1) and (2) above, the defendant’s liability expert said in the cross-examination that he had known such problems well before the trial, but for no good reason, he failed to rectify such problems at all and left the report dented with all such problems to be presented before the Court. This simply shows that the defendant’s liability expert is not up to standard as an expert for the Court, failing his duty in paragraph 9 of the Code of conduct for expert witnesses in Appendix D to the Rules of District Court, that “[if] an expert witness who prepares a report believes that it may be incomplete or inaccurate without some qualification, that qualification must be stated in the report.” The plaintiff’s liability expert suffers no such problem.

46.  Now, back to the 2022 Joint Liability Report. In this 2022 Report, the plaintiff’s liability expert opines that:-

“3.9 … Based on the test result in [the defendant’s liability expert’s] report, water seepage has caused damage to the external wall as evidenced by blue colour dye coming out mostly from the top of the external wall and cold temperature zone recorded by infrared images…

3.10 Although only a few rooms was found with water seepage problem at the internal surface of external wall after the water test, as the possible sources are (i) roof; (ii) external wall and (iii) window, the damage at the external wall with cracks will definitely allow rain water to seep into the kindergarten and rain water can also enter the window and seep into the kindergarten…”

47.  The defendant’s liability expert opines that:-

“4.5 By the above figures and para. 4.3 identified seeped areas, except Main entrance, Skylight and External wall, the identified areas are located near and/or adjoining to the roof expansion joint of the kindergarten.

4.6 All rooms including ceiling and wall surfaces have not identified water seepage occurrence. Although the seeped water at the external wall was observed after water ponding at the roof, no sign of seepage penetrated to the inner wall surfaces and seeped water retained at the external wall surface only.”

48.  After that, on 3 October 2024, the plaintiff’s liability expert conducted an inspection of his own, where Mr Li Siu Peng (of Bilok) showed the plaintiff’s liability expert the locations where he had taken some photos and video footages of water seepage in early September 2023 after a strong typhoon and a heavy rainstorm. The plaintiff’s liability expert then prepared a short supplemental expert report, expressing his belief, upon that unilateral inspection but without carrying out any tests, that the water leakage was “from the expansion joint, the roof structure, the skylight and the external walls/windows. But [he] cannot distinguish the exact source by photo as [he] [believes] some water leakage [he] saw were from more than one source”. This supplemental report on mere visual inspection is not of much value to me, save and except showing that the plaintiff’s liability expert’s tendency to rely on his belief without proper testing and thus undermining his credibility.

49.  On the other hand, in his supplemental expert report dated 15 October 2024, the defendant’s liability expert expressed his view, upon reviewing the photos and the video footages, that his opinion remains unchanged.

50.  Taking all the above together with the defendant’s liability expert’s error in his percentage apportionments mentioned in §36 above (which is, to me, a blatant error not expected of a reasonable expert), where the reliability of the experts would become an issue (all other things being equal), I would prefer the plaintiff’s liability expert opinion. That said, for the reason set out in §48 above, I should also be sceptical of the plaintiff’s liability expert opinion to the extent inconsistent with any objective test results.

51.  In my view, the water ponding test carried out on the Rooftop is such an objective test, and is highly probative. This test is the direct test to see whether the Rooftop and the Membrane were the cause of the water seepage. Of course, the result of the water ponding test would still have to be considered with the results of the other tests, as both liability experts agree in their oral evidence that one has to consider the results of all the tests to come to the view on whether the water used in the water ponding test did cause the water seepage. There was, however, dispute over whether the Skylights and the Expansion Joint should be made subject matter as part of the tests, and as a result of this dispute, the Skylights and the Expansion Joint were covered and excluded from the water ponding. In my view, given that the Rooftop is defined to be “immediately above [the Kindergarten Structure]” and both the Skylights and the Expansion Joint lie within the area of the Rooftop (but not even at the edge of the Rooftop), both the Skylights and the Expansion Joint should be regarded as part of the Rooftop and should have been made the subject matter for the test. If there was any material dispute over the scope of the test to be carried out by the expert, the parties should apply for expert directions, rather than simply allowing the experts to carry out the test one way or the other, risking missing any relevant parts for the testing. As the tests were carried out in such way in the present case, I only have evidence before me about whether the water seepage was caused by water seeping through the Rooftop excluding the Expansion Joint and the Skylights. Since the burden of proof lies upon the plaintiff, without any test done on the Expansion Joint and the Skylights, and absent any good basis for me to draw inference, I find that the plaintiff has failed to discharge its burden of proof in respect of the Expansion Joint ant the Skylights as the source of the water seepage.

52.  However, for the rest of the Rooftop, it is clear from the test results that water seepage occurred after the water ponding test at locations 1, 2, 3, 5, 6, 8, 9, 11, 12, 13, 14, 15, 17, 18, 19 and 27 in Annex B, consistent with the plaintiff’s liability expert opinion. Therefore, I find that water did escape into the Rooftop (excluding the Expansion Joint and the Skylights) and the Membrane (sandwiched between the Rooftop and the ceiling of the Kindergarten Structure) into those locations.

53.  I note that for some of the locations, the plaintiff’s liability expert opines that the external wall was also a source of the water seepage. In my view, his reason in this respect is suspect – that the cracks seen on the surface of the external walls allow water to seep in. First, it is not the plaintiff’s pleaded case that the external walls were also a source of water seepage. Second, mere cracks seen on the surface of the external walls would not necessarily allow water to seep through the concrete into the interior. Third, in this connection, no tests such as microwave scan (though not conclusive) were carried out to re-construct the flow of the water to show that the water did seep through the external walls. In the circumstances, I do not make any findings on whether the external walls also contributed to the water seepage.

54.  I should also say that for location 26, although the test results are negative and the plaintiff’s liability expert also agrees that there was no water seepage after the tests, he opines that the water seepage in the subject claim must have come from the Rooftop. However, he did not explain why there would be no positive result of any of the tests carried out. As such, I do not accept his opinion in respect of location 26.

X. OWNERSHIP OF THE ROOFTOP

55.  Since the water seepage came through the Rooftop, the ownership of the Rooftop is material in determining who has the liability.

56.  To ascertain the ownership of the Rooftop, one starts with the DMC. It is not necessarily that when the DMC does not expressly assign a certain part, that part is a common part: see Donora Co Ltd v Tsuen Kam Center (IO) (2024) 27 HKCFAR 166 at §§39 and 51. Rather, the Court’s task is objectively to ascertain the parties’ intention from the DMC, by construing it contextually and purposively, together with the 1990 Assignment: see Donora, supra at §39, against the factual matrix known to both parties and bearing in mind that a contractual construction exercise is not a word with game: see Jumbo King Ltd v Faithful Properties Ltd (1999) 2 HKCFAR 279 at 296D-I, but “a unitary exercise involving an iterative process”: see 黎偉雄 v 信和物業管理有限公司 [2020] HKCA 448 at §26 per Lam VP (as he then was).

A. Relevant provisions of DMC

57.  The recital of the DMC provides that:-

“(3) [The developer] has constructed on the Land… six residential blocks of multi-storeyed buildings being “Block 1”, “Block 2”, “Block 3”, “Block 4”, “Block 5” and “Block 6” respectively, one refuse collection point, one liquefied petroleum gas compound [defined as the “LPG Compound” in the DMC], one estate management office, one owners’ committee office, one kindergarten and one commercial centre…”

58.  Clause 1(a) of the DMC defines the following terms as below:-

(1) “the Commercial Centre”:-

“the building complex in the Estate erected or to be erected on the Land comprising, inter alia, Commercial Units on the Ground Floor and Car Parking Spaces on the 1st Floor, the 2nd Floor and Roof thereof, the Estate Management Office…”

(2) “the Commercial Common Area”:-

“those parts of the Commercial Centre intended for the common use and benefit of the Owners of the Commercial Units and shall include… flat roofs on the 1st Floor… Provided Always that in case of any portion or space (including, but not limited to, any passage or corridors) in the Commercial Centre which is intended for the use in common by the Owner of some of the Commercial Units… and… in the case of all such Commercial Units being owned by the same Owner, then while and for so long as such Commercial Units shall be so owned, such portion or space shall subject to the prior written approval of the Manager be excluded as part of the Commercial Common Areas and the persons for the time being owning such Commercial Units shall have the exclusive use of such portion or space… and in the event that the aforesaid Commercial Units shall not be owned by the same Owner, such Owner and any new Owners thereof shall be responsible for returning such portion or space to its original state and condition at his own expenses” (emphases added)

(3) “the Common Areas”:-

“the Estate Common Areas, the Residential Common Areas, the Commercial Common Areas and the Parking Common Areas and other areas in the Estate intended for common use and enjoyment of all Owners of the Estate” (emphasis added)

(4) “the Common Facilities”:-

“shall… mean and include… (c) any other facilities, fixtures, fittings, plant, machinery, apparatus and installations from time to time installed for the common use and benefit of the Estate or any part thereof and not for the use and benefit of any particular Unit” (emphasis added)

(5) “Estate”:-

“the whole of the development on the Land known at the date hereof as “FU NING GARDEN…” including but not limited to the Residential Blocks, the Commercial Centre, the Kindergarten, the LPG Compound and all other structures and erections erected or to be erected on the Land and all equipment apparatus fixtures fittings facilities and services installed in, under, on or over the Land for the use and benefit of the said development or any part or parts thereof”

(6) “the Estate Common Areas”:-

“those parts of the Estate intended for the common use and benefit of all the Owners, Occupiers, their bona fide guests and visitors including but not limited to the landscaped areas, spaces for planter, vehicular access road… and the entrance and exit thereto, pavements lanes and pedestrian ways…” (emphasis added)

(7) “the Parking Common Areas”:-

“all those spaces in the Commercial Centre intended for the common use and benefit of the Owners of the Car Parking Spaces including but not limited to… the 2^nd Floor and Roof of the Commercial Centre and the flat roofs, upper roofs thereof except the flat roofs on the 1^st Floor and except the space for the flushing water tank on the Roof” (emphasis added)

(8) “Kindergarten” (that is, the Kindergarten in this case):-

“the kindergarten constructed or to be constructed on the Land in accordance with the Building Plan (together with the Open Play Area for the Kindergarten designated in the Building Plans as such) and includes all equipment apparatus fixtures facilities and services thereof and therein…”

(9) “Kindergarten Owner”:-

“the Owner for the time being of the Kindergarten…”

(10) “the LPG Compound”:-

“the part in the Estate where liquefied petroleum gas equipment serving the Estate is installed including but not limited to… flat roof…” (emphasis added)

(11) “the Residential Common Areas”:-

“those spaces intended for the common use and benefit of Owners of the Residential Units including but not limited to… the roofs and flat roofs of the Residential Blocks… and any other parts of the Residential Blocks not for the exclusive use and benefit of any one particular Owner of a Residential Unit” (emphasis added)

(12) “Unit”:-

“a Residential Unit, Commercial Unit, Car Parking Space, the LPG Compound or the Kindergarten as the case may be, being a portion or portions of the Estate intended for the exclusive use occupation and enjoyment by the Owner thereof and to which Undivided Share(s) is or are allocated in the manner set out in the First Schedule hereto.”

59.  Further, the Kindergarten “shall be used as a kindergarten only” by virtue of Clause 21(o) of the DMC.

60.  Clause 21 of the DMC, under the heading “Special Provisions Applicable to the Estate and Specific Parts Thereof”, provides that:-

“(k) Roofs, open yards, lifts, public lighting, transformer rooms, pump rooms, pumps, apparatus equipment and services and other Common Facilities

Subject to the rights of the LPG Company where applicable all the above shall be under the exclusive control of the Manager and no Owner shall have the right to enter into, alter, repair, connect to or in any other way interfere with or affect the working of the same without the previous written consent of the Manager.

(m) Roofs Flat Roofs and External Walls

The Owners and Occupiers of any Unit or their bona fide guests visitors and licensee shall have the right to use the roofs and flat roofs of the Estate only for escape in the event of fire or emergency but subject thereto or other provisions of this Deed no Owner shall have the right to use the same and subject to Clause 22(a) no Owner or Occupier shall erect or place or cause or permit to be erected or placed any advertising sign or any structure on the roofs and external walls of the Estate or any part thereof and the Manager shall have the right to remove and destroy anything erected or placed on the roofs and the external walls of the Estate or any part thereof…” (emphases added)

B. No shares assigned specifically to Rooftop

61.  From the above, the DMC does not assign any share with specific reference to the Rooftop, but assigns shares to the Kindergarten. This, however, does not take me either way. The question remains what “the Kindergarten” in the DMC was intended to be. I cannot simply rely on section 2 of the BMO to say that because there is no such assignment of share, the Rooftop is a common part. As mentioned above, the correct approach is to discern the common intention of the relevant parties by reading the DMC and the Assignment together in the contractual construction, bearing in mind the context and purpose: see Donora, supra at §39.

C. Common area of distinct category

62.  The definition of “the Commercial Common Area” (quoted in §58(2) above) of the Commercial Centre sheds some light because like how it treats Commercial Centre, the DMC should accord the same or similar treatment to the Kindergarten (composed of the Kindergarten Structure and the Kindergarten Open Area) in a category of its own, distinct from the residential blocks, the LPG Compound, the committee office and the Commercial Centre: see recital (3) of the DMC quoted in §57 above and Clause 1(a) defining “Unit” quoted in §58(12) above.

(1) As is clear from the definition of “the Commercial Common Area” quoted in §58(2) above, when all the commercial units in the Commercial Centre are owned by one single owner, there would no longer be any Commercial Common Area because all the otherwise co-owned common areas are now owned by the same owner. Although that single owner would have to apply for written approval from the manager, one would understand the rationale – because subsequently, those units may be sold to different owners and thus the Commercial Common Area would appear again. Therefore, the manager would have to ensure that before the Commercial Common Area could be used by the same single owner as its private area, the manager would take some photos or steps to know what the states of such common areas are, so that when sold to different purchasers, such common areas could be restored to “its original state and condition”.

(2) Ms Chan (for the plaintiff) submits that the Kindergarten Structure is different in that it is joined to, or part of, Block 1. Thus, how the Commercial Common Area of the Commercial Centre is defined has no relevance here to the Kindergarten. However, in my view, like the Commercial Centre, the DMC specifically treats the Kindergarten in its own distinct category, rather than treating it as a unit on the ground floor of Block 1. So, at least viewed from the DMC, how the Commercial Common Area is defined provides a context which I should consider in the contractual construction exercise.

(3) As a footnote, the 2^nd floor of the Commercial Centre (the top floor of the Commercial Centre) and the Roof thereof are not included in the definition of the Commercial Common Area, but in that of the Parking Common Areas.

63.  Therefore, in respect of the Kindergarten, which can only be owned by one single owner from the perspective of the DMC, it may well be argued, also from the perspective of the DMC, that following the same logic, the Rooftop is part and parcel of the Kindergarten. What is different is that the single owner of the Kindergarten would not need to apply for the manager’s approval to exclusive use and occupy the Rooftop because the rationale for such approval simply does not exist for the Kindergarten.

64.  Similarly, “the LPG Compound” is defined to include its “flat roof”. Like the Kindergarten, the LPG Compound can only be owned by one single owner. That the definition includes “flat roof” may, however, point either way. One way to look at this is that therefore, the Kindergarten, like the LPG Compound, also includes the Rooftop. The opposite way to look at this is that if the Rooftop is intended to be included, then a similar definition would be adopted for the Kindergarten expressly mentioning “flat roof”.

65.  But, overall, in my view, how the DMC treats the common areas of the other distinct categories points towards that the Rooftop is owned by the owner of the Kindergarten.

D. Common theme of common areas – “common use and benefit”

66.  In the DMC, there is a common theme in the definitions of the common areas or facilities (that is, “the Commercial Common Area”, “the Common Facilities”, “the Estate Common Areas”, “the Parking Common Areas” and “the Residential Common Areas”). The common theme is “for the common use and benefit” or “common use and enjoyment” of all the owners of the relevant complex that can be owned by more than one owner or Fu Ning Garden as the estate as a whole. Therefore, it is very likely that the parties would have intended certain part to be a common part when that part is “for the common use and benefit” of all the owners of the relevant complex or Fu Ning Garden. As a matter of common sense and a practicality check, it is very unlikely that the parties would be willing to take up the responsibility for the maintenance and repair and any other costs and expenses related to such part when such part cannot be for any “common use and benefit” or “common use and enjoyment”.

67.  In this regard, Mr Cheung (for the defendant) submits that the Rooftop is not for the common use, benefit and enjoyment of any other owners of Fu Ning Garden than for the owner of the Kindergarten alone. He stressed that below the Rooftop is the area of the Kindergarten Structure only. There is no other owners thereunder at all.

68.  On the other hand, Ms Chan (for the plaintiff) submits that by virtue of Clause 21(m) of the DMC or otherwise, the Rooftop could be used as a fire escape as common use and benefit of the co-owners. However, in my view, reservation to a party to use certain part for specific, limited purposes does not give the party an exclusive right of possession or use, occupation or enjoyment of that part: see Tsuen Kam Center (IO), supra at §26. Put another way, a mere permission for all the co-owners to use certain parts only conditionally does not mean that those parts were for common use, benefit and enjoyment sufficient to make it a common part: see Incorporated Owners of Greenwood Terrace v U-Teck Ltd, unreported, LDBM 11/2011, 29 May 2012 at §47. Thus, the fact that a part that can be used for such limited purpose for the common use, benefit and enjoyment is in my view insufficient to make it a common part. Relatedly, as Mr Cheung (for the defendant) points out, when an owner of a residential unit would like to commence interior structural alteration work, he also has to obtain consent from the manager, but this does not make the residential unit a common part.

69.  Ms Chan (for the plaintiff) also submits that common facilities could be installed on the Rooftop for the common use, benefit and enjoyment. That may be true, but this statement is too broad insofar as relied upon to say that once some common facilities could be installed on a part, that part is a common part. Even a private part of a residential unit could have some facilities installed (for example, CCTVs installed in a private area facing outwards) for such common use, benefit and enjoyment. I think such a broad statement may be more helpful to Ms Chan’s case if such facilities could practically be installed only in that area (for example, a water tank may have to be installed on the top of a building for the supply for water to the whole building due to water pressure), and in such circumstances, it would be more arguable that the parties would intend such area to be a common part. However, there is no evidence that the Rooftop, covering the Kindergarten Structure, is such area.

70.  Based the defendant’s evidence, which I accept, the defendant has erected fences on the Rooftop towards Block 1 to make it difficult for burglars to break into the units on the first floor and the other lower floors of Block 1 using the Rooftop as the springboard. However, it is the existence of the Rooftop that gives rise to such a state of affairs. It is not that the Rooftop is for the common use, benefit and enjoyment, or that the Rooftop is built for the erection of the fences, because, if there were no Rooftop in the first place, there would not be any need for the fences at all. Thus viewed, it is the fences erected on the Rooftop that are for the common use, benefit and enjoyment. As mentioned above, installation of an object on a private property for the common use, benefit and benefit does not necessarily convert the private property into a common area.

71.  As a matter of fact, the unchallenged evidence before me suggests, and so I find, that the Water Tank installed on the Rooftop was used at least for a certain period of time for supplying flushing water in the toilets in the Kindergarten Structure. This is the only use of the Rooftop that has actually happened (in addition to the fencing off of a small area as mentioned above for the security of the residential units on first floor of Block 1). Beside the installation of the Water Tank and the fencing off, the Rooftop (including the Expansion Joint) itself is a structure that shelters nothing else but the Kindergarten Structure, and as well it holds the Skylights, which serves exclusively the Kindergarten Structure.

72.  Lastly, in her closing submissions, Ms Chan (for the plaintiff) submitted that some photos in the evidence show that there were some pipes running on the Rooftop and this shows that the Rooftop has been used for the common use, benefit and enjoyment. I cannot accept her submission because there is no evidence on what these pipes were and what they were for.

73.  In my view, the overall picture about the use of the Rooftop is that it is not so much for such “common use and benefit” or “common use and enjoyment” of any other owners that fall within the common theme in the DMC defining “common areas”, “common facilities” or the like, as for the exclusive use, benefit and enjoyment of the owner of the Kindergarten. Put to the highest for the plaintiff, the “common use and benefit” of the Rooftop, if any, is limited to the fencing off.

E. Clause 21(k) of DMC

74.  Clause 21(k) of the DMC (quoted in §60 above) states in general that roofs are under the exclusive control of the manager and no owner shall have the right to enter into the roofs, provides an exception only to the LPG Company in respect of the LPG Compound. If the Rooftop is within the exclusive control of the owner of the Kindergarten, Clause 21(k) would have provided a similar exception for the Kindergarten and its owner. One may further argue that these parts mentioned in Clause 21(k) are contractually regarded as “for the common use and enjoyment” of the co-owners.

75.  I agree that this provision in itself may be taken in favour of the plaintiff’s position that the Rooftop is a common part rather than part of the Kindergarten owned by the plaintiff. However, one may counter-argue that because the parties of the DMC have already intended the Rooftop to be part of the Kindergarten, they did not find any need to make any similar exception because the owner of the Kindergarten would always be able to enter into the Rooftop. Indeed, I must bear in mind that the DMC treats the Kindergarten (composed of the Kindergarten Structure and the Kindergarten Open Area) in a category of its own, distinct from the residential blocks, the LPG Compound, the committee office and the commercial centre: see recital (3) of the DMC quoted in §57 above and Clause 1(a) defining “Unit” quoted in §58(12) above. So, in ascertaining the intention under the DMC, I should be cautious in applying any such general provision to the Kindergarten.

76.  Overall, in my view, Clause 21(k) does not take the plaintiff or the defendant too far in advancing their respective positions.

F. Building Plan in DMC and 1990 Assignment and the physical features of Kindergarten

77.  In addition to the textual provisions, the Building Plan (to which “Kindergarten” is defined in the DMC with reference, being Annex A1 to this judgment) is an important part of the DMC. It is convenient here also to consider the physical features, which are also relevant to the contractual construction exercise as well: see Jackson v Bishop (1979) 48 P&CR 57 at p 62.

78.  The area shaded in pink (the area being assigned) covers the Rooftop. Mr Cheung (for the defendant) submits that because the area shaded in pink covers the Skylights, which the owner of the Kindergarten have exclusively used, this follows that the shading is not for area only, but also the features on the Rooftop and the Rooftop itself. However, in my view, the Building Plan labeled as a floor plan in the DMC and the Assignment, is indeed intended as a floor plan only, but not a three-dimensional plan or an elevation plan. The Building Plan only identifies the area being assigned, but does not identify three-dimensionally or vertically which space or structure was being assigned. Also, if Mr Cheung were right in saying that the Rooftop was intended to be covered by the pink colour, then the canopy, being part of the Rooftop[3], should also be shaded in pink, but this is not the case. So, I reject Mr Cheung’s such submissions.

79.  Ms Chan (for the plaintiff) relies on the building plan titled “Block 1 Typical Floor Plan”. In that building plan, part of the Rooftop is shown, with the description “FLAT ROOF AT 1/F ONLY”, and since “the Residential Common Areas” defined in the DMC (quoted in §58(11) above) includes “flat roof”, then (Ms Chan submits) the Rooftop is a common area. Ms Chan’s such submissions would carry force if there is only one flat roof shown in the plan, but as a matter of fact, there are at least two more “FLAT ROOF AT 1/F ONLY” in the plan. Thus, it is not a situation where there is only one flat roof of Block 1 and thus the “flat roof” in the definition must refer to the Rooftop. More importantly, both parties agree that the Rooftop includes the whole open surface immediately above the Kindergarten Structure. Their common ground is that the whole Rooftop is owned either by the plaintiff or by the defendant, and there is no halfway house where part of it is owned by the plaintiff and part of it is owned by the defendant. If Ms Chan is right, then the floor plan of the Block 1 would mean that only part of the Rooftop is owned by Block 1. I of course have not overlooked Ms Chan’s argument that the rest is an extension of this part or it is just that the rest of the Rooftop is not included in this plan. The answer to his question depends on whether or not this part of the Rooftop is included in the plan for the sake of showing the positions certain parts of the first floor of Block 1 relative to the Rooftop (and thus it is not necessary to show all the Rooftop in the plan), in particular bearing in mind that it is described as the flat roof “AT 1/F” rather than “of 1/F”. This in turn takes one back to the question what exactly the Kindergarten is. So, I do not think that this plan of the first floor of Block 1 adds much.

80.  Further, thus viewed, while I accept that there is validity in Ms Chan (for the plaintiff)’s submission that “flat roof” included in the definition of the Residential Common Areas in the DMC could refer to the Rooftop, which is joined or adjoined to Block 1, this submission does not take the plaintiff too far, but has still to be considered with other matters in the iterative process involved in the unitary contractual construction exercise I am now taking.

81.  Nevertheless, the Building Plan (of the Kindergarten) is probative in some other aspect, namely, the ownership of the external walls of the Kindergarten Structure and its relationship with the ownership of the Rooftop. From the Building Plan, the large majority of the walls of the Kindergarten Structure are external walls that can only be accessed in the Kindergarten Open Area, while the remaining minority can only be accessed in the common area in the area of Block 1, or some are simply the partition walls shared with the residential units on the ground floor of Block 1. In my view, at least for that large majority of the walls of the Kindergarten Structure, it is inherently improbable that Sebasto and the plaintiff would have intended them to be common part, because while the manager may have the power to access any common part even within a private property: see section 40 of the BMO, this would be very unusual for a developer to reserve, and for the purchaser to agree to, a common part that would lie so interior inside a private property, unless that common part has no other place to put in but within the private property. On the contrary, it is inherently more probable that in such context and also taking into account that the Kindergarten Structure is intended for the user of kindergarten only and the Kindergarten Structure can only be used by its owner (or persons authorised by the owner like a tenant), at least the majority of the walls are also assigned as part of the Kindergarten to the owner of the Kindergarten. In fact, this is also the stance taken by Ms Chan (for the plaintiff) that this large majority part of the walls are part of the Kindergarten owned by the plaintiff. Therefore, I find that for this majority part, they are walls owned by the plaintiff as the owner of the Kindergarten.

82.  Ms Chan’s position until closing submissions was that for the remaining minority of the walls, they are common parts. I have no difficulty in this position to the limited extent regarding the partition walls shared with the residential units on the ground floor of Block 1. However, I have difficulty in this position to the extent regarding the external walls lying within the area of Block 1. It would be absurd that the parties would only intend that a majority of external walls of a distinct structure are owned by the owner of that structure, while the remaining minority of the external walls of the same distinct structure (though joined to Block 1) are property owned by others, especially when the minority of the external walls (if they were private property) are accessible by the owner from the common area, by virtue of §4(d) of the Third Schedule to the DMC or by virtue of the fact that the owner of the Kindergarten is entitled to enter common parts as an owner of Fu Ning Garden. Such absurd demarcation would also lead to practical difficulty in managing, maintaining and repairing as well as consistent use of the external walls of the Kindergarten Structure.

83.  During the oral closing submissions, Ms Chan (for the plaintiff) changed her position, and submitted for the first time that only those external walls paved with mosaic tiles as the external walls of Block 1 are common parts. This means that even some of the external walls within the area of Block 1 would be owned by the plaintiff, contrary to Ms Chan previous position mentioned just above. Ms Chan’s latest position, though, means that even a larger part of the external walls are owned by the plaintiff as the owner of the Kindergarten. Considering my reasons in §82 above, I accept Ms Chan’s latest position, and find that at least those external walls are also owned by the plaintiff. For convenience, the external walls of the Kindergarten Structure which I find are owned by the plaintiff is marked green in Annex A2 to this judgment. One can see that almost all the external walls connected to the Rooftop are owned by the plaintiff, on the plaintiff’s own latest position.

84.  As shall be seen below, the ownership of such overwhelming majority of the external walls is sufficient for the present purposes. So, I do not need to make a determination on the ownership of the remaining part of the external walls which according to Ms Chan’s latest position are common parts.

85.  The ownership of such overwhelming majority of the external walls of the Kindergarten Structure is relevant (though not conclusive) to the issue of the ownership of the Rooftop because the Rooftop and the external walls (except those in the area of Block 1) are joined together, and thus, it is inherently more probable that the treatment to such overwhelming majority of the external walls would be the same as that to the Rooftop in terms of ownership. In particular, the top surface of the external wall structure forms curbs on the Rooftop, and the plaintiff’s liability expert accepts that the curbs are part of the Rooftop. In my view, his qualification to his answer that by external walls he refers to the façade of the walls only was just too artificial to be accepted. From this, the plaintiff’s liability expert also answered positively to the question whether the waterproofing system of the Rooftop and the external walls are integral to each other, and this waterproofing system is for the Kindergarten Structure only. This is not like the waterproofing system on the external wall of Block 1 above the ground floor connected to the Rooftop, which would arguably be for both Block 1 and the Rooftop and thus there can be no dispute that the external wall of Block 1 above ground floor is a common part.

86.  Overall, the above points towards that the owner of the Kindergarten owns the Rooftop.

G. Skylights

87.  There cannot be any dispute that Skylights serve exclusively the Kindergarten Structure. Mr Cheung (for the defendant) submits that this means that the owner of the Kindergarten also owns the Skylights. Mr Chan’s position (for the plaintiff) is that they are common parts, but even so, the Skylights are just like windows of residential units on the external walls – the external walls remain common parts while the owner of the residential units is entitled to use and responsible for the windows and their window frames. I also note that by §4(d) of the Third Schedule to the DMC, the owner of the Kindergarten, upon reasonable written notice to the manager, is entitled to enter common parts for maintenance and repair of the Kindergarten.

88.  I do not think that the use and ownership of the Skylights sheds much light on the issue of the ownership of the Rooftop, because physically, the Skylights are themselves part of the Rooftop. I think that absent any special reasons, the same treatment in respect of ownership should be accorded. In fact, in the plaintiff’s statement of claim, which defines the Rooftop as mentioned above, no exclusion has ever been made for the Skylights.

H. Conduct subsequent

89.  Conduct subsequent can be used as an aid to construction of a contract “where a conveyance is unclear or ambiguous with respect to the land conveyed by it”: see Chitty on Contracts (35^th ed) Vol 1 §16-061. The conduct in question must be the conduct of the original parties to the contract in question, because it is they who drafted and entered into the contract. Any parties-in-successors cannot change the meaning and intention of the contract – they simply take up all the rights and obligations. I should also caution myself, in the words of Ms Chan (for the plaintiff) in her closing submissions (citing Chow Wai Ping and another v Chan Yam King [2013] 2 HKLRD 280 at §9), that “the fact that a developer had purported subsequently to assign the disputed area, which had been designated as a common area by a DMC, to a purchaser can make no difference, for the developer could not thereby convey something which he did not own”.

90.  First, back in 1992, Sebasto undertook repair works to the Expansion Joint damaged as a result of the misuse of the Rooftop. However, in my view, back in 1992, when Fu Ning Garden was just sold, it would be usual for the developer to be willing to fix up problems found in the units. In any event, Sebasto made it clear in the letter dated 19 March 1992 (quoted in §9 above) that the repair was out of goodwill and they reiterated that it was not their responsibility. Thus, Sebasto undertaking repair works to the Expansion Joint is not conclusive and is at most a factor for my consideration only.

91.  Second, the letter of 14 May 1993 issued by Kingsland Kindergarten (mentioned in §11 above) may be relied upon as conduct subsequent to show that the plaintiff regarded the Rooftop as its property because Kingsland Kindergarten made it clear that the fencing on the Rooftop was part of its property and they would like to replace it with brick-layed fence as they wished. Nevertheless, I note that the letter was concerned with the fence on the Rooftop only, and more pertinently, in fact, Kingsland Kindergarten was seeking the manager’s opinion on their “proposal” to replace the fence, which seems to suggest that they were in fact seeking consent to access the Rooftop to carry out the proposed replacement. No evidence has been adduced before me as to what happened subsequent to this letter, for example, whether the manager confirmed that the fencing was Kingsland Kindergarten’s property, or whether the manager replied like, “The Rooftop is your property”; “You could do whatever you like on your own property”; “There is no need to seek our opinion on what you propose to do on your own property”. In my view, the weight of this letter is not significant in advancing the defendant’s case.

92.  Third, as mentioned in §10 above, a signboard on the Rooftop was erected back in 1992 warning to the effect that this is the kindergarten’s private property and no objects are allowed to be left thereon. It is likely, and so I find, that Kingsland Kindergarten, the kindergarten back then, which was operated by a director of the plaintiff, erected it. This is indicative of the plaintiff’s understanding back then. In any event, even if the signboard was erected by Sebasto, this would also reflect the same parties’ understanding.

93.  Fourth, from the unchallenged evidence, all along, Sebasto, the manager and the defendant has had the key for access to the ladder to the Rooftop.[4] Further, the defendant also posted a warning notice on the said gate stating “未經許可嚴禁攀爬一經發現報警處理”, installed a CCTV on the Rooftop and installed fences to fence off the area of the Rooftop near Block 1. None of these are acts permitted by the DMC for the defendant or the manager to carry out, and the defendant did all these without the plaintiff’s consent. Save that it was Sebasto who kept the key (a conduct subsequent in favour that the Rooftop is a common part), the other acts were done by the defendant and the manager who are not the original parties to the DMC and the 1990 Assignment.

94.  Fifth, as regards whether the plaintiff was given a key for access to the ladder to the Rooftop, the plaintiff’s answer is in the negative, but the defendant’s answer is in the affirmative. Both sides’ evidence is say-so evidence only, without any documents in support. That said, I would have thought that there should be some written acknowledgment of receipt of the key if it were given to the plaintiff, but no such document is produced. On balance, I find that the plaintiff was not given the key. This is conduct subsequent in favour of the plaintiff’s position that the Rooftop is a common part.

95.  Lastly, the manager undertook cleaning services of the Rooftop from time to time. However, the manager is not the original contractual party, and thus what the manager, or even the defendant, has done is not relevant.

96.  In short, while most of the conduct subsequent does not aid significantly or at all my contractual construction exercise, the erection of the signboard on the Rooftop mentioned in §10 above points towards that the Rooftop is part of the Kindergarten Structure owned by the owner of the Kindergarten, while the defendant and the manager keeping the key but plaintiff not given the key to the ladder points towards that the Rooftop is a common part. Overall, the conduct subsequent points either way, or neither way.

I. Structural dependence or independence of Kindergarten Structure

97.  Both experts also give their opinion on whether the Kindergarten Structure is a building structure independent from the adjacent residential Block 1. The plaintiff’s liability expert has the following to say in the 2022 Joint Liability Report:-

“From the photo… taken at the main entrance of the kindergarten, the red line I put on the photo separates the domestic units… and the kindergarten… The structure and the wall are actually seamless and thus the kindergarten is definitely not an independent structure.

I have also elaborated my opinion in my supplemental report signed on 24 June 2021 (page 7 & 8) and I still hold the same opinion expressed in this report.”

98.  His supplemental report signed on 24 June 2021 refers to the general building plan and the structural plan of ground floor (labelled as D1 and D3 respectively) and the general building plan and the structural plan of the first floor (labelled as D2 and D4 respectively), and expresses his opinion as follows:-

“From the 4 enlarged plans D1A, D2A, D3A & D4A, it is clear that portion of the Kindergarten (under the blue line on plan showing the expansion joint) was directly under the domestic units of Block 1. The structural walls as shown in DWG D3A & D4A under the expansion joint on the plans are identical which means the connected structural walls of 1/F domestic units (together with any loadings from the floors above) are supported by structural walls of the Kindergarten on G/F and the loadings are then transferred to the foundation.

In the [May 2020 Joint Liability Report], [the defendant’s liability expert] opined that there are other sources of water seepage that the Defendant is not liable and in paragraph 3.3.4, [the defendant’s liability expert] mentioned that ‘water seepage of the defective flooring of the individual flat of residential block’. This opinion tells that part of the Kindergarten is actually directly below individual flat of the residential block (Block 1) and is not an independent building structure.”

99.  The defendant’s liability expert has the following to say:-

“Structural Independence of Kindergarten and Residential Block

Referring to the framing plan and foundation plan of residential block of tower 1 at Fu Ning Garden and the kindergarten, there two independent structure systems were designed and constructed for them separately…

The high-rise residential block at tower 1 of Fu Ning Garden was designed to be supported by bored pipes, while the kindergarten was simply sit on the raft foundation. The load bearing walls and beams were separately arranged to support these two buildings solely. Hence, it is apparent that the kindergarten and the residential block were designed as two separate structures without any structural connections and they are entirely two separate buildings.

Kindergarten Extended From Residential Block

Referring to the Approved Building Plan, part of the kindergarten area at G/F was arranged below the 1/F of residential block of tower 1 at Fu Ning Garden whereas 1/F at the residential block has not been intruded by the Kindergarten. Besides, two buildings structure were designed and constructed separately. Hence, in my opinion, Kindergarten cannot be considered as the extension from the residential block of tower 1 at Fu Ning Garden.”

100.  Fundamentally, as mentioned in §56 above, only facts that were commonly known to both contractual parties is relevant for the contractual construction. The reason is simple: the court is to ascertain the parties’ intention objectively in the circumstances. If one party knows a fact but the other party does not, objectively speaking, the latter party’s intention would not be affected by that fact at all.

101.  Here, while it is reasonably arguable (though not pleaded) that Sebasto, being the developer, had knowledge of the structural dependence or independence of the Kindergarten Structure, there is no plea or evidence at all even from the plaintiff itself that the plaintiff, at the time of the acquisition of the Kindergarten, had any such knowledge. Therefore, I do not find the structural dependence or independence of the Kindergarten Structure to be relevant at all to my contractual construction exercise.

102.  For the sake of completeness, the plaintiff’s liability expert opinion is that the Kindergarten Structure and Block 1 are interlinked, because there is no dispute that the structural walls of the part of the Kindergarten Structure lying within the area of Block 1 are also the structural walls supporting the residential floors of Block 1 above. The defendant’s liability expert opinion is looking at the part of the Kindergarten Structure lying outside Block 1 only, and based on the structure of the part lying outside Block 1 only, he formed an opinion that the Kindergarten Structure is structurally independent of Block 1. In my view, there is no good reason for the defendant’s liability expert to ignore the structural walls of the part of the Kindergarten Structure lying within the area of Block 1. I therefore prefer the plaintiff’s liability expert opinion, and find that the Kindergarten Structure is dependent on or interlinked with Block 1.

J. Rooftop being an extension of Block 1

103.  Ms Chan (for the plaintiff) submits that the Rooftop is an extension of Block 1, but this submission, in my view, does not take the plaintiff any further. No doubt, the Rooftop is connected to the external wall of Block 1. However, I do not see why connection itself can be regarded as a material factor. In a co-owned building, many parts of a private property are connected to common parts. It does not follow that those parts would be regarded as an extension of the common parts, if “extension” here means that it would be a common part. One has to consider the matter contextually, like what I have done in relation to the connection between the external walls in the Kindergarten Structure and the Rooftop in Section F above.

K. Conclusion on ownership of Rooftop

104.  Having considered the above iteratively (Sections C, D and F pointing towards the plaintiff’s ownership of the Rooftop while Sections B, E, G, H, I and J being neutral), I find that the DMC and the 1990 Assignment were intended to include the Rooftop of part the Kindergarten but not to designate the Rooftop as a common part. In other words, the plaintiff owns the Rooftop.

105.  For the avoidance of doubt, the Expansion Joint and the Skylights, lying well within the area of the Rooftop and being part of the Rooftop, are also owned by the plaintiff.

XI. OWNERSHIP OF MEMBRANE

106.  The Membrane is sandwiched between the Rooftop and the ceiling of the Kindergarten Structure. When both the Rooftop and the ceiling of the Kindergarten Structure are owned by the plaintiff, and when, as Ms Chan accepts, the Membrane serves exclusively the Kindergarten, it is overwhelmingly probable that the parties intended any structure or materials between the Rooftop and the Kindergarten, including the Membrane, are also owned by the plaintiff.

107.  So, I find that the plaintiff also owns the Membrane.

XII. OWNERSHIP OF WATER TANK AND PIPES

108.  According to Mrs Wong Li Pak Yee (or Ms Li Pak Yee) (“Mrs Wong”), a director of the plaintiff, also a director of Kingsland Kindergarten and a consultant of Bilok, Sebasto installed a water tank after she complained to Sebasto that the pressure of the flushing water in the toilets of was weak, Sebasto installed a water tank on the Rooftop. She has no idea whether that water tank is the Water Tank in the present proceedings. Mrs Wong denies that that water tank or the Water Tank was owned by the plaintiff. Her such evidence was given only for the first time in her oral evidence. Such evidence should have been set out in her written statement or her supplemental witness statement, given that the ownership of the Water Tank is clearly in issue. So, I do not pay much regard to her such oral evidence.

109.  Mrs Wong was also asked about the subsequent works to the water tanks. The long and short of her answer is that any works were done by the manager or the defendant and she had no idea why they were done or when they were done.

110.  The evidence of Mr Li Siu Pang, the development manager of Kingsland Kindergarten and also the son-in-law of Mrs Wong, is in gist that whatever works were done to the Water Tank, it was the manager or the defendant who did the works, and that he had to ask for the permission of the manager or the defendant for the access to the Rooftop and the Water Tank.

111.  He admits that though he does not remember the time, he once asked the manager to repair the Water Tank, and the manager, for that purpose, had to turn off the water supply to the Water Tank. As a result, there was no flushing water in the toilets of the Kindergarten Structure. Therefore, I find that the Water Tank supplies water to the Kindergarten Structure. There is no evidence suggesting any other use of the Water Tank. So, I further find that the Water Tank exclusively serves the Kindergarten Structure.

112.  Mr Chan Kwok Ki, a factual witness for the defendant, is a former member of the owners’ committee from 1993 to 1999, and the former chairman of the Management Committee of the defendant, from 1999 to 2020. His evidence is that:-

(1) In the initial period, the kindergarten installed a water tank for toilets in the Plaintiff’s Premises.

(2) Prior to 2012, there had already been a water tank on the Rooftop for the air conditioners in the Plaintiff’s Premises. That water tank was removed in 2012.

(3) The Pipes connected the Water Tank and a potable water supply from the Government, without connecting to any pipes or openings in Fu Ning Garden.

113.  His evidence, however, is without any documentary evidence at all.

114.  Lastly, during the trial, I asked Ms Chan (counsel for the plaintiff) if she had any case on whether it was the kindergarten operating in the Kindergarten that built the Water Tank. Although the plaintiff had witnesses from Bilok (namely, Mrs Wong’s son-in-law and Mrs Wong’s daughter who was also involved in the operation of Bilok) and Mrs Wong herself (being also a director of Kingsland Kindergarten), it is strange (to put mildly) that Ms Chan told me that the plaintiff did not have any case on that.

115.  In any event, from the above evidence, the common fact is that the Water Tank (or the water tank in the past) serves the Kindergarten exclusively. Irrespective of whoever (Sebasto or the defendant or the kindergarten operating in the Kindergarten) built it, the Water Tank was for the exclusive use of the Kindergarten Structure. Taking into account the fact that the Water Tank was installed on the Rooftop owned by the plaintiff, the likelihood is, and so I find, that the Water Tank was owned by the plaintiff for the benefit of its tenant. For the avoidance of doubt, even if the Water Tank was built by some others, it was built to be owned by the plaintiff. I, however, do not need to make any finding on who built the Water Tank.

116.  If I were wrong on this ownership issue, at least, the plaintiff has permitted the Water Tank to remain on its Rooftop for the benefit of its tenant.

117.  The same should apply to the Pipes. So, I find that the Pipes are also owned or at least permitted to be put on its Rooftop by the plaintiff.

XIII. WHO, THE PLAINTIFF OR THE DEFENDANT, HAS THE DUTY TO MAINTAIN AND REPAIR THE MEMBRANE, THE ROOFTOP, THE WATER TANK OR THE PIPES UNDER THE DMC OR THE BMO?

118.  Since it was the plaintiff who owned the Rooftop, the Membrane, the Water Tank and the Pipes, it is the plaintiff who has the duty to main and repair the same.

XIV. IF THE DEFENDANT HAS THE DUTY, WHETHER THE DEFENDANT HAS BREACHED THE DUTIES AND/OR HAS BEEN NEGLIGENT?

119.  For the sake of completeness, assuming that the defendant had the duty, I would find that the defendant became aware of the water seepage shortly after early 2016 because (1) the kindergarten and the plaintiff had a history of making complaints about water seepage whenever it took place (like in 1992 and 2013 as mentioned above); (2) the plaintiff had been holding (rightly or wrongly) the manager responsible for the water seepage; and (3) the water seepage could affect the operation of the kindergarten and thus it would be natural that Bilok or the plaintiff made complaint to the manager and the defendant shortly after the water seepage started in early 2016. This is so despite the lack of documentary evidence in support of any early 2016 complaint. I accept that the complaints were made orally.

120.  On this finding, I would also find the defendant has failed its duty.

XV. WHETHER AND AGAINST WHOM AN ORDER SHALL BE MADE AGAINST FOR RECTIFICATION WORKS TO PREVENT THE WATER SEEPAGE

121.  Upon my above findings, no order for rectification works shall be made.

XVI. COSTS OF REPAIR OF THOSE PARTS DAMAGED BY WATER SEEPAGE FROM ROOFTOP

122.  For those parts I have found above to have been damaged by water seepage through the Rooftop and the Membrane, the two liability experts’ opinions on what repair works should be carried out are in substance the same, namely, removal of the damaged parts and replacement with new ones.

123.  However, only the plaintiff’s liability expert sets out in detail the breakdowns for the estimated costs of the remedial works for each location identified for the damage, while the defendant’s liability expert in essence gives a lump sum for the remedial work in respect of all the locations. When being cross-examined on the workers’ wages, the plaintiff’s liability expert explained that he did not, like the defendant’s liability expert, adopt the statistics from the government on the rates of the workers and the works because the statistics are for large scale works like whole buildings or even whole developments. I accept his explanation – it is simply common sense that a “bulk buy” would usually result in lower rates.

124.  The plaintiff’s liability expert also accepts that he should give a 5% discount to his estimate because in breaking down the items, sometimes, the rate for one day work (一工) or half day work (半工) would be sufficient to cover some other item of work when all the items of work would be carried out in one go.

125.  I would also consider the unreliability of the defendant’s liability expert relative to that of the plaintiff’s liability expert as I have found above.

126.  Mr Cheung submits that the costs for repair of the external walls should be excluded because the plaintiff does not plead to any loss to the external walls. True that the plaintiff does not, but it is also true that the plaintiff simply does not particularise any loss in its pleadings and the defendant did not ask for any particulars, allowing the action to proceed to trial as it has. In my view, the damage to the external walls is within the plaintiff’s general claim for loss and damages suffered as a result of the water seepage. Therefore, I would reject Mr Cheung’s submissions.

127.  All in all, I would accept that the plaintiff’s liability expert’s estimates to be reasonable, totaling HK$474,688.35 as set out in Annex C to this judgment. Applying a 5% discount as agreed by the plaintiff’s liability expert, I would find the costs for repair to be HK$450,953.93.

XVII. GENERAL DAMAGES FOR INCONVENIENCE

128.  Given my findings above, the plaintiff is not entitled to general damages for discomfort, inconvenience and disturbance. Again, for the sake of completeness, I shall briefly discuss this issue.

129.  The plaintiff is not the occupant of the Kindergarten. That said, the plaintiff, as landlord, is still entitled to general damages if the nuisance did cause discomfort, inconvenience and disturbance, for example, the plaintiff was inconvenienced and disturbed by having to arrange for repair and/or complaints made to it about the water seepage. But as the plaintiff is not the occupant, any discomfort, inconvenience and disturbance caused to it should usually not be as bad as to the occupant.

130.  The evidence of discomfort, inconvenience and discomfort to the plaintiff is scarce. From the evidence, the only inconvenience to the plaintiff was that it had received complaints from the kindergarten and contacted the manager with respect to the complaints. However, it seems that Mrs Wong, on behalf of the plaintiff, does not know much detail herself (see my analysis of her evidence in §108 above). In other words, her involvement was not substantial. In the circumstances, having considered Yeung Yik Chun v Wong Lai Ming [2023] HKDC 1160 (the only case Ms Chan for the plaintiff cited to me) and the summary of the other cases in §166 of that case, the plaintiff’s involvement and the length of the water seepage since early 2016, I would find that the general damages here should be HK$18,000.

XVIII. REDUCTION OF RENT

131.  Again, for the sake of completeness, I should also make a finding on the reduction of rent caused by the water seepage.

132.  As mentioned at the outset, each party has its own valuation expert on the valuation of the market rent of the Plaintiff’s Premises. The plaintiff’s valuer, Ms Choi Kin Kwan (the “plaintiff’s valuation expert”) and the defendant’s valuer, Mr Kwan Ki Hong (the “defendant’s valuation expert”) prepared a joint statement of valuation dated 19 May 2020 (the “joint valuation report”) to express their respective opinions on the quantum of the market rent of the Kindergarten. They were not called to give oral evidence.

133.  The date of valuation adopted is 1 August 2016, the date from which the rent was reduced from HK$150,000 per month to HK$100,000 under the tenancy agreement between the plaintiff and Bilok due to the water seepage. In summary:-

	Plaintiff’s valuation (per month)	Defendant’s valuation (per month)
Unit rate	HK$296/m2	HK$245/m2
Market rent	HK$250,000	HK$210,000
Rent reduction	HK$72,800	HK$46,200
Reduced rent	HK$177,200	HK$163,800

134.  Both the plaintiff’s valuation expert and the defendant’s valuation expert consider what effect, if any, the water seepage has had on the operation of a kindergarten. Inevitably, valuation involves various assumptions which may not be true, as well as professional judgment which is a range rather than an exact point. The actual reduction of monthly rent, being HK$50,000, is within the range limits by the respective experts. There is no suggestion that the reduction of the rent is a sham or exaggeration engineered to enlarge compensation. Thus, I would find that the actual rent reduction is the loss the plaintiff would suffer as a result of the water seepage.

XIX. WHETHER THE PLAINTIFF IS LIABLE TO REMOVE THE WATER TANK AND THE PIPES

135.  Both parties agree (rightly in my view) that the Water Tank is an unauthorised building work, and that that by virtue of Clauses 21(a)(2), 21(a)(3) and 21(m) of the DMC, the Water Tank and the Pipes connected to it should be removed.

136.  Upon my finding above that it is the plaintiff who owns the Water Tank and the Pipes, the plaintiff has breached the provisions of the DMC, and is liable to remove the Water Tank.

XX. CONCLUSION

137.  In the circumstances, I make the following order:-

(1) The plaintiff’s action shall be dismissed.

(2) On the defendant’s counterclaim, the plaintiff do remove or caused to be removed the Water Tank and the Pipes forthwith.

138.  I make a costs order nisi that the plaintiff shall pay costs of the action and the defendant’s counterclaim (including all costs reserved) to the defendant, to be taxed if not agreed, with certificate for counsel.

Annex A1

Annex A2

Annex B

(Note: “wall” below is either external wall, or interior wall or both)

Location number	Description	Water ponding test (+/-)	Infrared thermography showing water seepage  (+/-)	Surface Moisture (significant increase) (Y/ N)
1	Canopy at main entrance	+	+	N
2	Ceiling behind reception area / Ceiling and Wall of Front of reception and Outside Room 1	-	+	Y
3	Wall above reception counter / reception	+	+	N
4	Wall and window at Teachers’ Room	-	-	N
5	Wall and ceiling under skylight	+	-	Y
6	Ceiling around skylight at Library	-	+	Y
7	Ceiling outside Library	-	-	N
8	Wall and ceiling of Class Room 1	-	+	N
9	Wall and ceiling of Class Room 2	-	+	Y
10	Wall and ceiling of Class Room 3	-	-	N
11	Wall and ceiling of Class Room 4	-	+	N
12	Wall and ceiling of Class Room 5	+	+	N
13	Wall and ceiling of Class Room 6	+	+	N
14	Wall and ceiling of Class Room 7	-	+	N
15	Wall and ceiling of Class Room 8	+	+	N
16	Boys’ lavatory / Girls’ lavatory / Boys’ lavatory	-	-	N
17	Wall and ceiling near rear exit	+	+	N
18	Ceiling at corridor outside Kitchen (near expansion joint) / Corridor outside storeroom	+	+	N
19	Ceiling at corridor outside Principal room (near expansion joint) / Corridor outside storeroom	+	+	N
20	Store at corridor next to Switch room (vertical through crack) / Storeroom	-	-	N
21	Wall and ceiling at Switch room / Meter room	-	-	N
22	Wall and ceiling at Principal room	-	-	N
23	Wall at Male/Female toilet	-	-	N
24	Wall and ceiling at Pantry	-	-	N
25	Wall and ceiling at Kitchen	-	-	N
26	Storeroom near rear exit	-	-	N
Locations added in the 2022 Inspection
27	External walls especially at the edge of the Rooftop	+	+	N

Annex C

Location number	Description	Costs of repair (HK$)
	Preliminary such as insurance and protections to structures	88,825.00
1	Canopy at main entrance	7,315.00
2	Ceiling behind reception area / Ceiling and Wall of Front of reception and Outside Room 1	5,956.50
3	Wall above reception counter / reception	5,956.50
5	Wall and ceiling under skylight	407.55
6	Ceiling around skylight at Library	2,027.30
8	Wall and ceiling of Class Room 1	24,244.00
9	Wall and ceiling of Class Room 2	11,808.50
11	Wall and ceiling of Class Room 4	27,379.00
12	Wall and ceiling of Class Room 5	27,379.00
13	Wall and ceiling of Class Room 6	13,689.50
14	Wall and ceiling of Class Room 7	10,241.00
15	Wall and ceiling of Class Room 8	13,689.50
17	Wall and ceiling near rear exit	23,617.00
18	Ceiling at corridor outside Kitchen (near expansion joint) / Corridor outside storeroom	22,676.50
19	Ceiling at corridor outside Principal room (near expansion joint) / Corridor outside storeroom	22,676.50
27	External walls especially at the edge of the Rooftop	166,800.00
	Total:	474,688.35