LUI SHEUNG KWAN v. CHUI KING SUM AND OTHERS

[English Translation – 英譯本]
HCSA11/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO. 11 OF 2009

(ON APPEAL FROM SCTC NO. 8942 OF 2008)

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JUDGMENT

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Background

1. The claimant and the defendants are respectively the owners of flat E on the 3^rd floor (referred to as “flat 3E” for short) and flat E on the 4^th floor (referred to as “flat 4E” for short) of Hoi Sing Mansion, Taikoo Shing.  Between the end of 2006 and early 2007, water seepage occurred on the ceiling of the bathroom of flat 3E.  At that time the defendants accepted that the source of the seepage was flat 4E.  On 15 February 2007 the two parties came to a settlement and signed an agreement to evidence the settlement.  The defendants paid $2,800 to the claimant as compensation for the cost of repair.  However, not long after the repair was done, seepage reappeared on the ceiling of the bathroom of flat 3E.  It was clear that the repair only brought about a temporary solution but could not solve the problem.  The source of the seepage was still not fixed.  In February 2008, the claimant filed a claim with the Small Claims Tribunal, claiming for $18,500 against the defendants.

2. Before the claimant filed his claim, in March 2007 the defendants engaged a renovation work contractor to find out the source of the seepage.  The contractor removed part of the tiles on the floor in the bathroom of flat 4E to investigate, but did not find the source of the seepage.

3. From 3 to 8 July 2007, the defendants left flat 4E and turned off the fresh water supply, but there was still water seepage on the ceiling of the bathroom of flat 3E.

4. Between August 2007 and January 2008, officers of the Food and Environmental Hygiene Department (referred to as the “FEHD” for short) carried out 6 tests in flat 4E, but the source of the water seepage was still not found (referred to as the “FEHD report” for short).

5. Meanwhile, the claimant filed another claim with the Small claims Tribunal to claim against the Taikoo Shing (Management) Limited（太古城物業管理有限公司）(referred to as the “Management Co.” for short).  Subsequently, the claimant unilaterally discontinued that claim.  However, the Management Co. prepared an investigation report in response to the claimant’s claim (referred to as the “Taikoo Shing report” for short).  There were a number of findings made in the Taikoo Shing report and I paid particular attention to the following:

(1)     On 17 July 2007, the Management Co. detected high moisture content in the floor slab of the bathroom and in the skirting of the partition wall between the bathroom and the sitting room of flat 4E;

(2)     On 31 December 2007, the Management Co. noticed that there was leakage from a water pipe on the external wall of flat 4E; but on 7 January 2008 (4 January 2008 in the Reasons for Decision), after fresh water supply to flat 4E was turned off, water leakage on the external wall of flat 4E and seepage on the ceiling of the bathroom of flat 3E stopped;

(3)     On 10 January 2008, after fresh water supply to flat 4E was turned off, water leakage on the external wall of flat 4E and seepage on the ceiling of the bathroom of flat 3E stopped (the Reasons for Decision did not mention that water seepage on the ceiling of the bathroom of flat 3E stopped); and

(4)     On 30 May 2008, the Management Co. confirmed that there were no cracks on the external wall of flat 3E, including areas around the window of the bathroom.

6. Before the trial, the claimant engaged the Proficient Surveyors & Co.（專業評量公証行）to investigate into the matter. On 23 August 2008, Mr. Wong of the surveyors company carried out on-the-spot investigation in flat 3E. He detected that the moisture content in the ceiling of the bathroom was 100%. Water droplets appeared and moved along the wall down to the floor. He tested the droplets with test paper and ascertained that they were fresh water. He concluded that the water seepage was caused by leakage of water from the fresh water pipes on the floor above.

7. On the same day, Mr. Wong went to flat 4E and asked for permission to go inside for an inspection, but was refused. On 1 September 2008, the Proficient Surveyors & Co., in compliance with the defendants’ request, sent a letter to the defendants to ask for permission to enter flat 4E to inspect, but was ignored by the defendants.

8. On 2 February 2009, the claim was heard before Deputy Adjudicator Josephine Chow (as she then was).

Decision made by the Deputy Adjudicator

9. The Deputy Adjudicator correctly pointed out that the issues on which she needed to rule were:

(1)     Whether flat 4E was the source of the water which seeped into the ceiling of the bathroom of flat 3E, and whether the defendants neglected to maintain the water pipes in flat 4E in good condition;

(2)     Whether the conduct of the defendants constitute nuisance in relation to the claimant; and

(3)     Whether damages may be awarded to the claimant.

10. The Deputy Adjudicator accepted Mr. Wong’s evidence. She found that the seepage on the ceiling of the claimant’s bathroom had been going on for a long period of time, sometimes there was improvement, sometimes it worsened, sometimes there was a lot of seepage, sometimes less, but the seepage was not continuous, and that seepage still occurred in March and August 2008.

11. She also accepted the evidence contained in the Taikoo Shing report, namely there was a high moisture content in the floor slab and the wall of the bathroom of flat 4E, but she did not rule out the possibility that it was caused by water leakage which had its source elsewhere.

12. However, the Deputy Adjudicator did not rely on Mr. Wong’s evidence. She accepted the conclusion reached in the FEHD report. She considered that the defendants’ evidence had refuted Mr. Wong’s analysis and opinions. The Deputy Adjudicator had this to say from paragraphs 24 to 29 of the Reasons for Decision:

“24.     The evidence of the expert witness Mr. Wong is that from his analysis he concluded that the source was in flat 4E. The analysis which Mr. Wong made was mainly an objective analysis of flat 3E. He reached the conclusion that the waterproofing of the floor slab of flat 4E was damaged, which led to seepage at the areas where the water was supposed to drain away. The defendant should dig into the floor slab, repair the pipes that leaked, and then protect them with waterproof cement; only in this way could the problem be solved. What Mr. Wong said sounded convincing and reasonable. I understand that flat 4E is right on top of flat 3E, and its layout is the same as that of flat 3E, so it naturally attracts suspicion. However, Mr. Wong did not go to flat 4E for further investigation. His judgment was only based on observation made from the outside. If the defendants, after they were aware of the water seepage problem in flat 3E, had paid no attention to it and had neglected it, then Mr. Wong’s analysis would have been established. But I consider the defendants’ evidence similarly on the basis of a balance of probabilities. I am of the view that I cannot totally rely on Mr. Wong’s analysis.

25. The defendants’ evidence can serve to rebut Mr. Wong’s opinions.  Miss Yu did not just sit there and did nothing.  She did not turn a blind eye to this matter.  Between 29 August 2007 and 3 January 2008 she had cooperated with the FEHD on 6 occasions, so that various kinds of tests could be carried out; but in the end the source of the water seepage was still not found.  Although Miss Yu did not call the FEHD officers to give evidence, I believe that a government department would remain neutral in this dispute.  The tests they carried out covered fresh water supply, salt water supply and the drainage pipes.  If Mr. Wong’s analysis is correct, they would surely have found it out.  Apart from that, Miss Yu’s evidence is also consistent with the chronological record in the Taikoo Shing report.  She and her family did leave flat 4E for one week, starting from 3 July 2007 and the mains were turned off, but it turned out that there was still water seepage in Flat 3E.  It had only lessened a bit.

26. I have also noticed the following events, which are the most baffling.  On 4 and 8 January 2008, on two occasions the water supply to Miss Yu’s flat was turned off for 1 whole day and the water seepage in Flat 3E ceased.  Based on this finding, Miss Yu had major renovation works carried out in March 2008.  The taps in the bathroom of flat 4E were replaced and the pipes were examined.  However, on 7 April 2008 the claimant complained to the management office again that seepage reappeared.

27. Miss Yu produced a report prepared by her expert.  The infra-red test did not detect any leakage.  It showed that there was no significant temperature variation and that there was no anomaly.  It can be seen that the seepage problem was not directly pinpointed.  The evidence does not go in one single direction to the conclusion that flat 4E was the source of the seepage.  Miss Yu did not call the expert witness to give evidence and the report was challenged by Mr. Wong.  In addition, the report only referred to the fact that there was no temperature variation.  It is true that it cannot assist the court in any significant way.  I will not give much weight to it.

28. There is no direct evidence showing that flat 4E was the source of the water seepage, except the fact that in early 2008, after water supply to flat 4E was suspended for one whole day, water seepage in flat 3E ceased.  In this case, the seepage problem had been going on for a long period of time; sometimes there was improvement, sometimes it worsened, I think that the outcome of just one event cannot be conclusive.  The FEHD had carried out a series of test.  The report of such tests is convincing.  Tests had been carried out in various areas in the bathroom, but they could not ascertain whether flat 4E was the source of the water seepage.

29. After considering the above matters, I find that the defendants had not neglected to maintain their water pipes in a good condition.  Their conduct was such that they had done their best and made every effort to cooperate in trying to find out the source of the seepage.  They did not cause any nuisance.”

Grounds of Appeal

13. The claimant’s ground of appeal is that the Deputy Adjudicator erred in law in that she accepted the conclusion made in the FEHD report without hearing evidence from the FEHD officers on how they carried out their tests.  The claimant also challenged the credibility of the FEHD report, which, by its nature, should be hearsay evidence.

14. Ms. Yu, the wife of the 3^rd defendant, was granted leave by me to appear in the appeal hearing for the defendants.  Her main arguments are: (1) The Small Claims Tribunal does not need to comply with the rules of evidence; (2) The error committed by the Deputy Adjudicator does not affect her finding that the defendants had not neglected to maintain the water pipes in good condition; and (3) The claimant has no evidence to prove whether any water pipe in flat 4E burst.

15. The dispute between the two parties centred round the question whether the Deputy Adjudicator had committed any error of law in her reception of the hearsay evidence.  If she did, the original claim should be remitted to the Deputy Adjudicator for her to continue to hear the claim, to hear evidence from the FEHD officers on how they carried out the tests and then make findings anew, based on all the evidence.  If the Deputy Adjudicator did not commit any error of law, then this Court has no jurisdiction to intervene, because the finding she made in this claim is a finding of fact.

Legal principles about reception of hearsay evidence

16. Under section 23 of the Small Claims Tribunal Ordinance, the usual rules of evidence shall not apply to proceedings in the Small Claims Tribunal.  The Deputy Adjudicator could receive hearsay evidence by virtue of section 23.  Whether to receive hearsay evidence or not is for the trial judge to decide as an exercise of his discretion, but the discretion cannot be exercised arbitrarily or unreasonably.  When a judge exercises his discretion, he must comply with legal principles, consider appropriate factors and not consider irrelevant matters.  If the exercise of the discretion is in compliance with legal principles, then even if the view taken by the appellate court is different from the decision reached by the trial judge as a result of the exercise of his discretion, the appellate court will not interfere with the decision made by the trial judge.

17. The Court’s reception of hearsay evidence must be fair and just.  In order to be so, when the Court is considering the reception of hearsay evidence, it must take into account 4 factors: (1) the reasons put forward by the party requesting the Court to receive the hearsay evidence as to why the witness concerned is not called; (2) the credibility of the hearsay evidence; (3) the relevance and importance of the hearsay evidence; and (4) whether there is any disproportionality between the expenses involved in providing the hearsay evidence and the claim amount.

18. Generally speaking, only when a witness gives evidence in Court will the Court consider his evidence.  This requirement is not a matter of tradition or a reflection of the Court’s obstinacy, but is based on the principle that the Court must be fair and just.  The reason is very simple.  The person accused should have the opportunity to see and hear his accuser giving evidence, so that he can test, through cross-examination, the credibility of the witness who accuses him.  By this process, the Court can observe the demeanour of the witness and ask him questions, so as to assess the credibility of his evidence.  This process is indispensable in a fair trial.  The Court should not waive this important process lightly or casually, therefore the Court should not receive the hearsay evidence in question unless the party requesting the Court to do so can provide a reasonable explanation as to why he does not call the witness, for example, the witness has passed away, is absent from Hong Kong, or has disappeared.

19. When the Court is deciding whether to receive hearsay evidence, it should consider the credibility of the evidence.  If the evidence is not credible, the Court should never receive it.  Before a judge receives hearsay evidence, he must consider all the circumstances under which the hearsay evidence is provided in order to ascertain whether the evidence is credible, for example: whether the witness who reports the hearsay evidence is credible, whether the eyewitness who witnessed the event is credible, all the circumstances in which the eyewitness carried out his observation, whether the eyewitness has a statutory duty to carry out the observation, make the investigation report or record in question, and whether there is any independent supporting evidence in the case which can support the credibility of the hearsay evidence.  Depending on the facts of a particular case, the Court may need to consider other factors.  Not all these factors are applicable to this claim.

20. If the hearsay evidence intended to be produced is credible, the Court must also consider its relevance and importance.  The more relevant and more important the hearsay evidence is, the more cautious the Court needs to be when it considers whether it should exercise its discretion to receive this evidence, because once the Court receives the evidence, the accused party has no opportunity to test its credibility through cross-examination, and that may be unfair to the accused party.  For this reason, if the hearsay evidence in question is the most crucial or decisive evidence in the case, the Court should not receive it.

21. To substitute hearsay evidence for the evidence given by an eyewitness may save some costs, but generally speaking, this is not a factor which the Court should take into account when considering whether it should exercise its discretion.  Even if in one particular case, there are special circumstances which make it necessary for the Court to consider the costs involved, the weight given to this factor would not be significant.  However, as far as the procedure of the Small Claims Tribunal is concerned, the jurisdiction of the Tribunal is only up to $50,000, therefore if the expenses for calling the eyewitness are out of proportion to the amount of the claim, the party required to call such evidence may be forced to give up his claim or his defence, resulting in unfair treatment to that party.  Under such circumstances, the Adjudicator can adopt a more flexible and more relaxed approach when considering whether he should exercise his discretion to receive the hearsay evidence.

22. I must emphasize that the above-mentioned principles are not absolute rules. For example, the Court should not refuse to receive hearsay evidence solely because such evidence is the most crucial and decisive evidence in the case. Nor should it receive such evidence solely because such evidence appears to be perfectly credible.  This is because under some circumstances, to receive hearsay evidence will be unfair to the accused party; while under another set of circumstances, to refuse to receive hearsay evidence will be unfair to the party who wishes to produce such evidence.  All in all, in exercising this discretion, the Court should take into account all the circumstances in a balanced way and make a decision which is fair and just.

Reasons for not calling the FEHD officers

23. In her Reasons for Decision the Deputy Adjudicator did not explain the defendants’ reasons for not calling the FEHD officers.  During the appeal hearing, Ms. Yu said that she had requested the FEHD to release the officers so that they could come to Court to give evidence but she was refused by the FEHD.  The reply given by the FEHD was that she just needed to show the Court the FEHD report.  I do not doubt Ms. Yu’s explanation.  The reply which she described is completely in line with the bureaucratic attitude, i.e. being self-conceited and less than frank and candid, of the general lower and middle level civil servants.  The refusal of the FEHD officers to come to Court and the advice given to Ms. Yu cannot be reasonable grounds for the Deputy Adjudicator’s admission of the FEHD report.  The defendants should have applied to the Deputy Adjudicator for calling the FEHD officers concerned to give evidence and to produce the relevant documents, investigation report and record.  The defendants of course would be required to pay the expenses, but if they came out successful, they could recover them from the claimant.

24. Even though the defendants asked the Deputy Adjudicator to admit the FEHD report by reason that the FEHD officers declined to come to Court to give evidence, I hold that this reason cannot be the reason for not calling the FEHD officers to give evidence.  The Deputy Adjudicator should not have considered it.  Besides, there is no evidence in this case that the fee charged by the FEHD would be far more than the amount claimed.

Credibility of the FEHD report

25. Since the hearsay evidence in question is the FEHD report, the credibility of such evidence is not founded on and has no connection with the credibility of the defendants.

26. Generally speaking, when a civil servant charged with a statutory duty is performing his statutory duty, he will be more attentive than a civil servant who is doing his duty under general circumstances.  The observation, investigation report or record which they make in carrying out their statutory duty will have higher credibility.  It is easier for the Court to exercise its discretion to admit this kind of hearsay evidence than other kind of hearsay evidence.  In this claim, the FEHD officers who carried out the tests and wrote the report were civil servants and they were acting in the execution of their duty when they were carrying out the tests.  The report they wrote is credible to a certain extent.  However, they did not have any statutory duty to make the observation, investigation report or record in question.  The Deputy Adjudicator, therefore, should carefully assess the credibility of their report according to the general principles.

27. According to the FEHD report dated 5 February 2008, between August 2007 and January 2008 FEHD officers had been to Flat 4E a number of times to investigate and carry out the following tests:

(1)     At 7 p.m. on 29 August 2007, coloured water test（色水測試）was carried out at the drainage pipe inlets of the sanitary fitments in the bathroom;

(2)     At 7 p.m. on 23 October 2007, water retaining test（蓄水測試）was carried out on the floor of the bathroom and the floor of the shower tray, while water sprinkling test（灑水測試）was carried out on the wall surrounding it;

(3)     From 8:30 a.m. to 5 p.m. on 9 November 2007, fresh water pipes test（食水喉管測試）was carried out, and the Management Co. turned off the water supply to the whole flat;

(4)     At 3 p.m. 10 November 2007, infra-red hot water test（紅外線熱水測試）was carried out in the bathroom;

(5)     From 8:30 a.m. to 7 p.m. on 3 January 2008, flushing toilet salt water pipe test（沖廁鹹水喉管測試）was carried out in the bathroom;

(6)     At 8 a.m. on 11 January 2008, coloured water test was carried out at the main drainage pipe inlet in the bathroom.

According to the FEHD report, they could not find the seepage source by conducting the above tests.

28. In paragraph 25 of the Reasons for Decision, the Deputy Adjudicator said she believed that the FEHD was neutral.  I agree with that but the FEHD officers were not under a statutory duty to prepare the report. Therefore the Deputy Adjudicator should still assess carefully, according to the general principles, the credibility of the report they prepared.  Although they carried out 6 tests, 2 of which were to do with drainage pipe inlets, and 1 was about the flushing toilet salt water pipe.  According to the evidence of Mr. Wong and the Management Co., the pipes which leaked were the fresh water pipes.  These 3 tests certainly had nothing to do with them.  Another test was the infra-red test.  There is nothing in this simple report which can help me to make any decision as to the significance and applicability of this test, and I do not know how the Deputy Adjudicator assessed the result of this test.  In paragraph 27 of the Reasons for Decision, a rather comprehensive infra-red test report produced by the defendants was denied credibility because the defendants did not call the expert who carried out the infra-red test.  I do not understand how come she would accept the simple FEHD report and be satisfied with the conclusion reached in the report.

29. The other 2 tests carried out by the FEHD were about the fresh water supply system.  One of them was water retaining test carried out on the floor of the bathroom and the floor of the shower tray and water sprinkling test carried out on the wall.  I believe that, as the names suggest, this means to use the floor of the bathroom and the shower tray to retain water, and to sprinkle water on the wall, and then watch to see whether there was any water seepage on the ceiling in the bathroom of flat 3E.  If the conclusion drawn by Mr. Wong is correct and the source of the seepage was the fresh water pipes, including the pipes installed in the wall or in the floor slab of flat 4E, but not only the surface of the floor or the surface of the shower tray, then this test could not detect the source of the seepage.  However, what is more important is that the mere words of ‘water retaining test’ and ‘water sprinkling test’ can never tell me how these two tests were carried out, how long the water was retained, what the use of sprinkling water on the wall was, how they observed the result of these tests, how they analysed the data obtained from these tests and how they came to their conclusion.

30. The remaining test was also about the fresh water pipes.  This test began at 8:30 a.m. and went on until 5 p.m.  The duration was as long as 8 hours and 30 minutes.  During this period, the management Co. turned off the water supply to the whole flat.  Similarly, the above description alone cannot tell me how this test was conducted, what the use of turning off the water supply was, how they observed the result of the test, how they analysed the data obtained from the test and how they came to their conclusion.  To give some examples: how did the FEHD officers carry out their observation as to whether there was water leakage? When did they carry out the observation? Did they go to flat 3E to inspect before and after the test and what was the result of their observation?  Hoi Sing Mansion of Taikoo Shing is 26-storeyed high.  Whether the main switch of the fresh water pipes was near the water tank on the rooftop, or outside flat 4E or inside that unit was important information.  If the main switch was situated on the rooftop, when the Management Co. turned off the main switch, did the FEHD officers turn on the taps in flat 4E to drain off the water in the water pipe from the rooftop to that flat, which was about 300 feet long, before they carried out the test and the observation?  If they did not do that, then I believe this test does not have much significance either and cannot rule out the possibility that the source of the seepage was the fresh water pipes of flat 4E.

31. The FEHD report did not provide detailed information.  There is no detailed description of the procedures of carrying out the tests or the significance of the tests.  The data obtained from the tests was not provided either.  There is only a bare assertion: “The source of the leakage is not found.”  In my judgment, a report which only provides the conclusion drawn from the tests but does not provide the factual basis on which the conclusion is founded is not credible and the Court cannot rely on it.  I find that the FEHD report does not meet the requirement for being admitted as hearsay evidence.

32. The Deputy Adjudicator has the duty to investigate.  To make any finding of fact, she must have sufficient evidence.  Her view that the FEHD was neutral cannot be faulted.  She gave much weight to the fact that the FEHD had carried out a total of 6 tests, which covered the fresh water supply, salt water supply and the drainage pipes.  However, only 2 of the tests had anything to do with the fresh water supply system.  As what I have pointed out in my above analysis, she had no way to understand how these tests could have any significance. Yet she accepted the conclusion reached in the FEHD report.  Her view was that if Mr. Wong’s analysis was correct, the FEHD would surely have found out the source of the seepage.  The basis of her finding was that the tests carried out by the FEHD were appropriate tests and that the data obtained could support the conclusion reached in the report.  In my foregoing analysis, I have found that the report did not provide such information at all.  If the conclusion reached in the report was the sole basis of the Deputy Adjudicator’s finding that the fresh water pipes of flat 4E were not the source of the seepage, then she had wrongly shifted the power to make findings of fact, which a trial judge solely enjoys, to the FEHD officers who carried out the tests.

The relevance and importance of the FEHD report

33. It is an indisputable fact that seepage appeared on the ceiling of the bathroom of flat 3E.  According to the Taikoo Shing report, on 31 December 2007 leakage from a water pipe appeared on the external wall of flat 4E.  After testing it with test paper, the Management Co. found out that the water leaked out was fresh water.  The Management Co. turned off fresh water supply to flat 4E on 7 and 10 January 2008 respectively, and the water leakage on the external wall of flat 4E and the water seepage on the ceiling of the bathroom of flat 3E stopped.  Before that, on 17 July 2007, the Management Co. noticed that there was high moisture content in the floor slab of the bathroom and in the skirting of the partition wall between the bathroom and the sitting room of flat 4E.  All such objective evidence supported Mr. Wong’s opinion.   The Deputy Adjudicator remarked that what Mr. Wong said sounded convincing, but in paragraph 24 of the Reasons for Decision she said that if Mr. Wong’s analysis was correct, the FEHD would surely have found out the source of the seepage.  This shows that she relied heavily on the FEHD report.  I believe that she dismissed the claimant’s claim because of the report.  The report is crucially relevant and important, but the claimant had no opportunity at all to conduct any cross-examination directed against the tests carried out by the FEHD or the officers who wrote the report.  Under these circumstances, the admission of the FEHD report by the Deputy Adjudicator was very unfair to the claimant.  It was not proper for the Deputy Adjudicator to accept the conclusion reached in the report when the officers who wrote the report were not called.

Conclusion

34. Based on the above analysis, the defendants did not have sufficient reason not to call the FEHD officers to give evidence as to the FEHD report.  The report is not credible, because it lacks information to support the conclusion reached as a result of the tests.  The report is crucially relevant and important in this claim.  It is not proper for the Deputy Adjudicator to accept the conclusion reached in the report when the officers who wrote the report were not called.  After a balanced consideration of the above factors, I find that the Deputy Adjudicator’s exercise of her discretion did not comply with the applicable legal principles and she wrongly admitted the FEHD report.  Because of the limitation of the evidence available, I cannot make any finding of fact in respect of any issue in this claim.  I can only remit the case to the Small Claims Tribunal for the hearing to continue.

35. For the above reasons, I allow the appeal and set aside the orders made by the Deputy Adjudicator on 10 February and 11 March 2009.  Pursuant to section 29 of the Small Claims Tribunal Ordinance, I remit this claim to the Adjudicator who heard this claim for the hearing to continue, and I give the following directions:

(1)     The Adjudicator may give further directions to the parties as to the continuation of the hearing of the claim;

(2)     The Adjudicator may not accept the conclusion reached in the FEHD report, unless the defendants have called suitable witnesses to give evidence as to the tests conducted in the FEHD report; and

(3)     The Adjudicator shall make findings based on the evidence admitted in the original hearing and the continuation of the hearing.

36. The appellant and the respondents shall bear their own costs of this appeal.