LEUNG WAN MING v. LIE MEY FONG

HCA 1267/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1267 OF 2011

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DECISION
(on Costs)
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Introduction

1.  This is a water leakage case.  The plaintiff took out an application for the imposition of a date for compliance by the defendant of an undertaking given by her to the court, so that if necessary, contempt proceedings could be instituted against her for her non-compliance.

2.  The plaintiff (“P”) is/was at all material times the registered owner of a shop and a cockloft (“P’s Premises”) in Luen Cheung Building in Luen Wo Market, Fanling, New Territories.  The defendant (“D”) is/was at all material times the registered owner of flat G on the first floor (“Flat G”) and a portion of the flat roof (“Flat Roof G”) in the same building.

3.  It was P’s case, among other things, that D had wrongfully erected authorized building works (“UBW”) on Flat Roof G and that such had caused serious overflow and leakage of water into P’s Premises. 

4.  P issued the proceedings herein, and in its statement of claim sought mandatory orders against D, including removing the UBW erected on Flat Roof G and for access to Flat G/Flat Roof G for inspecting and investigating the cause/source of the water leakage.

5.  The undertaking given on 29 October 2013 by D to P and the court was to replace and/or repair the waterproof membrane of the Flat Roof G (“Undertaking”).

6.  Prior to the hearing before this court, D had complied with the Undertaking and P sought leave to withdraw his application.  The only issue which was in dispute between the parties was then only the question of costs.

Chronology of relevant events and correspondence

7.  P’s statement of claim was filed on 27 July 2011, alleging, among other things:

(i) Since from at least 2000, water started to seep /leak into P’s Premised from Flat Roof G;

(ii) Flat Roof G was originally uncovered, but later UBW was erected, namely about half of the Flat Roof G was covered by corrugated steel sheet and an additional room (with toilet or kitchen) was built thereon;

(iii) Since at least November 2009, P had repeatedly requested D to give P and his expert and contractor access to Flat G/ Flat Roof G so as to inspect and find out the cause of water leakage and D had persistently refused to do so.

8.  D filed her defence on 11 November 2011 and, among other things:

(i) Put P to strict proof of his allegations;

(ii) Denied P’s allegations;

(iii) Denied D had wrongfully erected the UBW on Flat Roof G;

(iv) Alleging that all of the original water pipes installed on Flat Roof G were replaced 4 to 5 years ago;

(v) Alleging that in around October 2010, at P’s request, the representatives of Food and Environmental Hygiene Department performed a water seepage test in relation to Flat Roof G, which showed that no water seepage was found;

(vi) Alleging that P was unable to identify the cause of the alleged water leakage, if any.

9.  On 28 February 2012, a building order was issued by the Buildings Department for the removal of the UBW by 27 April 2012 (“Building Order”), but no action was taken by D.

10.  The 1^st Case Management Conference was held on 22 March 2012, and Mr Registrar Lung had directed, among other things, exchange of expert reports.

11.  Prior to the 2^nd Case Management Conference, P made an application for, among other things, access to Flat G/Flat Roof G, for the purpose for P and his expert to carry out certain tests (“Inspection”).  Such order was duly granted by DHCJ Woo.

12.  On 4 July 2013, Master Hui ordered, among other things, the parties to prepare a joint expert report.

13.  Thereafter, P issued an application for summary judgment.

14.  At the hearing of P’s application for summary judgment, on 29 October 2013, DHCJ Le Pichon, as she then was, ordered, among other things, D to remove the UBW within 3 months of the order, ie by 29 January 2014 (“Removal Works”), to provide P within 21 days of the order a copy of the schedule of the Removal Works, so that an appointment could be arranged for the Inspection (“Le Pichon Order”).  It was at this hearing that D gave the Undertaking, that she would replace and/or repair the waterproof membrane of Flat Roof G upon completion of the Removal Works.

15.  The schedule for the Removal Works was duly sent by D’s solicitors to P’s solicitors on 2 January 2014 and on 8 January 2014, D’s solicitors wrote to inform P’s solicitors that the Removal Works would take place on 10 – 14 January 2014.  Subsequent thereto, the Inspection was arranged on 14 January 2014.

16.  On 23 January 2014, P’s solicitors wrote to D’s solicitors seeking a confirmation that the Removal Works had been completed and asking whether the waterproof membrane had been duly repaired/replaced by D.

17.  There was no reply, and P’s solicitors wrote again on 27 January 2014.  Again, there was no reply, and P’s solicitors wrote on 4 February 2014.

18.  D’s solicitors sent 2 letters to P’s solicitors on 18 February 2014.  In the 1^st letter[1], D’s solicitors put on record what happened on the day of the Inspection, and towards the end, D’s solicitors stated that they wished to put on record that D had removed the UBW in accordance with Le Pichon’s Order.  However, there was no mention at all of whether the Undertaking had been complied with by D in the 1^st letter.

19.  In the 2^nd letter[2], all D’s solicitors did was to refer to P’s solicitors’ letters of 27 January and 4 February 2014, and stating on record that the attachments in the letter of 27 January 2014 were only received by them on 29 January 2014, and in view of the Chinese New Year Holiday, D and her expert needed time to look into the structural issues alleged.  Again, there was no reply in the 2^nd letter as to whether the Undertaking had been complied with by D.

20.  There seemed to be some further correspondence from D’s solicitors, which led P’s solicitors to send a further letter on 24 March 2014 to invite D to focus on, among other things, disclosing the full details of works on the Flat Roof G including especially how and when the Undertaking had been complied with.

21.  There was no reply to the above letter from D’s solicitors.

22.  It was P’s case that notwithstanding that on D’s initial proposed schedule on the Removal Works D should have completed the same by 15 January 2014, she had failed to do so.  P had filed his 3^rd affirmation providing evidence to support his case.

23.  Then there was a hearing before Master Ho on 3 April 2014, during which D’s solicitors indicated that D had fully complied with the Le Pichon Order, including the Undertaking.  P immediately wrote after the hearing to seek documentary evidence from D’s solicitors to verify the same.  There again seemed to be no reply.

24.  Thereafter D filed her Supplemental List of Documents on 15 April 2014 disclosing documents purportedly in support of D’s compliance with the Le Pichon Order.  Among others, there were 2 documents namely (i) a copy of a quotation issued by one Cheong Kee Decoration Engineering dated 22 November 2013 (“CK Quotation”)[3], and (ii) an invoice dated 2 March 2014 issued by another company Cheung Hing Company (“CH Invoice”)[4].  The CH Invoice referred to 2 items of using “滲透膠”and“保護膠”for work to prevent water leakage.

25.  P was not satisfied as he alleged that the water leakage had continued even after February 2014, and further he claimed that the photographs he took on 13 April 2014 showed that by that day, no waterproof membrane works had been carried out, and that what D had apparently done was no more to re-paint the surface of the floor area with a dark paint.

26.  On 24 April 2014, P’s solicitors issued interrogatories, seeking further information including when Cheong Kee and/or Cheung Hing was instructed to carry out the waterproof membrane work and when such work was completed, and details of such work.

27.  There was again no response from D, and P’s solicitors wrote a further letter on 27 May 2014 indicating that they would issue a summons. There was still no response from D.

28.  On 10 June 2014, P issued a summons (“P’s Summons”), and sought, among other things, an order for D answer the interrogatories and, in paragraph 1 of P’s Summons (“Paragraph 1”), what P sought originally was for the Undertaking to be enforced and specifically performed by D forthwith.

29.  On 8 September 2014, D’s son Fan Fai Frederick (“Fan”) filed his 4^th affirmation on behalf of D explaining for the first time that initially D had asked Cheung Hing for an oral quotation and estimated commencement and completion dates of the waterproof membrane work, and although subsequently D had obtained from Cheung Hing a quotation in writing (“Handwritten Quotation”)[5], she did not produce it as D believed that the CH Invoice would support D’s case that she had complied with the Undertaking. Fan then said for avoidance of doubt, he then approached Cheung Hing for another quotation, and Cheung Hing then produced one with company’s letter head, but titled “invoice”(發票) dated 28 January 2014, which D said was in fact a quotation from Cheung Hing (“CH Quotation”)[6].

30.  On 29 September 2014, P filed his 4^th affirmation and explained why he was of the view that the Undertaking had not been complied with, and produced an email from Dr Eddie Lam, a structural engineer that the methods of D using “滲透膠”and“保護膠”could not be regarded as to “repair” or “replace” the existing waterproofing membrane and that methods used by D was not acceptable as a means of repair and was not effective. Further any repair or replacement could only be regarded as completed after a “ponding test” to assess the waterproofing condition, and D had not mentioned that this had been carried out.

31.  P’s Summons was fixed before DHCJ Wilson Chan on 9 October 2014.  It appeared that shortly before that hearing, P realized that Paragraph 1 might have been defectively drafted, in that he could not seek a “specific performance” of the Undertaking, and that Paragraph 1 should have been an application under Order 45 rule 6.  P then issued a summons to seek leave to amend Paragraph 1.  Leave was so granted and Paragraph 1 was adjourned for substantive argument[7].

32.  The amended summons was filed by P on the same day 9 October 2014 (“Amended Summons”).  In the amended Paragraph 1, P sought an order for D to comply with the Undertaking on or before 14 October 2014 or such other date as the court would think fit[8].

33.  Then on 2 January 2015, D filed an affirmation of a Chartered Building Surveyor, Mr Chan Jor Kin Kenneth, exhibiting a report (“KC Report”)[9] which disclosed that additional work had been carried by D after the Amended Summons, through another contractor HKP Engineering (Materials) Limited (“HKP”).

34.  After obtaining P’s expert’s comments on the KC Report, P’s solicitors had written to D’s solicitors on 5 February 2015, requesting clarification of the KC Report and seeking certain outstanding information and documents .

35.  On 13 February 2015, P had also filed his 5^th affirmation indicating that he would rather progress and resolve the matter cost-effectively, and if D had indeed carried out and/or completed the additional work up to the required standard as set out in the KC Report, then there was no need to pursue the substantive part of Paragraph 1 of the Amended Summons, save in relation to issue of costs.

36.  Anyway, there was no response from D again on P’s further request for clarification of matters in the KC Report, which led to P issuing a summons for specific discovery seeking the outstanding information and additional documents on 24 February 2015.

37.  Eventually, on 12 March 2015, P’s solicitors wrote an open letter to put on record that once P had received a substantive response to their further requests for documents, P was willing to withdraw the Amended Summons, and the only issue would be costs, which P sought from the date of the date of issue of P’s Summons until then.  P’s solicitors further indicated that failing an agreement before close of business on 16 March 2014, they would prepare the hearing bundles and would send their brief to Counsel.

38.  On 20 March 2015, D’s solicitors replied refusing to bear P’s costs.

39.  On 23 March 2015, Fan filed his 6^th affirmation to provide additional documents sought under P’s summons for specific discovery, disclosing quotations and receipts issued by HKP.

40.  Finally, on 25 March 2015, P’s solicitors sent a further letter marked “without prejudice save as to costs”, and proposed that to resolve the matter costs effectively, P was prepared to withdraw the Amended Summons with costs in the cause.

41.  There was no reply from D.  No agreement was reached.

42.  Mr Alexander Tang appeared for P and Mr Jin Pao appeared for D at the hearing before this court. P sought leave to withdraw Paragraph 1 of the Amended Summons and sought cots of and incidental to the application to be paid by D to P forthwith.

Discussion

43.  It was quite clear from the chronology of the correspondence set out earlier prior to the issue of P’s Summons, D was stonewalling P’s letters seeking confirmation of when and how the Undertaking was complied with.

44.  On 18 February 2014, D’s solicitors had confirmed on record that the Removal Works had been carried out and that this part of Le Pichon Order complied with.  Thus, according to the Undertaking, D should have proceeded to comply with the Undertaking thereafter.

45.  Eventually, after a number of letters as referred to earlier, P’s solicitors were only informed orally for the first time during the hearing on 3 April 2014 before Master A Ho that D had complied with the Undertaking, but with no documentary evidence had been provided for verification.  The CH Invoice, which was dated 2 March 2014, was disclosed for the first time on 15 April 2014 in D’s Supplemental List of Documents and a copy was sent to D’s solicitors on 16 April 2014. There was no explanation from D on the details of the waterproof membrane work, whether the membrane was replaced or repaired and whether the work mentioned in the CH Invoice had in fact been completed by 2 March 2014.

46.  In light of D’s attitude, it was not unreasonable for P to seek more details of what waterproof work was being carried out, and whether it had been completed.  It was also not unreasonable for P to seek further information by way of the Interrogatories.  Again, D simply ignored the same, and failed to reply.

47.  In light of D’s unresponsive attitude, I am of the view that   P was justified in issuing an application to seek compliance of the undertaking by D.

48.  As mentioned earlier, in Fan’s 4^th affirmation, he had tried to explain that D had obtained the Written Quotation, and then later he had also obtained the CH Quotation.

49.  The Written Quotation was undated and was not on any company’s letter head, and was provided by a Mr Ho of a “祥興裝飾公司”, which was not exactly the same name as Cheung Hing Company “祥興公司”. Anyway, it stated that the estimated cost was HK$12,000, and also the work would commence on 15 February 2014 and would be completed on 25 February 2014.

50.  Fan had explained Mr Ho was owner of Cheung Hing Company and/or Cheung Hing Decoration Company.  Fan had said he approached Mr Ho of Cheung Hing for a proper quotation on his company’s letter head and that the CH Quotation, although dated 28 January 2014, was received by Fan from Mr Ho only about 2 weeks ago, ie around the 3^rd week of August 2014.

51.  As mentioned earlier, Fan then stated that although the CH Quotation was titled “invoice”/發票, it was in fact a quotation/報價單and not an “invoice”, as Cheung Hing was a small company and usually would only give oral quotation to customers, and thus did not have separately printed “quotation” with Cheung Hing’s letter head.

52.  I find D’s case rather confusing, if what Fan had said was indeed the case, then as the CH Invoice was also titled “invoice”, it could also have been only a quotation.

53.  Further, on both the Written Quotation and the CH Quotation, the estimated cost was HK$12,000.  Yet on the CH Invoice, the cost was stated to be HK$16,000.  Fan had tried to explain that the additional costs was for cleaning and clearing service subsequent to the completion of the waterproof membrane work.  This was not apparent on the CH Invoice.

54.  The photographs produced by P taken on 14 March 2014 and 13 April 2014 showed debris remaining on the Flat Roof G.  Fan had explained in his 4^th affirmation that as it was always raining during March and April 2014, D was not able to remove those debris earlier.  Anyway, there was no sufficient evidence to show that the additional HK$4,000 was for cleaning and clearing service, which at 1/3 of the cost of the water proofing work, appeared to be high.

55.  In any event, Cheung Hing could have been asked by D to clarify and confirm that the additional HK$4,000 was for clearing/clearing service.  There was simply no sufficient evidence as to when Cheung Hing completed the waterproof work, and when it was paid by D.

56.  Further, it would appear from the KC Report produced by D that additional waterproofing work had been carried out by another contractor HKP in December 2014, with completion of liquid waterproofing membrane and water flooding test.

57.  D had maintained that any additional work undertaken under the supervision of a competent expert, after the issue of P’s Summons should not be seen as an admission on D’s part of a breach of the Undertaking in the first place and they maintained they had complied with the Undertaking prior to the issue of P’s Summons[10].

58.  However, as pointed out by Mr Tang, D’s own expert Mr Kenneth Chan had not made any comment on the work done by Cheung Hing.  If such waterproofing work had been properly done by Cheung Hing, Mr Chan could have opined that the existing work was adequate, before going on to comment on the additional work done by HKP.

59.  Further, if indeed the work done by Cheung Hing was adequate, then there seemed to be no reason for D to voluntarily engage a new contractor HKP to carry out the additional work at her own cost.  Mr Chan would have advised D that there was no need to duplicate the work, if properly done in the first place.

60.  It was submitted by Mr Pao that as a matter of interpretation, where an obligation could be performed in different way, it was for the party obliged to perform the obligation to choose the method of performance[11]. Mr Pao had argued that the Undertaking was silent on 3 matters, namely (i) the identity or qualification of the contractor; (ii) material/substance to be used; (iii) method of performance of the obligation or method in which the works should be carried out, ie opening up of tiles as alleged by P’s expert.

61.  However, P’s expert Dr Eddie Lam had said that the “滲透膠” and “保護膠”applied by Cheung Hing on Flat Roof G was neither replacement nor repair of the waterproof member, and generally “滲透膠” and “保護膠” was not for the purpose of acting as a waterproof membrane, and not suitable for waterproofing work[12]. There was no evidence in the KC Report to contradict what was said by P’s expert.

62.  Having considered the above, and the lateness in D in carrying out the additional works, P’s final offer of costs in the cause was in my view a reasonable one, and D should have accepted, to avoid the delivery of brief to Counsel and further incurrence of costs.  I do not find D’s conduct reasonable.

Conclusion

63.  I give leave to P to withdraw Paragraph 1 of the Amended Summons.

64.  On 7 October 2014, DHCJ W Chan had made no order on paragraph 2 of the Amended Summons but ordered that costs of paragraph 2 be costs in the cause of Paragraph 1.  He had further dismissed paragraphs 3 to 6 of the Amended Summons and had ordered costs be to D’s in any event, such costs to be taxed if not agreed.

65.  Mr Pao had submitted that as DHCJ W Chan had ordered costs thrown away by P’s amendment application be paid by P to D in any event, that should have included the hearing before this court.

66.  I do not agree.  The hearing before this court was for the substantive argument of Paragraph 1 of the Amended Summons which had been specifically adjourned and not dealt with by DHCJ W Chan.  DHCJ Chan had in fact specifically ordered the costs of the hearing on 7 October 2014 be costs in the cause of P’s Amended Summons and costs of paragraph 2 be in the cause of Paragraph 1 of the Amended Summons.

67.  Having considered all the circumstances of this case, I am of the view that D should pay P’s costs of and incidental to the application in Paragraph 1 of the Amended Summons, to be taxed and paid forthwith by D.

68.  Finally, I would like to thank both Counsel for their submissions and assistance to the court.