TAM WAI CHEUNG ROGER AND ANOTHER v. GOODWELL PROPERTY MANAGEMENT LTD

DCCJ2262/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2262 OF 2013

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REASONS OF DECISION

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1. This is an application by the defendant to strike out the Statement of Claim under Order 18 rule 19, the Rules of District Court.

2. The day before this hearing the defendant filed a summons to amend the striking out summons and added an alternative application to strike out part of the Statement of Claim.

3. The plaintiffs also applied for an unless order to require the defendant to file and serve Defence and Counterclaim (if any).

4. After hearing submissions from both parties, I dismissed the defendant’s application and gave the defendant 21 days to serve its Statement of Defence.  The following are my reasons.

5. The 1^st and 2^nd plaintiffs are the occupier and owner, respectively, of a unit in the building known as Peninsula Heights. The defendant is the manager of the same.

6. The plaintiffs alleged as manager of Peninsula Heights, the defendant has certain duties under the Deed of Mutual Covenants (the “DMC”), inter alia, to ensure owners do not cause or permit any disturbing noises in his unit or do or cause or permit anything to be done which will interfere with the rights, comforts and convenience of other occupants of Peninsula Heights.

7. Commencing from approximately April 2012, the 1^st plaintiff alleged he heard disturbing noises in his unit and made numerous complaints to the defendant.

8. The plaintiffs filed this claim against the defendant and alleged that after receiving their complaints, the defendant was in breach of their duty under the DMC, including: pay timely attention to the complaints; identify the sources or causes of the disturbing noises; and failed to prevent others, including the occupier of the unit immediately above, from creating disturbing noises.

9. The 1^st plaintiff originally filed a claim at the Lands Tribunal, which was subsequently transferred to this court.

10. Order 18, rule 19 states:-

“ (1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the indorsement of any writ in the action, or anything in any pleading or in the indorsement, on the ground that-

(a) it discloses no reasonable cause of action or defence, as the case may be; or

(b) it is scandalous, frivolous or vexatious; or

(c) it may prejudice, embarrass or delay the fair trial of the action; or

(d) it is otherwise an abuse of the process of the Court,

and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.”

11. It is trite that the threshold test in a striking out application is a high one. The learned authors of the White Book 2014 expressed it as follows:-

“It is only in plain and obvious cases that the court should exercise its summary powers to strike out the indorsement on any writ or any pleading under this rule. There should be no trial upon affidavit. Dispute facts were to be taken in favour of the party sought to be struck out. Nor should the court decide difficult points of law in striking out proceedings. The claim must be obviously unsustainable, the pleading unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out. If the court does not think the matter to be clear beyond doubt or if it fails to be satisfied that there is no reasonable cause of action or that the proceedings are frivolous or vexatious, then there should be no striking out. ”

12. One of the plaintiffs cause of action is negligence and it is trite that the essential elements in a negligence action are: duty, breach and causation of damages.

13. In paragraph 5 and 6 of the Statement of Claim, the plaintiffs had clearly pleaded the defendant’s duty under the DMC.

14. In paragraph 9 and 10, the plaintiffs pleaded their complaints and the defendant’s alleged failure to comply with its duties under the DMC.

15. In paragraph 14, the plaintiffs pleaded they suffered loss and damages.  So all three essential elements are present in the Statement of Claim.

16. As I understand it, Mr Yeung’s argument to strike is that the DMC prohibits an owner from making, causing or permitting disturbing noise in his unit.  The noises must therefore be disturbing noise before the defendant is bound by the DMC to intervene.

17. Citing Southern Ever Trading Limited v The Incorporated Owners of Joy Garden LDBM 8/2002 and Lo Yuk Chu v Hang Yick Properties Management Limited CACV 169/1996 as support, Mr Yeung argued that what constitute disturbing noises must be measured by some objective standard before it can be disturbing; for example, the level imposed by the Noise Control Ordinance.  The Statement of Claim was inherently bad because it failed to plead the disturbing noise was above an objective standard.

18.  Lo Yuk Chu was an appeal based on whether the duty of a manager under a DMC was “the same as the common law duty of care” or one that was “absolute or strict duties”, and was of no help to Mr. Yeung.

19. In Southern Ever Trading Limited,Deputy Judge Wong (as he then was) held, in considering whether noises constitutes a nuisance, other factors together with the statutory limit should be considered.  He held in paragraph 20 of his judgment:-

“…I agree with Mr So that the test for nuisance is not whether the noise has exceeded the statutory limit.… As agreed by Mr So, the statutory limit is highly relevant, although not conclusive by itself, to the test of nuisance.”

20. Deputy Judge Wong then considered other evidence, including whether other owners made similar complaints, before he came to a final decision.

21. Whilst it may be true that to constitute a nuisance, one of the factors is to measure the noises against some objective standard; however, in this matter, the plaintiffs need not prove the noises were a nuisance, only that these noises constituted “disturbing” noises under the DMC.

22. Once the noises were “disturbing” noises, the defendant’s duty under the DMC will be triggered.

23. Since the DMC did not define what constitutes “disturbing” noises, it is therefore open to the parties to argue how “disturbing” noises under the DMC should be measured.  For example, as in Southern Ever Trading Limited, the plaintiffs may ask neighbours to prove there were “disturbing” noises.

24. Whether the noises heard by the 1^st plaintiff constituted “disturbing” noises under the DMC is of course a matter that must be proved by the plaintiffs at trial; however, how that can be done is surely a matter of evidence and not pleading.

25. As an alternative to striking out the whole of the Statement of Claim, the defendant submitted paragraph (2) of the Particulars of Damages in paragraph 14 of the Statement of Claim, namely “Damages for discomfort and inconvenience caused by the Disturbing Noises (including loss of right to enjoy the premises which should be free from the Disturbing Noises) to be assessed” and prayer (1) of the Statement of Claim, namely, “An order that the Defendant doses identify the cause of the Disturbing Noises and take such steps to stop the Disturbing Noises” should be struck out.

26. Mr Yeung argued during the 2^nd call-over hearing while this matter was still with the Lands Tribunal, the 1^st plaintiff, through Mr Yung, gave an oral undertaking to Deputy Judge Roy Yu (as he then was), that he would only claim damages up to the date of the 2^nd call-over hearing.  By virtue of that undertaking, the plaintiffs are estopped from claiming continuing damages under paragraph (2) of the Particulars of Damages.

27. As a result of the estoppel, the plaintiffs are also barred from relief sough under prayer (1).

28. The plaintiffs submitted when the parties were discussing an adjournment for mediation, Deputy Judge Roy Yu, raised a concern about the continuing damages for staying in alternative accommodation during the adjournment.  The 1^st plaintiff then accepted a concession to forgo claims for rent of staying in alternative accommodation after the 2^nd  call-over hearing.

29. Mr Yung argued that there was no undertaking, but if there was, it was: First, restricted to rent for alternative accommodation after the 2^nd call-over hearing. Second, not binding on the 2^nd plaintiff, because it was not yet a party to this matter.

30. As evidence of the undertaking, Mr Yeung submitted a transcript of the call-over hearing.

31. I have read through the transcript and there was never a formal undertaking given.  Reading the transcript as a whole, it is not possible to say: if an undertaking was given; whether it was on all of the damages after the 2^nd call-over hearing or just on alternative accommodation.

32. The only mention of any concession was in lines “O” to “T” of page 38 of the transcript.  After a short adjournment, Mr. Yung stated:-

“I have taken instructions and, as far as the concern as to the continuing damages, we will agree to have a – at least, my instruction is that we will cease claiming from now on today. So there will no longer any continued applications as to that problem. And, on the other hand, as …(indistinct) mediation is concerned, your Honour, we say –I just have a – we have a quick word with Mr Yeung and we say, maybe, we should have mediation within two months’ time because we still are afraid that, given that the continuing application is gone now, by now, so I think we – but, at the end of the day, we still need to address the matter. We’re not delaying, so we say two months’ time would be more safe because, given the Chinese New Year intervening.”

33. However, there was an earlier mention of continuing damages that may impact on Mr. Yung’s statement.  On line “M” of page 30 of the transcript, Mr Yung stated: “He has moved out and has moved to a alternative accommodation as a result of the noise.”

34. On line “P”, Deputy Judge Yu asked Mr Yung : “So the damages is continuing?”  To which Mr Yung replied: “As far saw – that’s right.”

35. Looking at these exchanges, it is not at all certain what Mr Yung meant by “…cease claiming from now on today”.

36. In any event, this is clearly not a “…plain and obvious cases that the court should exercise its summary powers to strike…”.

37. In view of the fact that the defendant has taken out this summons to strike and are dealing with the plaintiffs’ claim seriously, this is clearly not an appropriate time to issue an unless order.

38. Mr Yeung conceded costs on the summons to strike and the parties agreed that the summons to amend should be assessed at $800.  My orders are therefore:-

(1) The defendant’s summons to strike out is dismissed.

(2) Costs of the summons to strike out is to the plaintiffs, with certificate for counsel, to be assessed if not agreed.

(3) Costs of the summons to amend be to the plaintiffs be summarily assessed at $800.

(4) Defendant do serve Statement of Defence and Counterclaim (if any) within 21 days from today.