HUI SIU KIM KIMME v. THE INCORPORATED OWNERS OF PARC REGAL

LDBM 284/2005

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. LDBM 284 of 2005

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JUDGMENT

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Background

1. The Respondent is the owners’ corporation of the building known as Parc Regal, 19 Homantin Hill Road, Kowloon, Hong Kong (“the Building”).  The Applicant is the owner of Flat B, 1/F., Tower 1 of the Building (“the Unit”).

2. The Applicant’s application herein, as stated in the Amended Notice of Application, is for an order that the Respondent do rectify water leakage and seepage from the external wall and cantilever projection of the Unit within 14 days.  The Applicant also claims against the Respondent a sum of $26,900, the particulars of which are as follows:-

          (1)     Damages to the Unit:       $22,000

          (2)     Termites Extermination:   $900

          (3)     Infrared Scan Report:      $3,200

          (4)     Solicitor’s Letter:            $800

3. The amounts concerning the infrared scan report and the solicitor’s letter should be part of the costs incurred by the Applicant in these proceedings.  So they should be dealt with separately under costs.

4. The Respondent raised only two grounds of opposition in the Amended Notice of Opposition.  The first ground is that the Applicant is put to strict proof that her alleged damages were due to the breach of Clause 36(f) of the Deed of Mutual Covenants of the Building (“the DMC”).  The second ground is that the Applicant had made alterations to the original state of window skirting and had previous dealings with the developer of the Building for the defects at the walls and the Applicant is put to strict proof that her alleged damages were not caused by such alterations and defects.

5. During the closing submission, Ms. Wong for the Respondent submitted that the Applicant’s only claim is for the sum of $26,900 and she did not claim that the Respondent should repair the external wall.  Thus, the Respondent has only prepared the case and the evidence in relation to the claim for damages.  Ms. Wong even suggested that the Applicant should commence another case to seek for an injunction against the Respondent for the repair of the external wall.

6. With respect, Ms. Wong’s submission is totally misconceived.  The Applicant has clearly stated in the Amended Notice of Application that she applies for an order to rectify water leakage and seepage from the external wall and the cantilever projection of the Unit within 14 days.  Even though the word “injunction” is not used, there should be no misunderstanding that the Applicant is asking for an order to rectify the external wall and the cantilever projection.  So the Applicant’s claim is not just for damages as suggested by Ms. Wong.

7. In the premises, I have to decide in this case whether the Applicant is entitled to an order for rectification against the Respondent, as well as the damages claimed.

Cause of water seepage

8. There is no dispute that the Building was built in 1995.  The occupation permit was issued on 5 May 1995 and the certificate of compliance was issued on 26 June 1995.  The Applicant bought the Unit in October 1996 and there was a one-year warranty period.

9. The Applicant first discovered the water seepage problem in 1997 during the warranty period.  The Applicant complained to the developer and the developer agreed to rectify the water seepage problem.  In April 1998, the developer replaced the wooden skirting board in the Unit and the wooden panel of the bay window with granite.  The developer also changed the timber flooring and repaired the other damaged parts inside the Unit.

10. As to the external wall, the developer replaced the granite cladding underneath the cantilever projection with some plastic panels to avoid accumulation of water inside the cantilever projection.  However, someone complained about the use of plastic panels at the cantilever projection because such plastic panels were not the approved material for the Building.  As a result of the complaint, the developer changed the plastic panels back to granite cladding.  After granite cladding was re-applied, the seepage problem occurred again.

11. The Applicant called an expert, Mr. Christopher Stanley, to give evidence at the trial.  According to Mr. Stanley, the granite cladding on the external wall is dry fixed to the concrete substrate.  Moisture can easily pass between the panel joints or over the horizontal surface and down vertical face.  It then flows or wind-blown towards the top of the window frame where it can penetrate around the sealant and pass to the inner edge of the metal frame.  As a result, damage to the internal finishes is taking place, particular moisture seeping downwards through the sidewall in the sitting room and damage the timber flooring with evidence of stain marks.  In order to prevent any further water leakage into the unit, the stone around the window frame top edge needs removing and re-sealing and the top edge window sealant may also need replacement especially at the corner edge.

12. The Respondent challenged the professional qualifications of Mr. Stanley.  However, with the extensive experience Mr. Stanley had in dealing with water leakage problems, I am satisfied that Mr. Stanley can give evidence as an expert witness, even though he might not have any professional qualification.  I accept his evidence on the cause of water seepage to the Unit and find that the cause of water seepage is as opined by him.

13. Although the Respondent also called an expert, Mr. Tsang Man Biu, to give evidence, Mr. Tsang was not really engaged to deal with the water seepage problem at the Unit.  He was engaged by the Respondent to deal with the problem of loosen tiles at the Building which is a separate matter from the granite cladding problem at the cantilever projection.  I do not find Mr. Tsang’s evidence helpful at all.

14. In any event, there is absolutely no basis at all for the Respondent to suggest that the alterations to the original state of window skirting and previous dealings with the developer were the cause of water seepage.  It is clear from the evidence that the work done by the developer was to reduce the amount of water seeping into the Unit.  The work done was not itself the cause of water seepage.  The cause of seepage, as opined by Mr. Stanley, is actually due to rainwater or other water going through the panel joints of the granite cladding at the external wall.

The Respondent’s liability

15. Clause 61 of the DMC stipulates that:-

“Nothing herein shall prejudice the operation of the Building Management Ordinance (Cap.344) and to the extent that any provisions contained herein shall be in conflict with the said Ordinance, the said Ordinance shall prevail.  During the existence of an Owners Incorporation under the Building Management Ordinance, the rights, duties, powers and obligations for the control, management and the administration of the Land and the Buildings conferred by this Deed on the Manager shall be vested in the Owners Incorporation, and the general meeting of the Owners Incorporation shall take the place of the meeting of Owners under this Deed, and the management committee of the Owners Incorporation shall take the place of the Owners’ Committee under this Deed.”

16. It is clear from Clause 61 of the DMC that the Applicant has the duties and obligations of the Manager under the DMC.  Clause 34(f) of the DMC stipulates that the Manager has the authority, amongst other things:-

“to repair, maintain, clean, paint or otherwise treat or decorate as appropriate, the structure and fabric of the Buildings and the external walls elevations and façade thereof but excluding windows and window frames except those situate in the Common Areas and Facilities…”

17. Thus, the responsibility to repair and maintain the external wall is on the Respondent, other than the Manager.  The Respondent argues that the design of the windows is one of the causes contributing the water seepage and Clause 61 states that the Respondent is not responsible for windows and window frames except those in the Common Areas.  This argument is totally groundless.  There is nothing wrong with the windows or window frames in the present case, and water should not have gone to the sides of the window frames inside the external wall and drip down.  If there were no gaps in the granite cladding, water should not be able to go through the external wall and come into contact with the sides of the window frames at all.

18. Moreover, section 18 of the Building Management Ordinance, Cap. 344 (“the BMO”), imposes a duty on the Respondent to “maintain the common parts and the property of the corporation in a state of good and serviceable repair and clean condition”.  So, apart from Clause 61, the Respondent has a duty to maintain the common parts of the Building.  Since external walls are part of the Common Areas and Facilities as defined in Clause 1 of the DMC.  It is clear that the Respondent has a duty to maintain the external walls.

19. Although there are 2 undivided shares allotted to the Common Areas and Facilities, it does not mean that the owner of these shares would have exclusive use of the Common Areas and Facilities and hence the Common Areas and Facilities would no longer be common parts of the Building.  In Incorporated Owners of Million Fortune Industrial Centre v. Jikan Development Limited and Plotio Property & Management Limited, HCA 14915/1998, CACV 381 & 503/2001 and FACV 2 & 3/2003, there were also shares allotted to the common parts in question, but it has been held that the owners of the shares would not have exclusive use of the common parts.  Thus, similarly in the present case, I do not think that the 2 shares allotted to the Common Areas and Facilities would cause the external walls to become non-common parts of the Building.

20. The Respondent further argues that the seepage problem was caused by the design and the construction defects of the developer.  The Respondent refers to page 211 of the book “Building Management in Hong Kong” by Kent, Merry and Walters, which states that:-

“Maintenance is the act of keeping things in working order.  Repair is the action or process of restoring something to its former condition or its replacement.  The need for repair may arise because of the manager’s failure to maintain, for which he would be potentially liable in damages to the owners, or through no fault of the manager, as where an item of equipment has reached the end of its working life.”

21. Based on this passage, the Respondent alleges that it is not responsible for any damages arising from defects or latent defects caused by the omissions or improper workmanship in the construction and design of the external walls.

22. I totally reject this argument.  Although it is possible that workmanship in the construction of the Building could be a cause of the seepage problem, the design of the Building should never be that water could seep through the external wall or the cantilever projection.  These structures should in fact have the function of preventing water going into the internal areas of the Building.  Since maintenance is the act of keeping things in working order, the Respondent should have the duty to make sure that the external wall or the cantilever projection is in working order and can prevent water seepage, and when it is not performing its function, it should be repaired.

23. It does not matter why the external wall or the cantilever projection is not performing its function or who caused the defects.  Be it that it was caused by poor workmanship during construction or normal wear and tear, or even by a third party, the Respondent’s duty to maintain and repair is still there.  Such duty to maintain and repair does not depend on who caused the defects or why they were caused.  Of course, if the developer has caused the defects, the Respondent or the owners can claim against the developer for damages, but the Respondent should still rectify the defects.  There is absolutely no reason why the Respondent could be exempted from the duty to maintain and repair just because the defects were caused by the developer.

24. According to the Applicant’s evidence, the Respondent was trying to delay the repair until the whole building would be renovated.  I agree with the Applicant that this is not an excuse for the Respondent not to carry out its duty.  The seepage problem has affected the Applicant’s use of the Unit.  So the defects should be rectified as soon as possible.  After all, according to the Applicant’s expert, the rectification work is just a simple job.  There is no reason to wait at all.

25. In the circumstances, I find that the Respondent is liable under Clause 34(f) of the DMC and section 18 of the BMO to repair the external wall and the cantilever projection to rectify the water seepage problem.

Damages

26. However, as to the damages claimed by the Applicant, I do not think that the Respondent should be liable to compensate the Applicant for the amount claimed.  The reason is simply that the Applicant did not inform the Respondent about the water seepage until after the Unit had been damaged.  The Respondent could not have done anything to prevent the damage when it was not made known about the water seepage problem beforehand.

27. According to the Applicant’s evidence, the Unit had been vacant since about mid 1998.  The Applicant seldom returned to the Unit.  She only went back to the Unit about every 2 to 3 months.  Before April 2005, she did not notice any water seepage in the Unit, because there was no obvious sign for water seepage.  In April 2005, when she returned to the Unit again, she discovered that the Unit was seriously damaged by water seepage.  Her last visit to the Unit before April 2005 was 2 to 3 months ago.  In other words, the Unit should have been damaged during these 2 to 3 months before April 2005.  However, the Applicant only informed the Respondent about the water seepage problem in April 2005 after she had discovered the damage in the Unit.  By then, it was too late to prevent the damage done.

28. Moreover, the evidence in paragraph 5 of the Applicant’s witness statement contradicts her aforesaid evidence.  In paragraph 5 of her witness statement, she said that after the developer re-applied the granite cladding at the end of 1998 or beginning of 1999, the water seepage problem re-appeared.  Since the Unit was vacant, she all along did not inform the management office about the water seepage problem.  It was only in April 2005 when she decided to return to live in the Unit, and it was then necessary for her to inform the management office about the water seepage problem and request for repair.  The evidence in this paragraph is completely different from what she said in court.  If it is true, it means that the water seepage problem was all along there and the Applicant was aware of it all along, but had chosen not to inform the management office until she wanted to move back to the Unit.

29. If the water seepage problem was all along there, it is impossible that the damage only occurred 2 to 3 months before April 2005.  I do not believe that there could be no sign of water seepage during these 4 odd years.  The damage to the Unit should have occurred much earlier than 2005.  If the Applicant has chosen not to do anything about it, she has not mitigated her loss at all.  She cannot then turn around and ask the Respondent to compensate her when she has done nothing during these years.

30. Thus, I do not find that the Respondent is liable to the damage claimed by the Applicant.

Conclusion

31. By reason of the matters aforesaid, I find that the Applicant succeeds in her claim for an order to rectify the water seepage problem, but fails in her claim for damages.  I would however give 28 days for the Respondent to rectify the problem, because the Respondent would need time to make arrangement for the work to be done.

32. On the question of costs, since the Applicant only wins half of her claims and loses the other half, I think it is fair that there should be no order as to costs.

33. I therefore order as follows:-

(1)       The Respondent do rectify the water seepage problem at the external wall and cantilever projection of the Unit within 28 days from today;

(2)        The Applicant’s claim for the sum of $26,900 be dismissed; and

(3)        Costs order nisi: There be no order as to costs.  Unless there is application for costs from the parties within 14 days from today, the costs order nisi shall become absolute.