LO WEI v. WISER (HONG KONG) LTD AND OTHERS

DCCJ 4082/2013

[2024] HKDC 1774

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4082 OF 2013

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BETWEEN

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DECISION

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1.  The Plaintiff took out a summons (“P’s Summons”) on 2 January 2024 for leave to appeal from my judgment handed down on 6 December 2023 (“the Judgment”). By way of summons dated 18 December 2023 (“Ds’ Summons”), Ds applied to vary (i) the costs order nisi given in the Judgment, and (ii) the interest applicable to the HK$5,000 damages awarded with regard to the 1^st Seepage.

2.  I will deal with both P’s Summons and Ds’ Summons in this decision. The facts and the reasons for the Judgment have been set out therein and I do not repeat the same here. For ease of reference, the abbreviations used in the Judgment are adopted in this decision.

Applicable Principles for Leave to Appeal

3.  The legal principles applicable for leave to appeal are well-established. They are not in dispute. Section 63A of the District Court Ordinance, Cap 336 (“DCO”) is the governing provision. Section 63A(2) stipulates: -

“(2) Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that —

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

4.  The relevant test of whether an appeal has a reasonable prospect of success under section 63A(2) of the DCO is whether the applicant can show that he has an arguable case with reasonable chances of success on appeal. It means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable”: see the Court of Appeal (“CA”) decision in KNM v HTF per Fok JA (as the learned PJ then was) at paragraph 9 [1]. The same test has been consistently applied by the CA: see for example, Yuen Oi Yee Lisa v Charoen Sirivadhanabhakdi & Others [2].

The proposed grounds of appeal

5.  The plaintiff’s solicitors set out their draft grounds of appeal in the said P’s Summons and filed a perfected draft on 4 March 2024 in 14 paragraphs. For convenience sake, I would group the first to sixth grounds under the 2^nd Seepage heading, the seventh ground under the 3^rd Seepage heading, the eighth to tenth grounds under the 4^th Seepage heading, with eleventh to thirteenth grounds being the quantum issue and the fourteenth ground on costs issue.

The 2^nd Seepage

6.  P contended that this Court erred in rejecting the saltwater inlet system from Ds’ Premises being the cause of the 2^nd Seepage by failing to consider the following findings made by Hau:

(a) The possibility of leakage from the drainage system was excluded based on the amount of ammonia found in the concrete sample;

(b) The possibility of salt water coming from the construction materials of the building was excluded based on the concrete sample collected from the non-affected area of P’s ceiling, which consisted of no chloride;

(c) The possibility of seepage from external wall was excluded based on Hau’s test;

(d) The impossibility that seepage could have come from other source but Ds’ Premises due to the layout of water pipes (common or not) of P’s Premises and its close vicinity;

(e) The absence of disagreement from Yeung of Hau’s analysis.

7.  Further, P alleged that Ds deliberately destroyed the evidence by renewing the salt water pipes, and this Court failed to draw adverse inference against the Ds for refusing Hau to inspect the Ds’ Premises prior to the Renovation 2013.

8.  Mr Lim, counsel for P also referred to paragraph 16 of the Judgment where this Court said it could not eliminate the crack (on the outside of the building) being a possible source of seepage, and opined the Court was erred in making this finding of fact as I did not consider first, the leaked water was salt water and therefore could not be rain water, and secondly Hau’s finding in his Hau’s Report 2013 that no signs of seepage could be found. Mr Lim also suggested that the Court failed to consider the possibility that there was leakage from both the external wall and the salt water inlet system of Ds’ Premises at the same time.

9.  It was further submitted on P’s behalf that the Court has erred to come to the conclusion that the 2^nd Seepage came to a stop after the Renovation 2013.

10.  So far as can be discerned from submission of P’s counsel, P said since (i) there was an abatement of seepage after the Renovation 2013; (ii) adverse inference against Ds must be drawn as Hau was not allowed to inspect Ds’ Premises; and (iii) the Court should not reject Hau’s Report 2013 as he had proven the possibility of leakage from Ds’ Premises.

11.  P’s counsel suggested in paragraph 18 of his supporting submissions that the Court should first draw an adverse inference against Ds as to the source of the leakage. Secondly, should the Court draw an adverse inference in that the Renovation 2013 was to get rid of the evidence of leakage from salt water pipes, then the Court would not come to the conclusion that P failed to prove the abatement of seepage, and thus able to find that the salt water inlet system of Ds’ Premises was the cause of the 2^nd Seepage.

12.  With respect, this logic is fundamentally wrong and the application of adverse inference was misconceived. It would be wrong if this Court, as a fact finder, to draw adverse inference against any unincorporated neighbours, and second-guess the destroyed evidence must establish the source of leakage without considering the plausibility of other evidence. In this regard, I was reminded of the principle of adverse inference that was discussed in Sit Ka Chun v Wing Wong Scaffolding Ltd [2022] HKCFI 1730 that even one is shown to have destroyed or failed to provide reasonable evidence, the court will still have to consider the quality of such missing piece of evidence vis-à-vis the quality of the parties’ case as meaningful inference can only be drawn if there is a strong enough case upon which the unavailable evidence can potentially bridge the gap. Further, the Court should also be persuaded that the nature of the unavailable evidence, and the inherent probability that such evidence would plug the evidential gap and remedy the evidential lacuna.

13.  The alleged ‘evidential lacuna’ of P’s case is the state of Ds’ Premises at the time when Hau made his inspection in 2013. To determine if adverse inference should be drawn and to what extent it should be drawn, the Court must consider the lacunae of such nature against the overall evidence and facts presented in the trial. A meaningful inference could only be drawn against Ds if there was evidence suggesting that the Renovation 2013 was to ‘destroy evidence which established the source of leakage’, and thus putting a stop to the seepage. Whether there was abatement of seepage after the Renovation 2013 was a fact-finding exercise which required assessment of various issues that were discussed in paragraphs 27 to 31 of the Judgment. Since it is ruled that the seepage did not stop after the Renovation 2013, it is plain that no lost evidence could ‘plug the evidential gap and remedy the evidential lacuna’.

14.  Further, at no point during the trial was the Court invited to draw adverse inference against Ds, and none of the factual witnesses ever suggested that the Renovation 2013 was done with an intention to ‘destroy available evidence’. Mr Cheng, counsel for Ds correctly pointed out that had the invitation to draw an adverse inference been made at the trial, it would open the floodgates of questions as to the why/when/how of both the Renovation 2013 and P’s request of site inspection. In other words, it would cause prejudicial effect upon Ds should the Court allow P to run this new point on appeal since Ds were not afforded an opportunity to explain why adverse inference should not be drawn against them by way of cross-examination.

15.  In light of the above, I would not draw any adverse inference against Ds; or even if I were to draw any adverse inference (which I would not), I would have taken the view that the adverse inference is not of significant weight to affect my discussion and then my finding above.

16.  In my view, the fatal point that resulted in P’s failure in this case is the lack of objective evidence supporting the abatement of seepage after Renovation 2013. This is a conclusion which this Court is fully entitled to come to after analysis of the pleadings and evidence, see paragraphs 27 to 31 of the Judgment. It is therefore plainly wrong to say that this Court failed to take into account of facts elicited under paragraph 19 of P’s counsel’s submissions in relation to the Joint Inspection 2014. In fact it was a distortion of Hau’s opinion to suggest that he agreed the water seepage was stopped at the Joint Inspection 2014. On the contrary, Hau said he could not tell whether the water seepage problem improved in 2014 due to the high moisture readings, and he attributed any possible seepage to rainwater.

17.  The attribution to rainwater brings to another point raised by P in relation to an alleged failure of this Court in considering the possibility of having both salt water and rainwater as the cause of leakage (see paragraph 8 hereinabove). This Court expressed its appreciation that P’s Premises could have suffered from more than one source of leakage at any point of time, see paragraph 44 of the Judgment. What this Court could not accept is Hau’s opinion that the rainwater only became a source of leakage after the Renovation 2013 when the crack on the external wall existed since the onset of the 2^nd Seepage, see paragraph 30 of the Judgment.

18.  In respect of the P’s contention that the Court has erred in rejecting the saltwater inlet system from Ds’ Premises being the cause of the 2^nd Seepage by failing to consider the findings made by Hau, I am of the view that the findings of Hau’s Report 2013 would certainly have more force if this Court was convinced that the 2^nd Seepage came to a halt after the Renovation 2013. In any event, there are other factors in support such finding, suffice to say that the Ds allowed the FEHD and the Joint Office to conduct various tests on three occasions in April, August and October 2012, but none of the tests could determine the source of leakage. (In fact all ten results conducted by the FEHD, the Joint Office, Single and/or joint experts from 2012 to 2019 have been analyzed under a table over 3 pages long which has set out all the details in paragraph 14 of the Judgment).

19.  I am of the view that taking all the evidence into account, including the P’s evidence and experts’ evidence, I am entitled to make the findings in paragraph 31 of the Judgment.

The 3^rd Seepage

20.  P submitted that this Court was wrong to hold that P had failed to prove that the 3^rd Seepage originated from Ds’ Premises besides the Intervening Period.

21.  I reject Mr Lim’s submissions that this Court had no bases to conclude the seepage outside the Intervening Period was caused by sources other than Ds’ Premises since it is trite that P has the burden of proof in water leakage case, and neither the Court nor the Ds have the duty to identify the actual source. If P wished to point out any alleged errors the Court made, P simply could not pinpoint any misapprehension of evidence on the part of this Court or any findings that no reasonable court, when presented with the evidence now placed before this Court, would have come to. This Court is fully entitled to come to the conclusion as it did in the said Judgment with considerations made under paragraphs 39 to 45 therein.

The 4^th Seepage

22.  All the arguments put forward by Mr Lim in respect of the 4^th Seepage boil down to the followings:

(i) The Court erred to find Hau’s microwave moisture diagrams were futile due to the lack of information on the thickness of the floor slab between P and Ds’ Premises (Ground 8);

(ii) The Court should accept Hau’s findings because Yeung failed to identify deficit of Hau’s test results and did not express reason for disagreement in the Joint Expert Report 2019 (Ground 9);

(iii) The Court should consider the failure of Yeung and Ds in offering further investigation as an act of preventing expert evidence, and thus depriving the Court the opportunity to reach a fully informed decision. As such, adverse inference should be drawn against the Ds (Ground 10).

23.  In respect of the reliability of Hau’s opinions versus Yeung’s is a factual finding made by the trial judge. The Court is not bound to accept Hau’s opinion even if Yeung’s opinion has its deficiencies. Indeed, I had reminded myself in paragraph 50 of the Judgment that courts should never take experts’ comments on their face value but to be critical when analyzing all available evidence. As clearly made in paragraphs 46 to 52 of the Judgment, the Court did not rule against the P’s case solely because of the weak conclusion drawn by Hau, but the significant cumulative effect of consistent negative results from two colour water tests and one ponding test that were conducted by both experts and the Joint Office. Still, the credibility of Madam Lo’s evidence was assessed thoroughly (see paragraph 51), which allowed this Court to make a factual finding that her evidence was so weak that could not even be saved by her own expert.

24.  There is no merit in arguing that adverse inference should be drawn against Ds simply because Ds’ expert did not propose further tests to be conducted to identify the source of leakage. Mr Lim quoted my earlier case Cox Kan Hay Tung Amy & Anor v Jenhon International Ltd [2023] HKDC 678 in which I ordered the defendant to allow access for the plaintiffs’ expert for inspection. P urged this Court to consider the Ds’ denials in allowing Hau’s inspection for the 2^nd Seepage, and the deliberate concealment of the expert’s opinion that further tests could have been done deprived the Court the opportunity to reach a fully informed decision.

25.  As is apparent from the case law and the discussions in foregoing paragraphs 13-17, the decision whether or not to draw an adverse inference is highly fact sensitive. After rejecting P’s contention to draw an adverse inference against Ds in the 2^nd Seepage, it remains to deal with the grave averment of Ds’ deliberate concealment of evidence in the 4^th Seepage. It is trite that Ds have no duty to find out or identify the source of the water seepage and do not bear any burden to prove their innocence. In other words, Ds have no duty to instigate further investigation in assisting P to locate the source. Further, this case must be distinguished from Cox Kan because first, the D in Cox Kan refused to let Ps’ expert to conduct any tests after three years since the onset of water leakage; secondly, the essence of that case is to protect plaintiffs who face with difficult defendant refusing every reasonable request for investigation. Thus the facts that Ds had their premises tested a handful time by both the Joint Office and experts allowed the Court to have sufficient factual and expert evidence at the trial to evaluate and weigh different possible causes of the leakage on a balance of probabilities. P simply could not pinpoint any misapprehension of evidence on the part of this Court or any findings that no reasonable court, when presented with the evidence now placed before this Court, would have come to. This Court is fully entitled to come to the conclusion as it did in the said Judgment.

Quantum

26.  Grounds 11 to 13 deal with the award of damages for the 1^st to 4^th Seepage. In a nutshell, P argued that they should be awarded for:

(i) nuisance, loss of enjoyment and discomfort during the 1^st Seepage (Ground 11);

(ii) actual damages suffered from the Intervening Period (Ground 12);

(iii) higher damages for loss of enjoyment.

27.  In Lam Suk Yee & Anor v The Incorporated Owners of Kam Kin Mansion [2018] HKCFI 2760, private nuisance was defined in paragraph 155:

“Private nuisance is basically unlawful interference with a person’s use or enjoyment of land, or some right over, or in connection with it. Generally, the essence of nuisance is a state of affairs that is either continuous or recurrent, a condition or activity which unduly interferes with the use or enjoyment of land.”

28.  Further in paragraph 26 of 張秀玲及吳炳漢 v 鄭禮莊 (unreported), CACV 268/1998, 9 April 1999, Woo JA said “For seepage of water to constitute nuisance at common law, the defendant must be shown to have actual or constructive knowledge that the leakage of water originated from the defendant’s property. Under this test, “knowledge” can be what the defendant actually knew, or what the defendant should have known with normal or reasonable diligence. If the defendant can be shown to have actual or constructive knowledge that the water seepage originated from the defendant’s premises, the defendant will be liable unless remedial action is taken without reasonable delay. Failure to do so will render the defendant liable for damages and to be restrained by injunction.”

29.  Ds rectified the 1^st Seepage within 3 days after being notified by the MO. P never offered any evidence as to how her Premises were rendered unusable from the 1^st Seepage. Further, no evidence as to the loss arising from the seepage to the amenity value of the P’s Premises due to the persons upon it were liable to suffer inconvenience, annoyance or illness. This ground must be dismissed.

30.  In respect of the damages suffered by P under the Intervening Period, this Court made a broad-brush assessment of $7,000 since the P’s bathroom was in such a dire state before the said leakage that warranted immediate repair. P relied on my findings in paragraphs 39-44 of the Judgment that the leakage was a lot more serous during the Intervening Period, and thus an award must be awarded to P to reflect the costs for repairing the damages. P invited the Court to apply some discounts to reflect the damage caused by the 2^nd Seepage if Ds are not found to be liable for the 2^nd Seepage.

31.  The extent of discount will have to depend on the state of the bathroom before the Intervening Period came to play, which P failed to show. Given the conclusion I made that the 2^nd Seepage never stopped, I could only expect the bathroom (and other parts of P’s Premises) were continuously ruined throughout the entire period from the onset of 1^st Seepage to the Intervening Period, which lasted for 5 years and more. The fallen concrete, as common sense dictates, must resulted from an extended period of structural defects which perhaps aggravated by the straw that broke the camel’s back, ie the serious leakage during the Intervening Period. This however will be unjust if this Court holds Ds liable to repair the bathroom for P due to the cumulative effect of previous damages that they were not liable for.

32.  As such, I consider asking the Court to apply a discount to the actual damages suffered from the 2^nd Seepage is more arbitrary than giving a board lumpsum to reflect the actual inconvenience and loss of enjoyment P suffered.

33.  Without saying, it is also trite that litigation in itself cannot amount to disturbance or inconvenience.

34.  Taking into account all of the above, Ground 11-13 must be rejected.

Costs Order Nisi

35.  This Court made an award that 80% of the costs of this action to the Ds and P argued that in the event that P fails to succeed in the Court of Appeal, the costs order should reflect the facts that neither the party on the Judgment was totally successful, and an order in P’s favour for the Ds to pay 1/3 of P’s costs should be made to reflect P’s success on the 1^st Seepage and part of the 3^rd Seepage.

36.  The discretion this Court exercised when considering the costs order was made with thorough assessment of each and every allegations raised by P in this action. The costs argument must fail because Ds admitted liability to the 1^st Seepage, so P technically lost two and a half of her cases out of three contested issues.

D’s Summons for varying costs order nisi

37.  In respect of the Ds’ summons and P’s submissions that Ds’ Summons should be stayed pending her application for leave to appeal against the Judgment, the Court made the following findings:

(i) As explained in the foregoing paragraphs, the Court does not see how P has won her case of the 1^st Seepage against Ds as Ds admitted liability early in the Defence, costs in respect of the 1^st Seepage should therefore be very little;

(ii) To put P’s case to its highest, she has lost two and a half of her cases in three contested issues;

(iii) Where a plaintiff fails to accept a sanctioned payment and obtain a better judgment, costs sanction should be imposed unless the Court considers it would be unjust to do so;

(iv) The Court sees no forceful argument put forward by P to suggest any unfairness;

(v) Ds suggested that an increase from 80% to 90% of costs of proceedings that P has to pay Ds should be a reasonable reflection of the sanction to be imposed for P’s failure to accept the sanctioned payment;

(vi) It is impossible to formulate an equation to assess the appropriate increment of costs P has to pay Ds but to rely on fair judgment from the Court;

(vii) Bearing in mind that the relevant rules in sanctioned payment does not require the Court to assess the substantive merits of the case (and even if it does, the Judgment explained the various weaknesses in P’s case), a 10% increase from the award made under the costs order nisi should be seen as a fair approach;

(viii) Last but not least, it is trite that an appeal does not operate as a stay on the order appealed against;

(ix) The Court therefore makes an order in terms of Ds’ Summons, save that the costs of and incidental to this application, on party and party basis with certificate for counsel, be to Ds, to be taxed if not agreed.

Conclusion

38.  Brevity is the soul of wits. Those instructed by P furnished 14 grounds of appeal that have been sensibly condensed to less headings by both counsels’ careful thinking. While not all proposed grounds were unmeritorious, there were grounds which are just a rehash of what was submitted at trial whereas some other grounds were shown to lack credibility, as they were challenges made about findings of fact rather than errors of law. The Judgment has dealt with all ten different results conducted by the FEHD, the Joint Office, Single and/or Joint Experts from 2012 to 2019, together with the credibility of each and every witness. I do not see any error in my analysis, and thus many untenable points made are far from the very high threshold required in respect of appeal against factual findings made by the trial judge.

39.  There is no merit in any of the grounds proposed by P. There is no reasonable prospect of success in the P’s appeal. The P’s Summons must be dismissed.

Costs

40.  Costs should follow the event. The costs of both P’s Summons for leave to appeal and Ds’ Summons for varying costs order nisi should be to the Ds, with certificate for counsel. I also order that the costs order nisi shall be made absolute if no application to vary the same is made within 14 days hereof.