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LDBM 1/2006
IN THE LANDS TRIBUNAL OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
BUILDING MANAGEMENT APPLICATION NO. 1 OF 2006
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BETWEEN
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TAI FONG TRADE LIMITED |
Applicant |
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and |
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THE INCORPORATED OWNERS OF |
1st Respondent |
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NOS.167 & 169 HOI BUN ROAD |
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LAM, CHAN & CO LTD |
2nd Respondent |
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Coram: H.H. Judge WONG, Presiding Officer, Lands Tribunal
Dates of Hearing: 10-14 March 2008, 20-23 & 26 May 2008 and 11-12 & 16 September 2008
Date of Submission of Last Written Submission: 8 October 2008
Date of Handing Down of Judgment: 11 November 2008
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JUDGMENT
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Background
1. The Applicant is and has been the owner of the 5th floor of the building known as Nos. 167 & 169 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong (“the Building”) since 1996. Its associated company was the owner of the 5th floor between 1983 and 1996. The 1st Respondent is the owners’ corporation of the Building. The 2nd Respondent was the developer of the Building and still owns the roof of the Building. These proceedings concern the water leakage problem from the roof to the 5th floor of the Building.
2. The Building was erected in the 1960s. The building plans dated back to 1965, and the occupation permit was issued in 1969. Thus, the Building is almost 40 years old. There are only 7 levels in the Building, namely the ground floor, the 1st floor, the 2nd floor, the 3rd floor, the 4th floor, the 5th floor and the roof. The 5th floor is the floor immediately below the roof. There is one owner to each of the levels (except the car parking spaces on the ground floor). The size of each level is rather large, with the dimension of 40m x 52m. According to the occupation permit and the building plans, the Building is primarily designed to be used as godown.
3. The parties have no dispute that there are various layers making up the floor slab of the roof cum ceiling slab of the 5th floor, from the top downwards, as follows:-
(a) concrete tile layer;
(b) cement/sand screeding layer;
(c) thermal insulation material layer (but it is unlikely to be present in the Building);
(d) waterproof membrane;
(e) cement/sand screeding and bedding layer; and
(f) structural slab.
4. It is also not in dispute that among the various layers, only the waterproof membrane is waterproof, all the other layers (above and below the waterproof membrane) are porous and not waterproof. The concrete tile layer is still the original concrete tile layer existing at the time when the Building was first constructed and has never been changed. Likewise, the waterproof membrane has never been replaced.
5. Like many of the other floors in the Building, the 5th floor was formerly used as a factory. There had been structures, like 3 chimneys, some air-conditioning cooling towers and a water tank, erected on the roof serving the factories in the floors below. Amongst those structures, a chimney and a water tank were erected by the Applicant’s predecessor in about 1983, at which time the other 2 chimneys and many other structures had already been erected on the roof. It is not disputed that in erecting the chimneys and the water tank, certain parts of the waterproof membrane were penetrated, as the anchorage for the chimneys had to be anchored onto the structural slab (though the chimneys themselves did not penetrate the floor slab) and the outward water pipe from the water tank did penetrate the structural slab to go down to the 5th floor.
6. Notwithstanding the erection of the structures, there was no water leakage from the roof to the 5th floor for over 14 years. The water leakage problem only occurred in about mid-1990s. In about October 1997, the factory at the 5th floor was closed down and moved to somewhere else. After the factory had moved out, the 5th floor was renovated and the renovation was completed by February 1998. The Applicant’s intention was to rent out the 5th floor, and by then, the Applicant had already put the 5th floor on the market with various estate agents for lease. However, the Applicant only managed to get a tenant by December 2000 and at a rental very much below the market rent. According to the Applicant, the reason for not being able to rent out earlier and the low rental is that there was widespread and substantial water leakage from the roof to the 5th floor affecting the use of the 5th floor. Despite complaints made by the Applicant to the 1st and 2nd Respondents, the 1st and 2nd Respondents failed to effect repair to the roof, and the water leakage problem continues until today.
7. The Applicant’s case is that the water leakage has been caused by 2 factors as follows:-
(1) The waterproof function of the waterproof membrane has failed due to aging and lapse of its natural life span. It is the 1st Respondent’s fault in failing to maintain the waterproof membrane.
(2) The lack of proper repair and maintenance of the floor of the roof has aggravated the water leakage problem. It is the 2nd Respondent’s fault in failing to properly repair and maintain the roof.
8. Thus, the Applicant claims against the 1st and 2nd Respondents for:-
(1) A mandatory injunction to repair the waterproof membrane within 7 days of the order;
(2) Damages for cost of repair and inspection already incurred and loss of rental already sustained;
(3) Further damages to be assessed;
(4) Interest; and
(5) Costs.
9. There is also an additional claim against the 1st Respondent for a declaration that:-
(1) The waterproof membrane forms part of the common parts of the Building; and
(2) It is the duty and obligation of the 1st Respondent to repair the defects in the waterproof membrane and to maintain the waterproof membrane in a state of good and serviceable repair and clean condition.
10. In the 1st Respondent’s Amended Notice of Opposition, the following points are taken:-
(1) The 1st Respondent was incorporated on 19 April 2001 and the liabilities of the owners of the Building prior to its incorporation cannot be enforced against the 1st Respondent. However, at the trial, the 1st Respondent abandoned this point on “pre-incorporation liability” and it is no longer a live issue.
(2) The 2nd Respondent should be responsible for the repair and maintenance of the roof. In this regard, the 1st Respondent has issued a Notice of Contribution against the 2nd Respondent.
(3) The 1st Respondent denies that the water leakage was caused by defects in the waterproof membrane, and alleges that it was the structures previously erected on the roof but subsequently removed in 2002 which caused the leakage.
(4) The 1st Respondent denies that the Applicant has suffered any loss or damage as pleaded, or alternatively, the 1st Respondent avers that the loss and damage were caused wholly or materially contributed to by the Applicant’s own fault in erecting the chimney and water tank.
11. In the 2nd Respondent’s Notice of Opposition, the following points are taken:-
(1) The 2nd Respondent does not admit that it is under a duty to repair and maintain the roof. The 2nd Respondent also issued a Notice of Contribution against the 1st Respondent.
(2) The 2nd Respondent denies that the water leakage was caused by it’s failure to repair or maintain the roof, and alleges that it was the structures previously erected on the roof but subsequently removed in 2002 which caused the leakage.
(3) The 2nd Respondent denies that the Applicant has suffered any loss or damage as pleaded, or alternatively, the 2nd Respondent avers that the loss and damage were caused wholly or materially contributed to by the Applicant’s own fault in erecting the chimney and water tank.
(4) The 2nd Respondent raised the issue that the cause of action did not first accrue to the Applicant within 6 years before the commencement of the action and hence the claim is barred by the Limitation Ordinance. However, at the trial, the 2nd Respondent abandoned this issue and I do not need to deal with it any more.
Water leakage
12. From the evidence before me, and also the site visit I had at the trial, it is clear that the water leakage problem at the ceiling of the 5th floor is very serious. I accept that the only source of water causing the leakage is from rainwater. As observed by Mr. Albert Chan, the Applicant’s expert, there is no water supply or drainage pipe at the ceiling, except ceiling mounted exposed fire services sprinkler water pipes, but there is no sign of water leakage from such pipes. As to the roof, again as observed by Mr. Chan, there is no water supply or drainage pipes that run on the surface of the roof, except a fire service water pipe running along the periphery of the roof, but the 1st Respondent’s expert, Mr. W.K. Kwong, confirms that the fire service water pipe is in good condition.
13. I accept the evidence of Mr. LauWah (the Applicant’s director and factual witness) that the water leakage problem at the 5th floor started in or not long before 1997. The first batch of water leakage spots were noticed by the Applicant a couple of years before 1997, and those were actually the spots in the middle of the ceiling, where had been no structures erected on the corresponding part of the roof. For the leakages in the vicinity around the place where there used to be structures erected, they were discovered close to 1997, some 14 years or more after the structures had been erected. Since the water leakage was discovered, the problem has deteriorated over time. The water leakage problem has become extremely widespread and substantial. It affects almost each and every part of the ceiling.
14. The presence of the whole series of metal trays and PVC water drainage pipes connecting the trays around the ceiling of the 5th floor is telling of the seriousness and extent of the leakage problem. Clearly, the trays are there to collect water dripping from the ceiling. It is a very elaborate water collecting system, the erection of which is no doubt costly and time-consuming. No one would have undertaken such an arduous task unless the water leakage problem is substantial and widespread.
15. I also accept Mr. Chan’s evidence, as stated in his reports, as follows:-
(1) “ In general, majority of the ceiling surface was being affected by water leakage. The areas of damp staining and flaking paintwork were scattered all around the ceiling and adjacent walls.”
(2) “a major water collection and diversion drainage system to collect the leaking water from the various points at the ceiling to two main horizontal and vertical downpipes to the building’s drains. The water collection trays were made from metal, both in rectangular and circular shape and were fixed by metal brackets suspended from the structural ceiling.”
(3) “the ceiling of the Premises had been suffering from serious water leakage problem. … The water leakage affected areas were scattered all around the ceiling surfaces of the Premises and that the damage had been related to the condition of weather. It became more serious in rainy seasons and less serious in dry seasons.”
(4) “the leakage spots were distributed evenly all over the ceiling within the Premises. The RITS results taken on the same day which was after several rainy days traced and found that the leakage took place at each of these individual spots from roof… This indicates that the leakage has been taking place at various locations and scattered all over the roof area.”
(5) “There were two major areas where the growing damp stains and water seepage spread from directly above at roof/ceiling level downwards to the two enclosing walls, east and west of the Premises”
(6) “areas and spots being affected by the water leakage problem, with defects including water staining, debonded/hollow plaster, cracking, concrete spalling/exposed steel reinforcement bars, bulging, bubbling and peeled off paintwork” are identified as per the layout plan prepared by Mr. Chan. “The number of defective spots was noted to be 37 and this figure does not include the internal wall damage.”
16. Mr. Chan’s evidence is supported by the Protimeter test carried out by him at some of the 37 spots observed to have been affected by water leakage as well as parts of the 5th floor not affected by water leakage, and it shows that those spots observed to have been affected by water leakage generally recorded high moisture contents as compared with much lower moisture contents at the other areas. As explained by Mr. Chan, more than 30 readings had been taken from the 5th floor, and amongst them he detected low moisture contents of 10-20% for areas not affected by water leakage (and with no water staining or other apparent defects) but high moisture contents of 80->90% at leaking spots and damaged areas. It is important to bear in mind that the use of the Protimeter is to compare the “relative” moisture contents at different parts of the same premises, of which different parts would be equally or similarly affected by the ambient relative humidity, and thus the ambient relative humidity would have little or no adverse impact on the reliability of such comparison.
17. Although Mr. William Poon, the 2nd Respondent’s expert, in his report and in his oral evidence sought to suggest that high moisture reading from Protimeter might be due to high relative humidity, he accepted that when one is talking about the different readings on 2 points in the same premises at the same time, the relative humidity would be the same and the high or low relative humidity would not adversely affect the reading picked up by the Protimeter. He further accepted the integrity of Mr. Chan and that the differential readings from the Protimeter for unaffected and affected areas obtained by Mr. Chan would show that there was water leakage at the areas with high readings.
18. The RITS scanning carried out by the Applicant’s expert after a few days of rain further confirms that there is water leakage at various spots all over the ceiling of the 5th floor. The leaking spots, as observed with RITS scanning, largely correspond with the visual observations of Mr. Chan. The RITS scanning results confirms that the water leakage problem is widespread and affecting virtually every part of the 5th floor.
19. The 1st Respondent’s expert, Mr. W.K. Kwong, also conducted RITS scanning, but I accept the Applicant’s comments on Mr. Kwong’s RITS scanning. Mr. Kwong’s scanning was done from above the roof surface, and such way of scanning would only show the water ponded or accumulated at the top layers of the roof surface above the waterproof membrane. It would not really show the positions of water leakage.
20. I also accept the Applicant’s comments on the RITS scan test conducted by the 2nd Respondent’s expert, which was done after localized ponding of part of the roof. The ponding test was done after and during days with fine weather, and as such the water from the ponding would be the only source of water one may find at the 5th floor. According to Mr. Poon, the localized ponding was supposed to be targeted at the parts of the roof where the previous structures were found. However, the ponding was flouted with problems.The locations of the ponds were wrong – with edges of water ponds cutting through half of the areas occupied by the chimneys and the water tank. The erection of the ponds themselves was done sloppily – with water leaking out from the ponds here and there. It is misleading to suggest that the water leakage problem at the 5th floor is not serious or that the water leakage was caused by the structures previously erected on the roof just based on the few spots of leakage discovered from the RITS scanning under localized ponding. Such localized ponding can only show localized leakage. It may well be able to show that there is leakage at places where the structures used to be – because water is ponded there and because the part of the waterproof membrane at that place has failed. It cannot however show whether it was the former structure or the aging of the waterproof membrane that caused the leakage. Neither can it show that there is no leakage at places where there were no structures. The RITS scanning by the 2nd Respondent’s expert did not show water leakage at other places where no water was ponded. However all the other evidence shows that there is widespread substantial water leakage throughout the ceiling of the 5th floor, even at areas where there had never been any structure erected.
21. Nevertheless, the scanning by the 2nd Respondent’s expert shows that the water leakage at the walls of the 5th floor also came from the surface of roof. According to the 2nd Respondent’s expert, after the ponding test, 4 spots of leakages were found at the ceiling of the 5th floor, whereas 6 spots of leakages were found on the internal wall of the 5th floor. This contradicts with Mr. Poon’s suggestion that rainwater could have gone through the gap between the Building and the adjacent building to cause damage to the walls of the 5th floor. Mr. Poon in fact confirmed in his oral evidence that the seepage or dampness found on the internal wall also came from the water ponded on the surface of the roof. This shows very clearly, on the 2nd Respondent’s own evidence that the water leakage problem at the internal walls of the 5th floor actually came from the floor of the roof as well.
22. The experts for all the parties agree that given the limited thickness of the structural slab of the floor of the roof, water leaking through the waterproof membrane would not travel for very long horizontal distance before coming out from the ceiling of the 5th floor, even though their evidence on the horizontal distance that the water can travel differ from each other. However, as the size of the 5th floor ceiling is huge, and there is water leakage at virtually every part of the ceiling, given the small horizontal distance which the experts estimate the water seeping through the waterproof membrane can travel, it is obvious that there are many points of leakage and they cover almost the entire ceiling. It is clearly not a case that there was only one or a few spots, or one or some localized parts of the waterproof membrane having failed. It is clearly a case where a very substantial part of the waterproof membrane, if not the whole of it, has failed.
23. Nevertheless, Mr. Poon sought to put forward some arguments to address or explain away the appalling condition of the ceiling of the 5th floor, but I agree with the Applicant that these arguments are of no substance. Mr. Poon sought to rely on the standard for concrete cover laid down by the 2004 edition of the Code of Practice for Structural Use of Concrete, which requires concrete cover of 30mm thick, to suggest that the concrete cover of the 5th floor was only 10-15mm thick generally and thus of insufficient thickness for protection, and that was the cause for the spalling of concrete. It is indeed surprising that Mr. Poon, on behalf of the 2nd Respondent, would have raised such a contention, when the Building was developed by the 2nd Respondent, and if anyone was at fault for putting up insufficient concrete covering, that would be the 2nd Respondent. However, it is unclear if the current building standard adopted by Mr. Poon was in force at the time the Building was erected some 40 years ago. Mr. Poon himself does not know the standard adopted at the time the Building was erected. As confirmed by Mr. Poon, his estimate of the 5th floor ceiling concrete cover thickness of only “10-15mm” was derived by visual observations made from the floor of the 5th floor, some 15-16 feet away from the ceiling. The estimate may not be accurate. In fact, the fallen spalled concrete pieces produced at the trial show that the ceiling concrete cover has thickness of some 25-30mm. Further, except for concrete spalling at the 5th floor ceiling and the ceiling of the staircase hood above the 5th floor, we do not see any similar spalling at the ground floor or at common staircase generally. One would assume that different parts of the Building would have similar concrete covering thickness. The absence of concrete spalling in other parts of the Building is telling that the thickness of the concrete cover had nothing to do with the spalling.
24. Mr. Poon also sought to suggest that the spalling of concrete at the 5th floor was caused by “exposure under ambient marine environment”. If that were really the case, one would expect that the whole of the Building would have been similarly affected and had similar concrete spalling. However, that was not the situation. The ground floor has good condition, with no obvious spalling. The condition of the common staircase, except the roof of the hood of the staircase, was generally good. It is unreasonable for Mr. Poon to suggest that the 5th floor would have greater exposure to such “ambient marine environment” than the ground floor. While there is nothing between the 5th floor level of the Building and the sea, for the ground floor there is only a wire mesh fence at ground level between the Building and the sea, which could not have effectively fended off the ground floor from the marine environment at all. Further, the premises on the ground floor has a completely open façade facing the sea whereas the premises on the 5th floor has most of the side facing the sea enclosed by wall. It is simply inconceivable that the 5th floor would have been more affected by the so-called “ambient marine environment” than the ground floor. The impact of carbonates and sulphates from the sea breeze would affect the 5th floor of the Building just as any other floor of the Building.
25. Thus, I find that the water leakage from the roof through the defective waterproof membrane to the 5th floor had caused damages to the ceiling and the walls of the 5th floor.
Whose responsibility
26. There is no dispute amongst the parties’ experts that all layers in the floor slab of the roof are porous except the waterproof membrane. Thus, when water is leaking from the roof surface to the ceiling of the 5th floor, it must be due to the defects of the waterproof membrane. Whoever is responsible for the defects of the waterproof membrane will be responsible for the damages to the 5th floor caused by water leakage.
27. The waterproof membrane is there to protect the interior of the whole of the Building, and not for any particular owner alone. It must fall within the definition of “common part” in section 2 of the Building Management Ordinance, Cap. 344 (“the Ordinance”). The authorities also clearly establish that such water proofing layer is a common part of the building (see 梁有勝 訴 馮源禧及另四人 LDBM 249 of 2000, Kung Shing Investment Ltd. v. The Sunbeam Manufacturing Co. Ltd. and another DCCJ 4093 of 2002 and Nation Group Development Limited v. New Pacific Properties Limited CACV 160 OF 1999 (CA) & [2001] 1 HKLRD 375 (CFA)).
28. As the waterproof membrane is a common part of the Building, it must be the duty of the 1st Respondent to maintain it in a state of good and serviceable repair and clean condition: section 18(1)(a) of the Ordinance.
29. It is also common ground of the experts for the parties that the layer of cement/sand screeding above the waterproof membrane is for the protection of the waterproof membrane. It follows that this layer of cement/sand screeding should also be a common part of the Building, and is within the responsibility of the 1st Respondent to maintain and repair.
30. As to the function of the concrete tile layer on the very surface of the roof, the experts for the Applicant and the 1st Respondent on the one hand and the expert for the 2nd Respondent on the other hand have different views. However, I accept the Applicant’s submission in this regard and find that the concrete tile layer is not a common part of the Building but a layer of which the 2nd Respondent as the owner has the exclusive right to use and the 2nd Respondent should bear the responsibility for the repair and maintenance of this layer.
31. First of all, the standard roof details from the Architectural Services Department (“ASD”) show that concrete tile layer is dispensable. There is no need for any concrete tile layer or covering (or any similar further layer) on top of the cement/sand screeding. It can be seen from the standard roof details that they were produced by ASD in 1995, and yet as confirmed by Mr. Kwong in his oral evidence, such specifications are till being used by ASD today. Mr. Poon also said in his oral evidence that “there are cases without the tiles”. It is clear to me that any suggestion by Mr. Poon that the concrete tile layer is a must for the roof is wholly unsustainable.
32. As to the use of any layer like the concrete tile layer on the roof, Mr. Kwong, who is an architect with particular expertise in matters of building design as compared to Mr. Poon who is a building surveyor, gives evidence that the concrete tile layer is “to provide a sound surface for pedestrian traffic of routine maintenance and activity at the main roof level”. Mr. Kwong also gives evidence that “merely a layer of Cement/Sand Rendering could also perform the function of protection” of the waterproof membrane. Thus, the concrete tile layer is not for the protection of the waterproof membrane and should be the responsibility of the 2nd Respondent to maintain.
33. Mr. Chan also shares the view of Mr. Kwong. Mr. Chan gives evidence that “The concrete tiles serve as a finishing layer and form a ‘load’ covering that also provide a wearing surface for maintenance and pedestrian traffic.” He agrees with Mr. Kwong that “the upper layer cement sand screeding could already properly perform the function of protection of waterproof layer against damage, and though the concrete tiles on top of it could also serve similar function, such concrete tiles would primarily serve other functions, such as slip protection, finishing characteristics or facilitate use of the roof.”
34. Mr. Chan further said that“Even for the waterproof material which would require protection, as mentioned above, the layer of cement/sand screeding on top of the waterproof layer would have provided sufficient and proper protection for the waterproof layer. The roof can properly do without any further layer of tile on top of that cement/sand screeding layer. … what is important is that such layer of concrete tiles … above the cement/sand screeding is dispensable from the waterproofing point of view.”
35. However, Mr. Chan also said in his report that “The waterproof layer and the cement/sand screeding on top of it protecting it from exposure to direct sunlight and damage by maintenance traffic are together forming an integral part of the roofing system. This roofing system performs the function of waterproofing to guard against water leakage to the interior of the building.” Mr. Chan has clarified this in his oral evidence and said that while theoretically the concrete tile layer can be said to have some extra protective function for the waterproof membrane on top of the cement/sand screeding (just as if one were to put a metal plate on top of the floor and that metal plate can be said to have given more protection to the waterproof membrane), protection of the waterproof membrane was not the function for which the concrete tile layer was there for.
36. I agree with the Applicant that Mr. Chan’s evidence should be considered as a whole and not taken out of context. He clearly opined that the concrete tile layer is not primarily for the protection of the waterproof membrane.
37. The description in the Roof Plan, i.e. “COURSE TILE ON 2-COATS FLINKOTE WATER PROOFING”, is only descriptive of (but not explanatory of the purpose of) what was to be laid on the top of the slab on the roof. It is wholly speculative for the 2nd Respondent, without calling the architect responsible for the design of the Building, to say that the architect would have thought that the concrete tiles layer formed part of the waterproofing system on the roof. Such suggestion is actually against the evidence of Kwong who is an architect himself.
38. The 2nd Respondent, as an owner, has actually the exclusive right to possession and use of the roof. The 2nd Respondent can even have extra storeys erected on top of the roof according to clause 23 of the Deed of Mutual Covenant of the Building. Thus, in terms of the right to use the premises, the 2nd Respondent has the usual right (and indeed more than the usual right) which an owner of a unit or a floor would have over his unit or floor. As pointed out by Mr. Chan, it would be very much up to the 2nd Respondent to decide what sort of layer he wants to put on the surface of the roof, just like what an owner of an internal storey or flat of a building can do to his flooring. Conceptually, the concrete tiles on the surface of the roof of a building, the right to exclusive possession of which being given to the roof owner, are no different from the wooden, carpet, tile or marble floorings of an internal unit of a building owned by an individual owner.
39. As pointed out by Godfrey JA in the Nation Group Case, supra., whose observations were affirmed by the Court of Final Appeal, the owner of a unit would have right to the exclusive use of the floor and ceiling surfaces of the floor owned by him and the air space between them, but not use of the underside of the concrete slab. I accept that with that right, it also comes with the right of the owner to change the finishes of the floor surface (be it wooden, plastic, carpet, tile or mable) and the ceiling surface (be it paint or ceiling paper). It is the responsibilities of flat owners to maintain the floor and ceiling surfaces, as they have the exclusive use of them, by virtue of section 34H of the Ordinance. In the case of an owner of a roof, the situation is the same except that the roof would have no ceiling. However, as far as the floor of the roof is concerned, the owner would still be entitled to the exclusive use of the floor surface, which carries with it the right to change the finishes of the floor surface and also the responsibility to maintain it.
40. I therefore reject the 2nd Respondent’s argument that the concrete tile layer is not “indispensable” and forms part of a “monolithic” system. The mere fact that the concrete tile layer could offer extra protection to the layers underneath would not make it a common part of the Building. If this argument is correct, then any additional layer, such as metal plate, which can afford extra protection to the layers below, would become a common part.
41. In order to maintain his contention that all of the layers in the floor slab are “indispensable” and form a “monolithic” system, Mr. Poon contends that even though there was probably no separate layer of insulation foam in the roof, the insulation function would have been taken up by the space underneath the “legged tiles” on the surface of the roof. While it is true that the use of a layer of insulation foam in the roof was not common in buildings of such age, and it is unlikely that the floor of the roof in the Building would have such a layer of insulation foam, Mr. Poon’s contention that the insulation function would be taken up by the “legged tiles” is clearly wrong. If legged tiles were used, probably many would have cracked upon installation of the illegal structures, but there is no widespread cracking of the concrete tiles found along the places where the structures were previously erected If legged tiles were used, the tile joints would not be sealed up, so as to allow air flow underneath the tiles and to achieve heat insulation purpose. However, the tiles on the roof all have joints sealed up (except for those where the joints have cracked). Indeed, there was a piece of broken and debonded concrete tile found on the roof and it is not a “legged tile”. Chances are clearly that all of the concrete tiles are not “legged”. In any event, as Mr. Kwong confirms, the insulation layer if present is only “to protect the space (unit) right underneath the main roof level from solar heat”, i.e. protecting the top floor of the building from the heat, rather than protecting the waterproof membrane from the heat. Mr. Poon himself also agreed that the purpose of the insulation layer is to protect the top floor of the building from the heat. Clearly, the insulation layer would have nothing to do with waterproof membrane.
42. It is therefore my findings that the 1st Respondent bears the responsibility for the maintenance of the waterproof membrane and the cement/sand screeding layer above it, whereas the 2nd Respondent bears the responsibility to maintain the concrete tile layer.
Who caused the damage to the waterproof membrane
43. There is no dispute that the waterproof membrane has not been repaired, replaced or re-done by the 1st Respondent or anyone since it was first laid there when the Building was erected in the 1960s. According to Mr. Chan, the normal life span of a waterproofing layer like the one in the Building would be around 15 to 25 years. Mr. Poon said it was around 20 to 30 years. Mr. Kwong initially said that he had seen waterproofing layer which could last as long as 40 years, but upon further examination, he clarified that that would be an exceptional case, waterproofing layer would normally fail by the 30-year mark and it would not be surprising to see waterproofing membrane starting to fail after 20 years. From these evidence, it is clear to me that by the time the water leakage started in the Building, i.e. in mid-1990s or around 1997, the normal life span of the waterproof membrane of the Building had probably lapsed, and the waterproof membrane would have started to fail and required a complete replacement. As Mr. Chan put it, by 1997, after lapse of some 29 years since completion of construction of the Building in 1968, there is a high probability – “99% probability” – that there would be leakage because of aging of the waterproof membrane. Indeed, with the widespread water leakage all over the ceiling of the 5th floor, it is clearly the case that the waterproof membrane had gone well beyond its life span.
44. The 1st Respondent in fact acknowledges that the waterproof membrane needs replacement, but they have simply not done it even up to today, despite repeated demands from the Applicant. The correspondence between the parties and the minutes of meetings of the 1st Respondent all show that the 1st Respondent has been made known of the need to repair the waterproof membrane for a long time.
45. I am of the view that it is extremely unreasonable for the 1st Respondent not to take any action to repair or replace the waterproof membrane, when it is clearly their duty to maintain it in a state of good and serviceable repair and clean condition under section 18(1)(a) of the Ordinance. I do not think that the 1st Respondent can raise the defence that since the concrete tile layer belongs to the 2nd Respondent, they cannot repair the waterproof membrane without the consent of the 2nd Respondent. The 2nd Respondent never refuses the 1st Respondent to repair the roof and indeed contends that the 1st Respondent should have the duty to repair it. As long as the 1st Respondent can reinstate the concrete tile layer for the 2nd Respondent, I see no reason why the 2nd Respondent would object to the 1st Respondent carrying work to repair or replace the waterproof membrane.
46. However, the Applicant’s claim is not just against the 1st Respondent, it also contends that the 2nd Respondent is liable for the repair or reinstallation of the waterproof membrane. The Applicant relies on various provisions in the Deed of Mutual Covenant of the Building (clauses 9 and 13, paragraph 5 of Part II of the 3rd Schedule and paragraph 4 of the 4th Schedule) as well as section 34H of the Ordinance to hold the 2nd Respondent responsible for repairing and maintaining the roof. However, as I have ruled above, the waterproof membrane does not belong to the 2nd Respondent, they do not have the responsibility to repair it unless they have damaged it as a result of their own fault. Their liability under these provisions of the DMC or the Ordinance is confined to the repair of the concrete tile layer.
47. No doubt the 2nd Respondent has never repaired or maintained the concrete tile layer of the roof and the surface concrete tiles are still the same tiles when the Building was constructed. Some of the tiles are cracked, bulging or even heaving. There is a large extent of vegetation growing along the cement joints of the original concrete tiles. Mr. Kwong opines that with the cracks, vegetation grows, and as the vegetation grows the cracks get bigger, allowing vegetation to grow more and bigger, a vicious cycle aggravating the condition of the roof, and eventually, the roots keep digging deeper damaging the waterproof membrane. The Applicant therefore argues that the lack of repair and maintenance of the surface of the roof by the 2nd Respondent has also caused the water leakage problem to the 5th floor.
48. Nevertheless, I do not accept the Applicant’s argument in this regard. The concrete tile layer, as opined by the Applicant’s and the 1st Respondent’s experts, whose evidence are accepted by me, is not for the protection of the waterproof membrane. Even if there were many cracks at this layer and vegetation grows along the cracks, there should still be protection of the waterproof membrane afforded by the cement/sand screeding layer. To take an extreme example, assuming the 2nd Respondent takes away all the concrete tiles, leaving the cement/sand screeding layer exposed to open air and water, and vegetation grows on this layer, the Applicant cannot hold the 2nd Respondent liable for anything. As an owner of the concrete tiles, the 2nd Respondent is entitled to do whatever they like to this layer. They can change the tiles and also to remove the tiles. As the tiles are not for the protection of the waterproof membrane, the Applicant cannot insist that the tiles must be there intact. The same argument will apply when the 2nd Respondent simply did nothing to maintain the tiles and cracks occurred. The 2nd Respondent is under no duty to provide an intact concrete tile layer to protect the waterproof membrane. As the protection is afforded by the cement/sand screeding layer, when vegetation grows at this layer, it is the duty of the 1st Respondent to remove the vegetation in order to protect the waterproof membrane from being damaged by the roots of the plants.
49. In any event, there is no actual evidence that there are roots of the vegetation going through the cement/sand screeding layer and the waterproof membrane causing the leakage. It is only a theory given by the expert. It is possible that the vegetation is only growing in between the cement/sand screeding layer and the concrete tile layer. It is also not possible to say whether the vegetation had caused damage to the waterproof membrane before it failed its waterproof function due to aging. Thus, there is no conclusive proof that the vegetation had caused the water leakage.
50. In the circumstances, I do not find that the 2nd Respondent should be responsible for the water leakage to the 5th floor.
51. As to the structures erected on the roof, although the Respondents allege that these structures had caused water leakage to the 5th floor, I do not think that the evidence supports their contention. First of all, by overlapping the scaled diagrams concerning the location of the structures and the water trays, it can be seen that the leakage was not confined to areas on top of which structures had previously been erected. It is misleading for the 1st Respondent to say that most of the sports of leakage at the ceiling were found to be below the previous locations of the structures on the roof. A lot of the trays are located at places other than below the previous locations of the structures.
52. The unchallenged fact is that by 1983, the Applicant’s chimney and water tank, and the other 2 chimneys, wooden huts, etc, had already been erected, and yet there was no water leakage problem discovered or noticed until mid-1990s. This shows that in carrying out the erection works, waterproofing materials had been applied on areas affected. The leakage only came years afterwards and started first at spots where there had never been any structures. Given the consensus amongst the experts that the waterproof membrane only had a lifespan of some 20-30 years, by the time the water started to leak, the end of the lifespan of the waterproof membrane had actually come. If the waterproof membrane at anchorage points for chimney or water tank etc. had not been properly repaired after the installation, one would expect there to have water leaking within 1 rainy season, but not until some 14 years later. Thus, it is reasonable to assume that the repair work was properly and successfully done. In any event, even if one or two of the leakage spots were caused by the erection of structures, it bears no significance to the whole picture. It is the accepted position of the experts that the whole of the waterproof membrane had to be replaced altogether. Given the widespread and substantial leakage throughout the ceiling of the 5th floor, even without those one or two leakage spots caused by the erection of the structures, the condition of the 5th floor would be just as bad.
53. The Respondents also seeks to rely on the additional loading by the structures previously there to suggest that such additional loading might have damaged the floor slab of the roof and the waterproof membrane. I accept the Applicant’s submission in this regard. There is simply no evidence to support this contention. No figures about the loading capacity of the roof, nor figures of the weight of the structures were produced. Without those figures, one could not say with any degree of certainty whether the loading capacity would be exceeded. Indeed, visual inspection of the roof shows no obvious or widespread damage by additional load to the surface of the roof. There is also no evidence that the load of such installation had damaged the waterproof membrane. On the contrary, many of the tiles along the base of the chimneys or the water tank were not damaged. It is therefore purely speculative for the Respondents to suggest that the load of the structures would have damaged or affected the waterproof membrane.
54. Thus, I do not find that the structures erected on the roof had anything to do with the water leakage, and even if they do, the effect is insignificant, and the Applicant is not responsible for the damage caused by the water leakage. In other words, only the 1st Respondent is responsible for the water leakage.
Loss suffered by the Applicant
55. The first head of loss suffered by the Applicant is the expenses incurred by the Applicant as a result of the water leakage problem. Over the years, as the water leakage problem has become more serious and widespread, the Applicant has to incur expenses to install more and more water trays and an elaborate water collection system at the ceiling of the 5th floor, with water trough along the edge of the wall, to collect and drain away the dripping water. The cost of installation of the drainage system together with the repairs to the system and the repairs to the ceiling amount to $95,828.00. There are also cleaning expenses at the roof to reduce the frequency of water flooding caused by the water leakage amounting to $26,715.00. The water leakage has also caused damage to the first services sprinklers and piping installed at the ceiling of the 5th floor, for which the Applicant has incurred expenses for their repairs. The amount is $17,700.00. The Applicant has produced the relevant receipts and I find them to have been reasonably incurred to remedy the water leakage. So these amounts are allowed.
56. The Applicant has also incurred expenses for commissioning an expert to look into the leakage problem, and as a result of which the first report of Mr. Chan was obtained well before the commencement of the present proceedings. However, I agree with the 1st Respondent that this should form part of the costs, and not recoverable under the heading of damages. Thus, this amount will be excluded as part of the damages claimed.
57. The Applicant’s main claim is the loss of rental. The Applicant alleges that because of the persistent water leakage problem, the normal use of the 5th floor has been adversely affected. Despite the erection of the elaborate water collection system, to minimize the direct impact of the dripping water on the use of the premises, it is wholly understandable that any potential tenant viewing the premises would hardly agree to lease the premises unless he had no choice and would ask for a significant reduction in rental were they going to rent it. It was after the premises had been put on the market for a long time before a tenant was secured on 1 December 2000.
58. In this regard, I accept the Respondents’ submission that there might be various and different reasons for the period of vacancy not related to the water leakage, e.g. the property market was not good at the material time in 1998 caused by the Asian economic Crisis in about October 1997, the premises were for godown purpose (or industrial purpose as alleged by the Applicant) and at that time, many factories had moved to Maintain China, and the demand for godown or industrial buildings were not good at that time, the saleable area of the premises is very large, namely, about 22,100 square feet, and therefore it was rather difficult to find a tenant requiring such a large area. The Applicant simply cannot rebut these possibilities.
59. Furthermore, the evidence of Mr. Lau Wah is that the Applicant carried out renovation to the subject premises which was completed in February 1998 and the subject premises was place in the market for rent. However, the earliest invoice for works carried out in the 5th floor produced by the Applicant was dated 16 April 1998. That invoice included an item for works relating to tiles and cement in the furnace room. Mr. Lau also said that he had thought of renting out the subject premises to an associated company. Mr. Jack Wong, director of Flourish Property Agency Limited, estate company engaged in the leasing of the subject premises also said that he became involved in the leasing of the subject premises at the end of 1999, but cannot tell when his company started to be engaged. Mr. Wong produced his company’s computer records showing only those from 1999. He explained that because of the conversion of the computer system, the records before 1999 were not retrievable. The computer records produced by Mr. Wong showed leasing information of various units of the subject building as well as other industrial building, including some which had been leased out after being placed in the market. However, Mr. Wong has not produced the record of the subject premises which would have shown when the subject premises was put on the market and the asking rent. It will be seen form the computer records that most of the units were open in the market for a considerable period of time. From 1999 to 2001, the asking rent of these units were also dropping. I accept that it is unlikely that the subject premised would be successfully let out immediately after being placed in the market. It would be even more difficult to let out if the asking rent were not reduced when the market condition was poor during the years from 1998 to 2000. Neither Mr. Lau nor Mr. Wong has given evidence if the asking rent had been reduced during the time when the subject premises was put on the market. It would not be unreasonable to assume that there would be a period of waiting time in the market for the subject premises.
60. Thus, I find that the alleged loss of rental before the subject premises was actually let out should be disregarded.
61. As to the market rent, the Applicant’s expert, Ms. Pamela Lam has provided a valuation report and the 1st Respondent’s expert, Mr. Thomas Li has also provided his report. The 2 experts have also respectively given oral evidence. I accept the Respondents’ submission that the subject premises is for godown use as stated in the occupation permit. Although the Conditions of Sale and the Deed of Mutual Covenant permit industrial use, conversions complying with relevant regulations would be necessary if other legally permitted use is intended. Mr. Li explained that it would be more difficult to convert godown than factory to office use and the demands for godown premises would be quite different from those for factory premises. Mr. Li has used floors in the same building with the same size and orientation, requiring minimal adjustments. The only factors for adjustments are time and level. Any adjustment would contain a subjective element and in a valuation, the less adjustment the better. As Ms. Lam has used comparables in other buildings which are industrial buildings, more adjustments have to be made. Ms. Lam has adopted 'view' of the subject premises as a favorable factor for adjustment. Bearing in mind that the windows in the subject premises are installed at a very high location and are mainly used for ventilation, such view factors should be disregarded. The suggestion that the opening for the loading platform can afford view is artificial.
62. Taking all the factors and evidence into account, I am of the view that Mr. Li’s evidence is more reasonable and reliable than Ms. Lam’s. I will therefore adopt Mr. Li’s valuation. I accept that the Applicant has suffered a loss of rental as assessed by Mr. Li. A comparison of the market rent and actual rent received by the Applicant is set out below:
| |
Date |
Market Rent |
Actual Rent |
| (a) |
1 December 2000 |
$59,000 |
$47,750 |
| (b) |
1 December 2002 |
$49,000 |
$47,750 |
| (c) |
1 December 2004 |
$57,000 |
$55,000 |
| (d) |
1 December 2006 |
$72,000 (2 January 2007) |
$60,500 |
63. Thus, the loss of rental is:
| (a) |
From 1 December 2000 to 30 November 2002 |
$270,000 |
| |
($59,000 - $47,750) x 24 |
|
| (b) |
From 1 December 2002 to 30 November 2004 |
$30,000 |
| |
($49,000 - $47,750) x 24 |
|
| (c) |
From 1 December 2004 to 30 November 2006 |
$48,000 |
| |
($57,000 - $55,000) x 24 |
|
| (d) |
From 1 December 2006 to 11 November 2008 (date of judgment) |
$268,717 |
| |
($72,000 - $60,500) x (23 + 11/30) |
|
| |
Total: |
$616,717 |
Conclusion
64. By reasons aforesaid, I find that the Applicant’s application against the 1st Respondent, but not the 2nd Respondent, is established, but the amount of damages calculated up to today is $756,960.00 ($95,828.00 + $26,715.00 + $17,700.00 + $616,717.00). I will give 3 months for the 1st Respondent to rectify the water leakage problem.
65. I therefore order as follows:-
(1) A declaration that the waterproof membrane forms part of the common parts of the Building and it is the duty and obligation of the 1st Respondent to repair the defects in the waterproof membrane and to maintain the waterproof membrane in a state of good and serviceable repair and clean condition;
(2) A mandatory injunction that the 1st Respondent do within 3 months from today carry out remedial works to rectify the water leakage problem, including but not limited to repairing or reinstalling the waterproof membrane, failing which the Applicant be at liberty and at the cost of the 1st Respondent to carry out the works themselves;
(3) The 1st Respondent do pay the Applicant damages in the sum of $756,960.00 together with interest thereon at judgment rate from today until satisfaction;
(4) The 1st Respondent do pay the Applicant further damages together with interest thereon at judgment rate to be assessed if not agreed;
(5) The Applicant’s application against the 2nd Respondent be dismissed;
(6) Costs order nisi: Save where there is previous costs order, the 1st Respondent do pay the Applicant their costs of the proceedings against the 1st Respondent with certificate for counsel to be taxed on District Court Scale if not agreed; and
(7) Costs order nisi: Save where there is previous costs order, the Applicant do pay the 2nd Respondent their costs of the proceedings with certificate for counsel to be taxed on District Court Scale if not agreed.
| |
H.H. Judge WONG
Presiding Officer
Lands Tribunal |
Mr. T.M. LEE, instructed by M/S Lo & Lo, for the Applicant
Mr. Dickson K.F. PANG of M/S Y.C. Lee, Pang, Kwok & Ip for the 1st Respondent
Mr. Thomas T.M. KWAN, instructed by M/S Kwan & Chow, for the 2nd Respondent
|