SHIU LAI WAH v. CHUN WEI PUN t/a WINFIELD ENGINEERING CO

HCCT 65/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO. 65 OF 2006

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J U D G M E N T

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I.       INTRODUCTION

1.  Flat F on the ground floor of Shuk Yuen Building (the Building) in Happy Valley belonged to Ms. Shiu’s husband.  Ms. Shiu brings this action as executrix of her husband’s estate and as the present beneficial owner of the Flat.

2.  The Building is a 50 year old structure.  It sits on an elevated platform supported on its sides by masonry walls (including a retaining wall).  These walls are close to other structures such as neighbouring residential buildings and a kindergarten school.

3.  In 1997 the Building became subject to a Dangerous Hillsides Order issued by the Government.  That Order required the Building’s Incorporated Owners to strengthen the adjoining retaining wall.

4.  Mr. Chun (trading as Winfield) contracted with the Incorporated Owners to carry out soil nail works intended to strengthen the wall to satisfy the Order. 

5.  WSP designed the works which Mr. Chun contracted to carry out.  Mr. Billson, an architect, was the Authorised Person (AP) for the works.  Mr. Williams, a director of WSP, was the Registered Structural Engineer (RSE) for the project.

6.  While the works were being carried out, the Building experienced greater settlement than had been anticipated.  At about the same time, cracks appeared in the Building and the Flat.  The Flat experienced backflows of foul water from its drains and a tilt in the Flat’s ground floor slab became more pronounced.

7.  Ms. Shiu attributes the damage that occurred to the Flat then to the negligence of one or more of the Defendants.  By this action, she seeks compensation for the loss (including her expenses of having to find alternative accommodation) which she says that she incurred due to such negligence. 

8.  The Defendants deny liability. 

9.  They say that, according to the information available prior to the start of the works, the Building’s foundation columns were thought to be resting on dense, compact material.  They argue that it was reasonable to have relied on such available information for the detailed design and initial execution of the works.

10.  It was only later, as a result of investigations following the greater than expected settlement which occurred during the works, that the Building’s foundations were discovered to be resting on loose fill.

11.  The Defendants contend that they took appropriate remedial steps to deal with the problem of loose fill once it had been brought to light.  They conclude that, in the circumstances, there was no negligence on their part.

12.  The main issues are accordingly as follows:-

(1)     Whether the Defendants owed any duty of care to Ms. Shiu?

(2)     Whether they breached any duty of care?

(3)     Whether the damage to the Flat was caused by the breach of any duty of care owed by the Defendants?

(4)     What (if any) damages is Ms. Shiu entitled to claim?

(5)     If the Defendants are liable in damages to Ms. Shiu, to what extent may they claim contribution from each other?

13.  The parties adduced expert evidence on geotechnical and engineering questions.  The experts (Mr. Buckell, Mr. Koo and Mr. Arbon) were asked to address an agreed list of sub-issues formulated by the parties.  Those sub-issues are set out in Section IV of this Judgment. 

II.      BACKGROUND

14.  Following issue of the Dangerous Hillsides Order, the Incorporated Owners engaged ESA Consulting Engineers to investigate the site and design the stabilisation works. 

15.  ESA submitted a design using a combination of shear pins and soil nails to strengthen the wall.  However, the Incorporated Owners rejected the design as too costly.  They requested ESA to consider an alternative design employing soil nails and tie bars instead.

16.  By letter dated 23 November 2000 ESA advised the Incorporated Owners that there might be difficulties with the proposed alternative design.  Among other reasons, ESA doubted that the Buildings Department (BD) would accept the scheme.  ESA wrote:-

“...  [W]e believe that we will be unable to propose a soil nail scheme for the west boundary [of the wall] which would be acceptable to BD/GEO.  Our experience is that such a scheme would have to be 100% certain so that the existing foundations would not be affected; this is not possible to do.

We have previously looked at the BD records of the foundations for the building.  Copies of sections we copied show these to be for the ‘proposed’ foundation locations and depths prior to construction.  We do not believe ‘as-built’ records exist and, in any event given the age of the records, we anticipate that BD will require us to prove the depths and locations of every footing which could be affected by the soil nails.  This will involve some excavation from within existing apartments (with disruption, dust, noise, breakages, reinstatement and expensive protective methods to ensure the safety of the building).  The investigation itself may well require a separate submission to BD to satisfy them that the building integrity is not compromised.  We cannot conceive that such investigation is justified, as it will have to be followed up by a scheme proposal which may prove impractical, and which BD/GEO would most likely reject on the grounds that the soil nails may affect the building integrity.”

17.  The Incorporated Owners dismissed ESA’s concerns.  The Owners responded on 27 November 2000:-

“1.     With the ‘approved’ foundation in hand, we have confident that BD/GEO shall approve the use the cheaper soil nail system in lieu of your proposed expensive shear pin system on west boundary.

2.      The Owners always consider a more economical solution is a better design.  You are requested to amend your design to incorporating all comments in 15th instant and submit to BD within one calendar month from the date of this letter or else we have no choice but to appoint another consultant in order to protect our own interest.”

18.  ESA wrote back on 8 December 2000 as follows:-

“We refer to your letter dated 29 November 2000 and regret that you remain unconvinced by our arguments that overall the scheme we have put forward is the most economic and safe solution that can realistically be expected to be approved and safely constructed.  Please be assured this is our genuine opinion and there are no other reasons why we undertook this solution in preference to any others.

In view of your specific instructions, however, we will now prepare an alternative scheme using soil nails along the western boundary and make an amended submission.  We will first prepare a scheme for investigation to prove foundation locations and depths.  In the light of the time necessary for the further investigation we do not believe that we can meet the one month deadline you have set but will do our best to expedite the process.

....

If these proposals are acceptable to you, please advise, in the light of our opinion that such work may prove to be abortive, that you are willing to pay an additional fees on a time basis at our usual rates or, alternatively, please set out your proposals for the basis of our reimbursement.”

19.  The Incorporated Owners became incensed.  They replied on the same day to ESA:-

“Your proposals are totally unacceptable for the following reasons:-

1.      You had been requested to incorporate all the comments un your revised scheme but not only restricted to that for the western boundary.

2.      We concur with your standing in your letter dated 10.7.2000 to against proceeding with the investigation to prove the foundation locations and depths, especially with the approved foundation plan in hand, its nonsense to make such proposal again.

3.      You are obliged to propose a scheme to your client’s best interest, therefore it’s your obligation to make amendments to achieve this goal.  We have no intention to pay any extra fee for these subsequent works as there is no additional works requested on our side.

Under the circumstance, we have no choice but to determine your services and to appoint another AP to take over the job in order not to waste our time in your non-constructive proposal.”

20.  The Incorporated Owners then employed Cordelia Chan & Associates (CCA) to design the stabilising works for the retaining wall.  CCA employed WSP as sub-consultant for such design.

21.  CCA submitted the design eventually prepared by WSP (which was a design only employing soil nails and tie bars) to the BD on 10 May 2001.  The BD approved WSP’s design in principle on 11 June 2001.  The approval was subject to a number of conditions including the following:-

“(c)   Prior to the consent application for commencement of the remedial works, a detail survey plan showing the precise location of all existing columns and concrete structures together with the proposed soil nails shall be submitted to BD for consideration.  Your attention is drawn to Note 2.10 of the Notes of Installation of Soil Nails on Drawing No. 1083/RW-01 that all soil nails shall be cleared from any existing columns and reinforced concrete structures for at least 500 mm.”

22.  WSP’s scheme for the works was put to tender.  On 26 February 2002 the Incorporated Owners accepted Winfield’s revised tender (in the sum of $3.15 million) for carrying out WSP’s design.  On 2 April 2002 the Incorporated Owners entered into the main contract with Winfield in respect of the relevant works.

23.  The main contract required (among other things) that:-

(1)     Winfield should submit a statement of its proposed method for soil nail installation;

(2)     all care should be taken to prevent collapse of drillholes and, where necessary, temporary steel casing should be used to support a drillhole.

(3)     soil nails should be installed row by row, beginning from the top row of the retaining wall down to the bottom row;

(4)     drilling for soil nails should be by rotary drill with air used as flushing medium (unless otherwise agreed by the RSE);

(5)     in no circumstance should water be used as a flushing medium for drilling works;

(6)     settlement markers should be installed before the works at locations to be agreed with the RSE; and,

(7)     a maximum inclination of 1 in 300 in respect of tilting movement and a maximum settlement of 25 mm would be permissible.

24.  On 27 June 2002 Ms. Cordelia Chan of CCA resigned as AP for the project. 

25.  On 25 September 2002 the Incorporated Owners engaged WSP to serve as AP.  WSP appointed Mr. Billson to act as AP.

26.  Prior to 25 September 2002 Mr. Ngai Hok Yan of WSP had been acting as RSE for the project.  As Mr. Ngai had actually resigned from WSP in January 2002, WSP also took the opportunity to appoint Mr. Williams as RSE in place of Mr. Ngai.

27.  On 24 October 2002 WSP submitted an amendment of the proposed works to the BD.  The submission included a revised detailed survey plan showing:-

“the setting out of approved permanent working soil nails to ensure that all the soil nails shall have at least 500 mm clearance from any existing columns and reinforced concrete structures”.

28.  The BD approved the amended submission on 26 November 2002.  That approval did not impose any condition for the provision of a further survey plan.

29.  On 24 January 2003 Mr. Billson as AP submitted a minor amendment in respect of the works to the BD.  That amendment was to enable the maintenance of a minimum clearance of 1 m from the existing footing and tie beams to the soil nails to be installed.  BD approved the submission on 25 February 2003.

30.  Winfield commenced the works on 3 March 2003.  The project was carried out under the supervision of WSP in general and Mr. Billson (as AP) and Mr. Williams (as RSE) in particular.

31.  On 5 March 2003 Winfield submitted various documents to WSP, including method statements for the works.  The method statement proposed (among other things) that:-

(1)     the use of percussive rotary drilling rigs with down-the-hole hammers for drilling holes for the soil nails of about 135 mm diameter;

(2)     the use of casing to the extent necessary in order to prevent the collapse of drillholes and permit unobstructed instruction of grout pipe bars;

(3)     drillholes would be cleared of all cutting, sludge and debris before insertion of a soil nail; and,

(4)     where a drillhole was not filled with grout within a day of drilling, the hole would be re-flushed with compressed air immediately before the start of grouting.

32.  No one commented adversely on Winfield’s proposed method.

33.  Before starting the works, Winfield checked the alignment of the proposed soil nails against foundation plans supplied by WSP.  This was done in order to minimise any conflict between the proposed soil nails and the foundation and drainage of the Building. 

34.  It should be noted, however, that (as ESA long ago pointed out to the Incorporated Owners) the foundation plans used were not “as-built” plans but merely BD approved design drawings for the Building.  The evidence is that no “as-built” plans for the Building exist.

35.  On 8 April 2003, before the works, Winfield submitted a defect survey report to WSP.  That identified existing major defects in the retaining wall’s features.

36.  Further, Winfield installed ground settlement and tilt monitors at locations stipulated in the main contract.  An initial set of readings was taken immediately after installation.  Settlement monitors were positioned in the paving outside the Building.  Within the Building, only tilt monitors were placed.

37.  Additionally, Winfield made a survey of the condition of the Building.  Winfield, however, did not examine the inside of Flat F or any other apartment within the Building for the purposes of this survey.

38.  By early May 2003 soil nail installation works at east and north elevation had been largely completed.  No unusual building defects or ground subsidence had been reported as at that time.

39.  On 17 May 2003, while Winfield was working on the west elevation of the site, cracks of 1 to 2 mm in length were observed in Flat 2C and the Building’s common stairwell.  This was reported to WSP.  Work was temporarily halted. 

40.  Work resumed on 19 May 2003.  But WSP instructed Winfield to install soil nails at the rate of only one at a time and to monitor the cracks closely on a daily basis.

41.  The cracks, however, progressively widened to between 4 and 5 mm.  Further, ground settlement at the northwest corner of the Flat was recorded to be 19 mm.

42.  On 23 May 2003 WSP ordered Winfield to suspend all works.

43.  WSP further instructed Winfield to install more monitoring stations, dig trial pits and carry out probing tests for investigation of underground conditions.  Winfield submitted the resulting survey results and probe test reports to WSP in early June 2003.

44.  Those survey results and test reports revealed that the founding level of the footing of the Building was 2,500 mm higher than shown on the approved design drawings.  It was also discovered that the spread footings of the Building were underlaid by loose fill, comprising weak and soft material overlaying granular fill of cobbles and boulders.  This was different from the design assumption for the works, which had proceeded on the basis of the foundations resting on harder, more dense and more compacted material.

45.  In early July 2003 WSP instructed Winfield to stabilise the ground by filling the soil beneath the Building’s foundations with grout.

46.  On about 7 July 2003 there were test pit excavations to identify underground utilities.  Grouting of the soil beneath the Building started in mid-July 2003.

47.  At the end of July 2003 Winfield and WSP discussed a revised method statement for installation of the remaining soil nails.  The following revisions were agreed (among others):-

(1)     To minimise vibration, rotary non-percussive drilling would be used, with full casing and air flushing.

(2)     Drilling of soil nails with distances of less than 5 m in between should not be done concurrently.

(3)     No soil nail shall be drilled within 5 m from an open soil nail drillhole or from any soil nails grouted for less than 24 hours.

48.  Grouting of the soil was completed on 31 August 2003.  Soil nail drilling re-commenced on 1 September 2003.  Throughout ground settlement and tilting markers were monitored by Winfield.

49.  On 26 September 2003 Winfield conducted a building defects survey of all units in the Building, including the Flat.  Without any admission of liability, it offered to carry out repair work to units where cracks and defects had been found.  But Ms. Shiu did not take up that offer for the Flat.

50.  Practical completion took place on 15 October 2003.  The defects liability period expired on 14 April 2004.

51.  Ground settlement marker GS09 showed a maximum settlement of 30 mm.  Tilt markers TO 7 and TO 13 showed movement of 21 and 22 mm respectively.

52.  The Building Authority confirmed that the Dangerous Hillsides Order had been complied with by letter dated 10 May 2005.

III.     DISCUSSION

A.      Main Issue 1: Whether the Defendants owed a duty of care to Ms. Shiu?

53.  I am prepared to accept that in designing or executing the works the Defendants owed a general duty to Ms. Shiu to take all reasonable care. 

54.  This is because Ms. Shiu, as a person living within the Building, would have been someone whom the Defendants could reasonably foresee as being adversely affected by a negligent or incompetent design or execution of the works.

55.  I do not think that Mr. Yeung (appearing for Winfield) or Mr. Maurellet (appearing for WSP, Mr. Billson and Mr. Williams) seriously contended otherwise.

56.  The real dispute between the parties is the precise nature or content of the Defendants’ general duty of reasonable care. 

57.  In particular, Mr. Harris SC (appearing for Ms. Shiu) alleges that the Defendants failed to take all reasonable care in the following respects:-

(1)     Before the works commenced, the Defendants ought to have:-

(a)    taken reasonable steps to ascertain that the Building was strong enough structurally to withstand the works; and,

(b)   undertaken adequate soil inspections to ascertain that the ground underneath the Building’s foundations would not be adversely affected by the works.

(2)     During the works, the Defendants ought to have:-

(a)    proceeded in accordance with an appropriate design for the works;

(b)   taken adequate steps to monitor whether the works were causing damage to the Building;

(c)   used casing and non-percussive rotary drilling from the outset so as to minimise vibration and prevent drillhole collapse;

(d)   proceeded in such a manner that the Building’s drains would not be damaged;

(e)    proceeded in a manner that the Building would not suffer settlement in excess of 25 mm; and,

(f)    stopped work as soon as it became apparent that the Building was suffering unusual settlement as a result of the works.

58.  Counsel for the Defendants hotly dispute that their clients either owed the particular duties alleged on behalf of Ms. Shiu or (if such were owed) that the duties were breached.

59.  It is those particular duties, therefore, that I shall focus on in Section III.B (Main Issue 2) below.

B.      Main Issue 2: Whether the Defendants breached any duty of care?

B.1    Duty of care before the commencement of works

60.  In essence, Mr. Harris complains that the Defendants failed adequately to investigate ground conditions at the site before commencing the works. 

61.  Mr. Harris’ argument is that the Defendants ought to have conducted further soil inspections and, had they done so, they would have discovered that there was loose fill under the Building’s foundations.  This would have falsified WSP’s design assumption and some alternative design would then have had to be adopted.  If so, there would have been no excessive settlement and cracks and other damage to the fabric of the Building would not have occurred.

62.  The Defendants, on the other hand, point out a number of matters in response.  I think these matters constitute an answer to Mr. Harris.

63.  First, the Building had stood for 50 years.

64.  Second, site investigations (including 7 trial pits, 2 vertical boreholes and 16 coreholes) for the purpose of ascertaining ground conditions had been carried out prior to the execution of the soil nail works. 

65.  The results of these investigations did not suggest the presence of loose fill under the Building’s foundations.

66.  Third, ESA had itself monitored the Building’s settlement between 8 February and 15 October 1999.  This monitoring had not recorded any significant movement.

67.  Fourth, all available information appeared to confirm what appeared on the Building Authority’s approved plans for the Building.  Those plans showed the Building as standing on concrete spread footings founded on soil with an allowable bearing pressure of 2 tonnes per sq. ft.

68.  Indeed, ground investigation core hole nos. H01 and H02 (adjacent to footings F10 and F11) and core hole nos. H04 and H05 (adjacent to footings F48 and F62) showed that the soil at foundation level was firm colluvium and dense highly decomposed granite.  Such soil would have the pressure bearing characteristic indicated in the approved plans.

69.  Fifth, Mr. Buckell (Ms. Shiu’s expert) himself accepts that, on the information available just before the soil nail works commenced, “there is no evidence that loose soil fill existed beneath one or any of the buildings foundations”.

70.  Sixth, asked in cross-examination what (despite the opinion in his report) additional investigation would be necessary before the soil works could safely start, Mr. Buckell suggested further examination of each of the 40 spread footings. 

71.  Such exercise would entail trial pits, probe testing and drilling.  It would also mean some digging up of the interior flooring and concrete slabs of individual units within the Building and drilling down for 3 to 5 metres in order to see what materials were to be found under the spread footings.

72.  As we have seen, in 2000 the Incorporated Owners acting on behalf of the owners had themselves queried the need for further investigation of the foundations by ESA.  The Incorporated Owners regarded such an investigation as an unnecessary intrusion and expense.

73.  It is doubtful whether the Incorporated Owners, let alone any unit owner, would have agreed to further drilling in light of the site investigation information already available.

74.  As Mr. Koo (Winfield’s expert) pointed out:-

“It is neither practical nor a trade practice to expose the existing footings to verify the soil material underneath the footings.  There would be substantial cost and severe disturbance to the residents involved in digging trail pits to expose the footings.  Further, if trial pits are located next to the footings, there could be a possibility that the foundation may be undermined and hence affecting stability of the Building.”

75.  Finally on this issue, I note Mr. Harris’ suggestion that, among the preliminary investigations that ought to have been conducted, the Defendants should have visited various units within the Building and examined their condition.  Mr. Harris submits that, the Defendants should have visited the Flat in particular.  He contends that, had the Flat been visited, the Defendants would have noticed a slight tilt to the ground floor slab.  This (it is said) would have led them to suspect that the foundations of the Building needed further investigation.

76.  On the site investigation information available to the Defendants at the start of the project, I do not see any particular reason why they should have visited various units.  Apart from the Flat, Mr. Harris has not specified how many units ought to have been visited or, if only a sampling of units, which ones.

77.  Even if the Flat had been visited, it is far from clear what the condition of its ground floor slab would have indicated (if anything) to a reasonably competent engineer.  The evidence is that before the soil nail works the tilt of the slab was slight (albeit perceptible).  At most that might have suggested that, over the 50 year history of the Building, there had been some slight differential settlement of the ground floor slab.

78.  Mr. Harris’ suggestion seems to me more a course of action advanced with the benefit of hindsight, rather than something which a reasonable engineer or contractor would have thought necessary at the relevant time.

79.  In my judgment, there may well have been a particular duty on the Defendants at the outset of the project to consider whether the soil nail works were likely adversely to affect the site.

80.  But, for the reasons in my summary of the Defendants’ case, I do not think that there was a breach of this particular duty.  In the circumstances here, it would have been beyond the expectation of a reasonable engineer or engineering contractor to suspect loose fill beneath the spread footings of the Building.  

81.  The Defendants were entitled to proceed on the design assumption that the Building was founded on firm colluvium.

B.2    Duty of care in the execution of the works

B.2.1 Duty to proceed with adequate design

B.2.1A    At common law

82.  Mr. Harris’ case here is that the design was inadequate because it required too many soil nails to pass in a criss-cross manner underneath the Flat.  In the case of Block F (including the Flat), some 37 soil nails would be required to pass underneath. 

83.  According to Mr. Buckell, the design would inevitably mean that as holes were drilled, there would be a risk of stress leading to the loosening and settlement of less competent soils. Indeed, it is Mr. Buckell’s theory, that the loose fill found under the foundations, was not a condition which pre-existed the works here.  Mr. Buckell suggests instead that the areas of loose soil were the result of too many soil nail drillholes stressing the ground.

84.  I am prepared to accept that there was a particular duty on the Defendants to proceed on the basis of an adequate design.  But I do not think that in the circumstances here Mr. Harris has demonstrated that the soil nail design used was inappropriate or incompetent.  On the adequacy of the design here, I prefer the opinions of Mr. Koo and Mr. Arbon (WSP’s expert).

85.  In my view, on the balance of probability, the Building’s foundations were resting on loose fill, especially below Flat F.  Through no fault of the Defendants, this fact was not known at the time when the soil nail works were commenced. 

86.  The likelihood is that the drilling of the soil nails disturbed some of the loose fill under the Building’s footings and caused the greater than expected settlement of the Building which was observed.

87.  I accept the submission of Mr. Yeung (appearing for Winfield) that Mr. Buckell’s theory (which attributes the excessive settlement to the drilling of soil nails alone) is unlikely to be correct. 

88.  This is because the soil nail holes (which were only of a relatively small diameter to begin with) were grouted shortly after being drilled (usually on the same day).  The grouting of the soil nail holes would have led to a strengthening of the adjacent ground.

89.  Mr. Buckell suggests that, as grout sets and hardens, there is likely to be a contraction of the grout within a drillhole.  This would leave some gap or void between the hardened grout and the boundary of the drill hole (according to Mr. Buckell) which could lead to the weakening of the soil.

90.  But, as Mr. Arbon observed (and Mr. Koo agreed):-

“With respect to the soil nail works, there is nothing in the method of drilling, installation and grouting of the relatively small diameter soil nails, with grouting of the previous soil nail being completed before commencing the drilling of the next soil nail, that would [be] likely to lead to the formation of extensive voids in sound natural ground of moderate strength.”

91.  The soil nails underneath Block F were not inserted all at once, but in 3 layers on different dates.  Accordingly, given the drilling and grouting procedure adopted, it is difficult to see why the total of 37 nails under Block F would constitute a bad design.

92.  I also note the evidence that a chemical is usually added to the grout to reduce the significance (if any) of such gap or void as might conceivably form.

93.  Mr. Buckell suggested alternative methods for strengthening the retaining wall.  More specifically, he proposed:-

(1)     the use of shear pins combined with soil nails (as previously advanced by ESA);

(2)     increasing the retaining wall’s thickness; and,

(3)     the use of tie back stress anchors.

94.  I am not satisfied on the evidence that any of these methods would have been better than the design actually used.

95.  First, on the use of shear pins and soil nails, Mr. Buckell accepted that the installation of shear pins would cause vibrations which risked disturbing the ground.  I note that shear pins would have required a larger diameter of drill hole and thus, potentially, could cause greater vibration than the installation of soil nails.  Apart from an assertion that shear pins entailed “less vibration,” Mr. Buckell gave no hard numbers as to how much less vibration was involved.

96.  Second, Mr. Buckell was equivocal about the sort of shear pin design he had in mind.  At times, he seemed to be advocating the use of shear pins merely as part of a wall thickening exercise.  This would have been very different from the shear pin scheme proposed by ESA.

97.  Third, if the wall thickening and shear pin scheme was the sort of method which Mr. Buckell had in mind, I am unable to reach any conclusion as to the merits of such proposal.  Mr. Buckell accepted that he had not carried out any preliminary design, nor given much thought to the viability of the scheme. 

98.  It was far from clear, for example, how much thicker the wall would have to be and whether there would be sufficient space to thicken the wall without encroaching on neighbouring land.  Nor had Mr. Buckell addressed the question of the nature and extent of temporary excavations around the wall for the purpose of thickening.

99.  Fourth, as for stress anchors, again Mr. Buckell did not put forward any preliminary design of the scheme which he had in mind. He simply insisted that stress anchors were a valid and practical solution.  He took this view despite PNAP 50.

100.  PNAP 50 states the BD’s opinion that the long-term monitoring of stress anchors “involves appreciable recurrent cost and, should deficiencies be revealed, remedial works may be difficult and expensive”.  PNAP 50 concludes that according to past records, compliance by owners with long term and any remedial requirements in respect of stress anchors is “not practically viable”.

B.2.1B        By statute

101.  Mr. Harris refers to the Buildings (Construction) Regulations (Cap. 123 sub. leg.) (BCR).  Those provide:-

“7.     No building works shall be carried out which may adversely affect the stability of any adjoining structure, land, street or services.”

“9.     Site assessment in respect of any building works or street works shall be carried out in such a manner and to such recognised standards as to provide adequate geotechnical and other relevant data for the design and construction of the building works or street works.”

“23.   (1)     Foundation works shall be carried out so as not to render inadequate the margin of safety of, or impair the stability of, or cause damage to any building, structure, land, street or services.”

102.  Mr. Harris suggests that, in proceeding with soil nail works, the Defendants failed to meet the standard of care implicit in the above regulations.

103.  I disagree.

104.  Given the available information, the Defendants reasonably believed that they could proceed with the works as designed by WSP.  That design incorporated a scheme of regular monitoring.  This meant that, where developments on site did not go as envisaged, problems could be detected at an early stage so that remedial steps might be taken.  Such design cannot have been in contravention of the BCR.

105.  Mr. Harris’ argument is essentially that, since it was foreseeable that there might be more settlement than anticipated, the Defendants must be liable in negligence because the implementation of the soil nail works in fact led to there being more settlement than expected.

106.  I do not think that the reasoning is right.  The question is whether, at the outset of the works, the risk of abnormal settlement was reasonably to be anticipated.  For the reasons already set out above, I do not think that such risk was foreseeable.  It follows that the design assumption behind the soil nail works was not a negligent or unreasonable one and, in any event, the design itself incorporated safety features so that problems which might arise could be speedily addressed.

B.2.2 Duty to take reasonable steps to monitor whether works damaging the Building

107.  I accept that there was a particular duty to monitor the works as they proceeded.  This would enable any difference between the design assumption and actual ground conditions to be detected at the earliest possible date.

108.  However, I am unable to find fault with the monitoring set up by the Defendants. 

109.  As soon as 19 mm of settlement was detected on 17 May 2003, works were temporarily halted.  The works re-commenced on 19 May 2003.  But monitoring was stepped up and soil nails were only installed one at a time.  The cracks which appeared becoming wider, works were suspended altogether on 23 May 2003 and a remedial scheme was designed.

110.  Mr. Harris submits that the failure to place ground settlement markers in the Building was negligent.  He also  complains that ground settlement markers GS03 and GS09 were improperly installed and did not record settlement accurately.

111.  I am not persuaded by this submission.

112.  There were 10 ground settlement markers and 16 tilt checkpoints.  All were placed in accordance with WSP’s design and regularly monitored.

113.  It seems to me that the settlement and tilt monitors were more than adequate to record any significant settlement as a result of the carrying out of the works.  In fact, they alerted the Defendants to a sudden increase in settlement on 17 May 2003. I am therefore unable to accept that the settlement monitoring system was somehow inadequate.

114.  It is true that only tilt markers were placed in the Building.  But what would have been a matter of concern was the differential settlement of various parts of the Building, not overall or uniform settlement of the entire Building.  The tilt markers would have detected such differential settlement.

115.  As for the ground settlement markers, Mr. Buckell suggests that GS03 and GS09 were wrongly stuck to the pavement, instead of being installed with joint fillers.  This (Mr. Buckell thinks) meant that their readings were inaccurate.  But I am unable to conclude from the fact that 2 markers may have been badly fixed (if they were) that the whole system was inadequate.  No explanation has been provided as to what difference to overall monitoring any wrong installation has caused.

B.2.3 Duty to use casing as well as rotary drilling

116.  Mr. Harris argues that casing ought to have been used from the outset.  He further submits that non-percussive rotary drilling should have been employed from the start.  Such steps would (Mr. Harris contends) have minimised vibration and soil collapse.

117.  These seem to me to be arguments based on hindsight. 

118.  Given my conclusion that there was no reason to suspect loose fill under the Building’s foundations, the Defendants must have been entitled to use percussive rotary drilling and to use casing only as and when they thought necessary.  Such methods were allowed by the contract and design specifications.  I accept the evidence of Mr. Koo and Mr. Arbon that, given what the ground conditions were supposed to be at the start of the project, those methods were suitable.

119.  In fact, when works re-commenced in August 2003, loose fill having been detected under the Building, the Defendants decided to use full casing and non-percussive rotary drilling as a precaution.  That appears to have been a perfectly responsible decision.

120.  I note Mr. Koo’s evidence that the use or non-use of casing would have not have had any significant effect on the subsidence of the building.

121.  There was some debate among the experts as to whether the initial failure to use casing caused voids to be formed in the ground.  These excessive voids (Mr. Buckell says) are evidenced by the larger than expected grout intakes recorded by WSP’s settlement monitoring. 

122.  According to WSP’s reports, the grout intake on the soil nails on the northern and western wall ranged between 0.2 and 2.62 cu m.  A grouting record prepared by Mr. Leo Li (a WSP engineer) seems to support this large intake of grout.  For example, on its face, Mr. Li’s record suggests that 21 batches of grout were used to fill drillhole R6.

123.  In cross-examination on this point, Mr. Chun stated that a batch of grout represented about 3 bags of cement or 0.11 cu m of volume.

124.  Mr. Chun had not previously seen Mr. Li’s record or WSP’s settlement monitoring report.  He could not, therefore, explain what they meant or signified.

125.  But Mr. Chun pointed out that, if there had truly been such serious loss of grout, WSP would have drawn his attention to the matter.  Works would then have stopped so that the matter could be investigated and remedied.  But it appears that WSP never did so.

126.  On the contrary, Winfield’s records indicate that the grout used exceeded calculated volumes by only between 5% to 10%.  Those records give the calculated and actual grout volume for R6 as 0.202 and 0.209 cu m respectively.  This would mean that there was no serious loss of grout.

127.  Mr. Buckell alleged that Winfield’s records are not to be believed.  But I am not prepared to discount those records.  I would make a number of observations.

128.  First, there is little (if any) evidence of reported drillhole collapse in the carrying out of the works, such as would give rise to voids.

129.  Second, I accept Mr. Chun’s evidence that WSP never raised the question of excessive grout intake with him.  This renders it unlikely, whatever Mr. Li’s records might mean, that WSP regarded the problem of excessive grout intake as a significant one.

130.  Third, I also accept Mr. Koo’s evidence that one can deduce little from the mere fact that x batches of grout were apparently prepared in relation to a given drillhole.  Mr. Koo explained that it was possible that more grout than was required for a drillhole may have been prepared.  There might have been a number of good reasons for this: for use in the soil nail head, for use in a bleeding test, of for making grout cubes for compressible tests.

131.  Fourth, as far as R6 is concerned, assume that Mr. Li’s record is reliable.  Even then, I have doubts that it would have been causative of any damage.  I am mindful of Mr. Yeung’s point that R6 was located near footings F29 and F30 where about 3.4 m of loose fill was subsequently discovered.  If a large amount of grout was injected into R6, that might have been due to pre-existing voids in the loose fill surrounding R6.  The grout injected simply filled up those voids. 

132.  Fifth, as Mr. Yeung also notes, in any event, R6 was drilled on 20 May 2003.  That was after 19 mm of settlement had already been detected on 17 May 2003.  The drilling of R6 could not, then, have caused the large increase of settlement observed prior to 20 May 2003.

133.  Finally, as to vibrations resulting from one or other method of drilling and the use or non-use of casing, I note that the evidence which Mr. Harris deployed was of a highly subjective nature. 

134.  The experts differed among each other as to whether one method or another produced “more” or “less” vibration.  In such circumstance, in the absence of hard figures, it is impossible for a Court to conclude that one or other method produced more or less vibration.  I am unable to say on the evidence that the use or non-use of some method must have constituted a breach of duty.

B.2.4 Duty to proceed in a manner so as not to damage the Building’s drains

135.  The undisputed evidence of Ms. Narisa Phiasura is that “in early 2003” on some 3 occasions there was backflow of foul water from drain outlets in the Flat.

136.  It is inconclusive from that evidence whether the backflow was due to damage or blockage to the Building’s drains caused by:-

(1)     the greater than expected subsidence experienced in May 2003,

(2)     the entry of grout; or,

(3)     some other cause.

137.  Assume that one or other or both of the first 2 reasons were the cause of the backflow.  Even then I am unable to see how that can be ascribed without more to the Defendants’ fault.

138.  There may well have been increased subsidence due to disturbance by the soil nail works of the loose fill under the Building.  This could not reasonably have been expected, in light of the available information at the start of the project.  If the drains somehow happened to be damaged as a result of such subsidence, it follows from the premise that the Defendants cannot be held negligently liable for the same.

139.  I have mentioned the lack of evidence of extensive drillhole collapse.  I have also referred to the possibility of the grout injected into drillholes (such as R6) entering into pre-existing voids in the soil underneath the Building.  Some such grout may conceivably have entered into drains under the Building.

140.  Later when grout was used to strengthen the soil underneath the Building, it is also possible that some grout entered into the drains.

141.  But I do not see from the possibility of grout entry alone that the Defendants can be held liable.  It is difficult, if not impossible, to predict where grout will go when injected into soil containing loose fill.  In those circumstances, the mere fact of entry into drains cannot signify negligence on the Defendants’ part.

142.  Thus, while the Defendants would obviously have a particular duty to use all reasonable care not to damage the Building’s drains, I do not find that a breach of such duty has been established.

B.2.5 Duty to proceed in a manner that the Building would not suffer settlement in excess of 25 mm

143.  This duty cannot be an absolute duty.  No engineer, the Defendants included, could guarantee that the Building would not undergo settlement in excess of 25 mm.  The Defendants are not insurers.

144.  The real question is whether, in designing and executing the works, the Defendants took all reasonable care to minimise the risk of settlement in excess of 25 mm.  For the reasons which I have set out above, I believe the Defendants have met that particular duty of care.

B.2.6 Duty to stop work as soon as unusual settlement became apparent

145.  Once there were signs that their design assumption was mistaken, the Defendants came under a duty to take all reasonable care in any further steps taken.

146.  But it seems to me that the Defendants did take such reasonable care.  On 17 May 2003 they temporarily suspended work.  They modified their method of proceeding, before re-starting on 19 May 2003.  When it became clear that the cracks in the Building were only becoming worse, the Defendants suspended the works altogether on 23 May 2003.

B.3    Summary on breach of particular duties of care

147.  In my judgment, the evidence does not establish any breach of the particular duties of reasonable care owed by the Defendants to Ms. Shiu.

C.      Main Issue 3: Whether breach of any duty of care caused damage?

148.  No particular breach having been established, the question of causation does not strictly arise.

149.  However, I would note that I found unsatisfactory the evidence adduced on Ms. Shiu’s behalf in relation to causation.  The evidence on causation struck me as too general in nature to be helpful.

150.  Thus, for instance, it was suggested by Mr. Buckell that further ground investigation at the outset was necessary.  This might well (it was submitted) have disclosed the problem of loose fill under the foundations.

151.  But nowhere in the evidence does Mr. Buckell explain why any specific investigation envisaged by him would likely have revealed the loose fill under the Building’s foundations.  Previous site investigations had not done so.  What standard methods of investigation would Mr. Buckell have employed? Why would these have succeeded in pinpointing a problem which previous competent investigations had not revealed?

152.  Without such hard evidence, a Court cannot conclude that the failure (say) to carry out further initial investigation led (on the balance of probability) to the problem of loose fill not being discovered until a late date.

153.  Take another example.  It was suggested that settlement monitoring was inadequate. 

154.  But nowhere in the evidence are chapter and verse cited as to how many more ground settlement, tilt or other monitors there should have been, where these monitors should have been placed, and how all that would have made any material difference to the earlier detection of ground settlement.

155.  Again, in the absence of such hard evidence, a Court would have difficulty concluding that any deficient monitoring meant that increased settlement was not noticed until much later than should have been the case.

D.      Main Issue 4: What quantum of damages?

156.  In light of my conclusion on liability, this question does not arise.

157.  Nonetheless, in the event that this case goes further, I should give some indication of my views on an appropriate quantum of damages.

D.1    Background to quantum

158.  Ms. Shiu claims the cost of repairing the Flat.  She estimates this at $800,000.

159.  She moved out of the Flat in March 2004.  She says that this was because, in consequence of the soil nail works, the Flat became uninhabitable.  The ground floor slab of the Flat acquired a pronounced tilt and was likely to be resting over a void.  She suggests that the ground floor slab is simply “on grade” and is not supported by the foundation columns of the Building.

160.  The Flat was not repaired immediately after the events in around May 2003.   This was apparently for 2 reasons.  First, it is suggested that subsidence did not stop until mid-2005.  Second, it was thought that the Court might wish to see for itself the actual damage to the Flat in the course of these proceedings.

161.  Ms. Shiu says that the rental value of the Flat is about $40,000 per month.

162.  Ms. Shiu claims the cost of alternative accommodation pending repair of the Flat. 

163.  Ms. Shiu moved out of the Flat into a second one owned by her in which her sister had been living.  That 2nd Flat had been sold to a developer but completion had been delayed.

164.  Ms. Shiu moved into a third flat upon completion of the sale of the 2nd Flat.  She rented that 3rd Flat at $56,000 per month.

165.  She also claims moving costs of about $20,000.

166.  The Defendants say that Ms. Shiu failed to mitigate her costs by refusing Winfield’s “without prejudice” offer in September 2003 to repair the Flat.

D.2    Discussion of quantum

167.  I shall here assume that the Defendants are found to have been negligent in the design or execution of the works.

168.  In my view, the $800,000 claimed by Ms. Shiu for repair is excessive.  It appears to cover renovation work which is not consequent upon any subsidence attributable to the Defendants’ negligence.

169.  For example, I think that Mr. Yeung rightly queries a claim for the re-provisioning of all wardrobes and cabinets in the Flat.  Such re-provisioning alone amounts to about $330,000 of Ms. Shiu’s claimed repair cost.

170.  Further, it is far from clear to me that any void under the ground floor slab would have been caused in whole or in part by the Defendant’s negligence. 

171.  It seems to me that Mr. Arbon is right to suggest that in all likelihood the slab rests on the Building’s foundations.  Over time, there will inevitably be some ground settlement.  Accordingly, such void as there is under the slab may merely have developed over the 50 year history of the Building.

172.  I do not accept that the void under the ground floor slab renders the Flat uninhabitable.  In all likelihood, the ground floor slab spans over any void beneath, being adequately supported by the Building’s foundation columns.

173.  In those circumstances, I would have had doubts in attributing any part of the cost of repairing the ground floor slab to the Defendants.

174.  In the premises, I prefer the estimated repair cost put forward by Mr. Lee (the Defendants’ valuation expert).  He estimates the cost of repair at $170,000 at current prices (equivalent to $146,572 at prices prevailing in December 2004). 

175.  Since one is dealing with rough estimates and there being not much difference between $146,572 and $170,000, I would have been prepared to assume the cost of repair to be about $170,000. I note that Mr. Lee’s estimate includes $60,000 for the purposes of re-grouting the void under the living room.

176.  Mr. Lee suggests that Ms. Shiu need not move out of the Flat when repairs are carried out.  He points out, however, that this would mean that Ms. Shiu and her maid would be restricted to living in only a portion of the Flat at the time of repair.

177.  I would then, in the circumstances, have allowed Ms. Shiu the rental value of her Flat for (say) about 3 months.  This should cover the cost of finding alternative accommodation while repairs are being effected.  This would amount to $40,000 x 3 or $120,000.

178.  There may be a cost in moving back and forth between the Flat and a temporary accommodation.  It seems to me that Ms. Shiu should have an additional allowance of $15,000 ($7,500 x 2) for this purpose.  This is based on her oral evidence that it cost about $7,000 odd to move from one apartment to another.

179.  I do not think that Ms. Shiu would be entitled to anything else.

180.  I would, therefore, have awarded damages of about $305,000.

181.  On the question of mitigation, I think that it was unreasonable for Ms. Shiu to refuse Winfield’s offer.  However, had the offer been accepted, Winfield would likely have incurred about $305,000 in repair cost and compensating Ms. Shiu for moving out of the Flat while repairs were being effected. 

E.      Main Issue 5: What contribution among the Defendants?

182.  In light of my conclusions on liability, the issue of contribution does not arise.

IV.     EXPERT ISSUES

183.  For the sake of completeness, I propose to set out brief answers to the expert issues agreed by the parties.  To a large extent, the latter issues have already been dealt with in Section III.  Accordingly, there will be some overlap between this and the previous section.

184.  Before I do that, however, I should say a few words about my impression of the expert evidence.

185.  As will have been apparent from the discussion in Section III, I have attached more weight to the evidence of Mr. Koo and Mr. Arbon.  This is because I felt that Mr. Buckell was more of an advocate for Ms. Shiu’s position, rather than an impartial expert.

186.  Let me give on example. 

187.  Mr. Buckell seemed to me equivocal on the question of a design based on shear pins.  Initially, it appeared that he was proposing a design along the lines advanced by ESA.  However, when that was queried by Mr. Yeung in the course of cross-examination, Mr. Buckell appeared to shift ground.  Rather than accept that the shear pin and soil nail design put forward by ESA had its own difficulties, Mr. Buckell seemed to suggest that his preferred design was one simply employing shear pins for wall thickening.  This was despite Mr. Buckell not having considered in any meaningful detail whether wall thickening was feasible within existing site constraints.

A.      Whether soil nail design was adequate/ appropriate?

188.  The design was adequate.

B.    Whether adequate risk assessment and proper condition survey prior to commencement?

189.  The risk assessment was adequate in light of the available information.  Sufficient site investigations had been conducted prior to commencement.

C.      Whether loose fill beneath spread footings reasonably foreseeable?

190.  The loose fill was not reasonably foreseeable.

D.      Whether soil nail installation method adequate?

191.  The method (in particular, the use of casing only when necessary and the employment of a percussive rotary drill) was adequate.

E.      Whether reasonable to expect some ground settlement and minor remedial works to the Building?

192.  It was reasonable.

F.      Whether Defendants remedial actions appropriate and adequate?

193.  The remedial actions were appropriate and adequate as matter of engineering practice.

G.      Whether compliance with Model Specification for Soil Nail Works?

194.  The Government did not issue this Model Specification until 2004.  Accordingly, its relevance to this case is unclear.

195.  If at all relevant, for the reasons given by Mr. Koo and Mr. Arbon in their expert reports, I think that there was compliance with the Model Specification.

H.      Whether compliance with general Specification for Civil Engineering Works?

196.  This does not seem to me a relevant issue.

I.       Whether compliance with GEOGUIDE 1?

197.  This is not a relevant issue.

J.       Whether compliance with PNAP 284?

198.  This is not a relevant issue.

K.      Whether specifications in Issues G to J ought normally to followed as a matter of normal engineering practice?

199.  See Issues G to J above.

L.      Whether drilling of soil nails caused cracks and tilting in the Building and damage to the drains?

200.  See Section III above.

M.     Whether remedial works for the Flat were in accordance with normal practice?

201.  The remedial works proposed seemed adequate.

N.      Whether soil nail works caused voids in the foundation and an increase in their size?

202.  See Section III above.

O.      Whether ground floor slab structurally unsafe?

203.  The slab is structurally safe, as confirmed by the BD in a letter dated 31 May 2004 in response to calculations on the safety of the ground floor slab submitted by WSP.

P.      Whether the settlement monitoring system was defective?

204.  The monitoring system was adequate.

205.  There was a dispute about the monitoring of GS03 and GS09.  Mr. Buckell contended that they did not properly measure settlement because they were fixed to the pavement outside the Building.  He suggested that the true settlement which ought to have recorded by GS03 from early 2003 would have been in the order of 105 mm.

206.  Assume that Mr. Buckell is correct.  I am not sure how such matter would advance Ms. Shiu’s case.

207.  Mr. Buckell’s measurement of the ceiling of the Flat suggests that, since the time when the Building was erected to the present, there has been settlement at the north-western corner of the Flat of about 209 mm. 

208.  If one subtracts 105 mm from 209 mm, one is still left with 104 mm of settlement unaccounted for.  The likely explanation is that over time the north-western corner of the Building has been subsiding due (perhaps) to voids underneath the foundation.

209.  It follows that, even if Mr. Buckell is correct in his measurement, his thesis (namely that, the subsidence experienced by the Flat was due entirely to the 2003 soil nail works) is not made out. 

210.  Assume that the 105 mm settlement was caused by the soil nail works.  That would simply have been because, unknown to all at the time of the works, there was loose fill under the Building’s foundations.  The vibrations from the soil nail works would have stressed the soil and caused the loose fill under the foundation to settle in an accelerated manner. 

211.  However, that loose fill had already been causing the Building to experience subsidence over time.  Further, for the reasons set out above, the existence of the loose fill under the foundations is not something which a reasonable engineer would have suspected at the start of the project.

Q.      When had settlement so diminished that it would have been possible to effect repairs to the Flat?

212.  Mr. Koo suggests the 1st quarter of 2004.  Mr. Arbon says July 2003.  Mr. Buckell proposes mid-2005. 

213.  I think that Mr. Koo’s date probably represents a conservative estimate.  I note that (as Mr. Koo points out) site monitoring data show that settlement in the area adjacent to the Flat came to a steady condition around November 2003.  Mr. Koo takes a 3 month period after that as a matter of prudence.

V.      CONCLUSION

214.  Ms. Shiu’s claim is dismissed. 

215.  Winfield’s contribution claims against WSP, Mr. Billson and Mr. Williams and the contribution claim of the latter 3 against Winfield are dismissed in consequence.

216.  There will be an Order Nisi that Ms. Shiu is to pay the Defendants’ costs, such costs to be taxed if not agreed.  The Defendants’ costs payable by Ms. Shiu are to include the costs of the Defendants’ contribution claims against each other.