WELL FORCE CO. LTD. v. BOOMWAY (HONG KONG) LTD.

HCA4480/1994

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.4480 OF 1994

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J U D G M E N T

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INTRODUCTION

1. This, sadly, is a dispute between neighbours. It is litigation which has stretched over the past four years, and which apparently has proved incapable of early resolution, notwithstanding the relatively small sums of money involved. The trial itself has lasted a full eight hearing days, and this against a background of diverse interlocutory applications since the inception of the case. The enormous disparity between the accrued costs over the past four years and the actual amounts at stake boggles the mind, and in my view does little credit to the common sense either of the litigants or of the legal advisers, although in fairness I note that counsel appearing at this trial are all new to the case, and have clearly made considerable efforts to focus upon the primary issues.

2. But to revert to the substance of the dispute. Mr Ronald Ho is an accountant and senior partner of a leading firm in Hong Kong. He lived, and indeed still lives, with his wife Florence on the 2nd Floor of a three-storey apartment building at No.27 Plantation Road, The Peak. Mr Ho acquired this property in the name of the Plaintiff company in late 1986; it is a 30 year old block, but it was purchased shortly after it had been extensively refurbished and renovated by a developer. It was, no doubt, an eminently acceptable residence.

3. In July 1993 Mr and Mrs Ho became aware that the 3rd Floor apartment immediately above them had been sold. As matters transpired, this apartment, on the top floor of No.27 Plantation Road, remained empty for some six months, but subsequently Mr and Mrs Ho learned that the purchaser of the flat was the Defendant company, the directors and shareholders of which were, and still are, a gentleman known as Mr Kenny Bee and his wife, Miss Teresa Cheung, both of whom, I understand, are well known show business personalities.

4. As matters transpired, this 3rd Floor apartment had been purchased by Mr and Mrs Bee as a matrimonial home and, as such, Miss Cheung, as I shall henceforth refer to her in light of her impending divorce, clearly was not satisfied with the existing layout of the flat. Major renovation works were planned, which appear to have involved the initial demolition of the majority of the inner non-load-bearing walls of the apartment and its complete internal reconfiguration; in fact, so complete was to be the change that even the existing bathrooms and kitchen were to be resited. To this end, Miss Cheung enlisted professional assistance, and accordingly she hired an interior design firm, Wong & Tai Interiors Ltd., the 2nd Third Party herein, together with a contractor which had been referred to her by that firm, one Jet Haven Ltd., the 1st Third Party in these proceedings.

5. I shall refer to the particular part played by both these entities later in this judgment. Suffice to say that when the works finally began, and began with the very extensive demolition work required by this 3rd Floor renovation project, Mr and Mrs Ho were horrified. The noise and disturbance created by the use of handheld jet hammers and sledge hammers was very considerable, as was the vibration transmitted through the structure, and the impact of heavy masonry falling onto the floor above. In addition, damage to their own property began to manifest; first and most obvious was the widespread cracking of wall tiles and wall plaster followed by the dislodging of at least two ceiling lights, and some water leakage resulting from the resiting of the bathrooms above. To add to this, damage was being caused to the common areas of the block, in particular to the marble in the entrance areas and the staircase.

6. These events caused Mrs Ho to take matters into her own hands. On her own case, she had the main lock to the block changed on two occasions in an endeavour to restrict the access of the workmen, after, she says, she had failed in all her attempts to contact Miss Cheung by mobile telephone. And matters eventually came to a head with a meeting between all apartment owners at Mr and Mrs Ho's residence in the late evening of 11th April 1994. At this meeting, alleges Miss Cheung, there was a mutual waiver of the respective claims and cross-claims consequent upon the damage caused and the 'lock out' of the workers.

7. This meeting, however, clearly did not conclude the matter, or lay the dispute to rest, the Plaintiff thereafter issuing proceedings for damages against the Defendant in May 1994, and the Defendant in return counterclaiming for loss occasioned by the 'lock out' of its contractors.

8. In turn the Defendant issued third party proceedings against both the contractor, Jet Haven, and the interior designer, Wong & Tai, claiming indemnity and/or contribution towards the Plaintiff's claim. I pause to note here that a further set of third party proceedings, whereby the Plaintiff, as defendant to the Defendant's counterclaim, claimed indemnity and/or contribution from the building manager, Messrs Knight Frank Kan and Baillieu (Services) Ltd., was discontinued by consent shortly before the trial of this action.

9. That, therefore, is the broad background and genesis of this unfortunate case.

10. With the agreement of Counsel, and in light of the particular circumstances, the Court permitted the trial of the main action and the third party proceedings to proceed in tandem and to be heard at the same time, and I turn now to consider the particular claims within both the head action and the third party proceedings.

(i) Plaintiff's claim against the Defendant

11. No point is taken on the Plaintiff's causes of action; in a nutshell, the Plaintiff alleges breach of the provisions of the Deed of Mutual Covenant, breach of the Defendant's common law duty of care, and nuisance, the claim for consequential damage being divided into a claim for physical damage to the flat and damages at large for nuisance.

12. Consideration of the Plaintiff's claim, it seems to me, revolves around three distinct subheads :

a) The "waiver" defence and the duty to mitigate;

b) The issue of physical damage; and

c) General damages for nuisance.

I deal with each in turn.

a. Waiver

13. The Defendant alleges that an agreement was reached between the Plaintiff and the Defendant at the meeting held in the late evening of 11th April 1994 during an interchange between one Mico Chung, owner of the 1st Floor apartment, Mr Bee and Miss Cheung, and Mr and Mrs Ho. In essence, it is said that it was agreed that the Plaintiff would waive its rights to claim against the Defendant in relation to the damage done to the Plaintiff's property arising from the renovation works in consideration for the waiver by the Defendant of its claim against the Plaintiff for loss and damage suffered by the Defendant as a result of the delay to the works consequent upon the changing of the main door lock of the apartment building. If successful, of course, this argument would cut both ways and would suffice to exclude both the Plaintiff's claim and the Defendant's counterclaim, although the Plaintiff does not take this point in the alternative, no doubt because Mr Ho of the Plaintiff was adamant that no such agreement took place.

14. Mr Fung, Counsel for the Defendant, has carefully rehearsed the evidence on the so-called 'waiver' point as has emerged in this trial from Miss Cheung, Mr George Wong, her personal assistant who was also present at the meeting, and from Mr and Mrs Ho. I will not here repeat that evidence in detail; suffice to say that, at its highest, the evidence was that there had been a suggestion at the end of the meeting emanating from Mr Mico Chung - doubtless acting in the role of conciliator and peacemaker - that the parties' disputes should be put aside and all solicitors' correspondence 'torn up', to which it is said that Mr Bee and Miss Cheung and Mr Ho agreed, Mr Ho being reported as saying 'of course'. I understand that this particular exchange was conducted in Cantonese, the words quoted representing the interpretation given to the Court during what was, for the most part, evidence given in English. I note, also, that although Miss Cheung specifically accepted that the word 'waive' or 'waiver' was not used, nevertheless she forcefully maintained that the spirit of the agreement was to the effect that the Plaintiff and the Defendant would each waive their rights against the other.

15. There were in fact typed Minutes of this meeting, produced I think, by Mr Ho, which make no reference to such mutual waiver, paragraph 4 thereof merely reciting that the allegation made against Mr and Mrs Ho by the other owners of this building be withdrawn 'in a formal manner' by the parties or their solicitors - which reference I take to mean to be a reference to the changing of the locks of the apartment building by Mrs Ho. Miss Cheung, in her evidence, attacks these Minutes as incomplete and falsified by Mr Ho, an allegation that I do not accept, although such an allegation does perhaps reflect the depth of feeling existing between the parties. There is, further, a hearsay statement from one Alison Dow, also known as Mrs Webb, the tenant at that time of the Ground and 1st Floors of the building, who confirms that these Minutes accurately record what transpired at the meeting, and who says that, to the best of her knowledge, the Plaintiff, in the person of Ronald Ho, "had not said anything at any time to Madam Bee (Miss Cheung) to the effect that the Plaintiff would release the Defendant from liability for having caused damage to the Plaintiff's premises at any time during the meeting."

16. Mr Fung for the Defendant suggests that, on the balance of probabilities, Miss Cheung's version of events should be preferred to that of Mr Ho, and in this regard places stress upon Mr Ho's denial that, for example, the issue of the lock changes was discussed at the meeting at all, or that the topic of damage to his apartment was discussed in detail; moreover, suggests Mr Fung, the content of the Minutes of the meeting is far from conclusive.

17. Mr Franklin, on behalf of the Plaintiff, demurs. He argues that the Defendant has failed to prove, on the balance of probabilities, that at the meeting on 11th April, or at any time, the Plaintiff had waived its rights to proceed, and submitted that even if the Defendant's evidence was accepted in its entirety, this would not amount to a waiver in law. He also points out that waiver did not figure in the original Defence, which was filed on 27th April 1995.

18. In my view Mr Franklin's submission is correct. The content of the meeting, in particular the alleged mutual assent to the suggestion by a third party, namely the said Mico Chung (who was not called to give evidence) is, in my judgment, too residually uncertain to be classified as, or as amounting to, a legally binding waiver. In my view, there was undoubtedly some verbal smoothing of ruffled feathers on both sides, and I am equally sure that emollient sentiments were indeed expressed - as Mico Chung is reported as also saying, the parties all had to be neighbours together - but in the circumstances I am disinclined to elevate such sentiments to the status of a binding waiver of a cause of action on either side. Both Mr and Mrs Ho are adamant that there was no such specific mutual agreement; in fact, it was notable that Mr Franklin did not take any point, in defence to the counterclaim, as at least seemed open to him in terms of paragraph 4 of the minutes, and it is a matter of record that not long after the meeting, on 5th May 1994, a formal letter of demand, quantifying the damages, was sent by the Plaintiff's solicitors, followed shortly thereafter by the writ on 11th May 1994. I note, further, that even on the Defendant's case, such 'waiver' did not apply to events subsequent to the meeting, and that, on the evidence, the work continued after the meeting, as did Mr and Mrs Ho's complaints (including, at least on Miss Cheung's evidence, a serious altercation between Mr Ho and one of the contractors).

19. At the end of the day, therefore, I do not accept the 'waiver defence' and I find, as a fact, that there was no such binding mutual agreement. Efforts at reconciliation there may well have been; but in my judgment, on the balance of probabilities, a binding preclusion of legal action on either side has not been established. Accordingly, this point fails.

Mitigation

20. I deal with this argument at this stage if only to remove it from the analysis. In short, Mr Fung says that if, which is not admitted, the Plaintiff has a valid claim against the Defendant, the Plaintiff failed to mitigate its loss in not accepting the 1st Third Party's offer, made on its behalf by Mr C.K. Lau, to repair the damage done to the Plaintiff's flat free of charge.

21. I confess to have had some difficulty in treating this point with the seriousness with which apparently it was put forward. On the basis, as Mr Fung accepts, that the test for mitigation of damage is one of reasonableness, I have considerable difficulty in accepting the proposition that it was unreasonable for Mr Ho not to accept an offer of physical restoration of the damage from the 'cowboy' contractor (to use Mr Ho's appellation) who had, in his eyes, been responsible for the very damage not only to his property but also to the common areas, and who had shown scant regard for the property of others.

22. That in itself is sufficient to dispose of the point. Nor, in any event, do I accept that there had been unconditional offers to repair. In cross-examination, Mr C.K. Lau, the director of the 1st Third Party contractor, said that he did make such an offer, although he accepted that this depended upon whether his work was responsible for the damage to Mr Ho's apartment, and certainly the general tenor of his evidence before me was that even now he was disinclined to consider such to have been the case.

23. I dismiss this argument also.

b. Physical damage

24. In terms of consequential physical damage to the fabric of Mr Ho's 2nd Floor flat, I have been greatly assisted by the extensive photographic and expert evidence put in and called by the Plaintiff. Photographs taken by Mr Ho himself of the 3rd Floor premises reveal the extensive and widespread nature of the demolition of the inner partition walls of the 3rd Floor premises - it is probably not putting it too high to suggest that the flat above was all but internally razed as a precursor to its rebuilding in a new internal configuration - whilst photographs taken by Mr David Chan, a surveyor, of one Wellgo Archdecor Consultancy Ltd., who inspected the Plaintiff's premises between 20th and 23rd April 1994 and reported thereon, are valuable in terms of appreciating the nature of the damage complained of by the Plaintiff. I found Mr David Chan to be an impressive witness, with a clear grasp of his subject, and I was much assisted by his observations upon the nature and effects of both structural and impact vibration. In short, I accept his evidence, which was substantially complementary to that of Mr and Mrs Ho, that the bulk of the matters complained of by the Plaintiff were caused by, and were consequent upon, the works being conducted on the 3rd Floor by the Defendant's contractors, Jet Haven. Indeed, so compelling was the probability of such consequential damage that, with a commendable sense of realism, neither Mr Fung nor Miss Wong, who appeared for the 1st Third Party contractor, really took issue with the fundamental issue of liability, opting instead to focus on the more contentious issue of quantum. I pause here to add that, in the context of the expert evidence called before this Court, I did not accept the expert evidence of Mr Kenneth Chan of Spence Robinson, a surveyor called on behalf of the Defendant, who concluded that the damage of which the Plaintiff complained was a function not of the demolition works but of the age of the building. In this connection, Mr Chan's observation, in cross-examination, that he would indeed consider other expert opinions before inevitably reverting to his own point of view, inspired little confidence in his judgment that, for example, the cracks complained of were old cracks, or that the lighting had not been properly fixed in the first place. Nor, it must be said, did his brief 30 minute survey of the Plaintiff's premises on 27th November 1994, some eight months after the damage complained of, afford any realistic opportunity to assess the nature and extent of such damage.

25. Against this background I turn, therefore, to the more pressing issue of quantum.

26. In this regard, the case has taken a somewhat odd twist in that notwithstanding the damage and disruption allegedly caused, ultimately little effort has been made to correlate in detail such damage with the costs of its repair. In this regard, Mr Ronald Ho's evidence was that he had lived with the damage caused by the upstairs renovations for a considerable period. He had, he said, originally intended to restore the damage, in particular the cracks and the damp patches on the ceiling, at a far earlier stage, but that it was not until November 1997 that repairs were actually undertaken. What happened was that he repaired the damage caused in early 1994 at the same time as he undertook significant additional works, which he unequivocally accepted amounted to improvements made to his property. He also made it clear that he did not seek from the Defendant payment for works done to the extent that they constituted such improvements. In short, Mr Ho sought only compensatory damages for the true cost of repairs, together with damages for nuisance.

27. As to the cost of the repairs to the damage, Mr Ho had initially obtained an estimate prepared by Messrs Davis Langdon and Seah HK Ltd, an estimate that was contained in a report by that firm dated 3rd June 1994. I will revert to this estimate shortly.

28. What, however, happened thereafter was that in 1997, and independently of the pre-existing estimate, Mr Ho entered into an oral contract with one Sun Pool Planning, a contractor, to redecorate and refurbish his residence (including the repairs to the damage of which he complains) at a cost of some $1.352 million, which amount, it is not disputed, he paid in the form of three cheques issued on 21st November, 24th November 1997 and 27th January 1998 respectively. For these refurbishments, it was Mr Ho's evidence that he moved both his family and his furniture out of his flat, returning only upon completion.

29. This then was the factual background regarding the matter of quantum of the Plaintiff's claim against the Defendant, and unsurprisingly in the circumstances, it was the 1994 Davis Langdon & Seah estimate which provided the focus for a forensic attack thereon by Mr Fung for the Defendant and Miss Wong for the 1st Third Party, to whose client, of course, the Defendant was and is attempting to pass on the full extent of any financial liability.

30. The Davis Langdon & Seah estimate put the total cost of such repairs at $223,000, just short of the sum of $225,000 claimed in the Plaintiff's solicitors' letter before action of May 1994. Miss Wong cautioned that the Court should approach the estimate with the utmost care, pointing out that the estimate in question emanated from a large firm of quantity surveyors whose adoption of the assumptions underlying the estimate bore little relation to what the Plaintiff apparently did in 1997 when it used Sun Pool to renovate its apartment. I say 'apparently' because there was no attempt to call anyone from Sun Pool to explain what in fact had been done during this refurbishment of Mr Ho's 2nd Floor apartment, nor indeed to assess (and this was not touched upon) the relationship and extent of the specific repairs, and their cost, to the refurbishment generally.

31. In any event, so far as the Langdon Seah estimate was concerned, both Miss Wong and Mr Fung highlighted in particular Categories 9, 10 and 11 of the estimate - namely, Preliminaries, Contingencies for Latent Defects and Professional and Administration Fees - as being inappropriate to the Sun Pool works, and as no evidence from Sun Pool was called, whether any of the assumptions underpinning the Davis Langdon Seah estimate had in fact been in place. Further, Mr Franklin had properly conceded Item 8 - which related to the refurbishment of the main entrance, which is part of the common area - whilst in addition the fundamental premise of the estimate was that there would be a 'zonal' refurbishment, with the works being done at the same time as the Ho family remained in residence, so that it followed, Miss Wong submitted, that the cost element relating to that particular manner of completing the redecoration must also be removed. To this latter point, Mr Franklin commented that, in turn, no claims had been made for the cost of alternative accommodation and furniture storage, although the answer to that seems to me to be that if any small part of that sum should be recoverable to represent the proportion the cost of repairs bore to the overall Sun Pool bill of $1.3 million, there was in any case no evidence of the ambit and amount of such ancillary accommodation and storage charges.

32. I have considered the respective arguments in terms of the validity of the Davis Langdon Seah estimate, together with the detail within the estimate itself. In this regard, save for the sum of $3,000, which I will allow in terms of Preliminaries, I have disallowed paragraphs 8, 9, 10 and 11 in toto, amounting to $118,000, leaving a balance of $105,000 in terms of the original estimate, and I have further deleted a round figure of $20,000 to take into account the lack of any 'zonal' cost requirement. This then leaves a balance of $85,000. There is no particular magic in this figure; in the circumstances it is what strikes me as just in the circumstances and in light of the rather poor state of the evidence. And if and in so far as this is somewhat arbitrary, then, with respect, so too is the estimate upon which the Court is being asked to proceed.

c. Damages for nuisance

33. This represents the third broad issue requiring to be addressed in terms of the Plaintiff's claim in the head action. Two issues arise here. First, one of principle. Miss Wong and Mr Fung say that it is not open to the Plaintiff, qua holding company, to pursue a claim for general damages in nuisance. Mr Franklin was, I think, surprised by the point, no prior indication having been given that it would be taken. He did not accept the validity of the argument, but out of an abundance of caution made an application at the conclusion of his final speech to join Mr and Mrs Ho as Plaintiffs. His application met with strenuous objection, and after some reflection, it was denied for the reasons given at the time.

34. In my view it is unsatisfactory that the point was taken late, although I fully accept that possibly it may have been an analytical afterthought rather than a case of deliberately hiding lights under bushels. In any event, no authority was cited in support of the proposition advanced, and in the particular circumstances of the case, the point is both narrow and unattractive. Moreover, it is curious to reflect that the Plaintiff, qua apartment owner, can validly maintain a cause of action for vibration damage to the apartment of which it is the legal owner, but not for the noise accompanying that very vibration. As I have indicated, no authority was produced in support of the proposition, and in the absence of full argument as opposed to the rather belated comment that this point was accorded, I am not minded to decide this issue against the Plaintiff; suffice it to say that if it has any validity, I am prepared to hold, and so do, that in these particular circumstances Mr and Mrs Ho clearly represent the alter ego of the Plaintiff, qua holding company, and I am not prepared to disallow the nuisance claim in specie simply because they have not been joined as parties.

35. That decision having been made, the question is, how much is a general damages claim in nuisance worth in contemporary Hong Kong when dealing with the common occurrence of excessive noise accompanying renovation of an adjacent flat? As Counsel, I think, all accepted, this is a cultural phenomenon of which the great majority of Hong Kong residents are all too familiar.

36. In this connection Miss Wong tells me that her research of the Hong Kong case law has revealed no previous decision arising from excessive noise. In any event she says, Hong Kong life being what it is, a reasonable level of tolerance must be assumed. Moreover, while she accepts in principle that an award of general damages does lie for discomfort and inconvenience, the period within which the level of such discomfort and inconvenience is suffered must loom large - in this case, she says, that the bulk of the demolition took not much more than a relatively short period of some 10 days to two weeks - and that in the circumstances, any such figure should not be in excess of $20,000. For his part, Mr Fung adopted Miss Wong's argument on the point.

37. Mr Franklin, too, whilst pressing this aspect of the claim, was unable to assist with regard to contemporary Hong Kong authorities. He appreciated, I think, the distinctly limited appeal of English cases in this area in the context of contemporary Hong Kong, although he did cite a newspaper report of one Hong Kong case in this jurisdiction which had settled at the sum of $200,000, and which involved disruption to the lives of flat occupants on the Peak. That, however, seems to me to be of very little assistance given the reported facts of that case, in particular the length of time that the parties' lives were apparently disrupted, together with the fact that, as Mr Franklin recognised, this in no sense represented a judicial finding on the point.

38. At the end of the day there is no doubt, on the evidence, that life was made unpleasant for Mr and Mrs Ho for a limited period, and that in the circumstances, during the intensity of the demolition, the noise and disruption was at a level in excess of the standards of reasonable tolerance which could be expected from neighbours, even in Hong Kong. After taking all the circumstances into account, in my judgment (and it may be more a matter of intestine than cerebrum) the appropriate sum to be awarded under this head is $35,000, and I so order.

The Plaintiff's Claim

39. The result of the foregoing, therefore, is that in my judgment the Plaintiff has made its case against the Defendant to the amount of $120,000.00.

40. I turn now to consider the Defendant's counterclaim; as I indicated during the security for costs application which took place shortly before the trial, in my view the two claims arise out of the same factual matrix and are sufficiently related to merit set-off of the one against the other, with judgment to be rendered for the balance.

(ii) Defendant's Counterclaim

41. There were two primary issues in the Defendant's case. One is the defence of 'waiver', with which I have now dealt, and the other was and is the loss and damage allegedly accruing to the Defendant by reason of the 'lock out' of the Defendant's contractor, Jet Haven, by the Plaintiff in the person of Mrs Ho.

42. The evidence of this 'lock out' presents a remarkably confused, and confusing, picture. Mrs Ho accepts that she changed the main door key lock to the apartment building on two occasions, namely on 21st and 23rd March 1994, but asserts that she neither changed nor caused to be changed the combination lock. Mr Ho commented in his evidence that the latter was a complex procedure requiring an electrician, and would be done only by the management company, Messrs Knight, Frank, Kan & Baillieu. On her own case, Mrs Ho was motivated to change the key lock in an endeavour to protect the Plaintiff's property - she told me she was also much exercised by the damage to the common areas that was taking place - and in the hope that the situation 'would be monitored'. I am unsure precisely what this latter phrase imported, or what Mrs Ho thought was going to happen given that there was but a part-time watchman and that the then building manager, Knight, Frank, Kan & Baillieu, were not present on the premises, although perhaps there was a faint hope that the contractors' worst excesses could in some way be mitigated. Be that as it may. On each occasion she says that she made the new key available to other residents, either through the watchman (on the first occasion) and, on the second occasion, through the watchman and through the managers; indeed, on this latter occasion, she says, that she delivered the second key personally to the manager's Garden Road premises.

43. That, however, was not the end of the story. Because the accumulated evidence appears to suggest, and in the circumstances I am inclined to accept, that the combination lock also was changed on two separate occasions, the first shortly after the renovations commenced on 8th March 1994, and the second after the second change of key lock. What is not clear, however, is who changed the combination lock, nor who caused it to be changed. Mr and Mrs Ho abjure responsibility for this, and no one from Messrs Knight, Frank, Kan & Baillieu was called to explain the situation. In my view, this is particularly regrettable, since I also accept as a fact that the change of combination lock was not a simple procedure, since it apparently involved an interlinking with the closed circuit TV monitor in the entrance hall, and that therefore this would have been particularly within the building manager's bailiwick.

44. For her part, Miss Cheung and her personal assistant Mr George Wong, both depended upon hearsay assertion, to which I accord little if any weight for these purposes, to the effect that responsibility for the combination lock change accrued to Mr and Mrs Ho; and equally, Mr C.K. Lau, the director of Jet Haven, was of the opinion, by a process of elimination, that Mr and Mrs Ho had persuaded management to do it. I am however equally disinclined to place any weight upon Mr C.K. Lau's conjectures - in the particular circumstances of this case, he is hardly a disinterested party.

45. Mr Fung, for the Defendant, whilst acknowledging the lack of weighty evidence to suggest that the combination lock was changed or caused to be changed by the Plaintiff, nevertheless asked me to infer, in all the circumstances, that the change of the combination lock must be attributed, by necessary inference, to Mr and Mrs Ho, and hence liability for damage so caused to the Defendant in terms of the results of the delay.

46. But even the actual delays arising from the various changing of the locks is essentially vague. Miss Cheung was travelling, and attempted to resolve the problem from long distance through telephone calls to Mr Wong, who in turn attempted to resolve matters mainly by or through Knight, Frank, Kan & Baillieu, so that for their part, they are unable to be specific. Whilst Mr C.K. Lau, who may have been expected to know, was not particularly helpful on the amount of time lost by his contractors, and in any event (and to add to the confusion) attributed such loss of time as there was to the change of the combination lock rather than the key.

47. All of which makes for a fairly insecure evidential basis upon which to mount a counterclaim which, in terms, consists of three heads : first, compensation for delay agreed to be paid by the Defendant to the contractor (in the sum of $184,400), second, the cost of Miss Cheung extending her leave flat to deal with the changed completion date ($41,561), and third, a consequential furniture storage charge ($26,523).

48. At the end of the day it is clear that some delay to the contractor's work was caused by interference with the locks to the main door of the apartment block, although I have a strong suspicion that in the circumstances the individual workmen were inclined too readily to pack up for the day when access could not immediately be gained rather than, in time honoured Hong Kong fashion, simply waiting until access could be gained via another user entering or leaving the building.

49. It is surprising that any significant period of delay was not contemporaneously noted and recorded and, at bottom, the only concrete first hand evidence as to delay consequent on the lock change comes from Mrs Ho herself, though even she is vague as to just how much respite she obtained as a result of her efforts. In the circumstances of this case, absent hearing from the building managers, who might have been expected to tell the Court precisely what had occurred, I am unprepared to make hard findings of fact on the basis of unattributed speculation. And needless to say, both in this regard and generally in the case, the Court has paid no regard whatever to the affidavit evidence assembled in the various interlocutory applications, and I have judged this case solely on the basis of admissible evidence placed before me at trial.

50. So, to return to the evidence of Mrs Ho, and to her own admitted actions in twice changing the key lock. In this connection I do not agree with Mr Franklin's assertion that through her the Plaintiff was acting within its rights in attempting to abate a continuing nuisance, or that this was some form of justified self-help. Whichever way one cuts it, and whatever may be the motive, in my judgment Mrs Ho's action was to place the Plaintiff in breach of the Deed of Mutual Covenant and, subject to satisfactory proof, liability for consequential damage must follow. Self-help of this arbitrary nature does not assist in resolving disputes between neighbours, and such unilateral action is not constructive. To the contrary, it frustrates and exacerbates, as no doubt occurred in this case; certainly Miss Cheung's frustration at being thwarted in her attempts to progress the renovation of her apartment was clearly evident at the trial some four years later.

51. Having established the principle, however, the fact remains that in our courts liability for consequential damage can be attributed only on the basis of cogent evidence, and it is here that the evidential difficulties to which I have earlier alluded loom large. Having declined on the evidence to attribute to the Plaintiff the delays caused by the combination lock, some suspicions notwithstanding, I am left only with the delay attributed to the change, on two occasions, of the key locks. In this regard the probabilities are that, in total, there was lost close to one working week notwithstanding Mrs Ho's attribution of but "2-3 days" after the second key change. Nor, in this connection, do I consider that her avowed efforts to place spare keys with an absentee caretaker (who seemed to spend the majority of his time at No.29 Plantation Road) and an offsite manager are sufficient to mitigate the rigours of liability, particularly since there is a real doubt whether the Defendant or its agents were actually, or promptly, informed of the location of these spare keys.

52. So far as the additional sum of $184,400 payable to the contractor is concerned, now claimed as compensation by the Defendant, I am bound to say that I view this figure with considerable reservation. Not only was it Miss Cheung's evidence that it had not yet actually been paid, but it seems to me distinctly odd that, having apparently fought tooth and nail for almost four years over a figure slightly in excess of $220,000, the Defendant should so readily have agreed not far short of a like sum without apparent demur. I am also conscious of the fact that interior decoration projects are notorious for running behind schedule, and in this regard there is no doubt, in my judgment, that Miss Cheung was a most demanding client who set and clearly expected high standards.

53. I bear in mind also (although this point was not taken in argument) the broad lack of correlation between the alleged cumulative 'lock out' delay, which on any basis cannot, I think, have been much more than in or around 20 to 25 days, and the overall project delay. In this latter context, the original handover date for the completed job was scheduled (after adjustment for commencement on 8th March and not 28th February) for mid-May, whilst Miss Cheung told me that completion had not taken place until the end of August or the beginning of September, a lag of some 31/2 months. Further confusing, and unexplained, is the apparent internal contradiction within Jet Haven's letter of 27th April 1994 (the genesis of the counterclaim figure of $184,400) which estimates an additional 62 man days required as a result of the delay, but then goes on to base the financial calculations therein on the basis of 180 man days.

54. Looking at the matter in the round, I have come to the conclusion, doing the best I can on the state of the evidence, that the Defendant's counterclaim only succeeds, if it succeeds at all, in the modest sum of HK$25,000 which, I am fairly confident, represents, on the balance of probabilities, the attributable cost of the delay arising from Mrs Ho's admitted change of the key locks. Certainly on the state of the evidence, with the best will in the world it is difficult to justify any larger sum. At the end of the day, the hard truth in litigation is that evidential preparation wins cases.

HEAD ACTION - RESULT

55. It follows therefore that in the head action between the Plaintiff and the Defendant, the Plaintiff is to have judgment against the Defendant in the sum of HK$95,000, which is the balance of the sums after taking into account and setting off the amount awarded to the Defendant on the counterclaim against the amount awarded on the Plaintiff's claim.

(iii) Defendant's claim against the 1st Third Party

56. The Defendant pursues the 1st Third Party, its contractor, Jet Haven Ltd., for indemnity and/or contribution in so far as the Defendant is found liable to the Plaintiff.

57. It was undisputed that there was a contract between the Defendant and the 1st Third Party for the renovation works at the Defendant's apartment in the sum of $1.65 million; equally, that the 1st Third Party was expected to perform the work with reasonable care and skill. I agree with Mr Fung's basic contention that had the 1st Third Party indeed exercised the required degree of skill and care, that damage would not have ensued, and I disagree with Miss Wong's ambitious contention that, in effect, the very extent of the works required made it inevitable that some degree of damage would occur, and that therefore the Defendant should retain some degree of residual liability for embarking upon such an ambitious project. Whilst she put the point far more attractively, that, at least, was the gist.

58. So that once I have found liability as I have, and having rejected Miss Wong's collateral argument (together with her caution that the Court should not be astute to find causation of the damage to the 2nd Floor to be established given the age of the apartment building), it seems to me that it is correct in principle that the Plaintiff should pass its loss down the chain and (subject to consideration of the 2nd Third Party's position) to lay it at the door of its contractor, who in my judgment had been entirely responsible for the damage. As I have earlier indicated, I have accepted the expert evidence prepared on behalf of the Plaintiff by Mr David Chan, and no expert evidence to the contrary was led at trial by the 1st Third Party.

59. However, before reaching final judgment on the 1st Third Party's position in terms of the Defendant's claim, I turn, finally, to consider the Defendant's action against the 2nd Third Party.

(iv) Defendant's Claim against the 2nd Third Party

60. At bottom, the Defendant's case against the 2nd Third Party, the interior design firm hired by Miss Cheung, was that it was the 2nd Third Party's duty to supervise and advise the contractor on site so as to control the progress of the work and the quality of the workmanship, and that, had this occurred, so that the contractor would have been so supervised and advised during the demolition, the Plaintiff's apartment would not have been damaged. This, at least, was the way Mr Fung put the Defendant's position.

61. The precise contractual relationship between the Defendant and the 2nd Third Party is not as clear as it might have been. There is no signed contract in evidence before the Court; in this connection I am inclined to think that Miss Cheung is mistaken in her assertion that she or her husband, Mr Bee, actually signed the Wong & Tai letter dated 9th September 1993, albeit I do not think that this much matters. It is quite clear on the evidence that both the Defendant and the 2nd Third Party broadly conducted themselves on the basis of the outline responsibilities in that letter, Miss Cheung, for example, following the payment schedule therein set out save for the final payment which was not sought by the 2nd Third Party upon its determination of its relationship with Miss Cheung in late June 1994.

62. No viva voce evidence was in fact called by the 2nd Third Party, although a hearsay statement of one Miss Jamie Chan, the person immediately responsible for Miss Cheung's account, was put in. The other person principally involved in the project for Wong & Tai, one Margot Yue, was the subject of a subpoena which was issued but which, I was told, could not be served. So the Court did not hear from her either.

63. For her part, Miss Cheung, for the Defendant, with considerable frankness, made it clear in her evidence that she herself had not been interested in pursuing Wong & Tai, but had been persuaded to do so by her solicitor only on the basis that it was advisable to have a second string to her third party bow, so to speak, in the unlikely event of Jet Haven, the 1st Third Party, being absolved from responsibility.

64. Mr Tse, on behalf of the 2nd Third Party, strongly disputed the allegation that his client should bear any liability for what had occurred. Even assuming the work profile in the letter of 9th September 1993 was the basis of the relationship - and his primary case was that it was not binding - he submitted that there was no clear stipulation that the supervision of the 2nd Third Party extended to telling the 1st Third Party contractor how to demolish the walls or what type of implement should be used. In turn, he said, Mr C.K. Lau of Jet Haven, the contractor, had confirmed this in his evidence. Mr Tse rehearsed the evidence, such as it be, upon the 'supervision issue', but I do not intend to refer to that in detail. Suffice to say that I agree with Mr Tse's submission that Wong & Tai, the 2nd Third Party, did not bear responsibility for the mode of demolition adopted by Jet Haven's workers; indeed, it would have been surprising if they had. Jet Haven was the professional contractor, being paid the not insignificant sum of HK$1.65 million for the job, with Wong & Tai bearing broad design responsibility for the flat fee of $120,000. Quite why it should be thought that Wong & Tai should assume responsibility, let alone possess the requisite knowledge as to the best way to demolish internal walls, is unclear. Nor do I interpret Clause 7 of the 9th September 1993 letter, which was heavily relied upon by Mr Fung, as imposing responsibility in the manner contended. To the contrary. The responsibility of Wong & Tai with respect to these renovation works was to act as Miss Cheung's agent - as indeed they had done at the outset in accepting Jet Haven's quotation on her behalf - and in overseeing the process of decoration works and in ensuring that the finished product met the required standards of the client. As Miss Cheung explained in evidence, she needed someone to adopt this role because of her own demanding personal and travel schedule, and I think it likely, at least until Wong & Tai resigned, that this in fact was precisely the function they were performing. It is also worth noting that there has been no criticism of the plans drawn up by Wong & Tai, which plans formed the blueprint for Jet Haven to follow, so that it is not said, for example, that damage of the kind suffered was the more likely than not to have resulted as a result of Wong & Tai's scheme.

65. At the end of the day, therefore, I can find no reasonable basis for accepting an assertion as to Wong & Tai's liability, which appears to have been a contemporary view shared by the Defendant's solicitors, Mr Tse pointing out that in inter-solicitor correspondence on 13th September 1994, it was indicated by the Defendant's solicitors that they could not then adduce whether the 2nd Third Party was negligent, nor was there then any allegation against the 2nd Third Party for failing to supervise the 1st Third Party.

66. In the circumstances I dismiss the claim by the Defendant against the 2nd Third Party.

ORDER

67. As a result of the foregoing judgment therefore, my order, in broad outline, is as follows :

1) The Plaintiff is to have judgment against the Defendant in the sum of HK$95,000.

2) The Defendant is to have judgment against the 1st Third Party in the sum of HK$95,000.

3) By agreement, there be a stay of execution of the Defendant's judgment against the 1st Third Party pending trial of the 1st Third Party's counterclaim against the Defendant, (an agreement that was indicated to me by Counsel at the outset of the trial).

4) The claim of the Defendant against the 2nd Third Party is dismissed.

68. I will now hear Counsel both on the issue of costs and, if necessary, upon any refinements to the broad order proposed.

[Submissions from Counsel]

69. I have now had an opportunity to hear from all Counsel on the twin issues of interest and costs, including, in the latter context, sight of some inter-solicitor correspondence in the proceedings between the Defendant and the 1st Third Party. I incorporate my decisions upon these twin issues into the following detailed Order, which is to read thus :

1) The Plaintiff is to have judgment against the Defendant in the sum of HK$95,000.00;

2) There is to be interest on the said sum at the rate of 8% from 1st November 1997 to the date of judgment, and thereafter at the judgment rate from time to time prevailing until payment;

3) The Plaintiff is to have the costs of the action against the Defendant, to be taxed and paid if not agreed.

70. That is the order on the head action. I turn now to the third party proceedings. My order in these proceedings is as follows :

1) The Defendant is to have judgment against the 1st Third Party in the sum of HK$95,000.00;

2) There is to be interest on the said sum at the rate of 8% from 1st November 1997 to the date of judgment, and thereafter at the judgment rate from time to time prevailing until payment;

3) That the 1st Third Party do indemnify the Defendant for the Plaintiff's costs of its claim against the Defendant and the Defendant's costs of defending the Plaintiff's claim up to and including 26th June 1998 save and except those costs-

a) incurred by the Defendant in pursuing the 'waiver' defence and its counterclaim against the Plaintiff, and those incurred by the Plaintiff in meeting such defence and counterclaim; and

b) costs which the Plaintiff and the Defendant have been ordered to pay for the grant of further time and/or adjournments in the head action.

4) With regard to paragraph 3), there be liberty to both parties generally to apply;

5) That the 1st Third Party do pay the Defendant's costs of the third party action against the 1st Third Party, such costs to be taxed if not agreed, save and except that the Defendant do pay the costs of and occasioned by the hearing of this action on the following dates, namely, 29th and 30th June, 2nd and 7th July 1998, such costs to be taxed if not agreed;

6) That there be a stay of execution of the Defendant's judgment herein against the 1st Third Party pending trial of the 1st Third Party's counterclaim against the Defendant, or until further order;

7) The Defendant's claim against the 2nd Third Party be dismissed;

8) The Defendant do pay the 2nd Third Party the costs of the third party proceedings against the 2nd Third Party, such costs to be taxed if not agreed.

71. I made reference at the outset of this judgment to what I regarded as the utter lack of cost effectiveness of this action. As a matter of record, however, I would like to thank all four Counsel who have appeared for the way they have presented their clients' cases, and, without exception, for their conspicuous fairness. The Court has been much assisted.