China National Aviation Corporation (Hong Kong) Ltd. v. Wong Tak Wah and Another

HCA 6489/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 6489 OF 1999

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ASSESSMENT OF DAMAGES

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1. Interlocutory judgment was granted on 24 November 1999 in favour of the plaintiff for damages to be assessed against both defendants.

2. The plaintiff ran an airline service and carried on its business in Hong Kong at the mezzanine floor, upper ground, lower ground and the basement floor of the CNAC Group Building at 10 Queen's Road Central, Hong Kong (hereinafter called "the Central Office").

3. The building in which the plaintiff's Central Office was located was owned by Sinobest International Limited. The plaintiff paid a monthly rental of HK$ 1,180,704 at the rate of HK$98 per square feet for the total floor area of 12,048 sq feet in respect of the 4 floors of its Central Office. Management fees were paid at HK$4.2 per sq ft per month. According to the tenancy agreement the Central Office was rented for use as a ticketing centre.

4. Apart from its Central Office the plaintiff had 4 other branch offices located at different parts of the territories in Hong Kong.

The Events

5. In the small hours of 14 August 1996 the 1st defendant, an employee of the 2nd defendant, drove the 2nd defendant's bus negligently, mounted the pavement and crashed onto the ground floor of the plaintiff's Central Office.

The Heads of Claims

6. It was the plaintiff's contention that the negligence of the defendant resulted in the closing of the Central Office for 20 days between 14th August and 2nd September 1996 bringing about the following losses:-

(a) additional air-conditioning charges of HK$3,600 at HK$150 per hour for 24 hours between 24th and 26th August 1996 to facilitate repair work beyond normal air-condition supplying hours (HK$150 x 24 hours);

(b) security guard fees of HK$12,640 for 158 man-hours to safe guard the property of the plaintiff after office hours between 5pm and 9am during the period of repair of its main entrance from 14th to 23rd of August (2 guards x 160 man-hours x HK$40 per hour - 4 man hours x HK$40 per hour which was not supplied due to shortage of manpower of the guard service company);

(c) loss of rental and management fees of HK$794,391 paid for 20 days between 14th August and 2nd September [($98 + $4.2) per sq ft x 12,048 sq ft x 20/31 days] during the closure of the Central Office;

(d) loss of HK$294,206 employee wages paid over the 20 days of repair in respect of the 48 staff engaged at the Central Office [(HK$456,020) x 20/31 days]; and

(e) interest at half the judgment rate from the date of the accident on 14 August 1996 till the date of the writ on 13 December 2000.

7. Claim in respect of the physical damages done to the building was attended to separately between the landlord and the defendants.

The Defence

8. The defendants accepted liability for the negligent driving of the 1st defendant but was contending that the plaintiff had suffered no loss or alternatively had only closed its Central Office for business for 2 days on 14th and 15th August 1996 but had resumed its Central Office business operation since 16th August 1996. In respect of the air-conditioning charges the defendants refuted the necessity of air-conditioning for the carrying out of decoration work. The defendant further contended in the alternative that the hourly rate and the time spent were excessive. In respect of the guard fees, the defendants suggested security guard service was unnecessary; or alternatively the hourly rate or the length of guard service was beyond the reasonable range.

9. The defendants took issue with the plaintiff about the quantum of interest to be awarded.

Damage suffered by the Plaintiff

(i) air-conditioning charges

10. I accept the financial manager's evidence that repair work had been done to the Central Office for 20 days between 14th August and 2nd September 1996.

11. Though I was not informed of the extent of damage done to the property, save the description of the financial manager that the damage was severe, yet there was clear documentary evidence to show that a sum of HK$3,600 had been paid for additional air conditioning supply. There was nothing before me to indicate the quantum was excessive.

12. The air conditioning charges were opposed to by the defendants on the ground that air-conditioning was unnecessary for the decoration work or alternatively that the time spent or the hourly rate was excessive. There was no evidence before me to indicate the hourly rate or the 24 hours spent was excessive. I do not accept the proposition that workmen were not entitled to a reasonable working environment such as the provision of ventilation or air-conditioning when the expense incurred was within reasonable magnitude.

13. The claim of air-conditioning fees without a corresponding claim for the costs of repair was slightly difficult to comprehend. If the repair was done to the reversion, that ought be a head of damage which the plaintiff would be answerable to the land owner. Alternatively the plaintiff had a right to sue the defendant for the costs of repair since the plaintiff had a duty owing to the landlord to maintain the premises in a good and tenable condition pursuant to clause 3.03 of the tenancy agreement. If the repair work was done to the tenant's furnishing and fixture, there ought to be a charge in respect of the costs of repair which was not claimed in the present proceeding. However as the defendants neither denied liability for the repair work nor contended that the work was unnecessary, it was not up to this court to speculate on the reason why the plaintiff lodged no claim against the defendants for the costs of repair of the damage.

14. I accepted the additional air-conditioning charges to be a reasonable sum of expenses which was within the foreseeable range of damages.

(ii) security guard service

15. I accept the financial manager's verbal testimony that the main entrance of the Central Office was damaged. One would have no difficulty to appreciate the necessity of the engagement of the security guard service. I accept the engagement of the 216 hours of man-hour to be reasonable for a relatively large office unit of 4 floors. There was nothing to suggest the HK$40 hourly rate to be excessive.

(iii) loss of use of the premises

16. Instead of claiming for the loss of profit for the period during which the business of the plaintiff was interrupted, the plaintiff chose to sue for its wasted costs in respect of rental management fees and employee wages.

17. No evidence was placed before court in respect of the extent of damage done to the premises, save a brief description by the financial manager that the damage to the premises was severe. The financial manager only heard from other sources that the main entrance to the Central Office and a pillar inside the office were damaged.

18. The financial manager accepted she had no personal knowledge about the extent of damage to the Central Office. She did not work there. She only took a look at the Central Office at a distance with the hoarding board around it. She did not go into the office to check. She could not be sure if business operation was conducted since 16th August. When asked if the operation of the Central Office resumed on 16th August, the financial manager resiled from her previous contention that the Central Office ceased operation. Instead she said the Central Office could not maintain its normal operation. She believed the staff at the Central Office were working therein for they had to report on duty. It was obvious that the financial manager only assumed that business operation could not be conducted. There was no description of the nature or extent of damage of the Central Office for this court to draw any inference, on balance, that the plaintiff could not possibly have carried out its operation since 16th August. The fact that damage was done to the premises might not have lead to an inevitable closure of the plaintiff's business operation. The necessity of repair work alone did not rule out the possibility of resumption of business operation, be it on a full or a reduced scale.

19. The plaintiff has failed to establish on balance for the period beyond 15th August 1996:-

(a) whether there a total loss of use of the premises and its staff; or alternatively;

(b) which portion of the premises and the staff team was affected in the carrying on of the plaintiff's business at the Central Office as a result of the accident.

20. Had the plaintiff been able to establish (a) or (b) I would award compensation in accordance with the proportional loss of use of the premises and the staff man-power, be it partial or total.

21. The damage was described to be severe and the defendants did not seek to dispute with the financial manager that the Central Office was closed for business on 14th and 15th of August, I accept the plaintiff's evidence that the Central Office was shut down for operation between 14th and 15th August, resulting in the following 2 heads of loss:-

(a) Loss of use of the Central Office - a sum of HK$79,439, being the payment of rental and management fees for 2 days [($98 + $4.2) per sq ft x 12,048 sq ft x 2/31 days]; and

(b) Loss of use of the staff team for 2 days during which the plaintiff had paid a sum of HK$29,421 [($456,020 x 2/31 days)] in respect of the 48 staff engaged in the Central Office.

Award

22. On the available evidence the damages the plaintiff was able to establish were as follows:-

(a)	Air-conditioning charges	$3,600
(b)	securities guard charges	$12,640
(c)	loss of rental and management fees	$79,439
(d)	payment of salaries of the employees	$29,421
		HK$ 125,100
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Interest

23. I award judgment in favour of the plaintiff against both defendants, jointly and severally, in the sum of HK$125,100.

24. Pre-judgment interest is awarded at 1% above prime lending rate from the date of the writ to the date of judgment. Judgment interest accrued from the date of judgment until payment.

25. I also award costs nisi in favour of the plaintiff against the defendants for the assessment hearing. Quantum of the costs to be taxed if not agreed.