HONG KONG ALZHEIMER'S DISEASE ASSOCIATION v. WILL RICH LTD AND ANOTHER

DCCJ 2851/2016

[2022] HKDC 304

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2851 OF 2016

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JUDGMENT

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Introduction

1.  This is a water seepage case. By way of a specifically endorsed Writ of Summons (“the Writ”) the plaintiff claimed against the two defendants for damages in the sum of HK$681,893.74 caused by a water leakage incident it discovered in the morning of 13 October 2013 (the “Leakage”/ “Incident”). The 1^st defendant (“D1”) was and still is the owner of the two relevant shops situated at Waterside Plaza, 38 Wing Shun Street, Tsuen Wan, New Territories (the “Plaza”). The one on the ground floor (“Lower Premises”) was let to the plaintiff who operated a care centre for Alzheimer patients. The one on the upper ground floor (“Upper Premises”) was let to the 2^nd defendant (“D2”) in 1992 who operated a restaurant since then.

Procedural History

2.  The Writ was issued on 15 June 2016 and the pleaded causes of action in the Statement of Claim were breach of duty of care (negligence) and nuisance under the common law. The particulars of negligence were premised on the defendants’ failing to inspect, maintain and/or repair the relevant pipe which burst and caused the Leakage (“Burst U-bend”)[1]

3.  D1 in its Defence filed on 23 August 2016 denied the plaintiff’s claim and averred that D2 who had exclusive use of the Burst U-bend owed such duty of care to the plaintiff. It averred that the breach was on the part of D2 who was thus liable to damages claimed by the plaintiff.

4.  In its Defence as amended on 15 June 2020, D2 averred that D1 was responsible for damages suffered by the plaintiff because D1 was the owner of the Upper Premises and the Burst U-bend. Further, the Leakage happened outside the boundary of the Upper Premises as stipulated by the tenancy agreement executed on 11 July 2012 (“Lease”/ “Tenancy Agreement”).

5.  Relying on negligence as a cause to claim against D2, D1 commenced these contribution proceedings on 23 January 2019. D1 alleged that the primary cause of damage was improper use by D2’s staff and that D2 had failed its primary duty to upkeep the condition of the pipes used by D2 exclusively[2]. D2 was also negligent when it refused to stop foul water running upon learning about the Leakage. D1 also adopted the particulars of negligence pleaded by the plaintiff in paragraph 7(B) of the Writ in support of its claim against D2.

6.  D2 started similar proceedings against D1 on the same day (collectively referred to as “Contribution Proceedings”). The claim against D1 was premised on D2’s pleaded case in its Defence in the main action[3]. D2 alleged that it had no knowledge of the existence of the Burst U-bend which was situated outside the Upper Premises; D1 had failed to put D2 on notice of the existence of the same; when it’s existence came to its knowledge on the date of Incident, D2 learned upon inspection that the Burst U-bend was worn out by serious erosion due to fair wear and tear over a long period of time[4]. It was pleaded that D1, as owner, was liable because it had failed its duty to inspect and repair the Burst U-bend and permit the same to become worn out. Relying on the Lease, D2 denied its liability saying that the Burst U-bend was not part of the Lease. If it was, which was denied, the condition of the Burst U-bend had exonerated D2’s liability pursuant to Clause 31 of the Lease under the exception clause of “fair wear and tear” therein (“Exception Clause”). It was also alleged that by not being put on notice of the existence of the Burst U-bed it could not liaise with D1 or the management of the Plaza to ensure that they would undertake the necessary duty to maintain and repair the same under the Lease[5].

7.  On 1 March 2021, the plaintiff accepted a joint sanctioned payment made by both defendants for an amount of HK$305,000. There remains the Contribution Proceedings to proceed to trial.

Background

8.  It is not disputed that the kitchen in the Upper Premises (“Kitchen”) is positioned on raised floor (“Raised Floor”) beneath which a sewage system has been installed for collecting waste water from the Kitchen and discharging the same outside the Plaza (“Sewage System”). Used/foul water collected from designated outlets in the Kitchen was sent to open channels (“Channels”) by sewage pipes (“Sewage Pipes”). The Channels run across the Raised Floor and were covered by metal grills levelled with the Raised Floor. Kitchen staff are not supposed to throw waste water directly into the Channels. To discharge waste water, the Channels are connected to another section of Sewage Pipes leaving the Kitchen and the Upper Premises. As revealed from undisputed evidence, there are 7 sets of Sewage Pipes and they were each connected to a U-bend pipe located at the Lower Premises. There the U-bend pipes were connected with yet another section of Sewage Pipes sending the waste water away. The Sewage Pipes carry the waste water and continue to run into the pump room of the Plaza (“Pump Room”) which is located outside the Lower Premises but next to the partition wall between them. In the Pump Room the 7 Sewage Pipes join a main drain pipe (“Main Drain Pipe”) which is of bigger size and waste water continues to run outside the Plaza[6]. It is not disputed that the Pump Room is a common part of the Plaza[7]. Waste water passing through the Main Drain Pipe would go into an interceptor installed outside the Plaza in a side lane (“Interceptor”) which is then connected to the underground sewage system by another section of the Main Drain Pipe. The purpose of the Interceptor is to treat the waste water from the Kitchen before it joins the public sewage system. As could be seen from photographs produced, the size of the Interceptor is about 0.8 m x 2 m x 3 m[8]. It is not disputed that installation of the Interceptor was a requirement for the grant of a restaurant license.

9.  The Burst U-bend, which was the undisputed source of the Leakage[9], was one of the U-bend pipes forming part of the Sewage System. The particular Sewage Pipe connecting to the Burst U-bend went vertically from the Kitchen to the Lower Premises as it carried waste water from one of the Channel which was blocked at the time of the Leakage (“Blocked Channel”) to another section of Sewage Pipe which runs horizontally across the ceiling of the Lower premises. The Burst U-bend was installed at the junction of the vertical and horizontal Sewages Pipes. To be more precise, the Burst U-bend was situated near the concrete ceiling but inside the false ceiling of the Lower Premises and therefore could not normally be visible to those using the Lower Premise.

10.  The material facts from the above include that the Sewage System installed for the exclusive use of the Kitchen comprised of the Sewage Pipes, Channels, Main Drain Pipes and the Interceptor. Some of them including the Burst U-bend are outside the Upper Premises but inside the Lower Premises. Some go further to the side lane outside the Plaza.

The Leakage/Incident

11.  It was not disputed that the Leakage was discovered by the staff of the plaintiff at around 0822 hr on 13 October 2013 when they went in for work. A report was made immediately to the DMC Manager, Sino Estate Management Company (“Sino”) and staff of Sino attended at site shortly afterwards.

D1’s Case

12.  D1 averred that, D2, as tenant, had a contractual duty to D1 to maintain the sanitary and water apparatus which included the Burst U-bend under Clause 31 in Section III of the Tenancy Agreement (“Covenant to Repair”/ “Clause 31”) in addition to its common law duty owed to the plaintiff, user of a unit below. D2 was thus liable to D1 in the Contribution Proceedings.

13.  It was also D1’s case that notwithstanding notice of the Leakage given to its staff at around 9:00 am, D2 refused to stop using water and waste water continued to flow through the Sewage System including the Burst U-bend. In fact Mr Chow, Chief Executive Officer of D2 arrived at the Lower Premises to understand the situation and he refused to stop using water saying that they had to operate business for lunch. D1 said such conduct had aggravated the damage caused to the plaintiff. It was further submitted by Mr Wang representing D1 that if the Burst U-bend had been in a defective condition due to fair wear and tear and had caused the subsequent burst as alleged, it was D2 who had failed to inspect the same and to put D1 on notice of the defective condition. D2 was therefore in breach of Clause 8 in Section III of the tenancy Agreement. The Covenant to Repair and Clause 8 shall be set out below.

D2’s Case as pleaded

14.  As mentioned earlier, D2’s pleaded case was that it had never been given notice of the presence of the Burst U-bend in the Lower Premises and therefore could not have reasonably foreseen that the Leakage would happen. It thus had no responsibility to maintain and repair the same. Further the duty was with D1 who was the owner of both premises with knowledge of the existence and location of the Burst U-bend. D2 also averred that D1 could not rely on the Covenant to Repair because there were defects in the Burst U-bend caused by fair wear and tear namely serious erosion on the rusted parts.

Issues

15.  The dispute between the defendants is basically what had caused the Leakage and who was responsible to inspect maintain and keep the Burst U-bend in good condition including not to suffer the same to improper use. D1 said the cause was improper use of D2 and D2 said it was due to fair wear and tear. They both said the other side was responsible for maintenance.

Evidence

16.  D1 called three witnesses. They were all from Sino.

Ms Ma

17.  Ms Ma, one of the manageresses of Sino, testified at trial giving an account of her investigation. Her evidence was that on 13 October 2014 after receiving a telephone call from her colleague she went to the Lower Premises. She arrived at about 9 am. As informed by staff of the plaintiff she saw water seeping from the Burst U-bend inside the false ceiling near a storeroom. Photographs at page 225 and 441-1 show what she saw at that time. As she saw that the Burst U-bend was connected to the Upper Premises, she immediately went there to check.

18.  She said upon arrival she saw a kitchen staff of D2 squatting by the side of the Blocked Channel trying to clear the blockage with a hand plunger pump. She referred the court to see a photograph in which the hand plunger pump was shown being placed by the side of the Blocked Channel[10]. The kitchen staff also told her that blockage had lasted for a few days already. She immediately requested the kitchen staff to stop using water so that the Leakage could slow down. Her request was refused. The kitchen staff said that they were preparing for lunch business and could not stop using water.

19.  The blockage was serious according to her. She saw through the metal grill cover that waste water stay inside not being able to be discharged as shown in one of the photographs produced[11]. The two photographs at pages 442-2 and 442-3 were taken at about 9:00 am when she arrived at the Kitchen. She confirmed that at no time there was overflow from the Blocked Channel. She referred the court to see other photographs showing the positions of the Channels inside the Kitchen[12]. She said the photographs were taken after lunch time when the Leakage was less serious.

20.  As soon as Ms Ma first visited the Lower Premises in the morning and confirmed the Leakage, Sino sent cleaning staff to remove the water gathered inside there. They used buckets and machines to remove water gathered as shown in photographs produced[13]. The Leakage however got more serious when it was near to noon time. They had to place an opened umbrella upside down on a ladder to receive water coming from the Burst U-bend[14]. The area affected by the Leakage got bigger and buckets could not effectively collect them. She said the Burst U-bend broke at the bottom. Technicians from the engineering department attended the scene to assist. As the Leakage continued, no repair work could be done to the Burst U-bend. She said the worst situation happened between 11:00 am to after 1:00 pm.

21.  Under cross examination she confirmed that at the time she entered the Lower Premises in the morning, the floor was covered with water already as shown in the photograph at page 442-1[15]. She confirmed all the photographs produced were either taken by her or by Mr Own who went with her to investigate the Leakage. She said she had seen the photographs taken by Mr Own on computer and confirmed that they reflected the situation they saw.

22.  Ms Ma said that she could see that the Burst U-bend had gathered grease and food residue inside and they took up half the Burst U-bend. She saw it after the Burst U-bend was taken down from the ceiling and replaced. She said the grease and food residue was in cream colour and in big lumps as shown in photographs produced[16].

Mr Chung

23.  Mr Chung, Assistant Manager of the Engineering Department of Sino, testified on the technical aspect as to how the Sewage System operated. In gist the Sewage System collected waste water from cooking and washing. There was also water used to cleanse the exhaust fume in the air inside the Kitchen. He said the whole of the Sewage System including the Sewage Pipes, U-bend pipes, the Main Drain Pipe and the Interceptor were exclusively used by D2. He told the court that the Interceptor was installed in compliance with the grant of license for restaurants. At the request of the court he marked the location of the Blocked Channel and the Burst U-bend on a copy of floor plan as shown at page 203 and the same was produced as Exhibit D1-1[17].

24.  About the Leakage, he told the court that he had contacted Mr Chow, and asked him to stop using water so that the Burst U-bend could be repaired soonest. The request was refused. He was told by Mr Chow that they could not stop using water as it was near the time for lunch business. The bottom of the U-shape part of the Burst U-bend eventually broke near noon time. He confirmed that by “broke” he did not mean the bottom part of the Burst U-bend fell off. Photographs at page 204 of Bundle B show the condition of the Burst U-bend after it was taken down from the connecting Sewage Pipes. It was that the cracks became bigger with more water pouring out but it did not break into pieces. The Burst U-bend was eventually replaced in the evening of the same day by contractor appointed by Sino because the contractor of D2 did not effectively repair the same earlier in the afternoon and the Leakage continued. The contractor of Sino also replaced 2 other U-bend pipes as well at a later time. The 4 remaining were still in use.

Ms Kwan

25.  Ms Kwan was employee of Sino. Her evidence was about the tenancy agreement between the plaintiff and D1 which did not bear relevance to these proceedings.

New Arguments raised by D2

26.  D1’s case was closed after all 3 witnesses gave evidence. At this juncture, Mr Wong on behalf of D2 submitted Supplemental Opening Submissions whereby Submissions D2 raised further issues and new arguments (“Further Issues”/ “New Arguments”):-

(1)  Proper Construction and Interpretation of the Covenant to Repair

By proper construction and interpretation in the light of Cap 102A and 123I, the Burst U-bend did not form part of “sanitary and water apparatus” under the Covenant to Repair. It refers only to toilet or toilet–related facilities.

(2)  D1’s Duty under BMO as Owner

D1, as owner, was under a duty to maintain the Burst U-bend pursuant to s. 34 H of the Building Management Ordinance (“BMO”) and could not be released from such duty by execution of the Tenancy Agreement. Mr Wong, relying on BMO, further submitted that even it was exclusively used by D2, the Burst U-bend was still a common part and only D1, as owner shall be responsible. He relied on Lily Tse Lai Yin and Others v The Incorporated owners of Albert House HCPI 828/1997[18] to say that exclusive use would not change the common nature of a facility or a part in question.

(3)  Burst U-bend being a Common Part pursuant to DMC and the Sub-DMC

Mr Wong submitted that the Burst U-bend in fact formed part of the common facilities in accordance with the DMC and the Sub-DMC so D2 has no duty to repair.

(4)  Exclusion of Liability in negligence, D1 is not exonerated from its liability by virtue of Section 7(2) of CECO.

27.  In reply Mr Wang said that D1 did not say it was not liable. It was but as D2 was the real wrong doer D1 should be indemnified by D2. Further Mr Wang, opposed to the New Arguments raised at such late stage. He said that they had not been pleaded and D1 was caught unprepared. Mr Wong said they needed not be pleaded as they were law points. Without making any judgment as to whether the New Arguments should be allowed, the court was asked whether D1’s case needed be reopened with additional witnesses called or evidence to be adduced. Mr Wang replied in the negative but said he would reserve his right to make submissions as to their admissibility in his closing submissions. The Further Issues are included in the agreed issues for discussion:-

(1)  whose responsibility it was for the maintenance and repair of the Burst U-bend, sub-issues include the following:

(i)  whether the Burst U-bend was exclusively used by D2 (§1 of Joint Statement)

(ii)  whether the Burst U-bend a common part or common facility of the Plaza in accordance with (a) DMC and the Sub- DMC, (b) the BMO, (c) so D2 has no duty to repair the same (New Argument);

(iii)  whether the Burst U-bend included in the Tenancy Agreement (New Argument);

(iv)  interpretation and proper construction of the Covenant to Repair in particular the meaning of “sanitary and water apparatus” by reference to Cap 102A and 123I (New Argument and §§6, 7 of the Joint Statement);

(v)  whether the Leakage occurred due to fair wear and tear within the Exception Phrase (§§6, 7 of the Joint Statement);

(vi)  Exclusion of Liability in negligence

(2)  Whether D2 had knowledge or constructive knowledge about the existence of the Burst U-bend (§§4, 5 of the Joint Statement).

(3)  Whether the Leakage was caused by improper use of the Burst U-bend by D2 (ie §8 of the Joint Statement).

(4)  Whether D2’s use of the Burst U-bend at the material time despite knowledge about the Leakage unreasonable and had caused further damage to the Lower Premises and the contents therein (ie §9 of the Joint Statement).

Discussions on the Issues

Issue 1:  Obligations and Liabilities of Parties owed to the plaintiff in relation to the Burst U-bend

28.  The sub-issues under Issue 1 will be discussed in the order ofsub-issues set out above in paragraph 27.

(i)  Whether the Burst U-bend exclusively used by D2

29.  I accept Mr Chung’s evidence and find that the Burst U-bend was exclusively used by D2.

(ii)  Whether the Burst U-bend a common part

(ii)(a)  Whether the Burst U-bend a Common Part under the Sub-DMC

30.  Mr Wong submitted that “Commercial Common Facilities” under the sub-DMC include water pipes and drains “inside the Commercial Development and for use and benefit of the Development”[19]. Further, “Commercial Development” means “The Commercial Units, shops, areas and spaces designated by the registered owner or intended for non-domestic and commercial use within the Estate”. Mr Wong said therefore the Burst U-bend should fall within the ambit of the Commercial Common Facilities because the Upper Premises was part of the Commercial Development. I cannot agree with this interpretation.

31.  In my judgment, the meaning of “Commercial Common Facilities” could not be taken out of context and be interpreted to suit the purpose of one party. It is clearly stated in Clause 1(a) under Section I that “In this Deed the following expression shall have the following meanings ascribed to them whenever the content so permits”[20]. Similar provision appeared in the sub-DMC at paragraph (2) in the preamble[21]. Context is important. Reading the meaning in context, “Commercial Common Facilities” could not have included the pipes built by individual owners/occupiers for its exclusive use. I do not accept that the Burst U-bend is part of the Commercial Common Facilities. It was built to serve its sole and particular purpose of discharging waste water from the Kitchen. It was for exclusive use of the Kitchen. There is simply no evidence that the Burst U-bend was “for use and benefit of the Development” except the Kitchen.

(ii)(b)  Whether the Burst U-bend a Common Part under BMO

32.  Mr Wong also relied on interpretation of BMO to say that the Burst U-bend and the Sewage System belong to common parts.

“2. Interpretations

common parts

(公用部分 ) means—

(a) the whole of a building, except such parts as have been specified or designated in an instrument registered in the Land Registry as being for the exclusive use, occupation or enjoyment of an owner; and

(b) unless so specified or designated, those parts specified in Schedule 1.”

33.  Mr Wong submitted that the Burst U-bend had never been specified or designated in an instrument. Mr Wang in reply pointed out that if it is D2’s averment that the Sewage System has not been specified and designated in an instrument registered in the Land Registry, it is for D2 to prove its averment. In any event, the 12 shops on the Upper Premises had been assigned to D1 and such assignments were registered in the Land Registry[22]. I accepted that the shop units making up the Upper Premises had been assigned and registered.

34.  Mr Wong said paragraph 6 of Schedule 1 which sets out the common parts is relevant and submitted that the Burst U-bend, being a waste pipe belong to common parts:-

“6. Water tanks, reservoirs, pumps, wells, sewers, sewage treatment plants, drains, soil pipes, waste pipes, channels, water-courses, gutters, ducts, downpipes, cables, conduits, refuse chutes, hoppers and refuse container chambers.”

35.  Upon reading paragraphs 2 and 6 of Schedule 1, I do not think D2 could rely just on the label of the facility to say that the Burst U-bend is a common part. The purpose for the facility to be built is more important. There was no evidence to show that the Burst U-bent was meant for use and had been used by any other owners/occupier in the Commercial Development but the occupier(s) at the Upper Premises operating restaurant business.

36.  For the circumstances in the present case, the Sewage System and the Burst U-bend were installed for exclusive use of the occupier of the Upper Premises to facilitate the specific nature of business, they cannot be turned into common parts because they are of similar nature or bear the same description of facilities set out under paragraph 6 of the First Schedule of BMO.

37.  I cannot agree with Mr Wong that the Burst U-bend is a common part pursuant to the Sub-DMC and the BMO.

38.  Further in my judgment, this New Argument should have been pleaded for D1 to prepare for its case. This is not a law point but a cause for D2 to make a claim against D1.

39.  In any event, even if the Burst U-bend is a common part, it does not exonerate D2’s duty by operation of the Covenant to Repair. D2’s duty thereunder was by reference to exclusive use of the sanitary and water apparatus. The Covenant to Repair expressly provides for D2’s duty in respect of the sanitary and water apparatus used exclusively by it or in common with others.

(ii)(c)   Whether D2 as tenant has no duty under DMC, Sub-DMC and BMO

40.  According to Mr Wang D1 does not dispute its duty under the DMC and Sub-DMC as owner of at least the two Premises in the Plaza. It is also answerable to the BMO in particular s34H. For these reasons it bears the responsibility to maintain the part in a building it owns (in the present case) in good repair and condition. D2, however, as the one who has the exclusive right to use, occupation and enjoyment of that part shall maintain that part in good repair and condition.

“Section 34H.

Duty to maintain property

(1) Where a person who owns any part of a building, has the right to the exclusive possession of any part of a building or has the exclusive right to the use, occupation or enjoyment of that part, as the case may be, but the deed of mutual covenant in respect of the building does not impose an obligation on that person to maintain the part in good repair and condition, that person shall maintain that part in good repair and condition.

(2) The obligation in subsection (1) shall be deemed to be an obligation owed to all owners of the building under the deed of mutual covenant.” (emphasis added by the court)

41.  Mr Wang submitted that the purpose of BMO is to regulate the rights and obligations amongst individual owners. In the main action, the plaintiff as tenant was no party to the DMC and it did not rely on BMO or DMC/Sub-DMC to claim compensation from its own landlord. Mr Wang submitted that, similarly, nor could D2 rely on the same to claim against its landlord, namely D1, for failing to maintain or repair the Burst U-bend under the BMO and/or DMC.

42.  Mr Wang reiterated that it was the case of D1 that D2 as the wrong doer was liable to the plaintiff in the first place and also liable to indemnify D1 under the Covenant to Repair. D1’s duty under BMO is not relevant in these Contribution Proceedings.

43.  Mr Wang, relying on Wong Lai Kai v IO of Lok Fu Building, Yuen Long CACV 189/99 & CACV 195/99, also submitted that a tenant having exclusive use of an equipment would be responsible for the maintenance of that part of the building under s34H, either alone or together with the landlord depending on the circumstances. Having submitted that, Mr Wang made it clear that he had no intention to rely on s34H in support of D1’s claim against D2. He said ultimately the effect and operation of s34H was not relevant to the apportionment of liability between D1 and D2.

44.  Mr Wang also argued that D2 should not be permitted to raise s34H because it had not been pleaded but was only raised after D1 closed its case.

45.  I agree with Mr Wang that BMO and DMCs are not pertinent to the issues in these Contribution Proceedings. I also agree that if D2 wanted to rely on BMO, it should have been pleaded. I do not agree with Mr Wong’s contention that since it is a law point it does not have to be pleaded. In my view, it is not just a law point but a cause to claim based on breach of statutory duty which D2 seeks to claim against D1. D1 is entitled to be put on notice of the contention it has to meet.

(iii)  Whether Burst U-bend part of the Tenancy Agreement

46.  Mr Wong said the Tenancy Agreement did not cover the Burst U-bend because they were not expressly indicated therein. He relied on Part II of the First Schedule of the Tenancy Agreement. The subject premises under the Tenancy Agreement was set out in Part II of the First Schedule therein[23]. Under Part II, against “Premises” at the margin, it set out the number of shop units to be leased to D2, they were namely UG1 to UG 12 of the Upper Floor. At the end of the description of shop units by their numbers, in a bracket it was said that “(the said Shops for the purpose of identification only are delineated and coloured Pink on the Floor Plan annexed hereto)”.

47.  I am of the view that the description set out in Part II was to identify the shop units under the Tenancy Agreement and there was no intention for the contents therein to be set out. Mr Wong also submitted that the Sewage System including the Burst U-bend was not indicated on the Floor Plan attached to the Tenancy Agreement[24]. His submission is rejected for same reason. It clearly stated that the Floor Plan was for “purpose of identification only” regarding the physical location of the shop unit.

(iv)   Interpretation and Proper construction of the Covenant to Repair

48.  Both parties relied on the Covenant to Repair in their pleadings. After D1 closed its case, as mentioned earlier, D2’s counsel put in the New Arguments including that the Covenant to Repair does not include the Burst U-bend. It was submitted that on a proper interpretation and construction, “sanitary and water apparatus” could only be relevant to toilet and toilet-related facilities. The Covenant to Repair reads as follows:-

Clause 31 “To keep the sanitary and water apparatus(if any) used exclusively by the Tenant and his servants agent licensees workmen or visitors in good clean and tenantable repair and condition ( fair wear and tear excepted) to the satisfaction of the Landlord and in accordance with the Regulation or by-laws of all Public Health and other Government Authorities concerned or to use in common with others the lavatories and washing accommodations and facilities provided by the landlord in the Building with care and proper manner and not to permit or suffer the same to be used in any improper manner or whereby the soil or waste pipe may become impeded or blocked and at all times to indemnify the landlord against liability for damage by the escape of water thereby caused to the properties or effects of the tenants or occupiers of the other part of the Building”[25] (Emphasis added by court)

49.  D2’s case in this regard is that its interpretation ought to be consistent with the interpretation of and definitions under the DMC and the Sub-DMC. Moreover, “sanitary and water apparatus” does not include the Burst U-bend in accordance with Cap 102A and Cap 123I. Thirdly, the phrase “lavatory and washing accommodations and facilities” suggests that this is a provision governing the proper use of toilet-related facilities. Proper interpretation and construction would show that the Covenant to Repair refers to sanitary facilities such as toilets or toilet-related facilities in the exclusive use of D2.

50.  In reply, Mr Wang contends that this New Argument is flawed for three reasons. First it has not been pleaded. The late addition of this New Argument is prejudicial to D1 because D1 had never been put on notice that it had to meet with this contention. No evidence had therefore been adduced on the possible factual matrix of the Tenancy Agreement relevant to the interpretation of the phrase “water apparatus” and its interpretation with Cap 102A or Cap 123I. Secondly it contradicts D2’s own case because D2 has relied on its full term and effect in its Defence. Thirdly, it is against common sense and without legal basis. In any event, Mr Wang made submissions on the construction and interpretation of the Covenant to Repair in case the Court is not with him on the procedure point.

51.  Relying on Marley v Rawlings [2015] AC 129 at paragraph19 and Arnold v Britton [2015] AC 1619 at paragraph 15, Mr Wang submitted that to construe a contract, the court’s task is to find the intention of the parties, and it does this by identifying the meaning of the relevant words, (a) in the light of (i) the natural and ordinary meaning of those words, (ii) the overall purpose of the document, (iii) any other provisions of the document, (iv) the facts known or assumed by the parties at the time that the document was executed, and (v) common sense or commercial common sense, but (b) ignoring subjective evidence of any party's intentions.

(iv)(a)  Natural and Ordinary Meaning

52.  Mr Wang went on to submit that applying the above principles in the present case the interpretation and construction of the Covenant to Repair is by the natural and ordinary meaning of the relevant words or phrase and not by reference to other instruments.

53.  I agree with Mr Wang’s approach on the interpretation and construction of a term in the Tenancy Agreement. I consider the natural and ordinary meaning of the words and the phrase. According to the Cambridge dictionary, “apparatus” means a set of equipment or tools or a machine that is used for a particular purpose[26]. So “water apparatus” cannot be interpreted to refer only to toilet or toilet related facilities. Further, “Sanitary” means “clean and not dangerous for health, or protecting health by removing dirt and waste, especially human waste”[27]. I am of the view that the Burst U-bend is a tool and an equipment which forms part of the Sewage System in the Kitchen to discharge waste water from the same for hygiene and health purpose. Thus the Burst U-bend falls within “sanitary apparatus”. Moreover, the Covenant to Repair also refers to “lavatory and washing accommodations and facilities provided by the landlord in the Building”. I am of the view that “washing facilities provided by the landlord in the Building” refutes the submission of Mr Wong that the Covenant to Repair applies only toilet or toilet-related facilities.

(iv)(b)  By reference to the DMC and Sub DMC

54.  Mr Wong relied on Clause 14 of the Sub-DMC:-

“Water closets and other water apparatus in the Commercial Development shall not be used for any purpose other than those for which they were constructed, nor shall any rubbish, rags or any other articles be thrown into the same. Any damage resulting from misuse of any water closets or apparatus shall be paid for by the owner or occupier in whose Commercial Unit it shall have been caused”[28] (Emphasis added by the court)

55.  In my view, Clause 14 of the Sub-DMC regulates the use of water closets and other water apparatus in the Commercial Development by owners or occupiers. I do not agree that D2 could rely on it to say that the Covenant to Repair applies to toilet or toilet related facilities only. Mr Wong has not shown the relationship between the Clause to Repair and Clause 14. I agree with Mr Wang that it does not advance the case of D2. There is no basis to submit that Clause 14 governs the interpretation and construction of a term in a private tenancy agreement.

(iv)(c)  Waterworks Regulations Cap 102A and Building (Standards of Sanitary Fitments, Plumbing, Drainage Works and Latrines) Regulations Cap 123I

56.  Mr Wong submitted that s 24 of Cap 102A demonstrates that the Burst U-bend does not fall within water apparatus in the Covenant to Repair.

“24. Other water using apparatus

An apparatus using water in respect of which no express provision is made in these regulations or an apparatus for the treatment or filtration of water shall not be installed or used without the permission in writing of the Water Authority and he may require any such apparatus to be supplied with water from a separate cistern. (Emphasis added by court)

57.  Mr Wong also relied on Cap 123I but as pointed out by Mr Wang “water apparatus” was not specifically defined in section 2 or other provisions in the Regulations.

58.  Mr Wang submitted that these Regulations have never intended to define or restrict the term “water apparatus” in any way. S 24 of Cap 102 A does not refer to “water apparatus” but “water using apparatus”. This section never purports to restrict “water apparatus” or “water using apparatus” to toilets or toilet-related facilities.

59.  I do not think the Court needs to attend to every detail in counsel’s submissions in this regard. It is true that “sanitary and water apparatus” was not specifically defined in the Tenancy Agreement. The two Regulations suggested by Mr Wong do not expressly refer to such term either. Moreover, the purpose of the Tenancy Agreement is very different from the two Regulations. Cap 123I is to govern the installation of water closet fitment and urinals and lavatory basins in specified places, for example restaurants[29]. Cap 102 A is about supply of water, basically fresh water for different use in a building. There was no basis to say that the phrase “sanitary and water apparatus” in the Covenant to Repair should follow or borrow what is provided in those two Regulations, if there are any relevant provisions. The meaning of the terms is narrowly and specifically interpreted to serve the purpose of the two Regulations. I do not accept Mr Wong’s submission.

60.  I noticed that D2’s pleaded defence sought to rely on the full term and effect on the Convent to Repair when seeking protection from the Exception Phrase. I agree with Mr Wang’s observation that the New Argument was not clearly and explicitly raised when D2 alluded to the Covenant to Repair. The New Arguments were not included in Mr Wong’s opening either.

(iv)(d)  By reading other provisions in the Tenancy Agreement

61.  Mr Wong submitted that reading Clauses 28 and the Covenant to Repair together, it is clear that the Covenant to Repair could not be have meant to deal with the Sewage System including the Burst U-bend. It should be covered by Clause 28.

62.  I cannot agree. Clause 28 provides for tenant’s liability for cost for “cleaning and clearing” of choked “pipes, drains, ducts, sanitary or plumbing apparatus” due to the careless and improper use by the tenant. The Covenant to Repair imposed a duty on a tenant to maintain and repair the “sanitary and water apparatus” and to indemnify the landlord against liability for damage by the escape of water. In my view, the two clauses dealt with liability of different nature and liabilities. They are not mutually exclusive.

(iv)(e)  By reading a similar provision in the Tenancy Agreement between plaintiff and D1

63.  Mr Wong submitted that the Covenant to Repair was a standard form which also appeared in the tenancy agreement between D1 and the plaintiff. It served a rightful purpose because there was a male toilet assigned for exclusive use by the plaintiff. As there was no such lavatories provided for D2’s exclusive use, the Covenant to Repair was not engaged.

64.  I cannot agree. Since I have made a finding that “sanitary and water apparatus” includes the Sewage System including the Burst U-bend, the argument must fail.

65.  The conclusion from the above discussion is that the Burst U-bend falls within ambit of the Covenant to Repair. It is therefore the duty of D2 to keep the same in good, clean and tenantable repair and condition to the satisfaction of D1 as stipulated in the Covenant to Repair.

(v)  whether the Leakage occurred due to fair wear and tear

66.  Before the court there was not much evidence about the condition of the Burst U-bend. It is not disputed that the Sewage System including the Burst U-bend was installed in 1992[30], no less than 20 years before the Incident took place. There was no evidence before the court on the usual life span of a U-bend pipe of the same make or material. There were photographs showing its condition. At page 441-1[31] there was exhibited a photograph showing the Burst U-bend attached to the ceiling with water dripping from cracks thereon. Photographs at pages 204, 205, 461 and 462[32], show that the Burst U-bend was lying on the ground not in its original shape but broken in pieces. Ms Ma confirmed that it was dismembered in the course of being taken down from the connecting Sewage Pipes in late afternoon or early evening. It did not break into pieces itself. There were cracks on it before it was taken down and the cracks got bigger later in the morning and more water came out through the cracks. It is further noticed from the photographs that the Burst U-bend was rusted. It was not disputed that after the Incident, 2 other U-bends were replaced, 4 were still there being used.

67.  There were photographs before the court showing the inside of the Burst U-bend after it was taken down[33]. They show that the Burst U-bend was blocked with grease and food residue. I accept Ms Ma’s evidence that half the Burst U-bend was blocked. Again there was no evidence before the court to say how long it would take for the grease and food residue to build up inside the Burst U-bend and took about half its space. As the court could see, the shape and the curve of the Burst U-bend would make it less easy for food residue to pass through along with the flow of water. Grease and food residue could accumulate and build up inside and impede the passage of the water. That explained why kitchen staff were not supposed to throw waste water which may include food residue and grease directly into the Channels. If food residue and grease went into the U-bend pipes they had to be deliberately and properly removed.

68.  Mr Wang, relying on Haskell v Marlow [1928] 2 KB 45, explained the circumstances in which one could seek reliance on the exception of “reasonable wear and tear”. It was said at pages 58-59

“The meaning is that the tenant (for life or years) is bound to keep the house in good repair and condition, but is not liable for what is due to reasonable wear and tear. That is to say, his obligation to keep in good repair is subject to that exception. If any want of repair is alleged and proved in fact, it lies on the tenant to show that it comes within the exception. Reasonable wear and tear means the reasonable use of the house by the tenant and the ordinary operation of natural forces. The exception of want of repair due to wear and tear must be construed as limited to what is directly due to wear and tear, reasonable conduct on the part of the tenant being assumed. It does not mean that if there is a defect originally proceeding from reasonable wear and tear the tenant is released from his obligation to keep in good repair and condition as to everything which it may be possible to trace ultimately to that defect. He is bound to do such repairs as may be required to prevent the consequences flowing originally from wear and tear from producing others which wear and tear would not directly produce. [Emphasis added by court]

For example, if a tile falls off the roof, the tenant is not liable for the immediate consequences; but, if he does nothing and in the result more and more water gets in, the roof and walls decay and ultimately the top floor, or the whole house, becomes uninhabitable, he cannot say that it is due to reasonable wear and tear, and that therefore he is not liable under his obligation to keep the house in good repair and condition. In such a case the want of repair is not in truth caused by wear and tear. For the greater part of it is caused by the failure of the tenant to prevent what was originally caused by wear and tear from producing results altogether beyond what was so caused. On the other hand, take the gradual wearing away of a stone floor or staircase by ordinary use. This may in time produce a considerable defect in condition, but the whole of the defect is caused by reasonable wear and tear, and the tenant is not liable in respect of it.”

69.  Mr Wang submitted that Haskill applies squarely to the present case and D1’s case in this respect is four-fold:-

(i)  Firstly, as Haskell held, the burden lies on D2 to establish that this exception applies, ie that that Burst U-bend did burst directly due to “fair wear and tear”. In this regard, no evidence has been adduced by D2 to prove that the Leakage and later bursting was due to fair wear and tear. Moreover, it is D1’s case that by virtue of the extent of the leaking, or burst, to be more precise, it cannot be due to “fair wear and tear”.

(ii)  Secondly, there is indeed evidence that the Burst U-bend was blocked out of improper use on the part of D2.

(iii)  Thirdly and alternatively even assuming that some wear and tear was involved, D2 is not “released from [its] obligation to keep in good repair and condition as to everything which it may be possible to trace ultimately to that defect. He is bound to do such repairs as may be required to prevent the consequences flowing originally from wear and tear from producing others which wear and tear would not directly produce.” On this Mr Wang submitted that D1’s witnesses had proved that the Leakage aggravated significantly during the course of the day from mild dripping to large quantity of sewage pouring from the Burst U-bend as a result of the continued use of the Sewage System by D2 despite its full knowledge about the Leakage.

(iv)  Fourthly and further alternatively even assuming that wear and tear exception does apply, that only excepts the operation of the Covenant to Repair on D2, so that D2 does not have express contractual obligation to repair. This cannot in any event be any basis to impose any duty on the part of D1 to repair. Even if it does so impose a duty on D1, as Mr Wong had submitted, being owner of the Upper Premises, D1 was not denying liability owed to the plaintiff but only the apportionment of compensation.

70.  A similar clause was discussed in Haskell in which a testator devised a dwelling-house to his wife for life, she was to insure the same against loss by fire, “and also keeping the same in good repair and condition (reasonable wear and tear excepted)”[34]. I accept that the discussion therein is good reference for me to assess the evidence in the present case. I accept the evidence of Mr Chung and Ms Ma about the Leakage on the material day. As will be discussed later in Issue 3, it is my finding that there had been improper use on the Blocked Channel and the Burst U-bend by D2’s allowing food residue and grease into the Blocked Channel. There were attempts to fix the Blockage by unprofessional personnel with improper skill and equipment. D2 could not claim that the Blocked Channel had been subject to reasonable use. Further, D2 could not claim that the Burst U-bend cracked directly due to wear and tear over the years.

71.  Moreover, as pointed out in Haskell, the user is “bound to do such repairs as may be required to prevent the consequences flowing originally from wear and tear from producing others which wear and tear would not directly produce.” From the evidence before me, there was never ever any regular or random inspection on the Sewage System carried out by D2. There was no such inspection even when problem of blockage appeared. Had there been proper inspection, the existence and the condition of the Burst U-bend would become clear to D2 (this will be further discussed later in Issue 2). In that case, the Leakage would have been prevented. I am satisfied that D2 cannot rely on the Exception Phrase to exonerate itself.

(iv)  Exclusion of Liability in negligence

72.  Mr Wong submitted that D1 is not exonerated from its liability under the Covenant to Repair by virtue of Section 7(2) of CECO. Mr Wang submitted that D1 did not say it is not liable. It is as far as damages suffered by the plaintiff is concerned. As D2 was however the real wrong doer, D1 should be indemnified by D2.

73.  After I have considered all the sub-issues under Issue 1, it is my conclusion that it was D2’s responsibility to maintain the Sewage System including the Burst U-bend under the Covenant to Repair and the Exception Phrase has no operation to exonerate D2 in the circumstances of the present case.

Issue 2:  Whether D2 had knowledge and/or constructive knowledge of the Burst U-bend

74.  It was D2’s case that they were not put on notice of the existence of the Burst U-bend, they were therefore not responsible to maintain and repair the Burst U-bend and the Blockage would never have been reasonably foreseeable.

75.  D1 said that first D1 as Landlord, had no duty to disclose the existence or the possible defects in the Burst U-bend. In support, Mr Wang referred to Fortune Global Development Ltd v Shung Cheong Food Trading Ltd [2002] 2 HKLRD 447 at paragraphs 83-84

“83. There is a fundamental difference between a vendor in a sale of land and a landlord in a tenancy. The landlord does not undertake to deliver an abstract of his title nor that he has good title to the land.

84. In the premises, I hold that the principle relating to disclosure of defects in title in a sale of land is not applicable to a tenancy. The rule of caveat emptor does apply. The plaintiff is under no duty to disclose to the defendant the sewage problem. The defendant has to rely on its own inspection.” (Emphasis added by court)

76.  Mr Wang pointed out that in the present case, this is more the situation because D2 rented the Upper Premises on “as is” basis. He also drew the attention of the court to the absence of warranty of physical condition in the Tenancy Agreement.

77.  Mr Wang further submitted that D2 was aware of the existence of the Burst U-bend which was part of the Sewage System or at least had been on constructive notice of the same. It was also Mr Wang’s submission that there was no need for D2 to be specifically notified of the existence of the Sewage System. It is commons sense that a sewage system must have existed for waste water produced during the operation of a restaurant kitchen. The waste water has to be disposed of. It is also a condition for getting a license to have an effective Sewage System installed. Further the Channels, part of the Sewage System, were visible to those present in the kitchen.

78.  I agree with Mr Wang and find that D2 through its servant or staff who was using the Kitchen everyday must be aware of the existence of the Sewage System. The existence and purpose of the Channels was obvious to the kitchen staff. Given also the fact that the Interceptor was a requirement for granting a license, it was unlikely that that those in charge of the operation of D2 was unaware of the presence of the Sewage System. D2, knowing or ought to have known about the presence of the Sewage System has a duty to keep the same in good condition. In my judgment, had D2 properly assumed the duty to maintain the same which included inspection to begin with, it could not say that it was not aware of existence of the Burst U-bend. Their claiming of having no knowledge of the same only proves its negligence or having failed to comply with the Covenant to Repair.

Issue 3:  Whether the Leakage caused by Improper Use

79.  It is D1’s case that not only D2 had failed in keeping the Burst U-bend in its tenantable repair and condition in breach of the Covenant to Repair, there was improper use leading to food residue and grease building up in the Burst B-bend. When those substances reached the Burst U-bend, it stayed there and had to be properly and deliberately removed.

80.  Ms Ma told the Court that she saw a kitchen staff using a hand plunger pump on the Blocked Channel. Ms Ma did not tell the Court what she saw inside the Blocked Channel in great details. She said what she saw was as shown in the photographs produced at pages 442-2 and 583-1[35]. Photograph at page 442-2 was a close-up shot of the Blocked Channel. Grease and waste water could be seen there inside. There was no obvious food residue seen inside the Blocked Channel as shown in the photographs. It was however noticed that food residue was left on the floor near the Blocked Channel. They looked like cooked vegetable and cooked noodles. The said two photographs show also a white-colour but filthy looking sieve. It was stained with dirt which probably composed of grease and fine particles of food residue. In the two photographs the white-colour sieve was placed upside down by the side of the Blocked Channel. There was yet another photograph at page 458 showing a red-colour sieve being put inside another Channel which was clear and without ponding of waste water. D2 admitted in its Defence that the sieves were part of the operation in the Kitchen. They were placed inside the Channels to filter food residue and stopped them from going into the Sewage System via the Channels[36]. In my view, the sieves were needed because food residue were habitually allowed to go into the Channels or at least some of the Channels. The Blocked Channel was one of those. The gathering of grease and food residue inside the Burst U-bend showed that these substance had gone down the Sewage Pipes in the course of operation of D2. Further, from the gathering of the substance inside the Burst U-bend, the use of the sieves was proved not to be sufficient nor effective. The holes of the sieves were not fine enough to stop food residue from going into the Sewage Pipe and the U-bend Pipes. They could not stop grease or greasy water from going through either. Such practice amounted to improper use unless there was arrangement for food substance to be removed from the Sewage System regularly. There was no such evidence.

81.  As mentioned, it was seen by Ms Ma that one of D2’s kitchen staff was trying to use a hand plunger pump to remove the Blockage. I do not think such conduct could be criticized if this happened for the first time or it happened in a domestic unit. Unfortunately this was not the case. According to the kitchen staff, this happened over the past few days. D2 was running a restaurant where the Sewage System forms an important part in its operation. When blockage problem lasted for days, it warranted serious attention and treatment. To clear pipe blockage with a tool which could create a pushing and sucking force is not uncommon. D2’ staff had however used this conventional method several days after the Blockage had appeared. That did not work.

82.  Mr Chung was asked to mark on the floor plan the locations of Sewage System and the Main Drain Pipe[37]. The Sewage System under the Raised Floor was coloured yellow. He also marked the Channels in green and the Main Drain Pipe in orange. He marked an “X” to show the location of the Burst U-bend and another “X” to mark the outlet in the Blocked Channel on D1Ex1. The two “Xs” were close to each other. It is accepted that the kitchen staff was trying to remove the blockage in the Blocked Channel and its connecting Sewage Pipe which further connected with the Burst U-bend.

83.  From a chronology prepared by D1 without identifying the author and the time of making the same[38], it could be seen that one of the follow up action suggested that: “喉管漏水懷疑原因是因管內嚴重淤塞，金富職員曾經嘗試通渠，但不果，懷疑是通渠時不慎破壞污水喉「沙眼」位置”[39]. I cannot rely on this suggested follow-up action to make any finding on the part on the Burst U-bend which was damaged and that the damage had caused the Leakage. This chronology was not adopted by the witnesses of D1. Mr Wang has never invited the Court to do so. What the Court can find from the Leakage and the conduct of the kitchen staff is that D2 had failed to elicit professional service when the Blockage occurred several days ago. This was improper use in the circumstances that the Sewage System was a complicated structure and important to D2’s operation. The grant of a license for D2 to run a restaurant at the address relied on the provision of a qualified sewage system. Such a system has to be professionally maintained. The conduct of the kitchen staff of D2 fell below of the standard required of when maintaining a sewage system in a restaurant and especially when a problem was apparent.

84.  Yet another allegation on improper use was that D2 refused to stop using water after knowing about the Leakage. The earliest time D2 was informed was at 9:00 am through its kitchen staff and the CEO also arrived at 11:00 am. Leakage became more serious between 11:00 am and after 1:00 pm. Obviously more water was used to cater for the lunch business. I accept the evidence of Ms Ma and Mr Chung that the Leakage got worst and the Burst U-bend broke at its bottom part. I find that this amounted to improper use.

85.  A further point made by Mr Wang in relation to improper use was that D2 by using a hand plunger plum to fix the Blockage was in breach of Clause 8 of the Tenancy Agreement whereby D2 had a duty to notify D1 of defects. Clause 8 provides that:-

“8 Notify Landlord of damage

To notify the landlord or its agent of any accidents to or defects in the water pipes, gas pipes...other facilities provided by the Landlord in the Premises whether or not the Tenant is liable hereunder for the repair of the same forthwith upon the Tenant's becoming aware (whether actually or constructively) of same arising.”

86.  This has not been pleaded by D1 but D2 never denied the duty to give notice to D1. As mentioned earlier, in its Defence, it said had it been put on notice of the existence of the Burst U-bend, it would ensure that D1 or its agents would perform their duty under the Lease[40].

87.  To summarise on the topic of improper use, it is my finding that there had been improper use on the Sewage System in that (i) allowing food residue and grease to go in to Blocked Channel, (ii) having failed to elicit professional service to fix the Blockage and (iii) having refused to stop using water upon learning about the Leakage.

Issue 4:  Whether the use of water after the Leakage occurred had caused further damage to the Lower Premises and the contents therein

88.  In the Statement of Claim the plaintiff stated that the Lower Premises was closed between 13 October 2014 to 8 February 2015. Damages claimed by the plaintiff is as follows:-

(a)  Loss of Income and Administrative Costs ($515,151)

(b)  Deducted amount by the Insurance Company ($48,896)

(c)  the administrative costs since 1^st February ($115,540) and the costs for additional Petrol Consumption during the period from October 2014 to February 2015 ($2,305).

89.  From an Incident Report produced at pages 439 and 440[41], the damaged parts included (i) floor became uneven with parts thereof pushing up; (ii) Many set of computer and furniture were damaged by water; and (iii) damage caused to the ceiling. Ms Ma agreed that what was shown on the photograph at 442-1 was what she saw upon arrival, that part of the floor was flooded.

90.  D2’s case is that the floor of the Lower Premises was already flooded when Ms Ma first arrived thereat by about 8:50 am. There is no evidence on how damage was further made after D2 was notified.

91.  I agree that further damages could not be quantified but such conduct of D2 amounted to improper use.

Conclusion on Liability of D2

a.  Under the Tenancy Agreement

92.  It is my finding that the Sewage System including the Burst U-bend was for exclusive use of D2 and not common parts at the material time. It was D2’s duty to properly maintain and repair the Sewage System under the Covenant to Repair which covered water-related facilities exclusively used by D2 or in common with others. D2 ought to have known the existence of the Sewage System yet there was no evidence that D2 had taken reasonable course of action to regularly inspect and upkeep their condition.

93.  It is immaterial whether D2 had been put on notice of the existence of the whole of the Sewage System and the Burst U-bend in particular. Had there been proper inspection and maintenance carried out at regular intervals prior to the Leakage, the location and condition of the Burst U-bend would have been made known to the user, namely D2.

94.  Evidence also shows that there was improper use on the part of D2 causing the Blockage and the Leakage by allowing food residue and grease into the Sewage System but made no arrangement to clearing the same regularly. Allowing waste water to go into the Blocked Channel knowing that the Leakage had occurred also amounted to improper use.

95.  For these reasons D2 is liable to the plaintiff for loss and damage caused by the Leakage.

96.  Further, there was no report made to D1 or the management when the Blockage or other impediment occurred. Even if D2 had erroneously believed the Sewage System or the Burst U-bend was common parts or it should be the responsibility of D1 to maintain and repair, it should have informed the management or D1 when a blockage last for days occurred. To the contrary, D2 chose to resolve a problem which it believed not within its duty to resolve. While doing that, D2 failed to deploy or appoint professional workman to fix the Blockage but wrongfully allowed one of its kitchen staff to fix the same with a hand plunge pump.

97.  From the above findings, D2 could not rely on the Exception Phrase to exonerate itself as it has failed to prove reasonable use on its part and the effect of natural force on the Burst U-bend.

b.  Liability under Law of Negligence and Nuisance

98.  From evidence before me, I am satisfied that D2 is liable to the plaintiff for the loss and damage it suffered under the law of negligence and nuisance. I am satisfied that from evidence before the court, D2 must have owed a duty of care to the plaintiff by proximity and foreseeability. My findings above on its having failed to maintain and repair the Sewage System including the Burst U-bend, its improper use of the Sewage System by allowing food residue and grease into the Channels and having failed to seek professional service to fix the Blockage amounted to negligence. D2’s refusal to stop using water further aggravated the situation.

99.  D2 is liable to the plaintiff under common law and liable to D1 for its breach of the Covenant to Repair and therefore should indemnify D1.

Finding on Liability of D1

100.  As owner of the Upper Premises, it is liable to compensate the lessee of the Lower Premises for loss and damage it has suffered due to injurious substance emitted from the Upper Floor. It is however entitled to be indemnified by the person who had caused the emission to happen.

101.  Mr Wang has mentioned that D1 was at fault for its failure to make sure that D2 properly carried out its contractual duty to inspect and maintain and not to use the Burst U-bend improperly under the Covenant to Repair[42], it made no concession on D1’s contention that D2 is wholly liable to the plaintiff loss. Having considered the evidence before me, I do not see any provisions in the Covenant to Repair purporting to impose on D1 a duty to ensure D2’s compliance with the Covenant to Repair or otherwise. Further I do not see that such “fault” would have amounted to negligence on the part of D1 to take away or diminish its entitlement to be indemnified under the Covenant to Repair.

102.  For these reasons, D2 could not claim contribution from D1 relying on the Exception Phrase or otherwise.

Apportionment of Liabilities

103.  From evidence before me, I agree with Mr Wang that it is just and equitable that D2 takes full responsibility of damages caused to the plaintiff and shall pay D1 the same amount D1 has paid into court as sanctioned payment.

Interest

104.  There be interest on the judgment sum at prime rate from the date sanctioned payment was made until date of the Judgment and thereafter at judgement rate until full payment.

Costs

105.  I make an order nisi that D2 do bear costs of D1 in the main action and these proceedings. Such order shall become absolute 14 days herefrom in absence of any application to vary.