THE INCORPORATED OWNERS OF CHUNG WUI APARTMENTS v. WUI FU COMPANY LTD

LDBM 360/2014 & LDBM 361/2014
(Heard Together)

[2024] HKLdT 10

LDBM 360/2014

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 360 OF 2014

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AND

LDBM 361/2014

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 361 OF 2014

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(Heard Together)

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REASONS FOR REVIEW

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Judgment on 2 Counterclaims

1.  The counterclaims of the captioned 2 applications both filed in January 2015 were tried together by this Tribunal on 4 days in early February 2023. All parties were legally represented at trial. On top of written opening submissions lodged by parties’ counsels, 2,000 odd pages of documents were produced by way of trial bundles at trial[1]. Parties’ counsels also lodged their respective written closing submissions on 20 March 2023[2], and trial resumed on 24 April 2023 for counsels making additional oral closing submissions.

2.  Judgment was handed down by this Tribunal on 24 October 2023[3] (the Judgment).

3.  For WF’s counterclaim in LDBM 360/2014, this Tribunal in the Judgment ordered IO to:-

(1)  pay damages in sum of $124,500 to WF, together with interest thereon at half HSBC prime rates from 23 January 2003 to judgment; and

(2)  comply within 120 days fully with such existing order issued by BD under s.28(3) of BO to rectify all existing problems and defects of underground drains and manholes of the Building (including sewage backflow and risk of sewage backflow to Toilet D1) to the satisfaction of BD (360 Injunction).

4.  For Sarwin’s counterclaim in LDBM 361/2014, this Tribunal in the Judgment also ordered IO to: -

(1)  pay damages in sum of $2,725,163 to Sarwin, together with interest thereon at half HSBC prime rates from 2 December 2006 to judgment;

(2)  pay damages in sum of $265,897 to Sarwin, together with interest thereon at half HSBC prime rates from 23 January 2003 to judgment;

(3)   pay damages in sum of $150,000 to Sarwin;

(4)   comply within 120 days fully with such existing order issued by BD under s.28(3) of BO to rectify all existing problems and defects of underground drains and manholes of the Building (including sewage backflow and risk of sewage backflow to Toilet C, and foul water leakage and risk of foul water leakage to floor of Shop B and Shop C) to the satisfaction of BD (361 Injunction); and

(5)   rectify and eradicate all existing problems and defects of the 3 Vertical Pipes (including foul water leakage and risk of foul water leakage to ceiling of Shop B and Shop C) within 120 days.

Applications for Review in each application

5.  On 17 November 2023, IO took out in each application its Application for Review of the Judgment supported in each by Affirmation, and 2^nd Affirmation, of Leung Man Man filed on behalf of IO on 17 November 2023 (Leung’s Affirmation) and on 21 November 2023 (Leung’s 2^nd Affirmation).

6.  In LDBM 360/2014, IO advanced Grounds of Review I, II and III in Annex A of Leung’s Affirmation, followed by Grounds of Review V and VI in Annex B of Leung’s 2^nd Affirmation.

7.  In LDBM 361/2014, IO put forward in Annex A of Leung’s Affirmation Grounds of Review I, II, III and IV, and in Annex B of Leung’s 2^nd Affirmation Grounds of Review V and VI.

Decision to review on 2 Grounds each

8.  On 24 November 2023, in LDBM 360/2014, having considered WF’s Submissions in Reply dated 22 November 2023 and its Supplemental Submissions in Reply dated 23 November 2023 prepared by Mr Lai for WF, this Tribunal decided to review the Judgment on Grounds V(1) and VI and decided not to review on the remaining grounds, including Ground V(2).

9.  On the same date, in LDBM 361/2014, having considered Sarwin’s Submissions in Reply dated 22 November 2023 and its Supplemental Submissions in Reply dated 23 November 2023 also prepared by Mr Lai for Sarwin, this Tribunal decided to review the Judgment on Grounds V(1) and VI and decided not to review on the remaining grounds, including Ground V(2).

Orders made after Review Hearing

10.  At the review hearing on 17 January 2024, counsel for IO in both applications i.e. Ms Clara Wong (Ms Wong) no longer pursued Ground V(1) in both reviews. Mr Lai did not object to IO’s withdrawal of such ground in both reviews.

11.  This Tribunal thus gave leave to IO in each review to withdraw Ground V(1).

12.  This Tribunal thereafter proceeded to hear Ms Wong and Mr Lai on Ground VI only in each review. After the hearing, this Tribunal decided to exercise its power of review under s.11A of Lands Tribunal Ordinance (LTO)[4] in each review as follows.

(1)  In LDBM 360/2014, this Tribunal varied 360 Injunction to become as follows.

“The IO do within 120 days

(i) comply fully with such existing order issued by BD under s.28(3) of BO to the satisfaction of BD;

(ii) rectify all existing problems and defects of underground drains and manholes of the Building (including sewage backflow and risk of sewage backflow to Toilet D1).”

(2)  In LDBM 361/2014, this Tribunal varied 361 Injunction to become as follows.

“The IO do within 120 days

(i) comply fully with such existing order issued by BD under s.28(3) of BO to the satisfaction of BD;

(ii) rectify all existing problems and defects of underground drains and manholes of the Building (including sewage backflow and risk of sewage backflow to Toilet C, and foul water leakage and risk of foul water leakage to floor of Shop B and Shop C).

Reasons for Review Decision/Orders

13.  This Tribunal now gives its reasons for its decisions/orders at [8], [9] and [12] above.

Applicable Rules and Principles

14.  The applicable rules of LTO that this Tribunal has adopted in making its decisions/orders above are the followings:

(1)  S.11A(1) of LTO reads: “The Tribunal may, within 1 month from the date of any decision by it, decide to review that decision and, on such grounds as it may think sufficient, may set aside, reverse, vary or confirm it”.

(2)  S.11A(3) of LTO reads: “If the Tribunal shall have decided, within 1 month from the date of any decision, to exercise its power of review in respect thereof, such power may be exercised at any time thereafter whether within such period of 1 month or otherwise”.

(3)  S.11A(4) of LTO reads: “The Tribunal may, in any review, hear and receive any evidence it thinks fit for the purpose of determining the issue between the parties”.

15.  And the principles upon which this Tribunal has exercised its power of review are those explained in Triumphal Foundation Ltd & Another v Chan Chi Lun & Others[5] as follows: -

“… Section 11A was designed to do justice between parties. It is an injustice to the winning party to be deprived of the fruits of the judgment. If the losing party is allowed to merely repeat what it had already said in the previous hearing this can amount to an abuse. If a party is allowed to adduce new evidence at the review hearing and such evidence could be obtained with reasonable diligence for use at the hearing, this could also amount to abuse. The exception is perhaps where the opposing party is not taken by surprise.

On the other hand justice must be done and where justice clearly lies it should not prevent a party from repeating himself on important points of law and adducing evidence of material importance or even decisive notwithstanding this could have been obtained earlier. The procedure of the Tribunal was designed to be more flexible than a court… This view is also supported by the fact that under Section 11A(4), it is expressly provided that this Tribunal may hear [evidence] [sic], and those [evidence] [sic] would necessarily include those [evidence] [sic] which had not (but should have) been put forward in this Tribunal … in the initial hearing before the Tribunal, notwithstanding the Tribunal is being asked to look at the same issues again at the review hearing. However, in a case where the parties had all along been legally represented and with assistance of experts, the discretion to review would normally be exercised more stringently than say where parties were unrepresented at the initial hearing (italics supplied).”

Overview of the Judgment

16.  Before this Tribunal examines below IO’s grounds of review in turn, a brief overview of the Judgment is, I think, called for.

17.  In LDBM 360/2014, this Tribunal found IO in breach of its duties under, inter alia, BMO to maintain common parts of the Building i.e. its underground drains and sewers, causing Toilet D1 owned by WF to go out of function since 2001. In particular, such breach included IO’s failure since 2007 to comply with orders issued by BD under s.28(3) of BO, with the latest replacement order issued in 2015.

18.  As a result, WF has suffered rental loss for Shop D1 and was held entitled to damages as from 2003 and 360 Injunction against IO.

19.  In LDBM 361/2014, this Tribunal found IO in breach of its duties in, inter alia, BMO to maintain two common parts of the Building i.e. its underground drains and sewers (causing 1) foul water leakage at the floor of Shop BC owned by Sarwin since 2001; 2) Toilet C owned by Sarwin to go out of function since 2001; and 3) the 3 Former Toilets owned by Sarwin unable to be reinstated) as well as 3 Vertical Pipes running down from 1/F to Shop BC (causing foul water leakage at ceiling of Shop BC from 2006). The former common parts also involved IO’s failure since 2007 to comply with orders issued by BD under s.28(3) of BO, with the latest replacement order issued in 2015.

20.  As a result, Sarwin has suffered loss and damage and was held entitled to damages for 1) costs of repair to Shop BC; 2) loss of rental income due to defective Toilet C as from 2003; and 3) rental loss for Shop BC due to foul water leakage as from 2006 as well as two mandatory injunctions, including 361 Injunction, against IO.

LDBM 360/2014

Ground I - Finding that Toilet D1 had “gone out of function” unsupported by evidence

21.  For reasons at para 2 & 3 of Annex A of Leung’s Affirmation, IO submitted on this ground that this Tribunal ought to have accepted, or at least accorded due weight to, Ms Lam’s undisputed evidence that Toilet D1 could flush normally without sewage backflow during her inspection on 27 (sic) May 2022. Had it been done, this Tribunal, it was submitted, would not have found Toilet D1 gone out of function since 2001.

22.  This ground is, I think, a repetition of submissions advanced at para 13 and 14(3) of IO’s closing submissions and is devoid of merits.

23.  The reasons this Tribunal gave at para 32 of the Judgment for giving limited weight to Ms Lam’s evidence are, I think, without doubt valid. As was said by IO itself on this ground of review, it was no more than observation on one single day by a lay person who had not actually used Toilet D1.

24.  And, on this liability issue, there is, I think, nothing wrong for this Tribunal at para 33 to 35 of the Judgment to give more/full weight to (and to prefer) Mr Wong’s clear expert opinion on the said issue as the single joint liability expert, which opinion was arrived at by him after his arranging scientific CCTV survey of the underground drainage system of the Building and after himself carrying out flushing/color water test on Toilet D1.

25.  Coupled with Mdm Wong’s detailed factual evidence going back to 2001 that this Tribunal had accepted (see para 36 & 37 of the Judgment), which IO did not see fit to challenge on this ground, there is, I think, plenty evidence at trial to support factual finding arrived by this Tribunal on this issue.

26.  Hence, this Tribunal decided against holding a review on this ground.

Ground II - No causation between alleged malfunctioning of Toilet D1 and the alleged defective underground drains and sewers at the Building

27.  IO next submitted that there is “no direct evidence” proving the existence of any causal linkage between the unauthorized alteration of the original sewage drainage system and the alleged malfunctioning of Toilet D1. Both Mr Wong and Ms Lam were, it was said, able to flush Toilet D1 on their respective inspections.

28.  Again, IO was, I think, repeating para 16 of its closing submissions where it was put as high as “no evidence whatsoever” to establish such casual linkage.

29.  This Tribunal completely fails to understand what “direct evidence” that IO could have complained WF to have failed to adduce in this case when the subject drains and sewers (and their unauthorized alteration) was all “underground” (thus not liable to direct naked eye observation) and when IO itself had already, on Mdm Wong’s evidence accepted by this Tribunal, “prohibited” of poo in water closets (see para 36 of the Judgment).

30.  There was, without doubt, circumstantial (including Mdm Wong’s detailed factual evidence going back to 2001 that was accepted) and clear and weighty expert opinion (given by Mr Wong as the single joint liability expert) adduced by WF to prove this causation issue.

31.  This ground is, I think, also completely without merit to call for a review.

Ground III - Damages awarded on erroneous bases

32.  For reasons at para 6 of Annex A of Leung’s Affirmation, IO complained that the award of damages made by this Tribunal in WF’s favour proceeded on an erroneous basis that Ms Lam’s pair analysis was premised on WF having a functional Toilet D1 for Shop D1 when it was not. Had it been appreciated, this Tribunal, it was submitted, would have declined to award damages in WF’s favour as WF has suffered no loss.

33.  Trial counsel for IO has already quoted at para 22 of IO’s closing submissions para 7.8 of 2^nd Valuation Report prepared by Ms Lam and made the above same submission of no loss to WF at para 23 of the said closing submissions. IO now simply re-runs the same point on this ground seeking a review.

34.  But IO itself held, I think, an erroneous view of all of Ms Lam’s evidence at trial to repeat such submission on this application for review.

35.  There can, I think, be no doubt that Ms Lam’s pair analysis was premised on WF having a functional Toilet D1 for Shop D1. Under cross-examination, Ms Lam agreed with Mr Lai that, if Toilet D1 could not be used for poo as was said by Mdm Wong, she would assess the loss to WF at $500 per month (see para 54 of the Judgment). Had her pair analysis not proceeded on Shop D1 having a functional toilet as was alleged (and now alleged again) by IO, Ms Lam should have, one thinks, maintained nil loss to WF (as Ms Lam had opined in 2^nd Valuation Report) in her answer to Mr Lai.

36.  I therefore also decline to hold a review on this ground without merit.

Ground V(2)– Interest on damages awarded on erroneous bases

37.  At para 2 of Annex B of Leung’s 2^nd Affirmation, IO further submitted that this Tribunal had erred in failing to disallow, or reduce rate of, interest on its award of damages for WF’s unjustifiable delay in prosecuting its counterclaim and reserved its right to adduce or rely on further evidence in due course.

38.  On this ground, I am in full agreement with Mr Lai’s reply submissions below.

(1)  This issue of alleged unjustifiable delay on the part of WF in prosecuting its counterclaim was never pleaded, raised or argued during the trial, inclusive of IO’s written and oral closing submissions. There is also no explanation in Leung’s 2^nd Affirmation for the said omission.

(2)  IO was throughout these proceedings legally represented. In view of the long history of these proceedings, there was, one thinks, plenty time and opportunity for IO to raise this point (and, if see fit, to adduce evidence to prove it) before conclusion of trial (but IO has failed to articulate its alleged further evidence even up to the current application for review).

39.  For the above reasons, IO should not, I think, be allowed to raise this new point belatedly at review to the prejudice of WF after WF had obtained an award of damages in its favour with interest (after counsels for parties had already addressed this Tribunal on interest in their oral closing submissions).

Ground VI - Scope of the Injunction Order Excessively Wide/ Injunction Order incapable of being enforced

40.  For reasons at para 3 to 6 of Annex B of Leung’s 2^nd Affirmation, IO complained that this Tribunal had erred in granting 360 Injunction on such impracticable and impossible term that requires IO to seek satisfaction of BD about no sewage backflow or risk of the same to Toilet D1 when the same could not be obtained from BD.

41.  As this Tribunal had indicated to Ms Wong appearing for IO at review hearing, after IO has compiled fully with such existing order issued by BD under s.28(3) of BO, it ought also to have eliminated the above risk by the drainage works it arranges to carry out. Such certificate of discharge of s.28(3) BO order issued by BD (and vacation of its registration at Lands Registry) would, one thinks, be best proof of satisfaction from BD in practice.

42.  Be that as it may, as Mr Lai agreed in his reply submissions that IO’s twin obligations to 1) comply with BD order; and 2) to eliminate sewage backflow may be stated in clearer terms by amending the terms of 360 Injunction, this Tribunal therefore decided to hold a review on this ground.

43.  At the review hearing, as counsels for WF and IO agreed on amended wordings of 360 Injunction which do not change IO’s substantive obligations ordered in the Judgment, this Tribunal was prepared to vary, and did vary, 360 Injunction in the manner at [12(1)] above.

LDBM 361/2014

Ground I - Lack of evidence in proving continuity in the alleged foul water leakage at the Ceiling of Shop B and Shop C

44.  IO submitted at para 1 of Annex A of Leung’s Affirmation that this Tribunal’s factual finding that Shop BC suffered from ceiling leakage for 16 years from 2006 until trial “lacks evidential basis”. Evidence of complaint of alleged ceiling leakage was not adduced, it was submitted, over 3 specific periods from January 2007 to March 2013[6] totaling about 78 months. There is thus no, insufficient or only ambiguous evidence to prove ceiling leakage during these months to make IO liable for Sarwin’s alleged loss of rental income.

45.  Further or alternatively, there is, IO also submitted, no evidence of alleged ceiling leakage maintaining the same level of severity throughout the said 16-year period, as was shown by Ms Lam’s observation on her day of inspection. Sarwin, IO argued, did not face the same level of difficulty in attracting tenants throughout the said entire 16-year period.

46.  This Tribunal ought, IO argued, to have concluded there was no persisting ceiling leakage problem (and ought to have discounted damages payable) for periods of time when there is no complaint or when there is no, insufficient or only ambiguous evidence of foul water ceiling leakage and/or leakage of persistent seriousness.

47.  Again, IO reserved at para 1(7) of Annex A of Leung’s Affirmation its right to adduce further evidence should this Tribunal decide that there should be a review.

48.  This ground at [44] above is, I agree with Mr Lai, the same “unrealistic” submissions made at para 29 of IO’s closing submissions. Implicit in it is the suggestion (which this Tribunal rejects) that one needs to have complained every day during the said 16 years in order to prove ceiling leakage problem persisting for 16 years. It of course takes time and efforts for one to lodge a complaint. Afterwards, one needs to wait for reply/result as it also takes time and efforts for complaint to be handled. And the fact that one stopped complaining for a period does not always mean that the problem complained about had disappeared.

49.  To put the record straight, this Tribunal had already considered the periods when there was no complaint and Ms Lam’s observation on her day of inspection (see para 59 to 63 of the Judgment).

50.  At the same time, Sarwin’s case of foul water leakage smelling badly occurring from time to time at ceiling of Shop BC from 2006 until trial is, I think, fully supported by its inherent probabilities, evidence of Mdm Wong that was accepted, contemporaneous records (including photos and videos) from 2006 until trial, and opinion of single joint liability expert. IO had, I am afraid, closed its eyes to these other evidence referred to at para 67 to 75 and 78 of the Judgment.      

51.  The suggestion that Sarwin did not thereby face the same level of difficulty in attracting tenants throughout the said entire 16-year period is, I believe, a new one. It had not been pursued or explored at trial or in IO’s closing submissions.

52.  Instead, trial counsel for IO had put to Mdm Wong that she had consciously elected to take up short-term licences (rather than fixed term tenancies) for Shop BC over the years. In closing submissions, it was further submitted on IO’s behalf that Mdm Wong had grossly exaggerated the leakage problem of Shop BC and that she had used FSY to create an impression that leakage had happened all the time in Shop BC (see para 138, 140 & 143 of the Judgment).

53.  This Tribunal had rejected all the above submissions of IO and instead accepted Mdm Wong’s evidence that she had, from time to time, made frank disclosure of leakage problem to prospective tenants and licensees and that, due to such problem, Sarwin was at all material times forced to take on short-term licenses over Shop BC for the long term at such monthly licence fees that were lower than it could otherwise fetch with letting out Shop BC on fixed-term tenancies unaffected with leakage problem (see 139(7) & (8) of the Judgment).

54.  As such, alleged lower level of leakage severity during specific periods has, one thinks, no direct effect on rental so long the said leakage problem persisted unresolved.

55.  For reasons given in this section, I therefore decide against a review on this ground with no merit, let alone to allow IO to adduce un-particularized further evidence on review.

Ground II - Lack of evidence in proving continuity in the alleged foul water leakage at the Floor of Shop B and Shop C

56.  IO first repeated its reasons for Ground I herein with the necessary modifications. I therefore also reject it for same reasons given above for Ground I.

57.  IO next complained with reasons given at para 3 of Annex A of Leung’s Affirmation that this Tribunal ought to have drawn against Sarwin adverse inference for not calling FSY at trial on the issue of how frequently leakage occurred at the floor of Shop BC, as FSY could give probative evidence on the said issue and is a witness whom Sarwin could reasonably be expected to call.

58.  Again, this is repetition of “failed” submissions raised at para 60, 66 & 68 of IO’s closing submissions. It is, I think, useless for IO to re-argue the same to seek a review.

59.  To put the record straight, this Tribunal never disputed that FSY could give material evidence on the above issue[7] but took the view that he was not a witness whom Sarwin could reasonably be expected to call due to their loose relationship (see para 98 to 100 of the Judgment). In ordinary course of events, a party could reasonably be expected to call a material witness with whom he/she has a close relationship like family or marriage than a loose one.

60.  In any event, this Tribunal had also proceeded to draw the adverse inference were FSY held a witness that Sarwin could reasonably be expected to call. Nonetheless, the combined weight of all such other evidence together with Mdm Wong’s explanation for FSY’s absence at trial (though it might not be wholly satisfactory) are such that Sarwin still proved its case on this issue on the balance of probabilities (see para 101 & 102 of the Judgment).

61.  At para 4 of Annex A of Leung’s Affirmation, IO pointed to alleged limitations of 1) the evidence of Mdm Wong; 2) evidence of Mr Wong; and 3) the CD. Once Mdm Wong’s account is discounted, there is, IO argued, no proper basis for this Tribunal to find that alleged floor leakage had occurred frequently at Shop BC (and continuous loss of rental income for Shop BC) from 2006 until trial.

62.  Looking at these alleged limitations, they are IO’s criticism directed against individual evidence which had already been considered at para 86, 95 and 96 of the Judgment. While that made against Mdm Wong and the CD are valid but that against Mr Wong invalid[8], this Tribunal has, I must point out, considered the totality of the evidence before reaching its conclusion on this issue.

63.  There is, I would point out, ample evidence at trial for this Tribunal to find that Shop BC had suffered from time to time foul water floor leakage smelling badly from 2001 until trial. On top of IO’s (Mr Lam’s) admissions, Sarwin had marshalled on this issue a great mass of evidence going back to 2001 including correspondences with various departments, considerable number of photos and videos, expert liability opinion and IO’s non-compliance (and conviction for non-compliance) of order issued by BD under s.28(3) of BO as early as in 2007 (which order was over the course of time replaced, with the latest issued in 2015 which remained valid until trial): see para 45, 46, 92 to 96 & 102 of the Judgment. They corroborated one another (and also Mdm Wong’s factual evidence) and their cumulative evidential effect should not, one thinks, be underestimated.

64.  This ground is, I think, a second attempt to re-argue failed submissions which has no merit. There is no point holding a review on this ground.

Ground III - Finding that Toilet C had gone out of function unsupported by evidence

65.  IO complained on this ground that the evidence before this Tribunal does not justify the above factual finding. Toilet C was, said IO, prima facie functional as Mr Wong had conducted color water test by flushing it. In any event, Mr Wong failed to address causative lexus between unauthorized alterations of underground drainage system, and alleged malfunctioning of Toilet C.

66.  Once again, IO reserved its right to adduce further evidence should there be a review on this ground.

67.  IO had, I think, misread Mr Wong’s evidence and opinion. The result of color water test he carried out on Toilet C is that one did not know to where the colored water was drained, indicative that Toilet C could no longer function properly according to its original design. And his clear views on causation are that without rectification of the unauthorized alterations to the underground sewer systems, Toilet C could not function properly without contravention of BO: see para 30 & 34 of the Judgment.

68.  This ground is therefore also devoid of merit. I fail to see any reason of holding a review on it, let alone allowing in unknown further evidence.

Ground IV - Damages awarded on erroneous bases

69.  At para 8 of Annex A of Leung’s Affirmation, IO repeated Grounds I and II together to argue that award of damages made by this Tribunal on Sarwin’s loss of rental income are premised on inappropriate durations as there is no basis to conclude that leakage at ceiling and floor of Shop BC was continuous and/or subsisted throughout the entire alleged period from 2000’s until trial.

70.  Both Grounds I and II have been covered and discussed by me above. For reasons given above, they fail, I think, either alone or cumulatively to provide any ground for review.

71.  At para 9 of Annex A of Leung’s Affirmation, IO submitted that discount rate adopted by this Tribunal on above award is overly generous. There is no evidence of alleged persistent and serious leakage affecting Sarwin’s ability to lease Shop BC on fixed-term tenancies. Indeed, such allegation was at odds with Sarwin’s 2-year fixed term tenancy with Chun Au from April 2008 to March 2010.

72.  Ms Lam had adopted 15% discount rate based on photos and videos provided to her of intermittent periods. She should not have applied 15% discount across the board for the period from 2006 to August 2019. This Tribunal, IO argued, ought either to have declined an award, or to have applied a discount rate “no more than 5%” for “such periods where there is no evidence of the severity of leakage at floor or ceiling” of Shop BC.

73.  Again, IO reserved its right to adduce further evidence if this Tribunal decides for a review on this ground.

74.  For IO’s complaint on this ground again of no evidence proving alleged persistent and serious leakage affecting Sarwin’s ability to lease Shop BC on fixed-term tenancies, it has, I think, been adequately dealt with above. The contrary position has been proven to be the case: see [50] and [63] above.

75.  As discussed above, there is also, I think, plenty evidence to show that Sarwin had suffered rental loss over Shop BC due to unresolved leakage problem over the years (see [53] above and para 139(1) to (6) of the Judgment). Chun Au’s 2-year fixed term tenancy is an explainable isolated instance in the sum total of evidence pointing to the other direction of rental loss.

76.  Regarding discount rate adopted, while admittedly Ms Lam suffered from insufficient instructions given to her and had to make assumptions as best she could in doing her task (see para 149 & 155 of the Judgment), the sum total of evidence, including bad odor generated by foul water, called for, in my views, discount rates greater than those adopted by Ms Lam (see para 158 to 160 of the Judgment). Hence, it is to the advantage of IO (and IO should have no cause for complaint) that the discount rates adopted by Ms Lam be applied by this Tribunal for making award of damages for loss of rental in Sarwin’s favour.

77.  Be it “no more than 1% for all relevant periods” (para 157 of the Judgment) suggested in IO’s closing submissions or “no more than 5%” for “such periods where there is no evidence of the severity of leakage at floor or ceiling” now suggested in this ground for review (neither of them having previously explored with Ms Lam at trial), IO’s counter-suggestion is, I think, wholly unrealistic and contrary to the totality of evidence adduced at trial.

78.  This ground is, I think, equally without merit. No review will be held for the same, nor shall IO be allowed to adduce unknown further evidence for the same.

Ground V(2) - Interest on damages awarded on erroneous bases

79.  This ground is identical to Ground V(2) in LDBM 360/2014 save that it is now directed against Sarwin’s alleged unjustifiable delay in prosecuting its counterclaim and interest awarded on damages payable to Sarwin.

80.  For same reasons given to Ground V(2) in LDBM 360/2014, I also fail to see any reason to allow IO to run this new point at review to the prejudice of Sarwin (when interest has already been awarded to Sarwin by this Tribunal in its awards of damages after parties had addressed interest orally in their closing submissions).

Ground VI - Scope of the Injunction Order Excessively Wide/ Injunction Order incapable of being enforced

81.  This ground is identical to Ground VI in LDBM 360/2014 save that it is now directed against 361 Injunction obtained by Sarwin. IO’s complaint is also identical.

82.  For those same reasons given by me on Ground VI in LDBM 360/2014, I decided to hold a review on this ground and, having heard parties on the same, I exercised my power of review to vary it as per parties’ agreed amended wordings at [12(2)] above.