886HK LTD AND ANOTHER v. AMJAD NADEEM

DCCJ 3113/2012

[2018] HKDC 405

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3113 OF 2012

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ASSESSMENT OF DAMAGES

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Introduction

1.  This is a water seepage case.  Judgment on liability has been entered against the defendant.  This is the assessment of damages.

2.  At all material times, the 1^st plaintiff was and is the registered owner and occupier of Flat A on 7th Floor, Harilela Mansion, No 81 Nathan Road, Kowloon, Hong Kong (“7A”).  The 2^nd plaintiff was and is a director of the 1^st plaintiff and the occupant of 7A.  The defendant was and is the registered owner of Flat A on 8th Floor, Harilela Mansion (“8A”).

3.  On 6 September 2012, the plaintiffs commenced these proceedings for (a) nuisance; (b) negligence; (c) the principle of Rylands v Fletcher; and (iv) breach of the relevant deed of mutual covenant.

4.  On 17 July 2013, judgment on liability (“the Judgment on Liability”) was entered against the defendant.

5.  The plaintiff has filed his list of documents, witness statement, and expert reports for the assessment of damages.  The defendant has failed to comply with the directions given by the court in relation to the filing of list of documents, witness statement and expert evidence, and therefore was debarred from adducing any evidence in the assessment of damages.

6.  The plaintiff has produced 2 expert reports made by Mr Cheung Wai Sum Simon (“the Expert”) dated 1 September 2012 (“the 1^st Report”) and 19 July 2014 (“the 2^nd Report”) respectively in support of his case.  Previously, the court has made an order directing that the Expert should attend the assessment hearing for cross-examination by the defendant.  At the beginning of the assessment hearing, both Mr Ryan Law, counsel for the plaintiff, and Mr Rowan Hunter, counsel for the defendant, have agreed that it would not necessary to have oral evidence from the Expert.  I therefore directed that the 2 expert reports be read as evidence in the assessment hearing and there would be no need for Expert to attend the hearing to give oral evidence.

The parties’ respective cases

7.  The plaintiffs claim that as a result of the water seepage problems, the plaintiffs have the pecuniary loss as shown below.  The parties’ respective positions in respect of the pecuniary loss claimed by the plaintiff are summarized in the table below:-

	Item	Plaintiffs’ claim	Defendant’s position
1.	Renovation Expenses in 2010 incurred by the 1st plaintiff	HKD 37,500	No indication
	Renovation Expenses in 2012 incurred by the 1st plaintiff
2.	Removal of defective items and dumping cost	HKD 50,000	Should be HKD 30,000
3.	Removal of defective wallpapers (3 rooms, living and dining room including the ceilings)	HKD 15,000	The total under this head and under item 5 below should be HKD 40,000
4.	Pest control and deodorization	HKD 22,000	Not disputed
5.	Replacement of wallpapers (including new wallpapers)	HKD 75,000	See item 2 above
6.	Replacement of surfaces of the ceilings, including the light trough	HKD 141,000	Should be HKD 60,000
7.	Follow up the power supply, replacement of burnt wires and sockets (to be inserted in rubber hoses and embedded into walls)	HKD 170,000	Disputed
8.	Replacement of wooden floor (including labour and materials)	HKD 122,000	Should be HKD40,000
9.	Replacement of 4 split-type air conditioners	HKD 52,000	Disputed
10.	Third party insurance	HKD 4,800	Not disputed
	Total amount of pecuniary loss claimed by the 1st plaintiff	HKD 689,300	HKD196,800
	Expenses in relation to alternative accommodation incurred by the 2nd plaintiff
11.	Moving and storage cost from 8 October 2012 to 7 November 2012	HKD 4,250	Disputed
12.	Moving and storage cost from 8 November 2012 to 29 November 2012	HKD 4,250	Disputed
13.	Rentals for alternative accommodation Monthly rental of HKD 30,000 x 2 months	HKD 60,000	Disputed
14.	Commission to estate agent	HKD 17,500
	Total amount of pecuniary loss claimed by the 2nd plaintiff	HKD 86,000	Nil

8.  The 2^nd plaintiff further claims a non-pecuniary loss in the sum of HKD 100,000 in respect of the distress, discomfort and inconvenience suffered by her as a result of the water seepage problems.  This item is not disputed by the defendant.

The principles

9.  The principles below are well established and not in dispute:-

(a)  In a case of nuisance which causes physical damage to the land, the damages could be measured by the cost of replacement/reinstatement or the cost of abating the nuisance[1].

(b)  Apart from the physical damage to the land a nuisance may cause, there can also be damages for the annoyance, inconvenience, discomfort, or even illness to the claimant. Recovery in respect of these principally non-pecuniary losses is allowable and can be regarded as part of the normal measure of damages[2].

(c)  Rules of the District Court, Order 37 rule 6 provides:-

“Where damages are to be assessed (whether under this Order or otherwise) in respect of any continuing cause of action, they shall be assessed down to the time of the assessment.”

(d)  A claim of nuisance is a continuing cause of action and by virtue of Order 37 rule 6, the damages could be assessed from the date of the nuisance occurred down to the date of the assessment[3].

10.  The issue before the court is applying these principles to the facts as found by this court, what should be the appropriate quantum of damages.

The evidence

11.  The 2^nd plaintiff has given evidence in support of the plaintiffs’ case in the assessment hearing.  The gist of her evidence is as follows:-

(a)  Since mid-2008, water seepage problems were found in 7A, which continued throughout 2008 until July or August 2008.  The water seepage problems happened again in the end of 2008 and until June or July 2010.  After that, the 1^st plaintiff repaired the affected areas and the repair costs was about HKD 37,500.  However, the water seepage problems resurfaced in late 2010 or early 2011 and continued until about October or November 2011.

(b)  Since about May 2012, the defendant has carried out decoration works in 8A.

(c)  Since about June or July 2012, the water seepage has appeared again and continues.  The plaintiffs’ solicitors wrote to the defendant, inviting him to conduct joint inspection of 7A and 8A by professional building surveyor(s). However, the defendant has not given any reply.

(d)  On 20 July 2012, 24 and 9 August 2012, the Expert inspected 7A and 8A.

(e)  The plaintiffs have also lodged complaints with the Building Department (“BD”) and the Food and Environmental Hygiene Department (“FEHD”).  The joint office of the BD and FEHD had carried out inspection at 8A and found that the water supply pipes serving 8A were defective, causing the water seepage problems.  The departments also referred the case to the Water Supplies Department (“WSD”) which requested the defendant to fix the water supply system and solve the water seepage problems.

(f)  Despite the repeated requests by the various government departments, the defendant has still failed to take any remedial action to stop the water seepage problems.

(g)  On 9 August 2012, there was a crack in the water supply system of 8A, which caused water seepage to other areas of 7A.  The defendant took no action upon it.  The water seepage was recorded in the expert reports.

(h)  At a time between 13 and 15 August 2012, there was a big burst in the water supply pipes serving 8A and water flooded into 7A (“the Water Flooding Incident”).  The WSD sent staff member to visit 8A and 7A.  On or about 15 August 2012, the WSD shut down the water supply to 8A and the situation was improved.  However, two or three days later, the defendant re-opened the water supply without the permission of the WSD.  7A was flooded again.

(i)  On about 29 August 2012, the WSD cut the water supply to 8A and the situation was improved.

(j)  The Water Flooding Incident lasted from 13 August to 15 August, and 17 (or 18) August to 29 August 2012, about 14 days.

(k)  The water flooded into 7A in the Water Flooding Incident was seawater as there were traces of salt.

(l)  The Master Bedroom, Bedroom 1 and corridor[4] were very severely affected.  Although the Bedroom 2 and Living and Dinning room were not as equally severely affected, their conditions were still very seriously affected.

(m)  There was water dripping along the walls of the rooms, like waterfall.  Even Flat 6A, the flat below 7A, complained about the water flooding.

(n)  Water flooded into 7A and could be seen everywhere.

(o)  As a result of the water flooding, the wooden flooring was lifted and twisted in all the rooms including Bedroom 2 and the Living and Dining Room.

(p)  The wall papers in all the rooms including Bedroom 2 and the Living and Dining Room were wet and damaged.

(q)  The light-fitting in all the rooms including Bedroom 2 and the Living and Dining Room was damaged. Electricity supply to 7A was cut.

(r)  A lot of seawater went into the air-conditioners.

(s)  As a result of all these, 7A was rendered uninhabitable as there were mould, bugs and flies, the wooden flooring was lifted and twisted and there was no electricity supply.

12.  Based upon the inspections on 20 July 2012, 24 July 2012 and 9 August 2012, the Expert is of the opinion that there were water leakages from 8A to the Master Bedroom living room and Bedroom 1 in 7A.  His findings are shown on the Plan.

13.  In the 2^nd Report, the Expert gives an estimation that the reasonable amount of the costs of the remedial works carried out by the 1^st plaintiff in 7A would be about HKD 580,950.

Analysis

14.  Mr Hunter accepts that the defendant is liable to the plaintiff in respect of the water seepage problems, including the Water Flooding Incident. 

15.  The main point taken by Mr Hunter is that the 2^nd plaintiff’s evidence is not supported by the expert evidence.  Mr Hunter submits that in accordance with the expert’s findings, only Bedroom 1 and the Master Bedroom were affected by the water leakage.  That being the case, it would not be necessary to renovate the whole unit.  Further, Bedroom 2 and other areas inside the unit would still be usable and there would be no need for the 2^nd plaintiff to find any alternative accommodation.  Mr Hunter submits that the plaintiffs have exaggerated the damage caused by the water seepage problems.

16.  With respect, I am unable to accept Mr Hunter’s evidence, for he has completely ignored the Water Flooding Incident.  The Water Flooding Incident occurred subsequent to the inspections conducted by the Expert, and hence the incident was not covered by the expert reports.  However, there is no dispute that the Water Flooding Incident did occur and the defendant is liable to the plaintiff in respect of this.  The Water Flooding Incident has caused severe damage to 7A.  According, there is no merit in Mr Hunter’s submission that the plaintiff’s evidence is not supported by the expert’s reports.  In my view, the 2^nd plaintiff’s evidence is supported by the undisputed fact that the Water Flooding Incident as mentioned by the 2^nd plaintiff did occur and the defendant is liable to the plaintiffs in respect of this.

17.  I am of the view that the 2^nd plaintiff is an honest and reliable witness.  Her evidence is cogent and supported by the documents produced by the plaintiffs.  I accept her evidence.

18.  I accept the expert’s evidence given in the 1^st Report.  In respect of the estimation of the remedial costs in the 2^nd Report, the Expert has not provided the data or information which forms the basis of his estimation in the report.  Without knowing these data or information, one would not be able to examine whether his estimation is on a sound basis or not.  That being the case, the 2^nd Report is of limited use.  I would not attach much weight to the 2^nd Report.

19.  In respect of the pecuniary loss suffered by the 1^st plaintiff, I am aware of the fact that the only evidence in support of item 1 in paragraph 7 above, ie the renovation expenses of HKD 37,500 incurred by the 1^st plaintiff in 2010 for rectifying the water leakage problems found from 2008 to 2012, is the 2^nd plaintiff’s evidence and there is no document in support of this item.  However, the defendant does not challenge the credibility or the reliability of this part of the 2^nd plaintiff’s evidence during cross-examination.  I accept the 2^nd plaintiff’s evidence on this claim and allow this item. 

20.  Further, on the basis of the evidence accepted by me, I am satisfied that the renovation expenses as claimed by the 1^st plaintiff under items 2 to 10 in paragraph 7 above are expenses incurred as a result of the water seepage problems (including the Water Flooding Incident), in respect of which the defendant is liable to the plaintiff.  I allow these items in full.

21.  Mr Law submits that the total of items 2 to 10 in paragraph 7 above is HKD 651,800, which is close to the figure estimated by the Expert in the 2^nd Report, ie HKD 580,950, and hence the 1^st plaintiff’s claim is reasonable.  As said in the above, the 2^nd Report is of limited use and hence Mr Law may not be able to derive much assistance from the 2^nd Report.  However, since I have found that the 1^st plaintiff did incur these expenses as a result of the water seepage problems in respect of which the defendant is liable to the plaintiff, that would be sufficient for awarding these sums to the plaintiff.

22.  I am also satisfied that the expenses in relation to alternative accommodation as claimed by the 2^nd plaintiff under items 11 to 14 in paragraph 7 above are reasonable.  I also allow these items.

23.  In respect of the non-pecuniary loss of HKD100,000 claimed by the 2^nd plaintiff, the defendant does not dispute this.  I allow this claim.

24.  Accordingly, the damages awarded to the plaintiffs are as follows:-

(a)  Damages awarded to the 1^st plaintiff: HKD 37,500 + HKD 651,800 = HKD 689,300

(b)  Damages awarded to the 2^nd plaintiff: HKD 86,000 + HKD 100,000 = HKD 186,000

25.  Accordingly, I would make an order awarding the aforesaid sums to the plaintiffs.  There should also be interest on the awards at 1% above the best lending rate of HSBC from the date of writ until the date of this judgment, and thereafter at the judgment rate until full payment of the judgment sums.

26.  The normal rule is costs following the event.  I would therefore make a costs order nisi that save and except the costs covered by the Judgment on Liability, costs of these proceedings (including all costs reserved, if any) be to the plaintiffs, with a certificate for counsel, to be taxed if not agreed.

Conclusion

27.  I make the order as set out in paragraphs 25 and 26 above.

28.  I thank Mr Law and Mr Hunter for assistance provided to this court.