TECH FOCUS LTD v. AUSTRIA PROPERTY MANAGEMENT LTD AND ANOTHER

CACV130/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 130 OF 2003

(ON APPEAL FROM DCCJ NO. 5287 OF 2002)

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J U D G M E N T

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Hon Rogers VP:

1. This is an appeal from a decision of his Honour Judge Muttrie given on 24 April this year, in which the judge gave judgment for the plaintiff and made an order in these terms:

"Pursuant to Order 34 r.5 of the Rules of the District Court, the defence filed herein on 9 November 2002 be struck out and judgment be entered for an injunction to restrain the 1st and 2nd defendants, agents and/or servants from causing or allowing water or otherwise unidentified fluid to seep or drop and/or percolate and/or escape from the roof area right above the plaintiff's property at Flat No. A on the 12th floor, including portion of the flat roof appertaining thereto, Yee Fung Building, No. 1 Village Road, Happy Valley, to the plaintiff's property as claimed in the statement of claim together with the costs."

Then there was interlocutory judgment for damages to be assessed.

2. I would say at once that the form of the injunction raises problems on the face of it. Although it is framed in terms of being a prohibitory injunction, it is in fact a mandatory injunction to prevent water leakage. It is very important when mandatory injunctions are framed that they are framed in precise terms so that everybody, including in particular the defendant, must know exactly what he must do and what steps he must take. In this case, all the defendant is told is that he has to stop water leakage. It may be - and it seems to have been - that the judge below was of the view that the water leakage was caused solely by a pipe and that the defendants had to take steps to prevent that water leakage. Be that as it may, things have turned out slightly differently.

3. The claim in this case was first brought in the Small Claims Tribunal on 8 April 2002. It was a claim in respect of water leakage. It was said that water was leaking from the roof of a building into the plaintiff's flat which is the top floor of the particular building. A claim was made against the incorporated owners and the property management company. It was transferred to the District Court on 6 August and a statement of claim was filed by the plaintiff on 21 October 2002. The defendants did not concede liability and a defence was filed in November of 2002.

4. On 6 December, Master Yu gave directions as to the further conduct of the case. One of the directions was that the parties should file with the Court and mutually exchange experts' reports as to the liability on or before 17 January 2003. Our attention has been drawn to correspondence which soon followed that. There was a letter of 9 December from the plaintiff's former solicitors in which they indicated that their client was prepared to allow the defendants' qualified agent to attend a joint inspection on 14 December, which was a Saturday. That offer was apparently ignored and never taken up.

5. The matter then arose again on 13 January 2003 when there was apparently a telephone call from the plaintiff's present solicitors who are a different firm, to the defendants' solicitors, which was followed up with a letter on the following day in which inspection was offered either on 4 or 5 February. The defendants' solicitors replied that they would prefer 5 February when they would attend with their client's expert. However, it is agreed that the defendants' expert did not attend, but the representatives of the management company did attend.

6. There were one or two interlocutory matters which were dealt with in the intervening time, including the request for better lists of documents from the defendants. On 28 March 2003, the plaintiff's solicitors served a Notice of Application for Pre-Trial Review under Order 34 r.3 of the Rules of the District Court. This included a checklist from the plaintiff showing the steps which had been taken and needed to be taken in relation to the action. The defendant was required to respond to that within 14 days.

7. We have then been shown today other correspondence. This correspondence is, to my mind, important. It was not shown to the judge below when he was considering the plaintiff's application which is the subject of this appeal. There is a letter from the defendants' solicitors dated 31 March 2003:

"We have instructed our surveyor to prepare expert report. Please confirm to us by return whether or not it is convenient to your client that our surveyor attends the premises in question to conduct the necessary survey on either 11th, 12th, 16th and 17th April 2003. The length of survey is estimated two hours."

8. The response to that was short and brief from the plaintiffs' solicitors:

"You would recall that, pursuant to our exchange of correspondence by a letter of 14th January 2003 and your letter of 15th January 2003, arrangements were made for your client's expert to inspect our client's property on 5th February 2003 from 6 pm to 7 pm. The inspection has duly taken place and we see no reason to disturb our client for another identical arrangement. Your client's request is therefore respectfully declined."

9. What followed thereafter on 15 April was the plaintiff's application for judgment in default of the defendants' solicitors filing their response to the notice. That response should have been filed four days earlier. That prompted two things on behalf of the defendants. On 16 April the defendants applied for a seven-day extension from 26 April to serve their Order 34 r.5 response. On 17 April, the following day, the defendants issued a summons for inspection of the property.

10. The judge below took a robust attitude. In many respects he may well have been justified in coming to the conclusion that the defendants had not done all they could to proceed with the action as quickly as possible. However, as I have already indicated, he was unaware at that time that the defendants, on 31 March, had sought inspection which would have taken place, possibly, on 11 April and that that had been declined for really no good reason at all. The judge had before him the plaintiff's own survey report and, from that, it would appear that he took the view that it was a simple question of a leak from the pipe which was causing the damage.

11. It seems from the expert's report, which we have seen, that there are questions to be decided as to what is in fact causing the leak to the plaintiff's premises. It may well be the illegal structures which are undoubtedly on the premises that are causing some or all of the difficulties.

12. Before us, Mr Acton-Bond, on behalf of the defendants, has argued strongly that the defendants' conduct was not contumelious and that the responsibility for any dilatory action on behalf of the defendants' solicitors should not be visited on the defendants.

13. I take a fairly simple view of this case. It does seem that there was some delay on the defendants' part but, in my view, it was by no means so serious that the defendants deserve to be driven from the judgment seat. The judge was not aware that the defendants had tried to gain access to the property which would have been necessary for them in order to be able to tell the court what needed to be done in the action. That was, to my mind, a very material matter. I cannot also leave out of the equation the fact that the defendants' report now shows that there are serious matters to be decided by the court as to what is in fact causing this leak. Until that is decided, the question of what must be done to cure the leak cannot be resolved.

12. In those circumstances I have no hesitation in saying that, in my view, the judgment must be set aside. In doing so I would not set aside the order of the judge below in relation to costs, simply because the defendants would have been seeking an adjournment in any event and would therefore have had to pay the costs of the hearing on 24 April in any event. I would therefore set aside the judgment below, which would mean that the defence is restored, but leave the order for costs unaffected.

Hon Le Pichon JA:

13. I agree.