THE INCORPORATED OWNERS OF GORDON TERRACE v. SHEN YANG LIEN AND ANOTHER

LDBM 291/2011

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO 291 OF 2011

--------------------

--------------------------------------------------------

REASONS FOR DECISION ON REVIEW

--------------------------------------------------------

1. This is the respondents’ application to review my judgment dated 27 August 2014 (“the Judgment”). The application is opposed by the applicant.

The Judgment

2. In this action, the respondents counterclaimed against the applicant for over $2 million alleging inter alia that the applicant had failed to maintain the waterproofing layer on 6A Flat Roof [1] causing water damage to the respondents’ flat below.

3. At the trial, the respondents admitted that they had installed the Elevated Roof [2] on top of the original roof on 6A Flat Roof.  Their case was that the original waterproofing layer (on 6A Flat Roof) had already been defective and the Elevated Roof was installed in 2007 to mitigate the leakage.  They argued that the defect (of the original waterproofing layer) was caused by the applicant’s failure to properly maintain it. 

4. It is common ground that the applicant had in fact done nothing over the years to maintain the original waterproofing layer.  The applicant had been operating upon the understanding (confirmed by legal advice) that it was the respondents’ duty as the owner of 6A Flat Roof to maintain the waterproofing layer there. 

5. By the Judgment, I held that the waterproofing layer on 6A Flat Roof is a “common part” of the estate and that the applicant is responsible for its maintenance and repair under section 18 of the Building Management Ordinance (Cap 344) and as provided in the applicable DMC.[3]

6. I nonetheless dismissed the respondents’ counterclaim, principally because:

(a)     I rejected the respondents’ case that the Elevated Roof was installed in 2007 after water seepage had occurred.[4]

(b)    Instead, I found as a fact that (i) the respondents had installed the Elevated Roof sometime before March 2005; and (ii) the imposition of the Elevated Roof had caused the original waterproofing layer to crack along the edges enabling water to seep into the respondents’ flat causing the water damage documented in the expert reports.[5]

(c)     There was insufficient evidence to support the respondents’ contention that lack of maintenance of the original waterproofing layer on 6A Flat Roof was a contributing cause to the water seepage problem at the respondents’ flat.[6]

The Review

7. According to the affidavit filed by the respondents’ solicitor (“the supporting affidavit”), the respondents seek to challenge the above principal holdings in this review.

8. Section 11A of the Lands Tribunal Ordinance (Cap 17) empowers the Lands Tribunal to review its decisions, but the tribunal may only invoke such power within 1 month from the date of the original decision.

9. An application to review is a two-stage process.  First, the tribunal considers whether the application should be entertained.  If the tribunal decides that there should be a review, then the substantive review will proceed.[7]

10. The respondents’ application and the supporting affidavit were filed on 19 September 2014.  In §4 of the affidavit, it was stated that:

“Additionally, the Respondents respectively seek leave to adduce new evidence, being a Quotation issued by Kingline Contracts Co Ltd in May 2007 for the Elevated Roof works.  A copy of the invoice is exhibited therein as “SD-1”.  Mr Wang will file an affirmation deposing to the authenticity of the document and his recovery of the invoice. The Respondents respectively ask for leave to adduce the Quotation.”

11. On 20 September 2014, I received a letter from the applicant’s solicitors complaining that:

“As the Instructed Counsel is out of town and we need more time to prepare our written submission to address the matters raised in the Respondents’ Application for Review, we humbly request the Honourable Court to grant us an extension of time…”

12. Notwithstanding the recent decision of the Court of Appeal in 馬穗端,[8] it remains unclear if the tribunal has the jurisdiction to extend the deadline for the first stage of the review process.  To give the applicant an opportunity to file the further affidavit and to give the respondents a fair chance to be heard, I decided to set down the review for argument by the end of the 1-month period. 

13. After hearing the parties fully on 24 November 2014, I dismissed the review application with costs.  I said I would explain myself in a written decision and these are my reasons.

Discussion

14. The respondents seek to review the Judgment by re-submitting on the evidence at trial and by means of new evidence. 

15. For the purpose of this review, the respondents have combed through the evidence again with a view to identify each and every bit which may be said to support their contention that the Elevated Roof was installed in 2007.  Notwithstanding the effort, I am not convinced that I was wrong.

16. In deference to the submissions of Ms Cheung (for the respondents), I have the following observations:

(a)     As the trial judge, I have to make findings based on the evidence.  I cannot be bound by the parties’ contentions or their evaluation of the evidence and have to come to my own independent decision.  As it turns out in this case, I have rejected both parties’ case on the timing of the Elevated Roof and found as a fact that it was constructed sometime before March 2005 (see §§90-101 of the Judgment).

(b)    It is wrong for the respondents to think that Mr Wong “has … independently given evidence that the Elevated Roof was erected some time in 2007” or that it was common ground at the trial that the Elevated Roof  had been installed in 2007. 

As I have noted in §101 of the Judgment, Mr Wong’s evidence was that the respondents had installed the Elevated Roof in the summer of 2006.

The applicant was entitled to cross-examine Mr Wang on his assertion that the Elevated Roof had been installed in 2007.  The fact that the questions were framed on the basis of the respondents’ case did not mean that the applicant had abandoned its own case.

(c)     The new-found faith on the evidence of Mr Wang and Mr Wong is misguided.  As I have found in §20 of the Judgment, I generally take their evidence with a pinch of salt for the reasons mentioned there.  I have further explained why their evidence specifically on the timing of the Elevated Roof cannot be relied on (see §§91-94 & 101 of the Judgment).  Significantly, the respondents have not attempted to deal with my queries on Mr Wang’s evidence (noted in §§92-99 of the Judgment) at the review.

(d)    I have dealt with the letters at Bundle 434 and 437 in §30(g) of the Judgment and discussed Mr Wang’s assertion that he had paid a security deposit for the works concerning the Elevated Roof in §93 of the Judgment.  These evidence, properly appreciated, do not quite corroborate the respondents’ case.

(e)     The respondents now try to argue, with reference to the photograph at Bundle 444a, that “the waterproofing at the vertical wall [of the staircase hood]” was part of the Elevated Roof (see §§7 and 14(6) of the supporting affidavit). 

This new argument is against the weight of the evidence that the respondents had initially omitted to waterproof the edges when they constructed the Elevated Roof (see §§105-106 of the Judgment).  They only subsequently applied waterproof coating along the edges (see §§107-108 of the Judgment).  The additional coating is quite apparent when one compares the photographs at Bundle 457 and 458, and compares the photograph at Bundle 444a and 218-219.[9] So, the white skirting towards the bottom of the vertical party wall cannot be part of the original construct of the Elevated Roof.

17. The respondents also seek to adduce new evidence at the review in terms of the quotation exhibited in the supporting affidavit.  The applicant opposes the introduction of new evidence.

18. There is no dispute that the Lands Tribunal has the power to receive new evidence in a review.  Section 11A(4) provides that:

“The Tribunal may, in any review, hear and receive any evidence it thinks fit for the purpose of determining the issue between the parties.”

19. Ms Wong (for the applicant) has asked me to apply Ladd v Marshall to reject the new evidence. 

20. In China Light & Power Co Ltd v Commissioner of Rating and Valuation (No 2) [1997] 4 HKC 500, HH Judge Cruden (together with the Members there) advocated a more liberal approach on the admissibility of new evidence in a review.  This is what they said (at 510H):

“The Tribunal considered the principles the Court of Appeal follows in determining applications to adduce new evidence. Reference was made to the authorities … including the threefold special circumstances test set out in Ladd v Marshall [1954] 1 WLR 1489. There are that the evidence could not have been obtained with reasonable diligence for use at the trial; if given would probably have an important but not necessarily decisive effect on the result; and is apparently credible.

The Tribunal held that those principles were a useful basis on which to approach the applications to adduce new evidence but that its discretion should be exercised more liberally…

To return to Ladd v Marshall, the Tribunal’s more liberal approach has on occasion admitted new evidence, which could have been adduced at the trial.  The second Ladd v Marshall condition, that the new evidence would probably have an important but not necessarily decisive influence on the result, admits of less flexibility.  Rarely will it be just to receive new evidence, which will not affect the outcome of the trial.  Invariably it would entail unnecessary expense and possibly delay.  In at least some circumstances, the admission of such evidence, could amount to an improper exercise of a judicial discretion.”

The justifications for a more liberal approach were explained at 505H and 506A of that judgment.

21. Applying the correct test, I am not satisfied that the respondents have overcome the second and third hurdles.

22. Despite the statement in §4 of the supporting affidavit (which was filed in September 2014), no further affidavit evidence was filed by the respondents (be it from Mr Wang or someone else) to depose to the authenticity of the quotation and the circumstances of its recovery.[10] In the absence of such confirmatory evidence, I am not satisfied that the new evidence is even credible.

23. More importantly, that new evidence is merely a quotation.  It is wrong for the respondents to treat it as an invoice (see §4 of the supporting affidavit). The respondents had adduced invoices from the same contractor at the trial for the other works done (eg the invoice at Exhibit R5 for the $20,500 claimed; the invoices at Bundle 76-77 for the works mentioned in §107 of the Judgment).  The presentation of a quotation is no proof that the works mentioned therein were in fact done.  The quotation (even if adduced) would not have made a difference. 

24. The respondents have advanced other arguments (at §§18-21 of the supporting affidavit) building upon their primary contention that the Elevated Roof was constructed in 2007.  They have still not addressed my concern (elaborated in §§146-149 of the Judgment) that there is insufficient evidence to establish that lack of maintenance of the original waterproofing layer had anything to do with the water seepage problem.  As their primary contention does not get off the ground, these further arguments are of no consequence.

Conclusion

25. For the above reasons, I dismissed the respondents’ review and ordered the respondents to pay the applicant’s costs to be taxed on the District Court scale if not agreed with certificate for counsel.