LUI KWOK FAI v. WONG HAU SHEUNG

DCCJ 1031/2019

[2020] HKDC 1194

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1031 OF 2019

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ASSESSMENT OF DAMAGES

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INTRODUCTION

1.  This is an assessment of damages arising out of a water leakage case.

2.  In absence of notice of intention to defend and having abandoned his claim for injunction, the plaintiff obtained an interlocutory judgment against the defendant with damages to be assessed[1].  The present assessment of damages is held in pursuance of that judgment.

3.  The plaintiff commenced the present proceedings against the defendant on 28 February 2019.  The action is based on (1) nuisance[2], (2) negligence[3], (3) breach of statutory duty[4], and (4) breach of the deed of mutual covenant[5]. According to the Statement of Claim[6], the plaintiff claimed damages under the heads of (1) the loss of rental income, (2) repair costs, and (3) the costs of expert report. 

4.  While the plaintiff’s opening skeleton submission was prepared by his solicitors Messrs Ivan Lee & Co, the plaintiff was represented by Mr Acorn Lau of counsel at the assessment hearing. The defendant, who was not legally represented, did not attend the hearing. Upon perusing the 5^th Affirmation of Chan Ngo Yin filed herein on 9 December 2020, I was satisfied that the defendant has been duly notified of the present assessment of damages, as well as the assessment hearing.  Accordingly, I decided to proceed with the hearing in the defendant’s absence.

ANALYSIS OF EVIDENCE

5.  At the assessment hearing, Mr Lau called the plaintiff as a factual witness.  The plaintiff adopted his witness statement filed on 29 June 2020 as examination in chief and confirmed the accuracy of the documents attached thereto.  The plaintiff also answered questions raised by me and thereafter was re-examined by Mr Lau.  His evidence was unchallenged.  On the whole, I find nothing inherently improbable about the plaintiff’s evidence.

6.  The plaintiff also relies on an expert report (“the Expert Report”)[7] prepared by Mr Hau Tung Ngai of Hong Kong Building Inspection & Structural Diagnostic Ltd.  In pursuance of the order made by Master Rita So dated 2 July 2020[8], the Expert Report may be adduced as evidence in chief without calling the marker thereof.

7.  After perusing Mr Hau’s curriculum vitae[9]annexed to the Expert Report, I am satisfied that he is qualified to give expert opinion in respect of the cause of the damages to the plaintiff’s flat, the remedial works that needed to be carried out, and the costs of such works.  As indicated in the Expert Report, two onsite inspections were taken place on 24 October 2017 and 17 November 2017[10].  On the whole, I accept the expert opinion to be both plausible and reasonable.

8.  I now turn to the plaintiff’s evidence and the expert opinion.

THE PLAINTIFF’S CASE

9.  The plaintiff is the registered owner of a flat located at the 1^st floor of No 1G, Sands Street, Hong Kong.  The defendant is the registered owner of the flat at the 2^nd floor immediately above the plaintiff’s flat.

10.  The plaintiff’s flat was partitioned into two rooms for lease.  Following the plan annexed to the Expert Report[11], I will refer to the rooms as “Room 1” and “Room 2”.  The plaintiff confirmed the accuracy of the said plan[12].

11.  In pursuance of a tenancy agreement dated 4 June 2015[13], Room 1 was rented to a tenant for a monthly rate of $7,800 with a 2-year term from 11 June 2015 until 10 June 2017.

12.  In or about early January 2017, water was found in the corridor of the plaintiff’s flat and Room 1.  The plaintiff suspected that the water seepage was caused by the leakage of the toilet of the defendant’s flat. He tried to contact the defendant for repair, but in vain.  In October 2017, he engaged the expert for inspection.  His former solicitors had written to the defendant for her permission to enter into her flat for leakage testing.  The defendant did not respond[14].

13.  The seepage problem in Room 1 was very serious.  A large area of water strain, mold, spalling was found on the room’s ceiling, and there were also molds and seepage in the room’s beam ceiling and wall.  There were spalling and water strain under the beam ceiling, as well as water drops and dripping on the ceiling near the balcony.  The plaintiff said that the leakage problem had seriously affected the well-being of the tenant.  As a result, the tenant refused to renew the lease after the termination of the tenancy agreement[15].

14.  The plaintiff tried to engage an estate agent for the renting out of Room 1.  However, the estate agent told the plaintiff that, unless the water seepage problem was solved, there was no chance that a reasonable tenant would be willing to rent the room.  As a result, Room 1 was left vacant for 26 months between July 2017 and August 2019[16]. 

15.  At the hearing, the plaintiff testified that, in the middle of 2017, he complained to Food and Environmental Hygiene Department for the water leakage problem.  He had subsequently engaged a contractor to undertake some remedial works in the flat.  While the conditions of the flat were improved after the works, the water leakage problem has not stopped completely.

16.  The plaintiff moved back into the flat in September 2019.  In the present proceedings, the plaintiff does not claim any loss of rent in respect of Room 1 after September 2019[17].

EXPERT OPINION

17.  According to the Expert Report, the water leakage caused damages to two areas of the ceilings, partition walls, and ceiling beams in Room 1[18], the ceilings and walls in both Room 2 and the corridor[19], and the ceilings in the balcony of Room 1[20]. The total costs of remedial works amounted to $44,100, the details of which are as follows:-

Item	Works	Claimed amount
1.	Opening costs (such as insurance and safety works)	$4,500
2.	Disposal of debris	$7,400
3.	Cement and steel bar works	$17,000
4.	Plastering and painting works	$13,200
5.	General cleaning	$2,000
	Sub-total:	$44,100

DISCUSSION

(1) Loss of rents

18.  It was submitted that loss of rents is recoverable as damages consequent upon the injury to the property by the nuisance[21]. I have no query about this proposition.

19.  Under this head, the plaintiff’s claim is based on the representation given by the estate agent that Room 1 could not be rented out unless the water leakage problem was solved.  However, the estate agent has given neither witness statement nor oral testimony at the hearing.  This is clearly hearsay evidence.  While such evidence is admissible in a civil court in Hong Kong, I am afraid that not very much weight can be attached to it. 

20.  That being said, I notice that it was stated in the Expert Report that the plaintiff’s premises were uninhabitable[22]. I have carefully considered the pictures of the flat taken on 24 October 2017[23], which the plaintiff had confirmed their accuracy in his witness statement.  The pictures clearly show that the plaintiff’s flat was in devastated conditions at the material times.  I accept that such an adverse state would make the flat unfit for habitation.  Accordingly, based on the pictures annexed to the Expert Report, I find as a matter of fact that the plaintiff would not be able to lease the flat out unless some remedial works were to be carried out. 

21.  The plaintiff claims for the loss of rents for 26 months, totaling $202,800 (namely $7,800 per month x 26 months).  There is no evidence before me challenging either the said period of the rental loss or the lack of steps taken by the plaintiff to mitigate the loss.  Furthermore, the plaintiff is also willing to give tax credit, which he would otherwise have to pay for the rental income.  According to the calculation of the plaintiff’s solicitors[24], the relevant property tax for the period between July 2017 and March 2018 was $7,862.40, the period between April 2018 and March 2019 was $10,670.40, and the period between April 2019 and August 2019 was $4,118.40.  Accordingly, the total tax credit amounts to $22,651.20.  At the hearing, the plaintiff confirmed that the said calculation was accurate.

22.  The total amount of the loss of rental income would therefore be $180,148.80, namely $202,800 - $22,651.20.  I would award the said amount accordingly.

(2) Repair works

23.  Generally speaking, damages for costs of repair and reinstatement is recoverable for physical damage caused to the property by nuisance[25].

24.  In the present proceedings, although the plaintiff testified at the hearing that some remedial works had been done, there is no evidence before me as to the costs of such remedial works.  Nor is there any evidence that the remedial works recommended by the expert had been actually carried out and costs had been actually incurred. That being said, I accept that, upon proof of the tortuous act causing physical damage to the property, the liability of the defendant to compensate the plaintiff accrues.  The fact that the repair is yet to be carried out is no bar to the claim for the costs of it[26].

25.  Accordingly, I am satisfied that the plaintiff is entitled to claim against the defendant for the costs of the remedial works.

26.  The claimed amount as stated in the Expert Report ($44,100) is not challenged.  There is no basis to suggest that the said amount was excessive or unreasonable.  I would therefore award the full amount accordingly.

(3) Costs of the Expert Report

27.  In the Statement of Claim, the plaintiff also claimed the costs of the Expert Report as part of his loss and damages[27]. I have difficulty in regarding the said costs as part of the plaintiff’s damages.  In my view, the costs of the Expert Report were clearly incurred in the contemplation of litigation, and they were not damages directly caused by any wrongdoing of the defendant. 

28.  In the plaintiff’s opening skeleton submission, I am not referred to any authority in support of the contention that the costs of the Expert Report can be claimed as parts of the plaintiff’s damages.

29.  In this regard, I find it more appropriate to award the costs of the Expert Report as parts of the plaintiff’s disbursement, instead of parts of his loss and damages.  I will therefore consider this head when I deal with the plaintiff’s costs of the present assessment proceedings.

(4) Summary

30.  Accordingly, I would assess the plaintiff’s damages in the present action at the sum of $224,248.80 (ie, $180,148.80 + $44,100).

INTERESTS

31.  In the plaintiff’s opening skeleton submission, the plaintiff seeks interests of the awarded sum from the date of the Writ of Summons (ie 28 February 2019) to the date of the judgment (ie 20 August 2019) at 1% above HSBC’s best lending rate, and at judgement rate thereafter until payment.

32.  I find the said submission reasonable and would grant an order accordingly.

COSTS

33.  Costs should follow the event.  I order that the defendant should pay the plaintiff’s costs of these assessment proceedings.

34.  In the plaintiff’s statement of costs, the plaintiff claims a total sum of $111,601.  I find the sum excessive and disproportionate.  In my view, this is a simple and uncontested water seepage case.  I cannot see any justification for the solicitor to engage 14 hours in communication.  As counsel has been instructed, the solicitors’ professional works (totaling 14.75 hours) in drafting and perusing documents, as well as preparing for the hearing, also seem to be on a high side.  On a broad brush approach, I fix the plaintiff’s costs at $50,000.

35.  As I said, I am also prepared to award the costs of the Expert Report as part of the plaintiff’s disbursement. The expert charged $25,000, which I cannot say to be outside the ambit of reasonableness.  I will therefore award the amount in full.

36.  Accordingly, I fix the plaintiff’s costs and disbursement of these assessment proceedings at $75,000 (ie $50,000 + $25,000).

DISPOSITION

37.  For the reasons as aforesaid, I enter final judgment in favour of the plaintiff against the defendant in the sum of $224,248.80 together with interests thereon at 1% above HSBC best lending rates from 28 February 2019 to 20 August 2019, and at judgment rate thereafter until payment.

38.  I also order the defendant to pay the plaintiff’s costs of the assessment of damage (inclusive of all costs reserved and the costs of the Expert Report) summarily assessed at $75,000, payable forthwith.