TEXCO HOOK AND EYE TAPE LTD v. CHAN WAI MING AND ANOTHER

HCA 2480/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2480 OF 2009

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BETWEEN

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REASONS FOR DECISION

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Introduction

1.  The plaintiff applied for a variation of the consent order dated 23 June 2010.  I dismissed it at the end of the hearing on 18 November 2010.  Below are the reasons for the decision.

Background

2.  The plaintiff is the registered owner and occupier of a shop unit located on the Ground Floor of a multi-storey building in Shamshuipo (“the Shop”).  The 2^nd defendant (“D2”) is the incorporated owners of that building.

3.  The 1^st defendant (“D1”) is the registered owner and occupier of the unit on the floor immediately above the Shop (“D1’s unit”).  D1’s unit consists of a residential unit and part of the uncovered flat roof.

4.  The plaintiff complains there has been water leakage into the Shop and blames D1 and/or D2 for causing it, or for permitting or suffering it.  This action was commenced in December 2009 as a result.

5.  Both defendants deny liability.

The Consent Order

6.  Further to commencing this action, the plaintiff took out an application in February 2010 seeking an order in effect that D1 should stop causing, permitting or suffering the water leakage into the Shop.

7.  At the end of hearing on 23 June 2010, the plaintiff and D1 sensibly consented to an order which in brief provided for a time-schedule for:-

(a)   the appointment of experts on water leakage;

(b)   a joint-examination by the experts of D1’s unit and the Shop for the purpose of giving an expert opinion as regards the cause of the water leakage into the Shop;

(c)   carrying out necessary repair works to D1’s unit.

(“the consent order”)

8.  The part of the consent order concerning para. 7(b) above is relevant to this application.  It reads:-

“... D1’s expert, in conjunction with the Plaintiff’s expert in water leakage and construction matters … shall …

… jointly commence the conduct of all requisite tests, examinations and inspections of [D1’s unit] (including the kitchen therein) with a view to establishing the source and cause of the water leakage and all such tests, examinations and inspections are to be completed with twenty one days of the afore-mentioned appointment and instruction of [D1’s expert] … ” (emphasis supplied) (para. 1(b)(ii) thereof).

9.  The relevant legal principles relating to orders or judgments obtained as a result of the litigating parties’ consent are:-

“A consent order is generally considered to be contractual in nature, and will only be set aside in exceptional circumstances. In Tsang Iu Hung v. Tsang Tak Wah and Another [1993] 2 H.K.C. 471, a consent order was upheld, notwithstanding that its terms were onerous. The court held that such an order would only be set aside as a consequence of unconscionable conduct such as unfair prejudice, domination, or victimization. … ” (Hong Kong Civil Procedure 2011, Vol. 1, para. 42/5A/4).

10.  The learned authors of Chitty on Contracts (1999) 28^th Ed. wrote:-

“A compromise may by consent be made the subject of a judgment or order of the court. A consent judgment will ordinarily extinguish by merger the contract of compromise, but a consent order will not have this effect. It does not itself constitute a contract, but it is sufficient evidence of the contract of compromise on which it is based, and such contract is no less a contract and subject to the incidents of a contract because there is superadded the command of a judge. … ” (para. 23-024).

11.  The parties have not referred to any direct authority on whether the same legal principles should apply to the variation(s) of consent orders and judgments.  There is no good reason to think that the principles should be different.

12.  The parties’ skeleton submissions for use at the hearing of 23 June 2010 show their respective stance at the time.  The plaintiff’s case is that the interim relief was needed and there was no arguable defence.  On the other hand, D1 opposed the application on the ground final relief which intruded into D1’s property rights (which was what the plaintiff’s summons sought in effect) should not be granted unless a strong prima facie case had been shown, and the court should feel a high degree of assurance the plaintiff would succeed at trial before granting the relief.  According to D1, this has not been shown.

13.  It is worth noting the scope of the consent order is quite different from the relief sought by the plaintiff’s summons. The parties have not disclosed the rationale behind the consent order.  But its terms are consistent with the spirit of the Civil Justice Reform and appear to aim at promoting a speedy (or at least speedier) resolution of the dispute; a “give-and-take” approach can also be inferred from those terms.

14.  In these circumstances, I conclude that the consent order is contractual in nature.  At the very least, it evidences the agreement reached between the parties as per the terms set out therein.  The legal principles referred to in para. 9 and 10 above are thus applicable.

The Application to Vary

15.  In essence, the plaintiff seeks to vary the consent order to enable its expert to conduct a microwave test inside D1’s unit.

16.  Since the date of the consent order, the following events relating to para. 7(b) above took place:-

(1)   on 30 June 2010, D1 informed the plaintiff of the appointment of his expert;

(2)   on 8 July 2010, the parties’ experts attended D1’s unit for visual inspection;

(3)   on 19 July 2010, the parties’ experts conducted moisture measurement and colour water test (or, according to D1, the water dye test) at D1’s unit;

(4)   on 23 July 2010, the plaintiff’s expert provided an “interim” inspection report to the plaintiff;

(5)   on 2 August 2010, the plaintiff’s experts re-inspected D1’s unit.

Put simply, in a colour water test, a colour dye is applied to the suspected source of water leakage to check if (and if so where) the dye stain can be seen at the water leakage site.

17.  Because D1’s expert was appointed on 30 June 2010, the 21-day period provided for in the consent order (see para. 8 and 16(1) above) expired by 22 July 2010.

18.  The colour water test was conducted about 18 days after the said appointment and about 3 days before the end of the 21-day period.  The plaintiff has not given any satisfactory explanation why the said test was not conducted earlier.

19.  This application must have been prompted by the following comments of the plaintiff’s report:-

“… as the [colour] water test result was not able to demonstrate an affirmative result, further test e.g. microwave test could be used to provide further evidence to substantiate our findings. … ” (emphasis supplied) (para. 6.0, p. 6, draft report).

The phrase “our findings” must be referring to his opinion that failure of the waterproofing materials on the flat roof of D1’s unit was expected to be the cause of the extensive water seepage on the ceiling of the Shop.

20.  The plaintiff’s expert explains that the microwave test would be conducted using a device called a “Moist 2000 Microwave Moisture Measuring Device”.  Briefly, the device emits microwave which is directed at the test site (such as a concrete slab suspected of water leakage).  The microwave penetrates the test site and measures the permittivity.  The difference between the permittivity of water and the permittivity of the surrounding solid (such as concrete) will be detected and measured.  After the data have been collected, they will be mapped with a software and the result will be depicted in the form of a diagram with different colour highlights.  (See exhibit LHTN-1 and appendix H to the draft expert report for details)

21.  The plaintiff’s expert claims the variation is necessary because:-

(a)   it is “normal market practice” that microwave test will only be conducted after other test results have been analysed.  Further, there was rain during the 21-day period which made microwave test unsuitable;

(b)   the microwave test can show the source of the water leakage (para. 16 and 18, affirmation dated 9 September 2010);

(c)   the microwave test has to be carried out inside D1’s unit.

22.  D1’s expert disputes para. 21(a) above. According to his report:-

“As agreed between both experts … , a joint water dye test at kitchen and flat roof … was carried out and finished on 19^th July 2010.

No further test was considered necessary by both experts” (para. 3.2 and 3.3 thereof).

23.  I leave aside the question whether D1’s expert is correct in asserting it was both experts’ conscious decision that only a water dye test, and no further test, was needed.  But I find the claim of the plaintiff’s expert to the effect the microwave test can show the cause of the water leakage and the test need to be performed in D1’s unit to lack sufficient foundation.

24.  As regards the claim that the test can establish the cause of the water leakage (para. 21(b) above), the plaintiff’s expert deposed:-

“… [the infrared technology] would have the drawback of neither measuring the depth of the water nor showing the path of the water leakage. Accordingly, it is not as helpful and constructive as a microwave test. …

… the results of microwave tests have been used in other similar cases to demonstrate the source of water leakage … ” (emphasis supplied) (para. 16 and 18, affirmation).

However, the claim that the test can show the path and source of the water leakage does not appear to be supported by the materials exhibited (pp. 579 to 596, hearing bundle (2) (“the exhibited materials”)).

25.  As described in appendix H, the plaintiff’s draft report, a microwave test will result in a diagram showing the water content density pattern of the test site:-

“After all data have been collected, all measurement points will be mapped with software, the result will be indicated in a defined graphical matrix figure and highlighted by different colour[s]”.

That kind of diagram can be seen at pp. 580 to 581 and 584 to 586, the exhibited materials.

26.  Two of the diagrams are illustrative of the conclusion reached in para. 23 above.

27.  The one on p. 585, the exhibited materials, shows the result of a microwave test performed at a vertical concrete slab under the sill of a bay window typically found in residential units in Hong Kong.  The darker patches indicate the areas of higher water contents (the patterns of which, in brief, look random).  There is no explanation (whether in the affirmation or the exhibited materials) as to how one should interpret the apparently random patterns.  Bearing in mind the probable source(s) of water leakage at such structures is/are (i) the aluminium window frame, (ii) the installation points (that is, the edges) of the window frame and/or (iii) the bay window concrete slab itself, the patterns do not appear to provide a readily understandable reason as to which of (i) to (iii) above was/were the source(s) of water leakage.

28.  The diagram on p. 586, the exhibited materials, depicts the vertical concrete wall to the left of an aluminium window frame of a bay window.  The darkest patch in the diagram (which probably is the area of densest water content) appears to match, in the related photograph, with the lowest part of that vertical wall, just above the left side of the bay window’s horizontal sill.  Similarly, bearing in mind the probable source(s) of water leakage (see (i) to (iii) in para. 27 above), the microwave test result does not shed light on the source of the water leakage (as opposed to the spot of highest water contents); that is, whether the source of the water leakage was at the lower left-hand corner of the bay window, or at some location(s) higher up on the window frame itself (or along the joint of the window frame with the vertical wall).

29.  The claim that the microwave test has to be performed in D1’s unit (para. 21(c) above) does not seem to be supported by sufficient basis either.  According to the plaintiff’s expert, concrete slabs forming the floor are typically 150mm thick, while the microwave testing device has a penetration capability of 110mm (that is, a penetration capability of about 70% of the said thickness).  The exhibited materials appear to assert a penetration depth of up to 300mm (p. 591 thereof).  As stated above, the Shop is located beneath D1’s unit.  The plaintiff’s expert has not explained why the microwave test cannot be performed from inside the Shop.  D1 confirmed during the hearing he had no objection to the last-mentioned course of action.

30.  Hong Kong Civil Procedure 2011 said this about expert evidence:-

“The party proposing to call a person to give expert evidence must demonstrate that there is a need for such evidence. … ” (Vol. 2, para. J1/58/8).

Further:-

“Although it was once held that the grounds or reasoning upon which an opinion is based are matters for cross-examination alone and may not be adduced in chief, the practice changed long before the modern statutory reforms. … The effect of the modern statutory regime is that it is now obligatory for an expert to provide a report in which his reasoning and conclusions are set out, as well as the material facts on which they are based” (emphasis supplied): Phipson on Evidence (2010) 17^th Ed., para. 33-09 (p. 1075);

“… It has been said that unless a witness states in his evidence in chief (in effect his report) the grounds and reasoning that have led to his opinion, the opinion is valueless. Before the court can assess the value of an opinion, it must know the facts on which it is based” (emphasis supplied): Phipson, para. 33-33 (p. 1100).

Conclusion

31.  By reason of the above matters, I was (and am) not satisfied the plaintiff has established:-

(1)   there was a need for a microwave test by reason that it will assist the resolution of this action;

(2)   there was a need to perform the microwave test in D1’s unit;

(3)   there was a good reason for not performing the microwave test within the prescribed time period.

Costs Order

32.  The parties agree costs of this application should follow the event.  There will accordingly be a costs order that those costs be paid by the plaintiff to D1.

33.  For the purpose of summary assessment of costs (to which the parties also indicated no objection at the hearing):-

(1)   D1 is at liberty to lodge with court and serve a statement of costs within 3 days;

(2)   the plaintiff is at liberty to lodge with court and serve a statement of objections within 3 days thereafter.