LO YUK CHU v. HANG YICK PROPERTIES MANAGEMENT LTD.

IN THE COURT OF APPEAL

1996, No.169
(Civil)

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J U D G M E N T

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Power, Ag. C.J.:

1. The appellant, Madam Lo Yuk-chu, was, at the relevant time, the registered owner of premises situated at Flat B, 1st floor, Cheong Wai Mansion, No.9A Fung Yau Street North, Yuen Long, New Territories. The respondent Hang Yick Properties Management Ltd. were the managers of that building pursuant to a Deed of Mutual Covenant dated 21st January 1989. The appellant sued the respondent in the District Court:

(i) For negligence alleging water damage to her premises and consequential loss caused by flooding as a result of a blocked sewage pipe caused, inter alia, by a failure by the defendant to inspect and maintain the sewage pipe. The appellant sought to rely when proving this allegation upon the maxim res ipsa loquitur.

(ii) In the alternative, for nuisance alleging that the flooding was caused or allowed by the respondent.

(iii) In the further alternative, for failing, in breach of certain of the covenants of the Deed of Mutual Covenant, properly to discharge its duties thereunder as manager.

2. There was for the most part no dispute about the facts which showed that, on 24th December 1993, the appellant left her flat and went to work. She then went for holiday to Mainland China not returning to her flat until 26th December when she found it flooded with water and sewage. She was required to find alternative accommodation. Extensive redecoration and repair had to be done and damaged furniture had to be replaced. The flooding had taken place on 24th December at about 8-9 p.m. but, because the appellant was in China, the respondent's employees were unable to contact her.

3. Judge Muttrie stated that it was clear that the flooding was caused by the blocked sewage pipe which caused the lavatories to overflow into the two first floor flats. He was satisfied, because of the nature of the materials which formed the blockage, that it had been caused by occupants putting solid material into their lavatories.

4. When dealing with the alleged breach of covenant (iii) above the judge stated:

"It is not in dispute that the Defendant, which was in control of the common sewage pipes, owed the Plaintiff a duty to take reasonable care to ensure that water did not escape into the Plaintiff's premises from that sewage pipe.

Further, the Defendant was bound by the Deed of Mutual Covenant to the various duties of maintenance and repair of the common facilities, including the sewage pipes, which are referred to at paragraph 7 of the Amended Particulars of Claim.

Such duties would not, however, be in the nature of insurance. The Defendant would have to take such steps as were reasonable to maintain the sewage pipes. In effect the contractual duty would be the same as the common law duty of care."

5. The judge posed for himself the following question:

"What should the Defendant have done, in order to fulfil its duty of care at common law and under the contract?"

He was satisfied that the respondent had not caused the blockage and that nothing it did after the blockage led to any damage. It was conceded that no maintenance of the pipe had been undertaken but the judge was satisfied that there was nothing to establish that "any particular maintenance strategy" should have been put in place. He was further satisfied that there was no evidence of mal-function which would have alerted the defendant to the need to carry out inspection and repairs.

6. The judge then considered the allegation of negligence ((i) above) holding, rightly in our view, that:

"The principle of res ipsa loquitur cannot apply because one necessary ingredient, is missing, namely that the circumstances point to negligence on the part of the Defendant. In fact they point to negligence by a third party."

He went on to say when considering whether the respondent had been negligent in failing to control third parties:

".... it is argued that the Defendant should have advised the occupants not to put solids down the lavatories, but it was powerless to stop them doing as they pleased in their own homes. Indeed the papers on which such advice was written might well themselves have contributed to a blockage."

Finally he dismissed the allegation of nuisance ((ii) above) stating that there was no evidence either that the respondent had created the flooding or that it had been given any warning of the possibility that a flooding might occur.

7. His findings as to negligence and nuisance have not been challenged in this appeal. Mr. Anthony Chan, who appears for the appellant, contends only that the judge was wrong to find that there was no breach of the duty owed under the Deed of Mutual Covenant and was wrong to hold that that duty was "the same as the common law duty of care". He contends that the judge should have held that the contractual duties owed under Section V Part B, Clause 1(10) and (12) of the Deed of Mutual Covenant were "absolute or strict duties" and that the respondent was in breach of them. The relevant paragraphs of Section V Part B are as follows:

"1. During the said term .... the Manager will manage the Building and the Land in a proper manner and in accordance with the provisions of this Deed and the Manager shall be responsible for and shall have full and unrestricted authority to do all such acts and things as may be necessary or requisite for the proper management of the Building and the Land. Without in any way limiting the generality of the foregoing the Manager shall perform the following duties:-

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(10) To keep all the common sewers, drains, watercourses and pipes free and clear from obstructions.

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(12) To keep all Common Facilities in good condition and working order."

8. Mr. Chan argues that the words, particularly those in sub-paragraph (10), mean exactly what they say. He contends that they are clear beyond argument and impose an absolute duty on the manager at all times to keep the sewers free and clear from obstruction.

9. The duty imposed upon the manager in the words of the opening paragraph of Part B is to "manage the Building and Land in a proper manner ..." The management is required not only to "keep all common sewers ... free and clear from obstruction" (Clause 10) but also to "keep all Common Areas well lighted" (Clause 5) and "in a clean sanitary and tidy condition" (Clause 7); to "prevent any person detrimentally altering or damaging any part of the building or any of the equipment, apparatus, services or facilities thereof" (Clause 24); to "prevent any person from occupying or using otherwise than in accordance with ... written permission ... any parts of the Common Areas" (Clause 21).

10. These requirements, if they are absolute duties, could only be satisfied by employing a virtual army of maintenance and security staff. This could never have been the intention of the parties. Indeed Clause 12, upon which the appellant places some reliance, itself gives a clear indication of the extent of the duty. It requires the managers to "keep all Common Facilities in good condition and working order". This, we are satisfied, was plainly never intended to posit an absolute duty to ensure that no common facility ever breaks down. That would impose an impossible burden.

11. The overall duty imposed on the respondent by the Deed of Mutual Covenant is one of "proper" management. Such management entails doing all that is reasonably required of a manager in the circumstances. Things like keeping drains clear are specific aspects of a building manager's overall duty. But the mere fact that such a thing is listed without being qualified by expressions such as "take reasonable steps to" does not turn a manager into an insurer against the consequences of a drain becoming obstructed through no failure on its part to act reasonably as a manager should.

12. The judge was right to hold that Section V Part B did not impose an absolute duty.

13. Given the way in which this appeal was argued we are not required to enter into an examination of the nature and extent of duty of care as it applied to the sewage pipes. We think it proper, however, to indicate that, upon the evidence before the court, there was, in our view, no failure by the respondent in that regard. To satisfy such a duty the managers would be required to:

(i) take all reasonable steps, by way of notices and letters, to warn the tenants of the danger of blockage if foreign articles were placed in the toilet;

(ii) undertake regular inspection, if it were shown that such inspection was feasible and was in accord with proper plumbing practice;

(ii) take proper action if there was any indication of mal-function;

(iv) act expeditiously to remove obstructions which do occur.

As to (i) the judge said:

"It is argued that the Defendant should have advised the occupants not to put solids down the lavatories, but it was powerless to stop them doing as they pleased in their own homes. Indeed the papers on which such advice was written might well themselves have contributed to a blockage."

The judge was, it must be said, at this time dealing with alleged negligence. However we find ourselves unable to agree with the judge if those words can be taken as a positive indication that there was no duty upon the respondent as manager to issue appropriate warnings. We are satisfied that there may well have been such a duty. The fact of the matter is, however, that no failure in this regard was ever specifically pleaded or raised in evidence at trial. It is true that reference was made by the appellant's counsel in the course of argument to the duty to give such warnings but there was no evidence as to whether or not any had ever been given and counsel having raised the matter then conceded that there was no evidence in that regard.

14. As to (ii), it was pleaded that there had been a failure to ensure by proper and reasonable inspection that water could not escape from the sewage pipe and the building superintendent, one of the respondent's witnesses, admitted that no system of regular inspection had been instituted. The judge was, however, satisfied that there was nothing in the evidence to suggest that any "particular maintenance strategy" was necessary and there was no evidence that proper plumbing practice indicated the need for any system of regular inspection.

15. As to (iii), the judge found that there had never been any complaints of main blockage in the three to four years before the incident.

16. As to (iv) the judge found that nothing that was done by the defendant after the accident contributed in any way to the damage.

17. The appeal must be dismissed. There will be an order nisi that the respondent is to have its costs to be taxed. Appellant's own costs to be taxed in accordance with Legal Aid Regulations.