THE INCORPORATED OWNERS OF CHEONG SHING MANSION v. WONG CHIT

DCCJ 961/2024

[2025] HKDC 1662

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 961 OF 2024

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ASSESSMENT OF DAMAGES

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A.  Introduction

1.  The Plaintiff is the incorporated owners of Cheong Shing Mansion (the “Building”). The Defendant is the registered owner of Flat C on the 20^th floor and Main Roof C of the Building (the “Premises”).

2.  On 6 May 2023, a fire occurred on the 20^th floor of the Building. The fire originated from the Premises (the “Fire Incident”).

3.  By Writ of summons issued on 20 February 2024, the Plaintiff claims against the Defendant for loss and damage suffered as a result of the Fire Incident.

4.  On 3 April 2024, interlocutory Judgment has been entered against the Defendant in relation to the Defendant’s liability.

5.  This is the hearing of the assessment of damages of the Plaintiff’s claim.

6.  The Plaintiff is represented by Mr Chu Kwok Po of Messrs C W Chan & Co. The Defendant (who did not appear in the previous hearings nor file any pleadings or submissions) appeared in person.

7.  The Plaintiff called one witness, Mr Kan Bing Lun, who was the property manager employed by the Plaintiff. In his witness statement which was adopted as his evidence-in-chief, Mr Kan deposed as to how the Fire Incident gave rise to reasonable costs incurred by the Plaintiff, including arrangements as to the cleaning and water clearance of the lift facilities; reparation needed for the damage in respect of the lifts and fire installation; and restoration work of the ceiling of the common corridor and walls etc.

B.  The Plaintiff’s Claim

8.  By the Plaintiff’s Statement of Claim dated 20 February 2024, the Plaintiff claims for a total of HK$431,974 being the loss and damage suffered by the Plaintiff arising out of the Fire Incident, including:

(1)  Cleaning Costs

(2)  Labour Charge for water clearance

(3)  Repair costs to lifts

(4)  Repair costs to fire installation

(5)  Repainting on 20/F ceiling of common corridor and walls

(6)  Costs to apply for incident report from Fire Services Department

C.  The Evidence

9.  The Plaintiff called one witness, Mr Kan Bing Lun, who was the property manager employed by the Plaintiff. In his witness statement which was adopted as his evidence-in-chief, Mr Kan deposed as to how the Fire Incident gave rise to reasonable costs incurred by the Plaintiff, including arrangements as to the cleaning and water clearance of the lift facilities; reparation needed for the damage in respect of the lifts and fire installation; and restoration work of the ceiling of the common corridor and walls etc.

10.  Having reviewed the same and considered the matter as a whole, I am satisfied that the amounts claimed are reasonable and supported by documentary proof.

D.  Whether there is double recovery

11.  During the hearing, the Defendant cross-examined Mr Kan and asked Mr Kan questions in respect of whether the Plaintiff had taken out insurance policies for the Building at the time of the Fire Incident and whether any payout had been made by any insurer to the Plaintiff in relation to the Fire Incident.

12.  Mr Kan for the first time gave evidence that the Plaintiff maintained an insurance policy and had received a payout of around HK$210,000 in respect of the Fire Incident from the relevant insurance company.

13.  The Defendant submits that the Defendant’s liability should be reduced by the amount of the payout received by the Plaintiff from the Insurer as it had already been compensated. As such, the Plaintiff is not entitled to the full amount claimed.

14.  In relation to this, the Plaintiff complained that this issue was raised for the first time and was unprepared to make submissions in relation to the legal issue of double recovery. The relevant documents and factual circumstances relating to the insurance policy are also not found in the hearing bundle.

15.  At the end of the hearing, I ordered that the Plaintiff file and serve relevant documents related to insurance policy(ies) in respect of the Fire Incident and documentary receipts relating to receipts received by the Plaintiff from the said insurance company(ies) and directed parties to file into Court written submissions on the issue of insurance.

16.  The supplemental documents reveal that the Plaintiff has taken out with Asia Insurance Co Ltd (the “Insurer”) an insurance policy in respect of the Fire Incident, and on 22 December 2023, received payment of HK$211,832.46 (“Payout Sum”). The Plaintiff submits that the issue of insurance is irrelevant as between the Plaintiff and the Defendant and that the Plaintiff is entitled to recover such loss and damages from the Defendant. Further, the Plaintiff would undertake to pay back the Payout Sum to the Insurer in the event the Plaintiff is granted the sum claimed in the present proceedings.

17.  The authorities are clear on this issue. The contract of insurance contains an implied term that the assured will pay to the insurer out of the moneys received in reduction of the loss the amount to which the insurer is entitled by way of subrogation, in the form of a lien over the moneys recovered by the assured from the third party. Thus, there would be no question of double recovery. Moneys recovered from the Defendant would, to the extent that the Plaintiff was already compensated for its loss, be recovered for the benefit of the insurance company. It is therefore not an answer to the Plaintiff’s action to argue that the Plaintiff has already been paid, in part, by the Insurer. See Bristol and West Building Society v May May & Merrimans (a Firm (No 2) [1998] 1 WLR 336 at 345H-346H; Bee v Jenson [2007] EWCA Civ 923, [2007] 4 All ER 791 at 799. See also Equity and Trusts Law in Hong Kong, 6^th Edition (2024) §10-09.

18.  Thus, in the present case, the Plaintiff is entitled to recover the reasonable damages suffered as a result of the Fire Incident even though, having been partially indemnified, he would hold part of the sum for the benefit of the Insurer.

19.  The Plaintiff is fully entitled to the amount claimed.

E.  Disposition

20.  I will therefore assess the damages at HK$431,974. The Plaintiff will also be entitled the usual interest rate, at 1% above the HSBC prime rate from the date of the Writ (ie 20 February 2024) to the date of this Judgment, and thereafter at Judgment rate until payment in full.

21.  Costs should follow the event. The Defendant shall pay the Plaintiff costs of the Action, summarily assessed at HK$90,000.