TANG HON TSAI v. KIN CHI TRADING CO LTD

HCA 1696/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1696 OF 1996

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J U D G M E N T

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1. The 2 summons attended to in this hearing were: -

(i)	The plaintiff’s summons for directions (taken out on 30 August 2007) under Order 37 rule 1 and Order 25 rule 1 for the usual directions for service of list of document, inspection of documents, exchange of witness statements and expert reports; and a date for assessment to be fixed.
(ii)	The defendant’s summons (taken out on 13 September 2007) for dismissal of the action under Order 25 rule 1(4) for want of prosecution, prolonged, inordinate and inexcusable delay causing prejudice to the defendant.

2. After hearing parties’ submissions, I granted an order to stay the plaintiff’s proceeding permanently on account of the prejudice the defendant would likely suffer should the matter proceed.

3. At the request of parties I now give my reasons.

4. The action commenced some 11 years ago.  On 8 February 1996 the plaintiff took out a writ of summons to sue the defendant for damages caused to his property as a result of water leakage from the defendant’s flat during the period from 24 November 1995 to 10 January 1996 (or to 2 January 1996 according to the plaintiff’s affirmation of 27 June 1996).

5. The plaintiff and the defendant are neighbours in the same block of residential premises.  The defendant occupies flat 2602 on the 26^th floor while the plaintiff lives one floor below in flat 2502.  Both the plaintiff and the defendant are the registered owners of their respective apartment.  The defendant is a limited company and flat 2602 is occupied by the defendant’s director Mr. Chan Kin Man.

6. Inspections to the plaintiff’s premises were carried out between 18 December 1995 and 10 January 1996 and a surveyor report was prepared on 17 January 1996.  It was the conclusion and the recommendation of the surveyor Samson Wong & Associates that: -

“In accordance with the inspection and findings, we can draw a conclusion that the water seepage at ceiling level of master bathroom of Flat 2502 was mainly caused by the corroded vent pipe.  Besides, other embedded pipes of same age may also have suffered from corrosion to similar extent and have slight leakage which could not be detected at this exercise.

In view that the general condition of the waste and soil pipe system are poor and water leakage may occur elsewhere due to aging, we recommend the management company conducting a detailed condition survey to the whole building and to consider complete replacement of the system within next 12 months.”

7. On 5 July 1996 Master O’Donnell, after hearing parties’ submissions and considering the evidence presented by the parties, granted summary judgment (under Order 14) on liability in favour of the plaintiff and ordered damages to be assessed.

8. Since the granting of summary judgment on liability, the proceeding was held in abeyance, as far as the court is concerned, until 10 years later when the plaintiff, through his solicitors, filed a notice of intention to proceed on 30 December 2006.

9. After filing the notice of intention to proceed, solicitors acting on behalf of the plaintiff filed the plaintiff’s list of documents on 18 August 2007 and took out the present summons for direction on 30 August 2007.

10. On 13 September 2007 the defendant took out the second of the present summonses to dismiss the plaintiff’s action on the ground of irreparable prejudice suffered by the defendant.

11. According to the defendant he suffered irreparable prejudice for the following reasons: -

(i)	On account of the long lapse of time, inspection of the affected premises was no longer possible. Preservation of evidence was rendered impossible.
(ii)	The delay made it impossible to trace or track down witnesses who participated in the inspection of the property 11 years ago when the incident happened.  Even if the witnesses were available, their independent recollection of the events would be doubtful.

12. The plaintiff objected to the defendant’s application on the proposition that no prejudice has been suffered by the defendant since inspection of the premises had been carried out in 1997.  He believed witnesses could give evidence with reference to the contemporaneous documents prepared at the time they inspected the premises.

13. The chronology of events showed after summary judgment was granted the plaintiff instructed a firm of surveyors Proficient Surveyors & Co to carry out a preliminary assessment of the damages to his premises on 8 August 1996.  A surveyor report was compiled on 17 August 1996 by Proficient Surveyors & Co covering work done to guest bedroom, master bedroom and master bathroom.  The plaintiff’s solicitors wrote to the defendant on 11 December 1996 demanding payment of compensation of HK$95,000 and general damages of HK$20,000 for inconvenience and discomfort suffered by the plaintiff during the period of repairs and restoration.

14. The defendant’s solicitors wrote back on 17 December 1996 asking to inspect the plaintiff’s premises.  There was disagreement between the parties as to whether the plaintiff had an obligation to maintain the status quo of his premises awaiting inspection by the defendant’s surveyor.  

15. Eventually on 3 January 1997 a joint inspection of the plaintiff’s premises was carried out by the plaintiff’s surveyor Mr. Wong of Proficient Surveyors & Co and the defendant’s surveyor Mr. Chan of Toplis and Harding (HK) Ltd.

16. Concerning his delay in proceeding with the assessment of damages, the plaintiff gave the following explanations.  He said he was a member of the Owners Incorporate of the building.  In order to maintain a harmonious relationship with the defendant who was a neigbhour of his and a fellow land owner in the same residential block, the plaintiff tried to negotiate settlement with the defendant through an intermediary from 1997 to 2002.  In between the years of 2002 and 2006 the plaintiff was pre-occupied with his own retirement and he had lost touch with his own surveyor during the same period.

17. In 2006 the plaintiff recalled this outstanding legal suit between him and the defendant when he believed Mr. Chan of the defendant moved out of the flat round about the same time.  The plaintiff therefore gave instruction to his lawyer to proceed with the assessment and to file a notice of intention to proceed on 30 December 2006.

18. By way of affirmation Mr. Chan deposed to his reply that he was never approached by an intermediary for any settlement proposal.  Mr. Chan also deposed to the prejudice he would likely suffer on account of the plaintiff’s delay.

19. There was no dispute between the parties that the starting point for the consideration of dismissal for want of prosecution is whether there has been intentional and contumelious delay; or whether there has been inordinate and inexcusable delay which gives rise to a substantial risk that a fair trial would not be possible or serious prejudice would have been suffered by the parties.  [ref: McAlpine [1968] 2 QB 229 (CA); Birkett v James [1977] 3 WLR 38 (HL)].

20. Counsel on behalf of the defendant further cited New China HK Group Limited [2005] 1 HKLRD 383 (CA) and Martin v Turner [1970] 1 WLR 82 (CA) while the plaintiff referred this court to Shtun [1996] 3 All ER 411 (CA), Lui Chun Kwong [1995] 1 HKC 695; and Can-Asia [1995] 1 HKC 521.

Decision

21. On the chronology of events there was no dispute that there has been a delay of assessment for over 10 years since the entering of the Order 14 judgment.

22. The explanation the plaintiff offered that he had been negotiating settlement with the defendant through an intermediary between the years of 1997 and 2002 was a bare assertion on affidavit.  The delay between 2002 and 2006 on account of the plaintiff’s retirement was not a good justification for inaction since the plaintiff has been legally represented throughout.  I accept there was inordinate and inexcusable delay on the part of the plaintiff to prosecute his assessment of damages.

23. The remaining consideration was whether the defendant would suffer irreparable prejudice on account of the plaintiff’s delay.

24. According to the information in the plaintiff’s affirmation of 27 June 1996 the plaintiff detected water leakage at his premises on 24 November 1995 and the water leakage problem to his flat abated on 2 January 1996.  There was uncertainty as to when the repair and restoration work was carried out in the plaintiff’s premises.  In the plaintiff’s own affirmation the repair work was said to be carried out shortly after 3 January 1997. According to the plaintiff’s surveyor report of 8 May 2007 (at page 8 of the report) the reinstatement work was said to be in progress between 28 December 1996 and 1 May 1997.  The variation in the data clearly showed the faulty nature of human memory through passage of time.

25. More illuminating about the difficulty was what the surveyor on behalf of the defendant said in his affirmation filed on 29 November 2007: - 

“ …… Due to long lapse of time, I do not have independent recollection of what happened on that occasion.  By looking at the Report again, I only have very vague memory of having been to the subject premises.  Other than that I cannot remember how I compiled this Report. It seemed that I have been supplied by surveyor of the other side with information about the alleged damages arising from the water leakage within Flat 2502 of Parkway Court.  At that time, I did not have the opportunity of examining every claimed item because extensive renovation or decoration work was in progress.  This can be seen from the photographs I took of the interior of the Flat 2502 as annexed to my report.

According to the Report, I did not carry out any test to verify whether the alleged damaged items were in fact caused by the water leakage.  I was acting as a loss adjuster, i.e. basing on the information supplied by the other side, I made appropriate adjustments.  I was not instructed to comment on the causation of each and every item because of the lapse of time between the water leakage incident and the date of my inspection.  The assessed figures were put down in the Report simply as reasonable deduction of what were alleged to be the damaged items.  At that time, I opined that quite a portion (of) costs involved should be categorized as improvement and/or not necessarily related to the water leakage incident. As the physical file was destroyed many years ago, I do not have benefit of referring to my notes or other documents in that file.  I do not know if the Report was ever amended or not subsequently.  Now, it is difficult for me to explain the wordings I used in my aforesaid report.  In reference to the statement “we shall assess 2/3 of the above assessed costs being attributed to damages caused by water leakage incident” contained on page 4 of the Report, I am unable to recall as to how that assessment was calculated, and in view of the fact that of (I) undertook no investigation pertaining to causation, I am now, due to the lapse of time, unable to elaborate further on this issue.”

26. It was clear with the long lapse of time, witnesses were unable to have clear independent recollection of their physical findings of what they saw on the premises at the time of their inspection, and what factors would have affected their judgment and assessment.  The defendant would likely be deprived of a fair trial if this assessment were allowed to proceed after this 10 ½ years lapse.

27. Interlocutory judgment on liability has been granted. It would be inappropriate to dismiss the action.  Nevertheless I exercised the court’s inherent jurisdiction and acceded to the defendant’s application to the extent of staying the plaintiff’s proceeding on account of the prejudice that the defendant would likely suffer on account of the inordinate delay of the plaintiff.

28. As I have stayed the plaintiff’s proceeding, I did not find it necessary to issue directions for exchange of documents for the purpose of the assessment hearing.  I dismissed the plaintiff’s summons for directions.

29. I had during the hearing granted orders for costs in the following manner: -

(i)	costs of this proceeding be to the plaintiff up to the conclusion of the bill of costs filled on 13 December 1996; and
(ii)	no order for costs for the rest of the proceeding; i.e. parties were to bear their own costs after 13 December 1996.