BULMER LTD. AND ANOTHER v. ACL ELECTRONICS (HK) LTD.

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J U D G M E N T

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Kempster, JA:

1. This is an appeal from a judgment of Liu J given on 13 December 1991 awarding the plaintiffs $19,500 by way of damages resulting from the presence on premises occupied by the defendants of cold air constituting a nuisance. The judge also found that the defendants were liable to the plaintiffs on the basis of strict liability under the rule in Rylands v Fletcher [1868] LR 3 HL 330.

2. It was common ground on the pleadings that at all material times the defendants, Associated Circuits (HK) Ltd, were the tenants and occupiers of and maintained for 24-hours a day an uninsulated air-conditioned room on the fifth floor while the plaintiffs, Bulmer Ltd and K. & Fung Industry Co Ltd, or one of them, were the occupiers of the fourth floor at Block A, Alexandra Industrial Building, Wing Hong Street, Kowloon.

3. The judge found that the air-conditioning machinery which the defendants had installed early in 1989 had rendered the floor of their premises so cold as to cause condensation of the moisture in the plaintiffs' contiguous ceiling below resulting in the spalling of the concrete and rusting of the steel reinforcing bars. The condition of the plaintiffs' ceiling had been drawn to the defendants' attention between June and August of that year as from when they must have appreciated the likelihood of the damage which, by August or September, had resulted from the continued operation of their air-conditioning system. The only precaution they may hive taken, having been apprised of the dampness of the ceiling below, was to install double vinyl flooring. It may be, however, that this was done by their predecessors. The d mage was made good by the plaintiffs during October 1990 at a cost reflected in the sum awarded by Liu J.

4. The judge also held that the defendants' use of their premises, albeit lawful and in an industrial neighbourhood - for what that was worth having regard to the terms of the speech of Lord Westbury LC in St Helen's Smelting Co v William Tipping (1865) 11 HLC 642 at pp 650 and 651 - resulted in foreseeable damage to the subjacent property in the plaintiffs' occupation. These facts are analogous to causing dampness in neighbouring property by the maintenance of a heap of earth or to causing excessive heat so to pass by installing a stove appropriate for an Italian restaurant. Hurdman v North Eastern Railway Co (1878) 3 CPD 168; Sanders-Clark v Grosvenor Mansions Co Ltd [1900] 2 Ch 373.

5. The judge was fu11y entitled, in my view, to find nuisance and resulting damage. Indeed, he might well have found liability on the basis that the defendants allowed the nuisance to continue once they had knowledge of the effect of their user of the fifth floor of the building. Sedleigh-Denfield v O'Callaghan [1940] AC 880. Despite the valiant efforts of Mr Ismail, for the defendants, to make bricks with very little straw, the facts relating to ventilation or to other hypothetical factors do not sustain the submissions that the judge was at fault in relation to the causation or remoteness of the damages awarded or to the matters of which he took judicial notice.

6. By reason of the defendants' knowledge of the condensation that had occurred on the plaintiffs' ceiling the resulting damage was a consequence described by Lord Denning MR in Stewart v West African Terminals Ltd [1964] 2 Lloyd's Rep 371 at p 375 as one "within the general range which any reasonable person might foresee and was not of an entirely different kind which no one could anticipate".

7. That really concludes the outcome of this appeal but I may, perhaps, turn briefly to the liability found by the judge pursuant to the rule in Rylands v Fletcher because at first instance (Fletcher v Rylands [1866] LR 1 Ex 265 at p 279) Blackburn J said that the doctrine applied to anything:

"which, though harmless whilst it remains there (on the defendants' land), will naturally do mischief if it escapes out of his land."

8. Lord Porter in Read v J. Lyons & Co Ltd [1947] AC 156 at p 176 used a similar description:

"Something which is dangerous in the sense that if it escapes it will do damage."

I have difficulty in accepting that cold air can properly be brought into that category or, on the evidence, that it "escaped" from the floor occupied by the defendants into the ceiling in the occupation of the plaintiffs. However, having regard to my conclusion in relation to nuisance the matter is academic and, indeed, Mr Ismail has expressly eschewed any criticism of the finding of "escape".

9. It transpired in the course of the hearing below that this action should have been tried in the District Court. Due to a variety of circumstances which have been explained to us the parties have been put to quite unnecessary expense.

10. This appeal should, in my view, be dismissed.

Sir Derek Cons, Atg CJ:

11. I agree entirely with my Lord. There was ample evidence from which the judge below could find by any standards that there was in this instance an actionable nuisance though, with every respect to him, not sufficient to support a finding under the rule in Rylands v Fletcher. I, too, would dismiss this appeal.

Bokhary, J:

12. I am of like opinion. The damages recovered were for repairing the ceiling. Those repairs were necessitated by spalling caused by condensation. The defendant was made aware of condensation almost as soon as it occurred. Once a reasonable man became aware of condensation, he should have foreseen damage of the genre to which spalling belongs. In all circumstances, the case in nuisance was unanswerable.

13. I also agree with all that has been said by my Lord Kempster JA in regard to Rylands v Fletcher.

Sir Derek Cons, Atg CJ:

14. The appeal is therefore dismissed.