FU SAU TAI, RAYMOND v. WOO KWONG PO AND ANOTHER

CAMP 215/2025, [2026] HKCA 1563

On Appeal From [2025] HKDC 904

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 215 OF 2025

(ON AN INTENDED APPEAL FROM DCCJ NO. 5546 OF 2020)

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DECISION

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Hon Cheung JA (giving the Decision of the Court) :

I. Renewed application for leave to appeal

1.  By summons filed on 12 November 2025, the plaintiff (described as the 1^st plaintiff in the title of the action) renewed his application for leave to appeal the judgment dated 29 May 2025 (‘the Judgment’) of Deputy District Judge Joseph Vaughan (‘the Judge’).  By the Judgment, the Judge dismissed the plaintiff’s claims for injunctive relief and damages arising from alleged water leakage from the defendants’ property at Kornhill, Quarry Bay, Hong Kong (‘Flat 410’) to the plaintiff’s property immediately below (‘Flat 310’). 

2.  Having considered the papers filed in this application and the parties’ written submissions, we consider it appropriate to determine the application on paper without an oral hearing pursuant to Order 59, rule 2A(5)(a) of the Rules of the High Court, Cap. 4A.

II.  The background

3.  The background facts are set out at [1]-[9] of the Judgment, which we will not repeat in details.  We highlight only the salient facts and evidence relevant to this application.

4.  The plaintiff acquired Flat 310 in 2010 and rented it out in 2011.  The subject building is managed by MTR Corporation Ltd.  The plaintiff claimed that water leakage began in 2016, affecting the tenant at that time.  The plaintiff could not rent out the unit after 2017 due to persistent leakage.

5.  The plaintiff based his case on five incidents of water leakage occurring between 2016 and 2021 (‘Incidents 1 to 5’), alleging that water leaked or seeped from Flat 410 to Flat 310, causing damages to the interiors and furnishings of Flat 310, thereby constituting a nuisance.

6.  The five incidents are briefly as follows :

1)  Incident 1 (9 August 2016): Leakage on the ceiling of Flat 310’s bedroom and corridor from a burst flush water pipe in Flat 410’s bathroom.

2)  Incident 2 (25 October 2016): Leakage in the living room, kitchen and corridor of Flat 310 from a burst fresh water pipe in Flat 410’s kitchen. 

3)  Incident 3 (27 October 2016): Leakage originated from the kitchen water trap or drain pipe inside Flat 410.

4)  Incident 4 (mid-October 2017): Leakage on the ceiling of Flat 310’s bedroom, corridor and kitchen of Flat 310, allegedly caused by defective bathroom waterproofing at Flat 410. 

5)  Incident 5 (January 2020 to November 2021): Episodes of seepage affecting the ceilings of the bathroom, bedroom and corridor of Flat 310, allegedly originated from Flat 410.

7.  The plaintiff initially commenced a claim for damages at the Small Claims Tribunal in 2019.  He subsequently applied to transfer the action to the District Court in 2020.  In his Statement of Claim dated 28 January 2021, he sought injunctive reliefs requiring the defendants to carry out repair works at Flat 410, compensation for renovation fees, and loss of rental income as damages for nuisance.  

8.  The defendants pleaded that Incidents 1 and 2 had been settled; Incident 3 was not their fault; Incident 4 required proof of causation; and Incident 5 originated from the external wall, not Flat 410, as the Joint Office of the Buildings Department/Food and Environmental Hygiene Department (‘Joint Office’) had not identified Flat 410 as the source.

III.  The parties’ case at trial

9.  The plaintiff’s case was that all five incidents originated from Flat 410 due to defective pipes, inadequate bathroom waterproofing and the defendants’ failure to remedy despite years of knowledge of the leakage problem.

10.  At trial, the plaintiff relied on the oral testimony of his wife, Ms Wu Xue Ping who adopted his case and the documentary evidence.  The documentary evidence included the plaintiff’s communication with the management office of MTR Corporation Ltd (‘Management Office’), its incident reports, the findings and test results prepared by the consultants appointed by the Joint Office, including Modern Testing Consultants Ltd (‘Modern Testing’). 

11.  The plaintiff called surveyor Mr Chiu Chi Pun (‘Mr Chiu’) as an expert witness; the defendant called engineer Dr Lam Shiu Shu Eddie (‘Dr Lam’).  The experts prepared a Joint Expert Report dated 23 August 2022 (‘JER’).

12.  For Incidents 1 and 2, both experts agreed the leakage originated from burst pipes in Flat 410.

13.  The defendants argued that Incidents 1 and 2 were settled through their respective insurers; the plaintiff’s insurer was Bank of China Group Insurance Company Limited (‘BOC’) whereas the defendants’ insurer was AIA Company Ltd (‘AIA’).  A discharge form signed by BOC on 20 September 2024 (‘the Discharge Form’) showed that BOC through its loss adjuster United Adjusters (HK) Ltd (‘United Adjusters’) accepted $18,100 ($16,290 to BOC and $1,810 as policy excess to the plaintiff) to settle all claims from the incidents on 9 August and 25 October 2026 (i.e. Incidents 1 and 2).  The plaintiff was entitled only to the uninsured loss of $1,810, which the defendants were willing to pay, but the plaintiff refused to accept.

14.  For Incident 3, the plaintiff alleged that it was caused by water dripping from the water trap and pipe at Flat 410 based on the Management Office’s investigation.  Despite the defendants’ replacement of the common drain pipe on 2 December 2016, seepage was still spotted by the Joint Office on 13 December 2016.  The defendants argued that Incident 3 was caused by a defective common drain pipe not attributable to them, as confirmed by United Adjusters.  Meanwhile, the Joint Office and Modern Testing could not ascertain the source of water seepage despite a colour water test on Flat 410’s drainage pipes.

15.  The experts’ opinions differed on this incident.  Mr Chiu for the plaintiff opined that it was caused by the U-shaped draining trap of Flat 410; Dr Lam opined that it was caused by seepage from the defective common pipe, and after its repair, there was no complaint until October 2017.

16.  For Incident 4, the plaintiff alleged that the test results of Modern Testing (which was concurred by Mr Chiu) showed defective bathroom waterproofing facilities at Flat 410 as the source.  This was also consistent with the findings of the Management Office.  The defendants argued that the tests conducted by Modern Testing were not determinative of liability because the ponding test does not reflect actual usage of the bathroom.  Further, the defendants said they have renovated the bathroom after the Nuisance Notice was issued by the Joint Office to the 1^st defendant on 5 March 2019, and the Joint Office found no leakage subsequently.

17.  For Incident 5, the plaintiff alleged the source was Flat 410’s bathroom due to defective waterproofing, and that the defendants’ repair works were incomplete or incompetent, as opined by Mr Chiu.  The defendants argued that they had taken all reasonable steps to alleviate seepage; the source was the external wall, not Flat 410.  Multiple investigations carried out by the consultants of Joint Office from 2020 to 2021 did not identify Flat 410 as the source.  The Management Office itself admitted that the seepage was caused by the defective external walls.  The defendants’ expert Dr Lam opined that the range of tests conducted confirmed water ingress from external walls.  In the Supplemental Joint Expert Report dated 21 July 2023 (‘SJER’), the experts maintained their opinions after considering water spray tests on the external wall.

IV.  The Judge’s findings

18.  In relation to Incidents 1 and 2, the Judge found a valid settlement was reached on the facts.

19.  By a Letter of Subrogation/Authorisation dated 6 June 2017, the plaintiff subrogated to BOC all his rights, title and interest in the loss and damage arising from Incidents 1 and 2.  BOC thus obtained the consent to pursue recovery of the insured loss.  Consequently, in signing the Discharge Form, BOC has accepted $16,920 in full and final settlement of those losses.  Applying subrogation principles, the Judge found that the plaintiff, having accepted BOC’s reimbursement of $16,290, could only claim his uninsured loss of $1,810, being the policy excess which he needed to contribute himself.  The plaintiff was not entitled to pursue this claim any further given that a settlement has been reached in that the defendants were willing to pay the policy excess but the plaintiff had continued to reject it.

20.  In relation to Incident 3, the Judge found that the plaintiff failed to prove on balance of probabilities that this incident originated from Flat 410.  The Judge accepted the conclusion of United Adjusters that the leakage could not be attributed to the defendants as it was caused by the defective common pipe in Flat 410.  The Judge did not accept the plaintiff’s case based on unspecified findings of the Management Office.  Though Mr Chiu pointed to the U-shape water trap in Flat 410 as the source of leakage, this was not identified by the Management Office at the material time.  In any event, the Judge considered that it was the Management Office’s duty to replace the U-shape trap.

21.  In relation to Incident 4, the Judge found insufficient proof that the leakage originated from Flat 410, particularly from defective bathroom waterproofing facilities.  Rather, the evidence pointed to possible seepage from the building’s external walls.  The Judge reasoned that :

1)  even though a ponding test was conducted by Modern Testing in Flat 410’s bathroom showing that the colour of the dyed water could be observed on the ceiling of the bathroom of Flat 310, the test report itself was not informative because it lacked details as to how the test was conducted, showing only a theoretical possibility as opposed to actual seepage. 

2)  after the defendants renovated the bathroom, the Joint Office confirmed no leakage in late June 2019 to August 2019.  Subsequent investigations in 2020 to 2021 did not identify Flat 410 as the water leakage source, raising doubt as to whether the continued complaints of water seepage originated from Flat 410.

22.  In relation to Incident 5, the Judge found that the plaintiff failed to prove on balance of probabilities that the source of water leakage was Flat 410.  The evidence strongly suggested that the source was the defective external walls.  The Judge based his conclusion on a number of findings :

1)  Multiple investigations conducted by the consultants of the Joint Office (including Prudential Surveyors International Ltd and Geotechnics & Concrete Engineering (HK) Ltd) in 2020 to 2021 could not identify Flat 410 as the source of water leakage.

2)  The Management Office admitted on 14 October 2022 that defective external walls caused seepage into Flat 310.

3)  While the Judge accepted the ponding test as a generally valid investigative method for water seepage, he accepted the defendants’ expert Dr Lam’s opinion that water on the external walls could seep into the bathroom of Flat 310 through the sunken slab at Flat 410 to Flat 310.  This opinion was consistent with (1) the Joint Office’s inspection outcome; (2) the Management Office’s admission; and (3) Ms Wu’s evidence that there was no complaint of leakage from her tenant since December 2023, following the repair works on the external walls by the Management Office.

4)  Dr Lam’s opinion was further confirmed by the water spraying tests conducted by Modern Testing on 29 December 2022 and 16 December 2023, and consistent with the experts’ interpretation and explanation of these tests in the SJER. 

5)  Mr Chiu accepted during cross-examination that the water spraying tests showed that water did seep through the external wall.

23.  Therefore, the plaintiff failed to prove on balance that the source of water leakage was from Flat 410.  The defendants bear no burden to prove that the source lies elsewhere, e.g. the defective external walls.  Hence, no liability can be established against the defendants. 

24.  For these reasons, the Judge dismissed the plaintiff’s claims.

25.  The plaintiff applied to the Judge for leave to appeal, which was refused on 30 October 2025 (‘Leave Decision).

V.  Proposed grounds of appeal 

26.  By summons filed on 12 November 2025, the plaintiff made the present renewed application for leave to appeal.  The draft notice of appeal (‘Draft NOA’) sets out six intended grounds of appeal, which are essentially the same as those put before the Judge.  They are as follows :

1)  Ground 1 (Incidents 1 to 2) : The Judge misinterpreted the context, contents and scope of the settlement which related only to the plaintiff’s insured loss and did not relate to his uninsured loss.  He failed to apply the principle that an insurer can only be subrogated a right to claim insured loss.

2)  Ground 2 (Incident 3) : The Judge erred in law in failing to consider or give any or any proper weight to the objective, material and probative evidence of the investigation and findings of the Management Office, which was relied on by the plaintiff’s expert Mr Chiu.

3)  Ground 3 (Incident 4) : The Judge erred in law in rejecting, without any proper or sufficient reasoning, the evidence and findings of the Joint Office and Modern Testing, and the positive results in an Inspection Report by Modern Testing dated 8 February 2019 (‘the MT 2019 Report’).

4)  Ground 4 (Incident 4) : Further or alternative to Ground 3, the Judge erred in failing to consider the material fact that Flat 410 was not inhabited from 16 April 2019 to 20 July 2020, and after it became inhabited again, seepage occurred again, which showed that the seepage originated from Flat 410 when it was inhabited and used.

5)  Ground 5 (Incident 5) : The Judge erred in law in accepting the illogical and speculative evidence of the defendants’ expert Dr Lam, which sought to vitiate the positive results of the objective ponding test conducted by Modern Testing from 31 December 2021 to 21 January 2022 in its test report dated 22 January 2022 (‘the MT 2022 Report’).

6)  Ground 6 (Incident 5) : The Judge erred in law in failing to consider the test results in the MT 2019 Report and an Inspection Report by another contractor of the Joint Office, Prudential Surveyors International Ltd (‘PS’) dated 4 October 2021, and the persistence of water seepage despite repeated repairs of the external wall in 2020 and 2021 - all of which rule out the external wall as the source.

27.  The plaintiff seeks in the Draft NOA to set aside the Judgment and the consequential orders, and enter judgment in terms of the relief at [1] to [3] of his Statement of Claim, or alternatively for a retrial. 

VI.  Our view

1)  Principles

28.  Section 63A of the District Court Ordinance (Cap. 336) provides that leave to appeal shall not be granted unless the Court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interest of justice that the appeal should be heard.

29.  The applicant has to show that the appeal has a reasonable prospect of success which means an appeal with prospects that are more than fanciful but which do not need to be shown to be probable: SMSE v KL [2009] 4 HKLRD 125 at [17]. 

30.  The Court would only intervene with the findings of fact by a trial judge where it was demonstrated the trial judge either palpably erred in making a finding not supported by evidence, misunderstood the evidence, failed to take into account relevant evidence or took irrelevant matters into account, or that the finding was plainly wrong: United Muslim Association of Hong Kong & Ors v Yusuf Yu & Ors [2018] 4 HKLRD 22 at [38]-[39]; Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336.

2)  Ground 1 – relating to Incidents 1 and 2

31.  In relation to Incidents 1 and 2, the Judge found that the plaintiff, by subrogating his rights to BOC, and having accepted BOC’s reimbursement of the insured loss of $16,920, could only claim for the uninsured loss of $1,810 being the policy excess.  However, a settlement was reached on this claim in which the defendants have indicated their agreement to pay but the plaintiff had refused.  The plaintiff could not pursue this claim any further.

32.  The plaintiff argues that the Judge was wrong to find a settlement because the settlement related only to the insured loss ($16,920) and did not affect his uninsured loss ($1,810).  In so finding, the plaintiff says that the Judge has committed the following errors :

1)  He failed to apply the legal principle that an insurer is subrogated only to the right to claim insured loss;

2)  He failed to properly consider factual evidence showing only the insured loss was settled.

33.  Regarding the first argument, the plaintiff says that the Judge has misinterpreted the context, contents and scope of settlement which related only to the plaintiff’s insured loss.  The thrust of the plaintiff’s argument is that the Judge should not have held that there was a settlement on his uninsured loss.  This, in our view, is essentially a challenge against the Judge’s factual finding of an overall settlement on the plaintiff’s claims under Incidents 1 and 2.

34.  At the trial and in this application, the parties have no dispute on the principle of subrogation of rights.  As stated by the Judge at [67] of the Judgment, there was no dispute that an insurer is subrogated only to rights which diminish the loss it has paid, and the insured can continue proceedings to gain compensation for his uninsured loss (MacGillivray on Insurance Law, 15^th Ed, at [22-038] and [22-042]).  The Judge correctly applied this principle to determine the scope of the settlement in this case, which covers the insured loss of $16,920.  There was no dispute that the uninsured amount was $1,810, in which the plaintiff was in principle entitled to pursue (and did pursue in the Small Claims Tribunal before the case was transferred to the District Court). 

35.  However, the plaintiff has accepted the assessment by United Adjusters that the total loss arising from Incidents 1 and 2 was $33,100.  It was understood at that time that the insurer of the building would pay the plaintiff $15,000 whilst his insurer BOC would pay him $18,100 including the policy excess which the plaintiff needed to contribute himself.  In other words, the uninsured loss of $1,810 was calculated after the plaintiff had agreed that the total loss arising from the two incidents was $33,100.  The uninsured loss would only have been $1,810 which the defendants were willing to pay but the plaintiff had continued to reject it.  The Judge, therefore, found that the plaintiff was not entitled to pursue this claim. 

36.  This being a factual finding of the Judge, the plaintiff was not, and could not point to any misapplication by the Judge of the law on subrogation.  In our view, the Judge was correct to hold that the plaintiff has subrogated his right to the insurer, and by accepting his insurer’s compensation, he has no right to pursue any loss other than his uninsured loss. 

37.  This brings us to the second argument of the plaintiff, where he argues that the Judge should have held upon the following documentary evidence that the settlement concerned only his insured loss :

1)  Letter dated 22 July 2020 from United Adjusters to the plaintiff;

2)  Letter dated 6 August 2024 from United Adjusters to BOC;

3)  The Form of Acceptance dated 6 June 2017 signed by the plaintiff;

4)  Letter of Subrogation/Authorisation dated 6 June 2017 signed by the plaintiff;

5)  The discharge form not signed by the plaintiff;

6)  The revised Discharge Form dated 20 September 2024 signed by BOC.

38.  However, we do not see any merit in this argument.

39.  First, it is clear by the Judge’s comprehensive analysis of the parties’ arguments that he has considered the above documents.  The Judge has set out at [59] to [72] of the Judgment in chronological order the correspondences pertaining to the settlement negotiation conducted by the loss adjuster United Adjusters, who was in communication with the defendants’ solicitors and/or insurer AIA at the material time.

40.  In his analysis of the plaintiff’s case, the Judge was clearly alive to the fact that a discharge form was sent to United Adjusters for the plaintiff to sign, but the plaintiff had refused to sign it (see [69] and [70] of the Judgment).  The Judge has further addressed the implications of the plaintiff’s refusal to sign, and dealt with the plaintiff’s argument that there was no valid compromise because of the lack of agreement on the settlement terms.  The Judge was keenly aware that the Discharge Form dated 20 September 2024 signed by BOC was not the same as the unsigned form which had not been executed by the plaintiff.  The Judge understood correctly that the Discharge Form signed by BOC was for BOC to accept $16,920 as the settlement sum of the insured loss.  Hence, there is no basis to suggest that the Judge failed to take into account the relevant correspondences in determining the existence of a settlement.

41.  Second, the plaintiff’s repeated contention that the settlement only relates to insured losses and that he did not sign the discharge form misses the point: once the insurer has paid the insured loss and obtained a subrogation, it is the insurer (not the insured) who holds the right to pursue the claim for the insured portion.

42.  On the facts, there is no challenge that the plaintiff had signed a Letter of Subrogation/Authorisation dated 6 June 2017, subrogating all his rights, title and interest to BOC in and to the property for which claim is made in respect of loss or damage at Flat 310 caused by Incidents 1 and 2.  This was confirmed by the plaintiff’s witness Ms Wu under cross‑examination.  Consequently, the plaintiff (as the insured) retains only the uninsured portion (being the policy excess of $1,810) which the defendants had offered to pay, but for the plaintiff’s own reason has refused to accept. 

43.  In the circumstances, the plaintiff would have to sue on the settlement agreement governing the parties’ legal relationship in relation to Incidents 1 and 2.  The plaintiff had not done so.  There being no breach on the part of the defendants as regards the settlement, no order can be made to compel the defendants to pay the $1,810 to the plaintiff.  For these reasons, the Judge was entitled to find that the plaintiff cannot now maintain a claim for $1,810 in which the defendants were willing to pay.

44.  Third, the plaintiff further argues in his written statement that the Judge failed to take into account the fact that the Letter of Subrogation/Authorisation dated 6 June 2017 signed by the plaintiff authorising BOC was ‘on a limited basis’. 

45.  However, it is not clear how this contention could support the plaintiff’s case.  The plaintiff has not explained how or in what aspect did the Judge err in construing the document, or how this limited subrogation/authorisation would affect the right of BOC to pursue recovery of insured claim on the plaintiff’s behalf. 

46.  Moreover, this argument of a limited subrogation does not align with the testimony of the plaintiff’s own witness Ms Wu, who confirmed the execution of the Letter of Subrogation/Authorisation as recorded in the preamble of the Discharge Form.  Accordingly, the plaintiff’s insurer (BOC) has effectively stepped into the shoes of the plaintiff to recover the amount it paid out for the loss.  Therefore, the plaintiff having subrogated his right to the insurer and in accepting the insurer’s reimbursement, has no right to claim any loss other than his uninsured loss. 

47.  To conclude, the evidence amply supports the Judge’s finding of a valid settlement on Incidents 1 and 2.  The plaintiff is not able to show any palpable errors of the Judge in his evaluation of the evidence and the application of the law.  In short, there is no reasonable prospect of success in this ground. 

3)  Ground 2 – relating to Incident 3

48.  This ground is not reasonably arguable.  The plaintiff has failed to show that the finding is plainly wrong.  We are of the view that the Judge has properly considered the competing evidence adduced by the parties and gave cogent reasons for concluding that the plaintiff failed to prove his case under Incident 3.

4)  Ground 3 – relating to Incident 4

49.  This ground is not reasonably arguable.  The Judge gave sufficient and cogent reasons for rejecting the plaintiff’s case on Incident 4.

5)  Ground 4 – relating to Incident 4

50.  This ground is not reasonably arguable.  The Judge did not merely rely on the cessation of seepage during the non‑occupation period as evidence against the plaintiff.  Rather, the Judge relied on the fact that despite the defendants’ renovation, and despite the Joint Office’s finding that leakage had stopped, the plaintiff still complained of water seepage in December 2020 and January 2021.  This casts doubt as to whether the leakage originated from Flat 410.

6)  Ground 5 – relating to Incident 5

51.  This ground is not reasonably arguable.  This ground is in substance an attempt to re-run the plaintiff’s challenge of Dr Lam’s evidence at the trial.  The Judge, having considered the evidence of the case, was entitled to accept the evidence of Dr Lam over that of Mr Chin and other test results.

7)  Ground 6 – relating to Incident 5

52.  This ground is not reasonably arguable.  The Judge was entitled to find on the evidence that the water seeped through the defective external walls.  Even the plaintiff’s expert accepted that during cross-examination that the spraying tests showed that water did seep through the external wall.  As the Judge held :

‘ 110. Despite the tremendous and forceful arguments put forward by Mr. Ng for the Plaintiff, I agree with the Defendants that overall, the findings of the Joint Office, the admission of the MO and the expert evidence show that, on the balance of probabilities, the source of water leakage was not Flat 410.  The Defendants do not have to prove that the source lies elsewhere, but in this case, the evidence strongly suggests that the water seeps through the defective external walls, which were not in good condition.  It must be mentioned that in this case there is no suggestion that the Defendants had caused the external walls to be damaged, thus leading to the water seepage.  There can be no question of attributing the water seepage from the external wall to the Defendant’s fault.’

VII.  Conclusion

53.  To conclude, we are of the view that the intended appeal does not enjoy a reasonable prospect of success.  Nor is there any matter which, in the interests of justice, requires the appeal to be heard.  

54.  Accordingly, we dismiss the plaintiff’s summons for leave to appeal.

55.  As the present application is totally without merit, we further make an order under Order 59, rule 2A(8) of the Rules of the High Court that no party may pursuant to Order 59, rule 2A(7) request our determination to be reconsidered at an oral hearing inter partes.

VIII.  Costs

56.  Applying the normal rule of costs follow the event, we order the plaintiff to pay the defendants’ costs of the summons to be summarily assessed.  Taking a broad-brush approach, we summarily assess the defendants’ costs at $110,000.