LEUNG TSANG HUNG AND ANOTHER v. THE INCORPORATED OWNERS OF KWOK WING HOUSE

Court:  Chief Justice Li, Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ and Lord Woolf NPJ

Dates of Hearing:  11 and 12 October 2007

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 J U D G M E N T

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Chief Justice Li:

1.  I agree with the judgment of Mr Justice Ribeiro PJ.

Mr Justice Bokhary PJ:

2.  Without attempting an exhaustive statement of the legal position, I think that at least this much can be said.  Where any part of, or anything annexed to, the common parts of a building falls off as a result of its hazardous state and causes death, injury or damage in the street below, the incorporated owners are liable in nuisance for the consequences if they knew or ought to have known of the hazard in time to remove it but had unreasonably failed to do so.  I regard such a rule as consistent with principle.  And, as Lord Reid famously said in Dorset Yacht Co. Ltd v. Home Office [1970] AC 1004 at pp 1026H - 1027A, “when a new point emerges, one should ask not whether it is covered by authority but whether recognised principles apply to it”.  That was said in regard to negligence.  It holds good in regard to nuisance.  On the basis of what these incorporated owners ought to have known in the circumstances of the present case as disclosed by the evidence, I am of the view that the estate of this deceased woman is entitled to succeed against them.  For the foregoing reasons and those more fully stated in Mr Justice Ribeiro PJ’s judgment with which I agree, I would allow this appeal in the terms which he proposes. 

Mr Justice Chan PJ:

3.  I agree with the judgment of Mr Justice Ribeiro PJ.

Mr Justice Ribeiro PJ:

A. The fatal accident

4.  On 10 August 1999 at about 3.00 pm, Madam Liu Ngan Fong Sukey was plying her trade as a hawker at a fixed pitch in Tung Choi Street when she was struck by a piece of concrete which had fallen from the adjacent building.  She died in consequence. 

5.  The building is known as Kwok Wing House (“the building”) and the object which had caused Madam Liu’s death was a triangular-shaped piece of concrete weighing some 15 lbs which had fallen from the 11^th floor.  It had formed the corner of a concrete canopy projecting out from over the enclosed balcony of Flat A on that floor (“the flat”), before it had become detached and fallen down into the street. 

6.  It was an old building, the occupation permit having been issued in October 1964.  In the approved building plans, the flat was shown as having an open balcony with a cantilevered concrete canopy above it, some 380 mm in length.  Someone decided to enclose that balcony, installing walls and windows around the space to be enclosed and extending the canopy by some 590 mm to form the roof and ceiling.  The extended canopy projected beyond the face of the enclosed balcony by some 200 mm.  It was a corner of this extension that broke off and fell into the street.  There was no evidence as to who had enclosed the balcony or when this was done, although there is some suggestion that the enclosure was already in place when the occupation permit was granted.  It is in any event clear that the extended canopy had been in existence for some 35 years by the time of the accident.  It is common ground that the extended canopy was an illegal structure, its construction not having been authorized by the Building Authority.

7.  The trial judge, Deputy High Court Judge To,[1] noted that the unchallenged expert evidence was that the extended canopy had been cast against the approved canopy with a roughened joint but without any longitudinal steel reinforcement rods, a design not in conformity with the Building (Construction) Regulations.[2]  The evidence indicated that the workmanship was poor with the concrete being porous, having voids and low density.  The most likely cause of the concrete fragment’s detachment was the long-term effect of the extended canopy’s exposure to rainfall and the seepage of moisture through a hairline crack which had probably existed in the structure since its construction.  The Judge concluded that the cause of the collapse “could not have been anything other than what could properly be described as want of repair”.[3]

B.      The proceedings below and the present appeal

8.  The plaintiffs are the administrators of the estate of Madam Liu.  They sued Tse Yiu Pui and Ho Lai Bing who jointly owned the flat (“the owners”) as the 1^st defendants.  Chan Kwok Chi was their tenant (“the tenant”) and he was made the 2^nd defendant.  The 3^rd defendants are the incorporated owners of the building, being a corporation  which had come into existence on 12 April 1999 upon the owners being registered under the Building Management Ordinance[4] (“the BMO”).

9.  The owners consented to judgment so that at the trial, the Judge was concerned only with the liability of the tenant and the corporation.  They were each sued in negligence and public nuisance.  His Lordship found the tenant liable along with the owners but dismissed the action against the incorporated owners with costs, holding that they did not owe any actionable duty to the deceased.  Damages were assessed in the sum of $1,554,742.00 and judgment in that amount, together with various sums of interest and costs, was entered against the owners and the tenant.  The plaintiffs’ appeal to the Court of Appeal in relation to the liability of the incorporated owners was dismissed,[5] again on the basis that the corporation owed the deceased no operative duty.  An appeal on quantum is pending in the Court of Appeal.  Leave to appeal to this Court was granted by the Court of Appeal[6] under section 22(1)(b) of the Court’s statute. 

10.  It is common ground that the liability of the incorporated owners, if any, should be determined by applying the law of public nuisance, and that the tort of negligence does not add anything and need not be considered in the present appeal.

11.  As the common law principles governing liability for public nuisance have been in a state of development for some time, and as general consensus may be lacking as to certain constituent elements of the tort, it will be necessary first to identify the governing principles before seeking to apply them to this case.  Application of the principles will require consideration of the juridical nature of an owners’ incorporation and the basis upon which a claim in public nuisance may successfully be brought against such a corporation on the ground that it has omitted to carry out its duties. 

C.      The legal principles governing public nuisance

C.1    The nature of public nuisance

12.  Public nuisance is a common law offence.  Inheriting the jurisdiction from the office of Attorney-General, the Secretary for Justice may also move to restrain a public nuisance in a relator action brought on behalf of the public at large.  Public nuisance is furthermore actionable as a tort by an individual who has been caused particular damage over and above the damage suffered by the public at large.[7]  That is the basis of the present action.  The ingredients of a public nuisance are the same for both the crime and the tort.[8]

13.  While there is an overlap between the elements of public and private nuisance, they are causes of action which are different in kind.  Private nuisance is a tort protecting property rights.  It is concerned with the activities of the owner or occupier of property within the boundaries of his own land which may harm the interests of the owner or occupier of other land.[9]  But while most reported public nuisance cases involve nuisances on or emanating from land or buildings, an interest in land is not an essential element of the tort.  Neither the plaintiff (who will often, as in the present case, simply be a person using the public highway) nor the defendant (who may simply be someone who does an act creating a nuisance hazard) need have any interest in or relationship with any land or building.  Such defendants (in both civil and criminal public nuisance cases) have included, for instance, a shipowner[10] and a demise charterer[11] of a vessel discharging oil into navigable waters; a person parking a lorry on the public highway;[12] and senders of racially offensive letters and letters containing salt which caused an anthrax scare.[13]

C.2    Hazards which amount to public nuisances

14.  A state of affairs which constitutes a public nuisance is one which endangers the lives, safety, health, property or comfort of the public; or  obstructs the public in the exercise or enjoyment of any right that is common to members of the public.  This is a proposition derived from a number of definitions approved by Lord Bingham of Cornhill in R v Rimmington.[14]  I will refer to such a state of affairs as “the nuisance hazard”.

C.3    Acts and omissions

15.  A defendant may be held liable for public nuisance on the basis of his positive act or his omission.  The present case has been approached on the basis of an omission on the part of the incorporated owners.  In each case, the nuisance hazard which arises from the act or omission must be causative of particular injury to a member of the public.  Certain differences necessarily exist in the rules applicable to acts and to omissions respectively.  Lord Hoffmann put the need to differentiate between acts and omissions as follows:

“There are sound reasons why omissions require different treatment from positive conduct. It is one thing for the law to say that a person who undertakes some activity shall take reasonable care not to cause damage to others.  It is another thing for the law to require that a person who is doing nothing in particular shall take steps to prevent another from suffering harm from the acts of third parties ... or natural causes.”[15]

16.  Where a nuisance hazard results from a positive act by the defendant, the basis of liability is relatively straightforward.  But before a defendant’s omission is actionable, he must first have been under a legal duty to eliminate the nuisance hazard or to prevent it from causing harm to the public.  The law must then recognize an entitlement on the part of an injured plaintiff to compensation for the defendant’s omission, which entitlement does not follow as a matter of course. 

C.4    Need for knowledge or presumed knowledge

17.  The modern case-law establishes that a defendant can only be liable for public nuisance if he knew or ought reasonably to have known (in that the means of knowledge were reasonably available to him) that his act or omission would result in a nuisance hazard presenting a real risk of harm to the public.  Where a defendant ought reasonably to have known of the risk, he may be said[16] to have the necessary “presumed knowledge”.

(a) In Sedleigh-Denfield v O’Callaghan,[17] Lord Wright stated:

“Though the rule has not been laid down by this House, it has I think been rightly established in the Court of Appeal that an occupier is not prima facie responsible for a nuisance created without his knowledge and consent. If he is to be liable a further condition is necessary, namely, that he had knowledge or means of knowledge, that he knew or should have known of the nuisance in time to correct it and obviate its mischievous effects. The liability for a nuisance is not, at least in modern law, a strict or absolute liability.”

(b) In Overseas Tankship (UK) Ltd v Miller SS Co Pty, The Wagon Mound (No 2),[18] while acknowledging that negligence is not an essential element of nuisance (in the sense considered below), Lord Reid explained:

“... although negligence may not be necessary, fault of some kind is almost always necessary and fault generally involves foreseeability, eg, in cases like Sedleigh-Denfield v O’Callaghan the fault is in failing to abate the nuisance of the existence of which the defender is or ought to be aware as likely to cause damage to his neighbour.”

(c) In R v Rimmington,[19] Lord Bingham regarded the passage from Lord Wright’s judgment in Sedleigh-Denfield v O'Callaghan cited above as “what has come to be accepted as the test”.  And Lord Rodger of Earlsferry approved the Court of Appeal’s decision in R v Shorrock,[20] holding “that a defendant landowner was responsible for a public nuisance which he knew or ought to have known (in the sense that the means of knowledge were available to him) would be the consequence of activities carried on by him on his land.”[21]

(d) One may also note that the Australian High Court has declared that the test for liability in public nuisance, at least as applied to highway cases, has been “absorbed by the principles of ordinary negligence”.[22]

18.  It is furthermore established that, as with the tort of negligence, a defendant is not liable in public nuisance unless the injury caused to the plaintiff is of a foreseeable type.[23] 

19.  It follows from the above that it is now recognized that liability in public nuisance is not “strict” or “absolute”.  Cases suggesting the contrary should no longer be followed.  Technical distinctions (often difficult to draw) should no longer provide the basis for determining whether liability is strict or alternatively dependent on knowledge or presumed knowledge. 

20.  Thus, a distinction was drawn in Wringe v Cohen[24] (and followed in many cases[25]) between instances where the nuisance hazard was due to “want of repair” (when liability was said to be strict) and cases where the hazard was due to the act of a trespasser or to “a secret and unobservable operation of nature” or to a “latent defect” (when liability was said to depend on whether the defendant knew or ought to have known of the nuisance hazard).  That distinction was adopted by Yuen JA below.[26]  However, in The Wagon Mound (No 2),[27] having stressed the need for fault in public nuisance, Lord Reid, speaking for the Privy Council, went out of his way to say: “Their Lordships express no opinion about cases like Wringe v Cohen, on which neither counsel relied.”  Of course, in a case where a property is in a dilapidated condition and plainly suffering from want of repair, it will generally not be difficult to establish knowledge or presumed knowledge of the nuisance hazard. 

21.  Other technical distinctions which equally should no longer serve as a basis for determining whether or not liability is strict include distinctions between hazards which abut upon or overhang a highway (where liability has been treated as strict, as with the collapsing wall in Mint v Good[28]) or merely near a highway (where it has not, like the Hawthorn tree in Salsbury v Woodland[29]); or between artificially made hazards (like the gas lamp in Tarry v Ashton[30])and natural hazards (like the tree branch in Noble v Harrison[31]) which overhang the highway. 

22.  Although in Mint v Good,[32] Denning LJ joined Somervell LJ in applying Wringe v Cohen[33] and holding that liability for public nuisances affecting users of the highway was strict, it is noteworthy that five years later, in the unreported case of Morton v Wheeler,[34] cited by Lord Reid in The Wagon Mound (No 2),[35] Lord Denning MR stated:

“But how are we to determine whether a state of affairs in or near a highway is a danger?  This depends, I think, on whether injury may reasonably be foreseen. If you take all the cases in the books, you will find that if the state of affairs is such that injury may reasonably be anticipated to persons using the highway it is a public nuisance.”

This received the Privy Council’s approval, Lord Reid commenting:

“So in the class of nuisance which includes this case [ie, a highway case] foreseeability is an essential element in determining liability.”[36]

23.  In my view, the law has now evolved to the point where the question is simply whether the defendant knew or ought to have known of the relevant nuisance hazard.  Thus, it must be shown that a defendant whose positive act creates the hazard knows or ought to know that it is the likely consequence of his act.  And a defendant who is potentially liable on the basis of an omission must be shown to have had knowledge or presumed knowledge that a nuisance hazard is the likely consequence of his failure to carry out his applicable duty.

C.5    Negligence not essential but liability is not strict

24.  It is clear that negligence is not an essential element of public nuisance.  However, this does not mean that liability is strict or absolute.  It means that where a defendant does an act with knowledge or presumed knowledge that it may result in a nuisance hazard causing injury to the public, it is no answer for him to say that he took all reasonable care to avoid causing injury if his act turns out to be causative of a foreseeable type of harm.  As Lord Goff of Chieveley put it:

“... it is still the law that the fact that the defendant has taken all reasonable care will not of itself exonerate him from liability, the relevant control mechanism being found within the principle of reasonable user.  But it by no means follows that the defendant should be held liable for damage of a type which he could not reasonably foresee;  and the development of the law of negligence in the past 60 years points strongly towards a requirement that such foreseeability should be a prerequisite of liability in damages for nuisance, as it is of liability in negligence.”[37]

C.6    Duty may be non-delegable but liability is not strict

25.  It is also important not to confuse strict or absolute liability with liability arising under a non-delegable duty.  Where a defendant is under a duty to nullify a nuisance (in circumstances discussed further below), that duty is non-delegable.  He remains liable even though he has engaged an apparently competent independent contractor to eliminate the nuisance hazard if, through the latter’s negligence or otherwise, the hazard is not in fact removed, resulting in injury to the plaintiff. 

26.  The frequently cited case of Tarry v Ashton[38] is properly understood as illustrating the foregoing proposition and not, as is sometimes suggested, as an authority for strict liability in relation to injury caused by structures projecting over the highway.  It was a case involving injury to a passer-by when a heavy gas lamp overhanging the pavement fell on her.  The defendant occupier knew or ought to have known of the potentially dangerous condition of the lamp and was held liable because his duty was non-delegable, not because liability was strict.  Blackburn J put it thus:

“Now in the present case there is ample evidence that in August the defendant was aware that the lamp might be getting out of repair, and, it being his duty to put it in repair, he employs Chappell to do so. We must assume, I think, that Chappell was a proper person to employ; and I may observe that he was clearly not the defendant’s servant, as the jury say, but an independent contractor. But it was the defendant’s duty to make the lamp reasonably safe, the contractor failed to do that; and the defendant, having the duty, has trusted the fulfilment of that duty to another who has not done it. Therefore the defendant has not done his duty, and he is liable to the plaintiff for the consequences. It was his duty to have the lamp set right; it was not set right.”[39]

This was re-iterated by his Lordship in the House of Lords five years later in Charles Dalton v Henry Angus & Co,[40] citing Tarry v Ashton among other cases:

“... a person causing something to be done, the doing of which casts on him a duty, cannot escape from the responsibility attaching on him of seeing that duty performed by delegating it to a contractor. He may bargain with the contractor that he shall perform the duty and stipulate for an indemnity from him if it is not performed, but he cannot thereby relieve himself from liability to those injured by the failure to perform it.”

27.  In Salsbury v Woodland,[41] Widgery LJ rejected the argument that Tarry v Ashton was a strict liability highway case, explaining that it was concerned with a non-delegable duty:

“[Counsel] argued that [Tarry v Ashton] illustrated the special sympathy with which the law regards passers-by on the highway.  He said that it demonstrated that the law has always been inclined to give special protection to persons in that category and so supported his argument that any action adjacent to the highway might be subject to special rights.  But, in my judgment, that is not so. Tarry v Ashton seems to me to be a perfectly ordinary and straightforward example of a case where the employer was under a positive and continuing duty to see that the lamp was kept in repair. That duty was imposed upon him before the contractor came and after the contractor had gone; and on the principle that such a duty cannot be delegated the responsibility of the employer in that case seems to me to be fully demonstrated.”

C.7    Liability based on positive acts

28.  Where alleged liability is based on a positive act, the defendant is liable if the act is his own or the act of someone for whom he is vicariously liable.  It is not clear whether a defendant can be made liable in this context for the acts of an independent contractor for whom he is not vicariously liable.  Without deciding the question, the better view seems to be that no such liability arises unless the independent contractor was engaged by the defendant with a view to discharging a non-delegable duty resting upon the defendant.

C.8    Liability based on omissions

29.  As noted above, an omission is only actionable in public nuisance if the defendant is under a duty to neutralize the nuisance hazard and fails to do so in circumstances where the law confers on the injured plaintiff the right to compensation from the defendant.  This is necessarily the position since everyone, and not merely any particular defendant, will have omitted to act.  A prerequisite of liability must be the identification of a duty on the defendant to prevent the nuisance from causing harm.  That duty must then be one which the law regards as actionable on behalf of the injured plaintiff, as opposed to a duty owed only within the confines of some other scheme of liability, whether contractual or otherwise.  As previously noted, such an actionable duty is non-delegable.  How then does the law identify cases where omissions are so actionable?

C.9    Occupiers of land: the criterion of control

30.  In one class of cases, liability on the basis of an omission – that is, of having done nothing – is clearly established.  Occupiers of land generally come under a duty to remove any nuisance hazard on or emanating from the land of which they have knowledge or presumed knowledge, or at least to prevent such hazard from injuring members of the public.  If they fail to do so and injury results, they are liable in public nuisance for such omission.  The law imposes that duty because occupation generally gives such immediate and practical control over the property that the occupier is justifiably made liable on the basis of omission. 

31.  Thus, in Wilchick v Marks and Silverstone,[42] Goddard J posed the question and supplied the answer as follows:

“What is the principle that determines the liability for nuisance; why is it that prima facie it is the occupier who is liable? In Laugher v Pointer 5 B & C 547, 576; Abbott CJ said: ‘I have the control and management of all that belongs to my land or my house; and it is my fault if I do not so exercise my authority as to prevent injury to another.’” 

32.  And in L E Jones (Insurance Brokers) Ltd v Portsmouth City Council,[43] Dyson LJ explained the criterion for liability in this class of cases as follows:

“... the basis for the liability of an occupier for a nuisance on his land is not his occupation as such.  Rather, it is that, by virtue of his occupation, an occupier usually has it in his power to take the measures that are necessary to prevent or eliminate the nuisance.  He has sufficient control over the hazard which constitutes the nuisance for it to be reasonable to make him liable for the foreseeable consequences of his failure to exercise that control and so remove the hazard.”

C.9a  Liability for omission of an owner-occupier

33.  A number of sub-categories within this class may be identified.  The paradigm instance where liability for omission is established involves owners in actual occupation of their land.  Such persons can plainly be expected to have effective control, both physically and legally, over the property in question.  Such an owner-occupier is subject to a duty to nullify the hazard if he knows or ought to know of its existence, even though he has done nothing to create it.  The hazard may have been created by a trespasser[44] or a by “a secret and unobservable operation of nature”[45], but his omission to neutralize the hazard within a reasonable time[46] after acquiring the requisite knowledge or presumed knowledge is actionable if particular injury results to a member of the public.

C.9b  Liability of an owner in respect of vacant land 

34.  An owner may have left his land vacant.  In such cases, although he is factually not in occupation, he is still regarded, by virtue of his ownership, as having sufficient control of the land to be made subject to liability on the basis of omission if he has the requisite knowledge or presumed knowledge. 

35.  A relator action succeeded, for instance, in AG v Tod Heatley,[47] where the owner’s vacant lot had been used by trespassers for dumping “dead dogs and cats, vegetable refuse, fish, offal, rubbish, and all kinds of filth” causing a public nuisance.  Lindley LJ stated:

“Now is it, or is it not, a common law duty of the owner of a vacant piece of land to prevent that land from being a public nuisance? It appears to me that it is. ... If the owner of a piece of land does permit it to be in such a state, eg smothered or covered with filth, that it is a public nuisance, he commits an indictable offence. He has no defence whatever to an indictment for such a public nuisance. It is no defence to say, ‘I did not put the filth on but somebody else did.’  He must provide against this if he can. His business is to prevent his land from being a public nuisance.”[48]

C.9c  Where land is occupied by a tenant

36.  Another sub-category within this class involves land, not occupied by the owner but by a tenant (by which term I include any sub-tenant or licensee who may be in actual occupation).  It is clear that the tenant, as occupier and therefore presumptively in immediate control of the premises, is in principle subject to liability by way of omission.  Thus, in St Anne’s Well Brewery Company v Roberts,[49] Scrutton LJ, referring to a tenant, stated:

“... it is clear law that the person liable for a nuisance on premises is surely the occupier.”

37.  However, it may be quite unrealistic to expect the tenant, who may merely be a weekly or monthly tenant with modest resources to have the means to eliminate and to be required to assume sole responsibility for eliminating a nuisance hazard of which he knows or ought to know.  The courts have therefore been ready to hold that the owner or landlord remains liable even though he has parted with possession to the tenant.  Thus, in Wilchick v Marks and Silverstone,[50] a passer-by was injured by a shutter falling from a building and sued both the owners and the tenant.  The landlords were found to have known of the hazard posed by the shutter and to have reserved to themselves the right to enter and do repairs if they thought fit.  That was enough for the court to hold them liable along with the tenants.  As Goddard J put it:

“A property owner knows that his house if not repaired must at some time get into a dangerous state: he lets it to a tenant and puts him under no obligation to keep it repaired: it may be the tenant is one who from lack of means could not do any repairs. The landlord has expressly reserved to himself the right to enter and do necessary repairs: why then should he be under no duty to make it safe for passers by when he knows that the property is dangerous? The proximity is there: he has the right to enter and remedy a known danger.  Is the injured person to be left in such a case only to a remedy against the tenant, who in this sort of tenancy, which commonly obtains only with regard to small properties, is probably in quite humble circumstances?”[51]

His Lordship concluded that the landlords “had the authority; they knew ... of the necessity to exercise it; they failed to do so and are accordingly liable.”[52]

38.  Powers of entry and repair are readily implied where no express covenant exists.  Thus, in Mint v Good,[53] a case involving a weekly tenancy, Somervell LJ commented that:

“... in the absence of evidence which excluded it, there is no term which would be more easily and more necessarily implied by law in a tenancy of this kind than a right in the landlord to enter, or to re-enter, to examine the premises and to do necessary repairs. It must be in the contemplation of both parties to such a weekly tenancy that the tenant will not be called upon to do  repairs.”

His Lordship concluded that:

“... in the case of a weekly tenancy, business efficacy certainly will not be effected if the house is allowed to fall into disrepair and no one keeps it in reasonable condition; and it seems to me, therefore, necessary for business efficacy that the landlord should have the right which I have defined.”

39.  This willingness to attribute liability to the landlord is not limited to cases involving short tenancies.  Brew Bros Ltd v Snax (Ross) Ltd[54] concerned a 14 year lease where the landlords took a covenant from the tenant to keep the demised premises in good repair.  The landlords were nonetheless held liable in respect of a wall which had become dangerous due to the undermining of its foundations because of seepage from defective drains.  It was held that the landlords ought to have known of that condition prior to the lease when they had full control of the property, notwithstanding the tenant’s covenant to be responsible for repairs.  Sachs LJ summarised the position, stressing the non-delegable nature of the owners’ duties as follows:

“... the test of an owner’s duty to his neighbour now depends on the degree of control exercised by the owner in law or in fact for the purpose of repairs: see the judgment of Denning LJ in Mint v Good at p 528, as fully agreed by Birkett LJ at p 529. As regards nuisances of which he knew at the date of the lease, the duty similarly arises by reason of his control before that date. Once the liability attaches I can find no rational reason why it should as regards third parties be shuffled off merely by signing a document which as between owner and tenant casts on the latter the burden of executing remedial work. The duty of the owner is to ensure that the nuisance causes no injury - not merely to get somebody else’s promise to take the requisite steps to abate it.”

40.  An owner can therefore usually be shown to have a sufficient degree of control to be made liable together with the tenant.

C.10  Relevance of the defendant’s resources

41.  As the foregoing cases indicate, in the context of liability by omission, a particular defendant’s resources are relevant to his potential liability.  The law adopts the criterion of what is reasonable in all the circumstances.  In asking whether a defendant ought to have known of a nuisance hazard, the financial and other resources realistically available to him are taken into account in deciding whether he ought reasonably in all the circumstances be regarded as having had the means of knowledge.  Similarly, such resources are taken into account in deciding whether in all the circumstances he ought reasonably be held responsible for failing to neutralize a nuisance hazard of which he had knowledge or presumed knowledge.

42.  In Goldman v Hargrave,[55] Lord Wilberforce put the principle thus:

“...the law must take account of the fact that the occupier on whom the duty is cast has, ex hypothesi, had this hazard thrust upon him through no seeking or fault of his own. His interest, and his resources, whether physical or material, may be of a very modest character either in relation to the magnitude of the hazard, or as compared with those of his threatened neighbour. A rule which required of him in such unsought circumstances in his neighbour’s interest a physical effort of which he is not capable, or an excessive expenditure of money, would be unenforceable or unjust. One may say in general terms that the existence of a duty must be based upon knowledge of the hazard, ability to foresee the consequences of not checking or removing it, and the ability to abate it.”

43.  In Leakey v National Trust,[56] Megaw LJ stated:

“The criteria of reasonableness include, in respect of a duty of this nature, the factor of what the particular man - not the average man - can be expected to do, having regard, amongst other things, where a serious expenditure of money is required to eliminate or reduce the danger, to his means. Just as, where physical effort is required to avert an immediate danger, the defendant’s age and physical condition may be relevant in deciding what is reasonable, so also logic and good sense require that, where the expenditure of money is required, the defendant’s capacity to find the money is relevant. But this can only be in the way of a broad, and not a detailed, assessment; and, in arriving at a judgment on reasonableness, a similar broad assessment may be relevant in some cases as to the neighbour’s capacity to protect himself from damage...”

44.  The question of resources is, however, only relevant in omission cases.  As Lord Hoffmann pointed out in Stovin v Wise,[57] a defendant’s lack of resources to abate a nuisance caused by his own positive acts is in principle irrelevant:

“[In Goldman v Hargreave]... Lord Wilberforce underlined the exceptional nature of the liability when he pointed out that the question of whether the landowner had acted reasonably should be judged by reference to the resources he actually had at his disposal and not by some general or objective standard. This is quite different from the duty owed by a person who undertakes a positive activity which carries the risk of causing damage to others. If he does not have the resources to take such steps as are objectively reasonable to prevent such damage, he should not undertake that activity at all.”

45.  As we have seen, in omission cases, effective practical control over the property in which the nuisance hazard arises is the criterion for imposing a duty to remove the hazard in the class of cases mentioned above.  It is consistent to regard a defendant’s lack of the resources objectively required to gain knowledge of and/or to eliminate the hazard as negating such control and so removing the basis of the duty. 

C.11  Actionable omissions unrelated to occupation: public authorities

46.  Do any other categories exist where omissions are similarly actionable?  In particular, is there a category in which a defendant who is not in occupation or control of land in which a nuisance hazard arises, can be made liable in public nuisance for doing nothing to abate that hazard?

47.  The debate has focused in this context on public authorities.  Attempts have been made to impose liability for public nuisance or negligence on a public authority for omitting to exercise its statutory powers or to carry out its statutory duties so as to remove a nuisance hazard of which it knows or ought to know, where injury to members of the public is the foreseeable consequence of inaction.  Thus, there have been attempts to make highway authorities liable for failing to use statutory powers variously to remove a bank of land obstructing the views of drivers at a road junction;[58] to erect “Give Way” signs so as to give earlier warning of a road junction;[59] and to warn motorists not to drive too quickly when approaching a dangerous road configuration by painting a “Slow” sign on the road.[60]  Similarly, public authorities having powers and duties to provide drainage services have been sued where inadequate sewers have resulted in overflows causing foreseeable damage to the plaintiffs’ land.[61]  There may be cases where it is necessary to distinguish between statutory powers and statutory duties,[62] but for present purposes, unless that need arises, I shall simply refer to “statutory powers” as shorthand for both.

48.  It should be emphasised that this is not a discussion about tortious liability for breach of statutory duty.  A statutory provision may impose a duty in terms making non-compliance actionable as a tortious breach of statutory duty.  Whether this is the effect of the provision is a matter of statutory construction. [63]  But in the cases under discussion, it is not suggested that the statutory powers in question can be construed as giving such a remedy.  Instead, the statutory powers are relied on for supplying a duty or power which forms the basis for an omission on the part of the relevant public authority to be actionable in public nuisance or negligence.

49.  This is an evolving area of law, as Lord Steyn pointed out.[64]  However, it is a category of proposed liability with a future which is at least uncertain.  If, as a matter of statutory construction, the public authority’s failure to act does not constitute an actionable breach of statutory duty, why should the same omission provide a basis for establishing liability in negligence or public nuisance on its part?  The intractability of this difficulty for proponents of liability has been noted on a number of occasions.  Thus, in Stovin v Wise,[65] Lord Hoffmann stated:

“As Lord Browne-Wilkinson said in X (Minors) v Bedfordshire County Council [1995] 2 AC 633, 739C in relation to the duty of care owed by a public authority performing statutory functions: ‘the question whether there is such a common law duty and if so its ambit, must be profoundly influenced by the statutory framework within which the acts complained of were done.’  

The same is true of omission to perform a statutory duty. If such a duty does not give rise to a private right to sue for breach, it would be unusual if it nevertheless gave rise to a duty of care at common law which made the public authority liable to pay compensation for foreseeable loss caused by the duty not being performed.”

50.  In Rice v Secretary of State for Trade and Industry,[66] after reviewing the authorities, May LJ stated: 

“... a statute containing broad target duties owed to the public at large, and which does not itself confer on individuals a right of action for breach of statutory duty, is unlikely to give rise to a common law duty of care, breach of which will support a claim by an individual for damages.”

51.  In Gorringe v Calderdale Metropolitan Borough Council, [67] Lord Hoffmann took as his example O’Rourke v Camden London Borough Council,[68] where a homeless person’s action for damages on the ground that the council had failed in its statutory duty to provide him with accommodation was struck out on the ground that the statute gave rise to no private rights. His Lordship commented:

“In the absence of a right to sue for breach of the statutory duty itself, it would in my opinion have been absurd to hold that the council was nevertheless under a common law duty to take reasonable care to provide accommodation for homeless persons whom it could reasonably foresee would otherwise be reduced to sleeping rough.”

52.  In the same case,[69] Lord Scott of Foscote went so far as to hold that the absence of a right of action for breach of statutory duty meant that no common law duty was capable of arising:

“In my opinion, if a statutory duty does not give rise to a private right to sue for breach, the duty cannot create a duty of care that would not have been owed at common law if the statute were not there. If the policy of the statute is not consistent with the creation of a statutory liability to pay compensation for damage caused by a breach of the statutory duty, the same policy would, in my opinion, exclude the use of the statutory duty in order to create a common law duty of care that would be broken by a failure to perform the statutory duty.” 

53.  Even if the proposed doctrine is not at present quite as definitively interred as Lord Scott would have it, it plainly cannot presently be regarded as established.[70]  It is at least true to say that it can only be in exceptional circumstances (if at all) that any such liability can arise.[71]  It is also clear that the mere existence of a statutory power which is causally relevant to the plaintiff’s injury cannot give rise to common law liability (even if the public authority has the needed knowledge or presumed knowledge).  Even if liability can arise, something more is required.  But there is no agreement as to what such additional ingredients might be.  In these circumstances, it is unnecessary and would be speculative to attempt further analysis of this proposed category.

54.  I should, however, emphasise that this discussion concerns attempts to impose liability on public authorities for omission.  It is not concerned with the liability which public authorities attract like other persons where they perform acts which negligently or otherwise unlawfully cause damage, unless their liability is excluded by statute.  This was stressed by Lord Hoffmann in Gorringe[72] in the following terms:

“We are not concerned with cases in which public authorities have actually done acts or entered into relationships or undertaken responsibilities which give rise to a common law duty of care. In such cases the fact that the public authority acted pursuant to a statutory power or public duty does not necessarily negative the existence of a duty.  A hospital trust provides medical treatment pursuant to the public law duty in the National Health Service Act 1977, but the existence of its common law duty is based simply upon its acceptance of a professional relationship with the patient no different from that which would be accepted by a doctor in private practice. The duty rests upon a solid, orthodox common law foundation and the question is not whether it is created by the statute but whether the terms of the statute (for example, in requiring a particular thing to be done or conferring a discretion) are sufficient to exclude it. The law in this respect has been well established since Geddis v Proprietors of the Bann Reservoir (1878) 3 App Cas 430.”

D.      Application of the principles to the present case

55.  The plaintiffs’ claim against the incorporated owners is founded on an omission.  Their pleaded case focuses on the corporation’s failure:

(a) to ensure that the canopy “while it remained on the external wall ... was inspected regularly by qualified professionals to see to it that it was maintained in a good and safe condition”; and

(b) “to ensure that the canopy was removed from the external wall ... when it knew or ought to have known that it was an unauthorized structure and/or it had fallen into a dangerous state of repair”.

56.  It was accordingly their case that the canopy was in a dangerous condition amounting to a nuisance hazard; that the corporation knew or ought to have known of that hazard; and that it is answerable in damages for failing to take any steps towards having the canopy removed or otherwise neutralizing the hazard.

D.1    The existing categories

57.  As noted in Section C.8 of this judgment, an omission is only actionable in public nuisance if the defendant is under a duty to eliminate the nuisance hazard and if his failure to do so is regarded in law as actionable at the suit of the injured plaintiff.  As discussed above,[73] a category where such omissions are recognized as giving rise to liability involves owners and/or occupiers of land who are regarded as having such immediate and practical control over the property that making them liable on such basis is justified.  And, as noted above,[74] a possible further category has been mooted but whose existence has been doubted, involving public authorities which have knowledge or presumed knowledge of a nuisance hazard likely to cause harm to members of the public, but which fail to exercise their statutory powers to prevent such injury.

58.  Plainly, the incorporated owners do not fall neatly within either category.  They are not owners or occupiers in the sense discussed above.[75]  Nor are they a public authority.  They are a corporation created under the BMO and given particular duties, powers and functions in relation to properties in multi-ownership in the Hong Kong context. 

59.  Mr Denis Chang SC, appearing with Ms Corinne Remedios for the appellants, submits that an examination of the juridical nature of an owners’ incorporation and of its duties and powers arising under the BMO and under the deed of mutual covenant (“DMC”) shows that it is in effect the corporate embodiment of the owners collectively, possessing and exercising such control over the common parts of the building that they should for all practical purposes be treated as if they were owners and occupiers of such common parts and therefore as falling within the recognized or an analogous category.

60.  Mr Ruy Barretto SC, appearing with Mr Meyrick Wong on behalf of the incorporated owners, contends that no basis exists for regarding his clients as falling either actually or by analogy within the recognized category of owners and/or occupiers of premises.  He argues that the Court of Appeal was correct to hold[76] that only “occupational control” meaning “control associated with and arising from presence in and use of or activity in the premises”[77] suffices to generate a duty giving rise to an actionable omission, and that such control was plainly absent.  While it is not an essential part of his case, he submits that the incorporated owners’ position is, if anything, analogous to that of public authorities where the existence of a relevant duty to act has been much doubted.[78] 

D.2    Excluding the public authority category

61.  If the incorporated owners were to be regarded as falling within the public authority category, it would follow that on the authorities as they stand, its failure to exercise any relevant powers or to carry out its duties under the BMO and the DMC would not be sufficient to constitute an actionable omission even if they had the knowledge or presumed knowledge of the hazardous condition of the extended canopy.

62.  It is not appropriate for the corporation to be so regarded.  The law has been reluctant to impose liability on public authorities at the suit of an individual affected by non-exercise of statutory powers or duties for two compelling reasons which are inapplicable to an owners’ incorporation. 

63.  This is first, because the imposition of liability would require the court’s intervention in high-level policy decisions regarding the allocation of public resources in the obviously inappropriate setting of an individual claim brought in public nuisance or negligence.  This is illustrated by Marcic v Thames Water Utilities Ltd,[79] a case involving a plaintiff who had regularly suffered damage caused by flooding due to overloaded sewers operated by the defendant.  The latter was under a statutory duty to provide a system of public sewers so as “to ensure that the area is and continues to be effectually drained”.  The plaintiff sued in nuisance, contending that the authority had failed to carry out its duty to provide adequate sewers and seeking to compel the authority to build new drains.  He failed.  Having pointed out that the courts are accustomed to dealing with nuisance claims between two private individuals, Lord Hoffmann continued as follows:

“But the exercise becomes very different when one is dealing with the capital expenditure of a statutory undertaking providing public utilities on a large scale. The matter is no longer confined to the parties to the action. If one customer is given a certain level of services, everyone in the same circumstances should receive the same level of services. So the effect of a decision about what it would be reasonable to expect a sewerage undertaker to do for the plaintiff is extrapolated across the country. This in turn raises questions of public interest. Capital expenditure on new sewers has to be financed; interest must be paid on borrowings and privatised undertakers must earn a reasonable return. This expenditure can be met only by charges paid by consumers. Is it in the public interest that they should have to pay more? And does expenditure on the particular improvements with which the plaintiff is concerned represent the best order of priorities?   These are decisions which courts are not equipped to make in ordinary litigation.”[80]

64.  Secondly, individuals’ rights and obligations vis-à-vis public authorities are regulated by public law doctrines which have their own rationale and mechanisms for balancing competing policies and interests.  To permit individuals simply to sue public authorities for private law remedies on the ground of non-exercise of their statutory powers (where the enactment cannot be construed as intending to provide a remedy for breach of statutory duty) is likely to do violence to those public law doctrines and concepts.  Thus, in Sutherland Shire Council v Heyman,[81] Mason J stressed that the precise public law duty should be given effect and not permitted to found a much broader private law claim:

“... although a public authority may be under a public duty, enforceable by mandamus, to give proper consideration to the question whether it should exercise a power, this duty cannot be equated with, or regarded as a foundation for imposing, a duty of care on the public authority in relation to the exercise of the power. Mandamus will compel proper consideration of the authority of its discretion, but that is all.”

65.  The possibility of reconciling public and private law doctrines by importing public law concepts as ingredients of a private law cause of action (such as a requirement that an omission must be irrational in the public law sense before it is actionable[82]) was firmly rejected by the House of Lords in Barrett v Enfield London Borough Council[83] and Gorringe v Calderdale Metropolitan Borough Council.[84]

66.  It is accordingly my view that the incorporated owners should not be excluded from liability by analogy with the public authority category of cases.

D.3    The legal attributes of an owners’ incorporation

67.  I turn then to the question whether incorporated owners should be treated as falling within the established owner and/or occupier category or within an analogous category of actionability.  This requires us, in the first place, to examine the legal attributes, powers and duties of the owners’ incorporation.

68.  Co-owners in a building such as the present hold their proprietary interests in the land and building as tenants in common.  As Mr Justice Litton PJ pointed out in Jumbo King Ltd v Faithful Properties Ltd,[85] the right of each co-owner is to an undivided share in the property, with each of them prima facie entitled to exert rights of possession over every part of the land and building, in common with the other owners.  This “unity of possession” is regulated by mutual covenant.  The co-owners enter into a DMC defining their mutual rights, interests and obligations.  It is by means of the DMC that rights of exclusive possession to individual portions are marked out and common parts, to be used and enjoyed by all owners in common, are designated.

69.  Before the advent of statutory owners’ incorporations,[86] the co-owners had to act together in relation to the common parts.  An owners’ committee was usually formed to take this in hand and it might in turn engage a manager to carry out the day-to-day management.  The cost would be shared among the co-owners and if legal proceedings were taken either by or against them, this would be done by naming each of them as a party.  Where, for instance, a visitor to the building was injured because of negligently maintained common parts, he would have to sue all the owners (along with any manager appointed by them) as occupiers.

70.  Such a procedure is obviously very cumbersome[87] and, as the BMO’s long title indicates, the main purpose of the Ordinance is to “facilitate the incorporation of owners of flats in buildings ..., to provide for the management of buildings ... and for matters incidental thereto or connected therewith.”  This is achieved by the creation of a statutory owners’ incorporation. 

71.  The close identification of such a corporation with the owners collectively is strikingly apparent from the BMO’s provisions.  Thus, the way in which the process of incorporation commences is by the management committee appointed by the owners applying to the Land Registrar “for the registration of the owners as a corporation.”[88]  Upon registration:

“... the owners for the time being shall be a body corporate with perpetual succession and shall in the name of the corporation specified in the certificate of registration be capable of suing and being sued and, subject to this Ordinance, of doing and suffering all such other acts and things as bodies corporate may lawfully do and suffer.”[89]

72.  After formation, resolutions passed at meetings of the corporation “with respect to the control, management and administration of the common parts or the renovation, improvement or decoration of those parts” bind all the owners.[90]  The corporation has generally the power to “act on behalf of the owners in respect of any ... matter in which the owners have a common interest.”[91]  It may finance its activities by establishing a fund maintained by the contributions of the owners[92] “to defray the cost of the exercise of its powers and the performance of its duties under [the DMC]”[93] and to pay Government levies and “other outgoings (including any outgoings in relation to any maintenance or repair work) which are payable in respect of the building as a whole”.[94]  If the corporation is successfully sued, the judgment may be enforced against its property or, with leave of the Lands Tribunal “against any owner”.[95]  And if it should be wound up:

“the owners shall be liable, both jointly and severally, to contribute, according to their respective shares, to the assets of the corporation to an amount sufficient to discharge its debts and liabilities.”[96]

73.  It is clear from the foregoing that an owners’ incorporation is the corporate embodiment of the co-owners collectively.  The corporation is a separate legal personality capable of suing and being sued in its own name, not because it has or is given by statute any rights or liabilities separate from those that are vested in the co-owners, but to facilitate the exercise and enforcement of those very rights and liabilities, avoiding the cumbersome procedures previously required.  It is through registration of the owners as a whole that the corporation is born.  When it acts, it binds them all.  The corporate veil is highly transparent and may be lifted for the purposes of enforcing a judgment against any owner and, on a winding-up, for the corporation’s liabilities to be recovered from all the owners rateably. 

74.  This is the view taken in Grenville House Ltd v The Incorporated Owners of Grenville House,[97] where the corporation brought proceedings against certain defendants for damage done to the common parts of a building by a landslide.  A preliminary issue was ordered to be tried since the defendants objected to its bringing such a suit on the ground that it had not itself suffered any loss and had no cause of action.  McMullin J rejected this argument, pointing to the close identity between the corporation and the co-owners:

“As a notional separate entity from its constituents it is quite true, as counsel have said, that the corporation has not itself suffered any damage and has no cause of action. It does purport to sue ‘on its own behalf’, but it does not do to lean too heavily upon these words.  In one sense of course it is true that it is suing on its own behalf since it is that corporate persona which is given the right to sue but it is not suing on its own behalf in the sense that it has a separate cause of action apart from the several causes of its constituents. Its action on its own behalf is for practical purposes indistinguishable from its action on behalf of the owners.  What the Ordinance has done is to create a persisting entity capable of representing all the owners at any moment of time for any of the given purposes.”[98]

75.  In Jikan Development Ltd v The Incorporated Owners of Million Future Industrial Centre,[99] the question was raised as to whether the incorporated owners were entitled to sue for recovery of parking fees misapplied by managers of the building prior to incorporation.  Mr Justice Litton PJ, with whom the other members of the Court agreed, answered it in the affirmative, stating:

“The owners as a body had the right to say, right up to the moment of incorporation : We want an accounting for the parking fees now.  This right then passed to the corporation and became exercisable by the corporation, in terms of s 16.  It is as simple as that.”

The cause of action asserted by the incorporated owners was therefore that vested in the owners as a body at the date of incorporation, thereafter being exercised by the corporation and reflecting the close identification of the incorporated owners with the owners collectively.

D.4    Control over the common parts

76.  Given such attributes, can it be said that the incorporated owners in the present case exercised sufficient control over the building’s common parts to justify placing them in a category of actionability in respect of omissions?

77.  In my view, the answer is affirmative.  The Ordinance places the incorporated owners under a duty to “maintain the common parts and the property of the corporation in a state of good and serviceable repair ...; and to do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant ... for the control, management and administration of the building.”[100]  The common parts include the external walls.[101]  Obligations deemed by the BMO to form part of the DMC which the corporation is duty-bound to enforce include a prohibition against any person converting any common part to his own use without the approval of the owners’ committee.[102] 

78.  The DMC in the present case requires each owner to share in the cost of keeping the external parts of the building in good and tenantable repair and condition.[103]  It also provides that the parties should not “make any structural alteration to the said building”.[104]  Each owner covenants “not to place anything in or to occupy ... any part of the ... said building intended for common use.”[105]  The parties also covenant to employ an agent to “generally take care of the said building for the common benefit of the parties hereto and to repair ... the structure and exterior of the said building or any part or parts thereof which are used by the parties hereto in common ...”[106]

79.  To give these powers and duties teeth, the BMO authorizes entry on behalf of the incorporated owners into any flat for the purpose of inspecting, repairing, maintaining or renewing any common parts or other property in the flat causing concern; or for the purpose of “abating any hazard or nuisance which does or may adversely affect the common parts or other owners”.[107]  If entry is refused, the BMO empowers a magistrate to issue a warrant authorizing a person to break into the flat in the presence of a police officer.[108]  Members of the management committee exercising such powers in good faith and in a reasonable manner are given personal immunity.[109]  Costs incurred in the exercise of these powers are recoverable from the owner in question,[110] as are the costs of remedial works which the corporation may undertake itself where the owner fails to do what is necessary, such costs being a charge upon the defaulting party’s share of the property.[111]

D.5    Incorporated owners’ actionable omissions

80.  In the light of the foregoing, it is my view that the legal attributes, duties and powers of the incorporated owners place them in a category closely analogous with that occupied by the owners and occupiers discussed above.[112]  They exercise a sufficient degree of control over the common parts of the building to justify making them subject to a duty which is actionable on the basis of omission in respect of nuisance hazards arising on or emanating from those common parts, subject to proof of the other necessary elements of liability.

D.6    Knowledge, presumed knowledge, causation and means

81.  I turn therefore to examine those other elements of liability.  One must ask: did the incorporated owners know or ought they to have known of the nuisance hazard constituted by the extended canopy?  If they knew or ought to have known, was their omission to exercise their powers or duties of management causative of the fatal accident?  Did they have the means and resources to eliminate or nullify the hazard?  These related questions can be dealt with together.

82.  It is common ground that the extended canopy was an illegal structure.  Ought the incorporated owners have known this?  In my view, the answer is plainly “Yes”.  The approved plans of the building were available.  Examination of such plans shows immediately that the balcony as approved was not enclosed and did not have a canopy which extended out over the street.  The extended canopy is obviously an unauthorized extension which, as the Judge found,[113] was attached to the common parts (the approved canopy being such a common part).  As we have seen,[114] the incorporated owners were under a duty, among other things, to maintain the common parts, including the external walls, in good repair.  To carry out that duty, they had to know what the common parts were and therefore can be expected, whether or not after consulting the approved plans, to have realised that the extended canopy was an illegal extension.

83.  The fact that a structure is an unauthorized extension does not of itself mean that it is a nuisance hazard.  It might not be a danger to anyone.  But it does mean that its design had never been approved by the Building Authority and may not be in compliance with established building standards and regulations (as was indeed the case here[115]).  The design and quality of such building works must therefore be subject to question.  As we have seen in the present case, workmanship was in fact poor.  I mention this not to suggest that the incorporated owners knew that this was so.  They did not.  However, they ought to have realised that these sorts of risks arise in connection with illegal structures.  When the abovementioned considerations are coupled with the fact that, as everyone must have known, the extended canopy was a structure projecting out over a busy street from the 11^th floor of the building and that it had been affixed to the common parts and exposed to the elements for some 35 years, the inevitable conclusion must be that the incorporated owners were at least under a duty to inspect the structure to ensure that it did not endanger the lives and safety of the public and then to take necessary preventive steps if a risk was detected.

84.  The Judge stated: “Anyone of ordinary sense who addressed his mind to the circumstances would at once recognise that if he allowed the Extended Canopy to get out of repair, it would cause danger or injury to the people below.”[116]  It is true that he said this in relation to the tenant and not the incorporated owners.  However, it is a statement made in general terms and is plainly justified on the evidence.  His Lordship accepted expert evidence indicating that “an experienced contractor would look for signs of aging, deformity and shrinkage in the concrete fin [that is, the fragment which became detached] and if necessary expose the concrete for a more thorough investigation for defect”[117] so that, upon proper inspection, the hazard would have been discovered and rectified.[118]  On his findings, the incorporated owners plainly ought to have known of the nuisance hazard in question.

85.  In my judgment, those are findings which are wholly justified and applicable to the pleaded case against the incorporated owners.  The evidence in fact makes it clear that the incorporated owners, through Mr Shek Hon-kei (“Mr Shek”), the chairman of their management committee, were conscious of safety concerns relating to the state of the premises of individual owners, including their unauthorized extensions.  The error which the incorporated owners made was to regard such concerns as solely the responsibility of the individual owners.

86.  Thus, on 18 March 1993, the owners (the corporation not yet having been created) received a letter from the Buildings Ordinance Office requiring them to repair defective storm drains.  This prompted them to commission works to maintain and repair the external parts of the building.  The works specification dated 29 March 1993 included “removing any loosened, broken or damaged concrete (slab) of the reinforced concrete structures ... in public areas, such as the external walls ...” and “removing rust and impurities from the reinforcement and adding and fixing new reinforcement where necessary.”  A scaffolding was erected around the whole of the building for this purpose.  The total cost was $250,920.00 which (according to the quotation) came to $7,380 for each of 34 flats concerned.

87.  Unfortunately, as Mr Shek explained when giving evidence at the coroner’s inquest, these works excluded inspection and maintenance of the canopies because the owners took the view that they were “additional structures put up by (individual owners) themselves and therefore were their own responsibility”. 

88.  When, in 1998 certain waterproofing works had to be done with scaffolding erected on the external wall from the 11^th Floor up to top of the building, the opportunity to inspect the canopy was again missed.  On that occasion, Mr Shek, caused a letter to be written to individual owners stating: “The government stipulates that all buildings are required to be checked and maintained regularly.  Therefore your attention is drawn to the safety and maintenance of your flat.”  This clearly shows that the incorporated owners  were (through Mr Shek) aware of the need for regular safety checks and maintenance for the premises.  But they thought they could simply leave it to the individual owners.  That was wrong as a matter of law.  They did not realise that it was not only their duty, but a duty which was non-delegable.[119]

89.  Accordingly, by virtue of its status as the embodiment of the owners collectively; of its effective control over the common parts, including the external parts, of the building; and of the fact that it knew or ought to have known of the nuisance hazard, the corporation was under a duty to remove that hazard or prevent it from causing harm to the public in the street below.  They plainly had the means to achieve this, as their ability to commission the maintenance and repair works in 1993 and 1998 demonstrate.  But the incorporated owners took no action.  If the extended canopy had been subjected to a proper inspection, its dangerous condition would, as the Judge found, have been discovered and rectified.  The omission was therefore causative of the fatal accident.

D.7    The respondents’ objection to new case on appeal

90.  Mr Barretto SC objected to the adoption of the foregoing approach to liability on the basis that it constituted a new case which falls foul of the well-known principles laid down in Flywin Co Ltd v Strong & Associates Ltd.[120] A party is barred from taking a new point on appeal “unless there is no reasonable possibility that the state of the evidence relevant to the point would have been materially more favourable to the other side if the point had been taken at the trial.”  Mr Barretto argues that the claim against the incorporated owners had proceeded on the basis of strict liability and that, accordingly, the question of whether they knew or ought to have known of the nuisance hazard was not explored, this being an issue obviously susceptible to his clients calling further evidence.

91.  That objection cannot be sustained.  The question of whether the incorporated owners had the needed knowledge or presumed knowledge is not a new point.  As noted above,[121] it was pleaded against them that they had such knowledge and they must have gone to trial prepared to meet it.  Under the law as expounded in the courts below,[122] there was a need to show that the incorporated owners ought to have known of the hazard where the hazard was not created  by the corporation but was attached to the common parts by a trespasser without the corporation’s consent.  Mr Shek chose not to testify at the trial, but the evidence discussed above was derived from statements made by him.  And the Judge duly made findings in relation to the tenants in general terms which embrace the position of the incorporated owners.  I can see no prejudice to the incorporated owners in the Court upholding the aforementioned approach.

D.8    Conclusion as to liability

92.  It follows, in my view, that all the elements of liability on the incorporated owners’ part have properly been made out.  They are accordingly liable for damages for public nuisance along with the flat’s owners and tenant.

93.  I ought to mention in this context a point concerning section 16 of the BMO which may require clarification.  That section provides that upon incorporation, “the liabilities of the owners in relation to the common parts of the building shall ... be enforceable against ... the corporation to the exclusion of the owners.”  Commenting on this aspect of the provision, Mr Justice Litton PJ in Chi Kit Co Ltd v Lucky Health International Enterprise Ltd,[123] stated: “After incorporation a visitor injured on the common parts will no longer be able to seek redress against the owners personally.”  It is important that this dictum should not be understood to relate to individual owners who, like the owners in the present case plainly can be made liable alongside the incorporated owners (and, indeed, other parties like the tenant).  This dictum should be read as referring to proceedings in relation to the common parts which, prior to incorporation, would have had to be brought against the owners as a body.  Such proceedings can now only be brought against the incorporated owners who may in turn, call for funds from the owners to meet its liabilities.[124]  A plaintiff may also seek leave to enforce against particular owners, a judgment obtained against the corporation.[125]

94.  The court may apportion liability among the defendants (including individual owners and the owners’ incorporation) and the Court of Appeal has held[126] that section 3(1) of the Civil Liability (Contribution) Ordinance[127] is applicable to claims for contribution among such co-defendants in respect of apportioned sums left unpaid by insolvent defendants.  Nothing in section 16 is inconsistent with this.

E.      The approach of the courts below

95.  At the trial, the Judge held on two main grounds that the plaintiffs could establish no relevant duty.  First, he accepted the incorporated owners’ argument that the plaintiffs were in effect seeking to impose liability on the corporation for failure to maintain an illegal structure which it had done nothing to create and had not authorized nor in any sense continued or adopted.  The plaintiffs’ case, they contended, involved reliance on a discredited “annexation” theory whereby the attachment of an illegal structure to a common part had wrongly been said to result in that structure becoming annexed to the common parts, so that its maintenance became the responsibility of the incorporated owners.[128]  The Judge accordingly held that the incorporated owners’ duty to maintain the external walls was not a basis for any actionable duty since it “could not be extended to cover external parts of an illegal structure attached to the building to which the incorporated owners had no right of possession, occupation or control”.[129]  Secondly, the Judge rejected the existence of any duty on the more general ground that the incorporated owners “were neither owners nor occupiers of the Extended Canopy and had no control over it.”[130]

96.  The “annexation” theory has rightly been rejected both at first instance[131] and in the Court of Appeal.[132]  However, it is incorrect to describe the plaintiffs’ case as based on that exploded theory.  They were not relying on any failure by the incorporated owners to maintain the extended canopy.  As noted above,[133] their argument was that the incorporated owners’ duty to maintain the common parts, ie, the external walls, obliged them (after due inspection) to remove any dangerous unauthorized structures that had been attached to those common parts. 

97.  The Judge’s second “control” ground was where the argument centred in the Court of Appeal.  Mr Barretto SC submitted that a duty to remove the nuisance hazard presented by the extended canopy could only arise if the incorporated owners had “occupational control” in the sense described by Lord Pearson in Wheat v E Lacon & Co Ltd,[134] where his Lordship stated:

“The foundation of occupier’s liability is occupational control, ie, control associated with and arising from presence in and use of or activity in the premises.”

Those submissions were accepted by Stock JA[135] and Yuen JA[136] who agreed that such occupational control was needed to found an actionable duty.

98.  It is my view, with respect, that the Court of Appeal’s approach was too narrow.  As indicated above,[137] the existence of a sufficient degree of control is the principal criterion for recognizing a duty to remove a nuisance hazard and for making the omission to do so actionable in public nuisance.  In most cases, such control does indeed arise from the defendant’s status as occupier or owner of the land in question.  But it is the control and not the defendant’s interest in or occupation of the property that is the criterion.  The necessary control may spring from some other source.  And as noted above,[138] liability in public nuisance is not tied to an interest in or relationship with land.  The possibility that other categories of actionable omissions may exist which do not involve any “occupational control” of premises is recognized in the on-going debate concerning the mooted liability of public authorities.[139] 

99.  Lord Pearson’s comment in Wheat v Lacon was that “occupational control” is the “foundation  of occupier’s liability”.  It is hardly surprising that “occupational control” should be fundamental in that context since the object of the Occupiers’ Liability Act (and its Hong Kong equivalent[140]) is “to regulate the duty which an occupier of premises owes to his visitors in respect of dangers due to the state of the premises or to things done or omitted to be done on them.”[141]  That branch of the law is therefore expressly tied by statute to the occupation and control of premises.  Lord Pearson’s dictum cannot be extrapolated with a view to confining the scope of duties in public nuisance.  Instead, in a case like the present, it is necessary to examine the specific legal attributes, duties and powers of the body in question, as has been done above, to decide whether liability on the basis of omission is justifiably to be imposed.  The courts below erroneously stopped short of that inquiry, considering it sufficient to exclude the incorporated owners on the basis that they did not enjoy occupational control in the Wheat v Lacon sense.

F.      Policy considerations

100.  In reaching his decision, Stock JA referred to policy considerations which led him to the view that fixing incorporated owners with liability in a case like the present might have “harsh and unreasonable pragmatic consequences”.  His Lordship stated:

“It would mean that whenever in this territory there was erected upon a multi-storey building a structure that was not authorized, no matter that it was, for example, constructed at the time the bui1ding was erected and is of a solid appearance, not inherently a dangerous structure, as was the structure in Chu Wo Heung & another v Hui Lai Wa [2002] 3 HKLRD 209, no matter that it was constructed by and for the exclusive use of one of the owners, the mere right in the DMC to require its removal, a right enforceable only by action in the courts at the expense of the corporation, would render the corporation liable for injuries to third parties occasioned by the fact that the owner or tenant permitted that structure to fall into disrepair, no matter that the disrepair was unapparent.”[142]

101.  This passage suggests that Stock JA was proceeding on the basis that liability is strict, so that the incorporated owners would be liable even where there is no reasonable basis for considering the structure a hazard.  However, if, as has been held above, it is recognized that the law has evolved to the point where liability is premised on the defendant knowing or properly being taken to know of the existence of the hazard, this policy objection falls away.  There is nothing harsh or unreasonable about making the body responsible, on behalf of the owners collectively, for keeping the common parts in good repair liable for failing to do so where they know or ought to know of the existence of a nuisance hazard endangering members of the public.  The powers of enforcement given to the corporation by the BMO have been mentioned above.[143]  The available measures are not confined to action in the courts.

102.  There are moreover, in my view, sound reasons for making the incorporated owners, and not merely the individual owners implicated, responsible.  Where the hazard involves the external common parts of a high-rise building, effective inspection and maintenance works can really only be carried out if those parts (and any illegal accretions thereto) are dealt with as a whole, with the erection of scaffolding and the like and with all the owners’ contributing to the cost, subject to possible adjustment regarding the individual owners implicated.  And where the nuisance hazard consists of some unauthorized structure encroaching upon or being attached to the common parts, the individual owners who may have erected or adopted the structure and benefit from its existence, may well be unwilling to take any steps to remove it.  Compulsion from, or direct action by, the incorporated owners may well be required if the hazard is to be nullified.

G.      Disposal of the appeal

103.  I would therefore allow the appeal and order that there be judgment for damages in favour of the plaintiffs against the 3^rd defendants.  As an appeal on quantum is pending before the Court of Appeal, I would direct that the parties be at liberty, when the outcome of that appeal is known, to apply to the Court, by submissions in writing, for orders as to costs, directions concerning contribution between defendants and any other directions relevant to the implementation of this judgment.  Any procedural directions needed regarding such application and submissions should be sought from the Registrar of the Court.

Lord Woolf NPJ:

104.  Mr Justice Ribeiro PJ’s judgment is a masterly examination of the law and merits relating to this appeal and I have no hesitation in saying that I am entirely in agreement with its contents.

Chief Justice Li:

105.  The Court unanimously allows the appeal and makes the orders and gives the directions set out in paragraph 103 of the judgment of Mr Justice Ribeiro PJ.