CHU WO HEUNG AND ANOTHER v. HUI LAI WA AND OTHERS

CACV 1715/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 1715 OF 2001

(ON APPEAL FROM HCPI 952 OF 1996)

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J U D G M E N T

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Hon. Cheung JA (giving the judgment of the court) :

The appeal

1. This is an appeal by the 5th defendant against the decision of Seagroatt J. who gave judgment for the plaintiffs acting as the administratrices of the estate of Mr. Yuen Fook Wah, deceased ("Mr. Yuen").

The accident

2. Mr. Yuen died in a tragic accident. The judge found that on 3 August 1994 at about 6 pm, Mr. Yuen was walking past a line of shop premises in Lung Fung Garden in Lung Sum Avenue, Sheung Shui, New Territories when he was struck by a piece of metal piping which entered his chest and caused his death within a relatively short time. The pipe was part of an awning structure outside shop number 39A2 in Lung Fung Garden. Lung Fung Garden consisted of a podium with 3 levels used for commercial purpose. Above the podium are three domestic buildings ("the premises"). The shop was on Level 1 of the podium.

The parties

3. The plaintiffs sued the following parties :

1) The 1st defendant, the tenant and operator of a fruit shop at Shop No. 39A2 ("the shop"). The judge dismissed the plaintiff's claim against her, as he found that the real operator of the shop was the 4th defendant.

2) The 2nd defendants, the registered owners of the shop. The plaintiff had discontinued the action against them.

3) The 3rd defendant, the Incorporated Owners of Lung Fung Garden. As the owners only became incorporated after the accident, the claim against it was earlier on struck out by the court.

4) The 4th defendant, the manager and operator of the shop. He ordered the awning to be installed. The judge found that he was one-third to blame for the plaintiff's death.

5) The 5th defendant, the manager appointed by the owners of the premises to manage Lung Fung Garden pursuant to the terms of a Deed of Mutual Covenant ("the DMC"). The judge found that it was two-third to blame for the accident.

6) The 6th defendants were the representatives of the owners of Lung Fung Garden at the time of the accident. The judge dismissed the claim against them.

Damages

4. The issue before the judge was on liability. The damages remain to be assessed. The judge made an interim award of $5,000,000.00 in favour of the plaintiffs against the 4th and 5th defendants. The 5th defendant had paid its share of the award.

The costs orders

5. Apart from awarding the plaintiffs' own costs against the 4th defendant and the 5th defendant, the judge also ordered the costs of the 1st defendant and the 6th defendant, who were successful in defending the action, to be paid by the 5th defendant.

The ambit of the 5th defendant's appeal

6. The 5th defendant is appealing against the judgment that was made against it in favour of the plaintiffs, the proportion of its liability towards the plaintiffs and the costs orders against it in favour of the 1st defendant and the 6th defendant.

The awning

7. The shop is on the first level of the podium. It is set back from the building by about 10 feet. Hence the top part of the building projected over the shop and acted as a canopy over the exterior of the shop. The awning was attached to the underside of the projecting part. The awning was then to extend across the forecourt and part of the pavement area, the end of it being stretched and held by a horizontal pipe. That pipe was then supported at either corner by a vertical pipe with a U-shape cup or fork in which the end of the horizontal pipe rested. These vertical pipes were then braced by two ropes tightened and secured to a metal ring which was fixed in the ground. The bottom end of the two vertical pipes rested simply on the ground. There was no insert or recess into which the vertical pipes could fit and be given any lateral support. The sole means of support were the two ropes.

How did the accident occur?

8. At about 5 pm on 3 August 1994 the Hong Kong Observatory hoisted the rainstorm signal effective until 10 pm. Heavy rainfall was recorded from 6 pm onwards. Winds became stronger gusting on occasions up to 60 k.p.h. The effect of these weather conditions at Lung Fung Garden was to detach the awning structure outside the shop from its moorings and cause one of the metal pipes to act as a projectile swinging with such force as to enter Mr. Yuen's chest.

Awning inherently dangerous

9. The judge found that the awning was an inherently dangerous structure with little, if any, stability or firmness of structure. One of the vertical poles could easily be struck by a passer-by and dislodged. As a result the outer part of the awning would then be lowered. The horizontal pole could fall on the head of a passer-by and the vertical pole, which was dislodged, had negligible restraint by the ropes. Extra stress should be put upon the ropes. It was eminently foreseeable that moving poles, horizontal or partly vertical or both, constituted an obvious risk of injury to passers-by.

Liability of the 4th defendant

10. The judge found that the 4th defendant was negligent in installing the dangerous structure. He ought to have appreciated the inherent danger which was obvious to anyone. This danger was heightened in adverse weather conditions, particularly wind and rainstorms. Despite this, he did not take the awning down at the time of the accident.

Liability of the 5th defendant

Duty of 5th Defendant

11. Under Section V of the DMC, the 5th defendant undertook the management of the premises : Clause A1. Specifically it was required to maintain the premises in a safe condition : Clause B(2). It was also required to remove any structure, installation in the premises which have erected in contravention of the DMC and/or without its written permission : Clause B(16). Under Section IV Clause 20, no projections or structures extending outside the buildings in the premises shall be erected without the prior written consent of the manager. Further under Clause 22 no owner is permitted to do anything which may alter the external appearance of the buildings without the prior written consent of the manager. Clause 35 again provides that no fixtures shall be installed through the external walls of the buildings without the prior written consent of the manager.

Knowledge of the 5th defendant of the awning

12. The judge found that the 5th defendant had full knowledge of the construction of the awning. It had stopped the 4th defendant during the construction because no application was made to erect the awning. The 4th defendant then submitted an application to the 5th defendant for permission to have the awning installed together with a drawing of the awning. He was later told by the person in the management office of the 5th defendant to proceed with the construction, although no written authorisation was given to him.

Negligence of the 5th defendant

13. The judge found that by reason of the requirement that permission must first be obtained from the 5th defendant, it exercised control over the existence and form of the awning. It owed a duty of care towards the public to ensure that the awning would not be a hazard and would be reasonably safe.

14. The judge found that the 5th defendant was negligent in allowing the awning to be installed in the first place. Furthermore the 5th defendant ought to have been aware of the weather condition at the time of the accident. It ought to have conducted a patrol to ensure that it was closed down and stored.

Was the awning part of the shop?

15. Many arguments were raised by Mr. Liang, counsel for the 5th defendant, in support of this appeal. One may as well start from the basic question of whether the awning was constructed within the boundary of the shop, so that the responsibility lies solely with the 4th defendant and not the 5th defendant. Reliance was made of Wong Lai Kai v. Incorporated Owners of Lok Fu Building, Yuen Long [2000] 3 HKC 633, in which the plaintiff failed in its claim against the Incorporated Owners of a building where an awning attached to the external wall collapsed causing him serious injuries. The awning was constructed at a height below the ceiling level of a ground floor shop. The Court of Appeal affirmed the first instance decision that the shop owners were solely to blame. The majority view of the court (per Keith J.A. and Woo J.A.) was that the plaintiff had failed to show that the external wall to which the awning was attached, was the common part of the building and not within the exclusive use of the shop owners.

16. The plaintiff there had not produced the assignment of the shop showing the extent of the area designated to be within the exclusive use of the shop. There is important because reliance was placed on S. 2 of the Building Management Ordinance (Cap. 344) which defines 'common part' as meaning :

“ (a) the whole of a building, except such parts as have been specified or designated in an instrument registered in the Land Registry as being for the exclusive use, occupation or enjoyment of an owner; and

(b) unless so specified or designated, those parts specified in the First Schedule...."

The First Schedule included 'external walls'. Because of the exclusion from the common parts of the building of such parts as having been designated for the exclusive use of an owner, it was incumbent on the plaintiff to show the relevant external wall was not specifically designated for the exclusive use of the shop owner.

17. In this case the plaintiffs had produced the assignment of the shop, which showed the area of the shop. The part to which the awning was attached was not within the exclusive use of the shop. It was clearly a common part of Lung Fung Garden.

18. If the awning was within the common part of Lung Fung Garden, then clearly the responsibility of the 5th defendant was directed towards it. After all, it was to manage Lung Fung Garden and maintain it in a safe condition. The requirement that the awning could only be constructed with its permission, clearly demonstrated that the 5th defendant knew the area in question was within its sphere of responsibility.

Did the 5th defendant owe a duty of care towards Mr. Yuen?

19. It was argued by Mr. Liang that although the 5th defendant may owe a duty towards the owners of Lung Fung Garden under the DMC, it did not owe any duty towards member of the public.

20. This is quite a surprising submission. On first principles, we fail to see why the 5th defendant's contractual obligations towards the owners would not allow a tortious liability to occur at the same time towards members of the public who were directly affected by the 5th defendant's negligence in the management of Lung Fung Garden.

21. Mr. Yuen in fact was not merely a member of the public. He was an owner there as well. However, Mr. Yau, counsel for the plaintiffs, did not rely on this to find liability against the 5th defendant, although he said he would reserve this point for argument if there is a further appeal on the matter. The plaintiffs' case against the 5th defendant is based on occupiers' liability and the duty of care towards user of a highway of overhanging structure. They rely on both aspects because immediately next to the boundary of Lung Fung Garden is government land. It is not clear whether Mr. Yuen was injured inside the former's boundary or on government land.

Occupiers' liability

22. Although occupiers' liability was not pleaded, clearly the 5th defendant was aware that the plaintiffs alleged that it was in occupation and control of the awning. As pointed out in Clerk & Lindsell on Torts Para. 10-01, at common law, occupiers' liability was one of several cases of liability based on negligence. Under the Occupiers' Liability Act (of which our own Occupiers' Liability Ordinance is based) the substance of occupier's liability became much more like the ordinary law of negligence, Para. 10-02.

23. The 5th defendant was clearly an occupier of the awning : it exercised a "degree of control over the state of the premises" per Lord Denning at Wheat v. Lacon Company Limited [1966] AC 552 at page 578. It also had control "associated with and arising from presence in and use of or activity in the premises" per Lord Pearson at page 589. This control existed because of the requirement that permission to construct the awning must be obtained from the 5th defendant and its various power under the DMC relating to structures on external walls, including the power to require unauthorised structures to be removed. The structure may be a filmsy one, but it remained to be a structure attached to the premises.

24. The 5th defendant owed a common duty of care to visitors such as Mr. Yuen. It' s liability under occupier' liability was clearly established if the accident happened within the boundary of Lung Fung Garden.

Overhanging structure

25. Further as shown in cases such as Cunard v. Antifyre [1933] 1 KB 551 an occupier of place, apart from owing a duty towards visitors to the place under its control, also owes a duty to those who may be injured by the structure which projects out from its place and overhangs the highway. This duty is not discharged by employing an independent contractor to do it : Walsh v. Holst Co. Ltd. [1958] 1 W.L.R. 800. If the injury occurred while Mr. Yuen was on government land, the 5th defendant was equally liable.

26. Mr. Liang, in support of his submission, referred to a passage in Wong Lai Kai in which Keith J.A. stated that assuming that there was a duty on the Incorporated Owners, it was a duty which it owed only to the units in the building and not to third parties such as the plaintiff. Keith J.A. was in fact specifically dealing with a clause which governed the respective obligations of the owners towards each other in relation to the erection of signboards to the exterior of the building. This was not to provide support for the proposition that the 5th defendant would not be liable to members of the public.

Fairness, justice and reasonableness

27. In Marc Rich & Co. v. Bishop Rock Ltd. [1996] 1 A.C. 235, the House of Lords, per Lord Steyn at page 235, stated that it has been settled law that the elements of foreseeability and proximity as well as considerations of fairness, justice and reasonableness are relevant to all cases whatever the nature of the harm sustained by the plaintiff.

28. Mr. Liang argued that the 5th defendant did not fail to take reasonable care in the light of the following :

1) Lung Fung Garden comprised three blocks and 600 odd units.

2) The 5th defendant undertook regular and ad hoc inspections.

3) The cause of the accident was because the 2 ropes which hold the awning broke under freak weather conditions and this was not reasonably foreseeable.

4) The two vertical metallic poles of the awning rested on government land and there was nothing which the 5th defendant could do within the ambit of its responsibility.

29. Mr. Yau referred to Perrett v. Collins [1998] 2 Lloyd's L.R. 255 in which Hobhouse L.J. disagreed that in personal injury cases, in order to establish liability, it is necessary to show that the injury to the plaintiff must have been directly caused by the wrongdoers and in addition that it is fair, just and reasonable that the wrongdoers should be under a liability to the plaintiff.

30. It is not necessary to enter into a philosophical discussion on the historical development and foundation of the tortious liability along the lines of Hobhouse L.J. Even if it is necessary to deal with the issue of fairness, justice and reasonableness as well, the plaintiffs had satisfied this requirement. The real issue is that it was within the power of the 5th defendant not to allow the awning to be constructed. By permitting it to be constructed, it must take the consequence in a situation such as this. Causation is established : it was the pole in the awning which injured Mr. Yuen. It is clearly also foreseeable that a passer-by, such as Mr. Yuen, may be injured if the awning became loosened. The 5th defendant is liable because as a result of its unreasonable lack of care, a dangerous situation existed which caused Mr. Yuen injury.

The ropes

31. Mr. Liang dwelled in great length about the judge making a wrong finding on how the accident occurred. He referred to the evidence of the 4th defendant who said that a sudden exceptionally strong wind of a twister or tornado character caused the two ropes which held the awning in position to break. Yet the judge said it was not possible to determine if the ropes broke or became loose and detached in the weather conditions. It was argued that if the ropes broke, then the accident would not be foreseeable. Because of this wrong finding, the validity of the judgment against the 5th defendant was undermined.

32. This is not a valid point. It is not necessary to consider the factual dispute on whether the 4th defendant was at this shop at the time of accident and did not actually see the rope broke. Whether the weather caused the ropes to break or not clearly was irrelevant. The point is that the awning was dislodged from the mooring causing it with the metallic pipe at one end to swing in the wind and hit Mr. Yuen's chest. This is how causation was established. Whether the ropes broke or simply became dislodged from the rings would not make the slightest difference to the result. As the judge found, in view of the filmsy nature of the structure, it would not withstand even moderate wind conditions.

Latent defects

33. Mr. Liang argued because the wind broke the ropes which had the thickness of a man's finger, then this would suggest that there must be some latent defects in the ropes which caused it to break. This is a hypothetical defence. There was no examination of the ropes after the accident which may have shed some light on their construction. At the risk of repetition, as the judge had found, the focus must be on the filmsy construction of the awning which would easily have been dislodged by even moderate wind.

Weather

34. It was further submitted that it was not foreseeable that the two ropes would break by the sudden adverse condition. The judge found that the 5th defendant ought to have been aware of the weather warning that late afternoon or early evening because it had a practice of informing of rainstorm warnings. It is a matter of common sense that adverse weather condition would happen when rainstorm signal was hoisted in the summer month of August. This certainly should cause precaution to be taken of filmsy structures like awnings. Whether the allegation of patrolling by the 5th defendant was pleaded or not would not make the slightest difference to its liability.

Ample evidence

35. There is ample evidence to support the finding of negligence of the 5th defendant.

Apportionment

36. An appellate court would only in exceptional cases interfere with a trial judge's apportionment of liability : The MacGregor [1943] A.C. 197 and Brown & Ano V. Thompson [1968] 1 WLR 1003.

37. The judge held that the 5th defendant must bear the larger of the responsibility. It gave the permission for the awning to be constructed and allowed it to continue in position. The awning was a danger. Without the permission, the awning would not have existed at all. Hence despite the fact that it was the 4th defendant who installed the awning and operated it, the judge had not overlooked any material consideration which would justify an interference with the apportionment.

Costs

38. The 1st and 6th defendant were the successful defendants. However, it does not automatically follow that the plaintiffs would need to bear their costs personally. Ordering such costs to be paid by a defendant who is ultimately found liable to the plaintiffs is well recognized : Sanderson v. Blyth Theatre Company [1903] 2 KB 533. The test is whether it is reasonable and proper for the plaintiff to join the successful parties and incur the costs in pursuing the claim against them : Leung Lai-ha and Another v. Hon Sau Ling and Another [1993] 1 HKLR 86.

39. The 1st defendant was the tenant of the shop. Obviously it was reasonable for the plaintiffs to join it as a party. The 5th defendant had also sought contribution and indemnity from the 1st defendant. The 6th defendant were the unincorporated owners of Lung Fung Garden at the time of the accident. In circumstances such as this, it would be reasonable to join it as a party. Bearing in mind that the judge found that the 5th defendant should be largely responsible for the accident, the discretion in ordering costs to be borne by it was not wrongly exercised.

40. In any event, as the 1st defendant appeared in person, her costs are likely to be negligible. As for the 6th defendant , it had not lodged any appeal on the costs order. If the 5th defendant is successful, then the 6th defendant would have to bear the costs personally. As the 5th defendant had agreed to indemnify the 6th defendant against any costs that it may have incurred in defending the claim, it will have to bear the 6th defendant's costs in such an event. As Mr. Yau had submitted, at the end, the question is really academic.

Conclusion

41. The 5th defendant's appeal is dismissed with costs to the plaintiffs, 1st, 4th and 6th defendants to be taxed if not agreed.

42. We would like to thank counsel for their thorough presentations in this appeal.