LEUNG CHIN TO MICHAEL v. TAN JOCELYN RIVERA

DCCJ 3319/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3319 OF 2014

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DECISION

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Introduction

1. By summons filed on 7 October 2014, the defendant applies to strike out the writ of summons and the statement of claim of the present action on the ground that the claim raises no reasonable cause of action, that it is scandalous, frivolous, vexatious and is an abuse of process of the Court.

Legal principle

2. The legal principles governing striking out applications are well established. This court should only strike out a claim in a plain and obvious case. The claim to be struck out must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed. It is for the applicant to demonstrate that the case is plain and obvious one in which the other party’s claim is bound to fail. There should be no trial upon affidavit. Disputed facts should be taken in favour of the party whose pleading is under attack. Hong Kong Civil Procedure 2015, §18/19/4.

3. As to the ground of the proceedings being scandalous, frivolous or vexatious, or an abuse of process of the court, a summary of the relevant legal principles is provided in the judgment of Sealegend Holdings Ltd v China Taiping Insurance (HK) Co Ltd & Ors HCAJ 95/2012 unreported 24 October 2014:-

“A proceeding is frivolous when it is incapable of reasoned argument, without foundation or cannot possibly succeed. A proceeding is vexatious when it is oppressive or lacks bona fides. The expression “frivolous or vexatious” includes proceedings which are an abuse of process …... An “abuse of process of the court” connotes that the process of the court must be used bona fide and properly and must not be abused. The court will prevent the improper use of its machinery, and will, in a proper case (eg where an action is absolutely groundless or time-barred) summarily prevent its machinery from being used as a means of vexation and oppression in the process of litigation …... There should be no trial on affidavit. Disputed facts are to be taken in favour of the party whose pleading is under attack …...”

The plaintiff’s claim

4. The plaintiff is and was the owner of the premises (the “Lower Premises”) which is situated directly below the premises (the “Upper Premises”) owned by the defendant before and upon the issuance of the writ of summons on 27 August 2014.  The defendant sold the Upper Premises on 29 August 2014.

5. It is the plaintiff’s pleaded case that in around November 2013, the contractor engaged by the defendant damaged the water proofing membrane and/or concrete flooring of the Upper Premises (the “Damaged Parts”) resulting in water seepage from the Upper Premises to the Lower Premises.  The plaintiff complained about the water seepage to the management company in around early April 2014.  The defendant's contractor admitted that the damage was caused by his renovation work in the Upper Premises.  The contractor conducted water testing by flooding the Upper Premises, and the water was completely drained off from the Upper Premises.  The water seepage from the Upper Premises caused damage to the Lower Premises. Despite complaints by the plaintiff, the defendant failed to take any action to remedy the water seepage.

6. The plaintiff pleads that the defendant was negligent in causing or allowing to cause damage to the Damaged Parts as well as failing to repair or make good the damage resulting in water seepage from the Upper Premises to the Lower Premises causing damage to the Lower Premises, hence, loss and damage to the plaintiff.  The plaintiff claims against the defendant, inter alia, to repair the Damaged Parts and the ceiling of the Lower Premises, damages and costs.

The defendant's complaints

7. The defendant has yet filed a defence.  She essentially raises the following complaints to support her application:-

(a) the plaintiff’s claim cannot be regarded as a negligent claim for the only reasonable cause of action against the defendant is that the defendant should be vicariously liable to the substandard works performed by her contractor and in the absence of the plea of vicarious liability, the plaintiffs’ claim discloses no cause of action;

(b) the plaintiff’s claim against her was extinguished after her saleof the Upper Premises on 29 August 2014, as the purchaser has stepped into her shoes, and accordingly, the plaintiff has no reasonable cause of action against her;

(c) the plaintiff’s claim is scandalous, frivolous or vexatious and an abuse of process of the court because the plaintiff had no valid reason to commence the present action in the circumstances that:-

(i) he had not complained about the damage until 5 June 2014, 6 to 7 months after the damage occurred;

(ii) by the letter to the purchaser’s solicitors dated 31 July 2014, the plaintiff expressly reserved his right to look to the purchaser for remedy for the damage of the Lower Premises;

(iii) the purchaser has written to the plaintiff stating that she would repair the damaged ceiling of the Lower Premises and accordingly the plaintiff suggested to the defendant to adjourn the present action sine die with liberty to restore;

(iv) the plaintiff had actual and/or constructive notice of an agreement between the defendant and the purchaser in that they agreed to deduct HK$80,000 from the purchase price of the Upper Premises which “is conclusively deemed to represent any amount, damages, compensation of the alleged complaint(s) made”by the plaintiff (the “Deduction Agreement”).

8. The defendant also disputes the plaintiff’s version of facts including, inter alia, the time the plaintiff first made his complaints about the water seepage; the expertise and findings of the parties’ respective experts.  That said, the parties agree that, for the present purpose, any disputed facts should be taken in favour of the plaintiff and this court should not be invited to resolve the disputed facts upon affidavit.

9. I will now deal with the complaints in turn.

Vicarious liability

10. The defendant seeks to argue that the wrongdoer who actually damaged the Damaged Parts was her contractor and without suing her for being vicariously liable to the wrongful act done by her contractor, the plaintiff’s claim discloses no reasonable cause of action.

11. Such argument clearly ignores the fact that the plaintiff’s claim is based on the defendant's breach of her duty of care towards the plaintiff by negligently causing or allowing to cause damage to the Damaged Parts and the ceiling of the Lower Premises as well as failing to repair or make good the damage resulting in water seepage.

12. It is well established rule that an occupier of a property is under a duty to take reasonable care to prevent damage to adjoining property of her neighbour and to avoid acts or omissions which she can reasonably foresee would be likely to injure her neighbour.  See Tort Law and Practice in Hong Kong (3^rd ed) §4.252

13. The duty includes the duty to maintain her premises in good repair and condition so as not to cause her neighbour any injury.  The duty will not be discharged by engaging contractors or that the contractors are the ones who are negligent.  See Tort Law and Practice in Hong Kong (3^rd ed) §4.252.  Lam Eguchi Mayumi v Fast Well Enterprise (HK) Ltd DCCJ  3702/2008 unreported HH Athena Pang 31 March 2010.

Claim extinguished after sale

14. I do not find the argument that the plaintiff’s claim has been extinguished after the defendant’s sale of the Upper Premises carries any merits at all.  The defendant has not produced any authorities to support her argument.

15. The long established law is that the owner of a property, being the actual wrongdoer of a negligent act causing damage to her neighbour, remains liable for the damage flowing from her own wrongs even if she has sold out the property.  The change of ownership of the property does not discharge the liability of the original owner of her own wrongs.  In the event that the negligent act is one that was and is continuing even after the sale of the property, the plaintiff has a cause of action against the original owner as well as the subsequent owner of it.  See Cosmos Legal Consultant Limited v Skycherry Development Limited & Anor DCCJ 2548/2009 unreported HH Wilson Chan 14 May 2013.

16. Further, a claim against one tortfeasor does not bar a plaintiff from making claims against other tortfeasors in relation to the same tort.  See Charlesworth & Percy on Negligence 13^th ed at §§3-93 to 3-97, and Tort Law and Practice in Hong Kong 3^rd ed at §§28.42 to 28.43.

17. I agree with the plaintiff’s submission that the defendant can seek no support from section 41 of the Conveyancing and Property Ordinance, Cap 219.  At the time when the negligent acts complained of occurred, the defendant was the owner of the Upper Premises. This has nothing to do with whether or not a benefit or burden of a covenant contained in the defendant’s assignment to the purchaser runs or does not run with the land. 

Valid reasons to commence action

18. I am not impressed by the complaint that the plaintiff had no valid reason to commence the present action.  First, the law does not impose a time limit for the plaintiff to make complaint about the water seepage.  So long as the present action is commenced within the limitation period for bringing action allowed under the Limitation Ordinance, Cap 347, the fact that the plaintiff only made a complaint 6 to 7 months after the damage occurred does not debar the plaintiff’s claim, not to mention that the plaintiff actually disputed that he had made the complaint a few months earlier.

19. Second, the plaintiff’s reservation of his right to look to the purchaser for remedy for the damage of the Lower Premises does not prejudice his right to claim against the defendant.  He may have multiple cause of action for the same tort against different tortfeasors as mentioned above.

20. Third, the letter of the purchaser’s solicitor dated 5 September 2014 stating that the purchaser would repair the ceiling of the Lower Premises is merely an indication of her intention.  There is no suggestion that an agreement has been reached between the purchaser (or the defendant) and the plaintiff to discharge the defendant’s liability in tort.  The plaintiff actually alleges that he has never agreed to take the purchaser’s intention to repair for discharging the defendant’s liability. A mere indication of intention to repair by the purchaser is not sufficient. There will at the least have to be some form of accord and satisfaction which are absent in the affirmations before me.  See Clerk & Lindsell on Torts(21^st ed) §§31-07 to 31-12.

21. Not only that the defendant has not provided any evidence to show that the purchaser has performed any repair works so far, the indication of the purchaser that she would repair the ceiling of the Lower Premises is not a complete answer to all of the plaintiff’s claims. It does not include any damages or costs incurred by the plaintiff.  Even if the purchaser has repaired all the damaged parts of the Upper Premises and the Lower Premises, this only goes to affect the form of the relief or the extent of damages the plaintiff can claim against the defendant.  It does not discharge the defendant of her liability completely, and will not go so far as to enable the defendant to strike out the plaintiff’s claim in its entirety.

22. By the same token, the plaintiff’s suggestion to adjourn the present action sine die with liberty to restore or his wait-and-see position to see whether the damage will be rectified poses no bar to the present claim.  It only tends to show that there is no satisfaction even if an accord  arguably exists. 

23. Fourth, even on the assumption that the Deduction Agreement does exist, I do not share the view that the plaintiff’s actual and/or constructive notice of it as alleged by the defendant, will render the plaintiff’s claim scandalous, frivolous or vexatious or an abuse of process of the Court.

24. There is no suggestion that the plaintiff is a party to the Deduction Agreement.  He is not privy to it.  There is no evidence that he has at any stage been involved in the negotiation or making of it.  An agreement reached solely between the defendant and the purchaser to give a discount on the purchase price said to be represented the damages and compensation of a complaint of the plaintiff, only binds the defendant and the purchaser but not the plaintiff, a non-party to the agreement.  The plaintiff actually had no say in the whole process and gave no consent to it.  It could not be right for the defendant and the purchaser to agree whatever terms they like and then debar a third party from asserting his legal rights.  The fact that the plaintiff was sent copies of the documents leading to the Deduction Agreement does not change the fact that he took no part in the Deduction Agreement and gave no consent to it. 

25. The plaintiff submits that the Deduction Agreement is arguably an agreement attempting to exclude or limit the defendant’s liability to the plaintiff’s claim.  It is clear that two persons cannot by contract impose the burden of an exemption clause on one who is not a party to a contract.  See Chitty on Contracts (31^st ed) §§14-001, 14-039 to 14-040.

26. Whether or not the purchaser has taken over the defendant’s liability or borne the responsibility to indemnify the defendant of her liability to the plaintiff is a matter of construction of the Deduction Agreement between them, and the law presumes that a party will not readily be granted an indemnity against a loss caused by his own negligence.  See Chitty on Contracts (31^st ed) §14-015.

27. I am not persuaded that the Deduction Agreement poses a bar to the plaintiff’s action against the defendant in negligence.  This is so even if the plaintiff has notice of it.

28. In my view, none of the complaints of the defendant demonstrate that the plaintiff’s claim is incapable of reasoned argument, without foundation or cannot possibly succeed.  She fails to show that the present proceeding is oppressive or lacks bona fides.

Conclusion and order

29. In conclusion, I do not find any of the arguments raised by the defendant in support of her application for striking out the plaintiff’s claim convincing.  I order that the application for striking out be dismissed.

30. I see no reason why costs should not follow the event.  I make an order nisi that the defendant do pay the plaintiff’s costs of and occasioned by this application with certificate for counsel, including all costs reserved, to be taxed if not agreed.  In the absence of any application by summons to vary the costs order nisi, it will become absolute after 14 days. 

31. I also make the following directions : -

(a) leave to the defendant to file and serve her defence within  28 days from the date hereof ;

(b)leave to the plaintiff to file and serve a reply, if any, within 21 days thereafter.