RICH METRO LTD v. THE INCORPORATED OWNERS OF KA MING COURT CASTEL PEAK ROAD

DCCJ 3905/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.3905 OF 2014

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JUDGMENT

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1.  The plaintiff flat owner sued the defendant incorporated owners of Ka Ming Court (the Building) for breach of duties under deed of mutual covenant (DMC) and breach of statutory duty under Building Management Ordinance, Cap.344 (BMO).

2.  The plaintiff complains that the defendant has failed and/or refused to take any or adequate steps to resolve in a prompt manner water seepage to flat D on 10/F of the Building it owns (Flat 10D) andfrequent lift breakdowns of the Building during the material years from 2010 to 2014. It claims altogether 11 heads of damages [1] for loss of rental, costs of repairs and transactions, and inconvenience suffered or incurred as a result of defendant’s breaches.

3.  The defendant says it has discharged its duties at law. It has done what could reasonably be required of it in all the circumstances it found itself in during the material years. On quantum, it takes issue with causation and quantum of plaintiff’s alleged loss and damage.

Housekeeping on day one

4.  On the first day of trial, this court invited[2] (and, after applications, gave leave to) respectively Mr Vincent Li for plaintiff (Mr Li) and Mr Jonathan Wong for defendant (Mr Wong) providing further and better particulars of alleged breaches of duties of the defendant at para 10 of the statement of claim (SOC) and making amendments to the defence to cover matters sought to be adduced by defence witnesses but so far not pleaded[3].

Trial more focused and disputes reduced

5.  After the above exercise, the alleged breaches of duties of defendant were finally identified and the issues in dispute also came to become focused. Mr Wong also came to abandon unsustainable factual defences sought to be raised by his witnesses.

No of factual witnesses reduced

6.  Mr Wong also no longer called Madam Yeung Wai Fong[4] and called Mr Fan Wing Kei (Mr Fan)[5], a flat owner and vice-chairman of the management committee (MC) of the Building during the material years, as his only factual witness. Mr Li called Mr Lau Siu Kin (Mr Lau), plaintiff’s director, as his only factual witness.

Assessment of factual witnesses

7.  While Mr Lau’s witness statement gave, as Mr Wong justifiably complained[6] and I agree, a simplified or selective view of only major events over the years, and sought to draw conclusions therefrom, I find Mr Lau an honest and reliable witness in so far most of his evidence goes. His evidence was not implausible on disputed matters and he was unshaken after cross-examination. I find such of his evidence I accept below as the truth, notwithstanding that some of his answers in the box were not covered in his witness statement[7].

8.  As for Mr Fan, save for admissions he gave under cross-examination which I give full weight, I am skeptical of, and do not feel safe to act on, his evidence unless it is otherwise corroborated. Noticeably, he saw fit to exaggerate, and to paint a picture of “satisfactory” lift services, in his witness statement (which was undoubtedly contradicted by the documentary records), such that at para 4 of his supplemental witness statement, he had no choice but to withdraw the same by deleting certain passages at para 3 of his witness statement.

Plaintiff’s expert opinion accepted

9.  After the housekeeping exercise on day one, Mr Wong also decided not to challenge the core opinion of plaintiff’s expert, Mr Wong Shun Tai, Stewart (Mr Stewart Wong), on origin of water seepage to Flat 10D. As explained by Mr Stewart Wong in his reports and statement and shown in sketch he prepared and produced as Exh.P2, water seepage to Flat 10D originated, I accept, from, inter alia[8], defective water-proofing layer on the roof (the roof layer).

10.  At trial, only Mr Stewart Wong was called to adopt his expert reports[9] and statement[10] whereas defence expert[11] was not called at all. Thus, no contrary expert evidence was forthcoming from defence on areas which are formerly disputed between the parties’ experts. On a few matters still challenged by Mr Wong by cross-examination, Mr Stewart Wong was, I note, unshaken and gave plausible answers. Having regard to the rest of the evidence, this court decides to accept the opinions of Mr Stewart Wong and give them full weight.

11.  On the basis of the opinion of Mr Stewart Wong and the rest of the evidence I accept in this judgment, I find that water seepage to Flat 10D had persisted unresolved throughout the material years until after repairs to the entire roof layer were completed in early 2014 and that failure to repair the entire roof layer was the dominant or material cause of continuing water seepage to Flat 10D.

Facts found by court

12.  Most facts are in fact not disputed and are documented in numerous minutes of the meetings of the MC and of the meetings of the owners of the Building[12]. In setting out below at rather long length[13]   these facts from minutes and other facts I accept from witnesses and plaintiff’s expert, I shall also highlight plaintiff’s various complaints and heads of claim.

The Building

13.  The Building is a 12-storey factory building located at Castle Peak Road. The DMC wasdated 1970. The “First owner” therein was Djiauw Pok Kie (Mr Djiauw). There are altogether 94 units therein, comprising shops on G/F, flats A to F on 1/F, and flats A to H on 2/F to 11/F. Undivided share was allocated to the whole of the roof (the roof).

14.  According to floor plan for 8/F to 10/F of the Building, flats A to D thereof are facing Castle Peak Road while flats D & H are side by side with adjacent building called Trendy Centre.  

15.  The Building was at the material times installed with 4 lifts, called L1 to L4, each serving 2 separate flats. Flats C & D thereof were served, and were only accessible, by one single lift i.e. lift L2. On its shutdown or breakdown, occupants of flats C & D had no choice but to walk up and down the stairs.

16.  From 2010 to 2014, the Building was managed by Chevalier Property Management Ltd (the Manager). It had its management office at 1/F of the Building at the material times.

The Parties

17.  At all material times, for leasing purpose, the plaintiff subdivided Flat 10D[14] into 7 units i.e. Units D1 to D3, and D5 to D8[15]. The manner of division can be seen from a floor plan produced as Exh.P1, where Mr Lau had marked the only accessible lift to its main entrance. Units D7 and D8 thereof were facing Castle Peak Road whereas Units D6 and D7 thereof were side by side with Trendy Centre.

18.  Due to set back of the 11/F of the Building away from Castle Peak Road, Flat 10D is partly situated below 11/F flats and partly below a small roof at 11/F level alongside Castle Peak Road (the small roof). Such setback and the small roof are illustrated by Exh.P2[16].

19.  At all material times, all flats on 11/F were vested in one single owner called Clover Group International Ltd (Clover) whereas the roof remained vested with Mr Djiauw. In order to get access to the roof, the only route is going through 11/F.

The year of 2010

20.  In Jan 2010, the defendant paid a sum of $28,000 to settle plaintiff’s then claim of water seepage against it at Small Claims Tribunal (SCT) [17].

21.  Since early 2010, Mr Lau had started making repeated oral complaints to the Manager regarding frequent lift breakdown.

22.  On 12 Mar 2010, representative of the lift maintenance contractor of the Building (lift contractor) i.e. Chun Ming Elevator Co. Ltd. (Chun Ming)[18] attended meeting of the MC to explain causes of recent lift breakdowns[19]. The MC resolved to require the Manager to issue last notice to Chun Ming to improve at once.

23.  On 15 Apr, 28 June and 29 July 2010, there were also complaints of water seepage to the Manager from plaintiff recorded in incident reports.

24.  On 21 June 2010, the Manager reported to the MC many flat D owners complaining of water seepage after rainy days. Defendant’s consultant, PWL Surveyor Consultant Ltd (PWL)[20], opined problem was the roof layer. The MC opined that the roof owner should be held responsible and required the Manager to approach the Food & Environment Hygiene Department (FEHD) seeking assistance.

25.  On 16 Aug 2010, the Manger reported to the MC that FEHD believed that water seepage occurred due to defective roof layer[21]. The Manager said it had written to Mr Djiauw to demand repairs. Messrs. Chung & Kwan (C&K), defendant’s legal advisers, also submitted to the MC court authorities involving roof layer.

26.  On 20 Aug 2010, the Joint Office of Building Department and FEHD (the Joint Office) wrote respectively to Mr Lau[22] and Mr Djiauw[23] believing that water seepage to Flat 10D occurred due to defective roof layer, and recommending Mr Djiauw hiring contractor to investigate and repair.

27.  On 31 Aug 2010, the Manager wrote to Mr Djiauw (copied to plaintiff) demanding repairs to roof layer within 7 days.

Localized repairs resolved

28.  On 27 Sept 2010, the MC resolved to require PWL to quote for drafting invitation for tenders to carry out repairs to the roof layer in such parts above Blocks C & D (localized repairs) and authorized Mr Fan to decide within a range of $5,000 to $10,000.

29.  Here, the plaintiff complains that the defendant should have opted for, and carried out within reasonable time, repairs to entire roof layer instead of localized repairs (1^st complaint)[24].

30.  On the same meeting of the MC, the Manager also submitted incident report of cable of lift L2 broken on 9 Sept 2010 and representative of Chun Ming attended to explain. According to the minute, lift L2 had its cable replaced on 26 Sept 2010 but Chun Ming could not tell when it could resume service[25].

31.  On 19 Nov 2010, the MC resolved to invite tenders for the localized repairs with timetable[26] and also resolved to invite tenders for lift maintenance contract due to expire on 31 Jan 2011. Pending new lift contractor, Chun Ming was resolved to be employed on a monthly basis after expiry of its contract.

32.  It was complained by plaintiff that the defendant had failed to supervise lift contractor effectively and failed to replace lift contractors with competent ones (5^th complaint)[27].

33.  On 29 Dec 2010, PWL gave defendant preliminary analysis of the various tenders for the localized repairs.

The year of 2011

34.  On 5 Jan 2011, the plaintiff issued letter to defendant and the Manager complaining about water seepage and charged defendant for costs of renovation work to walls and ceiling said to start next week[28].

35.  On 7 Jan 2011, the MC resolved by circulation of paper[29] to engage GrowTech Ltd (GrowTech) to carry out the localized repairs at a reduced sum of $250,000.

Localized repairs by GrowTech

36.  Between 13 Jan 2011 and 23 Feb 2011, GrowTech carried out the localized repairs.

37.  On 14 Jan 2011, the MC interviewed the 2 lowest lift contractor tenderers i.e. Chun Ming and Nikkin Lifts & Escalators Ltd (Nikkin).

Nikkin selected as lift contractor

38.  On 18 Feb 2011, the owners in annual general meeting (AGM) resolved to select Nikkin as lift contractor for the years 2011 to 2013.

39.  On 1 Mar 2011, Nikkin became lift contractor in place of Chun Ming with contract period up to 28 Feb 2013.

Localized repairs failed

40.  On 18 Mar 2011, GrowTech submitted completion report of the localized repairs to the MC. Member of the MC (Ms Wong from Clover) noted there was still water seepage and asked for temporary measures. The MC instructed defendant’s works supervisor Mr So to follow up with proposals at next meeting.

41.  The localized repairs did not, I find, resolve water seepage problem to Flat 10D. Water seepage to Flat 10D persisted, I accept from Mr Lau, after Mar 2011. Notwithstanding absence of written records of complaints to the Manager from Feb 2011 to May 2012, I accept from Mr Lau that he had kept on making oral complaints to Mr Yip of the Manager at its management office at 1/F of the Building throughout the aforesaid period of time[30].

42.  The plaintiff complains here that the defendant had failed to inform it about the localized repairs and failed to take timely action to repair the roof layer after knowing that the localized repairs were ineffective (2^nd complaint)[31].

43.  On 25 Mar 2011, the MC resolved to require representative of GrowTech to submit quotation for alternative repair method to enable Mr So to draft invitation for tenders.

44.  On 4 Apr 2011, the MC listened to explanation of quotation submitted by GrowTech and resolved to invite tenders with timetable[32] for repairs to the entire roof layer (wholesale repairs).

45.  On 16 May 2011, the MC noted that tender for wholesale repairs had been closed on 13 May 2011 and interviews with tenderers were being arranged.

46.  On 24 May 2011, the MC[33] resolved to convene extraordinary general meeting (EGM) on 9 June 2011 to resolve on wholesale repairs, and also required C&K to give written opinion on roof ownership and legal liability for the same for EGM purpose.

47.  On 3 Jun 2011, C&K wrote to defendant opining that roof layer was common parts under BMO and the DMC for which defendant was responsible for its maintenance and repair.

Wholesale repairs voted down

48.  On 9 June 2011, owners in EGM (with plaintiff absent) voted by a majority of 35 to 28 against wholesale repairs[34].

49.  The above EGM resolution is complained of by plaintiff as a failure of defendant to discharge its duties (3^rd complaint)[35].

50.  On 21 Jun 2011, the MC suggested in its meeting to representative of Clover in MC for Clover sharing part of the costs of wholesale repairs and the said representative agreed to relay the same.

51.  On 16 Aug 2011, plaintiff entered into tenancy with SAR Apparel Co. (SAR Apparel) in respect of Unit D2 at $4,100/month from 1 Sept 2011 to 31 Aug 2013[36].

52.  On 5 Sept 2011, the Manager reported receipt of letter from Clover’s lawyers. The MC resolved to instruct C&K to reply and to require the Manager to obtain quotation from independent consultant for carrying out a survey of the roof layer.

53.  On 17 Oct 2011, the MC resolved to engage PWL, the only tenderer, to conduct a survey of the roof layer at $30,000.

54.  On 14 Nov 2011, representative of Nikkin attended meeting of the MC to explain recent frequent lift problems[37]. The MC accepted explanations given by Nikkin and reminded Nikkin to implement measures suggested by it to improve service, which would be monitored periodically.

The year of 2012

Legal action by Clover

55.  On 11 Feb 2012, writ of summons was issued by, inter alia, Clover against defendant and Mr Djiauw for, inter alia, damages for failure to repair the roof causing water seepage to 11/F.

56.  On 7 May 2012, the Manager reported to the MC receiving survey report from Clover and its lawyer’s letter. The MC also received quotation from PWL in respect of survey report and resolved to discuss it at next meeting. Some members suggested the defendant sharing half of the costs of wholesale repairs with Clover. Representative of Clover said she could only reply to the MC after report to Clover.

57.  On 14 May 2012, the Manager reported receiving reply from Clover that Clover had rejected sharing half of the costs of wholesale repairs and the MC resolved to engage PWL to prepare survey report at $15,000. The MC also appointed 8 June 2012 to hold AGM with agenda of, inter alia, resolving to carry out wholesale repairs and funding arrangement for it.

58.  On 1 Jun 2012, it was reported to the MC that Clover had stayed its legal action in view of coming AGM agenda. C&K reiterated to the MC that the roof layer was common parts but, since Clover had unilaterally placed on the roof air-conditioning equipment (the equipment) which might damage the roof layer, defendant could demand it to share part of the repair costs.

Wholesale repairs at last resolved

59.  On 8 Jun 2012, owners in AGM (with plaintiff absent) resolved by majority (49 to 8) to carry out wholesale repairs[38].

60.  On 11 & 13 Jun 2012, the plaintiff complained to the Manager about water seepage and recorded in incident reports.

Waterproofing works to Flat 10D separately agreed

61.  On 18 June 2012, PWL submitted to the MC 2 options of wholesale repairs and the MC required PWL to submit at next meeting quotations for drafting invitations of tender for the two options. The Manager also received complaint of water seepage from Flat 10D owner i.e. plaintiff and suspected, after inspection, that it arose from canopy of external wall. The MC agreed to carry out waterproofing works to Flat 10D at the same time of carrying out wholesale repairs, but it had to be separately quoted by the Manager.

62.  On 27 Jun 2012, Kong Kei Waterproofing Engineering Ltd (Kong Kei) signed quotation in total sum of $29,500 from the Manager dated 22 Jun 2012 regarding waterproofing work to Flat 10D.

63.  On 7 Jul 2012, the MC instructed the Manager to call for tenders for the wholesale repairs.

64.  On 17 Jul 2012, Ms Creamy Ng of the Manager (Ms Ng) told Mr Lau that repair work to Flat 10D would be rescheduled to late Aug 2012 after telephone with tenant of Flat 10D.

65.  On 17 Jul 2012, the MC, on PWL’s advice of 2 possible options, resolved to require PWL to draft invitations for tenders separately on each option and the Manager[39] to begin tendering for wholesale repairs after receipt of the same.

66.  On 21 Aug 2012, PWL provided defendant with tender analysis of the 2 options of wholesale repairs.

67.  On 28 Aug 2012, Ms Ng emailed Mr Lau to say that repairing work regarding water seepage to Flat 10D would be carried out on 3 Sept 2012 by contractor.

68.  On 29 Aug 2012, the plaintiff entered into stamped[40] tenancy agreement with Pacific First Group Ltd (Pacific First) in respect of Units D6 & D7 at $12,000/month for 2 years from 21 Sept 2012 to 20 Sept 2014[41].

69.  On 30 Aug 2012, PWL explained its analysis of the tenders on the 2 options to the MC. Repair to Flat 10D was also reported to the MC to be carried out in early September at request of its owner. The lifts were reported to have suffered from time to time service breakdown requiring repairs, causing much inconvenience to the occupiers and owners. The Manager was asked by the MC to invite tenders for lift contractor and to report at the next meeting.

Waterproofing works to Flat 10D by Kong Kei

70.  From 3 to 12 Sept 2012, Kong Kei carried out water proofing works to Flat 10D at, I find, the external walls envelope. The said works did not, however, resolve water seepage problem to Flat 10D. Water seepage to Flat 10D persisted afterwards.

71.  On 5[42], 10[43], 12[44], 18[45], 25[46], 26[47] & 27[48] Sept 2012, Mr Lau emailed Ms Ng.

72.  By fax dated 27 Sept 2012, two Mr Chans[49] issued quotation dated 12 Sept 2012 in sum of $4,500 (Claim No.4) [50] in repainting and replacing damaged ceiling wallpapers to Unit D8[51]. I accept these works were done and plaintiff had paid the same.

73.  By fax dated 27 Sept 2012, two Mr Chans[52] quoted plaintiff for, inter alia, $7,000 (Claim No.5) [53] for installing wooden panels to seal off damaged parts of Units D6 & D7 from sight with associated painting works. I also accept the works were done and paid for by plaintiff.

74.  On 15 Oct 2012, the MC was reported to have arranged remaining 2 tenderers to carry out onsite inspection in early Oct 2012 and the matter would be put to vote at coming EGM. The performance of Nikkin was reported to be far from satisfactory. Tender for new lift contractor was to be closed on 19 Oct 2012 and put to vote at EMG tentatively scheduled on 13 Nov 2012.

75.  On 11 Nov 2012, Pacific First terminated its tenancy of Units D6 & D7 earlier than its expiry date.

TWL chosen for wholesale repairs

76.  On 13 Nov 2012, owners in EGM (with plaintiff absent) resolved to accept the tender of Tsang Wan Lee Construction Co. Ltd (TWL) at $3,560,700 to carry out wholesale repairs together with necessary funding arrangement. Owners also agreed unanimously to defer voting for new lift contractor[54].

Improvement works proposed by Nikkin

77.  On 23 Nov 2012, Nikkin proposed to the MC improvement measures[55] (improvement works), costing $105,000[56] and requiring 45 working days for each lift. The MC required the Manager to distribute questionnaires to gather views of owners and occupiers about the improvement works. The Manager was also requested to write to Clover to demand removal of the equipment from the roof, failing which it may be held liable for any delay to wholesale repairs.

78.  Failure to implement at once or timely the improvement works was another complaint of the plaintiff (6^th complaint)[57].

79.  On 17 Dec 2012, the defendant demanded Clover in writing to remove the equipment from the roof within 14 days or else to bear legal liability.

80.  On 18 Dec 2012, Pacific First sent letter to plaintiff explaining early termination on 11 Nov 2012 due to water seepage and lift breakdown.

81.  On 31 Dec 2012, the plaintiff entered into tenancy with Hong Kong Noble Fashion Co Ltd (Noble Fashion) in respect of Units D6 & D7 at $12,000/month for 2 years from 10 Jan 2013 to 9 Jan 2015[58].

82.  The plaintiff seeks to recover alleged loss of rental for Units D6 & D7 from 12 Nov 2012 to 9 Jan 2013, plus alleged wasted agency commission and wasted stamp duty, in total sum of 35,586 (Claim No.1).

The year of 2013

83.  On 9 Jan 2013, plaintiff’s solicitors sent letter before action to defendant complaining about water seepage & frequent lift breakdown.

Nikkin’s contract renewed for 2 years & improvement works deferred

84.  On 18 Jan 2013, the Manager reported to the MC that defendant received writ of summons from Clover in early Jan 2013 and the MC resolved to engage C&K to settle Defence. 14 questionnaires were reportedly returned on the improvement works, with 8 opposed and 6 in favour, and the MC unanimously resolved to defer the improvement works. The MC also resolved unanimously to renew Nikkin’s contract[59] for 2 years at a monthly sum of $9,600. The Manager also reported receiving letter before action from plaintiff’s solicitors.

85.  It was complained by plaintiff that Nikkin should have been replaced by another contractor and that its contract should not be renewed for another 2 years (5^th complaint)[60].

86.  On 26 & 28 Mar 2013, Mr Lau emailed Ms Ng complaining about lift shutdown for 2 & 4 days.

87.  On 10 Apr 2013, Mr Lau emailed Ms Ng saying new tenants at Units D6 & 7 kept asking compensation for water seepage. Ms Ng replied to say that management of the Building was taken over by Ms Cheung of the Manager (Ms Cheung).

88.  On 15 Apr 2013, representative of Nikkin attended meeting of the MC to explain the improvement works and the MC suggested sending out questionnaires again to gather views of occupants.

SCT proceedings by plaintiff

89.  On 30 Apr 2013, the plaintiff issued proceedings again at SCT against defendant to recover lost rental, stamp duty, agency fee and repair costs etc. for water seepage and lift shutdown.

90.  On 6 May 2013, Mr Lau emailed Ms Cheung saying that plaintiff would employ contractor to carry out remedial works to prevent water seepage and that all costs incurred will be recovered from defendant as it failed to perform its duties.

91.  On 6 May 2013, Ms Cheung emailed Mr Lau stating source   of water seepage could not be identified.

92.  On 24 May 2013, Mr Lau passed to Ms Cheung complaint letter dated 23 May 2013 plaintiff received from tenant of Units D6 and D7 i.e. Noble Fashion regarding, inter alia, water seepage and frequent lift breakdown.

93.  On 29 May 2013, as recorded in incident report, plaintiff erected scaffoldings outside Flat 10D to carry out waterproofing works at, I find, the flat roof.

94.  On 30 May 2013, the Manager wrote to plaintiff to demand cessation of works at, it thought, external wall of the Building.

95.  On 10 Jun 2013, plaintiff complained to the Manager about water seepage and recorded in incident report.

Survey by Mr Stewart Wong

96.  On rainy days of 11 & 15 Jun 2013, Mr Stewart Wong of Proficient Surveyors & Co. surveyed Flat 10D on plaintiff’s instructions and took various photos now annexed to his survey report.

97.  On 24 Jun 2013, Mr Stewart Wong prepared survey report for plaintiff, which submitted it to the Manager. The plaintiff seeks to recover $91,000 (Claim No.10) [61] for reinstatement works, including structural repairs to damaged ceiling slabs, to Units D7 & D8, as opined by Mr Stewart Wong in the said report.

Plaintiff’s waterproofing works to small roof

98.   On 30 Jun 2013, Yip Cheong Engineering Ltd invoiced plaintiff a total sum of $6,000 for waterproofing work to Flat 10D, which, I accept, was paid for by plaintiff. On 12 Jul 2013, Hop Hing Scaffolding Ltd. invoiced plaintiff $6,500 for scaffolding at Unit D6 done on 29 May 2013, which sum I accept was also paid.I accept that these 2 sums were incurred as temporary waterproofing works done to the small roof from around 31 May to 15 Jun 2013[62]and plaintiff now seeks to recover their total in sum of $12,500 (Claim No.6) [63].

Clover at last agreed removing the equipment

99.  On 2 Jul 2013, the MC noted that Clover had finally agreed to remove the equipment away from the roof and the Manager had relayed to TWL to commence works but documents submitted by TWL are not complete.

100.  On 4 Jul 2013, Wing Fung Metal issued a cash memo in sum of $600 to (I accept from Mr Lau that it was paid by) plaintiff (Claim No.7) [64] for replacing damaged light troughs[65].

101.  On 13 Jul & 24 Aug 2013, Kam Hung Aluminum Engineering Co Ltd quoted a total sum of $1,119 (Claim No.9) [66] for aluminum trays, which I find, were paid by plaintiff to be installed in Unit D7 as temporary trays[67] to collect water seepage.

102.  On 17 Jul 2013, the MC in its meeting noted that lawyers for Clover had written to C&K to demand defendant carrying out repair as soon as possible. Mr Fan emphasized that the equipment on the roof must be removed by their “user” to facilitate the repairs. Representative from TWL also said to the MC that wholesale repairs were supposed to begin in Dec 2012.

103.  On 2 Aug 2013, the plaintiff discontinued its claim against defendant at SCT.

TWL at last began wholesale repairs

104.  On 5 Aug 2013, the MC noted in its meeting that wholesale repairs were commenced by TWL on the same day.

105.  Delayed commencement of the wholesale repairs is another complaint of plaintiff (4^th complaint)[68].

106.  On 18 Aug 2013, TWL signed letter of acceptance of wholesale repairs dated 8 Aug 2013 at the sum of $3,350,000 with completion period of 120 calendar days to start on 5 Aug 2013 and to end on 2 Dec 2013.

107.  On 9 Sept 2013, SAR Apparel left Unit D2 after expiry of its tenancy with plaintiff.

108.  On 11 & 13 Sept 2013, Mr Lau emailed Ms Cheung complaining lift shutdown for 3 days and for 1 week, and tenants going to request compensation.

109.  On 17 Sept 2013, the MC resolved to adjourn 7 Oct AGM to 18 Nov 2013 to allow more time to propose the improvement works and to enable tendering procedure of lift contractor to be completed as frequent and serious lift shutdowns necessitated works of improvement and upgrade. Representative of Association & Electrical Engineering Ltd (AEEL) attended meeting of the MC at Mr Fan’s invitation to explain current lift situations of the Building.

110.  On 24 & 26 Sept 2013, Mr Lau emailed Ms Cheung complaining of lift shutdown for 2 days and for 4 days.

111.  On 3 & 5 Oct 2013, and on 7 & 30 Nov 2013, Mr Lau again emailed Ms Cheung complaining of lift shutdown.

112.  On 4 Nov 2013, the Manager reported to the MC at its meeting that 5 tenders to the improvement works were received after it was closed on 21 Oct 2013.

AEEL appointed to carry out improvement works

113.  On 18 Nov 2013, owners in AGM (plaintiff was present) resolved to choose AEEL as new lift contractor plus contractor for improvement works (the latter costing $541,200), together with necessary funding.

114.  On 3 Dec 2013, the plaintiff entered into tenancy with Pick Technology Ltd. in respect of Unit D2 at $5,000/month for 2 years from 23 Dec 2013 to 22 Dec 2015.

115.  The plaintiff seeks to recover alleged loss of rental for Units D2 from 10 Sept 2013 to 22 Dec 2013, plus alleged wasted agency commission, in total sum of $18,080 (Claim No.3)[69].

116.  On 14 Dec 2013, Mr Lau emailed Ms Cheung complaining of lift shutdown.

117.  On 16 Dec 2013, after representative of AEEL reported to the MC that every lift required a total of 39 days[70] for the improvement works, the MC resolved to arrange the said works at public holidays and by stages to reduce inconvenience, with 1^st stage works to begin during public holidays of Chinese New Year for Blocks C, D, E & F. Representative of AEEL in attendance also agreed to start improvement works on 1 Jan 2014.

The year of 2014

118.  On 1 Jan 2014, AEEL was appointed as lift contractor in place of Nikkin.

119.  On 9 Jan 2014, Noble Fashion terminated its tenancy of Units D6 & D7 earlier than its expiry date.

120.  On 10 Jan 2014, Mr Lau emailed Ms Cheung saying water seepage had forced tenant to leave and all incurred costs would be charged to defendant.

121.  On 20 Jan 2014, TWL reported to the defendant that wholesale repairs had on this day been completed.

122.  On 27 Jan 2014, one Mr Chan[71] invoiced the plaintiff the sum of $1,500 (Claim No.8) [72] for repainting and replacing damaged ceiling wallpapers for Unit D7[73]. I accept it was done and paid for by plaintiff.

123.  On 11 Feb 2014, the plaintiff entered into tenancy with Idnerd Studio Ltd in respect of Units D6 & D7 at $13,500/month for 2 years from 1 Apr 2014 to 31 Jun 2016[74].

124.  The plaintiff seeks to recover alleged loss of rental for Units D6 & D7 from 10 Jan 2014 to 31 Mar 2014, plus alleged wasted agency commission, in total sum of $38,516 (Claim No.2)[75].

125.  On 27 Feb 2014, Electrical & Mechanical Services Department (EMSD) gave AEEL resumption permits allowing lifts L2 & L3 to resume operation.

Water seepage and lift problems solved

126.  With TWL’s completion of wholesale repairs in Jan 2014, appointment of AEEL in Jan 2014 and its completion of the improvement works in early 2014, water seepage to Flat 10D and the problem of frequent lift breakdown complained of by the plaintiff were satisfactorily resolved at last.

127.  For inconvenience and disturbance caused to Mr Lau in handling tenants’ complaints during the material years, the plaintiff further seeks to recover general damages from $50,000 to $100,000 (Claim No.11)[76].

128.  On 14 Oct 2014, this action was commenced by plaintiff against defendant.

Applicable legal principles

129.  Neither Mr Li nor Mr Wong took issue with the following propositions of law and I accept them as correct.

130.  Under s.18(1)(a) of BMO, the defendant shall “maintain the common parts in a state of good and serviceable repair” and the lifts and the roof layer of the Building are “common parts”[77]. But the section “does not provide insurance to the extent that if some part of the building becomes in disrepair the Incorporated Owners automatically and necessarily become liable… liability may arise if there is fault. It also arises if, having been made aware of a defect which requires remedy, the Incorporated Owners fail to take appropriate steps”: Lau Chun Wing Rod v IO of Po On Building, unreported, CACV 20/2007, 1 Nov 2007, per Rogers VP at para 12 of the judgment.

131.  Power ACJ had also once held that similar provision in deed of mutual covenant “was plainly never intended to pose an absolute duty to ensure that no common facility ever breaks down. That would impose an impossible burden. The overall duty imposed… is one of ‘proper’ management. Such management entails doing all that is reasonably required of a manager in the circumstances”: Lo Yuk Chu v Hang Yick Properties Management Ltd [1996] 4 HKC 278, 282D.

132.  Furthermore, the standard against which defendant’s action is to be judged should not be retrospective as “it is always easy to be wise after the event”: para 7-53 ofCharlesworth & Percy on Negligence, 13^th (2014) Edition.

133.  In Grace International Ltd v IO of Fontana Gardens [1996] 4 HKC 635, Le Pichon J (as she then was), had ruled at 657G-658B that the existence of the duty to repair the common parts “cannot turn on the costs of the repairs in question… Implicit in this is the duty to raise the necessary finance, which is concomitant to the duty to repair… What this entails is for management first of all to make a decision regarding the repairs that are necessary.The next step is to obtain quotations or tenders and having made a decision thereon, proceed to collect the necessary contributions from the owners”.

Liability

Breaches of duty

1^st complaint

134.  The dispute here is whether the MC should have reasonably followed the advice of PWL on 27 Sept 210 to undertake wholesale repairs or localized repairs. Mr Li suggests the former while Mr Wong suggests the latter.

135.  It is thus common ground between the parties that, by the date of this meeting of the MC, the defendant had been made aware of the water seepage problem to, inter alia, Flat 10D and took the view[78] (and, I think, the right view) that it required remedial action[79] to the roof layer[80] by defendant and not by others[81].

136.  While Mr Li is,I think, right to stress that opinion was proffered[82] to the MC on 27 Sept 2010 that wholesale repairs should be done in order to solve thoroughly (徹底) the water seepage problem and that PWL opined that localized repairs were not ideal (非最理想), Mr Wong is, I think, equally right to point out that PWL also opined that localized repairs could be worth trying (可以考慮嘗試) considering objective factors and finances of the Building.

137.  As such, PWL had not, I agree with defence, given to the MC on 27 Sept 2010 an unequivocal recommendation of only one option of proceeding with the wholesale repairs.

138.  As Mr Wong submits, I agree that the judgment of Le Pichon J. (as she then was) in Grace International Ltd, supra, does not debar an incorporated owner from considering the finances of the building in resolving on different possible options.

139.  As was recorded on the same minute of the MC on 27 Sept 2010 and as Mr Wong submits, the defendant was at the same time following up on renovation to the Building completed shortly ago (item 2) and involved in an adverse possession litigation (item 5)[83]. It was thus understandable for the MC[84] to take the finances of the defendant into account in resolving on the different options.

140.  While Mr Fan agreed with Mr Li that the extent of localized repairs was not determined by scientific method and, according to Mr Stewart Wong, the local water ponding test carried out after the localized repairs was not of much use to check the effectiveness of the repairs to stop water seepage to Flat 10D, the evidence is unclear to this court if these matters were explored by the MC on or before 27 Sept 2010. If not, it is, I think, always easy to be wise after the event

141.  All things on or before 27 Sept 2010 considered, I do not find it unreasonable for the MC to follow the professional advice of PWL[85] to try making localized repairs to resolve the water seepage problem to, inter alia, Flat 10D.

142.  This 1^st complaint is, I think, not made out by plaintiff.

2^nd complaint

143.  Mr Li submitted that the defendant ought to have informed the plaintiff specifically of the localized repairs so that the plaintiff could check its effectiveness in resolving water seepage problem to Flat 10D but defendant had not done so.

144.  Factually, on defendant’s part, it denies that it had failed to inform the plaintiff of the localized repairs. It avers on pleadings that the resolution of the MC to engage GrowTech by paper circulation dated 7 Jan 2011 had expressly attached plaintiff’s complaint letter dated 5 Jan 2011 threatening to carry out its own rectification works. By reason of GrowTech commencing the localized repairs, the plaintiff, it was said, never carried out its rectification works as it had threatened[86]. Nonetheless, I find against the defendant on this point. I come to conclude that that the defendant had never so informed the plaintiff the localized repairs as pleaded[87].

145.  However, I agree with the legal submission of Mr Wong that the defendant owed no duty to specifically inform the plaintiff about the localized repairs. Defendant’s statutory duty under BMO is to maintain the common parts in a state of good and serviceable repair. In merely not informing the plaintiff of the localized repairs as I find above, the defendant has not, I think, been in breach of such duty[88].

146.  After the localized repairs proved ineffective, I do not think that the few weeks from 18 Mar 2011 to 4 Apr 2011 the MC had spent on exploring other options matters much. As Mr Wong rightly pointed out, the MC did resolve to invite tenders for wholesale repairs on 4 Apr 2011 and completed the tendering exercise on 13 May 2011. Counting from the meeting of the MC on 18 Mar 2011, the defendant did call for tender for wholesale repairs within 3 months (as plaintiff suggests) after knowing the ineffectiveness of the localized repairs.

147.  Afterwards, on 24 May 2011, the MC resolved to convene EGM on 9 Jun 2011 to resolve on the wholesale repairs. The plaintiff does not contend, and I do not think, it unreasonable for the MC to seek approval of owners in general meeting to go ahead with the costly wholesale repairs.

148.  This 2^nd complaint is also, I think, not made out.

3^rd complaint

149.  With localized repairs proved ineffective, tendering of the wholesale repairs completed and shortlisted contractors to be picked, it is submitted by Mr Li that the defendant ought to have resolved in EGM held on 9 June 2011 to proceed with the wholesale repairs in line with legal advice of C&K received but the majority owners of defendant had voted to the contrary failing its duty.

150.  As recorded in minute of the EGM, Mr Chan of C&K (Mr Chan) had explained to the owners present that the roof layer is, on the authorities, common parts and the defendant is responsible for its repairs[89]. He recommended that repairs be undertaken as soon as possible. Representative from Clover in attendance also urged for support for such repairs, or else it did not rule out taking action for such loss it suffered from water seepage. It should further be noted that Mr Chan had specifically warned, if the court finds against the defendant in future, there would be additional damages and legal costs, and the contribution of each owner would be even greater.

151.  Mr Wong for his part invited this court to consider this Jun 2011 EGM resolution in light of, or together with, subsequent efforts by the MC to propose sharing of the costs of the wholesale repairs with Clover to make such repairs more palatable to the owners to reconsider their decision in this EGM[90]. He submitted that defendant was not in breach of its duties as, in light of subsequent developments, including Jun 2012 AGM resolution to proceed with the wholesale repairs, it never “gave up” the proposal of making wholesale repairs.

152.  I am afraid I disagree with Mr Wong. The defendant did not, one notes, merely defer voting the resolution concerned but had voted against it. And, notwithstanding the subsequent developments, the issue before this court on this complaint remains whether, on 9 Jun 2011, the defendant owners in making this EGM decision as they did has failed to discharge their duty of care.

153.  All things on or before 9 Jun 2011 considered, including the then finances of the defendant[91] but bearing in mind judgment of Le Pichon J. (as she then was) in Grace International Ltd, supra, I conclude that the defendant had, unfortunately, come to an unreasonable decision on 9 Jun 2011 to reject the wholesale repairs in all the circumstances then prevailing (indeed, Mr Fan also frankly admitted under cross-examination that this EGM resolution was unreasonable) and that the defendant has been in breach of its duty to repair since then.

154.  The subsequent developments (which were by no means certain when one looked to the future on 9 Jun 2011) were, I think, no more than efforts by defendant owners to remedy its breach (and to mitigate the loss and damage, if any, caused by it).

155.  I am therefore satisfied that this 3^rd complaint has been made out by the plaintiff.

156.  As it turned out, remedial steps of another AGM resolution to proceed with the wholesale repairs, appointment of TWL as contractor and funding arrangement at another EGM were not all resolved upon by the owners until 13 Nov 2012.

157.  Having regard to expert opinion of Mr Stewart Wong I accept and continued water seepage, I find, to Flat 10D after the futile localized repairs by GrowTech and the futile waterproofing works by Kong Kei, such continuing breach of duty on the part of the defendant in resolving against (and not resolving on) the wholesale repairs from 9 Jun 2011 to 13 Nov 2012 caused, I am satisfied, continuing damage by way of water seepage to Flat 10D and that it was the dominant or material cause of the latter.

158.  Had the owners voted for wholesale repairs (and selected contractor and approved funding for the same in one goal) in EGM held on 9 June 2011, having regard to the rest of this judgment, I think it likely that wholesale repairs would have been completed by about Aug 2012[92] and that water seepage to Flat 10D would by then have been resolved earlier than it was the case in early 2014. As such, water seepage damage to Flat 10D from about Aug 2012 to early 2014 was, I think, caused by defendant’s continuing breach of duty here.

4^th complaint

159.  The plaintiff also complained of delayed commencement of the wholesale repairs only in Aug 2013.

160.  The explanation put forward by the defendant is that Clover had declined defendant’s written request on 17 Dec 2012 to remove the equipment from the roof to enable the wholesale repairs to be carried out earlier[93].

161.  In reply, the plaintiff contends that the defendant could have a) demanded Clover to remove the equipment prior to Dec 2012[94]; b) used its power under clauses 11(h) & 12(c) of the DMC to demand Clover to remove the equipment[95]. But the defendant did neither.

162.  Mr Fan agreed with Mr Li that the defendant had not written to Clover seeking removal of the equipment after the wholesale repairs was resolved upon in Jun 2012 AGM. It did so only after both TWL and its funding was agreed upon by the owners in Nov 2012.

163.  But, had Clover agreed, and did remove, the equipment after June 2012, the wholesale repairs could not, I think, begin in any event until after TWL and its funding was agreed upon in Nov 2012. Hence, any demand by defendant to Clover earlier than Dec 2012 as plaintiff suggests is, I think, neither here nor there[96].

164.  Moreover, there is nothing before this court that indicated to the defendant prior to Nov 2012 that it would expect any resistance from Clover against removal of the equipment when it was, one thinks, also in Clover’s own interest (as Clover had taken out litigation against the defendant) to have the wholescale repairs done to remedy water seepage to 11/F. Such resistance of Clover is, Mr Wong pointed out to Mr Lau and Mr Lau agreed, self-contradictory to its stance of requiring the wholesale repairs being done as soon as possible.

165.  On the proper constructions of the DMC, I also agree with Mr Wong that it was up to Mr Djiauw (and not the defendant) to decide whether to allow Clover to keep the equipment on his private property i.e. the roof, and that the defendant had no power under either clauses 11(h)[97] or 12(c)[98] thereof to demand their removal or remove them (if indeed the defendant or the MC knew of and/or was advised of such provisions of the DMC at the material time).

166.  The only evidence I had is that Mr Fan (and the MC) knew that the roof was private property and that C&K had once explained to defendant that it could apply for injunction to demand Clover to remove the equipment. Details of such advice are, however, lacking before this court, including the merits of, the costs and the length of time required for such application. Had Clover unreasonably continued its resistance after such application mounted by the defendant, it is, I agree with Mr Wong, not unlikely that the court process would have dragged on unresolved beyond Aug 2013.

167.  This 4^th complaint is therefore not made out either.

5^th complaint

168.  For this complaint, I am first satisfied that, from time to time over the material years, the lift contractors concerned had not properly maintained, inter alia, lift  L2 such that satisfactory lift service was not provided for the Building for, inter alia, the plaintiff and its tenants at Flat 10D. I so find having regard to lift maintenance records of the Building, minutes of the MC and of owners’ meeting, Mr Fan’s divers admissions and Mr Lau’s numerous complaints before me.

169.  Mr Li stressed in submissions, and put to Mr Fan in cross-examination, that the plaintiff first complained of lift problems as early as in early 2010, its tenants had suffered tremendously during lift shutdowns (many counting in days, not in hours), and it took the defendant too long to resolve the problem by early 2014. But, as shall be shown below and as Mr Wong rightly points out, it is not the case that defendant did nothing during the material years.

170.  The plaintiff has also, I note, made a general plea in its further particulars that defendant had failed to supervise its contractors in an effective manner. Save cross-examining Mr Fan about replacement of lift contractors, extension of their contracts and the improvement works to be discussed below, Mr Li has not otherwise put to Mr Fan how the defendant could have done better nor developed this general plea in his submission.

171.  Looking at the minutes of the MC and of owners’ meetings, I do not think there is any substance of the allegation of failure to supervise lift contractors. The standard of lift services and lift incidents were taken seriously, and discussed, from time to time by the MC at its meetings. Representatives of lift contractors were invited to attend meetings of the MC to explain and, if required, notice of improvement was issued to lift contractors. Improvement of the lift contractors was to be monitored by the MC and/or the Manager regularly.

172.  As to replacing lift contractors, Mr Li submitted that the defendant should have replaced a) Chun Ming before end of 2010; b) Nikkin before end of Jan 2012; c) Nikkin in Sept 2012 (or only have extended its contract on a monthly basis); d) Nikkin by June 2013, by a more competent contractor.

173.  The short answer, I note, Mr Wong gave is that Chun Ming was replaced with Nikkin on 1 Mar 2011. And, on the plaintiff’s case, Nikkin’s performance proved to be unsatisfactory either and it was also replaced with AEEL on 1 Jan 2014.

174.  As to specific deadlines to replace lift contractors concerned submitted by Mr Li in para 172 above, I do not think a) and b) thereof had specifically been put by Mr Li to Mr Fan. His emphasis is more on c) and d) thereof.

175.  While clause 14 of Chun Ming’s contract with defendant allows defendant to terminate the said contract with 3 month’s prior written notice or summarily[99], the evidence is unclear to this court whether the defendant knew and/or was advised of such provisions at the material times. If such provisions are to be exercised at all, it is also unclear to this court if replacement contractor was around at once or within 3 months to maintain continuous lift service. And summary termination must, of course, be supported with cogent reasons or else it is liable to be challenged by the contractor in courts of law.

176.  Chun Ming’s contract was originally due to expire on 31 Jan 2011. On 19 Nov 2010, the MC has resolved to invite tenders for lift contractor. Pending new contractor, Chun Ming was employed on a monthly basis after expiry of its contract. Such arrangement was, I think, no doubt made to maintain continuous service. The owners in AGM on 18 Feb 2011 selected Nikkin as replacement and Chun Ming’s contract was thus extended for only 1 month to 28 Feb 2011. Hence, Chun Ming was replaced as short as only 2 months later than the suggested deadline of end of 2010 Mr Li had submitted.

177.  As for Nikkin’s contract, it has identical clause 14 to Chun Ming’s contract. Its first contract with defendant was to begin from 1 Mar 2011. While there was lift problems before meeting of the MC held on 14 Nov 2011, the minutes recorded that the members accepted explanations of Nikkin’s representative and were prepared to give it more time[100] to improve its service (which would be monitored in due course). Such treatment of Nikkin by the MC was, I think, by no means unreasonable. If Nikkin was to be replaced before the deadline of end of Jan 2012 as Mr Li suggested, such matters in para 175 above need, I think, also to be considered seriously by the MC.

178.  As to another deadline of Sept 2012 also suggested by Mr Li to replace Nikkin, the MC lost, I note, no time to ask the Manager to invite tenders for lift contractor as early as on 30 Aug 2012 after noting frequent service breakdown. The tendering was to close on 19 Oct 2012. However, when it came to EGM on 13 Nov 2012, only 2 tenders (one being Nikkin) were received after 2 rounds of invitations, and the other tenderer did not comply with the tender documents (the failed exercise). As such, the owners in Nov 2012 EGM had, I think, no choice but to defer voting for new lift contractor as they did.

179.  Mr Li alternatively suggested that, like the case with Chun Ming, Nikkin’s contract ought to have been extended on a monthly basis and not extended for 2 years as the MC did on 18 Jan 2013. As the minute of this MC recorded and as Mr Fan explained, the 2-year extension was made as the lift situation had “improved in the recent months” of Dec 2012 and early 2013.

180.  And against absence of interest from other tenderers in the failed exercise, the defendant, I have to agree with Mr Fan, had not much bargaining power to negotiate (and thus failed to secure) a monthly contract deal with Nikkin to maintain continuous service, especially when Nikkin was not “flexible” like Chun Ming as Mr Fan clarified in the box. That was the case despite Mr Fan agreed with Mr Li that lift service was far from satisfactory by Jan 2013 and that any responsible MC would not have renewed Nikkin’s contract for 2 full years.

181.  Finally, Mr Li suggested that Nikkin should have been replaced by June 2013. In any termination of Nikkin’s contract after its renewal, matters in 175 para above must again, I think, be seriously considered by the MC before action taken, all the more so not long after the failed exercise. While there were lift shutdowns in Mar 2013 that called for action, Nikkin had, one notes, as early as on 23 Nov 2012 proposed the improvement works to the MC to remedy its lift service. Though not at once implemented, that was by all means one reason for the MC to retain Nikkin, if not already contractually bound by its renewed contract with Nikkin.

182.  As things turned out and as Mr Fan clarified in the box, the defendant spent much time to negotiate with Nikkin for early termination of its 2^nd (renewed) contract. It was not until 1 Jan 2014 that AEEL was appointed to replace Nikkin. AEEL was the lift contractor of another aged building (of which Mr Fan was chairman of its management committee) whose lift service improved much after similar works of the improvement works. However, the evidence is unclear if the defendant could have earlier invited AEEL to tender for lift service of the Building or AEEL could have complied with defendant’s tender documents in the failed exercise earlier.

183.  All in all, the defendant had, I am satisfied, during the material years its own difficulties and obstacles in replacing its lift contractors which cannot be ignored. It has not, I think, been proved that the defendant can reasonably be faulted for failing to replace lift contractors as the plaintiff suggested.

184.  Hence, the plaintiff has not, I think, made out this 5^th complaint.

6^th complaint

185.  Mr Li in his submissions suggested that the defendant should have replaced the old and worn parts of the lifts before various deadlines. I do not propose to consider these submissions as such allegations were not pleaded nor put to Mr Fan. The only pleaded complaint is that the defendant had failed to implement the improvement works within reasonable time by Jan 2013[101] after they were suggested by Nikkin back on 23 Nov 2012.

186.  In reply, Mr Wong pointed out, on the said meeting of the MC dated 23 Nov 2012, it was made known by Nikkin that as many as about 45 working days were required to complete the improvement works and such works costed as much as $420,000.

187.  Thus, it was then reasonable, Mr Wong submitted, for the MC on 23 Nov 2012 to require the Manager to distribute questionnaires to ascertain the views of owners and occupiers. And in view of the majority opposing views on the returned questionnaires, it was also reasonable for the MC on 18 Jan 2013 to defer the improvement works for the time being.

188.  Under cross-examination, Mr Lau disagreed with Mr Wong about distribution of questionnaires and claimed that the improvement works were a must. But Nikkin, I observe, never went as far to say that it was a must on 23 Nov 2012. According to the minute, Nikkin only indicated that the parts of the lifts of the Building had gradually become aged. It therefore recommended replacement of main control panels, after which there should be substantial or considerable improvement in terms of lift breakdowns[102]. It should be stressed that Nikkin nowhere then said to the MC that the lifts of the Building cannot function without the improvement works.

189.  Of course I do not overlook that the lifts of the Building, including lift L2 serving Flat 10D of plaintiff, had by then suffered from time to time frequent shutdowns lasting as long as days. But the improvement works could make the lifts inoperative lasting as long as over 6 weeks, not in terms of mere days as plaintiff or its tenants had previously complained of.

190.  As at 23 Nov 2012 or 18 Jan 2013, it was not suggested before the MC that such length of inoperative time of the lifts due to the improvement works could be shortened or substantially shortened, be it by Nikkin or by other contractors[103].

191.  Such lengthy period of shutdown of the lifts would, one thinks, definitely cause much inconvenience, if not substantial loss or disaster, to occupants of the Building. Were the MC to have pressed ahead with the improvement works on 18 Jan 2013 despite the opposition, it was likely, one thinks, to attract more complaints (if not more law suits) of breaches of its duties from other owners than the plaintiff[104]. Indeed, Mr Fan, I accept his evidence, also opposed the improvement works in his returned questionnaire as, he explained, he cannot continue running his business in the Building on such lengthy shutdown.

192.  With the benefit of hindsight, AEEL, Mr Fan explained and I accept, managed to take only 15 days (unlike 21 days suggested by Nikkin) to complete the improvement works themselves[105] by working overtime and by working during Chinese New Year holidays in 2014. But that was only to be wise after the event.

193.  Even when representative of AEEL was invited by Mr Fan to attend the meeting of the MC on 17 Sep 2013 to explain about the lift situation and the improvement works, the aforesaid ingenious work schedule was not suggested by AEEL. It was only by 16 Dec 2013 that the same was agreed upon by MC after discussing with AEEL.

194.  All things considered, including the need, and the potential serious impact, of the improvement works, and the professional advice the MC was given, I do not find it unreasonable for the defendant not to implement the improvement works by Jan 2013 as the plaintiff had suggested.

195.  Accordingly, this 6^th complaint has not been made out by the plaintiff.

Quantum

Four groups of claims

196.  Plaintiff’s claims in para 11 of SOC could, I think, be divided into 4 groups, namely: -

(1) loss of rental and related transaction costs – Claim Nos.1, 2 & 3;

(2) costs of repairs incurred – Claim Nos.4, 5, 6, 7, 8 & 9;

(3) reinstatement works to be done – Claim No.10; and

(4) inconvenience & disturbance – Claim No.11.

Group (1)

197.  I refer to para 29 to 33 of Lau’s witness statement.

198.  Mr Wong submitted that Claim No.1 relates to a period (12 Nov 2012 to 9 Jan 2013) when the defendant was in the process of tendering which eventually led to the appointment of TWL on 13 Nov 2012 and this was a period, he submitted, when defendant was not in breach of its duty. I disagree.

199.  On my findings at para 157 & 158 above, defendant’s continuing breach of duty therein caused, I think, Pacific First to suffer from water seepage during its tenancy of Units D6 & D7 as from 21 Sept 2012 and to terminate it earlier on 11 Nov 2012 than it would otherwise be the case and the plaintiff could not let the units out again to Noble Fashion until 10 Jan 2013.

200.  Mr Lau’s evidence that Pacific First terminated its tenancy earlier due to water seepage is, I note, corroborated by complaint letter dated 18 Dec 2012 from Pacific First.

201.  Claim No.2 is, Mr Wong submitted, concerned with early 2014 when water seepage had improved. The decision of Noble Fashion to exercise the break clause of its tenancy was, he submitted, unlikely due to water seepage problem which should by then have been resolved. Again, I disagree with him.

202.  On my findings at para 157 & 158 above, defendant’s continuing breach of duty therein caused also, I think, Noble Fashion to suffer from water seepage during its tenancy of Units D6 & D7 as from 10 Jan 2013 and to terminate it earlier on 9 Jan 2014 than it would otherwise be the case and the plaintiff could not let the units out again until 1 Apr 2014.

203.  That water seepage was one of the causes of early termination of its tenancy is, I think, shown by Noble Fashion’s letter of complaint dated 23 May 2013.

204.  Mr Wong further stressed that Claim No.3 is concerned with Unit D2. There is no evidence as to what efforts, if any, plaintiff took to let out this unit after expiry of the tenancy of SAR Apparel. It is, he submitted, nothing but ordinary for a unit to be vacant for just over 2.5 months before new tenants are found. Moreover, plaintiff’s complaints of water seepage to Flat 10D were, he emphasized, in relation to Units D7 & D8. I agree with these submissions.

205.  Mr Stewart Wong’s opinion (which I accept) is also that defective roof layer caused water seepage to Units D7 & D8. He did not mention Unit D2 at all. And SAR Apparel never terminated its tenancy before its expiry date. Absent further or more specific evidence from the plaintiff, I am not satisfied on balance that the rental loss in Claim No.3 was caused by defendant’s breach of duty or water seepage problem to Flat 10D as found by this court. I disallow Claim No.3.

206.  For group (1), I therefore only accept the evidence of Mr Lau on Claim Nos.1 & 2 and award the respective loss of rental in sums of $23,226 and $32,516 as claimed in SOC. Granted that Pacific First and Noble Fashion had entered into their tenancies with plaintiff, I do not think that plaintiff had “wasted” its agency commission or stamp duty in the transactions concerned, though the tenancies had turned out to last shorter than the plaintiff might have hoped for.

Group (2)

207.  I refer to para 34 of Mr Lau’s witness statement.

208.  Mr Wong stressed that the plaintiff has only pleaded (and Mr Lau only gave) the dates of repairs and not the period during which the damage was sustained. If damage was sustained at an earlier period for which the defendant was not found in breach of its duty, plaintiff’s claims, he submitted, must fail despite that such repairs were done in a period the defendant was found in breach of its duty.

209.  In terms of timing, plaintiff carried out these repairs in Claim Nos.4 to 9 at about Sept 2012, May to Aug 2013 and about Jan 2014. Having regard to all facts I accept, I think these repairs were all done in response to pre-existing and continuing water seepage to Flat 10D. On my findings at para 157 & 158 above, water seepage damage to Flat 10D from about Aug 2012 to early 2014 was, I find on balance, caused by defendant’s continuing breach of duty as found by this court and, as such, I am also satisfied on all evidence before me that these repairs were caused by defendant’s breach of duty too.

210.  While the defendant had, I find, acted reasonably in engaging GrowTech to carry out localized repairs, I disagree with Mr Wong who suggested that Claim Nos.4 & 5 ought to be disallowed on this basis. The plaintiff should, I think, be allowed to recover reasonable expenses incurred by it to mitigate its losses due to water seepage damage to Flat 10D caused by defendant’s breach of duty, all the more so when defendant had, I find above, not specifically informed plaintiff of this “futile” localized repairs.

211.  While on my findings plaintiff spent money from about May to Jun 2013 on temporary waterproofing works to Flat 10D at the small roof, which was, as opined by Mr Stewart Wong, at “about the same spot” Kong Kei had carried out waterproofing work in Sept 2012, I do not find it unreasonable for plaintiff to carry out the former works as submitted by Mr Wong. The latter works had “failed” and there is no clear evidence that the plaintiff later knew of all the details of this earlier works[106] and was, so to speak, “repeating the same mistake”. It occurs to me inherently unlikely that the plaintiff would knowingly waste its money on repeating defendant’s same mistake. The plaintiff should, I think, be recompensed with reasonable amount for its effort, even futile one, to mitigate its losses caused by defendant’s breach of duty.

212.  I have therefore decided to accept Mr Lau’s evidence on all group (2) claims. Considering expert opinion of Mr Stewart Wong on the reasonableness of the amounts claimed for Claim Nos.4 to 9 in the 1^st supplemental survey report and the joint expert statement, I allow all of them in the total sum of $27,219 in full.

Group (3)

213.  I refer to Mr Stewart Wong’s opinion and estimate on Claim No.10 in his survey report, 1^st supplemental survey report and joint expert statement, and para 35 of Mr Lau’s witness statement.

214.  Mr Wong first challenged the impartiality of Mr Stewart Wong. It was said that Mr Stewart Wong gave his first opinion of alleged structural damage to Units D7 & D8 of Flat 10D and estimated repair costs of $91,000 like a claims consultant of plaintiff in June 2013. After he was given leave by the court to be engaged as an expert in this action, his opinion evidence was likely biased to support or defend his earlier opinion and estimate.

215.  There was also no basis, Mr Wong submitted, for Mr Stewart Wong to assert that there was structural damage as he had never opened up the affected concrete area of Flat 10D to detect alleged rusting. Had it been so damaged, it is significant, he said, that the plaintiff did not rectify the same between Jun 2013 and the trial. Claim No.10 remains at trial a claim for prospective loss.

216.  I do not accept these defence submissions. As early as in his survey report in Jun 2013, Mr Stewart Wong has already declared that he had read, and agreed to, the code of conduct for expert witness[107] and that he understood that he had an overriding duty to help the court impartially and independently[108]. He declared that he had complied with such duty he owed to the court and would continue to comply with it.

217.  Having regard to entire contents of survey report in Jun 2013, including survey results of Mr Stewart Wong on 2 rainy days in Jun 2013 and photographic records taken by him, I accept his evidence in the box that he could then have arrived at a professional judgment from all these (without opening up the affected areas) to conclude that structural damage had already been done to Units D7 & D8 and that it is reasonably necessary for plaintiff to reinstate the same. And on his expert evidence I accept, I find on balance that such structural damage was caused by defendant’s continuing breach of duty on the 3^rd complaint as I have found in para 157 & 158 above.

218.  And plaintiff has so far not reinstated such structural damage as opined by Mr Stewart Wong because, as Mr Lau explained in his witness statement and in the box and I accept, he planned to do so after obtaining compensation and, if practicable, after tenancies for Units D6 & D7 and another tenancy for Unit D8[109] all expire, in much the same way he had arranged for earlier repairs to be carried out on expiry or termination of tenancies.

219.  Accepting Mr Stewart Wong’s opinion that the amount claimed is fair and reasonable, I thus allow Claim No.10 of $91,000 in full in favour of plaintiff.

Group (4)

220.  I refer to para 36 of Mr Lau’s witness statement.

221.  Mr Wong invited this court to disallow Claim No.11 on the basis that there was insufficient evidence. No evidence was, he stressed, adduced to show, for example, the salary of Mr Lau who dealt with tenants’ complaints on plaintiff’s behalf.

222.  While it is, I agree, helpful to have such salary evidence and detailed evidence like total time Mr Lau has spent on handling tenants’ complaints during such period caused by defendant’s breach of duty, I do not think their absence is fatal. The many instances of documented water seepage complaints made by Mr Lau since Aug 2012 shed, I think, useful light on his efforts. And this court can, and should, do its best on the limited evidence adduced to value the inconvenience and disturbance allegedly caused to Mr Lau as a result.

223.  A more fundamental objection to this claim lies, I think, in the fact that the plaintiff is a corporate entity which let out most units of Flat 10D as a landlord.Plaintiff’s own occupation of Unit D5 was never disturbed by any water seepage caused by defendant’s default. In so far leasing of other units of Flat 10D was disturbed by such water seepage causing rental loss to plaintiff, such financial loss has already been recouped as group (1) claim.

224.  Granted that plaintiff was to receive rental from its tenants, Mr Lau as plaintiff’s director could, one thinks, be said to have been paid to handle complaints of plaintiff’s tenants as part of his duties as agent of landlord. There is no evidence that Mr Lau’s handling of complaints had disturbed or otherwise caused inconvenience to Mr Lau in discharging his other duties, if any, within plaintiff.

225.  Put it another way, this case is not the typical one of human claimants who naturally and personally suffer disturbance or inconvenience in their living residence due to water seepage and who are ordinarily allowed to recover general damages by analogy with personal injuries claims. Significantly, the only authority drawn to my attention on this claim by Mr Li[110] is such a domestic case.

226.  I am therefore not satisfied that the plaintiff can recover general damages for alleged disturbance and inconvenience caused to its director as claimed. Were I wrong on this point, I would have allowed no more than $10,000 to the plaintiff.

227.  For the reasons given above, I disallow Claim No.11.

Summary of claims allowed

228.  Hence, for Claim Nos.1, 2, 4 to 9 and 10 I allow in full or in part, the defendant should pay damages in total sum of $173,961 to the plaintiff for its breach of duty i.e. $23,226 + $32,516 + $27,219 + $91,000.

Disposition

229.  Accordingly, I enter final judgment in the plaintiff’s favour against the defendant in the sum of $173,961. The said judgment shall further carry interest at judgment rate from 14 Oct 2014 until the date hereof, and thereafter at judgment rate until payment.

Costs

230.  I also make a costs order nisi that the costs of this action, including all reserved costs and costs of this trial, together with certificate for counsel, be paid by the defendant to the plaintiff, to be taxed if not agreed. It shall become absolute if none applies within 14 days from the date hereof to vary the same.

231.  Lastly, I am most grateful to, and thank, Mr Li and Mr Wong for their valuable assistance.