Rainbow More Ltd v. The Incorporated Owners of the Arcadia
Read the full judgment text of LDBM 141/2015 on BabelCite. This Lands Tribunal judgment was delivered on 8 May 2018.
1. The respondent is an owners’ incorporation of a real estate development of which the applicant is an owner. This trial concerns whether, and if so, under what circumstances the owners’ incorporation is liable to an owner for damages resulting from default on the part of the corporation’s building contractor. It is the parties’ common ground that the contractor’s work was defective which caused damages to the applicant’s chattels and to the interior of his unit as a result of water seeping thr
Cited by 1 case · Cites 8 cases
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LDBM 141/2015 [2018] HKLdT 30 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION BUILDING MANAGEMENT APPLICATION NO. 141 OF 2015 ________________
________________ Before: His Honour Judge K W WONG, Presiding Officer of the Lands Tribunal, in Court Date of Hearing: 16-17, 20-22 February, 23-24 March 2017 Date of Submission: 13 April 2017 (by the Respondent) 13 April 2017 (by the Applicant) Date of Judgment: 8 May 2018 ____________________________ JUDGMENT ____________________________ 1.The respondent is an owners’ incorporation of a real estate development of which the applicant is an owner. This trial concerns whether, and if so, under what circumstances the owners’ incorporation is liable to an owner for damages resulting from default on the part of the corporation’s building contractor. It is the parties’ common ground that the contractor’s work was defective which caused damages to the applicant’s chattels and to the interior of his unit as a result of water seeping through the external wall. The applicant accuses there being delay and/or inaction on the part of the respondent to make good the defective external walls despite repeated demands and requests. The respondent denies. Brief Background 2.Along No. 8 Forfar Road, Kowloon City stands a residential development known as The Arcadia comprising, inter alia, 2 residential 14-storeyed towers with 4 units on each floor (i.e. 112 units), 4 semi-detached houses, a club house and a swimming pool. The Arcadia was completed and occupied in or about 1989. The respondent is the owners’ incorporation of The Arcadia (“IO”). All owners including the applicant and the IO are subject to a Deed of Mutual Covenant dated 25 January 1990 and registered with the Lands Registry by memorial no. UB4323336 (“DMC”). 3.There is an Emergency Vehicular Access (“EVA”) within The Arcadia. The EVA is in fact a large space on the ground floor of at least 6 metre wide. Fire engines can enter and park there in case of emergency. There is no dispute that the EVA is a common area of The Arcadia. 4.The applicant is the registered owner of Unit B of Ground Floor of Block 2 (“the Unit”) of The Arcadia. The Unit has all along been occupied by the applicant’s sole director Mr Chan Hon Chuen (“Chan”) and his family as their home since December 2004. It is a 3-bedroom unit with an open front Yard and a back Yard (referred to as “Front Yard” and “Back Yard” respectively). In order to understand how the Unit might be affected by the renovation work, it is essential to understand its layout and its position relative to other part of the development. 5.The Front Yard is of a split-level design. Immediately before the renovation, its elevated part and the EVA are of the same water level. They are only separated by a short parapet wall open with an iron gate which is the only access to the Unit. After entering the iron gate, the 3-bedroom Unit is a few steps down at the end of the lower part of the Front Yard. Accordingly, except the elevated part of the Front Yard, the Unit is basically situated at a level below the EVA. 6.There is an open drain covered with metal grilled runs on one side of the EVA. The same drain runs straight underneath the said parapet wall. It continues to run along the elevated part of the Front Yard and across the upper landing of the descending steps. If the EVA floor is raised, the original design of the drain may be unable to collect the water before it flushes to the Front Yard. Further, the drop in height may cause water running faster in the drain towards the Unit. It may lead to flooding of the Front Yard, and thus the Unit. 7.It is the applicant’s case that the EVA level was raised by the IO’s contractor by 40 mm. Serious flooding to the Unit was caused as a result. Despite the applicant’s protest, neither the EVA was lowered nor the Front Yard raised. The applicant said in order to protect its properties it was forced to raise accordingly the Front Yard floor level. It now claims reimbursement of the expenses incurred. 8.This, however, is only one of the applicant’s many claims against the IO. 9.On14 June 2008 it was resolved by the owners of The Arcadia that the buildings required major renovation. In particular, the renovation aimed to fix the water seepage problem attributable to the external walls that had troubled many owners for years[1]. After some hiccups, Lee Cheong Construction & Materials Limited (“LC”) was appointed the building contractor[2], and Spence Robinson LT Limited (“Spence”) the IO’s consultant of the renovation project. It helped also supervise the work of LC. The then management company was one Sino Estate Management Limited (“SEML”). An ad hoc sub-committee comprising representatives of SEML, Spence and the management committee (“MC”) of the IO was formed particularly to deal with matters arising from the renovation and to monitor its progress. 10.The renovation includes, inter alia, re-paving the EVA floor and doing water proofing works to the external wall of the buildings. The latter involves hacking off of the existing tiles jacket of the buildings and re-tiling the same. It was then estimated by Spence that roughly $24 million was required for the entire renovation project[3]. LC revised its quotation and its appointment was approved by owners[4]. The applicant paid its contribution of $206,518 by 4 instalments. 11.Unfortunately, the renovation has become a nightmare for owners of The Arcadia. It is the parties’ common ground that works carried out by LC were defective, and service rendered by Spence unsatisfactory. The renovation created more problems than before. According to the report of the IO chairman dated 18 December 2013, they were able to identify 3,632 defects spreading over almost each and every part of The Arcadia. As can be seen below, substantial costs for remedying the defects, professional consultation and legal action have been incurred, and will continue to be incurred. 12.According to the contract signed by the IO and LC, the renovation was to commence on 10 December 2009. It should have been completed by 23 February 2011[5]. Any delay is subject to a liquidated damage of $15,000 per day. There had been delay in LC’s work. Apparently dissatisfied with the quality of work by LC and the delay, the IO refused to issue a certificate confirming the renovation was practically completed on 15 September 2011, which was a date recommended by Spence[6]. It is not in dispute that LC abandoned its work in or about March 2012. At trial, the IO is still engaging in arbitration with LC for outstanding contract fees and compensation after LC’s proceedings in the Court of First Instance (“CFI”) had been stayed. The IO is also entangled in 2 more arbitrations with respectively Spence and the insurer who issued a bond in favour of the IO on matters arising from the renovation. Several owners were suing the IO for damages caused by water seepage through the defective tiling work of LC, either in this Tribunal or in the CFI. 13.It is the applicant’s case that the renovation had caused it to suffer loss and damages which were attributable to the negligence and/or poor workmanship of LC and/or the failure on the part of the IO to discharge its duties under both the Building Management Ordinance, Cap 344 (“BMO”) and the DMC. The applicant said the IO has a duty to properly supervise LC and/or Spence. In addition to claiming general damages, the applicant claims specific damages under the following 8 heads:
14.The applicant asks for:
15.The IO denies liability. Its defence, so far as can be discerned from submission of Ms Wong of counsel for the IO, can be grouped under the followings broad heads[14]:
16.The material facts of this case, after hearing submission of counsel and the evidence of the witnesses, are basically not in dispute. It is the applicable legal principles that they differ. In the interlocutory stage, the IO disputed the causes of water seepage and the quantum of damages. Mr Kenneth Chan, a Chartered Building Surveyor, and Mr Chang Ka Chung, a Quantity Surveyor, have been appointed as the Single Joint Experts on these 2 disputed areas respectively. The causes of water seepage and the quantum of damages were later agreed on by the parties. By consent, their reports and conclusions are admitted as agreed, and their attendance of trial is dispensed with. 17.In a nutshell, the parties now agree that the water seepage is caused by the poor workmanship of LC’s work while hacking off the original tiling of the external work and re-making the same. The damages caused to window surrounds, structures, walls and air-conditioner hoods or latent defects exposed in the renovation process have not been fixed before re-tiling[15]. Re-sealing work surrounding windows is also defective. The cause is in fact exactly as that found by the IO by its consultant SSL in as early as September 2012: see [50(xii)] below. 18.Quantity surveyor Mr Chang’s conclusion of damages under various heads of claims is as follows[16]:
19.Both parties agree to adopt the quantum assessed by Mr Chang as the damage for the respective heads of claim if judgment on liability is entered against the IO. 20.Mr Fan for the applicant has stated that the applicant is not seeking to argue that the IO has not exercised due care in the selection of its contractor and consultant. At the commencement of trial, counsel for both parties also agree that for the proper disposal of the applicant’s claims, the followings are the issues for the trial:
21.At the commencement of trial, Ms Wong indicated to the Tribunal that the IO is prepared to carry out the necessary rectification work to the external wall of the building with a view to stopping water from seeping into the Unit. She indicated that it was on a without admission of liability basis. However, she is unable to obtain instruction from the IO as to when the work can be carried out and completed. She submitted it was because the MC had yet to resolve on the matter. The Factual Witnesses 22.Chan, the only director of the applicant gives evidence on the applicant’s behalf. Chan confirms and relies on:
23.Madam Law Ka Ming (“Law”), a MC member of the IO testified on behalf of the IO. She confirms and relies on:
24.Both witnesses orally supplemented their evidence at trial and gave detailed explanation on some of the documents exhibited. Lengthy statements and voluminous documents sufficient to fill up 8 box files were filed and extensively referred to at trial. The Applicable Principles The Applicant’s Argument 25.Mr Fan relies on section 18 of the BMO and certain provisions of the DMC which impose an obligation on the IO to effect repair to the common parts of The Arcadia. It is Mr Fan’s submission that although an owners’ incorporation does not have an absolute duty to owners likes an insurer, authorities support the proposition that liability to owners may arise if there is delay and particularly when, having aware of a defect which requires remedy, it fails to take appropriate steps to rectify. He refers this Tribunal to a number of authorities including the CFI decision in Wide Power Corporation Limited v The Incorporated Owners of Manhattan Court[18], the Court of Appeal (“CA”) decision in Lau Chun Wing Rod v The Incorporated Owners of Po On Building[19], the Court of Final Appeal (“CFA”) decision in Leung Tsang Hung v The Incorporated Owners of Kwok Wing House[20] etc. in support of his proposition. 26.It is his submission that the IO in the present case simply fails to take appropriate action to stop the damages from happening despite the applicant’s repeated alerts, notices and complaints. There has been undue delay despite the IO may be in a difficult position. The IO’s Argument 27.Ms Wong submitted on behalf of the IO that if independent contractors were engaged, generally the employer should not be liable for any loss and liability caused by these contractors. The IO does not rely on other authorities or provisions of the DMC to justify that the alleged acts or omission of the IO are exempted or otherwise attracting no liability save and except the following passage in Clerk and Lindsell on Torts (22nd Ed) at paragraph 6-62[21]:
28.In the present case, it is common ground LC and Spence are independent contractors. Since the applicant does not seek to argue there is any negligence on the IO’s part in their appointment, Ms Wong submitted that the IO therefore should not be liable for any loss and damages caused by them. Discussion 29.In the Tribunal’s view, the applicant’s losses and damages can be broadly grouped under 2 categories, namely,
30.The applicant’s claims for damages to its tree, steel cabinet, awning, air-conditioners and glasses belong to the first category while those arose from water seepage from external wall, raise of EVA floor level and termite treatment fall under the second category. 31.This Tribunal accepts the legal proposition advanced by Ms Wong that generally, the IO is not liable for any acts or omission of independent contractors selected without neglect. That may, perhaps provide an answer to the first category of claims. However, this legal proposition does not provide a complete answer to the applicant’s claims under the second category which the IO has an independent duty to its owner. In the present case, the DMC and BMO imposed directly upon the IO duties and obligations and in the Tribunal’s view, they are non-delegable. Any discussion without touching upon these areas will be incomplete. Further, even according to Clerk & Lindsell (see highlighted part above), the IO is not immune from liability if there is fault or neglect on its part, or if such fault or neglect has been ratified or adopted. 32.Section 18(1) of the BMO stipulates:
33.Mr Fan draws the Tribunal’s attention to certain provisions of the DMC. It should be noted that according to the same DMC[22], the rights, duties, powers and obligations for the control, management and administration of The Arcadia shall be vested in the IO after it was incorporated. This Tribunal considers the following clauses of the DMC are pertinent for the present discussion:
34.Clauses 9(h) and (i) appear to operate to exempt the IO from liability for any acts or omissions on the part of the IO. This issue has not been raised and argued. However, for completeness sake this issue needs be dealt with. This Tribunal’s preliminary view is that the said sub-clauses cannot help the IO. 35.Lee Ming Yueh v Broadway-Nassau Investments Ltd & Another[23] concerned a claim by an owner against the DMC manager for breach of duty under the DMC and BMO to maintain the roof top which is the common part of the building. The Tribunal found that the manager has not breached its duties. There are sub-clauses in the DMC of the relevant development in that case similar to the aforesaid sub-clauses (h) and (i). Although the applicability of the exemption clauses has not been argued in Lee Ming Yueh (supra), Hon Cheung JA appeared to have approved the meaning of “wilful default” explained by Bowen LJ in Re Young and Harston’s Contract (1886) 31 Ch D 168, 174-175 in [27] of that decision as follows:
36.Under clause 9(h), the liability of the IO will not be exempted if it can be established that the acts or omissions by the IO amount to a wilful neglect. In the Tribunal’s judgment, “neglect” does bear similar meaning to “default”. Applying the definition approved in Lee Ming Yueh (supra), in order to establish “wilful neglect”, one simply needs to prove that the IO freely chooses and knows what it has not done which one ought to do. So, knowingly neglect of somethings which the IO ought to have done will not exempt it from liability to its owners. 37.Furthermore, clause 15 of the DMC expressly provided the DMC is without prejudice to the BMO. Accordingly, the BMO and whatever construction of its provisions as enunciated in case law will be applicable to the present case. The IO cannot seek immunity from liability under the DMC and/or BMO relying on clause 9(h). This Tribunal understands Ms Wong is not relying on the said provision. 38.Lo Yuk Chu v Hang Yick Properties Management Ltd[24] is a CA decision concerning whether an owners’ incorporation is liable to water damage to an owner caused by flooding as a result of blocked sewage pipe. The relevant DMC imposed duties on the manager to keep all common sewers clear from obstruction and common facilities in good working order. The duties are similar to the present case to those allegedly breached by the IO. It is essential to appreciate common facility, namely, sewage pipe, was involved. The learned Power ACJ (as the NPJ then was) refused the argument of an absolute duty and stated:
39.Power ACJ went on to state that in order to satisfy such duty by the manager (equivalent to the IO in the present case) to the owner, it would be required to:
40.The aforesaid provides a very good guideline to this Tribunal in approaching the claims of the applicant. 41.Lau Chun Wing Rod (supra) is an appeal against my decision in which s.18(1) of the BMO was engaged and that the owners’ incorporation was held in breach thereof. Hon Rogers VP stated in [12] and [13] of the decision the following:
42.So an owners’ incorporation may be liable if it does not take appropriate steps towards a defect in the common areas or its properties despite being alerted that it was necessary to do so. Lau Chun Wing Rod (supra) was applied in Lee Ming Yueh (supra). 43.The CFA decision of Leung Tsang Hung (supra) concerns duty of an owners’ incorporation in a fatal accident to a third party. In that case a triangular-shaped concrete block detached and fell from a canopy illegally erected at the common area of a building on the 11th floor and killed a hawker below. Although the law of public nuisance[25] was at issue, it shed light on the duties of an owners’ incorporation generally. In the course of discussion, the legal attributes of an owners’ incorporation were analysed. Section 18(1)(a) and (c) was discussed. Hon Ribeiro PJ stated in [80] of the decision the following:
44.In [23] and [25] of Leung Tsang Hung (supra), Hon Ribeiro PJ had this to say:
45.The principles that an owners’ incorporation assumes no absolute duties under section 18 of BMO as if it were an insurer but may attract liability if there is fault on its part, or when it fails to take appropriate steps after being made aware of a defect which requires remedies have been applied in many CFI decisions: see for example Wide Power Corporation Limited (supra) at [20] and [21]. 46.It is essential to note that in all the above-mentioned cases, the duty owed by the owners’ incorporation concerns common areas and/or facility in respect of which the corporation has a duty. From the above, the principles applicable to the present case can be summarized as follows:
47.This Tribunal will apply the above principles to examine each heads of claims of the applicant. 1. Water Seepage 48.The renovation started in or about December 2009, and was considered by Spence practically completed on 15 September 2011: see [12] above. The applicant’s first complaint about water seeping into his Unit was by email of 22 May 2010 to SEML, the then management company of The Acarida[26]. By then, LC was still working for the project. It was not until some 22 months later, i.e. in or about March 2012, that LC abandoned its work. 49.At the time of trial, almost 7 years have elapsed since the applicant’s first complaint, or about 5 years from LC leaving the project. Yet no rectification to the external wall to stop the seepage problem has been carried out. Neither has any time-table been fixed for such rectification. In the Tribunal’s judgment, the problem has remained for too long. It will be necessary to examine whether and if so, what knowledge the IO has about the water leakage, and what in fact has been done to see whether the long delay is justified. 50.The followings can be gleaned from records and is not controversial. This Tribunal accepts them as facts:
51.The gist of Law’s evidence was that the IO had done its best in the circumstances. Although it takes quite some time, there is no delay, or the delay is excusable. Her explanation is basically this:
Discussion 52.In the Tribunal’s judgment, it was beyond dispute the IO knows from the very beginning that water damages to many units, and in particular the applicant’s Unit, was caused by LC’s defective re-tiling work. So far, a total of 3 consultants had been engaged to find out the cause. They were PSI in 2011, SSL in 2012 and ISS in 2013. Based on PSI’s report, the IO even made complaints to the Buildings Department. In any event, when SSL set out its conclusion of the water seepage to the IO in its report of 24 September 2012[61], the water seepage problem of the Unit, and its cause were crystal clear to the IO. 53.Concerning the dispute on whether Chan has ever refused entry of LC’s workers to carry out the repair, Chan did not deny. However, he had an explanation. According to the renovation contract between the IO and LC, LC was responsible to build whatever access that might be required at its own costs for carrying out its renovation work. He was unwilling to allow access of LC’s workers and moving of building materials and debris through his Unit. Apart from messing up his Unit and causing inconvenience, it also posed a security issue as only his wife and daughter were home during daytime. In any event, LC could build a scaffolding and access bridge to finish all that were required to finish its job at no extra costs to the IO. After hearing the parties, this Tribunal accepted his explanation. He had a good reason not to use his house as access for the repair. At any rate, his refusal cannot be regarded as unreasonable. 54.The Tribunal has a lot of sympathy to the IO in the matter. The renovation ends up in a mess and brings about a huge financial burden on the IO. It is noted that as at as at 14 March 2015, some $2.5 million had been incurred on arbitration[62], not to mention other rectification works. It was also noted that a resolution to raise $1.8 million as further arbitration expenses was not approved[63]. It is not in dispute that as at the AGM held on 14 March 2015, the renovation fund has been depleted substantially by, inter alia, the surveying expenses, arbitration and litigation expenses. The renovation fund of the IO diminished from about $3.2 million (as at 27/2/2013) to about $97,367 (as at 13/3/2015). The IO has only $179,614.15 sitting in its bank accounts then[64]. 55.However, while it is true the IO is under financial difficulties during this period, this Tribunal does not believe it the real reason for the IO not able to take any effective step to repair the leakage in these 5 years. 56.Firstly, although the IO was facing financial difficulties, they did manage to raise quite substantial funds for the various works post-renovation, e.g. engagement of ISS at $2,556,000[65], repair of water supply system at $491,300[66], arbitration expenses of $3 million[67], litigation fund for the present case of at least $1 million[68], repair of pedestrian main gate, carpark gate and changing room of swimming pool at the aggregate of $1,339,404[69], temporary repair work to stop water seepage of $0.5 million and further consultancy fee of $1.5 million[70]. 57.It is noted that the $0.5 million raised was to effect temporary repair work to stop water seepage in a number of serious cases[71] on a non-admission of liability basis. The resolution was passed on 14 January 2017. In the Tribunal’s judgment, $0.5 million is a relatively small amount compared with the total funds raised during this period. Yet it can help stop seepage problem, at least on a temporary basis, for a number of units. 58.In fact, the applicant had procured quotations from 3 contractors for repair of the external wall of its Unit. They were in the range of $202,000 and $227,000. According to these quotations, work could be finished in about 2 months’ time[72]. It was stated in these quotations the remedial work would be a comprehensive waterproofing and retiling work, and not temporary measure as contemplated by the IO aforesaid. A reasonable inference is that if the repair is to be on a temporary basis, the costs would be less than $202,000. 59.The 2017 resolution referred to in [57] above and the applicant’s said quotations support the applicant’s contention that financial difficulty is not the IO’s genuine reason not dealing with the water seepage problem of the Unit. 60.Given the relative small amount to be incurred to solve the applicant’s problem, or even a lesser sum if on a temporary basis, question arises as to why the IO did not propose the same earlier. After hearing the evidence of Law and submission of Ms Wong, in the Tribunal’s view, the IO simply has no or no satisfactory explanation. It is a matter of priority rather than financial difficulty. 61.Secondly, the costs of repair for a comprehensive ($31 million) or patch ($18 million) repair of the 7 major items of the entire estate had never been put by the IO to the general meeting for a vote. Neither had the repair of the outer wall specifically (only $4.75 million for patch or $12.9 million for comprehensive) ever been put to vote or discussion by the owners in general meeting. Law did not seek to dispute that. Accordingly, whether owners would be unwilling to contribute, for example, patch repair of the external wall of the buildings at as low as $4.75 million, as suggested by the IO is in serious doubt. It is particularly so when over 50% of units are suffering from different degree of water seepage[73], and some have even sued the IO in the Tribunal and in the CFI for water leakage. The Tribunal does not think the IO has a strong case to say owners would be unwilling to contribute because of financial problem. A majority of them were suffering from the water seepage problem. Logically they should have voted for an immediate course to remove such problem. From the evidence adduced at trial such option has never been put to vote by owners at general meeting. 62.Thirdly, on the other hand, it was resolved in the MC meeting held on 6 July 2015 to the effect that the IO would not be doing any repair to units affected by water seepage for the time being. Instead, repair would be effected to all affected units in one go. Priority of repair would be assigned according to the seriousness of the seepage[74]. 63.This Tribunal agrees that generally it will be good management to rectifying all defects in one go and/or according to a rationally assigned priority. In so doing, fairness and certain degree of economy can be achieved. However, such practice should still be subject to the governing principle of it being done with reasonable expedition, otherwise it will amount to a licence to delay. From the undisputed evidence in the present case, such so-called “good management” decision only came up in mid-2015[75] after outcries from affected owners (including the applicant) for inaction for at least 3 years[76]. Further, it was not until 14 January 2017, i.e. almost 2 years later that the IO resolved to raise $0.5 million for fixing the problem of water seeping through the external wall. Even then, it was only limited to seriously affected units, and on a temporary instead of permanent basis[77]. At trial, there is simply no evidence whatsoever from the IO of any plan for fixing the overall water seepage problem of The Arcadia through external walls. Neither is there any evidence of any list of priority, not to mention the time-table for repairing the applicant’s Unit. It is to be noted that the purpose of raising $0.5 million is for a temporary measure. It is still not “tackling the matter in one go” as resolved by the MC. The Tribunal cannot help forming a view that it is a short-term measure of the IO responding to mounting pressure from dissatisfied owners because of its inaction for too long. 64.In fact, from the meeting minutes of the MC and IO, they appeared undecided and not knowing what to do in the reality of the difficult situation forced upon them by LC. For example, although it was acknowledged that the problem of water leakage through the outer wall was serious and prevalent in The Arcadia, the MC did not wish to allow individual owners to take up the repair themselves for fear of uncertain legal consequences that might arise after the repair. The MC resolved to withhold any decision except to seek further legal advice: see [41] of Law’s witness statement dated 29 March 2016[78] and meeting minutes of the MC meeting held on 10 October 2013[79]. Take another example, the IO did not know whether by effecting the repair, the outcome of the arbitration with LC/Spence would be affected: see the meeting minutes of the EGM dated 29 August 2015[80]. By reason thereof, the IO refrained from voting on effecting repair to defects left behind by LC. Further, it is to be noted that in an earlier EGM held on 12 October 2014, the agenda item of effecting repair to external wall to stop the water seepage problem had been adjourned for further discussion on the next occasion[81]. By the EGM held on 29 August 2015, the same subject was further adjourned[82]. It appears from the evidence that the IO/MC somehow allow the matter to drag on, probably not being able to come up with a satisfactory solution on one hand, and somehow gathered that their position in the arbitration proceedings might be adversely affected if a status quo is not maintained on the other[83]. 65.In the AGM of 30 January 2016, ISS was fired on the ground its fee being expensive. By then, tenders for rectification had already been invited. The dismissal of ISS rendered the preparatory work for the intended external wall repair futile and money incurred wasted. The management company had to draft tender for appointment of another consultant for the external wall repair. No contractor can be appointed until after the consultant’s appointment[84]. At trial, the IO put in no evidence that it has sought advice on the impact, if any, of the repair on the outcome of arbitration. Neither has the IO produced any evidence that it had sought legal advice on implication of individual owners being allowed to effect repair to the external wall. The IO also adduces no evidence regarding any concrete plan for works, no matter on patch or comprehensive basis, not to mention any priority list of repair. 66.Applying the principles summarized in [46] above, the IO is not exercising proper management in addressing the problem of water leakage from the external wall. They have a statutory duty under section 18(a) of the BMO and the relevant provisions of the DMC to maintain the common parts in a state of good and serviceable repair. They are fully aware of the problem for at least 5 years, if not 7 years, before trial. Yet they fail to take proper and expeditious action to remove the problem, no matter on a temporary or permanent basis. Except some surveys, they have done nothing concrete conducive to stopping water seepage through the external wall. For the sake of discussion, even assuming it was the owners who have resolved not to effect repair, it is still not a good excuse. If that were to happen, it only means that the owners are breaching their duty knowingly and collectively. It serves to explain the breach rather than excuse the IO from liability of such breach of duty. 67.For the above reasons, this Tribunal shall grant a mandatory order against the IO to carry out the rectification works and/or to effect necessary repair to the external walls of the buildings within 30 days so as to stop water from seeping into the Unit, such work to complete within 120 days of commencement. 68.In the circumstances, there is no reason why the IO should not be made liable for the damages arising. Since the quantum for damage for internal damage and accommodation has been agreed, this Tribunal awards against the IO damage in the total amount of $118,719.2, being the aggregate of $46.299.2 for rectification of the interior of the Unit and $72,420 for accommodation expenses to be incurred during the repair: see [18(i) & (ii)] above. General Damage 69.Mr Fan referred this Tribunal to a number of authorities to justify the applicant’s claim of $80,000 as damages for nuisance and inconvenience. In respect of this head, the first complaint was made in 2010. After the SSL report in September 2012, it was clear to the IO the cause of the water damage being attributable to water seeping through the external wall. No action was taken by the IO to remove the problem until trial. The applicant has, for at least 5 years, if not 7 years, been suffering from the problem. 70.In Leung Yung Chun & Other v Chan Wing Sang & Ors[85], learned Hon Cheung J (as Cheung JA then was) awarded a sum of $80,000 as damage for inconvenience to the plaintiffs for enduring the leaking problem for 2 years. 71.In Golden Nation Limited v Mak Ping Yiu[86], the learned judge awarded the same amount of $80,000 for nuisance and inconvenience for a period of about 5 years. 72.In the District Court decision of Chung Che Shum & Other v Dong Sai Ming Fernando & Other[87], DDJ Chow awarded a sum of $80,000 for nuisance and inconvenience for about 2 years. 73.In the present case, from the photos shown, there are water marks found on walls, ceiling near to external wall and window sills in the 3 bedrooms, dining room and sitting room of the Unit. Plastering and paints were peeling and falling off. Because of the dampness, mould and tiny bugs were found. Chan has properly documented all his problems with emails and photos and made a lot of complaints about his problems but to no avail. He had been kept waiting for decisions of the MC/IO but they continued to let him down. He and his family have to endure these nuisance and inconvenience for 7 years and are still suffering until rectification. He has to move out at least during the internal repair. A claim of $80,000 is a modest claim under this head. This Tribunal has no hesitation to award the same to the applicant. 2. Flooding Resulting from Raise of the EVA Platform 74.It is not in dispute the EVA floor level has been raised above that of the Unit’s Front Yard by about 40 mm[88]. Neither is there any dispute that as a result, flooding had occurred to the applicant’s Unit. The IO said it had never consented to LC deviating from the renovation contract. Its position is that it was a mistake committed by LC for which the IO should not be held liable[89]. 75.After reviewing the evidence as more particularly stated below, this Tribunal cannot accept the argument advanced on the IO’s behalf. 76.The IO did not deny that Chan had forewarned in or about April 2011 the possibility of flood when he found out that the EVA floor level had been raised by about 40 mm[90]. Spence looked into the matters and had come up with 3 options, which had all been rejected by the applicant. The IO said the rejection of the proposed options by the applicant unreasonable. These options can be found in Spence’s memo to the IO date 14 June 2011. They were[91]:
77.It is also noted that in the said memo, Spence advised the IO that according to the renovation contract between LC and the IO, the re-paving work was supposed to cover floor of the EVA as well as the Front Yard (my emphasis). Now LC had omitted the Front Yard but at the same time, had raised the EVA level. Spence advised the IO to make deductions for the part of work which LC had not done. However, Spence did not appear to advise the IO to press for a complete re-do of the EVA so as to comply with the original contract requirements. Instead, Spence advised certain remedial works be done to the Unit. Spence reported all its proposed remedial options had been rejected by the applicant who requested a corresponding raising of the Front Yard and the height of steps. Such work costed an extra of $6,000. Spence specifically asked for approval of the IO for this additional sum[92]. 78.The problems caused by the raised EVA floor were particularly discussed in one of the MC meetings held on 27 June 2011[93]. It would be unnecessary for this Tribunal to refer to the response of other affected owners. Suffice it to say that the MC disapproved the applicant’s request. The MC’s rejection was based on the ground that privately-owned area was involved in the applicant’s proposal. 79.Learning of the refusal, Chan gave a final notice to the IO to effect repair by 7 July 2011 failing which the applicant would do the remedial work in order to protect itself, and would seek reimbursements from the IO. Quotations from 3 contractors with prices ranging from $24,000 to $25,800 were also enclosed. 80.Works were not started as initially intimidated. It is the applicant’s case that the Unit was seriously affected by ingress of water because of the level difference. The first incident happened on 11 July 2011[94] and the second on 10 August 2011 when amber rainstorm signal was hoisted[95]. The aforesaid emails and floods were unchallenged and this Tribunal accepted them as facts. 81.The work to raise the Front Yard and the steps were carried out by the applicant in early August and finished by 22 August 2011. 82.In the Tribunal’s judgment, it is totally reasonable for the applicant to reject Spence’s proposed alternatives and insist on raising correspondingly the Front Yard floor level and the steps. It would also be unreasonable for the IO to reject the applicant’s proposal. 83.All the 3 options proposed by Spence and apparently endorsed by the IO suffered from one fatal drawback, namely, the EVA was still maintained at a level higher than the Front Yard. They are not a complete solution to flooding for the simply reason water collected from the entire EVA will flow to the Front Yard by the force of gravity. Option 1 involves aligning gradually the ground surface of the EVA down to meet smoothly with the unraised ground of the elevated part of the Front Yard (a remedial work which is referred to as “Four Sui” (科水) at trial). Obviously it cannot help solve the problem. The EVA is still at a higher level than the Front Yard. It is only a dress-up work, in the Tribunal’s view. Whether the door sill (Option 2) was effective to stop any overflowing depends on the amount of water and the speed of flow. The making of a drainage hole (Option 3) hinges on the effectiveness of this additional drain. Given typhoons accompanied with torrential rain are not uncommon in Hong Kong, and that Hong Kong normally has a rainy summer, even if all the 3 options were to be adopted, the risk of water over-flowing into the Unit remains very real as its cause is not removed. 84.It is the applicant’s evidence (which this Tribunal accepts) that there was no incident of flooding prior to the raise of the EVA level. The fact that its Unit suffered from flooding on 2 occasions after the EVA’s floor was raised speaks for the correctness of Chan’s judgment. 85.The applicant’s proposal aimed to address the root problem of any potential flood. Further, by raising the Front Yard floor level, the first step of the stairs will fall a greater height compared with others. Accordingly, it would also be necessary for works to be carried out to even out the height of each steps as well. 86.The IO’s refusal to raise the Front Yard level was premised on the fact the Front Yard a privately-owned area. Is it not the original contract term that re-paving was to cover the Front Yard as well? This was confirmed by Spence[96] and a fact not disputed by the IO. By including the Front Yard to be covered in the original renovation contract, all owners in general meeting had in fact already approved that the floor re-paving work should cover privately-owned areas. It is LC who had made a mistake by, inter alia, omitting the Front Yard. It is not understood why Spence asked the MC for approval of additional payment to raise correspondingly the Front Yard floor level which the original contract covered. It is also not understood why the MC refused to approve work which the IO had by its previous resolution agreed to cover. The IO’s refusal to raise the Front Yard on the ground it being a privately-owned area is inconsistent with its previous resolution. It is unreasonable in the circumstances. 87.It is Ms Wong’s submission that the IO had not approved LC’s mistake, and therefore it should not be responsible for LC’s mistake. With due respect, this Tribunal cannot accept her submission. The IO had not asked LC to correct the said mistake. Instead, by accepting Spence’s remedial options, the IO had adopted or ratified LC’s mistake, otherwise it should have asked LC to re-do the EVA in accordance with the original contractual requirements. 88.Applying the principles aforementioned[97], the IO has been made aware of a problem in the common area. Instead of asking LC to comply with the contract requirement which will remove the cause of flooding totally, the IO adopted it. They, however, refused to take appropriate action to protect the applicant’s Unit from a mistake they adopted. In the Tribunal’s judgment, it is not proper management of the common area and is in breach of section 18(a) of the BMO and clause 9(e) of the DMC. In addition, the IO had ratified LC’s mistake. It really cannot hide behind the usual rule of an employer not liable for mistake of a carefully selected independent contractor[98]. In the circumstances of this case it is reasonable for the applicant to take prompt action to protect itself and mitigate its loss by carrying out the work without further reference to the IO. By then it had already suffered from flooding twice. 89.The IO should be held liable for the applicant’s costs to raise the Front Yard floor level and even the steps. This Tribunal do award against the IO a sum of $22,552, being the agreed quantum[99]. 3. Termites Treatment 90.The applicant first complained to SEML and Spence about the appearance of termites in its Unit on 24 May 2011[100]. It was apparent from Spence’s memo of 26 May 2011 to the applicant that since the start of the renovation work, the hygiene of the common areas was getting worse. The deterioration was attributable to LC not properly dumping the debris and carrying out the renovation works, including not sealing gaps/holes between the external wall and the door frame of the Unit[101]. The gist of Spence’s position is that it could not conclude the cause of the termites. Spence, however, advised the applicant to treat the problem immediately in order to avoid their attack on wooden furniture of the Unit. 91.On 29 May 2011, Chan sent over 2 quotations for termite treatment to SEML and members of the MC. The quoted prices were $4,980 and $4,500 respectively. It was noted that in one of the quotations by a Christian Environmental Health Ltd dated 26 May 2011, the said pest control company stated that “termites were found entering the feet of the front door’s doorframe facing outside”[102]. 92.Chan was also able to find termites outside his Unit in unsealed gaps/holes at the bottom of the parapet walls left by LC’s renovation[103]. SEML was notified again by his e-mail of 5 June 2011. Photos were attached[104] . 93.Since the IO did not respond the applicant carried out the termite treatment at the costs of $4,500 on 7 June 2011[105]. 94.It is submitted on the IO’s behalf that the responsibility for the appearance of termites, and their treatment, fall on LC, not the IO. 95.This Tribunal cannot accept this submission. On a balance, this Tribunal accepts Chan’s evidence in this respect in its entirety. The presence of termites in gaps/holes between the Unit’s door frame and external wall was attributable to the messy and unhygienic conditions caused by LC. However, these are common areas for which the IO are responsible. Applying the above principles[106], although such unhygienic situation was created by LC, the IO remains primarily responsible for these common parts and such responsibility is non-delegable. The failure to take prompt action to maintain the common parts in a clean condition amount to breach of section 18(a) of the BMO and clause 9(e)(6) of the DMC. As to how soon a problem needs be rectified depends on its nature. In the present case, there is a real and immediate risk of infestation of termites. Even Spence, the IO’s then consultant, considered prompt action was required. In the circumstances, the Tribunal considers it justified for the applicant to immediately appoint pest control company to eliminate the risk and to claim reimbursement from the IO. 4. Damages to Tree 96.It is common ground Chan complained to SEML and an MC member by an email of 30 December 2010 the downpour of irritating chemicals on 2 occasions, namely, the 29 and 30 December 2010. By then the tree in the planter box of the Front Yard was partly damaged. The applicant reserved its right for any loss and damages[107]. 97.SEML replied immediately the next day that they had already asked LC to stop that morning, and briefed them and Spence’s clerk of work to take preventive measures before carrying out such work. According to an email from SEML to Spence, the IO admitted no advance notice had ever been given to owners when LC washed the outer wall of the buildings[108]. 98.About 3 months later, Chan complained by email of 27 March 2011 that half of the tree was cut by LC without his prior approval[109]. 99.After negotiation, SEML informed Chan on 14 May 2011 that LC agreed to replace the damaged tree[110]. On 1 June 2011 it was said LC could replace the tree on 4 June 2011. The applicant said LC did not show up as promised[111]. The IO said the applicant insisted on a one-year guarantee which was unreasonable, and as a result the replacement did not materialize. 100.The gist of Mr Fan’s submission is that the IO has failed to procure LC to discharge its contractual obligations to remedy its own fault, and no action had been taken by the IO to pursue after LC for the tree notwithstanding LC had promised a replacement[112]. 101.I cannot accept Mr Fan’s submission in this respect. 102.It is the applicant’s case that the IO was not negligent in appointing their contractors including LC. The undisputed fact of this case is that the tree was found damaged or partly damaged from the sudden downpour of chemical on 2 consecutive days by end of 2010. There was no further downpour thereafter until May 2011, apparently, after the IO had reminded LC of not to repeat. In mid-March, the damage to the tree came by in a different form and without notice. Part of the tree was trimmed away. 103.From the above, it is a tort committed directly by LC on the applicant in the course of execution of the renovation contract. The damage was caused in 2 separate incidents. The applicant can adduce no evidence to suggest the IO had either authorized or ratified this tort of LC. 104.As a matter of principle, the IO is no insurer to owners of any mishaps that may happen to them when the IO’s contractors are carrying out their works. The applicant has failed to identify any legal principle by virtue of which the IO can be held liable for failure to procure LC to honour its promise to replace the said tree. Accordingly, the IO is not liable for the tort committed by LC on the applicant direct. In the Tribunal’s view, to hold the IO liable in the circumstances is akin to making the IO a guarantor of each and every owner for liabilities of its contractor, which is contrary to the established principles as set out in paragraph 6-62 of Clerk and Lindsell on Torts (22nd Ed): see [27] above. 105.Though the replacement cost of $4,100[113] is considered minimal, the applicant’s claim under this head should fail. 5. Damages to Air-conditioners 106.The applicant’s case is that its air-conditioners were damaged by (i) irritating liquid, which was acidic and corrosive, poured down; and (ii) a gondola, i.e. suspended working platform, hitting one of them. Both were done by LC’s workers. From the evidence which this Tribunal accepts, it occurred on 2 separate occasions. 107.The applicant first complained on 2 May 2011 about its air-conditioner having been damaged[114]. By Chan’s email of that date, Chan said on 1 May 2011, irritating chemical was poured down in the Back Yard when LC’s workers were using it for cleaning external wall without any prior notice to owners. From the photos taken on 1 May 2011, the downpour had caused quite a messy situation to the Unit[115].This happened again the next day on 2 May 2011. Chan said he immediately made complaint but was unable to find any staff of Spence supervising the said work of LC’s workers[116]. Again, pictures were taken[117]. His second email of 2 May 2011 was sent only some 2 hours after his first one[118]. 108.Representative of Spence did a visual inspection of his air-conditioner on 23 May 2011. The said representative took the view that only dirt accumulated on the top of the outdoor unit. It should be working after cleaning[119]. On 12 July 2011, Chan urged SEML and Spence to “clean/rectify the malfunction including cleaning the condenser and/or rectifying damages caused by them”[120]. His said request was to no avail. It is noted that there is no complaint the air-conditioners being rendered not workable as a result. 109.On 16 August 2011, as evidenced by the complaint record of SEML and the photos attached, the window-type air-conditioner in the master bedroom of the Unit was damaged when a gondola operated by LC’s workers bumped against it accidentally[121]. 110.On 16 April 2012, the applicant sent an email to SEML and Spence stating since no actions had been taken to rectify the damage done to the Unit, Chan would proceed to repair without further reference to them. Chan said the first action to take was to repair the condenser for the dining room and the air-conditioner of the master bedroom[122]. 111.On 30 April 2012, the applicant replaced the said 2 air-conditioners at a total cost of $14,030. Several photos of the damaged air-conditioners were sent to SEML and members of the IO[123]. 112.The applicant’s case is that there are provisions in the main renovation contract between LC and the IO stipulating that LC should be responsible for any damage caused to individual owners during the renovation. Further, it also provides if it is necessary for LC to remove air-conditioners before it can proceed with its work, LC should do so before work starts and re-fixes them after completion at its own costs. The applicant said it started as early as 30 December 2010 to complain about the pouring down of irritating chemical by LC’s workers. The first incident of such downpour occurred on 29 December 2010, and the second on the next day. Had the IO exercised proper supervision over LC in carrying out the renovation works, no matter in respect of work progress, compliance with contract terms and workmanship, the damages could have been avoided. 113.It is most unfortunate that the applicant’s air-conditioners have been damaged by LC in the course of renovation. However, this Tribunal has reservation regarding the merit of its claim against the IO. 114.Firstly, the applicant adduced no evidence whether the 2 replaced air-conditioners have been rendered beyond repair in the 2 incidents, and if they were not, whether the repair costs would be lower than those of replacement. The date of replacement was about a year after the alleged date of damage. There were no recorded complaints of the air-conditioners not working from Chan, who was ready to record almost each and every complaint. This Tribunal believes the said 2 air-conditioners were still working after the alleged incidents. 115.Secondly, the applicant accepts the IO was not negligent in selecting LC and Spence. Further, the IO had put in additional effort to deal with the extra work brought about by the renovation. Apart from monitoring progress, systems were set up with a view to a speedy resolution of claims and/or complaints that might arise in the renovation. In the cross-examination, Chan accepted:
116.From the available evidence, this Tribunal accepts the first reported incident of chemicals dripping down occurred on 29 and 30 December 2010: see [96] above. There is no dispute that Spence was immediately notified on 3 January 2011 of the complaint with a view to conveying the message to LC[124]. Thereafter there was no recorded downpour of chemicals until 1 & 2 May 2011: see [107] above. The Tribunal accepts LC had been duly reminded of not repeating that again, and any such cleaning should be with advance notice and proper precautionary measures. It can therefore be said that the aforesaid system worked well to the extent of at least stopping the same from happening again for a few months. 117.It is noted that in his email dated 7 April 2011 to SEML and Spence, Chan lodged complaint that LC had caused various damages to his properties including (i) steel cabinet; (ii) awning; and (iii) tree at the Front Yard[125]. There was no mention of any damage to any air-conditioners in that email. This Tribunal thus believes the condenser situated at the applicant’s Back Yard was damaged (be it completely or partially) in one downpour incident that occurred only on 1 and/or 2 May 2011. 118.Obviously, the air-conditioner in the master bedroom of the Unit was damaged (be it partially or totally) in an accident happened on 16 August 2011: see [109] above. 119.In the Tribunal’s judgment, the IO had put in reasonable effort in relation to the renovation by engaging extra staffs and Spence as consultant. Immediately after the first incident of acid downpour taken place by end of 2010, the IO issued reminders to Spence/LC. There was then no further downpour for about 5 months’ time until May 2011. It shows that the mechanism put in place, to a certain extent, was working. There was no negligence in the selection of LC and Spence. However, it is most unfortunate that both of them were not performing up to standard at the same time, resulting in dripping of chemicals repeating again some 5 months later despite previous reminder. The bumping of the gondola against the air-conditioner was obviously a single isolated accident caused direct by LC’s workers. 120.In the Tribunal’s judgment, these were torts committed by LC on the applicant direct. It will be impossible and obviously unreasonable for the IO to police Spence and/or LC in respect of each and every steps taken or to be taken in the course of their work. It would be unfair and too onerous a duty to require the IO to procure LC to comply with every contractual requirement in the sense, as impliedly suggested by the applicant, that if LC defaulted and/or absconded the IO would be liable instead. It cannot be right otherwise it will make the IO a guarantor of LC in the performance of the renovation contract. 121.By applying the principles distilled in [46] above, the applicant’s claim under this head is dismissed. 6. Damages to the Steel Cabinet and its Contents 122.The basis of claim of the applicant under this head is similar to heads (4) and (5), and in a nutshell, is this. Had the IO exercised proper or more control over LC in the implementation of LC’s work, the steel cabinet, and the properties kept therein, would not have been damaged. 123.It is common ground Chan of the applicant first lodged his complaint about the damaged steel cabinets on 27 March 2011 by his email[126]. It was stated the cabinet’s top had been used by LC’s workers as “… access to the light well. Apart from the fact that the roof was bent, leakages were found inside the cabinet as well”. In his follow-up email dated 5 April 2011, he wrote the following:
124.Shortly thereafter and on 6 April 2011, LC agreed to replace the cabinet but only after the renovation was completed[127]. 125.However, Chan rejected the proposal on 7 April 2011 on the ground LC should replace it immediately[128]. He requested a proposal for temporary storage in the meantime for the stuffs such as books, files, notes for the time being stored in the damaged cabinet. The 100% waterproof requirement for their storage was emphasized. From one of his statements in the said email as follows, it could be inferred that the paper contents stored there had not been damaged by then:
126.When cross-examined, Chan admitted he continued to keep all the aforesaid stuffs, which were mostly papers, in the steel cabinet after he found the cabinet’s roof was damaged. His explanation was that the documents kept there were voluminous, and he had already place a nylon sheet on the top of the papers to protect them from water damage. 127.In any event, LC agreed to compensate and Chan had chosen his replacement (at a price of $12,880) on 2 May 2011[129] from the choices provided by LC. On 1 June 2011, LC even paid deposit of $6,440 for such replacement[130]. 128.The replacement did not materialize because LC had abandoned the work. 129.As regards the damage to the contents of the papers stored inside, it is noted that the first time Chan raised the problem was about 2 years later on 26 March 2013 via his email in which he stated “to avoid further damages to the properties (largely books etc.) inside the cabinets”. He further requested the IO to arrange someone to attend a joint inspection when the damaged stuffs were removed from the cabinet before it was removed. A set of photos were taken of the damaged properties, mostly documents, when they were removed on 7 April 2013. It is apparent from the pictures that almost all contents inside suffered from water damage. 130.The applicant initially claimed $13,680 being actual replacement costs of the steel cabinet[131], and $40,800 being its estimated damage in respect of the properties stored inside. It now claims $13,680 and $16,623 which are assessed by the quantum expert Mr Chang and agreed by the parties for respectively the 2 items. 131.In the Tribunal’s judgment, like claims under heads (4) and (5), it was a tort directly committed by LC on the applicant. The IO should not be expected to police LC in the execution of any work process which it has already appointed a competent contractor to execute. In any event, the IO has appointed an apparently competent contractor Spence to help discharge its supervision duty, if any. LC had since admitted liability. For the reasons discussed under the head of “Damages to Air-conditioners” and more particularly in [115], [119] and [120] above, this Tribunal cannot agree that the IO is liable to the applicant under this head. 132.In particular, Chan of the applicant knowingly kept his vulnerable properties in a cabinet which he knew had already been damaged and water and/or chemical damage being a real risk. He well-appreciated the risk of papers being kept in a damaged cabinet. That is perhaps why he requested an immediate replacement. Yet he did not keep his vulnerable properties somewhere else to avoid the possible damage. When he was aware of the risk the papers were still dry and intact. He therefore voluntarily assumed the risk. At the end of the day his own protective measures, namely, putting a nylon sheet on their top, simply did not work. He is to blame for the damage to his own properties stored inside the cabinet. 133.The applicant’s claim under this head is dismissed. 7. Damage to Awning 134.Argument of applicant under this head is similar to claim heads (4) to (6) above: the damage could have been avoided if the IO had exercised adequate supervision and control over LC’s work, or if the IO could have urged and required LC to comply with its contractual obligation towards the IO[132]. 135.It is undisputed that the applicant first mentioned by email its awning being broken on 5 April 2011 on which an inspection took place. Chan stated[133]:
136.The photos[134] attached with the aforesaid email showed that the fabric of the awning was heavily loaded with garbage which were used paper cartoon boxes of building materials and debris such as broken tiles and concrete chips. It is the Tribunal’s finding that they were wasted materials dumped on it by LC’s workers in the course of the renovation. 137.At trial, it was Chan’s evidence that he later found out fabric damaged and the arms of the awning not functioning properly. In any event, by LC’s letter to the applicant dated 6 April 2011, LC agreed to replace the same after the renovation[135]. Again, LC did not do so because of its litigation with the IO. He asked the IO to pay for the costs of replacement. It now claims $8,620.37 being the replacement costs assessed by Mr Chang Ka Chung. 138.In light of LC’s admission by his letter to the applicant, this Tribunal accepted that the awning was damaged by LC in the course of the renovation. 139.This is again a tort committed by LC on the applicant direct. The discussion in [115], [119] and [120] above are also relevant to this head of claim. The IO and Spence should not be expected to police each and every step taken by LC in the renovation. Applying the principles distilled in [46], the IO is not liable to the applicant for damage done to it direct by its contractor LC. 8. Damage to Glasses 140.Again, the basis of this head of claim is similar to heads (4) to (7) above. 141.This applicant’s case is this. According to the renovation contract, there was a specific provision requiring LC to protect the windows before the start of the tile-hacking process. It was suggested in the contract that apart from a protective plastic film, boards made of polystyrene foam or other suitable material should be placed to guard the windows. The plastic film should remain even after the completion of the hacking off process and should only be removed until all surface work had been completed. Spence and IO should have asked LC to comply with this contractual requirement. Had they strictly and/or properly supervised LC to observe this contractual provision, the applicant would not have suffered from such damage. 142.It is not in dispute as early as March 2010, there were large number of owners complaining that their windows were damaged during the hacking off process[136]. 143.Chan first complained on 15 May 2011 that there was cement paste sticking to window panes and frames of his Unit[137]. On 8 March 2012, there was also complaints that scratches were found in the glasses of window of his Unit[138]. 144.Law, said in her evidence (which this Tribunal accepts), that it was Spence’s advice that polystyrene foam boards were sufficient to prevent glass scratches. Chan accepted sometimes polystyrene foam boards were used. However, very often blue-tek was used to stick the foam board onto the window. In any event, from reading of the meeting minutes between LC, Spence, SEML and the IO, it is this Tribunal’s finding that LC had agreed to accept liability to replace the scratched glasses. LC was even in the process of repairing the windows of the affected owners[139]. It was because of its subsequent abandoning of work that makes the replacement action abortive. 145.In the Tribunal’s judgment, polystyrene boards were used upon the advice of Spence. They offered certain protection against glass scratches in the renovation, but obviously, the protection would be insufficient. In any event the IO has done its best to engage Spence as its professional consultant to advise and to assist in supervising this big project. There is no reason for the IO not to rely on Spence for its professional advice as the IO has no professional knowledge in the matter. It happens the advice and supervision were unsatisfactory. It is the best the IO can do in the circumstances. In any event the complaint system put in place by the IO worked well. LC had admitted liability to repair and replace soon after the complaint. 146.It is another example of a tort committed direct by LC on individual owners including the applicant. LC and Spence were independent and apparently competent contractors, the selection of them was without negligence. The discussion in [115], [119] and [120] above are also relevant to this head of claim. Applying the principles summarized in [46] and elaborated in aforesaid passage in para 6-62 of Clerk and Lindsell on Torts (22nd Ed) (see [27] above), this Tribunal does not consider the IO should be liable for the applicant’s loss in this respect. Dispositions 147.By reasons of the above, this Tribunal now grant the following orders against the IO:
148.Apart from those set out in the preceding paragraph, all other claims of the applicant against the IO are dismissed. 149.In the circumstances of this case, this Tribunal proposes and now makes a costs order nisi that the IO do pay half of the applicant’s costs of this application, including all costs reserved, such costs be on District Court scale with certificate for counsel. This order nisi will be made absolute if there is no application to vary the same within 14 days from today.
Mr Alan Fan, instructed by Humphrey & Associates, for the applicant Ms Becky Wong, instructed by Chung & Kwan, for the respondent [1] For examples, see the report of the IO’s then Chairman at its AGM held on 20 December 2005 (B4/1211), and the minutes of management committee meeting held on 31 March 2006 (B4/1230-31). [2] See [4] of the minutes of EGM of the IO held on 30 November 2009 (B4/1273). [3] See [11] of the 1st witness statement of Madam Law dated 29 March 2016 (A2/523) and [4] of the minutes of management committee meeting held on 31 July 2009 (B4/1261). [4] See the minutes of the EGM of the IO held on 30 November 2009 stating LC’s quoted price was $23,871,682 (B4/1273). In fact, according to the minutes of the EGM of the IO held on 30 November 2009 (B4/1270), the price originally quoted by LC in its tender was $36,892,050, which is the 3rd highest among 7 tenders received. It was subsequently reduced to $23,871,682 which had become the lowest among all. The contract price with LC was later agreed at $20,680,000. Probably because of subsequent variations and/or additional orders, the contract price was said to be $21,390,495: see the minutes of AGM of the IO held on 21 October 2012 (B5/1514). [5] See [2.4.1] of the minutes of the EGM of the IO held on 7 October 2011 (B4/1404), but the contractual completion date was stated to be 240 working days after commencement of work, subject to extra working days agreed to by the IO from time to time. [6] See Spence’s letter to the IO dated 19 September 2011 (B4/1398). [7] See Chan’s email to SEML dated 22 May 2010 (B1/199-200). [8] See Chan’s email to the management office of The Arcadia dated 17 April 2011 (B3/842). [9] See the 2 photos taken by Chan exhibited (B3/843). [10] See [99] of Chan’s 1st witness statement of 19 April 2016 (A2/460), and the 2 photos (B3/902). [11] See [100] of Chan’s 1st witness statement of 19 April 2016 (A2/460). [12] See Chan’s email to SEML dated 30 December 2010 (A1/270). [13] Mr Fan of counsel for the applicant confirms at trial that the applicant is not seeking the alternative remedy of carrying out the rectification work itself and does not ask for $202,000 being the costs of such repair. [14] See [18] of Ms Wong’s Opening submission dated 10 February 2017. [15] See conclusion at [10] of Mr Kenneth Chan’s report dated 30 June 2016 (A2/583). [16] See summary at [4.44] of Mr Chang’s report dated 11 October 2016 (A2/702). [17] Filed on 19 April 2016. [18] (Unreported), HCA 1485/2013, 29 July 2016 [19] (Unreported), CACV 20/2007, 1 November 2007, [2007] HKEC 1940 [20] (2007) 10 HKCFAR 480 [21] Ms Wong referred to paragraph 6-59 of the 21st Edition of Clerk & Lindsell on Torts which becomes paragraph 6-62 of the 22nd Edition. [22] Clause 15 of the DMC (B1/260-1) [23] [2012] 5 HKLRD 208 [24] [1996] 4 HKC 278 [25] It was common ground of the parties that the tort of negligence does not add anything and need not be considered in the appeal to CFA: see [10] of the decision at p.490. [26] See Chan’s email to SEML dated 22 May 2010 (B1/199-200). [27] See Chan’s email to SEML dated 22 May 2010 (B1/199-200) [28] (B1/358) [29] (B1/360) [30] B1/365 [31] B1/367-83; B1/384-6; B2/387-407; B2/409-11 [32] B2/417-591 [33] B2/427 [34] B2/592-614; B2/615-30 [35] B2/684 [36] B5/1561-4 [37] Paragraph No. 4 of the background report (B5/1561) [38] B5/1558 [39] B5/1550-8 [40] B3/1059-62 [41] B3/1065-6 [42] B3/756-9 [43] Total would be $18.8 million including 7 other items of work (B5/1632). [44] Total would be $31.6 million including 7 other items of work (B5/1632). [45] B3/760 [46] B3/761 [47] B5/1621-41 [48] See the minutes of management committee meeting (B3/778-84 @780) [49] B5/1659-72 @ 1672 [50] B3/805-17 @ 817 [51] B3/818-20 [52] B5/1673-83 @1680 [53] B4/1418 [54] B4/1423-29 @ 1424 [55] See [34] of the 1st witness statement of Madam Law dated 29 March 2016 (A2/529-30) and the minutes of AGM held on 21 October 2012 (B5/1516-8). [56] For example, see the minutes of the AGM held on 21 October 2012 (B5/1504-20). [57] See item T of the minutes of the AGM held on 21 October 2012 (B5/1513). [58] See [42] of the 1st witness statement of Madam Law dated 29 March 2016 (A2/531). [59] A2/531-3 [60] B5/1649-58 @1656 [61] See [50(xii)] above. [62] See the minutes of the AGM held on 14 March 2015 (B5/1611-1620 @ 1615). [63] See the minutes of the AGM held on 14 March 2015 (B5/1611-1620 @ 1620). [64] See the minutes of the AGM held on 14 March 2015 (B5/1611-1620). [65] B5/1558 [66] B5/1552 [67] B5/1809 [68] B5/1683 [69] B5/1677 [70] See the minutes of the EGM held on 14 January 2017 (B5/1808-26 @1820-1). [71] It was recorded “… 法團認為可先幫助部份有嚴重滲漏問題單位…”: see B5/1820. [72] B3/1128-32 [73] See [50(xiv)] above [74] The said minutes recorded as follows: “- 經管委會商討，認為除上述單位 (Block 1, unit 13D) 出現滲漏外，其他單位亦有滲漏情況，管理處已經漏水問題向業户發出通告，收集所有漏水單位之情況及記錄，將來管委會安排工程把漏水單位進行一次性處理，所以暫時不會優先處理上述單位之漏水問題。 - 管委會補充收集所有單位之漏水情況後，將按其嚴重性定立級別，並按級别分類維修之先後次序。” (B5/1656) [75] See the minutes of the MC meeting held on 6 July 2015 (B5/1649-58). [76] If counting from the attack by Typhoon Vicente in July 2012: see [50(ix)] above. [77] Item 5 of the minutes of the AGM held on 14 January 2017 stated “… 希望幫助該部份較嚴重滲漏的單位，進行臨時性執修工程…” (B5/1808-26 @1820). [78]A2/531 [79]B5/1548-49 [80] B5/1659-72 @ 1672 [81] B5/1609 [82] B5/1672 [83] See [50 (xxi) & (xxii)] above [84] B5/1680 [85] (Unreported), HCA 12235/1998, 28 January 2000 [86] (Unreported), HCA 5714/1998, 15 February 2001 [87] (Unreported), DCCJ 21504/2001, 15 February 2007 [88] See Spence’s report to the IO at 2nd para (B5/1689). [89] See [58] of the 1st witness statement of Madam Law dated 29 March 2016 (A2/536). [90] See Chan’s email to the management office of The Arcadia dated 16 & 17 April 2011 (B3/842-3). [91] A1/232-4 [92] See Spence’s memo to the IO date 14 June 2011 (A1/232-4 @ 232). [93] See the minutes of the MC meeting held on 27 June 2011 (B4/1366-85 @1374-5). [94] See Chan’s email to SEML and a member of the IO dated 11 July 2011 (B3/868). [95] See Chan’s email to SEML and a member of the IO dated 11 August 2011 (B3/871). [96] A1/232 [97] See [46] above [98] See the extract from Clerk and Lindsell on Torts (22nd Ed) at para 6-62 repeated in [27] above. [99] See [18] above [100] See Chan’s email to SEML and members of the MC dated 24 May 2011(A1/255). [101] See the photographs annexed to Spence’s Memo dated 26 May 2011 to the applicant (B3/898-900 @900). [102] B3/896-7 [103] See the 2 photographs taken by Chan at B3/902. [104] B3/902-3 [105] See the receipt dated 7 June 2011 (B3/904). [106] See [46] above [107] See Chan’s email to SEML dated 30 December 2010 (B3/905). [108] B3/949 [109] See Chan’s email to SEML dated 27 March 2011 (B3/907-9). [110] See SEML’s email to Chan dated 14 May 2011 (A1/277-8). [111] See LC’s email dated 1 June 2011 (A1/280) and Chan’s email dated 10 April 2013 (A1/281). [112] See [106] of Mr Fan’s closing submission dated 13 April 2017. [113] See the quotation dated 8 April 2013 (B3/917). [114] See Chan’s email to SEML dated 2 May 2011 (B3/950). [115] B3/951-5 [116] B3/956 [117] B3/957-9 [118] B3/956 [119] B3/960 [120] B3/960 [121] B3/961 [122] A1/328 [123] A1/330-7 [124] See SEML’s email to Spence dated 3 January 2011 (A1/315). [125] B3/930 [126] A1/272 [127] See LC’s notice dated 6 April 2011 (A1/294). [128] See Chan’s reply dated 7 April 2011 (A1/295). [129] See Chan’s email dated 2 May 2011 (A1/297). [130] See the deposit cheque copy (B5/1697). [131] See invoice (A1/300). [132] See [131] of Mr Fan’s closing submission dated 13 April 2017. [133] B3/970-4 [134] B3/973-4 [135] B3/929 [136] See [10.4] & [10.2] of the 2 minutes of the sub-committee comprising IO, SEML, Spence and LC held on 19 March & 20 April 2010 respectively (B1/40-45 @ 43 & B1/46-50 @49) [137] See Chan’s email to SEML, IO and Spence dated 15 May 2011 (B3/848). [138] See Chan’s email to SEML, IO and Spence dated 8 March 2012 (B3/980-999). [139] B1/49 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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