So Kai Hau v. Ysk2 Engineering Company Ltd

HCPI 1077/2006

[2018] HKCFI 1803

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 1077 OF 2006

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Before:  The Hon. Mr Justice Bharwaney in Court

Dates of Hearing: 3-6 August, 25 August 2015

Date of Judgment:  31 July 2018

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J U D G M E N T

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INDEX

1.The Garley Building fire disaster that occurred on 20 November 1996 resulted in the tragic loss of 40 lives[1]. The Garley Building Fire in 1996 and the collision between two passenger ferries off Lamma Island on 1 October 2012, that resulted in the loss of 39 lives, are two of the worst disasters that Hong Kong has witnessed in the last 60 years.  The occurrence that gave rise to the present proceedings is a tragic sequel of the Garley Building Fire.

2.After the fire, the Garley Building was closed and left unoccupied until it was purchased by Worldfaith Properties Ltd (“Worldfaith”) in 2003.  Sometime later, the new owner proceeded to demolish the 16 storey building with a view to constructing a new building on the site.  YSK2 Engineering Company Limited (“YSK2”), a specialist demolition contractor, took over the site on 29 December 2003 in order to carry out the demolition works.  The conventional top-down demolition method was adopted for the demolition works and, by June 2004, such works had progressed down to the 3^rd floor (“3/F”).

3.Mr So Kai Hau, the plaintiff in these proceedings, was the site foreman employed by YSK2.  His main duties were to oversee the collection and removal of scrap metal and miscellaneous waste at the demolition site.  On 28 June 2004, a bromotrifluoromethane[2] cylinder (“BTM Cylinder”) shot up from under a heap of building debris from the 3/F of the partially demolished Garley Building following upon the sudden release of pressurised gas from within the cylinder.  It rocketed skywards, struck the external wall on the 16/F of an adjacent building and then ricocheted downwards back to the 3/F of the Garley Building.  In the course of this explosive event, the valve of the BTM Cylinder and building debris blown away by the escaping gases struck and amputated the plaintiff’s left arm at above the elbow level.  The dramatic event was captured on CCTV, the recording of which is an exhibit in these proceedings[3]. Prior to the accident, the BTM Cylinder had been located in a BTM Bottle Room on the 3/F.

4.The plaintiff brought these proceedings against YSK2 on 5 December 2006 claiming damages for personal injuries caused by the negligence and breach of statutory duties on the part YSK2, its servants and agents, in failing to discover, properly handle and/or remove the BTM Cylinder prior to commencement of the demolition works.

5.Third party proceedings were commenced by YSK2 against Wellgo Archdecor Consultancy Limited (“Wellgo”) and JMK Consulting Engineers Limited (“JMK”) on 24 November 2009. The Third Party Notice was amended to include Joseph Chow Ming Kuen (“Joseph Chow”) and Daniel Kwan Pok Man (“Daniel Kwan”) on 24 November 2010.

The Parties

6.After the Garley Building Fire, the Fire Services Department (“FSD”) inspected the Building and prepared an investigation report dated 26 November 1996[4]. Subsequently, the  FSD issued a number of Fire Hazard Abatement Notices all dated 20 January 1997 to the Incorporated Owners of the Garley Building (“the IOGB”)[5]. Many of the Abatement Notices were on fire service installations.

7.The Building Department (“BD”) also inspected the Building after the Garley Building Fire.  The BD issued 2 closure orders dated 25 November 1996 directing that Office 1306, 14/F and 15/F and roof of the Building be closed[6]. There was a further closure order dated 28 November 1996 for closing Portions of G/F, 1/F, 2/F and Cockloft of the Building[7].

8.In addition, the BD issued a number of building orders dated 5 December 1996[8]. Some of these orders[9] were prefixed by the letters “INVO” which stood for investigation works.  In all the building orders, the BD prescribed the time for carrying out the works as specified.  Order No. INVO 34/K/96/C[10] covered defects at the 3/F of the Building.  The registered owner of the 3/F used to be Chinese Arts & Crafts (HK) Ltd (“Chinese Arts & Crafts”) at the time of the Garley Building Fire[11] and the 3/F was then let to Pacific Link Communications Ltd (formerly known as Pacific Telelink Ltd) (“Pacific Link”)[12], a paging company which occupied the 3/F as a paging centre.  In addition to the aforesaid building orders, the BD had issued a letter dated 4 February 1997 to Chinese Arts & Crafts on a number of infractions at the Basement to 5/F and 7/F[13].  The BTM Cylinder located on the 3/F was not mentioned on the list of infractions.

9.It was under these circumstances that Joseph Chow was appointed as the Authorized Person (“AP”) and Registered Structural Engineer (“RSE”) to deal with the building orders, as evidenced by a letter dated 29 January 1997 from Joseph Chow to BD[14]. By a letter dated 10 April 1997 from Joseph Chow to BD, Joseph Chow informed the BD that the owners of the Building intended to demolish the Building and to redevelop the site and that the owners wished “to carry out only the essential work to ensure the structural stability and to seal off the building from access without permission”[15].

10.David Chan Wah Wai (“David Chan”) of Wellgo came to replace Joseph Chow as the AP to deal with certain building orders[16] but, as can be seen from the letter dated 9 May 1997[17],  Joseph Chow remained as the RSE until his role was taken over in or about December 2003.  David Chan is a building surveyor and a director of Wellgo[18].  As evidenced by a later letter issued by the IOGB dated 30 March 1998[19],  the IOGB “confirmed” and “authorized” the appointment of Wellgo to be the IOGB’s representative for  “Monitoring, Inspection and Reporting to Buildings Department for the extension of the various Building Department Orders of which the expiration date have long been transpired (sic)”.

11.The owners obtained an order for sale of the land, on which the Garley Building was built, for the purpose of redevelopment from the Lands Tribunal under the Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545,on 10 July 2003[20]. The sale took place on 11 September 2003 and the purchaser was Worldfaith, a company in the China Resources group of companies[21].

12.To oversee and enable the demolition of the Garley Building, Daniel Kwan was appointed the AP for demolition, JMK was appointed the Structural and Geotechnical Engineer Consultant for demolition, with Helen Kwan of JMK being engaged as RSE for demolition works.

13.In August 2003, JMK was invited by Worldfaith’s holding company, CRE Properties (HK) Limited, to conduct structural appraisal work with the Building for the purpose of planning for demolition and to perform duties as RSE.  JMK was invited to submit a consultancy fee proposal based on the scope of the services listed[22].  JMK submitted its fee proposal on 26 August 2003[23].  The agreement to appoint JMK was made on 27 August 2003[24]. JML prepared an Appraisal Report dated September 2003[25] and also submitted an Engineer’s Supplemental Assessment Report dated November 2003[26].

14.Joseph Chow and his company,  Joseph Chow & Partners Ltd. (“JCPL”), had previously held 1% and 99% respectively of the share capital in JMK[27]. JCPL transferred its entire shareholding to May & Kay Investment Co. Ltd. on 24 August 2001[28]. On 17 April 2003, Joseph Chow and May & Kay Investment Co. Ltd. transferred their entire shareholding in JMK to Helen Kwan, Liu Sik Wing and Shirley Tam Yuet Ping[29]. Joseph Chow had no further interest in JMK after 17 April 2003.

15.Daniel Kwan was appointed on 30 September 2003 as the AP for Demolition.He submitted the site investigation, demolition and hoarding plans to the Buildings Authority (“BA”) of the BD on 30 September 2003[30]. They were approved on 27 November 2003[31].  Further forms and a “Site Safety Supervision Plan” were submitted by Daniel Kwan on 20 February 2004[32] and further approval was granted by BA on 2 April 2004[33].

16.YSK2 was engaged as the demolition contractor.  By letter dated 16 October 2003 from Worldfaith’s agent, Davis Langdon & Seah Hong Kong, YSK2 was invited to submit tenders for demolition works[34]. YSK2 inspected the Building on 27 October 2003 and submitted a tender to Worldfaith enclosing the proposed method statement[35].  YSK2’s tender was accepted by Worldfaith on 22 December 2003[36]. The Building Contract between Worldfaith and YSK2 was dated 30 December 2003[37]. On 15 May 2004,  YSK2 submitted a Revised Site Safety Supervision Plan to BD[38].

17.The plaintiff was the site foreman employed by YSK2[39].

18.The consent for the commencement of the demolition works was given by the BD on 2 April 2004[40]and the demolition works commenced thereafter.  The conventional top-down demolition method was adopted for the demolition works with props erected on floors below the floor being demolished.  By June 2004, such works had progressed down to the 3/F.  The accident took place on 28 June 2004.

The Proceedings

19.The third party proceedings brought by YSK2 against Wellgo were discontinued by a consent order made on 25 July 2011. On 17 February 2012, JMK issued a fourth party notice against Wellgo claiming that Wellgo is liable for David Chan’s acts and omissions.  David Chan has not been sued.  Wellgo has not raised any defence that it is not liable for David Chan’s acts and omissions.

20.Third party proceedings were discontinued by YSK2 against Joseph Chow on 31 October 2014.

21.YSK2 settled his third party claim against JMK by a consent order made on 15 May 2015 on terms that JMK would be liable to indemnify YSK2 “to the extent of 35% of the damages and interest (accrued up to the date of judgment/order disposing of the main action between the plaintiff and [YSK2] only, if any) the defendant may be liable to pay to the plaintiff in the main action” and to pay the costs incurred by YSK2 against JMK in the third party proceedings. 

22.The plaintiff settled his claim against YSK2 by a consent order dated 14 July 2015 on terms that YSK2 agreed to be liable for 95% of the loss and damage suffered by the plaintiff, to be assessed, and costs.

23.YSK2 settled his third party claim against Daniel Kwan by a consent order made on 30 July 2015 on terms that Daniel Kwan would pay to YSK2 an agreed all-inclusive sum of $2,200,000, and that there be on order as to costs between them in the third party proceedings.

24.Finally, the plaintiff settled his claim for damages and interest against YSK2 by a consent order dated 19 August 2015 on terms that damages were agreed in the gross sum of $10,000,000 “inclusive of interest and inclusive of employees’ compensation already received by the plaintiff in the sum of $1,966,065.2)”; that the net balance sum of $8,033,934.8 to be payable within 35 days; and that YSK2 pay the plaintiffs’ costs of the action.

25.The result of these settlements was that the only remaining issue to be dealt with at the trial before me was the liability, if any, of Wellgo to make contribution to JMK.

The Pleading Point

26.Wellgo took the point that JMK had failed to plead whether Wellgo owed any duty of care and to whom such duty of care was owed.  In JMK’s opening, it was suggested that Wellgo owed a duty of care to the plaintiff, the defendant and to JMK.  No such averment appeared in the Fourth Party Notice and Wellgo submitted that JMK was not entitled to rectify defects in the pleading by introducing new matters way of submission.  Wellgo relied on the authority of Kwok Chin Wing v 21 Holdings Ltd.[41] and Grandregal Enterprises Ltd v Sitwell Estates Ltd.[42] to submit that Wellgo’s claims were a “non-starter”.

27.JMK referred to the averments in the Fourth Party Notice, the Reply and the Answers to Further and Better Particulars to demonstrate that all material facts and circumstances giving rise to the duty of care had been pleaded in great detail, including the precise capacity and role of David Chan as the AP, the duration of his appointment, the scope of works and responsibilities undertaken by him, the material contents of the Monitoring and Inspections Reports (“MIRs”), the particulars of knowledge of David Chan, and how his failings caused the plaintiff’s injuries.  By §14 of the Fourth Party Notice, the standard of duty required of Wellgo and particulars of its breach has also been pleaded under the heading of “Particulars of David Chan’s Negligence for which the Fourth Party is vicariously liable”.

28.My view of the matter is that Wellgo’s complaint stems from the enigmatic plea, (Wellgo described it as “hardly comprehensible”), in §16 of the Fourth Party Notice that,  if YSK2’s loss was caused by JMK’s negligence, then YSK2’s loss was caused by Wellgo’s liability to YSK2.  JMK’s opening submissions did not improve upon the matter by asserting in §10 that:

“(a) Wellgo owed a duty of care to the Plaintiff as an Authorized Person. Wellgo’s negligence caused the Plaintiff to have suffered injuries thereby causing damage to the Plaintiff. Since YSK2 was liable for the same damage suffered by P, YSK2 was entitled to seek contribution against Wellgo under the CLCO for its losses in meeting its liability towards P (including costs) (as claimed in the original third party proceedings which later became discontinued). Since both JMK and Wellgo are liable to YSK2 for such losses suffered by YSK2 (whether jointly or otherwise), JMK is entitled to seek contribution against Wellgo under the CLCO for apportionment of its compromised liability towards YSK2 with Wellgo;

(b) Wellgo owed a duty of care to YSK2 as an Authorized Person. Wellgo’s negligence caused YSK2 to have suffered the same damage (i.e. paying liability to P, including costs) that JMK was also obliged to contribute to. JMK is therefore entitled to seek contribution against Wellgo under the CLCO for apportionment of its compromised liability against YSK2 with Wellgo; and

(c) Wellgo owed a duty of care to JMK as an Authorized Person. Wellgo’s negligence caused JMK to have suffered losses in becoming subject to the liability to YSK2 (as compromised, inclusive of costs). Since Wellgo breached its duty thereby causing JMK’s loss and damage for all damages to be paid to YSK2, JMK is entitled to claim damages against Wellgo.”

29.There has been a failure on the part of JMK to appreciate that its settlement with YSK2 was in respect of JMK’s liability to contribute towards the claims of the plaintiff to YSK2 pursuant tothe Civil Liability (Contribution) Ordinance, Cap. 377[43], just as JMK’s present claim against Wellgo is for Wellgo to contribute towards the claims of YSK2 pursuant the Civil Liability (Contribution) Ordinance, Cap. 377[44].  The claims of YSK2 are none other than a claim for contribution towards the claims of the plaintiff.

30.Section 3(1) of Civil Liability (Contribution) Ordinance, Cap. 377 provides:

“3. Entitlement to contribution

(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).”

Section 2(3) of Civil Liability (Contribution) Ordinance, Cap. 377,  defines a person liable in respect of any damage as:

“2. Interpretation

(1) In this Ordinance—

…

(3) A person is liable in respect of any damage for the purposes of this Ordinance if the person who suffered it … is entitled to recover compensation from him in respect of that damage (whatever the legal basis of his liability, whether tort, breach of contract, breach of trust or otherwise).”

31.The provisions of the Civil Liability (Contribution) Ordinance, Cap. 377, come into play only when the claimant and the respondent are both liable to the person who suffered the damage, in this case the plaintiff.  Accordingly, the only duty of care which is properly pleaded, and which the court has to consider, is Wellgo’s duty of care, if any, to the plaintiff.

32.Underpinning these provisions is the principle that the victim of a tort can obtain a judgment for damages against multiple tortfeasors who, either jointly or severally, caused him or her to suffer the same damage[45], and can then seek satisfaction of the entire judgment of debt from any one of the tortfeasors adjudged liable to him or her, regardless of whether or not that tortfeasor has been adjudged to be minimally or substantially at fault. This principle ensures that it is the solvent tortfeasor, not the victim, who bears the risk of insolvency on the part of the “non-paying” tortfeasors.

33.I completely disregard the plea in §16 of the Fourth Party Notice and JMK’s submissions contained in §10(b) and (c) of JMK’s written opening insofar as they purport to raise a duty of care on the part of Wellgo to safeguard either YSK2 or JMK from economic loss caused by negligence on the part of Wellgo.  There is no proper averment of any such duty of care on the part of Wellgo or of any assumption of responsibility by Wellgo[46]. Consequent upon this ruling, much of the evidence regarding the reliance by JMK on the monitoring and inspection reports issued by David Chan, and specifically, the evidence of Ms Helen Kwan[47], Mr Thomas Choy[48] and Mr Sze Ka Tat[49], is no longer relevant to the determination of the primary issues before me, namely, whether or not David Chan owed a duty of care to the plaintiff and whether or not he was in breach of any such duty. I should also mention that I was not impressed by the evidence that I heard from these 3 individuals.  However, their evidence is not relevant to the issues I have to determine, save on the question of reasonable foresight, which I deal with below[50], and I say no more about it.

The BTM Cylinder and BTM Installation

34.The Garley Building Fire was investigated by FSD and the Labour Department and they produced the following reports:

(a) “Incident Report” prepared by the FSD in July 2004[51];

(b) “Technical Report” prepared by the Technical Support Unit/Support Services Division of the Labour Department dated 17 November 2004[52]; and

(c) “Accident Report” prepared by the Labour Department in December 2004[53].

35.The point was taken that the makers of these reports had not been called to give evidence. Additionally, the maker of the Labour Department Technical report had not been identified.  It is the norm in personal injury cases to direct that such investigation reports to be adduced into evidence without calling the makers thereof.  Such a direction was given in these proceedings[54].  If the findings reached by the investigators are disputed, parties can seek a direction for the makers of the reports to be called and also seek leave for expert evidence to be adduced to challenge such findings.  If the challenge has substance, the court may grant the leave that is sought.  No such challenge was made by Wellgo in the course of the case management of these proceedings.  I accept these reports as hearsay evidence that was properly adduced before me.  Having considered them carefully, and having given to them the weight that they deserve, I make the following findings based on these reports:

(a)  The BTM Cylinder was a gas cylinder that was 1 metre in height and 0.4 metres in diameter.  It remained largely intact after the accident. The empty BTM Cylinder weighed 86.5 kg[55];

(b)  The identification plate of the Cylinder showed that it used to contain a substance known as “Thorn Halon 1301 Fire Fighting”, a highly compressed gas which weighed 97 kg in addition to the weight of the Cylinder[56];

(c)  “Halon 1301” is chemically known as “Bromotrifluromethane” (CBrF3) or “BTM”. BTM was used in the past as a gas chemical fire extinguisher in a “BTM fire extinguishing system”[57]. This gas was kept “liquefied” inside the BTM Cylinder at very high pressure[58];

(d)  BTM was a substance which was banned after the 1985 Vienna Convention for the Protection of the Ozone Layer and the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer.  Consequently, the Ozone Layer Protection Ordinance was enacted in 1989 prohibiting the manufacture and import of Halon[59];

(e)  The original valve of the BTM Cylinder could not be found after the accident. A photograph of the original valve can be seen in Bundle C at p.721. After obtaining the same valve assembly from the supplier, it was found that it weighed 8.18 kg[60]. Sudden removal of such valve would cause a release of the high pressure and energy which would be similar to an explosion.  The tremendous force created by the high flow rate of the Halon would propel the Cylinder up to the sky like a rocket[61]. The sudden release of energy would also create a tremendous drift of gas which would carry away the detached valve assembly and building debris in the vicinity at a very high speed[62];

(f)  The video recording showed that the BTM Cylinder, after it was propelled into the sky and hit the external wall of the  adjacent building, fell, about 6 seconds after it had flown up, to a position that was near its original position[63];

(g)  The BTM Cylinder had been left unattended. It had not been serviced and no maintenance work was done on it since the occurrence of the Garley Building Fire on 21 November 1996[64]. Significant corrosion developed on the threads of the valve. The strength of the corroded threads was reduced and corrosive materials developed and filled the space between the threaded joint.  The valve was disturbed which caused cracks to be formed on the corrosive materials.  This resulted in gas leakage from cylinder.  The gas leakage caused more corrosive materials to be stripped away. The rate of gas leakage increased as the corrosive materials stripped away. Eventually, the high pressure inside the cylinder forced and pushed the entire valve out from the Cylinder and carried away the detached valve assembly and building debris in the vicinity at a very high speed, causing injury to the plaintiff [65];

(h)  A BTM installation was found by the FSD to have existed inside the computer room on the 3/F of the Garley Building.  A photograph of the BTM Installation can be seen in Bundle C at p.721. A notice was posted next to the door of the room where the BTM Cylinder was stored. The notice stated: “B.T.M. GAS BOTTLES ROOM”. Plans for the BTM installation had never been submitted to FSD for its approval and record[66]. The BTM Cylinder would be classified as dangerous goods under the Dangerous Goods Ordinance, Cap. 295[67], requiring a licence for its storage in any premises[68].  No licence or approval had been granted for the storage of the BTM Cylinder at the 3/F of the Garley Building[69]. Although David Chan was not a specialist fire services engineer and did not profess to have special knowledge about BTM, he knew, and he agreed, that a BTM cylinder that was full of gas should be classified as dangerous goods[70], and that BTM gas would deplete the ozone in the atmosphere[71].

36.JMK and Wellgo have called their respective experts to give evidence in this case.  Dr James Lau, JMK’s expert, is an expert in civil, geotechnical and structural engineering, having over 40 years’ experience in construction, design and research in these fields. He holds a PhD in geotechnical engineering and MSc in structural engineering.  He was an AP under the Buildings Ordinance, Cap.123, since 1983, a RSE since 1982 and a Registered Geotechnical Engineer since 2005. Although he has not been an AP for Remedial & Monitoring Works, he was involved in assessing the stability of a number of fire damaged buildings and restoring the damage done to them[72]. I accept him as a properly qualified expert witness in these proceedings[73].

37.It was not disputed that the BTM installation on the 3/F of the Garley Building was an automatic system and that the BTM gas inside the BTM Cylinder would be released when triggered by smoke detectors[74]. I accept the following evidence that Dr James Lau[75] gave about fixed BTM installations, which ought to be known to an AP[76]:

(a)  Unlike normal firefighting systems using water discharged through sprinklers, BTM is dry and is given out as dense fumes. When it contacts with burning substances, BTM absorbs heat and vaporises. This vapour blankets and suppresses the fire by excluding oxygen. It is used mostly to suppress fires in water sensitive environments such as computer centres with servers holding important data[77].

(b)  BTM is widely known to be a toxic substance[78] and warning signs are normally shown in rooms storing BTM cylinders[79]. Upon release of such gas, people must be evacuated immediately[80].

(c)  BTM depletes the ozone layer above the Earth[81]. Hong Kong has stopped the import of BTM installations for fire suppression since January 1994. There are strict rules about the use and disposal of BTM as a controlled substance.  Old and unused BTM bottles are collected by specialist companies who recycle the BTM using special equipment[82]. Nowadays, a new type of waterless fire suppression system is used in Hong Kong called FM 200. This is a non-toxic and environmentally safe chemical.  However, during its release, people inside the area could be killed by suffocation. Warning signs are displayed at FM 200 installations[83].  However, old BTM installations can still be found in Hong Kong[84].

(d)  The design and installation of a BTM system must be submitted by an AP and approved by the FSD, which has strict guidelines for the use of fixed BTM installations that are contained in circular letters issued by the FSD to APs, building services consultants and fire service installation contractors about BTM installations[85].

(e)  BTM is stored inside BTM cylinders under high pressures. High pressure BTM cylinders should not be allowed to remain in a building without proper maintenance. Corrosion of the valves could cause leakages of the high pressured contents and lead to explosion of the high pressured cylinders[86].

38.I also accept the evidence of Dr Lau that the fixed BTM installation on the 3/F of the Garley Building was not approved by the FSD. It was not part of the original fire services installation in the Garley Building.  Dr Lau opined that, most likely, it was installed by a tenant who found it necessary to protect his computer servers by a fixed BTM installation. The installation did not conform to the requirements of BTM installations as stated in FSD’s circular letters. The required signage was not placed on the entrance of the BTM room to warn people of the toxicity of BTM[87].  After the Garley Building Fire, the BTM cylinder was left unattended[88].

39.I have already found that the BTM Cylinder had been left unattended and had not been serviced and maintained since the occurrence of the Garley Building Fire[89].  I also find that Pacific Link had installed the BTM system to protect its computer servers at its 3/F paging centre, without first seeking the necessary approvals from FSD.

40.I also accept Professor Barnabas H.K. Chung as a properly qualified expert witness in these proceedings.  He was called by Wellgo as its expert witness.  He was formerly Chief Building Surveyor of the BD and worked in that department and its predecessor from 1968 until he retired in 1998. He was experience in all aspects of statutory building control and enforcement.  Since 1983 he has been teaching on the subject of the Buildings Ordinance and Regulations in the Department of Architecture in the University of Hong Kong and another tertiary institutions and professional organisations.  He served on several statutory bodies dealing with issues involving building control.  He is an AP and a Registered Professional Surveyor. However, he did not practice as an AP in private practice[90]. He did not express any disagreement with the evidence of Dr James Lau on the BTM Cylinder and the BTM installation, asserting that he was not an expert on fire service installations[91].  He did express the opinion that they were irrelevant to the overall and structural condition of the Garley Building or to the orders issued by BD[92].

41.Prior to Wellgo’s appointment on 30 March 1998, David Chan had a site inspection of the Garley Building with a building surveyor of BD, Mr Michael Pang, on 3 September 1997.  At that inspection, David Chan found the BTM installation, including the BTM Cylinder, inside an enclosed BTM Bottle Room.  The BTM Cylinder was a fixed fire services installation for part of the premises on the 3/F of the Garley Building. David Chan was given a set of identification plans of the building by Mr Pang during this inspection.  The plan for the 3/F showed that there was a BTM Bottle Room on that floor[93]. The BTM Bottle Room was located behind the access door to Staircase C.

42.David Chan had taken a number of photographs of the BTM Cylinder and the BTM Bottle Room at 3/F of the Garley Building.  These photographs are in Bundles C and CB[94]. David Chan prepared another plan, based on the enlarged plan, in Bundle CB on p.121(59) to show the direction he was facing when he took these photographs[95]. These photographs showed the doors to Staircase C from the 3/F Exit Lobby[96] and the doors from the landing of Staircase C[97] to the 3/F.  Another photograph showed the opening to the BTM Bottle Room with a sign next to the opening that stated: “BTM GAS BOTTLES ROOM”[98].  A smoke detector can be seen outside the BTM Bottle Room at the upper right hand corner of that photograph[99].  Another photograph taken inside the BTM Bottle Room showed the BTM Cylinder connected to a valve and gas pipe leading to another location.

43.David Chan explained in evidence that the top photograph in Bundle C at p.721 showed the open door of a cabinet inside the BTM Bottle Room and that the BTM Cylinder was kept beside that cabinet[100]. He drew a sketch, Exhibit R-1, to depict the location of the cabinet and the BTM Cylinder[101]. The cabinet door was slightly higher than the BTM bottle, being 1.5 metres as opposed to the height of the BTM bottle which was 1.3 metres.  If that door was swung open, it would obstruct the view of the BTM Cylinder; however, that door was usually closed[102].  It was closed on the other occasions and on the last occasion of his inspection of that area on 23 August 2003[103]. I accept David Chan’s evidence in this regard and find that anyone entering, or looking into, the BTM Bottle Room ought to have seen the BTM Cylinder.

44.I also accept David Chan’s evidence[104] and find that the BTM Cylinder remained in the BTM Bottle Room up to the time that the Garley Building was handed over by David Chan to the AP for Demolition on 29 December 2003.  There was an inspection of the Garley Building by David Chan and Thomas Choy on 23 August 2003[105].  The BTM cylinder was then still in an upright position affixed to the wall inside the BTM Bottle Room at 3/F.  Although Mr Choy gave evidence that he did not see the BTM Cylinder when he inspected the 3/F on 23 August 2003 with David Chan[106], I do not infer from his evidence that it was not there.  Mr Choy was concentrated on the structural elements of the building and had little knowledge of the BTM Cylinder and the BTM Bottle Room[107].  After 29 December 2003, someone had removed the BTM Cylinder from its original position and location in the BTM Bottle Room.  I accept the evidence of Helen Kwan that it was the workers of YSK2 that had moved the BTM Cylinder and allowed demolition debris to be stacked on top of it[108].

45.The removal of the BTM Cylinder probably disturbed the valve assembly and contributed to the subsequent explosion. The BTM Cylinder ended up in the stack of debris on the 3/F from where it exploded on the date of the accident, as depicted in the CCTV recording.

David Chan’s Role and Responsibilities as AP of the Garley Building

46.As I have noted in §10 above, David Chan is a building surveyor and a director of Wellgo[109]. On 30 March 1998, IOGB appointed Wellgo to be the IOGB’s representative for monitoring, inspecting and reporting to BD and for requesting the extension of time to comply with the various orders issued by BD.  As noted in §10 above, although he was only the AP in charge of 2 of the building orders, David Chan admitted that he was effectively and for all practical purposes the AP for the entire Building as all AP works in relation to all the Building Orders were done by him[110].

47.Following upon David Chan’s site inspection of the Garley Building with Mr Pang of BD on 3 September 1997, when the BTM Cylinder and BTM Installation was found inside the BTM Bottle Room,  JCPL had written to the IOGB on 4 September 1997 referring to the joint inspection with the BD[111]. David Chan followed up on the matter by a letter dated 5 September 1997 explaining to IOGB the infractions identified by the BD and the main concerns of the BD, including maintaining an unobstructed means of escape in case of fire and removal of thick piles of building debris left on the roof[112]. The BTM Cylinder and BTM Installation were not listed as one of the infractions.

48.On 4 November 1997, representatives of JCPL and David Chan attended a meeting with the BD and the FSD to discuss fire safety measures[113]. The BTM Cylinder and the BTM Installation were not specifically mentioned by the BD and the FSD. However, the Chairman of the meeting, who was from FSD, required Wellgo and Joseph Chow to make sure that there was no over storage of dangerous goods and to look into the possibility of removing all debris from inside the premises. It can be seen from §§7-8 of the minutes that the reinstatement of the fire services installations and the maintenance of fire safety in the building was within the scope of David Chan’s duty as AP.  However, there was no express or implied requirement to reinstate the BTM installation.  Indeed, it would have been meaningless to do so. Further, the removal of “appendages” from the exterior of the building, referred to in §9 of the minutes, cannot be said to include the BTM Cylinder which was not an appendage.  The representative from the Labour Department expressed his concern about the safety of workers working in the Garley Building[114], which was also was within the scope of David Chan’s duty as AP.  The concern for workers’ safety was reiterated by BD in its letter to David Chan and Joseph Chow dated 21 January 1998[115].

49.The owners of the Garley Building held a meeting on 24 September 1997 and resolved to undertake the redevelopment of the building instead of repairing it[116].  Wellgo carried out its task of seeking extensions of time to comply with the building orders.  On 6 February 1998, by a letter from the BD to David Chan and Joseph Chow, BD asked for the purpose of seeking extension of time to comply with the building orders[117]. David Chan and Joseph Chow replied to BD by letter dated 16 April 1998 stating that the owners had opted to redevelop and, in order to secure BD’s consent to the extension of time, they confirmed that they would inspect the Building on a monthly, or more frequent basis, to ensure that the structural condition of the building was sound and that there was no cause of imminent danger to the public[118].

50.On 8 May 1998 David Chan wrote to BD confirming that owners/occupants had agreed not to enter the Garley Building and that potentially dangerous and/or loose elements of construction had all been removed and vulnerable structures shored up by steel props, so that no special arrangement and safety measures would need to be instituted save that persons with legitimate cause to enter the building, such as workers, would be warned that they were entering a fire damaged building that had remained vacant for many months[119]. The Garley Building was sealed off, security guards were posted and anyone entering the building was required to sign an entry registration record maintained by Wellgo[120].

51.David Chan and JCPL carried out a preliminary inspection on 27 April 1998. The inspection did not include the 3/F as it was then locked[121].  Another inspection occurred on 13 May 1998 and the first monitoring inspection report (“MIR”) dated 29 May 1998, signed by Joseph Chow and David Chan, was produced[122]. It recorded for the 3/F that “[a]ll tenancy fixtures & furnitures together with fire damaged debris were removed and carted away”[123].

52.David Chan wrote a letter to IOGB dated 20 October 1999 referring to JCPL’s fax concerning the removal of fire debris on 13/F to 15/F and making the observation that removal of all fire debris would eventually be required:

“(i)  in order the RSE responsible for the demolition works could examine the factual condition of the structure and prepare the “Demolition Plans and Proposal” for approval by the BD; and

ii)  [required] by BD to remove all fixture and fittings … prior to the issue of “Demolition Consent”[124].

In this letter, David Chan also gave a rough estimate of the costs ($1.5 million) required for removal of fire debris in the whole Building.  The estimate did not include the 3/F because that work had already been done[125], as noted in the 1st MIR dated 29 May 1998[126].  Such a proposal was never discussed, accepted, or acted on by the IOGB, notwithstanding a reminder by letter dated 11 April 2000[127].

53.Pursuant to the terms of his engagement, Wellgo liaised with BD for extension of time for compliance with the building orders, given the owners’ intention to undertake the redevelopment of the building.  Wellgo carried out monitoring inspections and submitted its MIRs to BD.  Wellgo reiterated that the Garley Building:

“will be kept under periodic monitoring inspections by the AP (Wellgo)/RSE firms; the associated Monitoring Inspection Reports be submitted to your Office (BD) for perusal and/or comment; and remedial measures being instituted where required in order to ensure that no undesirable situation which could affect the safety of the general public would arise.”[128]

Extension of time was granted by BD from time to time[129].

54.Although, as noted in §10 above, the David Chan’s engagement appeared to be limited to “Monitoring, Inspection and Reporting to Buildings Department for the extension of the various Building Department Orders”, some other works were also carried out as requested by BD. The works covered by building order no. DBC 1/K/96/C[130] involved the removal of the identified unauthorized building works (“UBWs”) that were not on the 3/F.  Other works performed included the opening of the floor slab at the 3/F to facilitate the removal of debris and rubbish[131].  David Chan and Joseph Chow did not perform any other removal works that involved the removal of fixed structures.

55.Wellgo also undertook other works to address concerns that were raised by BD such as the removal of dilapidated signboards, defects in timber boarding, deterioration of safety nets, broken window glazing and loose plastering[132]. BD’s concern was not only confined to structural-related matters but also included concerns over dilapidated and unhygienic conditions. As noted in §52 above, Wellgo also preformed work to remove tenancy fixtures and furnitures, and fire damaged debris.

56.Indeed, Wellgo wrote various letters to IOGB and their representatives in respect of a wide range of matters including safety precautionary measures, removal of debris, hygiene issues, entrance/security concerns, remedial works (e.g. pumping away of water, spraying of anti-mosquito chemicals, mounting of safety-nettings, removal and taking down of dilapidated parts), redevelopment/compulsory sale progress and the transitional arrangements (including the role of Wellgo to be taken over by JMK and Daniel Kwan)[133].

57.Although environmental hygiene was not part of the works under the building orders, David Chan admitted to be in charge of this aspect of his word as AP under the “parameters of the Buildings Ordinance” which concerned building safety and environment[134].  David Chan also admitted that he had arranged works by contractors for various works not strictly required by the building orders, which included pumping away of water from basement, installation of safety nettings and removal of wet debris[135].  He also took up the duty of control of access of visitors to the Garley Building[136].

58.Advising on the removal of debris was one of his responsibilities as AP, which he undertook, to cater for the possibility that the building would eventually be demolished, although that was not the only option to the owner who would eventually acquire the entire building[137]. David Chan agreed that the term “debris” included all “fixture and fittings” which became useless and did not serve any function[138]. It was stated in Wellgo’s letter to IOGB dated 20 October 1999 that:

“From a wider perspective, removal of ALL fire debris, including fixtures and fittings by respective occupiers would eventually be required:

i) in order the [RSE] responsible for the demolition works could examine the factual condition of the structure and prepare the “Demolition Plans and Proposal” for approved by [BD]; and

ii) by BD to remove all fixtures and fittings, hanging signs, air-con condenser units, etc. ... prior to the issue of “Demolition Consent.[139]”

59.As AP,  David Chan was responsible for fire-services related matters in the Garley Building[140].  If he found fire hazards, such matter would be raised with the FSD[141].  As recorded in the minutes of meeting with the FSD on 4 November 1997 and as explained by David Chan in evidence, there was a second fire occurrence on 29 October 1997 on the 13/F of the Garley Building during the removal of appendages using oxyacetylene torches.  FSD insisted and it was agreed that, thereafter, all appendages would be removed by mechanical means[142].

60.During the period when Wellgo worked for the IOGB, FSD had entered into the Garley Building for inspection on numerous occasions[143].  No mention was made of the BTM Cylinder during these inspections.

61.There were altogether 40 MIRs[144].  The 40^th MIR was dated 29 August 2003[145].  In all these reports, it was stated that the 3/F was free from debris.  The MIRs were submitted jointly by Wellgo and Joseph Chow.  The 40^th MIR had been sent by David Chan to Thomas Choy for comment and confirmation[146].  Thomas Choy used to work in JCPL but he ceased to do so on 1 April 2003 when he began to work for JMK[147]. David Chan was not aware that Thomas Choy ceased to work for JCPL since 1 April 2003.

62.The work Wellgo performed on monitoring, inspection and reporting and the other works undertaken by Wellgo is evidenced by the invoices issued by Wellgo to IOGB[148].

63.As I have noted on §11 above, Worldfaith purchased the land on which the Garley Building was built on 11 September 2003.  Prior to the sale to Worldfaith, Wellgo wrote to IOGB, by letter dated 13 August 2003, pointing out that considerable safety remedial works were required to be carried out and asking for advice on the status of the redevelopment proposal[149].  By another letter dated 6 September 2003 from Wellgo to the IOGB, Wellgo gave a summary of the outstanding building orders and sought confirmation as to whether Worldfaith still wanted to retain Wellgo and Joseph Chow to deal with the building orders as it was not clear whether the building orders would cease to have effect upon the auction sale[150]. By a letter dated 15 September 2003, Wellgo and Joseph Chow sought instructions on the transitional arrangements for monitoring the Building until the taking over of the site by the new AP/RSE for demolition[151].

64.The BD continued to grant extension of time to comply with the building orders[152].  The outstanding building orders were only withdrawn on 30 November 2004[153] after the completion of the demolition works on 27 September 2004[154].

65.By letter dated 9 October 2003, Wellgo again asked IOGB for instructions on the transitional arrangements[155].  On 16 October 2003, Daniel Kwan, who had been appointed AP for demolition, wrote to Wellgo suggesting that Wellgo and Joseph Chow continue their appointment until consent to commencement of demolition works was given by BD[156].  Wellgo did not accept the suggestion and left the site on 29 December 2003 after the physical handover of the site on that day[157].

66.As recorded at the minutes of the handover meeting, David Chan gave general advice regarding safety in relation to the Garley Building[158] to JMK and Daniel Kwan who would perform work on the demolition of the Garley Building.  He agreed that that if there was anything in the Garley Building that posed an ‘obvious danger’, such matter would be brought to the attention of JMK and Daniel Kwan[159].  David Chan also gave evidence that it was important that JMK, as demolition RSE, should know about the condition of the Garley Building and that it was “good practice”, as demolition RSE, that JMK should trace the previous condition of the Garley Building[160].

67.David Chan ceased to be the monitoring AP and Joseph Chow ceased to be the AP/RSE for the Garley Building on 31 December 2003 when David Chan’s letter to BD of the same date demarcated the cessation of their respective roles[161].  BD’s consent for demolition of the Garley Building was given later on 2 April 2004[162].

Common Practice

68.I have already made my findings of fact on the terms of Wellgo’s engagement and the scope of the works carried out by him in the preceding section. I did not need any assistance from the experts, Dr James Lau and Professor Barnabas Chung, in making these findings.

69.The works undertaken by Wellgo, to be the IOGB’s representative for monitoring, inspecting and reporting to BD, and for requesting the extension of the various orders issued by BD, were unusual. David Chan said that, although he was an experienced AP in building maintenance[163], he had never acted as AP in this sort of situation where the damaged building was being monitored, and extensions of time were being sought from BD to delay the carrying out of building orders to repair the building, pending the entire demolition of the building[164]. I accept the opinion of Professor Chung that there was no common practice[165], particularly for this exceptional type of work, which was far removed from the normal case where an AP in charge of the building order would take steps to repair the building, which repair works might include partial demolition, with the aim that the building would be reoccupied.  I do not accept the opinion of Dr Lau that the work on monitoring merged with the work of demolition in the circumstances of the present unusual case, particularly as David Chan, who was appointed as AP for the Garley Building by IOGB, was not appointed by the subsequent purchaser, Worldfaith, as AP for demolition of the Garley Building[166].

70.Common practice is often deployed by way of defence to an action in negligence. For example, a defendant may plead that he acted in accordance with the common practice of his profession and, for that reason, the court should not find that he had departed from the reasonable standard of care that was to be expected from him.  Even if such a defence is established on the evidence, the court may still find for the plaintiff on the ground that the common practice that was adopted carried with it, or gave rise to, unreasonable risks.  In this case, however, Dr Lau’s opinion on common practice appears to be deployed to shape the scope of the duty of care on the part of David Chan acting as AP for the Garley Building. In the course of his evidence, Dr Lau said that that there was a moral duty on the part of a building professional who knew “something [was] dangerous, they [knew] that it [was] environmentally wrong to have [the] BTM [Cylinder] there without any servicing, any maintenance, they should let the owner know[167]”. The law of negligence is not based on moral duties but on legal duties and it is for the court to determine those legal duties. The court can usually do so without the assistance of expert evidence on the common practice adopted in a particular trade or profession. There may be cases, however, where the court needs the assistance of expert evidence.  The present case is not such a case.  In any event, I have already found that there was no “common practice” for the rather unusual work that David Chan was engaged to perform as AP for the Garley Building.

The Draft Code

71.JMK asserted that David Chan must comply with the Draft Code of Practice for Demolition of Buildings issued in February 1998 (“the Draft Code”)[168],  which was later reviewed and revised in December 2004 and renamed the “Code of Practice for Demolition of Buildings”[169].

72.It is accepted that Wellgo had removed some UBWs in compliance with building order no. DBC 1/K/96/C[170]. This was done because no extension of time could be obtained from BD in relation to removal of UBWs.

73.I also find that part of the floor slab of 3/F had been removed by Wellgo to facilitate the transport of debris.  This was demolition work to which, JMK contended, the Draft Code applied.

74.Wellgo contended that the Draft Code did not apply to such removal of UBWs since:

(1)  the building order was dated 5 December 1996, whereas the Draft Code was only first issued in February 1998[171]. This was confirmed by Professor Chung in his oral evidence;

(2)  although not expressly spelt out in the Draft Code as to whether it applied to removal of UBWs, the Draft Code was subsequently formalized[172] and in the formal Code, it is expressly stated that under “1.1 Scope” that “this Code is not intended to cover unauthorized building works”[173] ;  and

(3)  there was no evidence as to whether the demolition and removal of part of the floor slab of 3/F was done before or after February 1998.

75.Clause 1.1 of the formal Code stated:

“However, this Code is not intended to cover unauthorized building works and major civil engineering works, such as underpinning, excavation, highway or railway bridges and dams. As for removal of unauthorized building works, reference should be made to the ‘Guidelines for the Removal of Typical Unauthorized Building Works and General Maintenance of External Walls’ issued by the Buildings Department.”

76.Those Guidelines were issued in 2000[174]. I conclude, from my construction of the Draft Code and the formal Code that the Draft Code applied to UBWs.  The formal Code did not apply to UBWs because, by then, the Guidelines for the removal of UBWs had already been issued.  I also construe the Draft Code as covering all UBWs and other demolition works carried out after it was issued in February 1998, regardless of whether or not the building order covering such works was issued before February 1998.

77.However, I accept Wellgo’s submissions that the Draft Code must only be applicable to the task in question, so that, by way of example, the removal of a UBW on 1/F of the Building would not mandate a building survey and structural survey of the entire Building to be carried out, as required by §§2.1.1 and 2.1.2 of the Draft Code[175], which would have led to the discovery of hazardous materials from 2/F up to the 15/F.  Dr Lau agreed to this proposition in the course of his cross-examination[176].  The Draft Code would only require a building survey relevant to (i) the demolition of the UBWs specified in the building order (which did not include anything on the 3/F); and (ii) the demolition of the part of floor slab of the 3/F.  That would not include a survey of the BTM Bottle Room for hazardous materials.

David Chan’s responsibilities, as AP for the Garley Building, towards the BTM Cylinder

78.David Chan had formed the view that all the BTM gas that was inside the BTM Cylinder should have been fully discharged when the fire occurred in the Garley Building on 20 November 1996 and that, even if some of the gas had not been discharged from the BTM Cylinder during the fire, its presence inside the BTM Cylinder on the 3/F should not be considered as an “over storage” of dangerous goods[177].  The BTM Installation was an automatic installation: the smoke from the fire would activate the smoke detector which would trigger the release of the BTM gas from the BTM Cylinder[178].  However, there was no indicator on the BTM Cylinder showing how much gas was in it[179].

79.I accept David Chan’s evidence that the BTM cylinder could not be grouped under the description “tenants’ fixtures and fittings” and was best described as the remains of a fixed fire services installation[180]. He accepted that the BTM Cylinder was one of the items that had to be removed from the Garley Building eventually[181]. As noted in §63 above, by 15 September 2003, David Chan was aware that the Garley Building had to be demolished for redevelopment.  He acknowledged that the BTM Cylinder would need to be removed before the commencement of demolition works[182]. It was his evidence that, even if the BTM Cylinder was empty, a specialist contractor had to be engaged to handle and dispose of it[183].  He estimated the cost of removal to be about $5,000 to $6,000[184]. The estimate of the cost of removal works that Wellgo had sent to IOGB by letter dated 20 October 1999[185] included estimates for the removal of fire debris and the removal of tenants fixtures and fittings, which did not cover the cost of removing fire services installations and transformers and “other like things”[186].  The estimate of the cost of removal works also included an item called “Preliminaries and Contingency”[187] that would cover the cost of removing the BTM Cylinder and other similar things that may exist throughout the building[188].

80.His assessment that the gas inside the BTM Cylinder should have been discharged during the fire was based:

“A. … on primarily three things.

…

A. Number one, my site observation, …. The two is that the Buildings Department, the authority in fire safety had produced a plan identifying a BTM bottle room. Although he had not drawn in the BTM bottle, it should be aware of the presence of that bottle. And if that officer, who is a professional grade officer, think that the presence of this particular bottle is hazardous or posing a risk to building safety. I firmly believe he has no reservation to put this down as one of the inflection items. Point number two, the Fire Services Department had held a special meeting, after the small fire incident, which was discussed earlier on this morning. That various requests were made to myself and JMK for various fire safety measures. FSD is authority in fire safety. In particular, Fire Services installations. If the presence of this cylinder poses an imminent hazard for us, no doubt they will demand, in that building, in the presence of the incorporated owners, other departments, to demand such installations to be removed. So these are primarily the three factors which may need to come to my assessment that this is an empty bottle.

Q. I see. So all these are your assessments, no more, right? Sorry, all these are your consideration at that time.

A. At that time, yes.[189]”

81.In the course of his evidence in chief, David Chan referred to the 3/F plan provided by the BD showing the BTM Bottle Room[190]. He made an enlargement of that plan to show the area that was protected by the BTM installation[191] and he made a sketch depicting the BTM installation on which he drew a smoke detector and nozzles coming through the false ceiling from which the BTM gas would be discharged upon the smoke detector triggering the release of the BTM gas. He gave evidence that the area protected by the BTM installation only sustained smoke damage and not fire damage[192].  In the course of his cross examination, he gave evidence that one corner of the building that was not protected by the BTM installation suffered severe fire damage, as could be seen from the enlarged top photograph number 42 showing the top landing of internal staircase “A” on the 3/F[193].  Staircase “A” can be seen at the bottom right hand corner of the enlarged plan[194] above the notations “Nathan Road” and “G/F Lobby ... To Front Staircase”. On the other hand, the area covered by the BTM installation was not so blackened, as could be seen from enlarged photograph number 10 showing that part of the 3/F that was facing Pilkem Street[195].  David Chan stated that the condition within the BTM protected area was far better than the rest of the area, particularly along the side of the lift, and, based on that, he made the assessment that the BTM bottle had discharged all its gas thereby protecting the area from fire damage so that only smoke damage could be seen there[196].

82.Whilst I accept that the area in the vicinity of the front staircase, Staircase “A”, appears to be damaged by fire, there was no evidence adduced before me of how the fire spread on the 3/F and whether the fire actually spread from Staircase “A” to the other areas of 3/F and had stopped spreading at the boundary of the BTM Protected Area. Indeed, the enlarged photographs show that some areas outside the BTM Protected Area did not suffer from any fire damage or smoke damage[197].  On the other hand, certain parts of the BTM Protected Area appear to be damaged by fire: the beams on the ceiling within the BTM Protected Area appear to be far darker, dilapidated and spalled than the neighbouring parts not situated within such area[198]. There was no clear evidence before me of the boundaries of the fire damage caused on the 3/F.

83.The evidence that unfolded before me also made me doubt the accuracy of David Chan demarcation of the BTM Protected Area on the plan in Bundle CB at p. 461:

“Q. Now, did you see those four ceiling and also those nozzles where the BTM gas pipes were running?

A. Yes.

Q. Right. Now, so you are saying that it is based on your observation that you drew up the diagram or sketch at [CB463], am I correct?

…

A. Yes, that’s correct.

Q. So when you took over the building as AP in May 1997, you saw those false ceiling and the BTM pipes there with the nozzles, am I correct?

A. The false ceiling were gone.

Q. How about the BTM pipes?

A. Yes, they’re there.

Q. It’s still there. But they didn’t cover the whole area protected by BTM?

A. Basically covered the hatched area on [CB461].

Q. It covers, right?

A. Yes.

Q. Okay. So that means if you look at the ceiling, you will find those pipes there, right?

A. Yes.

Q. Okay. Now look at -- But did you arrange those pipes to be removed later?

A. I have not arranged those pipes to be removed, but it appears that the Pacific Link people had removed some of their valuable equipment.

Q. But did they remove those pipes?

A. I think they have disturbed some of those pipes. I cannot...

Q. Disturbed, but did they remove those?

A. I think they have removed some of those, but to what extent I cannot remember.

Q. Yes. But some remained, right?

A. Yes.

Q. According to what you said, right?

COURT: Mr Chan, why would they remove some of the pipes? What could -- what use could they make of...

A. I don’t know. I don’t know. Because that might be -- connect to some other things, because maybe they removed something which is installed next to that pipe.

COURT: Because the pipes would be of no use to them.

A. Exactly, yes. I agree.

Q. So would it be strange for...

A. Yes. Lots of strange things happened in this building.

Q. Right, okay, now, let me show you this picture before we left for -- we leave for lunch. Right, okay. Now, look at the blown-up drawing, page 719 of bundle C.

A. Yes.

Q. All right. I am talking about Pilkem Road side.

A. Yes.

COURT: Yes. Number 10 -- photograph number 10?

MR YEUNG: Yes, photograph number 10, yes.

Q. Right.

A. Yes.

Q. That is the area which were hatched for protection by BTM, right?

A. Yes, correct.

Q. Now, we see all false ceilings had gone, right?

A. Yes.

Q. But did you find any of the BTM pipes?

A. No.

Q. Right. In fact, according to the drawings which you -- or the photographs which you showed to us, in fact, there were no longer any BTM pipes at the ceiling. Am I correct?

A. All I can say is, you cannot see any BTM pipes at the ceiling.

Q. Yes. So that...

COURT: From the photos, but...

A. From the photos.

COURT: ...but when you were physically there, you saw some pipes.

A. Yes, yes.

Q. Are you sure? Now, we look at, for example, another blown-up drawing, bundle O, page 3605, the drawing number 39 to 40.

COURT: Yes, page...

MR YEUNG: My Lord, the blown-up photos 39 and 40. Page 3605.

COURT: Yes.

Q. Now, do you agree that that is the -- that shows the area of the hatched area?

COURT: 3605 photograph?

MR YEUNG: Sorry, 3605, my Lord.

COURT: Photo...

MR YEUNG: 39, 40 and 41.

COURT: 39...

MR YEUNG: 40 and 41.

COURT: ...40 and 41 shows the protected hatch areas.

MR YEUNG: Yes.

Q. Is there any BTM pipes in there?

A. There is no BTM pipes there.

Q. So do you know why BTM pipes were removed but not the BTM cylinder? They -- these two altogether formed the so-called BTM system.

A. I have no idea.

…

Q. MR Chan, I just...

A. Your Lordship.

COURT: Yes, Mr Chan.

A. Before counsel proceed with the questioning, I would like to, if allowable, amend one of the opinions -- one of the statements I have made this morning, and one observation.

COURT: Yes.

…

A. The second point is that talking about the removal of the BTM gas pipe, and I remember your Lordship had said that they don’t cost anything or they have no value.

COURT: Yes.

A. But in practice, they will be regarded as scrap metal by the workers, and they cost about, well, current market rate, $15 per kilogramme, so all those metal pipes, they are the extra money to the workers.  To us, it’s debris, it’s no use, but to the workers, it’s worth something.  So I guess that’s why when they remove the other things, whatever metal they can lay handily on, they will remove that together.  That’s my observation.[199]”

84.The gas pipes which were linked to the BTM Cylinder above the false ceiling and which were present initially, had been entirely removed during the period when David Chan was AP.  I am not satisfied that he has a good recollection of the extent of the gas pipes that would be fed by the BTM gas upon the occurrence of a fire.  Whilst the top photograph in Bundle C on p.721 showed a smoke detector just outside the BTM Bottle Room, the other smoke detectors had also been removed, and David Chan was also not in a position to say how many smoke detectors had been installed by Pacific Link.

85.David Chan agreed that there was no discussion about the BTM Cylinder with the officers of BD[200].  As noted in §48 above, the BTM Cylinder and the BTM Installation were not specifically mentioned by the BD and the FSD during the meeting on 4 November 1997.  It was shown on the logbook records for the period between July 2002 and December 2003 that the BD only visited once on 27 October 2003[201].  Neither was there any discussion about the BTM Cylinder with the officers of the FSD[202]. David Chan confirmed that he did not accompany the FSD officers during their visits[203]. Indeed, David Chan confirmed that he did not know what had or had not been inspected by BD and the FSD[204]. In the light of the above, David Chan could not be in a position to say whether BD or FSD had actually considered the hazards, if any, posed by the BTM Cylinder.

86.The critical evidence from David Chan is his admission that he had a duty,  as AP for the Garley Building, to report obvious damage[205]. I have no difficulty finding that he was under a duty to take reasonable care to protect persons entering the Garley Building from obvious danger during the time that he was AP for the Garley Building. David Chan also admitted that if the BTM Cylinder still consisted of compressed gas, he would classify it as “dangerous goods”[206] that needed to be treated by specialist contractors: indeed, even an empty cylinder had to be handled by specialist contractors[207].  Had David Chan assessed the BTM Cylinder not to be empty, he would not have left it to be unattended for 5 years[208].  He accepted that his assessment that the BTM Cylinder was empty or nearly empty was proved to be wrong by the occurrence of the accident that injured the plaintiff on 28 June 2004[209].

87.In the light of this evidence, if a visitor to the 3/F of the Garley Building had been injured by an exploding BTM Cylinder during the period of time that David Chan was AP for the Garley Building, such as, for example, Thomas Choy who visited the 3/F with David Chan on 23 August 2003[210],  the liability of David Chan to the injured visitor would turn on the question of whether or not he was in breach of his duty of care by assessing the BTM Cylinder to be empty or nearly empty without assistance from specialist contractors: there can be no dispute that David Chan was under a duty to take reasonable care for the safety of that injured visitor[211].  In short, the duty to take reasonable care to protect persons entering the Garley Building from obvious danger included a duty to take reasonable steps to ascertain whether or not potentially dangerous structures or objects were dangerous[212].

Did the duty of care of David Chan to take reasonable care to protect persons entering the Garley Building from obvious danger extend to cover the plaintiff?

88.The critical question in this case is whether or not the duty of care of on the part of David Chan, as AP for the Garley Building, to take reasonable care to protect persons entering the Garley Building from obvious danger, extended to cover the plaintiff. Was it foreseeable that harm would be caused to the plaintiff by David Chan’s acts or omissions? Was there a proximity of relationship between the plaintiff and David Chan? Was it fair, just and reasonable to hold that a duty of care was owed by David Chan to the plaintiff?

89.If such a duty was imposed on David Chan, it could have been discharged by David Chan engaging specialist contractors to remove the BTM Cylinder at a cost of about $5,000 to $6,000 or by advising IOGB of the need to engage specialist contractors to remove the BTM Cylinder.

(i) Wellgo’s Terms of Engagement

90.The first matter that the court should have regard to, when considering whether a duty of care arises on the part of a professional who is retained under a contract, are the terms of his engagement:

“Where the professionals … are contractually retained, the Court must initially determine what the scope of the contractual duties and services were. It is in the context of what the professional person is contractually engaged to do that the scope of the duty to warn and the circumstances in which it may in practice arise should be determined” per Arkenhead J. in Goldswain v Beltec Limited (t/a BCS Consulting)[213].”

91.Wellgo was appointed by IOGB.  I have already made my findings of fact on the terms of Wellgo’s engagement and the scope of the works carried out by him in §§46 to 67 above.  Wellgo’s engagement did not involve the demolition of the entire building.  IOGB never intended to undertake the demolition of the Garley Building themselves.  All along, the intention of the IOGB was to obtain extensions of time from BD to comply with the building orders until such time as the Garley Building could be sold to a new owner. This was achieved by appointing David Chan and Joseph Chow to monitor the building and perform remedial works to the satisfaction of BD.  The Garley Building was then sold to Worldfaith who decided to demolish and redevelop the Building.  Wellgo was never engaged by Worldfaith. As anticipated by David Chan and Wellgo, a completely different demolition team (consisting of professional persons, the RSE and the AP for demolition, as well as the specialist demolition contractor) was appointed by Worldfaith.  On 29 December 2003, Worldfaith handed over the Garley Building to the demolition team[214].  Wellgo was never a part of the demolition team. David Chan ceased to be the AP for Garley Building on 31 December 2003[215].  His role as AP ceased and he left the Garley Building on that day. The consent for the commencement of demolition works was only given on 2 April 2004[216].  It was not disputed that David Chan’s area of expertise was in building maintenance and he had never been involved in demolition work.

92.The accident happened during the demolition stage.  It happened because the BTM Cylinder had not been removed prior to actual demolition.  By then, Wellgo’s contractual engagement had come to an end and David Chan had already left the site for some 6 to 7 months.  It cannot be disputed that the demolition team (as supervised by experienced professionals) were under a duty to remove the BTM Cylinder.  They were appointed to demolish the building, which must include removing everything left in the Garley Building so that the concrete structure of the building could be taken down floor by floor. They were under a duty to protect the workers who were performing the demolition work from harm.  The settlements YSK2, JMK and Daniel Kwan reached with the plaintiff are proof enough of their breaches of the duties they owed to him.

93.It is pertinent to consider the observations of Pearson LJ as he then was in Clayton v Woodman & Son (Builders) Ltd.[217]:

“Secondly, it might be suggested that the fault of the architect was in not advising the builder, through his existing representative on the site, the plaintiff, as to how the work required by the specification should be executed. If he had done so, the architect would have been stepping out of his own province and into the province of the builder. It is not right to require anyone to do that, and it is not in the interests of the builder's workpeople that there should be a confusion of functions as between the builder on the one hand and the architect on the other. I would hold that it was plainly not the architect’s duty to do that. It will be observed that he had at any rate no pre-existing duty to do that. He was not asked to give any such advice and he did not profess to give any such advice, and I cannot see that it can be regarded as fault on his part that he did not step out of his province and advise the builder in what manner the builder should carry out his own building operations.

Thirdly, it might be suggested that the architect should have given a warning to the builder’s workman, the plaintiff, as to how the work should be done or that there was some risk involved in doing it in a particular way. But there, also, it seems to me that that would have been stepping out of his own province and entering that of the builder. He was entitled to assume that the work would be carried out properly, that the builder knew his own business and would properly perform his own operations.

…

… It is not shown by the evidence that the manner of work was necessarily unsafe, and in my view it would be wrong to impose on the architect in this case any extraneous duty which would involve a completely additional task for him and would involve interference by him in the sphere of the builder.  That might result in confusion of functions and in the function of the builder not being performed by him.”

94.Further as Judge Stabb QC also stated in Oldschool v Gleeson (Construction) Ltd.[218]:

“… it seems abundantly plain that the duty of care of an architect or of a consulting engineer in no way extends into the area of how the work is carried out. Not only has he no duty to instruct the builder how to do the work or what safety precautions to take but he has no right to do so, nor is he under any duty to the builder to detect faults during the progress of the work. The architect, in that respect, may be in breach of his duty to his client, the building owner, but this does not excuse the builder for faulty work. I take the view that the duty of care which an architect or a consulting engineer owes to a third party is limited by the assumption that the contractor who creates the work acts at all material times as a competent contractor. The contractor cannot seek to pass blame for incompetent work on to the consulting engineer on the grounds that he failed to prevent it…”

95.These authorities would be relevant and determinative if it had been asserted that David Chan or Wellgo had a duty to advise the demolition team how the work ought to be done or a duty to ensure that the demolition team acted competently.

(ii) Duty to protect from obvious danger?

96.The pressing question in this case is whether a duty of care ought to be imposed on David Chan to protect from obvious danger persons, like the plaintiff, who were likely to enter the Garley Building to carry out the demolition work after Wellgo ceased to be engaged. As stated above, if such a duty were to be imposed it could be discharged by David Chan, during the period of Wellgo’s engagement by IOGB, by engaging specialist contractors to remove the BTM Cylinder at a cost of about $5,000 to $6,000 or by advising IOGB of the need to engage specialist contractors to remove the BTM Cylinder, prior to Wellgo’s completion of its contractual engagement and David Chan’s departure from the Garley Building.

97.The English Court of Appeal case of Clay v. AJ Crump & Sons & Others [1964] 1 QB 533 is the leading authority on point.  An architect, one, Mr Young, employed by AJ Crump & Sons, was responsible for inspection and planning of demolition of certain existing buildings with demolition contractors.  It was expected that, after demolition, the site would be redeveloped by another building contractor.  A party wall next to the site was to be demolished, according to the plan, before any building work was commenced but the owner requested that the wall be retained for security reasons if “it was safe” to do so.  It was not inspected by the architect who visited the site. The architect merely relied on the opinion of the demolition contractors’ foreman that the wall was safe to remain. As a result, the wall was left standing in a dangerous condition. After the architect and the demolition contractor completed their works and left the site on 10 April 1958, the subsequent building contractors who came to the site also failed to appraise the dangerous condition of the wall and also did no work to reinforce its support.  Some 2 months later, the wall eventually collapsed and fell on the plaintiff, Mr Clay, an employee of the building contractor, who was seriously injured as a result. In his appeal against liability, the architect argued that he only owed duties contractually towards the owner of the old buildings, that the examination by the building contractors absolved the architect from any duty he was under, and that the damage sustained was not reasonably foreseeable.

98.Ormerod LJ, Upjohn LJ and Davies LJ dismissed the appeal and held that the plaintiff was a person who was closely and directly affected by the acts of the architect and would fall within the class of people to whom a duty of care was owed.  This was because the architect’s duty with his employer was to see that the works as instructed to be done were to be conducted safely.  It was within the reasonable contemplation of the architect that builders would come into the site to erect buildings. In such regard, the injured worker of the building contractor was “properly described as one of the class of closest neighbours to the architect and the demolition contractors”[219].  They also held that the architect was clearly in breach of his duty by assuming that the wall was safe from the advice given by a foreman without inspecting the wall himself and that such breach clearly caused the plaintiff’s injuries[220].  They held that there was no difference between a case where the architect creates the dangerous structure or permits its continuance because there is a duty not to expose to unnecessary danger anyone who it is reasonably foreseeable might be so exposed[221].  Further, they held that the mere fact that the demolition contractors and building contractors were negligent did not absolve the architect’s liability[222].

99.Clay v. AJ Crump & Sons & Others was considered in Perrett v. Collins[223],  where the English Court of Appeal held that an inspector, who certified the air-worthiness of an aircraft under the regulations, and an amateur flying association owed a duty of care to a passenger flying in the aircraft which crashed and injured him. They rejected the submission that the defendants did not owe a duty of care to the injured passenger. Hobhouse LJ said[224]:

“… It has never been a requirement of the law of the tort of negligence that there be a particular antecedent relationship between the defendant and the plaintiff other than one that the plaintiff belongs to a class which the defendant contemplates or should contemplate would be affected by his conduct. Nor has it been a requirement that the defendant should inflict the injury upon the claimant.

…

In cases of personal injury, it suffices that the activity of the defendant has given rise to the situation which has caused the injury to the plaintiff. Where the defendant is involved in an activity which, if he is not careful, will create a foreseeable risk of personal injury to others, the defendant owes a duty of care to those others to act reasonably having regard to the existence of that risk. The limiting factors are the concepts of foreseeability and reasonableness.

…

Where the plaintiff belongs to a class which either is or ought to be within the contemplation of the defendant and the defendant by reason of his involvement in an activity which gives him a measure of control over and responsibility for a situation which, if dangerous, will be liable to injure the plaintiff, the defendant is liable if as a result of his unreasonable lack of care he causes a situation to exist which does in fact cause the plaintiff injury.

Once this proximity exists, it ceases to be material what form the unreasonable conduct takes. The distinction between negligent misstatement and other forms of conduct ceases to be legally relevant, although it may have a factual relevance to foresight or causation.

…

But where on general principle in the context of a foreseeable risk of a personal injury, a duty of care exists; lack of directness, unless it destroys the causative link, provides the defendant with no answer.”

100.In the course of the hearing I had asked the parties to address me on the decision of the English Court of Appeal in Harrison v. Technical Sign Co. Ltd[225].  The case concerned a fascia, or shop’s sign, of a shop owned by a tenant known as Maison Blanc that became detached from the building, fell onto the ground and injured some pedestrians in June 2007, The pedestrians claimed against Maison Blanc and a surveying firm known as Cluttons.  At first instance, Maison Blanc admitted liability to the claimants, but sought contribution and or indemnity from Cluttons on the grounds that Cluttons owed a duty of care to the pedestrians[226].  Cluttons was not engaged by Maison Blanc. Instead, Cluttons was appointed by the owners of the building to supervise some building works carried out above the shopfront by the owners. These works involved the erection of scaffoldings near the awning of the shop.  In March 2007, the awning of the shop did not function.  Maison Blanc suspected that the malfunctioning of the awning was due to the dismantling of the scaffoldings by the owners. With a view to making a claim against the owners for damages, Maison Blanc called up Cluttons, as the representative of the owners, to complain about the matter and requested Cluttons to “look into it”[227]. Cluttons sent an employee, one Mr Hunt, to handle Maison Blanc’s complaint by inspecting the awning’s functions. In doing so, Mr. Hunt took a number of photographs[228].  Later, Mr Hunt sent an e-mail back to Maison Blanc to explain that the problem with the awning had nothing to do with the scaffolding and that the awning’s problem was with its own retracting mechanism.

101.The trial judge found in favour of Maison Blanc in its contribution claim against Cluttons.  On appeal, the Court of Appeal held that the question of whether Cluttons owed a duty of care to the public could not be answered without taking into account the circumstances in which Cluttons had become involved. The judge’s findings betrayed two errors in his reasoning. The first related to the role in which Cluttons were acting. The judge appeared to have approached the matter on the assumption that Cluttons had been instructed to inspect the shopfront on behalf of Maison Blanc.  However, that was not the case.  Cluttons had visited the shop for the limited purpose of investigating a complaint that the awning had been damaged by the landlord’s workmen, and that was the context in which the relationship between Cluttons and members of the public fell to be determined.

102.The Court of Appeal also held that the judge had also erred in placing too much emphasis on foreseeability of harm, almost to the point of treating it as sufficient to create a relationship of proximity between Cluttons and passers-by.  The Court of Appeal referred to the judgment of Hobhouse LJ in Perrett v. Collins and held that foreseeability alone was not enough. A relationship of proximity or “neighbourhood” was also required.  If Cluttons had noticed a defect in the shopfront as they passed the shop, but had said nothing to Maison Blanc, they would not have been in breach of duty to any member of the public who was subsequently injured as a result of that defect, as no neighbour relationship would have existed between them. Moore-Bick L.J., with whose judgment the other members of the court agreed, went to say:

“… even where physical injury is concerned, the existence of a duty of care requires a relationship of proximity or “neighbourhood”….  If, however, Cluttons had been asked by Maison Blanc to inspect the awning on its behalf to ensure that it did not pose a danger to passers-by, a sufficient degree of proximity would probably have existed, because the very purpose of the inspection would have been to ensure the safety of the public. In those circumstances it could be said that by accepting the instructions Cluttons had assumed some responsibility for the safety of those using the highway (or, to paraphrase Hobhouse L.J (in Perrett v. Collins) that he had become involved in an activity which gave him a measure of control over, and responsibility for, the safety of passers-by). As it was, however, Cluttons’ involvement had nothing to do with the safety of passers-by; their role was simply to see whether the shop front had sustained damage for which their clients might be liable. In those circumstances I do not think that there was a sufficient degree of proximity between them and the claimants to give rise to a duty of care on their part.”[229] [Emphasis added]

103.With regard to whether a duty was owed to Maison Blanc:

“The judge … accepted that he should apply a synthesis of the three-fold test, the assumption of responsibility test and the incremental test, as proposed by Sir Brian Neill in Bank of Credit and Commerce International Overseas Ltd. v. Price Waterhouse (No.2) [1988] P.N.L.R. 564. He found that a reasonable surveyor would have appreciated that, if he failed to carry out a competent inspection of the shopfront, Maison Blanc might suffer economic loss in the form of liability to any members of the public injured by its collapse. He then held that there was sufficient proximity between Cluttons and Maison Blanc to give rise to a duty of care, because Cluttons knew the premises well, because Maison Blanc had been in touch with them during the progress of the works to the upper floors and because Maison Blanc and asked them to investigate the problem and they agreed to do so. He also relied on the fact that Maison Blanc would rely on what Cluttons told it and that it was reasonable for it to do so; and on the fact that in his view Cluttons had assumed the responsibility to Maison blanc to carry out an inspection with reasonable skill and care.”[230]

104.The Court of Appeal held that the judge’s finding that Cluttons had undertaken a responsibility to Maison Blanc to inspect the shopfront and report their findings, and, in so doing, to act with reasonable care and skill, lay at the heart of his analysis.  On that basis, Maison Blanc would in effect become a client of Cluttons, at least for that limited purpose.  However, the relationship between Cluttons and Maison Blanc was essentially adversarial in nature.  Cluttons were approached as agents of the landlord rather than as surveyors, for Maison Blanc to make a claim in respect of damage that it thought had been caused by the landlord’s workmen.  Cluttons’ concern was with the awning. There was no evidence to suggest that they had been asked to advise Maison Blanc in relation to the condition of the shopfront in general, or that a relationship of professional adviser and client had come into existence. The judge’s finding that Maison Blanc would have relied on what Cluttons reported following the inspection, and that it was reasonable for Maison Blanc to do so, was not supported by the evidence. The relationship continued to be an adversarial one, with Maison Blanc pressing Cluttons as the landlord’s agent to ensure that the awning problem was resolved. The nature of the relationship was inconsistent with an assumption of responsibility by Cluttons.  The judge had therefore also erred in holding that Cluttons owed a duty of care to Maison Blanc. As Cluttons did not owe a duty of care to Harrison or Maison Blanc, the claim for a contribution had to fail[231].

(iii) Did Wellgo or David Chan owe a duty to YSK2 or JMK?

105.If I was wrong to rule, as I did in §33 above, that the claims, based on a duty of care on the part of Wellgo to safeguard either YSK2 or JMK from economic loss caused by negligence on the part of Wellgo and based on an assumption of responsibility by Wellgo, were not properly pleaded,  I would still have dismissed those claims on the grounds that there was an insufficient degree of proximity between Wellgo, on the one part, and YSK2 on the other part; and between Wellgo on the one part, and JMK on the other part, to give rise to a duty of care on the part of Wellgo towards YSK2 or towards JMK; and that there was no evidence to suggest that Wellgo had been asked to advise YSK2 or JMK in relation to the condition of the Garley Building and of its contents so that a relationship of professional adviser and client had come into existence. Their reliance, if any, on the MIRs cannot be equated with an assumption of responsibility on the part of Wellgo towards them.  Wellgo had never been asked either by YSK2 or by JMK to do anything for them.  Save for the brief handover meeting on 29 December 2003, there was no interaction whatsoever between Wellgo YSK2 and JMK.  They were simply different parties who worked at the same site at different phases.

106.Counsel for Wellgo relied on Goldswain v BeltecLtd (t/a BCS Consulting)[232] to submit that Wellgo had no duty to warn of risks outside its sphere of engagement[233]. In Goldswain v BeltecLtd (t/a BCS Consulting), the court held that a firm of engineers was not liable for the collapse of a building following construction work to convert the cellar into living accommodation by lowering the floor and underpinning the outer walls.  Competent engineers were entitled to expect that builders would understand and act upon the construction method indicated in the design. There was nothing in the design documentation produced by the engineers which would prevent the contractor from doing its work in a reasonably safe way.   On the question of the duty to warn, Akenhead J stated:

“47. Drawing from the authorities, I can reach the following conclusions in relation to a duty to warn:

(a) Where the professionals (engineers in this case) are contractually retained, the Court must initially determine what the scope of the contractual duties and services were. It is in the context of what the professional person is contractually engaged to do that the scope of the duty to warn and the circumstances in which it may in practice arise should be determined.

(b) It will, almost invariably, be incumbent upon the professional to exercise reasonable care and skill. That duty must be looked at in the context of what the professional person is engaged to do. The duty to warn is no more than an aspect of the duty of a professional to act with the skill and care of a reasonably competent person in that profession.

(c) Whether, when and to what extent the duty will arise will depend on all the circumstances.

(d) The duty to warn will often arise when there is an obvious and significant danger either to life and limb or to property. It can arise however when a careful professional ought to have known of such danger, having regard to all the facts and circumstances.

(e) In considering a case where it is alleged that the careful professional ought to have known of danger, the Court will be unlikely to find liability merely because at the time that the professional sees what is happening there was only a possibility in future of some danger…; any duty to warn may well not be engaged if all there is is a possibility that the contractor in question may in future not do the works properly.” [Emphasis added]

I also find that there was no duty on the part of Wellgo to warn the demolition team.  The editors of Jackson and Powell on Professional Liability have noted, after referring to Goldswain v BeltecLtd (t/a BCS Consulting)[234], that “[t]he cases in this area all concern a professional’s duty to warn as part of his implied contractual duty of care to his client; it is likely that a duty to warn a third party will rarely be found.”[235]  In this case, the third party to Wellgo was YSK2 and JMK.

(iv) Reasonable Foresight and Proximity

107.Was it foreseeable that harm would be caused to the plaintiff by David Chan’s acts or omissions? Was there a proximity of relationship between the plaintiff and David Chan?

108.David Chan admitted that had he assessed the BTM Cylinder not to be empty, he would not have left it to be unattended for 5 years[236]. Clearly, the BTM Cylinder which was full or nearly full of gas was an obvious danger to any visitor to the Garley Building during David Chan’s watch.  The BTM Cylinder which was full or nearly full of gas would be even more dangerous to demolition workers carrying out the work of demolishing the building if it continued to be left unattended on the 3/F of the Garley Building.  It was reasonably foreseeable that demolition workers carrying out the work of demolishing the building would be endangered by the BTM Cylinder on the 3/F if it was full or nearly full of gas.  I found in §§44 and 45 above that the workers of YSK2 had moved the BTM Cylinder and allowed demolition debris to be stacked on top of it, which probably disturbed the valve assembly and contributed to the subsequent explosion.  This finding does not detract from my finding that it was reasonably foreseeable that demolition workers carrying out the work of demolishing the building would be endangered by the BTM Cylinder if it was full or nearly full of gas and remained on the site during those works.  The test of reasonable foreseeability, in the context of determining whether or not a duty of care exists, does not require foresight of the precise sequence of events that results in damage[237].

109.I deal below with the question whether it was reasonably foreseeable that Daniel Kwan,  JMK and YSK2 would negligently fail to safely remove or to take steps to safely remove the BTM Cylinder from the 3/F of the Garley Building so that it would continue to remain a danger to demolition workers, like the plaintiff, carrying out the work of demolishing the building.

110.It was within the reasonable contemplation of David Chan that demolition contractors and their employees, including the plaintiff, would enter the Garley Building in order to carry out the demolition of the entire building. Whilst the injured worker of the building contractor was “properly described as one of the class of closest neighbours to the architect and the demolition contractors” in Clay v. AJ Crump & Sons & Others, and the injured plaintiff in the present case was more removed from David Chan, the plaintiff was sufficiently proximate to David Chan for a duty of care to arise in the present case.  The proximity of the plaintiff to JMK and to Daniel Kwan was similar to the proximity of the injured worker in Clay v. AJ Crump & Sons & Others to the architect and the demolition contractors, and the proximity of the plaintiff to David Chan was one step further removed.  The injured worker in Clay v. AJ Crump & Sons & Others was injured 2 months after the architect and the demolition contractors left the building site. The plaintiff in the present case was injured some 6 months after David Chan handed over the Garley Building.  Nevertheless, in my judgment, there was sufficient proximity between the plaintiff and David Chan for the duty of care to arise in the present case, provided, of course, that the fair, just and reasonable element of the 3 part test is satisfied.

111.I have already found that it was reasonably foreseeable that demolition workers carrying out the work of demolishing the building would be endangered by the BTM Cylinder if it was full or nearly full of gas.  The question whether it was reasonably foreseeable that Daniel Kwan, JMK and YSK2 would negligently fail to safely remove or to take steps to safely remove the BTM Cylinder from the 3/F of the Garley Building so that it would continue to remain a danger to demolition workers, like the plaintiff, carrying out the work of demolishing the building merges with the question whether it is fair, just and reasonable to impose a duty of care on the part of David Chan, as the following cases demonstrate.

112.Baxall Securities Ltd. v Sheard Walshaw Partnership[238] concerned an appeal by Sheard Walshaw Partnership (“SWP”), a firm of architects, who appealed against a decision that they were liable for the flood damage suffered by Baxall Securities Ltd. (“Baxall”),  the occupiers of premises designed by SWP, which was consequent upon the defective design of a valley roof gutter.  Experts agreed that the gutter's lack of overflows was a fundamental defect and that the design criteria adopted in relation to anticipated rainfall intensity were also deficient.  There was evidence from surveyors’ and engineers’ reports that Baxall had been alerted to the existence of an unresolved problem having caused previous flood damage, although the absence of overflows had not been noticed. Baxall claimed that the gutter had two latent defects, the lack of overflows and a flawed design. SWP claimed that there was only one defect, the lack of overflows, which was a patent defect for which they were not liable.

113.The English Court of Appeal allowed the appeal, holding that the absence of overflows was a patent defect which should have been discovered by Baxall’s surveyors had they exercised reasonable care, and that, had the defect been discovered and remedial measures taken, the flood damage would not have occurred.  The absence of overflows was the sole effective cause of the flood and it was not possible to say that the under-design of the gutter, which it was accepted could not reasonably have been discovered by the surveyors, was an additional contributory cause.  There had therefore been a break in the chain of causation between the architect’s error in design and the damage caused.

114.David Steel J. delivered the main judgment, with which Brooke and Hale L.JJ agreed. He said:

“53. In summary, I would put the matter in this way. Where, in the normal course of events, a surveyor would be engaged in a survey of a building for a purchaser, and, with the exercise of due diligence, that surveyor would have discovered a defect, that defect is patent whether or not a surveyor is in fact engaged and, if engaged, whether or not the surveyor performs his task competently. It follows that in my judgment, the judge was right to conclude as follows:

“108. In the present case, the precise defect had not been discovered before the floods, but there had been at least one previous flood evidenced by markings on the floor in the building. In my opinion, the duty of the defendants to the claimants must depend on the question, ‘Was there a reasonable opportunity of inspection of the drainage system and discovering the defects before the floods?’ If the claimants had a reasonable opportunity of inspecting the drainage system and discovering the defects before they suffered damage, it would not be fair just or reasonable to hold the defendants liable for that damage nor would it be right to say that there was a proximate relationship between the claimants and the defendant.

109. There was a reasonable opportunity of inspecting the building before the claimants took a lease. It would be normal procedure for any incoming tenant to have the building inspected by the surveyor, and that is what they did. Although the claimants received warnings from both the surveyors and from Mr Meiklejohn of a danger, they were not told what was the precise problem. The surveyors could, and in my view should, have told the claimants that there were no overflows, and that overflows should be provided. The cost of overflows was very small and if the claimants had been advised to install them then I cannot think that they would have failed to do so.

110. If Lambert Smith Hampton had been more assiduous in the performance of their duties, the claimants would have been expressly warned of the absence of overflows and the floods would not have occurred. To what extent is the claimants' claim affected by the acts of their professional advisers? Are they entitled to say, as they might in response to a defence of contributory negligence, that they took skilled advice and are entitled to rely on that advice? I do not think that that is the right approach.

I do not think that it is fair just or reasonable that the extent of the liability of the defendants should depend on the assiduity of the surveyors instructed by the claimants. The claimants had the opportunity to discover the absence of overflows by reasonable inspection by professional advisers who might reasonably be expected to be instructed: whether that reasonable opportunity in fact revealed the defect is irrelevant. Because there was a reasonable opportunity to inspect, the defendants were not in a proximate relationship to the claimants so far as concerns defects which could have been discovered by that inspection, namely, the absence of overflows. But I repeat my previous finding that neither the claimants nor their surveyors could reasonably be expected to have discovered the underdesign of the drainage system.”

54. In my judgment the judge's analysis is correct. Actual knowledge of the defect, or alternatively a reasonable opportunity for inspection that would unearth the defect, will usually negative the duty of care or at least break the chain of causation unless (as is not suggested in the present case) it is reasonable for the claimant not to remove the danger posed by the defect and to run the risk of injury: see Targett v. Torfaen BC[1992] 3 All E.R. 27 per Sir Donald Nicholls V-C at p. 37.” [Emphasis added]

115.However, the English Court of Appeal in Pearson Education Limited v Charter Partnership Limited[239]did not agree with the decision in Baxall Securities Ltd. v. Sheard Walshaw Partnership when they held that Charter Parnership Ltd. (“CPL”), a firm of architects, were liable to the claimant lessee of a warehouse in circumstances where the architects’ negligent design of the rainwater drainage system had led to a flood that caused the claimant substantial financial loss. They held that an earlier flood, of which the claimant was not aware, was not enough to place the claimant outside the range of any duty of care owed to it by the architects and it did not break the chain of causation between the architects’ want of care and the damage caused. Lord Phillips CJ, giving the judgment of the Court stated:

“The material facts in Baxall can be summarised as follows:

i) The claimants could ‘reasonably be expected’ to instruct surveyors to inspect the drainage system.

ii) The claimants did instruct surveyors to inspect the drainage system.

iii) Had the surveyors exercised reasonable skill and care they would have discovered that the system was defective in that it lacked overflows.

David Steel J provided two explanations for holding that architects were not liable in a case such as Baxall. The first was that the duty of care was negatived. The second was that the chain of causation was broken. The decision in Baxall supports the following two principles, either of which can explain the result in that case:

i) Where it is reasonable to expect that an occupier will inspect a property before entering into occupation, no duty of care will be owed in respect of any defect that such an inspection should disclose.

ii) Where an occupier could reasonably have been expected in his own interests to carry out an inspection that would have revealed the defect, failure to carry out such an inspection, or to carry it out with reasonable skill and care, will break the chain of causation.

Neither principle seems to us to be wholly satisfactory. The first principle can perhaps be justified on the basis that if a subsequent inspection is anticipated, it will not be reasonably foreseeable that any defect will go undetected. But if an architect who has the primary responsibility for producing a safe design produces a defective design, it is not obviously fair, just and reasonable that he should be absolved from any liability in tort in respect of its consequences on the ground that another professional could reasonably be expected to discover his shortcoming.

So far as the second principle is concerned, it is not obvious why a failure of a person, put at risk by a defective design, to take due care for his own safety or that of his property should break the chain of causation, rather than amount to contributory negligence.

…

It was reasonably foreseeable that, if CPL caused an inadequate drainage system to be installed in the warehouse, owners of property within the warehouse might suffer flooding damage to their property. The test of foreseeability in the context of duty of care does not require foresight of the precise sequence of events that results in damage: Hughes v Lord Advocate[1963] AC 837 .

So far as the second principle is concerned, [the claimants] neither knew nor should have known of the flood, so that there was no reason why they should carry out any investigation of the adequacy of the rainwater system.

The alternative way that Mr Dennys put his case was to argue that, once Pick Everard discovered the defect, it ceased to be latent and the chain of causation was broken. We can see no basis of principle or authority why the fact that a third party becomes aware of a latent defect should be deemed to make the defect patent to others who neither know, nor ought to know, of the discovery.

There are a number of authorities that give some assistance in analysing the significance in the law of negligence of the possibility of intermediate examination of a dangerous chattel or building. In Clay v Crump[1964] 1 QB 533…

At first instance and on appeal the architect, the demolition contractors, and the building contractors were all held jointly liable to the plaintiff. The significance of the case for present purposes is that the architect's assertion that he could reasonably expect the defect to have been discovered by a subsequent inspection was held to be no answer to the duty of care that he owed to the plaintiff. Ormerod LJ held at p. 559:

“It may be that there was negligence in some degree on the part of both of the demolition contractors and the builders. If there was such negligence, it may be that it was a contributory cause of the accident. It cannot, however, in my judgment, absolve the architect from a share in the blame. To hold otherwise would be to hold that an architect, or indeed anyone in a similar position, could behave negligently by delegating to others duties he was under an obligation to perform and escape liability by the plea that the injuries caused were caused by negligence of that other person and not of himself. I do not accept that as being the true position in law and I am satisfied that it is not the law as laid down by Lord Atkin in Donoghue v Stevenson or by the judgments in any of the other cases to which we have been referred.”

The other members of the court gave judgment to similar effect.

The facts of Clay v Crump differ from those of the present case in that in that case the architect's negligence was not in respect of a defect in design and the consequence of his negligence was personal injury rather than damage to property. We cannot see, however, why the manner in which the principles of both foreseeability and remoteness were applied to the possibility of intermediate inspection in that case should not apply equally in a case such as Baxall or the present case.

May J. considered the effect of the possibility of discovering a defect by an intervening examination in Nitrigin Eireann v Inco Alloys Ltd [1992] 1 WLR 498 at 506. He was dealing with pipes that were defective because, so it was alleged, their manufacturers had been negligent. The pipes cracked in 1983, but the plaintiffs failed to ascertain the cause of the cracking. They subsequently ruptured, causing the damage to the plaintiff's property that gave rise to the claim. May J said:

“The question which is begged by this analysis and which needs to be addressed is what the position would be if the plaintiffs ought reasonably to have diagnosed the cause of the cracking in 1983. Would that affect the accrual of a cause of action in negligence? In my judgment it would not. The fact of sufficient physical damage to sustain the plaintiffs' cause of action would remain, but the first defendants could argue on appropriate facts that the plaintiffs' recovery should be reduced or extinguished by the plaintiffs' contributory negligence.”

This approach is supported by the analysis of the High Court of Australia in Voli v Inglewood Shire Council (1962–3) 110 CLR 74. The appellant was injured by the collapse of the floor of a public building. The architect had negligently specified inadequate floor joists. The Council, whose building it was, approved the plans albeit the size of the floor joists was less than required by its own by-laws. The architect argued that he was under no liability because the defect in his specification ought to have been discovered by the subsequent inspection of his plans by the Council. This defence succeeded at first instance, but not on appeal. Giving the leading judgment, with which the other members of the court agreed, Windeyer J held at p. 87:

“There is, of course, an obvious difference between making or supplying a thing to be examined, tested or treated before use, and making or supplying a thing to be used without more ado. But, when harm ensues, the problem for a court is whether the proximate cause of it was the negligence of a person who was to examine, test, or treat it, or the combined negligence of both persons. In some cases, the failure of the person who was to make the test to do so properly, whether he was himself the contemplated user or a third person, may supersede the initial liability of the manufacturer or supplier of the defective article. But, if separate and independent acts or omissions of several persons have directly contributed to cause an injury, the first wrongdoer does not necessarily escape liability by proving that, though he was to blame, the injury would not have occurred but for the later negligence of another person.”

Finally we would draw attention to the comments of Lord Lowry CJ on the development of the law in relation to intermediate inspection since the decision in Donoghue v Stevenson in the case of McIlveen v Charlesworth Developments [1982] NI 216. The appellant had been injured when a push- chair collapsed as a result of a defect in its manufacture. At first instance her claim had been withdrawn from the jury on the ground that, as the push-chair would not be used without the likelihood of inspection that would reveal the defect, the manufacturers owed the appellant no duty of care. The Court of Appeal reversed this decision. At p. 221 Lord Lowry said this about the duty of care in negligence:

“That duty does not cease to exist because there is a possibility or probability of inspection by an intermediary or by the neighbour himself before the article is taken into use. If an inspection is certain and will reveal the defect and the person making the inspection will appreciate the danger, then no doubt a risk to the neighbour is not reasonably foreseeable. But such considerations raise questions of fact which will usually be questions for the jury. An exception arises when there is only one reasonable answer — in favour of the potential defendant, and in such a case the neighbour's claim will fail for want of evidence reasonable to be laid before a jury. Most of the defences based on the possibility of discovering a defect raise questions on causation — ‘Has the chain been broken?’ — and, as such, are most invariably a matter for the jury, or questions of contributory negligence, the existence and extent of which are again for the jury.”

These decisions reinforce our conclusion that the first flood and the inspection to which it gave rise neither placed [the claimants] outside the range of any duty of care owed by CPL nor broke the chain of causation between CPL's want of care and the damage suffered by PEL. They also lend support to the criticism of the decision in Baxall made by Mr Duncan Wallace QC in the First Supplement to the 11th edition of Hudson's Building and Engineering Contracts at paragraph 1.314 and in (2003) 119 LQR at p. 19 where he asked:

“could it not have been put rather differently, that a defect in a building must be so glaringly obvious that, if the “patent defect” defence is to apply, no reasonably competent adviser carrying out a normal inspection could fail to notice it? As expressed Baxall may offer an unnecessarily wide avenue of escape from liability for defective buildings, to developers, contractors and professional advisers and their insurers alike …?”

It may be that, in an appropriate case, Baxall will receive consideration by the House of Lords. For the reasons that we have given, on the facts of the present case it affords CPL no defence to [the claimants'] claim and we reject the grounds of appeal that have given rise to the first issue.” [Emphasis added]

116.It was in the course of my own legal research that I came across the decision of the English Court of Appeal in Pearson Education Limited v. Charter Partnership Limited. I am disappointed that senior counsel appearing for Wellgo, who relied on the authority of BaxallSecurities Ltd. v. Sheard Walshaw Partnership, did not draw my attention to this authority which is discussed by the editors of Jackson and Powell on Professional Liability[240].

117.I return to the question whether it was reasonably foreseeable that Daniel Kwan, JMK and YSK2 would negligently fail to safely remove or to take steps to safely remove the BTM Cylinder from the 3/F of the Garley Building so that it would continue to remain a danger to demolition workers, like the plaintiff, carrying out the work of demolishing the building. The test propounded by Akenhead J. in Goldswain v BeltecLtd (t/a BCS Consulting),that any duty to warn will not arise if there is only a possibility that the contractor to be engaged may in future not do the work properly, is different from and not relevant to the question of reasonable foresight in the present context of ascertaining whether or not a duty of care exists. As Lord Lowry CJ held in in the case of McIlveen v Charlesworth Developments[241],  if an inspection is certain and will reveal the defect and the person making the inspection will appreciate the danger, then no doubt a risk to the neighbour is not reasonably foreseeable.  However, if it is not certain that an inspection will result in the discovery of the BTM Cylinder, and result in its removal prior to the commencement of demolition, then the ensuing risk may be reasonably foreseeable.

118.The demolition team comprised of Daniel Kwan, AP for demolition, JMK, RSE for demolition and YSK2, specialist demolition contractor.  The demolition works entailed the removal of the BTM Cylinder and the BTM Installation, including the BTM cylinder.  Both experts, Professor Chung and Dr James Lau, agreed that this was part of the duty of Daniel Kwan as AP for demolition[242]. It was not disputed that in discharging their duties, Daniel Kwan, JMK and YSK2 were each required to carry out their own independent inspection of the Garley Building.  There was also no dispute that they did inspect the building.

119.It was Helen Kwan’s evidence that she visited the Garley Building twice a month[243] and Sze Ka Tat visited once a week during Stage 1 of the demolition works and twice a week during Stage 2[244]. Thomas Choy’s evidence was that he had been there about 10 times and visited 3/F each time[245]. Sze Ka Tat’s evidence was that he visited the Garley Building regularly and had inspected it over 10 times[246]. There was a conspicuous yellow sign in front of the BTM room which read “BTM GAS BOTTLES ROOM”, yet each of them missed spotting the BTM Cylinder[247].  It was their evidence that had any one of them spotted the BTM cylinder, it would definitely have been removed prior to the commencement of demolition works[248].  I am satisfied that the above evidence is true.  They had as much knowledge, if not more, as David Chan did about BTM gas and that highly compressed BTM gas inside a cylinder was classified as dangerous goods.  If they had spotted the BTM Cylinder, they would have known that it was hazardous and posed an obvious danger.  I am quite certain that, if any one of them had seen the BTM Cylinder, he or she would have taken steps to have it safely removed prior to the commencement of demolition works.

120.Any one of these building professionals ought to have spotted and removed the BTM Cylinder prior to the commencement of demolition works.  However, the present case is not a case where it was certain that their inspection would reveal to them the presence of the BTM Cylinder prior to the commencement of demolition works.  It was likely that their inspection would reveal to them the presence of the BTM Cylinder, and lead them to take steps to cause its removal, prior to the commencement of demolition works, but it was reasonably foreseeable that each of them would negligently fail to appreciate the presence of the BTM Cylinder, with the result that no steps would be taken to safely remove it from the 3/F of the Garley Building prior to the commencement of demolition works. As  I have noted in §43 above, if the cabinet door inside the BTM Bottle Room was swung open, and remained open, it would obstruct the view of the BTM Cylinder. In other words, I find that, while it was certain that the BTM Cylinder would have been safely removed if it had been spotted, it was reasonably foreseeable that Daniel Kwan, JMK (including Helen Kwan, Thomas Choy and Sze Ka Tat) and YSK2 would negligently fail to spot it, with the result that the BTM Cylinder would continue to remain a danger to demolition workers, like the plaintiff, carrying out the work of demolishing the building.

121.I conclude that the risk to the plaintiff was reasonably foreseeable and that he was sufficiently proximate to David Chan for a duty of care to arise.

(v) Was it fair just and reasonable to impose a duty of care on David Chan?

122.I find that it is not obviously fair, just and reasonable that David Chan should be absolved from any liability to the plaintiff on the grounds that other professionals could reasonably be expected to discover the BTM Cylinder and to safely remove it, and that the failure of such other professionals to do so would also create legal liability on their part towards the plaintiff.  It was within the reasonable contemplation of David Chan that demolition contractors and their employees, including the plaintiff, would enter the Garley Building in order to carry out the demolition of the entire building and it was reasonably foreseeable that such workers would be endangered by the BTM Cylinder if it remained on the site during those works.  I conclude that it is fair, just and reasonable to impose a duty of care on the part of David Chan to take reasonable care to protect demolition workers, like the plaintiff, working in the Garley Building from obvious danger, even though such workers would not enter the building to carry out such works until many months after David Chan ceased to be AP for the Garley Building.  The greater the potential for harm, the more likely it is that a duty of care would be imposed. The danger posed by the unattended BTM Cylinder was extremely serious. It might not be placed in the same category of dangerous objects as an unexploded World War II mega bomb, but the unattended BTM Cylinder would not be too far removed from this category.  The amputation of the plaintiff’s left arm at above the elbow level was a very substantial injury caused by the exploding BTM Cylinder. Indeed, the plaintiff could easily have been killed by the exploding BTM Cylinder and is very lucky to be alive. I feel compelled to reach the conclusion that it is fair, just and reasonable to impose a duty of care on the part of David Chan in the present case by the recognition that “the right to bodily integrity is the first and most important of the interests protected by the law of tort  …[and includes] the right not to be subjected to bodily harm or injury”[249]. I may not have reached the same conclusion if the claim being brought in the present case was not in respect of damages for personal injuries but in respect of damage to property.  May LJ was of similar mind when he said in Bellefield Computer Services Ltd. v. E Turner & Sons Ltd. that “I would reserve for future consideration the question whether or to what extent the scope of an architect’s duty of care to a subsequent owner or occupier could extend to loss unassociated with physical damage.”[250]  Buxton LJ stated in Perrett v. Collins that “when one turns to the judgmental issues of justice, fairness and reasonableness the importance of the fact that water is put at risk is the plaintiff’s body and not just his goods, is … deeply embedded in the law of negligence.”  Hobhouse LJ, in the same case, referred to the refusal by the House of Lords in Marc Rich & Co v. Bishop Rock Marine Co Ltd. to place a duty on a maritime inspection authority, and distinguished that case on the ground that the loss in that case involved damage to property and not personal injury.

Was David Chan in breach of his duty to take reasonable care to protect the plaintiff from obvious danger?

123.Was David Chan in breach of his duty to take reasonable care to protect demolition workers, like the plaintiff, working in the Garley Building from obvious danger?  I have already held in §87 above that the duty to take reasonable care to protect persons entering the Garley Building from obvious danger included a duty to take reasonable steps to ascertain whether or not potentially dangerous structures or objects were dangerous. Counsel for Wellgo accepted that “the BTM Cylinder in the present case was … patent”[251].  It was not disputed, and I readily find, that a specialist contractor would have been able to discover that the BTM Cylinder was full or nearly full and conclude that it posed a danger to workers working in its vicinity in the Garley Building. Did David Chan fail to act as a reasonable and prudent man by his omission to engage a specialist contractor to check the BTM Cylinder and to remove it?

124.The determination of what are and are not reasonable steps to take in any particular case to safeguard persons from harm requires an exercise of balancing cost and benefit. The benefit of a particular precaution turns on the likelihood and severity of harm: the greater the likelihood of harm, the greater the severity of harm, the greater the benefit of the precaution.  The cost of a particular precaution turns on the expense of the precaution and the value or utility of the activity that would be curtailed by taking the precaution: the greater the expense of the precaution, the greater the value or utility of the lost activity, the greater the cost of the precaution.

125.In this case, the degree of likelihood of harm from the BTM Cylinder which had been unattended for 5 years was high, and the severity of harm from an exploding BTM cylinder, which could cause death or very serious bodily injury, was very great.  On the other hand, the cost of the precaution was minimal, if not nil, as the BTM Cylinder, even if it had been empty, had to be removed eventually from the Garley Building, before the demolition works commenced, by a specialist contractor at a cost of $5,000 to $6,000.

126.I refer to the findings I made in §§78 to 87 above. David Chan, thinking that the BTM Cylinder was empty, or nearly empty, chose not to engage the specialist contractor but to leave it unattended on the 3/F of the Garley Building.  He accepted that his assessment that the BTM Cylinder was empty or nearly empty was proved to be wrong by the occurrence of the accident that injured the plaintiff on 28 June 2004.  He admitted that he was not a fire services specialist and did not have specialist knowledge of BTM cylinders and BTM installations. David Chan agreed that there was no discussion about the BTM Cylinder with the officers of BD.  He confirmed that he did not accompany the FSD officers during their visits and he did not know what had or had not been inspected by BD and the FSD.  He was not in a position to say whether BD or FSD had actually considered the hazards, if any, posed by the BTM Cylinder. His assessment that the BTM cylinder was empty, or nearly empty, was based on his site inspection which, I found, was not reliable: there was no clear evidence of the boundaries of the fire damage caused on the 3/F and there was doubt about the accuracy of David Chan’s demarcation of the BTM Protected Area on the 3/F.

127.Although David Chan genuinely believed that he had made a proper and reliable assessment that the BTM Cylinder was empty, or nearly empty, I find that he departed from the standard of care to be reasonably expected from him, as AP for the Garley Building, by failing to take the reasonable step of engaging a specialist contractor to assess whether the potentially hazardous BTM Cylinder was, indeed, hazardous.  The degree of likelihood of harm from the BTM Cylinder that was full or nearly full, and the severity of harm from an exploding BTM Cylinder, far outweighed the cost of engaging specialist contractor.

Was there a break in the chain of causation?

128.I have already considered the cases of Clay v. AJ Crump & Sons & Others[252], BaxallSecuritiesLtd. v Sheard Walshaw Partnership[253]and Pearson Education Limited v Charter Partnership Limited[254],  in which the decision of the High Court of Australia in Voli v Inglewood Shire and the case of Council McIlveen v Charlesworth Developments were referred to.  All these cases dealt with the question whether or not there was a break in the chain of causation with the result that the casual link between the tort complained of and the damage that was caused was severed.

129.I also refer to the decision of the Court of Appeal of New South Wales in Baden Cranes Pty v. Smith [2013] NSWCA 136 in which, the plaintiff, who was operating a crane in Darling Harbour, Sydney, was seriously injured when the upper deck of the crane toppled off its base, throwing the plaintiff to the ground.  The court found that the crane was previously owned by Brambles, who engaged Baden to modify the crane. The crane had been manufactured to be transported in 2 parts and Baden modified it, allowing it to be transported in one piece. The modified crane was subsequently purchased by Gillespies, who was its owner at the time of accident and the employer of the plaintiff. To drive the modified crane safely required the release of a “slew lock”, which held together the crane base and superstructure. If the lock was not released there was a risk that the pins connecting the 2 parts of the crane would shear.  The plaintiff was not warned of this risk. He failed to activate the release switch and the accident occurred.  All 3 parties were defendants in the action and they were all held liable for breach of the duty of care they each owed to the plaintiff.  Baden was in breach of his duty for failing to provide a failsafe mechanism to prevent the crane being moved in one piece without the slew lock being released. Brambles owed a duty of care to future crane operators to protect them from any damage flowing from a failure of the crane due to the lack of safety device, and was in breach of duty by failing to take the same steps as was required of Baden.  Gillespies was in breach of his duty to the plaintiff by failing to warn him of the risk.  The Court of Appeal apportioned liability in the proportion of 40% against Baden, 20% against Brambles and 40% against Gillespies.  The Court of Appeal held that each act of negligence by each of the defendants was a necessary element in a set of conditions which, together, were sufficient to cause the harm.

130.They dismissed the appeal based on the ground that there was a break in causation, holding that each tortfeasor in the chain should not escape liability for the sole reason that others before or after it were negligent.  Basten JA stated that:

“This was not a case of negligence followed by the tortious intervention of a 3^rd party which might break the causal chain … Nor was this a case involving consecutive injuries caused by consecutive but independent acts of negligence … Where the subsequent negligence is a reasonably foreseeable result of the earlier negligence, it will not break the causation chain: thus, negligent medical treatment following a work injury may be foreseeable, but not gross incompetence… It is in this sense that each subsequent actor in the chain should not, in principle, escape liability for the sole reason that others before or after it were negligent. Subsequent negligent acts of the same kind, as in this case, will readily be foreseeable consequences of the first negligent act.”[255]

Baden had no reason to believe that the risk which it had created would be obviated by the conduct of the owner of the crane.  Basten JA went on to state that:

“With respect to Brambles, the scope of the appropriate liability is less clear. On the one hand, its failure to ensure that the crane as modified incorporated protection against inadvertent mistakes in releasing the slew lock … remained a significant cause of the accident. Nevertheless, when the accident occurred, it had no control over the crane, its use, the training of operators or the manner of its operation. However, its role in creating the risk indicates that it, like Baden, should continue to bear some responsibility for the accident.”[256]

131.I refer to my findings of facts set out in §§91, 92, 108, and 118-120 above. The present case is a case of subsequent tortious conduct by third parties.  Whilst they should have discovered the presence of the BTM Cylinder on the 3/F of the Garley Building and removed it prior to the commencement of demolitions works, it was reasonably foreseeable that Daniel Kwan, JMK (including Helen Kwan, Thomas Choy and Sze Ka Tat) and YSK2 would each negligently fail to spot it, with the result that the BTM Cylinder would continue to remain a danger to demolition workers, like the plaintiff, carrying out the work of demolishing the building.  Having carefully considered the facts of the present case relevant to this issue and the authorities referred to above, I have come to the firm conclusion that the subsequent tortious conduct of Daniel Kwan, JMK and YSK2 did not break the chain of causation.  One must not lose sight of the fact that the BTM Cylinder was under the “watch” of David Chan for a considerably longer period of time than the time when Daniel Kwan, JMK and YSK2 had responsibilities in respect of the Garley Building.  I find that this is a case of multiple torts and multiple tortfeasors whose responsibility for the ultimate damage, that each of them caused, ought to be apportioned between them.

132.I refer to my findings in §§44 and 45 above. Although, the removal of the BTM Cylinder by employees of YSK2 probably disturbed the valve assembly and contributed to the subsequent explosion, I find that the act of removal did not break the chain of causation.  This act, by the employees of YSK2, increased the causative potency of the negligence of YSK2, which would be a relevant consideration in the apportionment of liability between the parties.

Is the court bound by the settlements reached on the liability of JMK and on the quantum of the plaintiff’s claims?

133.Section 3 of the Civil Liability (Contribution) Ordinance, Cap. 377, provides:

“3. Entitlement to contribution

(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).

…

(4) A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.

(5)  On assessing any contribution under this section the court shall disregard any part of the payment in respect of which the contribution is sought which appears to the court to be excessive.” [My emphasis]

134.Lord Hobhouse provided guidance on sub-section (4), quoted above, in Dubai Aluminium Co Ltd v Salaam and Others [2002] 2 A.C. 366:

“69. …This raises the question: how is the factual basis of the claim against him to be identified? The answer to this question must obviously depend upon the circumstances. The claim may have been settled or compromised without the commencement of legal proceedings or it may only be settled later after the exchange of pleadings or during the trial. Some proceedings may be governed by strict procedural rules; others may allow a party to inform the other of the factual basis of his claim with greater informality. Pleadings may be dispensed with. In the Commercial Court factual allegations can be particularised informally in a number of ways.

70. In the present case the factual allegations in the pleading were more than sufficient to lay the factual basis for a liability of the partnership under section 10 of the Partnership Act 1890 in the tort of deceit.  […] But I would not wish it to be thought that material other than pleadings may never have to be looked at.  The variety of circumstances to which I have already referred demonstrates this. […] The purpose of subsection (4) is to facilitate bona fide settlements without prejudicing the rights of the paying party to claim a contribution from another.  Of course the factual basis for the claim has to be identified in order to enable the remainder of section 1 to be applied but it would be mistaken to introduce inappropriate formalities into the criterion required by the subsection.”

135.None of the concerns raised by Lord Hobhouse affect us in the present case.  The factual basis of the claim of YSK2 against JMK have been identified, not only in the pleadings exchanged between them, but also by the evidence that has been adduced before me and by the facts that I have found.

136.Would JMK have been liable to YSK2, assuming that the factual basis of the claim against JMK could be established?  It is not necessary, in this case, to assume that the factual basis of the claim against JMK could be established: the factual basis of the claim against JMK has been established on the evidence adduced before me.  On the established factual basis of the claim against JMK, I conclude that JMK is liable to YSK2.  Indeed, I have already found that each of David Chan, Daniel Kwan, JMK and YSK2 had a duty to take care to safeguard the plaintiff from obvious danger and that each of them was liable, as several tortfeasors, in respect of the same damage to the plaintiff.  Just as I have found that the subsequent torts of Daniel Kwan, JMK and YSK2 did not break the chain of causation of the negligence of David Chan, so too do I find that the subsequent tort of YSK2 did not break the chain of causation of the negligence of JMK.

137.If I am compelled by section 3(4) of the Civil Liability (Contribution) Ordinance not to rely upon my own findings of fact, but only to have regard to an assumption that the factual basis of the claim against JMK could be established, I would reach the same conclusion that I have reached in the preceding paragraph, namely, that, on the assumption that the factual basis of the claim against JMK could be established, I conclude that JMK is liable to YSK2. 

138.However, as section 3(5) of the Civil Liability (Contribution) Ordinance, quoted above, makes clear, I am not bound by the settlement reached on the quantum of the plaintiff’s claims.

139.I can deal with the settlement on quantum quite briefly.  As set out in §24 above, the plaintiff settled his claim for damages and interest against YSK2 by a consent order dated 19 August 2015 on terms that damages were agreed in the gross sum of $10,000,000 “inclusive of interest and inclusive of employees’ compensation already received by the plaintiff in the sum of $1,966,065.2)” and that the net balance sum of $8,033,934.8 to be payable within 35 days. That settlement took into account the concession of 5% contributory negligence on the part of the plaintiff, as noted in §22 above.  The concession was probably made to achieve a settlement rather than by way of a concession that the plaintiff accepted that he was guilty of some contributory negligence.  Counsel for Wellgo informed me during oral closing oral submissions that he had no submissions to make on quantum[257].  I have perused the plaintiff’s Further Re-revised Statement of Damages dated 29 May 2015 and YSK2’s Answer to its predecessor, namely, the plaintiff’s Further Revised Statement of Damages dated 24 June 2009.  I do not find that the settlement reached on quantum was excessive.  The plaintiff was a young man aged 36 years at the date of the accident.  He suffered an amputation of his left arm at above the elbow level; he suffers from persistent phantom limb pain, restricted shoulder movement, unsightly scars, post-traumatic stress disorder with depression; he was earning more than $20,000 at the time of the accident and was entitled to a substantial award for past and future loss of earnings; he was also entitled to a substantial award for the present and future costs of a myoelectric prosthesis that had been recommended for him by the prosthetic experts appointed by the plaintiff and YSK2.  The plaintiff’s Further Re-revised Statement of Damages claimed damages in excess of $14,000,000, including a claim for loss of earnings in excess of $5,500,000, and claim for the cost of prosthesis in excess of $7,000,000. I am not satisfied that I should disregard any part of the payment in respect of which the contribution was sought from JMK.  YSK2 were legally represented. The settlement was reasonable. It was not excessive.

140.Does section 3(5), which provides that, “on assessing any contribution under this section the court shall disregard any part of the payment in respect of which the contribution is sought which appears to the court to be excessive” apply to a contribution sought from JMK, in percentage terms, of 35% of the plaintiff’s damages and interest?  I conclude, on my construction of this provision, that it does apply. The contribution sought from JMK, of 35% of the plaintiff’s damages and interest, amounts to a payment of $3,500,000, given the settlement of quantum in the sum of $10,000,000.  If I were to find that the contribution sought from JMK of 35% of the plaintiff’s damages and interest, was excessive, it must follow that I must find that the payment of $3,500,000 in respect of which contribution was sought from JMK, was also excessive. I construe the provision to also apply to a case where damages are to be assessed and have not yet been assessed at the time when the contribution proceedings are being heard, so that, if I were to find that contribution being sought of 35% of the plaintiff’s damages and interest to be assessed was excessive, I would apply the provision to reduce the percentage of contribution to a level which I found to be appropriate, say, by way of example, to 25%. Applying the provision, I would “disregard any part of the payment in respect of which the contribution is sought which appears to the court to be excessive”, i.e. 10% of the plaintiff’s damages and interest to be assessed, and only award contribution of 25% of the plaintiff’s damages and interest to be assessed.  Although a similar provision is not found in the UK Civil Liability (Contribution) Act 1978, the common law in the UK has developed a similar rule that the part of any payment made by way of a settlement that is not recoverable in law is to be disregarded[258].

141.Is the contribution being sought by JMK from Wellgo in respect of 35% of the plaintiff’s damages and interest in the amount of $10,000,000, excessive?

142.Section 4(1) of the Civil Liability (Contribution) Ordinance provides:

“4. Assessment of contribution

(1)  Subject to subsection (3), in any proceedings for contribution under section 3 the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person’s responsibility for the damage in question.’ [My emphasis]

143.Lord Hobhouse also provided guidance on section 4(1), quoted above, in Dubai Aluminium Co Ltd v Salaam and Others [2002] 2 A.C. 366:

“71. In a simple case, say, injury to a passenger arising from a collision between two cars, both to blame, no problem arises. The court apportions the liability between the two drivers. But where, as in the present case, there has been a conspiracy to defraud involving a number of individuals, complications can arise. Only some of them may be before the court; some may be beyond the practical reach of the law; some may be insolvent; the routes by which liability has arisen may differ.

72. Section 2 of the statute requires the court to order contribution in an amount which is “just and equitable having regard to the extent of that person's responsibility for the damage in question”, the “person” being the person being ordered to contribute and the “damage in question” being the damage suffered by the victim for which the persons claiming and paying contribution were both liable.  The concept of what is just and equitable corresponds to the restitutionary principles applied elsewhere in the law, for example, contributions between sureties or between insurers.  The right to a contribution arises from the fact that one person has borne a disproportionate burden which it is just that another should share or even bear in full, section 2(3)).  Likewise responsibility includes both the degree of fault and the causative relevance of that fault. The power given to the court is principled but not otherwise restricted. It is this power which the court must use to solve any problems and arrive at a just and equitable outcome.” [Emphasis added]

144.The parties before the court in the contribution proceedings that were eventually settled were YSK2, JMK and Daniel Kwan. As noted in §23 above, YSK2 settled his third party claim against Daniel Kwan by a consent order made on 30 July 2015 on terms that Daniel Kwan would pay to YSK2 an agreed all-inclusive sum of $2,200,000.  Given the settlement with the plaintiff in the sum of $10,000,000, the settlement with Daniel Kwan amounts to a settlement that Daniel Kwan should contribute 22% of YSK2’s liability to the plaintiff. With JMK agreeing to contribute 35% of YSK2’s liability to the plaintiff, the settlements had the effect of apportioning liability between the 3 parties in the proportion of 43% being the liability of YSK2, 35% being the liability of JMK and 22% being the liability of Daniel Kwan.

145.It is clearly right that YSK2 should bear the greater liability as between the 3 parties, given the fact that he was the employer of the plaintiff and given, further, the fact that the causal potency of his negligence was greater.  However, I find that it was not just and equitable that Wellgo should bear a greater share of responsibility than Daniel Kwan in failing to safely remove the BTM Cylinder before demolition work commenced. Daniel Kwan was in overall charge of the demolition works and must bear a greater responsibility than JMK, the RSE for demolition responsible for the structural elements of the Garley Building.  Clearly, commercial considerations came into play in the settlement between YSK2 and Daniel Kwan, which I raised with counsel for JMK during closing submissions:

COURT:  … one can see that the actual settlements enabled the AP for demolition, Mr Daniel Kwan, to be less liable than yourselves because his was a fixed sum of about 20 per cent or so of the total liability. 

MR YEUNG:  Yes, yes, but, your Lordship...

COURT:  Isn’t that evidence that I can rely on to say that, as it turned out, you might have agreed more than your rightful share?

MR YEUNG:  Now, and, your Lordship...

COURT:  What do I do in that case?

MR YEUNG:  Now, your Lordship, in my submission, that would not be a good indicator because of course that was settled at the last moment.

COURT: Yes, there is also the consideration of his creditworthiness, his insurance position, his ability to pay the judgment that may be obtained against him.  You have all those factors as well.

MR YEUNG:  Yes, yes.  So -- but, obviously, Daniel Kwan, we don’t know whether he is insured.  So, obviously, whether it would be able to recover fully from Daniel Kwan was a matter which the defendant would take into consideration.  So we could not just say that by agreeing to a sum lesser than ours means that our culpability in that case was excessive in settling with the defendant because that, obviously, parties came into settlement under different considerations and under different time as well.  So, obviously, that would be a matter which the court would take into consideration globally to see, first of all, whether that settlement was reasonable or not.

COURT:  How do you -- yes.  That’s the vagaries of life, right?  Creditworthiness, extraneous factors.  But assuming that every defendant and every third party was equally creditworthy and well able to satisfy the judgments to be entered, then what would be the proper apportionment?

MR YEUNG:  You mean having all the parties there? 

COURT:  Yes.

MR YEUNG:  Then we would...

COURT:  With all the parties with lots of money in their pocket.

MR YEUNG:  Yes, we would venture to suggest that, obviously, the defendant would bear the greatest liability, and then we are saying that then...

COURT:  As between yourself and Daniel Kwan.

MR YEUNG:  Now, we are saying that we are less culpable than Daniel Kwan, but we are saying that Wellgo is more culpable in the sense that they knew...

COURT:  No, let’s not talk about Wellgo. We just talk about your three selves. So what should the proportions be? Demolition contractor, AP for demolition and RSE for demolition, what are the proportions?

MR YEUNG:  Well, we are saying that we may be 25 per cent and then the rest 75 per cent being shouldered by these two parties, and that would be in the case of 40 and 35 per cent for the demolition contractor and the...

COURT:  Thank you.

MR YEUNG:  ...the Daniel Kwan.

COURT:  That’s helpful.  Thank you.”[259]

146.I find that the liability of JMK to contribute towards the plaintiff’s claim should be no more than 25% of the plaintiff’s claim, which amounts to the sum of $2,500,000, being 25% of the settlement of the plaintiff’s claim for damages and interest in the sum of $10,000,000.

What is the proper apportionment to make in the present case?

147.What is the proper apportionment to make as between JMK and Wellgo in the present case? I repeat the observations of Lord Hobhouse quoted in §143 above. I also adopt the observations of Sakhrani J. in Sze Che Sau v. Dragages et Travaux Publics (HK) Ltd that:

“The apportionment of damages is substantially a matter of discretion. The court must apportion the damages between the parties who are actually before the court. It is not relevant to have regard to the possible negligence of some of the person, not a party to the proceedings, whose fault may have contributed to the damages suffered by the injured [plaintiff].”[260]

The only 2 parties for me to consider in the present exercise are JMK and Wellgo.  I have to weigh their respective responsibilities, in terms of moral blameworthiness and causative relevance, for the damage they caused to the plaintiff.

148.I also note that YSK2 have discontinued the claim for contribution against Wellgo and Daniel Kwan has not claimed any contribution from Wellgo.

149.I do not accept the submission of counsel for JMK that, as between JMK and Wellgo, Wellgo was more responsible for the damage suffered by the plaintiff. Whilst Wellgo had more time and opportunity to inspect and safely remove the BTM Cylinder, there was much greater proximity between the plaintiff and JMK. The accident occurred almost 6 months after David Chan handed over the site. The time that JMK had responsibility in respect of the Garley Building was more than sufficient for JMK to discover and safely remove the BTM Cylinder.  The quality of JMK’s inspection left much to be desired. I refer to §119 above.  The failure of Helen Kwan, Thomas Choy and Sze Ka Tat to notice the easily discoverable BTM Cylinder was a grave and serious breach of JMK’s duty to protect the plaintiff from obvious danger. If JMK had conducted its inspections properly, it would have become aware of the presence of the BTM Cylinder on the 3/F of the Garley Building and could easily have informed Daniel Kwan, AP for demolition, who would have taken steps to safely remove it prior to the commencement of demolition works.

150.However, I readily dismiss the submission of counsel for Wellgo that Wellgo’s responsibility was de minimus, such that I ought to exempt Wellgo from any liability to make contribution pursuant to section 4(2) of the Civil Liability (Contribution) Ordinance.  That section provides that the court shall have power, in any proceedings for contribution under section 3, to exempt any person from liability to make contribution. I find that Wellgo’s responsibility for the damage suffered by the plaintiff was much more than de minimus.

151.Counsel for Wellgo submitted, in the alternative, that JMK was much more responsible for the damage suffered by the plaintiff than Wellgo. He submitted, in the course of his closing submissions before me, that the overall responsibility for Wellgo should not be more than 5%:

“MR LI: No, I would say 5 per cent overall, my Lord, of the whole accident. I say this, my Lord, on the point I canvassed. I mean, as to the causative impact as to the causes of accident.

COURT: I see. So defendants, 40 per cent; Daniel Kwan, 40 per cent; JMK, 15; and you are 5.

MR LI: Yes, that’s the point.”[261]

152.Translating that submission into a submission of the relative responsibilities as between JMK and Wellgo would produce an apportionment of 75% responsibility on the part of JMK and 25% responsibility on the part of Wellgo: i.e. their overall responsibility was 20% (15% + 5%) in respect of which JMK was responsible for 75% of 20%, being 15%, and Wellgo was responsible for 25% of 20%, being 5%.

153.Whilst I accept this alternative submission on behalf of Wellgo that, as between JMK and Wellgo, JMK should be apportioned with greater liability to contribute towards the damage suffered by the plaintiff than Wellgo, I find that it is wrong to approach the matter in the way that counsel for Wellgo has done.  For a start, the respective share of liability as between 4 contributing parties must be less than the respective share of liability as between 3 contributing parties or 2 contributing parties. Further, I have already found, in §146 above, that, as between YSK2 Daniel Kwan and JMK, the liability of JMK to contribute towards the plaintiff’s claim should not be more than 25% of the plaintiff’s loss and damage. If one makes the assumption that Wellgo is an additional contributing party, then JMK’s share of the overall liability ought to be less than 25% but not, in my view, as low as 15%, as submitted by counsel for Wellgo. I conclude that I must approach the question of apportionment, guided by the authorities discussed above, by apportioning liability only between the parties who are before me.

154.After having regard to the matters highlighted in §149 above, and after having weighed their respective responsibilities, in terms of moral blameworthiness and causative relevance, for the damage they caused to the plaintiff, I conclude that, as between JMK and Wellgo, JMK is responsible for 70% of the damage caused to the plaintiff and Wellgo responsible for 30% of that damage.

155.I have found in §146 above that the liability of JMK to contribute towards the plaintiff’s claim should be no more than 25% of the plaintiff’s claim, which amounts to the sum of $2,500,000, being 25% of the settlement of the plaintiff’s claim for damages and interest in the sum of $10,000,000. I find that Wellgo is responsible for 30% of this liability, that is to say, 30% of $2,500,000, i.e. $750,000.

Conclusion

156.The point was not taken that Wellgo was not responsible for any breach of duty of care on the part of David Chan as AP for the Garley Building.  I make an order that Wellgo make contribution to JMK in the sum of $750,000, together with interest at HSBC prime + 1% per annum, from the date that JMK satisfied the consent order made on 15 May 2015 that it make contribution to YSK2, as set out in §21 above, up to the date of this order.

157.I also make a costs order nisi that Wellgo pays the cost of these contribution proceedings to JMK, to be taxed, if not agreed, on the District Court scale.

Mr Yeung Ming Tai and Mr Adrian But, instructed by Liu, Chan & Lam, for the 2^nd Third Party

Mr C.Y. Li SC and Mr Jeremy Kwong, instructed by Fred, Kan & Co, for the Fourth Party