Sun Kwong Chiu Chow Restaurant Ltd v. Skyhorse Development Ltd t/a Gala Association

DCCJ 4886/ 2015

[2019] HKDC 535

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4886 OF 2015

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JUDGMENT

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Introduction

1.Sun Kwong Chiu Chow Restaurant Limited (“the Company”) operating its restaurant business (“the Restaurant”) at a shop premises (“the Property”) on the ground floor of Wah Fat Mansion (“the Building”) located on Lockhart Road, Wanchai, Hong Kong has been suffering a water seepage problem since late 2014. The Company alleges that Skyhorse Development Limited trading as Gala Association (“Skyhorse”) has caused the water seepage problem. Skyhorse operates a mahjong club (“the Club”) above the Property. Hence, the Company commenced these proceedings on 29 October 2015 to make a claim against Skyhorse in the tort of nuisance and negligence and claims for injunctions and damages.

2.The main issues, in broad terms, include (a)whether there was water seepage from the Club to the Property and if so, (b) whether it is the negligence of Skyhorse which has caused or allowed the seepage problem to persist and result in the nuisance to the Restaurant with its actual or constructive knowledge of the seepage problem and (c) the computation of the quantum of damages payable by Skyhorse to the Company.

Undisputed background facts

3.The Building was completed in 1987 and Kin Yick Liong Company Limited (“the Developer”) is its first owner. It is a 23-stoery building and comprises commercial and residential units. According to the plans (“the 1987 Plans”) annexed to the Deed of Mutual Covenant dated 19 June 1987, the ground floor of the Building is divided into four shop premises and they are marked Shops A to D. The Property is Shop D on the left side of the Building facing Lockhart Road.

4.The 1987 Plans also show that each of the first and second floor of the Building is equally divided into Shop/Office A and Shop/Office B. The Club occupies the entire two floors. Skyhorse accepts that there are altogether forty odd mahjong rooms on these two floors and there is a self-contained toilet in each of those mahjong rooms. An uncontroversial layout plan of the first floor shows that there are approximately 22 furnished mahjong rooms on the first floor. Each of those rooms is numbered. Rooms 109 and 110 are immediately above the Restaurant.

5.Intersafe Management Limited (“the Management Company”) is the property manager of the Building. The Management Company has produced a chronology of the development of the present dispute and the chronology was included in the expert report of Trusty Surveyors (HK) Ltd engaged by Skyhorse dated 12 September 2016. It is as follows.

6.On 21 November 2014, the Management Company wrote to Skyhorse to bring to its attention the seepage problem suffered by the Restaurant. The Management Company urged Skyhorse to inspect and carry out remedial works on its drainage pipes if necessary.

7.On 27 November 2014, the Management Company and their contractor inspected the Restaurant and found water stain marks on the ceiling without knowing the source of water seepage.

8.On 29 November 2014, the Management Company sent their technician to inspect the Restaurant and the first floor of the Club. The technician could not identify the source of water seepage however.

9.On 4 December 2014, the loss adjuster of Skyhorse inspected the premises of the Club and he was unable to identify the source, either. He was denied access to the Restaurant because it was operating its business.

10.On the other hand, the Company sent to, among other persons, Skyhorse, a complaint letter dated 2 December 2014 (“the Complaint Letter”) and highlighted the seepage of salty water problem adversely affecting the business of the Restaurant.

11.On 12 January 2015, the Management Company, Mr Mak of Skyhorse and the loss adjuster inspected the Restaurant and found no further water leakage. No complaint was received.

12.The affected area is limited to the front portion of the Restaurant where there is a braised food stall. It is immediately beneath Rooms 109 and 110 of the Club on the first floor.

13.The Company commenced this action on 29 October 2015. The parties arranged joint inspection of the Restaurant with their respective experts on three occasions. Mr Wong of Proficient Surveyors & Co. acts for the Company and Mr Lau of Trusty acts for Skyhorse and their joint inspection took place on 13 April 2016 (“the 1^st Visit”), 30 May 2016 (“the 2^nd Visit”) and 6 June 2016 (“the 3^rd Visit”). Mr Wong and Mr Lau created a document entitled “Joint Statement By Experts” dated 10 May 2017 (“the Joint Report”) in addition to their respective expert reports.

14.The experts during the three Visits carried out a dye/ water ponding test and a chloride content test.

15.On the other hand, the Buildings Departments/ FEHD Joint Office (“the Joint Office”) sent to the Club a letter dated 2 February 2016 (“the 1^st Letter”) informed that their staff carried out investigation and a dye test at the Restaurant and the Club on 11 January 2016 but they failed to identify the source of the seepage problem.

16.The Joint Office sent another letter dated 19 April 2017 to Skyhorse (“the 2^nd Letter”). It referred to the telephone enquiry made by Skyhorse on 10 April 2017. The Joint Office stated that its contractor had undertaken investigation and test(s) at the Club including a water ponding test but they were refused entry by the Restaurant. As a result, no test could be carried out at the Property. Subsequently, on 11 July 2016, the Company indicated to the Joint Office that it was not necessary to follow up its complaint.

Relevant legal principles

17.Both Mr Chong, together with Mr Lai, for the Company, and Mr Cheng, for Skyhorse, remind this court of the established principles applicable to water seepage cases. I need only give a brief summary of such principles.

18.There is no presumption that the source of water must come from the unit immediately above the victimised unit and the plaintiff must prove on a balance of probabilities that the defendant’s unit is the source of water seepage.

19.The defendant has no duty to find out or identify the source of the water seepage. Nor does it bear any burden to prove its innocence.

20.The plaintiff has to prove the knowledge, actual or constructive, on the part of the defendant in respect of the seepage problem. Mr Chong invites this court to read the following extract from Clerk & Lindsell on Torts, 22^nd ed., at §§20-39:

“If the defendant knew or ought to have known that in consequence of his conduct harm to his neighbour was reasonably foreseeable, he is under a duty of care to prevent such consequences as are reasonably foreseeable. In such case the defendant is liable because he is considered negligent in relation to his neighbour, and here nuisance and negligence coincide. Whether his liability is described as falling under one legal rubric or the other would seem to be only a difference of words.”

21.Knowing the consequence of the seepage problem cannot be equated with the knowledge of the source of the seepage problem. If a person does not know the source of seepage coming from its own property, it cannot be said that it has the intention to cause nuisance to his neighbour and the tort of nuisance cannot be established. See Tin Kin Ka Clara v Chan Koon Cheong and Anor., unreported, DCCJ 3139/2012, 11.5.2015 per H.H. Judge Andrew Li at §54.

22.Once the defendant has actual or constructive knowledge of the seepage problem, he should take remedial action within a reasonable time: Tin Kin Ka Clara, supra, at §56.  

Analysis

Any seepage problem?

23.The pleaded case of the Company is that since end of October or early November 2014, there has been seepage of water from the flush water supply and drainage pipes in the toilets of the rooms of the Club and all the floor slabs of the Club.

24.Skyhorse denies that there is any seepage problem. It admits that large-scale renovation works had been carried out at the Club in 2010 and such works included partitions of mahjong rooms with toilets and new installation of all flush water pipes and all other pipes within its premises on the 1^st and 2^nd floor of the Building.

25.Upon receipt of the complaint of Company in late November 2014, Skyhorse, out of abundance of caution and on a non-admission of liability basis, engaged a plumbing contractor (“the Contractor”) to replace the concealed flush water pipes of those rooms immediately above the Restaurant with new exposed flush water pipes. The new installation work was completed on or about 19^th December 2014. Skyhorse avers that the Company did not make further complaint to the Management Company or Skyhorse about any further water seepage problem after end of November or early December 2014.       

26.Skyhorse goes on in its Defence to say that the alleged water leakage or wet condition of the Property could be due to other reasons not involving the Club such as the air conditioning system of the Restaurant at the Property.

27.On this factual issue, I rely heavily on expert evidence. I should first mention the order made by DDJ Daniel Tang dated 19 May 2016 (“the Order”) relating to expert evidence. By the Order, it was ordered that the samples number of the chloride content test be limited to 5 only and the experts of the respective parties shall attend the Property to take the reading, result and/or measurement of the dye test.

28.In the Joint Report, the experts agree that (a) wet surface appeared on the structural ceiling slab of the Property and (b) there was high chloride content in the plaster of the structural ceiling of the Property.

29.The experts used Apple Green H-6586 and purple dye water for the dye/ water ponding test administered on the floor of Room 109 and 110 during the 2^nd Visit. After about 2.5 hours of the test, the experts inspected the ceiling of the Property. They found droplets of water on the ceiling slab and some of them dripped onto the suspended plastic sheet placed below the ceiling slab. Photographs were produced and such droplets could be seen.

30.Then the experts spaded off some ceiling plaster ashes at the Property and they were divided into five small packets as samples pursuant to the Order. These 5 samples were brought to Soils & Materials Engineering Co. Ltd. for a chloride test.

31.The chloride test results released on 18 June 2016 show that the chloride contents in the 5 samples far exceeded the permissible contents by 44% to 309%. Mr Wong says that the test results provide cogent proof of water seepage from Rooms 109 and 110 of the Club to the Property and the leakage emanated from the flush water and drainage pipes in the toilets of Rooms 109 and 110.

32.Mr Wong further concludes that the damp proof membrane in the floor slab of Rooms 109 and 110 are damaged so that water could seep through the floor on the first floor to the ceiling of the Property.

33.It was also observed after the dye/water ponding test that some stain marks were present at the bottom of the timber skirting of the external wall of Room 109 and also on the floor in the internal corridor outside Room 109. Mr Wong says that the stain marks were green in colour but Mr Lau says that they were brown.

34.The photographs of such stain marks show that they were brown. However, I can accept that the true colour may not be accurately reflected in the photographs and they might be a bit green when they were observed on the scene with naked eyes.

35.Mr Lau argued that such brownish dampness could have nothing to do with the dye test. He even tried to explain that it was due to the condensation of the enclosed area of the corridor as a result of the intermittent opening of the air conditioning of the area.

36.I am not convinced by his explanation. The colour of the green dye leaking out Room 109 might be changed a bit after being mixed with other materials. However, I do not think that his explanation is necessary and the green/brownish dampness is irrelevant to the investigation of the present seepage problem affecting the Property. As I understand, Mr Chong does not rely on this, either.

37.The evidence of Mr Lau dealing with the dye/water ponding test and the chloride test results is in a shambles. In his expert report, he tried to challenge the reliability of the 5 test samples. He pointed out that Mr Wong failed to comply with CS1:1990 Section 21.10.2 in that hardened concrete obtained by drilling should have been collected instead of the plaster samples. It begs the question why he did not raise any objections when the plaster samples were collected in his presence during the 2^nd Visit.

38.At trial, Mr Lau accepted that the differences between plaster samples and concrete samples would only be slight. He accepted that if chloride was detected in the plaster samples, it would be more likely than not that chloride would also be founded in the concrete. His criticism about the plaster samples in his expert report turns out to be meaningless.

39.To dilute the effect of the chloride test results, Mr Lau alleged that the chloride content of other areas on the 1^st floor of the Building was also high. In his expert report, he said this:

“A test strip “Quantofix Chloride” is used to measure the concentration of chloride ions by comparing with the colour scale on 18 July 2016. Three samples were when dumbly retrieved by scalping the water surface at the isolate dry locations with the ceiling void namely Location 1 (Lavatory of Room 102), Location 2 (Room 102) and Location 3 (Group 101) of the Subject Property. It is confirmed that all samples contain chloride ions. It simply reflects that the chloride content of other areas on 1/F of Wah Fat Mansion is also high.”

40.I note that Mr Lau himself did not comply with CS1:1990 Section 21.10.2 in collecting the 3 samples. No test result on those samples has ever been disclosed. It is unknown as to how Mr Lau confirmed that all the 3 samples contained chloride ions as alleged. 

41.I am alarmed that the defence saw fit to adduce this purported expert evidence in this manner. For chloride tests, the number of samples was specified in the Order. No further chloride test on other samples has ever allowed by the court. If the defence found it necessary to adduce further evidence on the chloride content of any other parts of the Building, failing agreement with the Company, it should have sought the directions of the court before any test was to be undertaken. It flies in the face of fairness to obtain some samples and carry out other tests thereon in the absence of the knowledge and participation of the Company. Such evidence on the unauthorised chloride tests must be excluded in my judgment.

42.The chloride contents of the dampness found in the ceiling slab of the Property can effectively negate the suggestions of Mr Lau as to other possible causes of the seepage problem.  Before I turn to those suggestions, I should make it clear that the defence does not have to identify the actual cause of dampness and the burden remains to be on the Company to prove the same.

43.First, whilst Mr Lau agrees that the ceiling slab of the Property is wet, he asserts that the temperature difference between Rooms 109 and 110 of the Club and the ceiling void of the Property may give rise to condensation and cause dampness. Any such dampness could not contain chloride content, nevertheless.

44.And it is unreasonable that such condensation would be confined to the front portion of the Restaurant. I cannot understand Mr Lau’s explanation that the layout of the furniture on the first floor could somehow explain the localised condensation on the ceiling of the Property. I do not believe that all the furniture on the entire first floor was confined to or excluded in the front portion of the Restaurant. I cannot understand the correlation between the positions of the furniture on the first floor and the dampness of the ceiling slab of the Property.

45.Mr Lau further suggests that stagnant water accumulated at the canopy on the first floor of the Building immediately outside Room 109 should be another major source of water seepage as water could seep through the joint of the canopy to the interior of Room 109. This suggestion is illogical in the first place and he does not explain how such water could find its way to the ceiling void of the Property. There is not a shred of evidence that such water contained any chloride content at all.

46.Mr Lau next suggests that the dampness found inside the Property could be caused by water seepage through the cracks on the external walls and the ineffective joint sealant between the Building and the adjoining building, i.e. Ascot Mansion. He, however, never explains why such water may contain chloride ions. He could not explain why such water would only go to the front portion of the Restaurant without any detection of the path by which it entered the Building and reached the ceiling void of the Property eventually.    

47.His suggestions are speculative and unacceptable. They were indeed uncalled for and unnecessary at all. To be fair to Mr Cheng, he does not address this court on those suggestions in his closing submissions.              

48.On the chloride test results, Mr Cheng submits that they fail to indicate whether there was indeed water seepage. He criticizes that Mr Wong failed to obtain a control sample from the dry areas in the Property to show the baseline chloride content. He complains about the absence of any evidence of the chloride contents in any other part of the Building. He further highlights the water used in the dye test was fresh water and the chloride contents detected in the sample could not have originated from the dye test.

49.I do not accept his submissions. The Order prescribed how the chloride test was to be carried out and what samples were to be obtained. The defence could not be heard to say that the chloride test was ineffective for want of a control sample only after the release of the results in its favour. There is nothing to prevent Skyhorse from reaching an agreement with the Company to get a control sample for another chloride test or at the very least making such a suggestion well before the trial.

50.It cannot be gainsaid that the parties agreed to a chloride test to be undertaken in these proceedings for a reason. It was to find out whether the dampness found in the ceiling slab of the Property contained chloride contents. Such contents would normally suggest that it was caused by the salty water used as flush water in the drainage pipes. By a letter dated 10 May 2016, the Water Supplies Department confirmed that salty water was provided to the Building for flushing purposes. It is futile to now argue that there can be a host of other reasons to explain for the presence of chloride contents in the samples.

51.For the dye test, both Mr Wong and Mr Lau agree that no dye was found in the ceiling slab of the Property. The droplets observed by Mr Wong and shown in the photographs were colourless. In other words, there is no evidence that the dye water had seeped to the Property from either rooms on the 1^st floor. But this does not affect the reliability of the chloride test results. Mr Wong does not suggest that the dampness of the ceiling void was caused by the dye used in the dye test.

52.The defence relies on the negative results of the dye test carried out by the experts and the one by Joint Office on 5 April 2016. I do not think that those results are significant when the evidence is assessed in the round.

53.As rightly pointed out by Mr Chong, it is repeatedly held that dye tests are not always successful and negative results alone are not conclusive: see Yeung Chiu Wing v Ho Chi Ming, unreported, DCCJ 3244/2015, 17.11.2017 per DDJ S.P.Yip at §22 and Good Century Investment Ltd v Yim Kin Kuo and Anor., unreported, DCCJ 4980/2013, 23.11.2015 per DDJ D. Ho at §18.

54.This approach is actually collaborated by the following guideline provided by the Hong Kong Institute of Surveyors (“the Guideline”):         

“In certain cases, the dye may not be seen within a short period of time. Sufficient time should be allowed for it to seep through the alleged leak path. It may last for over a day or even a week. However, the dye test is not always successful. A failure to record its presence in the damp zone cannot be taken as definite evidence against the suspected source. However, a positive test confirmed by the laboratory is firm proof of the source.”

55.The message conveyed in the Guideline is no rocket science and accords with common sense. Mr Lau’s response is that the Guideline is for laymen and is based on general experience only. This explanation does not make any sense to me. There is no reason why the Hong Kong Institute of Surveyors would publish an inaccurate guideline to the public. Mr Lau does not begin to explain why and how the Guideline is not applicable to the present dispute.

56.Mr Chong seeks to explain the negative result of the dye test. He refers to the observation of Mr Wong in his expert report that shortly before the 1^st Visit, cement works were carried out in Rooms 109 and 110. These works may have a bearing on the result of the dye test.

57.He further refers to the unchallenged evidence of Mr Chiu, who is a long serving staff of the Company and the Manager of the Restaurant, that the cements in the rooms had even not been dried up during the Visit.

58.I am inclined to agree that the cement newly laid on the floor of the rooms would contribute to the negative result of the dye test but I do not think it is necessary to find out an explanation at all.

59.As pointed out by Mr Cheng in his opening submissions, the trial, and in particular the issue of seepage, turns on expert evidence. Factual evidence is not really of any materiality. I need only deal with the following matters for completeness.

60.Mr Chiu, the factual witness of the Company, appeared to be an honest and straightforward witness. In cross-examination, he mentioned for the first time that he once touched the wet surface of the ceiling and then licked his hand, he found that it was salty.

61.Mr Chong submits that his observation was consistent with the complaint in the Complaint Letter too.

62.I do not think Mr Chiu made a false allegation in his testimony. However, his finding might not be reliable as there could be other reasons why he found saltiness when he licked his own hand. I am not prepared to give any weight on his evidence. In any event, the chloride contents of the dampness in the ceiling slab were borne out by the chloride test and the Company does not need to rely on the observation of Mr Chiu.

63.On the other hand, I accept Mr Chiu’s evidence that he did not withdraw his complaint from the Joint Office on 11 July 2016 or at all as alleged in the 2^nd Letter. The Joint Office might well have been mistaken. I accept his evidence that the seepage problem in the Property persists until the very date of his testimony.

64.Even if the Company told the Joint Office that it was not necessary to take follow-up action in respect of its complaint after the commencement of these proceedings, it does not follow that as a matter of fact the seepage problem has been eradicated.

65.The Contractor testified that on 13 December 2014, Skyhorse engaged him to change all the concealed salty water pipes in the 11 rooms on the first floor to exposed pipes and after the completion of the works he could not detect any water seepage problems in both the Club and the Restaurant.

66.I am unable to have any confidence in his evidence and he clearly had his financial interests to serve. I am not persuaded that all the flush supply and drain pipes are no longer embedded in the concrete. In any event he accepts that the drainage inlets are still being on covered in Room 109.

67.To sum up, I am convinced by the chloride test results that there was salty water seeping to the ceiling slab of the Property. There being no other sources identified, on a balance of probabilities, the sources of such salty water would be the flush supply and drain pipes of the Club on the first floor of the Building.

Knowledge of Skyhorse     

68.This factual issue should be straightforward. The letter sent by the Management Office in November 2014 and the Complaint Letter should have put Skyhorse on notice that there must be something wrong with the flush water pipes in the Club. Up till December 2014, as observed by the Contractor, all the flush supply and drain pipes in the toilets on the first floor were still concealed in the concrete. There is no evidence that Skyhorse had ever checked whether those pipes were properly maintained without leakage.

69.Thereafter, Skyhorse caused to be undertaken some works about the flush supply and drain pipes in its toilets on the 1^st floor. The negative result of the dye test carried out by the Joint Office could not have given Skyhorse any false sense of security given the Guideline. In the absence of any identified source of salty water seeping into the Property, Skyhorse could not be heard to deny any constructive or actual knowledge of its being the source of the salty water seeping into the Property. I cannot accept the bare denial of Ms Wong, the shareholder and director of Skyhorse, under cross-examination.

70.In the circumstances, I am satisfied that Skyhorse should have at least constructive knowledge that the water seepage originated from the toilets in its rooms on the first floor.

Reasonable steps taken to stop seepage?

71.I am not persuaded that all the flush supply and drain pipes of the Club are now exposed and confirmed after tests that they are in good order without any leakage problems. In the absence of such confirmation, I cannot be satisfied that Skyhorse has taken reasonable steps to investigate, locate and repair the water leakage. Skyhorse should reasonably foresee that the persistent leakage problems with its pipes would cause the Company to suffer loss and damage.

72.The seepage is still there. I hold that Skyhorse has failed to make a reasonable effort to solve the seepage problem within a reasonable time or at all.      

73.On the evidence, the claim of the Company is established and I find Skyhorse liable in both nuisance and negligence.

Relief

74.There is a debate about the quantum of damages payable. Both experts have given their assessments in the Joint Report.

75.First, Mr Chong asks for HK$413,000 as the repair costs for reinstating the entire false ceiling of the Property. The Company has produced three quotations obtained in September 2015 and the said amount is the middle-priced one.

76.There is no challenge to the reasonableness of any of these quotations. The issue is whether it is reasonable to have the entire false ceiling replaced.

77.Mr Cheng is right in his submissions that there is no allegation of any structural issue with the false ceiling. The complaint is about the hygiene issue and also it is understandable that the stain marks on the false ceiling would look unsightly in the Restaurant.

78.I agree that there is no valid reason why the false ceiling has to be replaced despite the assertion of Mr Wong. There is no allegation that the dampness of the false ceiling is not amenable to removal even after the cessation of the seepage problem. Nor does it seem to me that the repainting of the false ceiling would not be able to restore it to its original condition.

79.Absent structural issue and given the localization of the stain marks, I am not convinced that it is reasonable for the whole false ceiling to be replaced. I disallow the claim for such costs.

80.The Company is still entitled to a reasonable sum as repair costs for the false ceiling. Mr Lau’s assessment is HK$27,000. I note Mr Chong’s challenge to his expertise to give such an assessment but his assessment was not challenged by way of cross-examination. I am convinced by the resume of Mr Lau that he has the expertise to make the estimate.

81.In the circumstances, in the absence of contrary evidence, I can only accept the figure put forth by Mr Lau as reasonable repair costs. I would allow an additional sum of HK$3,000 due to the fact that the actual repair costs should have been increased over the years.

82.Mr Chong further asks for HK$28,300 as the out-of-pocket expense for replacing a mal-functioning air-conditioner damaged by water seepage on 31 August 2016.

83.However, the evidence of Mr Chiu is only that the air-conditioner was from time to time out of order due to the dampness and it required repair works by the technicians sent by the sales agent of the air-conditioner. There is no allegation that the air-conditioner was beyond repair and necessitated a replacement. Nor is there any allegation of repair costs paid by the Company.  

84.Hence, I am unable to allow such a claim for replacement costs or repair costs.

85.In regard to the claim for damages for distress, discomfort and inconvenience, I am convinced that a corporate plaintiff can make such a claim in respect of a commercial property: see Century Way Investment Limited v Willbert Limited & Anor., unreported, DCCJ 3710/2013, 23.12.2016 per DDJ Winnie Tsui (as then she was).    

86.In the present case, I accept that the seepage problem has persisted for a few years, the emission of a mild stench was caused and the fact that the Restaurant has been deprived of the use of some rented space underneath the dampened part of the ceiling due to the seepage problem for quite some time. Therefore, the Company must have experienced and should still be experiencing inconvenience. It should be entitled to damages under this head.

87.For quantum, I accept the amount of HK$100,000 suggested by Mr Chong, given the duration of the seepage problem and the inconvenience experienced by the Company in the course of the business of the Restaurant.

88.Lastly, Mr Chong indicates that the Company does not press on with its claim for loss of profits. Though an assessment of loss of profits inevitably involves some guess work as there could be a number of reasons for such a loss, the evidence adduced by the Company is not even suggestive of any loss, let alone substantial loss, at all. In my view, Mr Chong is only right not to pursue such a claim.

89.Given the findings above, the Company is clearly entitled to the injunctions sought.

Conclusion and dispositions

90.For the reasons given, I conclude that the Company has proved its claim against Skyhorse and it is entitled to judgment.

91.I shall grant the two injunctions pleaded in the Amended Statement of Claim.

92.Further, Skyhorse should pay the Company a total sum of HK$130,000 as damages.

93.There is no reason why costs should not follow the event. I make a costs order nisi that Skyhorse do pay the Company its costs of this action including all costs previously reserved, if any, to be taxed if not agreed. I also grant the Company certificate for counsel.

94.It remains for me to thank Mr Chong, Mr Lai and Mr Cheng for their detailed and comprehensive submissions.

Mr Patrick Chong and Mr Lai Chun Ho instructed by Michael Pang & Co., for the plaintiff

Mr Alfred C P Cheng instructed by Anthony Siu & Co., for the defendant