Leung Tak Kwan t/a Wallpaper Warehouse (HK) Co. v. Gao Meng Fa Ltd

DCCJ 2532/2019

[2021] HKDC 1540

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2532 OF 2019

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BETWEEN

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Before: His Honour Judge KC Chan in Court

Dates of the Hearing:  14-18 and 22 December 2020

Date of Judgment: 9 December 2021

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JUDGMENT

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1.This claim arose out of a water flooding incident occurred on 25 May 2015.

2.This trial was originally scheduled to be heard in mid May 2020, but due to the measures for public health reasons adopted immediately upon the resumption of hearings after the GAP, this trial was re-fixed to the present hearing dates.

The background, the 2015 Flooding and the 2018 Flooding

3.The plaintiff was and is the sole proprietor of a business trading and wholesaling in imported wall papers and was at the material time operating from the premises known as Unit O, 14^th Floor, Yue Cheung Centre, Nos 1-3 Wong Chuk Yeung Street, Fo Tan, Sha Tin (“Unit 14O” and “the Building”). The plaintiff used Unit 14O primarily as a warehouse storing the wall papers.

4.The defendant purchased and became the registered owner of Unit M, 14^th Floor of the Building (“Unit 14M”) in October 2012. Since then, it rented Unit 14M to one Enlighten Management Services Limited (“the 14M Tenant”).

5.In between Unit 14M and Unit 14O was Unit N (“Unit 14N”). There were 16 units on a floor, identified as Units A to P. There are 8 units adjacent to each other on each side – Units A to H on one side and Units P to I on the other - separated by an elongated corridor. In each unit were two lavatories, one for male and one for female. It is common ground that the lavatories of units M and L of the Building were served by the same vertical drainage pipe which has a diameter of 100 mm (“the Vertical Pipe”). The relevance was this will be made apparent later.

6.Since about 2014, occupying Units E, F, G, H, J, K and L on the 15^th Floor of the Building and using them as a factory producing noodles has been one Luen Fung Flour Noodle Factory Limited (“the Noodle Factory”).

7.At about 9:50 am in the morning on 25 May 2015, which was a Monday and a public holiday, the management office of the Building (“MO”) received a report from the occupier of Unit 14N that Unit 14N was flooded.

8.Mr Law Tik Wah (“Law”), the Head of Security of the Building employed by the Incorporated Owners of the Building and two other staff of the MO then attended the 14^th Floor. They found that there was water flooding into Unit 14N. They found the flooding also involved Units 14M, 14O, and to a minor extent, also Unit P (“the 2015 Flooding”). They could not enter Unit 14M as it was locked. With a view to stop the flooding, the staff then turned off the saltwater supply for flushing the toilets of Unit 14M and Unit L on the same floor (“Unit 14 L”) (which shares a common saltwater supply) as well as the fresh water supply to the entire 14^th Floor. It is common ground that the toilets in the Building were flushed by the supply of sea water. Though none of the witnesses expressly said so, but it is very obvious as no one mentioned that the flooding continued despite the said taps being turned off or mentioned that other measures were taken to try to stop the flooding, and I find, that the flooding stopped after the said taps were turned off.

9.The MO then informed the responsible persons of the said 4 units about the incident. Various personnel from the units involved then arrived at the scene. Mr Au Kin Sing (“Au”), the Compliance Officer of the 14M Tenant arrived to open the door to Unit 14M.

10.A plumber Mr Lai Yung Shi (“Lai”) sent by the defendant also arrived at Unit 14M shortly after. After checking and communicating by phone with the defendant’s director Ms Chan Chau Yi (“Chan”), Lai immediately carried out certain repairs to the facilities in the male lavatory of Unit 14M that day.

11.Mr Leung Wai Kee (“Leung”), father of the plaintiff, arrived at Unit 14O at about 12:45 pm and found that the entire floor area of Unit 14O was flooded with water 2 inches deep. He found that the wall papers stored on the floor, among other properties, were all soaked.

12.It is common ground that no one attending the scene was able to give, or gave, direct evidence as to where the water causing the flooding came from.

13.In the record in the occurrence book of the MO filled out at about 1:00 pm that day by Law (“Law’s Record”)[1] who all along attended the incident, the incident was described as “flooding caused by broken waste drainage pipe” (exact words in Chinese were “污水渠爆裂引致水浸”).

14.Considering Unit 14O no longer suitable to be a warehouse and in July 2015, the plaintiff vacated Unit 14O and relocated her warehouse to another premises in Tsuen Wan (“New Premises”).

15.On 11 March 2016, the plaintiff commenced HCA 640/2016 against the defendant to claim loss and damages.

16.On 9 July 2018, another flooding occurred on the 14^th Floor of the Building affecting Unit 14M, Unit 14N, Unit 14L and Unit K (“the 2018 Flooding”). According to Chan, the flooding water was milky and warm and it originated from the Noodle Factory, and the discharge of this milky water containing flour by the Noodle Factory had caused incrustation inside, and then the blockage of, the Vertical Pipe.

17.On 13 December 2018, HCA 640/2016 was transferred to the District Court and leave was given to the defendant to re-amend its pleading.

18.By the re-amendment, the defendant introduced the plea that both the 2015 Flooding and the 2018 Flooding were caused by the Noodle Factory and therefore the defendant should not be held liable for the 2015 Flooding.

Alleged breaches by the defendant of the DMC, the Ordinance and the common law

19.It is common ground that the rights and liabilities of the owners of the Building relating to their units were governed by the Deed of Covenant dated 6 November 1986 (“the DMC”). The DMC contained the following provisions which the plaintiff said the defendant had breached:-

“16. Each party hereto hereby covenants with the others as follows:

…

(c) Not to use the Unit of which he is entitled hereunder for any illegal or immoral purposes nor do or permit anything therein or thereupon which may create unnecessary noise or may be a nuisance or annoyance to or may cause damage or inconvenience to the other occupiers of the Building.

…

(e) To be responsible for and indemnify the Manager of the Building and all other owners and occupiers against all actions, proceedings, claims and demands whatsoever arising out of or in respect of any loss or damage to any person or property caused by or as the result of the act or negligence of any occupier of any unit of which he is the owner or of any person using such unit with his consent, expressed or implied or by, or through, or in any way owing to the overflow of water therefrom.

(f) To be responsible to the Manager of the Building and other owners for the time being for the acts and omissions of all persons occupying any unit of which he is the owner or using the same with his consent, express or implied and to pay off costs, charges and expenses incurred in repairing or making good any loss or damage caused by the act, neglect or default of all such persons.

…

(h) Each owner shall maintain in good repair and condition in such a manner so as to avoid any loss, damage nuisance or annoyance to the owners or occupiers of any other part or parts of the Building that part of the Building owned by him.”

20.Alternatively, the defendant was also said to owe to the plaintiff a statutory duty under Section 34H of the Building Management Ordinance Cap 344 which provides:-

“34H. Duty to maintain property

(1) Where a person who owns any part of a building, has the right to the exclusive possession of any part of a building or has the exclusive right to the use, occupation or enjoyment of that part, as the case may be, but the deed of mutual covenant in respect of the building does not impose an obligation on that person to maintain the part in good repair and condition, that person shall maintain that part in good repair and condition. (Amended 69 of 2000 s. 14)

(2) The obligation in subsection (1) shall be deemed to be an obligation owed to all owners of the building under the deed of mutual covenant.”

21.The plaintiff claims further and alternatively that the defendant is liable in negligence and nuisance.

Issues in dispute

22.Pursuant to the court’s direction given in the Pre-trial Review, the parties filed an Agreed Statement of Issues in Dispute[2] setting out the following as the agreed issues to be resolved at this trial (“the Agreed Issues”):-

“(1) Whether [Unit 14O] had suffered from water leakage on 25 May 2015 as alleged ? If yes to (1) above, what was the source of the 2015 Flooding?

(2) Whether as contended by the plaintiff, the source of the said water leakage ie. the 2015 Flooding suffered by [Unit 14O] originated from [Unit 14M] as alleged ?

(3) If the source of the 2015 Flooding did not originate from [Unit 14M] … , what would be the possible cause(s)/source(s) of the 2015 Flooding ?

(4) What were the causes of the 2018 Flooding … ? Whether … the source of the 2018 Flooding was related to the source of flooding of the 2015 Flooding ?

(5) If the plaintiff’s claim succeeds, what should be the quantum of damages to be awarded by the Court ?”

The witnesses

23.Leung gave factual evidence for the plaintiff, while Chan, Lai and Au gave factual evidence for the defendant.

24.Law evidently is a very material factual witness. The plaintiff filed a short witness statement of Law consisting of 4 paragraphs in Chinese dated 25 April 2017 and filed on 28 April 2017 (“Law WS1”). The material account was given only in paragraph 4 thereof, the contents of which were by and large the same as Law’s Record.

25.Oddly, included in the Trial Bundles is another witness statement of Law prepared by the defendant’s solicitors consisting of 14 paragraphs in English signed by Law and dated 27 April 2017 (“Law WS2”), but bearing a chop showing that it was received by the plaintiff’s solicitors about a year later on 25 April 2018. It was never filed, nor was there any application for leave to file the same having been made. The parties, particularly the defendant, could not offer a clear explanation at trial of this state of affairs. The upshot was that despite the plaintiff having issued and served a subpoena on Law, he did not attend trial to give evidence. Ultimately, the parties by agreement adduced the said 2 witness statements of Law as evidence.

26.Mr Choi Wing Hay Calvin (“Choi”), the director of the company then occupying Unit 14N and who on 25 May 2015 first discovered there was flooding on 14^th Floor, filed a witness statement as a witness for the plaintiff. He however also did not appear to give evidence. I will therefore completely disregard the contents of his witness statement. In this connection, the defendant asked the court to draw an adverse inference against the plaintiff as a result, a matter which I will discuss later on.

27.The parties have engaged two sets of experts to give expert evidence.

28.The plaintiff’s expert on liability Mr Lee Kwok Chuen compiled a report dated 19 September 2017 (“P’s Liability Expert” and “P’s Liability Expert R1”) and the defendant’s expert on liability Mr Lam Siu Shu Eddie compiled a report dated 9 October 2017 (“D’s Liability Expert” and “D’s Liability Expert R1”). They compiled 2 joint statements respectively dated 31 January 2018 and 19 June 2018 (respectively “Liability Experts’ JS1A” and “Liability Experts’ JS1B”). Following the introduction of the 2018 Flooding by the defendant in her pleadings, the 2 liability experts were given leave to, and did, compile another round of supplemental reports respectively dated 9 January 2019 (“D’s Liability Expert R2”) and 18 March 2019 and (“P’s Liability Expert R2”) and another supplemental joint statement dated 14 May 2019 (“Liability Experts’ JS2”).

29.The plaintiff’s former expert on quantum Mr Tsang Kwok Yin Eric (“Tsang”) compiled a report dated 10 May 2017 and the defendant’s expert on quantum Mr Wong Shun Tai Stewart compiled his dated 18 May 2017 (“D’s Quantum Expert” and “D’s Quantum Expert Report”). Unfortunately, Mr Tsang passed away shortly after. He was replaced by Mr Chang Ka Chung who compiled a report dated 12 March 2018 based largely on the opinion of late Tsang (“P’s Quantum Expert” and “P’s Quantum Expert Report”). The two quantum experts compiled a joint statement dated 13 March 2018 (“Quantum Experts’ JS”).

30.Both sets of experts gave oral evidence at trial.

WHETHER UNIT 14O HAD SUFFERED FROM WATER LEAKAGE ON 25 MAY 2015 AS ALLEGED

31.It is not clear why this was stated in the Agreed Statement of Issues in Dispute to be an issue. At trial, the defendant did not dispute that Unit 14O did suffer from flooding on 25 May 2015, and I so find.

WHETHER THE WATER FLOODING UNIT 14O IN THE 2015 FLOODING ORIGINATED FROM UNIT 14M; WHAT WAS THE CAUSE / SOURCE OF THE 2015 FLOODING ?

Water could pass through under the partition walls

32.I will begin by addressing whether water could pass through under the partition walls of Units 14M, 14N and 14O, which was a subject investigated by the liability experts. This was brought into issue as in the witness statement of Lai, he said that when he arrived at 14^th Floor of the Building at or around 11:00 am on 25 May 2015, he noticed there was no water on the corridor of that floor, which was not contradicted by the evidence of the other witnesses or by any photograph taken that day.

33.In the inspection by P’s Liability Expert on 26 July 2017[3]:-

(1) He noted that the side at Unit 14M of the partition wall between Unit 14M and Unit 14N was newly painted, while the side at Unit 14N showed clear marks of water stain and serious paint peel-off at the section of the wall close to the floor. He also noted there was a gap between the floor and the partition wall separating Unit 14M and Unit 14N.

(2) He also noted that at both sides of the partition wall separating Unit 14N and Unit 14O were clear marks of water stain and serious paint peel-off at the section of the wall close to the floor. He also noted there was also a gap between the floor and the partition wall separating Unit 14N and Unit 14O.

(3) He was making preparation work in Unit 14M to set it up for a ponding test to see if water could leak through from Unit 14M to Unit 14N under the partition wall. Before the set up was completed, Chan refused further permission and dismantled the set-up and asked P’s Liability Expert to leave.

(4) He continued setting up a similar ponding test in relation to the partition wall between Unit 14N and Unit 14O and found that water immediately passed through the gap between the wall and the floor from Unit 14N to Unit 14O.

(5) He opined that there was no waterproofing system between these partition walls and the floor, and that even though the test could not be carried out regarding the partition wall between Unit 14M and Unit 14N, he was of the clear opinion that water could similarly pass through thereunder.

34.In the second inspection carried out by D’s Liability Expert on 27 September 2016, instead of setting up a ponding test, he merely swayed 10 buckets of water (volume of bucket was not given) one by one in Unit 14M towards and along the entire length of the partition wall with Unit 14N. Even by such a test, he found that water readily passed through from under the partition wall to Unit 14N[4].

35.D’s Liability Expert also did not dispute the opinion of P’s Liability Expert that there was no waterproofing system between the partition walls and the floor and that water could similarly pass through the partition walls between the other units.

36.I therefore find that water could pass through under the partition walls separating Units 14M, 14N, 14O and 14P.

The state of disrepair of the facilities in the lavatories of Unit 14M, and the repairs actually performed on 25 May 2015

37.Au, the Compliance Officer of the 14M Tenant, said the following in evidence. Unit 14M was rented by the 14M Tenant to store documents since 2012. He was employed by the 14M Tenant since 2013. He was the only person of the 14M Tenant that would visit Unit 14M. He visited Unit 14M only occasionally, about once or twice a year, and would only stayed there briefly. He had never used the lavatories of Unit 14M. He had never flushed the toilets there.

38.During his visits, Au would usually walk around inside Unit 14M to see if everything was alright, and during these walks he noticed that there was a big patch of rust stain on the floor at the base of the flush toilet near where it was connected to the horizontal waste pipe via the T-joint. He confirmed that the rust stain patch was similar to that depicted in the photograph taken by Lai on the day of the 2015 Flooding[5]. I thus find that there had been leakage at the said T-joint for quite a while.

39.Au also confirmed that the defendant has never visited Unit 14M after it was rented to the 14M Tenant who had changed the lock and kept the keys. In other words, and I find that, the defendant has never done any repairs to the facilities in the lavatories since Unit 14M was rented to the 14M Tenant.

40.In this regard, I particularly note that, despite the allegation made against the defendant that it has breached Clause 16(h) of the DMC, Chan in her witness statement has not even mentioned anything regarding the condition, or the state of repairs, of the lavatories in Unit 14M, or whether any repairs has ever been done by the defendant to the facilities in the said lavatories.

41.The pictures taken by Lai on the day of the 2015 Flooding clearly showed that in the male lavatory of Unit 14M, as spoken to by Leung, and I find, the pig iron T-joint connecting the horizontal waste pipe and the flush toilet was seriously rusted and cracked, and broken on the side extended to the under-side with an opening of about 2 x 5 inches in size and with broken pieces of the pipe on the floor.

42.Based on the above-mentioned evidence and matters, I find that the facilities in the lavatories in Unit 14M had not been used at all since 2013 and were in a general state of serious disrepair immediately prior to the 2015 Flooding.

43.I would note at this juncture that despite it being so clearly depicted in the picture he had taken, it has taken multiple questions in the cross-examination of Lai for him finally to answer that the pipe was in fact broken as above described. Lai also repeatedly asserted that nevertheless it would not cause serious leakage. I find that when Lai was giving evidence, he was evasive and argumentative advocating for the defendant’s case rather than trying to give truthful evidence of factual matters. I also find what Lai said in his witness statement that he did not find anything unusual about the toilet, that he only saw some rust outside the horizonal waste pipe, that he only suggested to Chan to replace the part of the waste pipe “for safety purpose” were serious understatements close to mis-statements and were at best half-truths.

44.I also find it most odd that in his witness statement (filed on 28 April 2017), Lai only said that the repairs he carried out consisted of replacing the “related waste pipe in the Toilet” and repainting a section of the Vertical Pipe near the floor (“the Mentioned Repairs”), and it was not mentioned at all that he in fact on 25 May 2015 also replaced the flush toilet, the toilet cistern and the entire section of pipes supplying the sea water to the new cistern (“the Unmentioned Repairs”; together with the Mentioned Repairs, “the Repairs”).

45.The Unmentioned Repairs were also not mentioned at all in the witness statement of Chan (filed on 28 April 2017). In fact, in paragraph 6 of Chan’s witness statement, she recounted in detail the telephone conversation she had with Lai on 25 May 2015 in which Lai reported what he found, suggested the repair works to be done and she agreed to the suggestion. According to Chan’s account there, only the Mentioned Repairs were suggested by Lai “in order to be safe” and only the Mentioned Repairs were agreed by her. The Unmentioned Repairs were not mentioned by Chan at all as part of that conversation. The new flush toilet and toilet cistern no doubt costed much more than the new PVC T-joint and PVC horizontal waste pipe. The defendant would be paying for them and the labour costs for replacing them. I find it most incredible and highly improbable that Lai would go ahead purchasing and replacing the flush toilet and the cistern that day without first obtaining Chan’s agreement. I find it equally incredible and highly improbable that both Lai and Chan would at the same time inadvertently forget to mention the Unmentioned Repairs in their respective witness statements.

46.For completeness, I would also note that the Unmentioned Repairs were also not mentioned in the defendant’s pleadings or in the witness statement of Au.

47.It was only in Liability Experts’ JS1A (dated 31 January 2018) that P’s Liability Expert first made the observation that the Unmentioned Repairs had been made and he there made a point that if the flush toilet, cistern and the piping supplying the sea water were in good condition, there was no reason to replace them[6]. P’s Liability Expert also there opined that “if the cistern was not used for a long time, the valve for controlling the level of water would be defective and that the water will flow out the cistern continuously if the unit was not attended by persons”[7].

48.That notwithstanding, the Unmentioned Repairs were not alluded to by Chan in her supplemental witness statement (filed on 9 January 2019), or commented on by D’s Liability Expert in Liability Experts’ JS1A, Liability Experts’ JS1B, D’s Liability Expert R2 or Liability Experts’ JS2. Nor has the defendant sought to file a supplemental witness statement of Lai to say whether the Unmentioned Repairs were actually made immediately after the 2015 Flooding and explained why he did not mention it in his witness statement. In other words, though the Unmentioned Repairs were discovered by P’s Liability Expert and adversely commented on in January 2018, the defendant’s side since just completely ignore it as if the matter were non-existent.

49.It was only at trial when asked in cross-examination that Lai admitted that the Unmentioned Repairs were actually made and that they were made on 25 May 2015 at the same time with the Mentioned Repairs. However, he offered no explanation as to why the Unmentioned Repairs were not at all mentioned in his witness statement as having been made at the same time with the Mentioned Repairs and as to whether it was talked about in the telephone conversation with Chan that morning.

Did water flow out from Unit 14M in the 2015 Flooding?

50.As explained above, now by agreement placed before the court are two witness statements of Law. In Law WS2, Law gave a much more detailed account, as compared to Law WS1, of what he saw and did on 25 May 2015. The defendant submitted that I should give more weight to Law WS2[8].

51.I find that in relation to whether water flowed out from Unit 14M in the morning of 25 May 2015, there was no conflict between Law’s account as given in Law WS1 and Law WS2, but rather, the account given in Law WS1 was not as clear and was lacking in details, while the account in Law WS2 was clear and detailed. In the circumstances, I will accord the account given in Law WS2 due weight.

52.In Law WS2, Law said:-

“3. … An around 9:50 a.m. in the morning, I received notice from the Management Office that there was water flooding in Flat N on the 14^th Floor of the Building (“Flat N”). When I arrived at the scene, I saw some water stain on the floor of Flat N and there were some workers inside Flat N trying to clear the water inside and I proceeded then to check where the water came from after a few minutes time.

4. When I started trying to locate the source of water for the flooding, I discovered that there was also some water flowing out from Flat M of 14th Floor (“Flat M”). Since the corridor of 14^th Floor was slightly tilted from Flat M’s direction towards Flat N’s direction, I guessed personally that the water might have come from Flat M. However, when I knocked on the door of Flat M, nobody answered to my call. As there was a slight slit in between the door and the doorframe of Flat M, I saw some water on the floor of Flat M and I therefore suspected there may be some burst of pipes inside Flat M.

5. In order to ensure there would not be further flooding on the 14^th Floor from whatever source, I decided to turn off the water tap for both clear water and sea water. Since the sea water tap for flats L and flats M of the whole Building is connected together and was located on the roof of the Building, I went to the Roof myself to turn off the sea water tap whilst my other staff turned off the clear water tap for the entire 14th Floor which was located in the water meter room on the 14th Floor. The reason why I only turned off the sea water tap for Flat L and Flat M was that I only saw water flowing from Flat M direction towards Flat N direction as abovementioned though I could not be sure where the source of water came from.” (my emphasis)

53.Therefore, according to Law’s evidence, which was expressed in no unclear terms, that he saw water flowing out from Unit 14M towards Unit 14N. Against the setting, as I find, that water could readily pass through from under the partition walls between these units, I find it not incredible that Law could have observed that water was passing through from under the partition walls from Unit 14M towards Unit 14N. Also, when Law said he “could not be sure where the source of water came from”, I think it very clear that in context he meant that he could not see exactly from which spot or pipe the water actually gushed out as Unit 14M was locked and he was not able to observe that through the slight slit in between the door and the doorframe of Unit 14M.

54.I find that the MO did inform Chan contemporaneously at the time that water was leaking out from Unit 14M, as it was the evidence of Lai, which specific part I accept, that in the morning of 25 May 2015 when Chan asked Lai to go to Unit 14M to check, he was told by Chan that she was informed that there was water leaking out from Unit 14M. It also explained why Chan sent Lai, a plumber, to Unit 14M right away when she received the news over phone.

55.In the premises, I accept the evidence of Law that he saw water flowing out from Unit 14M towards Unit 14N.

56.In this regard, I find the opinion of D’s Liability Expert that he measured and found no tilting of the floor of the corridor from Unit 14M towards Unit 14N inconsequential as regards my finding above. Firstly, water passed through under the partition walls, not from Unit 14M towards the corridor then into Unit 14N or Unit 14O. Secondly, when water accumulated to 2 inches deep (which was the evidence of Leung regarding the depth of water in Unit 14O, which I accept), there would be sufficient pressure, despite the fact that the floor was level, for water to flow (through under the walls) from Unit 14M towards Unit 14N, and likewise, from Unit 14N to Unit 14O.

57.Now, at the time when Law first arrived at 14^th Floor, the taps were not turned off and Law did not see any water gushing out anywhere from inside Unit 14N. That would exclude Unit 14N as the source of the water.

58.It is common ground that in the 2015 Flooding Unit 14L was not flooded. That would also exclude the nearby Unit 14L as the source of the water.

59.It is also not disputed and according to Law[9] that Unit 14P was only slightly flooded, with only the carpet on the floor getting wet. It is thus very highly improbable that water would source from Unit 14P causing such a serious overflow and flood to Units 14M, 14N and 14O, while itself only sustained such a minor wetting-of-the-carpet. In my judgment, I will also exclude Unit 14P as the source of water.

60.Next, it is common ground, and there is no suggestion otherwise, that there was no repairs whatsoever done to Unit 14O immediately after the 2015 Flooding, and the sea water supply to Unit 14O was never turned off at the time, such that if water indeed originated from Unit 14O causing the 2015 Flooding, then later on when the taps were turned back on, water should be seen escaping from Unit 14O, which was never the case.

61.The plaintiff emphasized, which I find, that after the 2015 Flooding, the only repairs done to any of the above-mentioned units on the 14^th Floor of the Building were the Repairs done to Unit 14M, and that thereafter for the next 3 years until the 2018 Flooding, there was no other instance of flooding. The plaintiff submitted essentially that it can be inferred that whatever was the cause of the 2015 Flooding, it has been remedied by the Repairs done to Unit 14M. Taking into account my conclusion below that I do not accept the opinion of D’s Liability Expert that the 2015 Flooding might have been caused by the backflow from the Vertical Pipe, I find the reasoning of this submission compelling, and I accept it.

62.Based on (a) Law’s such evidence, (b) my analysis above excluding the surrounding Units 14L, 14N, 14O, 14P as the source of the water, leaving Unit 14M as the source of water causing the 2015 Flooding and (c) the fact that there was no further flooding for a long while after the Repairs were done to Unit 14M, I find that the water that caused the 2015 Flooding came from inside Unit 14M.

63.It is convenient for me here to address the defendant’s submission that an adverse inference should be drawn against the plaintiff as Choi failed to attend trial to give evidence. To begin with, this is not the usual situation where a witness who is able to give probative evidence was not called and also did not file a witness statement. The witness statement of Choi was filed on 28 April 2017. In paragraph 6 thereof he said that “at about 10:00 a.m., … I saw the serious water leakage problem at Flat N and also noticed water leaking from the common wall between Flat M and Flat N”. As said, I have completely disregarded Choi’s witness statement, and as above set out, have reached my above finding without taking it into account. Moreover, Choi was an independent party who was equally accessible to the plaintiff as well as the defendant as a witness, and the defendant therefore could have called him. In the premises, I would not draw any adverse inference against the plaintiff; or, even if I were to draw any adverse inference (which I would not), I would have taken the view that the adverse inference is not of sufficient weight to affect my discussion and then my finding above.

The 2018 Flooding; backflow from the Vertical Pipe caused the 2015 Flooding ?

64.I will deal next with the defendant’s contention that the 2015 Flooding and 2018 Flooding were similar and were both caused by the waste water discharge from the Noodle Factory which contained flour, thereby causing incrustation to the inner surface of the Vertical Pipe, then blockage, and then backflow, causing the 2015 Flooding and the 2018 Flooding.

65.I will first succinctly describe the 2018 Flooding as reported in an incident report made by Law dated 9 July 2018[10] and as described in the supplemental witness statement of Chan, both of which were not disputed.

66.At about 9:55 am on 9 July 2018 (a Monday), occupiers of Unit 14N reported to the MO that water leaked from Unit 14M through the partition wall. Law and other staff attended the 14^th floor. As seen from the photographs, the water was milky white in colour and had an oily layer on the surface. Chan further said that the water also felt warm. Law and the staff then turned off the fresh water supply to the 14^th floor and the sea water supply to the lavatories of Unit 14M and Unit 14L. Though the taps were turned off, the flooding continued. Law then went up to the Noodle Factory on 15^th floor to ask the workers there to stop discharging water, but to no avail. In the meantime, the flooding spread to Units 14M, 14N, 14O, 14K and 14L. As can be seen from the residue flour and grey stain left on the surface of the flush toilets, the milky water back flowed through the Vertical Pipe, then the horizontal waste pipe and escaped from the flush toilets of Unit 14M.

67.A professional drainage company was engaged that afternoon to unblock the pipes and drainage, particularly the Vertical Pipe. It is common ground that a section of the Vertical Pipe on the 13^th floor was found blocked, and that section was saw out and replaced (among other remedial measures).

68.Without really giving any clear reasons, in D’s Liability Expert R2, D’s Liability Expert opined and concluded:-

“Based on my inspections on 30 March 2016, 27 September 2016, 4 May 2017 and 9 July 2018, I am of the opinion that the 2018 Flooding is a replica of the 2015 Flooding and that the sources of flooding in [sic] both occasions are the same and originated from the Noodle Factory.”[11]

69.My understanding of the evidence of D’s Liability Expert is that he accepted what Lai said in his witness statement (a) particularly Lai’s narrative in paragraph 5 thereof[12], and thereby summarily and definitively excluded the scenario that the 2015 Flooding was caused by leakage from the sea water supply in the male lavatory of Unit 14M, and (b) he based his opinion on what Lai said regarding the water in the 2015 Flooding being milky.

70.I have no hesitation in preferring the opinion of P’s Liability Expert that the 2015 Flooding and the 2018 Flooding were different in nature and were occasioned by different causes, in view of the following:-

(1) In the 2015 Flooding, water stopped after the fresh water supply on the 14^th floor and the sea water supply to the lavatories of Units 14M and 14L were turned off, but water continued to flow in the 2018 Flooding though the said water supplies were likewise turned off on that occasion.

(2) The flooding water in the 2018 Flooding was clearly and very noticeably milky white in colour and had an oily layer on the surface. As I will explain in the next paragraph, I do not find it to be the case regarding the flooding water in the 2015 Flooding.

(3) The cause of the 2018 Flooding was addressed mainly by the unblocking of the Vertical Pipe and replacing part of it by professionals (among other drainage service done). After such works were performed, there was no further flooding. The common ground concerning the 2015 Flooding, however, is that no clearing, unblocking or replacing of section of the Vertical Pipe were required or performed, and the only remedial measure performed were the Repairs done to Unit 14M; and then there was no further flooding.

71.I do not accept Lai’s evidence that the water in the 2015 Flooding was milky white in colour, despite he insisting on it when giving oral evidence, for the following reasons:-

(1) Law, who attended Unit 14N upon receiving the report of flooding and has been dealing with the whole incident that day, and whose evidence I generally accept, said in Law WS2 that the water was clear water[13].

(2) Leung’s evidence, which I accept, was that the water was not milky white in colour.

(3) From the photographs taken by the staff of MO[14] and taken by Leung[15], it can be readily perceived that the water on the floors of various units on the 14^th floor was clear and transparent.

(4) No witness mentioned that there was an oily layer on the surface of the water in the 2015 Flooding, and none can be perceived in any of the pictures.

(5) Also, had the water came from a backflow of water discharged by the Noodle Factory (which was milky white in colour), it would not have stopped after the fresh water and sea water supply taps were turned off by Law and his colleague.

72.In the premises and for the above reasons, I reject the opinion of D’s Liability Expert and find against the defendant’s case that the 2015 Flooding and 2018 Flooding were similar incidents, that the 2015 Flooding was caused by the clogging or blockage of the Vertical Pipe resulting in backflow therefrom.

The 2015 Flooding was caused by illegal alternations made connecting the vertical drainage pipe for rainwater to the Vertical Pipe ?

73.In D’s Liability Expert R1, D’s Liability Expert postulated another possible cause for the 2015 Flooding – namely, ingress of rainwater into the Vertical Pipe.

74.D’s Liability Expert said the following, which was not seriously disputed by P’s Liability Expert. It was not uncommon in Hong Kong that waste pipes may somehow, intentionally or unintentionally, be connected to rainwater pipes. Such connection is in breach of building regulations. The rainwater vertical pipes, by law, should be 150mm in diameter and should be a stand-alone system exclusively for the drainage of rainwater collected from the roof directly to manholes. If there were such illegal connection, rainwater may get into the waste drainage system and overload it during heavy rainfall and caused overflow to the floor drain or water closet.

75.D’s Liability Expert then referred to the fact that there was recorded heavy rainfall on the few days before the 2015 Flooding, and he opined that this might explain the 2015 Flooding.

76.In Liability Experts’ JS1A, D’s Liability Expert provided the information, which was not disputed, that the relevant 150 mm rainwater vertical pipe ran from the roof in the Building along and inside the male lavatories of units L on all the floors in the Building, whereas as mentioned, the Vertical Pipe ran along and inside the male lavatories of units M on all the floors in the Building. The two pipes therefore were separated by the partition wall between units L and units M.

77.The oral evidence of the two liability experts were essentially in agreement, and I accept, that whether this could have been the cause of the 2015 Flooding would depend on a number of conditions being met:-

(1) There was actually such an illegal connection at a point indicated below.

(2) If water backflowed from the Vertical Pipe, it would escape first from the first available outlet, such as the nearest floor drains and flush toilets. Therefore, for rainwater to backflow from the Vertical Pipe to the lavatories in Unit 14M, there would have to be a clogging/blockage point in the Vertical Pipe somewhere between the 13^th to 14^th floor or else such water would have backflowed to and flooded Unit 13M or Unit 13L (or such units providing the nearest water escape outlet(s)) rather than Unit 14M.

(3) At the same time, the point of ingress of rainwater to the Vertical Pipe (ie the illegal connection between the Vertical Pipe and the rainwater vertical pipe) in all likelihood need to be at a point above the said clogging/blockage point in the Vertical Pipe, or else the rainwater could have been drained by the Vertical Pipe, or if there were other clogging/blockage point(s) below, would cause backflow to any of the lower floors, rather than Unit 14M.

(4) Unless the rainwater vertical pipe was also clogged or blocked or the volume of rainwater was so huge, the rainwater should have been able to be drained by the 150 mm rainwater vertical pipe, as the 150mm diameter of that pipe was required by building regulations as it would provide the sufficient flow volume to cater with the heavy rainfalls in Hong Kong.

78.Having heard and considered the expert evidence, I have no hesitation in rejecting this as the cause of the 2015 Flooding because:-

(1) Primarily and as emphatically pointed out by P’s Liability Expert, whose reasoning I find very compelling, and I accept, that had there actually been such an illegal connection and the above-mentioned conditions having been met, it would have been highly probable that there were other instances of such backflows before or after the 2015 Flooding when there were heavy rainfalls, bearing in mind that the rainfall immediately before the 2015 Flooding was heavy, but not record-breaking heavy. Moreover, the 2018 Flooding showed that there was around the time a blockage of the Vertical Pipe on 13^th floor, but it was waste water from the Noodle Factory that backflowed and there was not an instance of backflow of rainwater before or around that time.

(2) This possibility was first postulated in D’s Liability Expert R1 dated 9 October 2017. Since then until trial for over 3 years, the defendant has not been able to proffer any evidence that there was in fact such illegal connection of the Vertical Pipe and the rainwater vertical pipe on the relevant floors, namely, 13^th to 16^th floors. There is ample evidence before me that the owners of the affected units in the 2015 Flooding and 2018 Flooding had been working with the MO relating to the 2 incidents of flooding, yet there is no evidence before me that the defendant has even tried to investigate this matter of illegal connection. As the defendant has not even tried, I could not accept any explanation that no such evidence could be proffered because the defendant did not have access to the relevant units.

(3) There being no evidence of such an illegal connection or other instances of flooding caused by backflow of rainwater (whether on the 14^th floor or other floors of the Building), this possibility is at best a purely theoretical possibility, and is not at all proved on balance of probabilities.

The Cause, and the source of water, of the 2015 Flooding; Liability established

79.Based on my findings above, namely (a) water flowed out from Unit 14M into Unit 14N, (b) water could pass through from the gap between the partition walls and the floor from Unit 14M to Unit 14N and then to Unit 14O, (c) Units 14N, 14O, 14L and 14P are excluded as the units from which the water escaped, (d) the flooding stopped after Law and his colleagues turned off the fresh water supply to the 14^th floor and the sea water supply to Units 14M and 14L, (e) the only repairs or remedial works done after the 2015 Flooding were the Repairs, (f) after the Repairs, there was no incident of flooding since then until the 2018 Flooding, and (g) my rejection of the defendant’s case set out above, it is in my judgment an irresistible inference that the 2015 Flooding was caused by a failure in the sea water supply facilities in the male lavatory of Unit 14M.

80.As have mentioned, P’s Liability Expert opined that the likely cause would be a failure in the valve mechanism of the cistern controlling the inflow of water into the cistern up to a certain level, thereby water would continuously flow into the cistern despite it was full and water would then flow out continuously from the top of the cistern[16]. In response, D’s Liability Expert in Liability Experts’ JS1A only mentioned and reasoned based on the likely volume of water leaked if the valve controlling the outflow of water from the cistern to the flush toilet failed, and not when the valve controlling inflow of water to the cistern failed[17]. It was only in oral evidence that D’s Liability Expert essentially asserted barely and in very general terms that such mechanism could not easily fail. Bearing in mind the general state of serious disrepairs and lack of use of the male lavatory in Unit 14M, that as agreed by the liability experts that the hanging cistern in male lavatory of Unit 14M was of an aged design used up to the 1980s, I prefer and accept the opinion of P’s Liability Expert.

81.I have set out in detail above the odd feature that the Unmentioned Repairs were not spoken to in the witness statement of Lai and the witness statement of Chan and that even after the same were discovered, adversely commented and opined on by P’s Liability Expert in Liability Experts’ JS1A, the defendant’s side has not in any way acknowledged, explained, responded to, or deal with the matter. As said, Lai admitted to the Unmentioned Repairs in cross-examination, but no evidence was proffered from Lai or Chan to explain why the Unmentioned Repairs were made in addition to the Mentioned Repairs. In the circumstance, I find valid and forceful the point made by P’s Liability Expert all along (and unanswered) and also made by the plaintiff at trial that if the flush toilet, the cistern and the piping supplying the sea water were in good condition, there was no reason to replace them and to replace them immediately. Taking all these matters into account, I will draw an adverse inference against the defendant and find that the flush toilet, the cistern and the said piping (either one or either combination of them or all of them) were not in good condition as on 25 May 2015 necessitating them to be replaced immediately.

82.The defendant relied heavily on, and the opinion of D’s Liability Expert was based on, what Lai said in paragraph 5 of his witness statement to exclude the sea water supply facilities in the male lavatory of Unit 14M as the source of the flooding water. In paragraph 5 of his witness statement, Lai said

“5. When I arrived at Flat M, I noticed from the management staff present at the scene that the main water taps for Flat M including both clear and sea water had been turned off. When the main water taps for Flat M were turned on later in the morning, I did not see any water burst from anywhere inside the toilets.”

83.When dealing with various issues and in paragraphs 43 to 45, 49 and 71 above, I have made various adverse comments with reasons on the evidence of Lai and rejected certain specific evidence of his. I am unfavourably impressed by him and do not find him an honest or reliable witness. I entertain serious doubt that he was telling the court the truth or the whole truth. I do not accept his evidence generally (save the specific part I accepted), particularly I do not accept what he said in paragraph 5 as accurate, reliable or the whole truth, and I reject it.

84.On a side note, it can be seen from Photo 8 of P’s Liability Expert R2[18] depicting the female lavatory of Unit 14M that there was a tap above the cistern (hanged high up on the wall) controlling locally the sea water supply to the cistern. In all likelihood therefore, there was the same tap in the male lavatory[19] at the material time. The tap could have been easily assessed by anyone to stop an overflow from the cistern. On the evidence before me, it is not sure whether in the chaos in the morning of 25 May 2015, and with many people present and going in and out of the various units, at some point in time someone might have turned off the tap.

85.Law in paragraph 9 of Law WS2 said that “the water which I saw in Flat N and Flat M should not be sea water but should be clear water instead as I did not get the smell of sea water or foul water associated with burst of toilet pipes” (my emphasis). I thus note that his evidence was made by way of a comment or observation in passing. He did not say he stopped and stooped down and placed his nose close to the water to try to purposefully smell out whether it was sea water. That being the case, I will not place much weight on it, or in any case such sufficient weight in the totality of evidence as would affect my finding below. In this regard, I accept the evidence of Leung when he said that several days after the 2015 Flooding when he went back to Unit 14O, he noticed the smell of sea water coming out from the soaked wall papers[20].

86.For completeness, I do not accept Mr Lun’s summary of Au’s evidence in his Closing Submissions[21] that Au said “there was no water cumulated in the toilets of 14M immediately upon his arrival”. Having heard the recording of evidence again to verify, I find that Au only said, to the effect and in context, that upon his arrival, he did not see water gushing out from the toilets of Unit 14M.

87.By reasons of all the matters aforesaid, I find on balance of probabilities that the 2015 Flooding was caused by a failure of the cistern in the male lavatory of Unit 14M leading to continuous overflowing of sea water from it, and that the failure was caused or occasioned by the defendant’s failure to maintain the same in good repair and condition in breach of Clause 16(h) of the DMC.

88.There was a dispute as to whether it was proven by the plaintiff that the floor drain in the male lavatory of Unit 14M was blocked. Having found that the defendant’s said breach has caused sea water to so flow out from Unit 14M, and the floor drain being part of the facilities in Unit 14M (and therefore it was the defendant’s duty to keep it in good repair and condition), I hold that it is not incumbent on the plaintiff to prove at the same time that the floor drain was blocked. The fact was, as I find, that water was able to, and did, flow out from the male lavatory of Unit 14M to other units causing damage, regardless of the state of the floor drain.

89.As I have decided the Agreed Issues on liability in the plaintiff’s favour, and there are no other issues raised apart from the Agreed Issues, I conclude and hold that the defendant is liable to the plaintiff as claimed.

QUANTUM

90.The plaintiff now claims the following loss and damage:-

Description	Amount claimed in HK$
619 carton boxes of damaged wall papers	$1,687,080
Books of wall paper samples and a roll of carpet	$8,540
Costs of 2 dehumidifiers	$3,500
Surveyor’s fee	$8,500
Estate agency fee	$7,000
One month’s rental of the New Premises	$18,500
Total transportation costs	$37,725
Removing metal racks in and repainting walls of Unit 14O	$30,000
Total:	$1,800,845

Damaged wall papers

91.Unit 14O was about 1,000 square feet in net area. It was in an elongated rectangular shape. There were metal racks installed along the whole length of the 2 walls and then free-standing metal racks were placed in the middle creating two elongated corridors along either side of the racks in the middle. All the racks had multiple levels to store carton boxes of wall papers.

92.Assured Reliance (Hong Kong) Limited, surveyors and loss adjusters, was engaged by the plaintiff and attended Unit 14O to assess the loss on 28 May 2015, which was just 3 days after the 2015 Flooding. It compiled an Assessment Report dated 7 July 2015 signed by Tsang (“the Surveyor” and “the Surveyor Report”)[22]. Services from a transportation company were also engaged by the plaintiff to move the carton boxes of wall papers around in the tight space and out to the corridor for the Surveyor to inspect, count and tally.

93.The Surveyor reported that 620 carton boxes of wall papers were damaged by water and each carton box contained 12 rolls of wall papers. The Surveyor verified as accurate and attached to the Surveyor Report 19 pages of stock lists compiled by the plaintiff. The said stock lists set out the country of origin of the wall papers, their item numbers, number of rolls and boxes, unit price and total amount.

94.A large number of pictures were also taken by the Surveyor and attached to the Surveyors Report[23]. It can be observed from those photographs, and I find, that Unit 14O was completely filled and had stored carton boxes of wall papers up to its full capacity.

95.The defendant raised no disputes except on the quantity of wall papers so damaged and their valuation.

96.In D’s Quantum Expert Report, D’s Quantum Expert disputed the quantity of carton boxes of wall papers so damaged as reported in the Surveyor Report and opined that only 202 carton boxes were damaged. His opinion that only 202 carton boxes were damaged was arrived at thus:-

(a) only the carton boxes stored on the floor were damaged;

(b) total net floor area of Unit 14O was about 1000 square feet;

(c) the size of a carton box was 430mm in length and 320mm in width (the height was irrelevant);

(d) netting the areas occupied by the two corridors as estimated by him;

(e) he calculated that Unit 14O could house 23 carton boxes x 10 rows = 230 carton boxes; and

(f) adding 10%, but estimating only 80% were soaked by water.

97.However, regarding the sizes of these carton boxes, the defendant’s former solicitors’ had by letter dated 30 October 2015 raised queries and the plaintiff’s former solicitors had by their letter dated 13 November 2015 provided to the defendant a detail breakdown of measurements of the 620 boxes. They were of different sizes. D’s Quantum Expert however only chose the largest size as the reference size for his calculation. No reasons for this choice were provided in D’s Quantum Expert Report.

98.On 10 January 2018, the two quantum experts had together inspected and measured the sizes of the various types of carton boxes which were similar to those soaked in the 2015 Flooding. I note that the photographs taken by the Surveyor showed carton boxes of different sizes and yet the defendant has proffered no evidence to dispute that the types of boxes measured that day were not the same as those photographed by the Surveyor. Thus, I accept the measurements as set out in paragraph 3.14 of P’s Quantum Expert Report^[24], and that there were 14 different sizes as there set out.

99.In Quantum Experts’ JS, D’s Quantum Expert revised his calculation of quantity by making only one change in his methodology - namely using an average dimension, that is, averaging the lengths and widths of all the carton box sizes and arrived at 333 mm x 254mm – yielding his revised opinion of 262 carton boxes.

100.With due respect to D’s Quantum Expert, I reject his such calculation for the following reasons :

(1) D’s Quantum Expert’s methodology of using the average dimensions did not take into account the fact that there were different quantities of carton boxes of different sizes. His methodology was premises on there being the same number of carton boxes for each size.

(2) I prefer and accept the calculation of P’s Quantum Expert, using the actual sizes of each type of carton box and then multiplying the same with the actual number of carton boxes of each respective size to arrive at the total area that was covered by all the 619 carton boxes, which was 54.12 meters square[25], which was 64.24% of the net area of 84.24 meters square of Unit 14O.

(3) Taking into account the areas occupied by the 2 corridors, the 2 lavatories, there would have to be gaps between these carton boxes and there would have been some spaces that were not utilized, a 64% coverage is clearly a reasonable and very plausible coverage.

101.I thus reject the defendant’s case on the quantity of wall papers damaged and accept the Surveyor Report in its entirety, save that I accept P’s Quantum Expert’s evidence that there was an error in the tally and the total number of carton boxes soaked was 619 instead of 620.

102.I next consider the dispute on valuation of these wall papers.

103.It is not seriously disputed that the 619 carton boxes of wall papers were imported from the following countries:-

Country the wall papers were made in	No. of carton boxes	% of carton boxes
Italy	121	20%
Spain	155	25%
France	13	2%
U.K.	36	6%
Germany	60	10%
Netherlands	21	3%
Canada	138	22%
Taiwan	75	12%
Total:	619	100%

104.D’s Quantum Expert valued all the Europe made wall papers at HK$168.80 a roll and the Taiwan made ones at HK$115.20 a roll. His basis, opinion and calculations were most brief, and I quote them in their entirety:-

“Taking market research, I got the following retail price guide:-

(1) Glory Rays Decorative Material Co. Ltd

Wallpaper, King’s, Taiwan @$150

(2) More Keen Wallpaper Limited

(i) Wallpaper, Serenade, 4011A, Taiwan @$108

(ii) Wallpaper, Emilliana Ando 26801, Italy, @$198

(iii) Wallpaper, Emilliana 70030, Italy, @$298

(iv) Wallpaper, Luxurious 18818, Italy, @$138

Prevailing market retail prices:-

Average market retail price for wall paper, Taiwan @$144

Average market retail price for wall paper, Italy @$211

Assessed net replacement costs:-

Taiwan @$144 x 0.8 (less 20% profit): @$115.20

Italy @$211 x 0.8 (less 20% profit): @$168.80”[26]

105.I note that save a quotation from More Keen Wallpaper Limited there was no further information whatsoever provided by D’s Quantum Expert such as the addresses of Glory Rays Decorative Material Co. Ltd, a quotation or invoice provided by it, catalogues of these wall papers and pictures showing these sampled wall papers. There is thus nothing whatsoever to show that why these few samples should be used as comparable to, or the prices appropriate to be used as reference points for, those that were damaged. There was also no explanation given why such a small sample size was adopted.

106.P’s Quantum Expert arrived at his opinion and valuation thus:-

(1) He visited the following wall paper retailers / wholesalers in March 2018, namely (a) Tat Ming Wall Paper at 16/F, Kwan Chart Tower, 6 Tonnochy Road, Wanchai, (b) Wall Paper Plus Limited at 9/F, The Hennessy, 256 Hennessy Road, Wanchai, and Kinland Décor at 1/F, 127-131 Lockhart Road, Wanchai.

(2) He obtained a total of 5 quotations from them on quite a large number of models of wall papers. He summarized the results in paragraph 4.13 of his report[27].

(3) He recognized that the prices varied a lot and would be affected by factors such as (a) origin, (b) materials, (c) design, (d) colour, (e) pattern, and (f) finish.

(4) He reckoned that the prices he obtained did not include wall papers from France, Netherlands, Spain or Canada; but upon enquiry, he stated that the prices of wall papers from Canada were similar to those from the USA, those from Spain or Netherlands were similar to those from Germany and Belgium and those from France were around 10% to 20% higher than other those from Germany or Belgium.

(5) He opined that (a) a bulk purchase discount of 23% should be applied to the retail prices he obtained, (b) a 25% mark-up on the price from distributors should be deducted to arrive at the costs (noting that D’s Quantum Expert only adopted 20%), and (c) another discount of 20% to bring the price back to 2012 level. These discounts, applied to the prices he obtained, would reduce the prices to 46.2%.

107.P’s Quantum Expert then used these reduced prices (reduced to 46.2%) to compare them with the amount claimed by the plaintiff (at costs that she acquired those wall papers at around 2012), as shown by the following table at paragraph 4.25 of his report[28], which I quote

Origin	Plaintiff’s claimed price per roll (HK$)	Distributor’s price Mr Chang assessed (HK$/roll)	Remarks on Mr Chang’s prices
Canada	190.00	320-950	Use North America prices
France	250.00	700-810	10% higher than Italian prices
Germany	230.00 to 250.00	460
Italy	230.00 to 250.00	630-740
Netherlands	250	450-740	Same as European prices in general
Spain	250.00 – 270.00	450-740	Same as European prices in general
UK	250.00	850
Taiwan	170.00 to 190.00	250

108.P’s Quantum Expert opined from his analysis that the prices claimed by the plaintiff were in the right range and reasonable.

109.In my view and with respect to D’s Quantum Expert, his sampling was evidently inadequate with no details whatsoever given such that I must find that his valuation was not at all reliable. I find the valuation of P’s Quantum Expert, on the other hand, much more substantiated and well-reasoned. Therefore, I have no hesitation in preferring and accepting the valuation by P’s Quantum Expert over that of D’s Quantum Expert.

110.The defendant urged on the court 2 other matters, namely (a) some of the wall papers might have been acquired even earlier, like 2010, and they might not be in vogue or in any case might be less marketable, and (b) some of them only had 12 rolls which might be such a relatively small quantity as to make them less marketable. For the following reasons, I would not take these matters into account:-

(1) These matters had not hitherto been taken issue on, such that (a) the factual basis had not been investigated on or established and (b) the quantum experts therefore did not have the opportunity to investigate and addressed them in their reports.

(2) I accept P’s Quantum Expert’s view that looking at the above table, it could be seen that there was a huge margin between the prices claimed by the plaintiff and the prices he opined even after discounting the price to 46.2%, and that therefore, even taking these factors into account, the prices claimed by the plaintiff were still within reasonable range.

111.In the premises, I accept the prices claimed by the plaintiff. P’s Quantum Expert has attached as Appendix 3 to his report[29] a 6-page printout of the excel table setting out in detail the origin, item numbers, number of rolls, unit price claimed by the plaintiff and the total number of rolls per item, and calculating the total amount at HK$1,687,080. The accuracy of this table was not disputed by the defendant, and I accept the same, and assess and award HK$1,687,080 to the plaintiff as her loss under this head.

Other items awarded

112.The loss of the books of wall paper samples and the roll of carpet as well as their value were not seriously disputed. I award the sum of HK$8,540, as claimed, for their loss.

113.The costs of the 2 dehumidifiers at HK$3,500, the Surveyor’s fee at HK$8,500, the costs of the transportation incurred on 28 May 2015 at HK$6,200 to move the carton boxes around to facilitate the Surveyor’s work that day, and the costs of HK$2,000 to dispose of the damaged wall, I find, are reasonable items the expenditure of which was caused by the flooding, and they are in reasonable amounts. I award them in the total sum of HK$20,200 (HK$3,500 + HK$8,500 + HK$6,200 + HK$2,000).

Items disallowed

114.The evidence of Leung was that the plaintiff relocated to the New Premises because Unit 14O was no longer suitable to be used as the plaintiff’s warehouse. There was really no evidence substantiating how and in what manner Unit 14O was damaged by the 2015 Flooding such as to make it so unsuitable, whether it be factual evidence or evidence from experts.

115.P’s Liability Expert mentioned that upon his visit, he found water stains on the lower part of the partition wall (between Unit 14N) in Unit 14O. No doubt, those were minor matters that could have been easily addressed. Likewise, the cleaning of the floor of Unit 14O with fresh water to wash away the stain of sea water would have been minor. Having addressed those, the “damage” done by the 2015 Flooding to Unit 14O would have been redressed. The fact that there were gaps between the partition walls and the floor, thereby making Unit 14O more susceptible to water coming through from those gaps and therefore flooding, did not result from the defendant’s breach or tort.

116.In the premises, I find that the plaintiff’s relocation was not caused by the 2015 Flooding, but was more a commercial decision on the plaintiff’s part.

117.I therefore do not accede to the plaintiff’s claim for the estate agency fee spent for being introduced the New Premises as well as the transportation costs attendant on the relocation. In addition to the above, I also find there is no basis for claiming a month’s rental of the New Premises.

118.The HK$30,000 costs for repainting Unit 14O and for removing the metal racks, I find, were costs incurred to ready Unit 14O to be rented by the next tenant. Unit 14O as it transpired in fact was at all material times registered in the name of Leung’s son, the plaintiff’s brother. It was not shown that the plaintiff, as tenant or licensee of the brother, was obligated to return Unit 14O to its original state. Even if the plaintiff was so obligated, it is her obligation to do so in any event when, even without the 2015 Flooding, the plaintiff is to return Unit 14O at a subsequent time in the normal course of event. I therefore would also disallow this sum.

CONCLUSION AND DISPOSAL

119.In the premises, I hold the defendant liable and give judgment to the plaintiff in the total sum of HK$1,715,820 (HK$1,687,080 + HK$8,540 + HK$20,200) with interest at the Prime Rate from the date of Writ to the date of this judgment and thereafter at judgment rate until full payment.

120.I will also make an order on costs, following the event and on nisi basis, that the defendant do pay the plaintiff the costs of this action, including all costs reserved, with certificate for one counsel, to be assessed at High Court scale before this action was transferred to this court, and then after at District Court scale, to be taxed if not agreed. This costs order nisi will become absolute after the expiry of 14 days from today unless in the meantime any party applies by summons to vary.

121.Lastly, I thank counsel for their assistance.

Mr Adrian Leung & Mr Chan Sam Kei, instructed by Humphrey & Associates, for the plaintiff

Mr Edward Lun, instructed by Wong and Partners, for the defendant