Tse Kwok Yee Erica and Another v. Sin Lai Sing and Another

DCCJ 6934/2019

[2022] HKDC 959

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 6934 OF 2019

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Before:  Deputy District Judge C.K.Siu in Court

Dates of Hearing:  17, 18 and 22 August 2022

Date of Judgment:  5 September 2022

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JUDGMENT

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1.This is a dispute concerning water seepage in a multi-storey building called Trillion Court at No 1 Dragon Terrace, Hong Kong (“the Building”). At all material times, the plaintiffs were and are the owner of Flat C on the 4^th floor of the Building (“Flat 4C”) and the defendants were and are the owners of Flat C on the 5^th floor of the Building (“Flat 5C”) which is immediately above Flat 4C. At the material times, Flat 4C and Flat 5C were occupied by the plaintiffs’ tenant and the defendants’ tenant respectively. The defendants also owned Flat C on the 21^st floor of the Building (“Flat 21C”).

(A)  Plaintiffs’ Pleaded Case

2.The plaintiffs pleaded that on about 21 August 2018, the plaintiffs were informed by their tenant about a water seepage problem from Flat 5C to various areas at the ceiling of Flat 4C, including the living room, master bedroom, master bathroom and guest bathroom. As a result of the water seepage, Flat 4C became uninhabitable and their tenant terminated the tenancy and vacated Flat 4C on about 3 February 2019.

3.The plaintiffs relied on the Nuisance Notice issued against Flat 5C by the Food and Environmental Hygiene Department (FEHD) dated 29 March 2019 (“Nuisance Notice”). It was not until about 3 October 2019 that the Joint Office was satisfied that the repair work at Flat 5C had complied with the Nuisance Notice. Immediately upon learning about the compliance with the Nuisance Notice on about 9 October 2019, the plaintiffs carried out repair work to the affected areas of Flat 4C. The reinstatement work of Flat 4C was completed in late November 2019. The plaintiffs then put Flat 4C to the market for rent. Flat 4C was subsequently rented to a new tenant with effect from 1 January 2020.

4.It is pleaded in paragraph 6 of the Amended Statement of Claim that:-

“6. As a result of the water seepage/leakage aforesaid, Flat 4C was rendered [un]inhabitable and on 3^rd February 2019, the tenant in occupation thereof terminated the tenancy and vacated the premises.”

5.The plaintiffs sued the defendant for negligence, breach of Deed of Mutual Covenant (“DMC”), breach of s 34H of the Building Management Ordinance (Cap 344) (“BMO”) and nuisance. The plaintiffs also pleaded the doctrine of res ipsa loquitur.

6.The plaintiffs claimed against the defendants for:-

(a)  loss of 11 months’ rental income from February 2019 to December 2019 in a total sum of HK$352,000;

(b)  real estate agency fee in a sum of HK$15,500;

(c)  reinstatement costs of Flat 4C in a sum of HK$41,000.

(B)  Defendants’ Pleaded Case

7.The defendants denied liability of any water seepage and/or leakage from their Flat 5C to the plaintiffs’ Flat 4C at all. The defendants averred that they had carried out repair work to the floor slap of the shower area of Flat 5C between 7 February 2019 and 15 March 2019. It is also pleaded that the FEHD had carried out site follow up inspections on 21 May 2019, 17 July 2019 and 22 August 2019 and FEHD found that there was no water leakage. The defendants also pleaded contributory negligence on the part of the plaintiffs.

8.In the premises, the defendants said that the plaintiffs were not entitled to any damages at all.

9.With respect to the quantum of damages, the defendants pleaded that:-

“13. If, which is denied, the Defendants are adjudicated to be liable to the Plaintiffs, the Defendants aver that any damages award to the Plaintiffs in this action, if any, shall be reduced by the extent of contributory negligence to be found on the Plaintiffs”

10.The defendant had not pleaded that the plaintiffs had failed to mitigate their loss.

11.In the parties’ joint Agreed Statement of Issues in Dispute dated 11 March 2021, there are, inter alia, the following issues in dispute:-

“3. Whether the Plaintiff’s premises were rendered inhabitable as a result of the water seepage.

4. If the Defendants were liable to the alleged water seepage, whether there was any contributory negligence on the part of the Plaintiffs.

5. Subject to the issue of liability, what loss and damage was suffered by the Plaintiffs as a result of the water seepage.”

(C)  The Trial

12.The trial was scheduled to commence on 17 August 2022. By their counsel’s written opening submission dated 10 August 2022, the defendants conceded that:-

“Ds would not dispute that they would be liable for their failure to keep good repair and condition to prevent water seepage from Flat 5C to Flat 4C. Therefore Ds would be liable in negligence and in breach of the DMC and BMO. Furthermore, Ds wound not maintain that there is contributory negligence on the part of Ps”

13.The defendants’ counsel confirmed the stance of the defendants in court on the first day of the trial. In the premises, an interlocutory judgment on liability was entered against the defendants by consent on 17 August 2022, with cost on liability to the plaintiffs.

14.The basis of the consent judgment on liability was also set forth in writing which was in line with the relevant parts of the plaintiffs’ Amended Statement of Claim regrading negligence, breach of DMC and breach of BMO. In the premises, the plaintiffs did not need to proceed their nuisance claim. The defendants abandoned their plea of contributory negligence on the part of the plaintiffs.

(D)  Assessment of Damages

15.The trial was then a trial on quantum of damages to be awarded. As judgment on liability had been entered against the defendants, I will set out the facts and evidence relevant to the determination of the quantum of damages below.

The Plaintiffs’ Evidence

16.The plaintiffs called the 2^nd plaintiff as their only witness.

17.The 2^nd plaintiff is the wife of the 1^st plaintiff. They owned Flat 4C in joint tenancy. They rented Flat 4C to their tenant. Their tenancy agreement had the following express terms:-

“8. Provided the Tenant shall have paid the Rent and other outgoing ... the Tenant shall peacefully hold and enjoy the Premises... during the Term without interruption by the Landlord. ...” (Clause 8 thereof)

“9. The Landlord shall keep and maintain the structural parts of the Premises in proper state of repair ...” (Clause 9 thereof)

“3. Break Clause
Both the Landlord and the Tenant shall be entitled to determinate this Agreement earlier than as herein provided by serving not less than 2 months' written notice or by paying 2 months' Rent in lieu to the other party provided that the said written notice shall not be served before the expiration of the 12^th month of the Term of Tenancy (i.e. shall not be serve earlier than 30 June 2018)" (Clause 3 of Schedule II thereof)

18.Mr Cheng, counsel for the plaintiffs, fairly conceded that quiet enjoyment was not pleaded by his predecessor who settled the Amended Statement of Claim. Mr Cheng conceded that the plaintiffs were bound by their pleaded case, ie as a result of the water seepage from Flat 5C, Flat 4C was rendered uninhabitable. The plaintiffs’ case was that as a result of the water seepage, Flat 4C became uninhabitable and the plaintiff’s tenant accepted the plaintiffs’ repudiation of the tenancy agreement.

19.The 2^nd plaintiff adopted her witness statement as her evidence in chief. The gist of her evidence was:-

(a)  On about 20 August 2018, she was informed by the plaintiffs’ tenant about a suspected water seepage incident from Flat 5C to Flat 4C. She then relayed the water seepage problem to the 2^nd defendant by WhatsApp messages no the next day. At the same WhatsApp messages, the 2^nd plaintiff pointed out that the water seepage occurred at the ceiling of the master bedroom, master bathroom and guest bedroom of Flat 4C with photographs attached thereto. The 2^nd plaintiff requested the 2^nd defendant to take remedial measure.

(b)  In reply, the 2^nd defendant claimed that water from Flat C on the 22^nd floor on the Building also leaked to her Flat 21C. She asked the 2^nd plaintiff to liaise with FEHD to see if water was leaked from Flat 5C or from the external wall of the Building.

(c)  On 21 August 2018, the 2^nd plaintiff contacted FEHD.

(d)  On about 13 September 2018, colour water test was conducted at Flat 5C by the Joint Office of the government departments (“the Joint Office”)

(e)  On about 2 October 2018, the Joint Office informed the 2^nd plaintiff that the source of water seepage could not be identified. The Joint Office also stated that, as the water seepage problem was continuing, it would consider carrying out a professional investigation. On about 22 October 2018, the Joint Office appointed IPS Consultants Limited (“IPS”) as its contractor to deal with the water seepage problem at Flat 4C.

(f)  On about 27 October 2018, the 2^nd plaintiff called IPS and tried to schedule for an appointment of conducting water leakage tests on 26 November 2018. On the same day, the 2^nd plaintiff was informed by the wife of the plaintiffs' tenant that the condition at the ceiling of the guest bedroom had deteriorated.

(g)  On about 31 October 2018, the 2^nd plaintiff, through WhatsApp messages, urged the defendants to rectify the problem as soon as practicable. The 2^nd plaintiff also commented that there were certain standard procedure and restrictions in the government's investigation which would take some time. However, the 2^nd defendant said that she would rather wait for the result of the tests to be conducted by the government. The 2^nd defendant asked the 2^nd plaintiff to find out the source of water leakage first. The 2^nd defendant added that a neighbour called Mrs Shum had the same water leakage problem at her kitchen and the whole Building also had the same water leakage problem. In reply, the 2^nd plaintiff proposed to engage a private surveyor to conduct a holistic water leakage test at their premises. The 2^nd defendant agreed on condition that she was not required to pay the costs of the private surveyor. The 2^nd plaintiff said that if the water source was not from Flat 5C, the 2^nd plaintiff would bear all of the costs. However, the 2^nd defendant refused and said that even if the water source was from Flat 5C, she would not bear the private surveyor's costs. The 2^nd defendant said that the government had agreed to investigate and she would rather to wait for the government's test. She said it was the 2^nd plaintiff who was so eager to do the test in haste, she was not eager to do so in haste. She also said that the 2^nd plaintiff was free to engage private surveyor to conduct the test, but she would not pay for it in any event (如要費用我唔出㗎。就算5C漏我都唔比。因你我要等政府黎。政府都話會派測司来。而家係你心急。我唔心急喎。總之我唔會比錢，你搵就你比). At the end, the 2^nd plaintiff said that the private surveyor’s costs was a small amount of money, but in case her tenant vacated Flat 4C, the loss of rental was a huge sum (唔緊要，呢D細數。如果間屋因此丟空，條數先有排計。大家都係想減低損失啫。). The 2^nd plaintiff said that they should mitigate the loss. The 2^nd defendant did not reply.

20.Due to rainy weather, the water leakage test to be conducted by IPS was re-scheduled to 17 December 2018 on which IPS conducted the water seepage tests.

21.On about 15 January 2019, the wife of the plaintiffs’ tenant sent the 2^nd plaintiff a photograph which showed that the plaster of the ceiling at the master bathroom had seriously cracked and flaked off. The colour of affected areas of the ceiling turned to dark grey or black. On about 16 January 2019, the 2^nd plaintiff told the wife of the plaintiffs’ tenant that the government would take action after the Chinese New Year and would demand the defendants to repair Flat 5C.

22.However, on 18 January 2019, the wife of the plaintiffs’ tenant informed the 2^nd plaintiff that they were planning to move out from Flat 4C after the Chinese New Year. She also told the 2^nd plaintiff that she had a quick chat with the security guard who told her that the renovation work at Flat 5C would take about 3 months. The 2^nd plaintiff acknowledged the request to move out after Chinese New Year and asked the wife of the plaintiffs’ tenant to give the 2^nd plaintiff a letter in which the plaintiffs’ tenant should set out their reasons of moving out, including attaching some photographs to show the conditions of the problematic areas of Flat 4C which led to their decision to move out without further toleration.

23.On 21 January 2019, the plaintiffs’ tenant sent a letter dated 18 January 2019 to the 2^nd plaintiff. The letter contained the following contents with photographs attached:-

“This letter serves as the notification for terminating the rental contract for Flat 4C ... with effective date on 3 February 2019. The early termination of the rental contract is due to unbearable living condition caused by water leakage as shown in the below photos.”

24.The plaintiffs’ tenant vacated Flat 4C on 3 February 2019.

25.The written investigation report of IPS was prepared on about 23 February 2019 (“IPS Report”). According to IPS Report, there were two seepage areas and three further affected areas all at the ceiling of Flat 4C. The two seepage areas were at the master bathroom and the adjacent guest room. The three further affected areas were at the master bedroom, area outside the door of the master bedroom and the guest bathroom.

26.IPS concluded that the source of water leakage to Flat 4C was from the master bathroom of Flat 5C, other possible sources were ruled out.

27.By a letter dated 11 March 2019, the Joint Office informed the 2^nd plaintiff that IPS’s test result showed that the water seepage at Flat 4C was caused by the failure of the waterproof measure at the master bathroom of Flat 5C. Joint Office said that it would issue a nuisance notice to Flat 5C owner(s).

28.On about 29 March 2019, a nuisance notice pursuant to section 127(1) of the Public Health and Municipal Service Ordinance (Cap 132) was issued against the 1^st defendant in respect of the water seepage from the master bedroom of Flat 5C to Flat 4C (“Nuisance Notice”). By the Nuisance Notice, the 1^st defendant was required to abate the nuisance within 42 days.

29.Follow-up examination at Flat 4C by FEHD on 21 May 2019 showed that the moisture content at the master bathroom of Flat 4C remained apparent. The staff of FEHD also inspected Flat 5C on 21 May 2019 on the same day and found out that the floor slab of the master bedroom of Flat 5C had been repaired. As the water seepage problem persisted, FEHD would refer the case to Joint Office to conduct review test and determine if the owner(s) of Flat 5C had complied with the Nuisance Notice.

30.On about 9 October, 2019, the 2^nd plaintiff then received a letter dated 3 October 2019 from the Joint Office. By that letter, the Joint Office informed the 2^nd plaintiff that the owners of Flat 5C had complied with the nuisance notice and that according to the inspection at Flat 4C by the Joint Office on 22 August 2019, the water stains at the affected areas at Flat 4C had dried up.

31.Then, the plaintiffs engaged their contractor to repair the ceiling of Flat 4C and the repaired work was carried out from later October to late November 2019 at a total costs of HK$41,000. In particular, the repair work included (i) the costs of cleaning up concrete spalling on the ceiling of the bathroom and 2 bedrooms, cleaning up the steel bars and applying anti-rust paint, screeding the ceiling with pre-mixed cement at a costs of HK$23,000; and (ii) the costs of plastering the ceiling, applying emulsion paint and clearing of waste materials upon the completion of work at HK$18,000.

32.After the completion of the repair work at Flat 4C, the plaintiffs immediately engaged an estate agent to rent Flat 4C to a new tenant. The new tenancy was signed on 8 December 2019, with effect from 1 January 2020 for 2 years at a monthly rental of HK$31,000.

33.Most of the plaintiffs’ evidence was supported by WhatsApp messages with photographs, letters with FEHD and the Joint Office, IPS’s water seepage inspection report, tenancy agreements with the plaintiffs’ tenant and their new tenant, written quotation for repair of the ceiling of Flat 4C and etc.

34.In her cross-examination, it was put to the 2^nd plaintiff by the defendants that:-

(a)  the 2^nd plaintiff induced the plaintiffs’ tenant to vacate Flat 4C and directed the plaintiffs’ tenant’s to write a letter dated 18 December 2019 in which it was falsely claimed that the reason for early termination of their tenancy was due to intolerable living conditions. The 2^nd plaintiff denied.

(b)  the reason for the 2^nd plaintiff to induce the plaintiffs’ tenant to quit in December 2018 was because the 2^nd plaintiff was a solicitor and she knew that the plaintiffs could recover any loss from the defendants because the defendants owned private properties for the plaintiffs’ enforcement. The 2^nd plaintiff only admitted that she was a solicitor and denied the rest of the allegations.

(c)  the true reason for the plaintiffs’ tenant to quit on 3 February 2019 was because of some other problems of Flat 4C instead of the water seepage problem. The defendants suggested that the water dripping from the air-conditioners in Flat 4C was one of the true reasons that the plaintiffs’ tenant vacated Flat 4C by early termination of tenancy. The 2^nd plaintiff only admitted that there used to be an incident of minor water dripping from an air-conditioner(s), but it was certainly not the present reason for the plaintiffs’ tenant to terminate the tenancy agreement.

35.In addition, the defendants also suggested to the 2^nd plaintiff that:-

(a)  the plaintiff could have repaired the ceiling of Flat 4C back in February 2019. The plaintiff denied and replied that water seepage was very serious in February 2019 and the ceiling of the affected areas was still wet.

(b)  as the plaintiffs’ domestic helper had overheard from the security guard of the Building in about February 2019 that the defendants would carry out repair work at Flat 5C and the renovation would take 3 months, the plaintiffs could have repaired the ceiling of Flat 4C back in about May 2019, ie 3 months from February 2019. The 2^nd plaintiff denied and said that she was not informed of any repair work from the defendants who all along denied liability and suggested that the seepage problem might be caused by leakage from the external water of the Building, and the ceiling of the affected areas of Flat 4C was still wet in May 2019.

(c)  item (i) the repair quotation in a sum of HK$23,000 was unrelated to any water seepage problem. The 2^nd plaintiff denied.

(d)  item (ii) the repair quotation in a sum of HK$18,000 was excessive as part of the costs covered the unrelated work of item (i). The 2^nd plaintiff denied and said that both items (i) and (ii) were related to the present water seepage incident.

(e)  estate agent fee at HK$15,500 had to be paid anyway upon the termination of tenancy of the plaintiff’s tenant. The plaintiff denied and added that but for the present water seepage, their tenant would not have moved out and they needed not incurred any estate agent’s fee.

(f)  the plaintiff could have rented out Flat 4C before October 2019. The 2^nd plaintiff denied and reiterated that the plaintiff only received the Joint Office’s letter on about 9 October 2019 and then they had immediately repair Flat 4C for lease.

36.Under cross-examination, the 2^nd plaintiff further said that:-

(a)  no water dripping was spotted from the ceiling of the affected areas of Flat 4C. The problems were the cracks the flaked off of the ceiling plaster and wet ceiling.

(b)  she allowed the plaintiffs’ tenant to terminate the tenancy on 3 February 2019 because the plaintiffs believed that they were in breach of the tenancy agreement, so their tenant could terminate the tenancy as of right.

(c)  because of the serious seepage in January 2019, she was afraid of electricity leakage from the air-conditioners and electric switches near the affected areas of water seepage. As their tenant had two young children, the 2^nd plaintiff then allowed the plaintiffs’ tenant to terminate the tenancy on 3 February 2019.

(d)  Flat 4C was not worth 10 cents with the plaster of its ceiling seriously cracked and flaked off, and no person would rent Flat 4C unless the defendants had successfully repaired Flat 5C and the water seepage ceased.

37.Concerning the renovation of the ceiling of Flat 4C, the 2^nd plaintiff added that she had in fact asked for a written quotation from their contractor, that was why the written quotation of HK$41,000 was dated 27 May 2019. She wanted to repair Flat 4C earlier, so that it could be rented out to new tenant. However, the follow up examination by FEHD of Flat 4C revealed that the moisture measurement at the ceiling of the master bathroom still persisted and it was apparent. FEHD concluded that the water seepage problem had persisted and on 24 May 2019, the case was referred to the Joint Office for further test to ascertain the source of water problem. It was not until about 9 October 2019 that they were told by FEHD that the affected areas at the ceiling of Flat 4C had dried up. The plaintiffs then immediately carried out the repair work with a view to renting out Flat 4C as soon as practicable.

The Defendants’ Evidence

38.The 2^nd defendant adopted her witness statement as her evidence-in- chief. She was the only witness for the defendants. The contents of her witness statement were mainly related to the issue on liability of the water seepage.

39.Concerning the matters relevant to the assessment of damages, the 2^nd defendant said that the defendants’ tenant complained of wet floor at the floor skirting of the guest room which was next to the master bedroom. The 2^nd defendant also said that their tenancy for Flat 5C was to be expired in February 2019. Because of the intended reinstatement work to be done at Flat 5C, the defendants’ tenant was allowed to terminate the tenancy in January 2019.

40.The 2^nd defendant further said that they had actually engaged their contractor to repair Flat 5C after the Chinese New Year, the costs of repair was HK$200,000 which included the costs of replacing 4 air-conditioners and the tiles of two bathrooms. She said that the repair work was completed on 14 March 2019. After the follow up inspection by FEHD on 21 May 2019, the 2^nd defendant alleged that she was orally told by FEHD that one of the affected areas at the ceiling of Flat 4C was still wet. So, the 2^nd defendant waited for the notification of the owners of Flat 4C and the defendants intended to repair Flat 4C for the plaintiffs. The 2^nd defendant said she believed that the owners of Flat 4C would contact her. Yet, what they received later was the plaintiffs’ solicitors’ letter.

41.Concerning the plaintiffs’ tenant, the 2^nd defendant said that she was told by her estate agent that the plaintiffs’ tenant had moved up to flat 6C of the same Building on 6 February 2019 with a monthly rental of HK$29,000. She said that the layout and areas of Flat 4C, Flat 5C and flat 6C of the Building were all the same. She accepted that the market rental of flat C units in the Building was between HK$29,000 to $33,000 in about 2019.

Cross-examination of the 2^nd Defendant

42.Concerning the alleged repair work for Flat 5C, the 2^nd defendant admitted that there was in fact a written quotation but it was not produced as evidence in the trial bundles. She conceded that apart from her own words, there was no other evidence that the repair work at Flat 5C was completed on 14 March 2019 as alleged. The 2^nd defendant had not explained why she chose not to produce the written quotation for the repair work at Flat 5C.

43.The 2^nd defendant admitted that she had not contacted the plaintiffs at all or relayed any progress about the alleged repair work at Flat 5C to the plaintiffs. The 2^nd defendant alleged that she had lost the telephone number of the 2^nd plaintiff, so she could not contact the plaintiffs after February 2019. However, the 2^nd defendant conceded that if she really wanted to contact the plaintiffs, she could have obtained the 2^nd plaintiff’s telephone number at the security or management office of the Building.

(E)  Mitigation of Loss and Damage

44.In Prosper Entertainment Limited v Ng Yiu Kuen trading as Andy Production House, HCA 1280/2000, 20 December 2002, the defendant counterclaimed against the plaintiff for premature termination of one of the two contracts. The defendant counterclaimed for the loss of 4 months’ remuneration due to premature termination of the said contract. The plaintiff had not pleaded that the defendant had failed to mitigate his loss during the 4 months. Yet, the plaintiff sought to run a case of failure to mitigate his loss on the part of the defendant regarding his counterclaim. The Court of First Instance resolved the matter by reference to the burden of proof and rule of pleading. As far as the pleading point is concerned, the court held that:-

“84. For my present purpose, I would content myself with resting my decision on a pleading point. In other words, I rule that the issue of mitigation is not open to the Plaintiff to run, as the Plaintiff has failed to plead the necessary particulars in support of the argument of mitigation as is required by Order 18 rule 12(1)(c). This is particularly serious when paragraph 14 of the Amended Defence and Counterclaim has specifically pleaded that after the wrongful termination of the 2 contracts, the Defendant was unable to and did not find any alternative contract with any production company. ... it would be wholly unfair to allow the Plaintiff to run this mitigation point without first pleaded it. Moreover, the pleading objection was indeed mentioned during final submission” (per Deputy High Court Judge A Cheung (as he then was) at para 84)

45.In Wang Ruiyun v Gem Global Yield Fund Ltd [2011] 3 HKLRD 785, the Court of Appeal held that:-

“By this Order it is incumbent on the defendant, in order to be more informative about its defence to state the grounds on which it intends to contest the amount of damages by giving particulars of all the facts on which it relies to support any such ground as, for example, in mitigation of or otherwise in relation to, the amount of damages” (per Cheung JA at para 30)

46.Further, according to Hong Kong Civil Procedure 2022, vol 1, para 18/8/28, at p 503, it is stated that:-

“(23) Mitigation of damages -- If a defendant wishes to set up a positive case to show that the plaintiff failed to mitigate his loss or damage, such allegations must be specifically pleaded with supporting particulars: see ).18 r.12(1)(c)”

47.In the present case, it would be unfair to allow the defendants to run any un-pleaded positive cases regarding the plaintiffs’ failure to mitigate their own loss and damage, if any. Furthermore, the defendants had not identified this issue as one of the disputed issues or raised this issue at her witness statement either. If the defendants had pleaded that the plaintiffs had failed to mitigate their own loss with necessary particulars, the plaintiffs could have made a reply by pleading and adduced rebuttal evidence in the course of preparation of their case.

48.The defendants, however, argued that according to paragraph 13 of the Defence, the reduction of damages was not only limited to reduction due to plaintiffs’ contributory negligence. Hence, according the defendants’ interpretation of paragraph 13 of the Defence, the court could reduce the plaintiffs’ damages in any event, even if there was no contributory negligence on the part of the plaintiffs.

49.The defendants simply pleaded at paragraph 13 of their Defence that they sought to reduce the amount of the plaintiffs’ damages to the extent of the plaintiffs’ contributory negligence. The defendants are bound by their pleading. The defendants are not allowed to run an un-pleaded positive case on the plaintiffs’ failure to mitigate their loss, if any.

50.Having said that, I accept that it is still the plaintiffs’ duty to prove their loss and that they have reasonably mitigated their loss and damage: McGregor On Damages, 21^st Ed at para 52-001.

51.According to McGregor On Damages, 21^st Ed, it is stated that:-

“(1) The criterion of reasonableness and the standard of reasonableness
In mitigating their loss, claimants are only required to act reasonably and the standard of reasonableness is not high in view of the fact that the defendant is an admitted wrongdoer...” (at para 9-079, at p 261)”

“At the same time, in assessing reasonableness, while it has been said the claimant is “not bound to nurse the interests” of the defendant, it has also, and long, been said that the claimant must act with the defendant’s as well as their own interests in mind” (at para 9-081, at p 262)

(F)  Findings of Facts

52.The evidence of this case has been set out hereinabove and liability of the water seepage was admitted by the defendants. I find that the reason for the plaintiffs’ tenant to terminate the tenancy of Flat 4C on 3 February 2019 was because of the mutual consent between the plaintiffs and their tenant. The terms of their consent were in term of the break clause of the tenancy agreement, save that the notice period was reduced to 13 days, ie from 21 January 2019 to 3 February, 2019, instead of 2 months. Alternatively, the plaintiffs’ tenant had exercised his right under the break clause and the plaintiffs had waived the 2 months’ notice period and substituted it by a notice of 13 days, ie from 21 January 2019 to 3 February 2019.

53.Mr Leung, counsel for the defendants, relied on余剛 (Yu Gang) 訴 彭素怡 (Pang So Yi), HCSA 44/2021, 12 April, 2022, and submitted that there was no implied term that a landlord had to provide an inhabitable premises to his tenant during the subsistence to the tenancy. I accept that there is no such implied term in this case.

54.Referring to the 2^nd plaintiff’s evidence and the photographs produced as evidence, the physical condition of Flat 4C was not serious enough to constitute a fundamental breach of the tenancy agreement of Flat 4C. I do not accept the plaintiffs’ case that the plaintiffs were in breach of the tenancy agreement, so that their tenant was entitled to terminate the tenancy agreement as of right. According to the WhatsApp messages between the wife of the plaintiffs’ tenant and the 2^nd plaintiff, it was clear that the tenant was asking for the 2^nd plaintiff’s consent for an early termination of the tenancy agreement by way of serving notice. The 2^nd plaintiff also requested the tenant’s wife to give a written notice with reasons of termination.

55.I find that the reason why the plaintiffs allowed their tenant to terminate the tenancy agreement by just giving 13 days’ notice was because their tenant had tolerated the seepage problem since about August 2018 and their tenant was to start a new tenancy at flat 6C of the same Building on about 6 February 2019. Out of good motive and kindness, the plaintiffs waived their contractual 2 months’ notice under the break clause of the tenancy agreement. Regarding the 2^nd plaintiff’s assertion that Flat 4C was not worth 10 cents unless and until the water seepage problem was rectified, I find that it was only an emotional expression by a litigant who had been troubled by the water seepage problem and the present litigation from 2018 to 2022.

56.The kindness of the plaintiffs to their tenant should not be given in the expense of the defendants. If the tenant served the notice to terminate the tenancy on 21 January 2019, the earliest date for him to terminate the tenancy was 20 March, 2019. Therefore, the loss of rental from 3 February 2019 to 20 March 2019 was self-induced and should not be recoverable from the defendants.

57.As a whole, I accept the rest of the 2^nd plaintiff’s evidence which was largely supported by contemporaneous documentary evidence, including, WhatsApp messages, letters, photographs, quotation and etc.

58.Regarding the evidence of the 2^nd defendant, she did not explain why she refused the 2^nd plaintiff’s proposal of engaging a joint expert to find out the source of the water seepage problem. It was clear that the 2^nd defendant would rather wait for the government’s inspection as she would not need to pay for the costs of inspection and she did not eager to find out the source of the water seepage at her expense. I do not accept that the 2^nd defendant or the defendants had the intention to repair Flat 4C for the plaintiffs as alleged.

59.I do not accept that the plaintiffs had acted unreasonably in failing to repair the five affected areas at the ceiling of Flat 4C in February 2019 or May 2019 as suggested by the defendants. It is because the seepage problem was serious in February 2019. In February 2019, the plaintiff did not know the source of water seepage. It should be noted, that at that time, the 2^nd defendant was still suggesting that the water seepage might be caused by the leakage from the external wall and the 2^nd defendant denied liability at that time. It is hard to see why the plaintiffs had to risk their money to repair the ceiling at Flat 4C in February 2019 which might necessitate them to repair again and again in a short future.

60.Nuisance notice was issued on 29 March 2019. Follow-up examination at Flat 4C by FEHD on 21 May 2019 showed that the moisture content at the master bathroom of Flat 4C remained apparent. There was then a follow-up inspection at both Flat 4C and Flat 5C on 22 August 2019.

61.Hence, I do not agree with the defendants’ suggestion that the plaintiffs could reasonably carry out their repair in May 2019, simply because the plaintiffs’ domestic worker overheard from the security guard in February that Flat 5C would be renovated and the renovation would take about three months.

62.On about 9 October, 2019, the 2^nd plaintiff was then told by the Joint Office that the owners of Flat 5C had complied with the nuisance notice.

63.Then, the plaintiffs engaged contractor to repair the ceiling of Flat 4C from later October to late November 2019 at a total costs of HK$41,000. The plaintiff then rented out Flat 4C to a new tenant in December 2019 with effect from 1 January 2020.

64.I find that the plaintiffs had been acting reasonably from 21 March 19 to 31 December 2019. They should be entitled to recover their rental loss due termination of the tenancy by the plaintiff’s tenant. From 21 March 2019 to 14 July 2019, the basis of the monthly rental should be the rental under the tenancy agreement. From 15 July 2019 to 31 December 2019, the basis of the monthly loss should be a fair market rental. I find that $31,000 was a reasonable sum for market rental. It is because the 2^nd defendant also accept that the monthly rental was about HK$29,000 to HK$33,000 and that the new rental of Flat 4C was also HK$31,000 in December 2019. There is no evidence that the monthly rental for flat C units of the Building had significantly fluctuated. The plaintiffs’ loss was foreseeable by the defendants.

65.I am satisfied that all of the plaintiffs’ repair work was incurred but for the present water seepage. The present water seepage problem was first noticed in about August 2018. After nearly a year of seepage, on balance of probability, it was likely to have spalling concrete. Hence the cleaning up of concrete spalling and steel bars and applying anti rust paint and screeding the ceiling with cement were nothing but reasonable. I will award the plaintiffs’ repair costs of HK$41,000 in full.

66.Concerning the estate agency’s fee, it should be noted that even according to the 2^nd defendant’s own evidence, the plaintiffs’ tenant moved up to Flat 6C of the same Building and his new tenancy commenced on 6 February 2019. On balance of probability, the only reason for the plaintiffs’ tenant to terminate his tenancy of Flat 4C on 3 February 2019 was because of the water seepage problem from Flat 5C. I prefer the 2^nd plaintiff’s evidence that but for the water seepage problem, the plaintiffs’ tenant would stay. It is likely that the plaintiffs’ tenant would extend the tenancy after 14 July 2019. Furthermore, the engagement of an estate agent would facilitate the lease of Flat 4C in a more effective way and hence reduce the amount of loss. It is reasonable and foreseeable that the plaintiffs would need to engage an estate agent to rent out Flat 4C in order to mitigate their loss. I would award the estate agent’s fee at HK$15,500 in full.

67.Hence, the plaintiffs’ loss of rental due to the said water seepage is:-

(a)	From 21 March 2019 to 14 July 2019, ie 3 months 23 days = 23/31 x HK$32,000 + 3 x HK$32,000 = HK$119,742
(b)	from 15 July 2019 to 31 December 2019, ie 5 months 17 days = 17/31 x 31,000 + 5 x HK$31,000 = HK$172,000
(a) + (b) = HK$291,742
(c)	Repair costs: HK$41,000
(d)	Estate agent’s fee: HK$15,500.
The total loss of the plaintiff is assessed at: (a) + (b) + (c) + (d) = HK$348,242

68.Hence, the defendants were liable to the plaintiffs for negligence, breach of DMC and BMO. Judgment has already been entered against the defendants on liability with costs. Damages of HK$348,242 is awarded to the plaintiffs with interest at half of the judgment rate from the date of issuance of the writ to judgment date, then at full judgment rate until full payment. The plaintiffs are also entitled to their costs on assessment of damages, with certificate for counsel, to be taxed if not agreed.

Mr Alfred C P Cheng, instructed by Tsangs, for the 1^st and 2^nd plaintiffs

Mr Colin Leung, instructed by WT Law Offices, for the 1^st and 2^nd defendants