Weswick Co Ltd v. Kong Ngiok Soe
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DCCJ 1277/2020 [2026] HKDC 1494 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 1277 OF 2020 -------------------------------- BETWEEN
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-------------------------------------------- ASSESSMENT OF DAMAGES -------------------------------------------- A. Introduction 1.This is an assessment of damages of a water seepage case between the Plaintiff and the 2nd Defendant. 2.At all material times:
3.According to the Plaintiff, shortly moving into the Plaintiff’s Premises, it was discovered that water had been continuously escaping into the premises and there were water leakage, cracks and spalling concretes at various spots at the ceilings of the premises. The Plaintiff said that the 1st and 2nd Defendants should be held liable for the water seepage in the premises. 4.On 8 May 2020, the Writ of Summons of the present case was issued against the 1st and 2nd Defendants. 5.On 17 December 2024, given no notice of intention to defend had been given, interlocutory judgment on liability was entered against the 2nd Defendant, leaving damages to be assessed. 6.By the Order of Master Ross Li dated 9 July 2024, leave was granted to the 1st Defendant to pay a settlement sum of HK$2,000,000 (inclusive of interest, costs and disbursements) (“Settlement Sum”) to the Plaintiff for full and final settlement of the Plaintiff’s claims against the 1st Defendant and upon the payment of the Settlement Sum, the 1st Defendant shall be fully discharged from all liabilities towards the Plaintiff’s claims. 7.By another Order of Master Ross Li dated 22 July 2024, the contribution and indemnity proceedings taken out by the 1st Defendant against the 2nd Defendant were wholly withdrawn with no order as to costs between 1st and 2nd Defendants. 8.In the Order of Madam Registrar M. Soong dated 13 May 2025, it was recorded at §7 that the Settlement Sum had been paid by the 1st Defendant to the Plaintiff and the liabilities of the 1st and 2nd Defendants towards the Plaintiff shall be joint and several. 9.On 22 October 2025, Master Louise Chan made three separate orders, one of which was an order for setting this case down for assessment of damages. 10.At the hearing, the 2nd Defendant was unrepresented and did not appear. Having considered the affirmation of service filed on behalf of the Plaintiff on 3 March 2026, I was satisfied that the 2nd Defendant had been duly notified of the proceedings and the hearing for assessment of damages. Therefore, the hearing was proceeded in her absence. B. The Plaintiff’s Case 11.By an assignment dated 30 November 1990, the Plaintiff became the registered owner of the Plaintiff’s Premises. 12.The Plaintiff was running a commercial business under the business name of “A-2 Business Center” by letting subdivided units in the Plaintiff’s Premises to tenants for commercial use and providing related secretarial services. This was how the Plaintiff generated revenue. 13.As stated above, immediately above the Plaintiff’s Premises are four residential units, one of which is the 2nd Defendant’s Premises. The said four units are surrounded by the 1/F Terrace. 14.Soon moving into the Plaintiff’s Premises, water was found to be continuously escaping into the premises and there were water leakage, cracks and spalling concretes at various spots at the ceilings of the premises. 15.Various investigations and repair works had been carried out by the Plaintiff in order to remedy the water seepage problem in the Plaintiff’s Premises. Despite such efforts, water continued to escape into the Plaintiff’s Premises. On 1 January 2018, due to the continuous water seepage and the physical damage caused by the water seepage to the property, the Plaintiff had to shut down the Plaintiff’s Premises completely. 16.On or about 28 March 2018, the Plaintiff lodged a complaint against the Buildings Department with the Office of the Ombudsman. It was found out by the Ombudsman that the Buildings Department had not followed with the Plaintiff’s complaint of water seepage diligently. The Buildings Department has never found out the source of water seepage in the Plaintiff’s Premises. 17.In or about November 2018, the Plaintiff at its own expense engaged Hong Kong Building Inspection and Structural Diagnostic Limited (“HKBI”) to, inter alia, determine the source of water seepage in the Plaintiff’s Premises. HKBI carried out various visits and investigations at the Plaintiff’s Premises and the 1/F Terrace. 18.As a result of the visits and investigations, Mr. Chung Wai Hoi Vincent of HKBI produced three reports, namely:
19.According to the Source Report, the water seepage in the Plaintiff’s Premises was caused by the poor condition and/or the lack of maintenance of the floor slabs, the waterproofing facilities and the external walls on the 1/F Terrace so that water on the 1/F Terrace escaped therefrom through the concretes onto the Plaintiff’s Premises. 20.Insofar as the liability of the 2nd Defendant is concerned, the Source Report had the following findings:
21.In or about July 2022, because of the worsening water seepage problem in the Plaintiff’s Premises, the Plaintiff had to vacate the property completely. 22.By an assignment dated 25 November 2022, the Plaintiff sold the Plaintiff’s Premises and ceased to be the registered owner of it. 23.The Plaintiff claims against the 2nd Defendant on the basis of negligence, nuisance, breach of section 34I of the Building Management Ordinance (Cap. 344) and breach of the relevant clauses of the Deed of Mutual Covenant of Lung Ma Building with the following particulars:
24.The Plaintiff sues the 2nd Defendant for damages under the following heads:
C. The Plaintiff’s Witnesses 25.The Plaintiff had two factual witnesses, namely:
26.However, only Mr. Chan attended the hearing for assessment of damages. He adopted his witness statement and his supplemental witness statement in full. He answered questions from this Court directly. His evidence was unchallenged. I find him a truthful witness and accept his evidence in full. 27.Mr. Chan explained to this Court the absence of Mr. Tam. He said that Mr. Tam had ceased to run Yee Bo and was running a food store which made him unable to attend the hearing for assessment of damages. 28.Mr. Tam made one witness statement. In his statement, he basically confirmed that 18% of his works rendered to the Plaintiff over the years were for remedying the water seepage problem in the property. 29.The Plaintiff also had one expert witness on quantum, namely, Sr. Wong Kam Wing (“Sr. Wong”). He was appointed as a single joint expert on quantum pursuant to the Order of Master Timon Shum dated 27 June 2023. He prepared a valuation report dated 19 June 2025 regarding the market rental value of the Plaintiff’s Premises (“Valuation Report”). He attended the hearing for assessment of damages. He adopted the Valuation Report as his evidence. His expertise and evidence were unchallenged. I have considered the Valuation Report. I find him a credible witness and accept his evidence in full. 30.It is noted that the Three Reports and a joint report by Mr. Chung Wai Hoi Vincent and Sr. Lau Wing Wai Patrick dated 25 February 2022 were adduced as expert evidence without calling the maker thereof pursuant to the Order of Master Louise Chan dated 22 October 2025. D. Analysis 31.At the outset, it is worth referring to Order 37, rule 6 of the Rules of the District Court (Cap. 336H) which provides:
32.One of the Plaintiff’s claims against the 2nd Defendant is nuisance which is a continuing cause of action. In fact, it was unchallenged that the water seepage problem in the Plaintiff’s Premises was a continuous one since it acquired the premises in 1990. By virtue of Order 37, rule 6, the damages could be assessed from the date of nuisance down to the date of the assessment of damages. 33.The Plaintiff claims damages under various heads. I will deal with them one by one. D1. Costs of the Three Reports 34.The Plaintiff claims a total of HK$138,000 for the Three Reports. 35.The Three Reports all predated the date of writ. 36.It is well-established that reasonable investigation costs for water seepage incurred by a plaintiff before commencement of action, including costs in engaging experts and in preparing investigation reports, are recoverable as damages: Polysoon Investments Limited v Lau Mo Kun & Anor [2022] HKDC 211, per HHJ H. Au-Yeung (as he then was), at §§219-220 and Yik Yuen Ling v Tso Wing Yan (unreported, DCCJ 813/2014, 18 October 2017), per DDJ Simon Ho, at §244. 37.I have considered the contents of the Three Reports. I accept that engaging HKBI to identify the source of the water seepage in the Plaintiff’s Premises and prepare the Three Reports was a reasonable step taken by the Plaintiff. I also find that the amount of HK$138,000 incurred for the Three Reports was reasonable. Such amount was fully supported by official invoices and receipts issued by HKBI. I allow HK$138,000 in full. D2. Loss of profit (including rental income and service income) 38.The Plaintiff claims two sets of loss of profit. 39.The first set of loss of profit is the loss of rental income generated from Unit 138 and the Warehouse. 40.As to the loss of rental income generated from Unit 138, the Plaintiff said that it was unable to rent it out or rent it out at market rate since about 2014. The Plaintiff relied on the Valuation Report for the market rental value of Unit 138. The Plaintiff also relied on the receipts issued to the tenants of Unit 138 to evidence the actual rental receipt in a particular month. With the above evidence, Mr. Ernest Wong, counsel for the Plaintiff, in his written opening submissions prepared a table showing the loss of rental income generated from Unit 138 from 2014 up to November 2022 when the Plaintiff parted with ownership of the Plaintiff’s Premises. The said table is reproduced below:
41.On evidence, I accept that there was water seepage in Unit 138 and the said water seepage was the fault of the 2nd Defendant, which was caused by, inter alia, the failure of the waterproofing layer under the bathroom floor of the 2nd Defendant’s Premises with the Unauthorized Structure. 42.The actual yearly rental incomes received by the Plaintiff by renting out Unit 138 as shown in the table above were all supported by documentary evidence. The market rental value of Unit 138 for each year was supported by the Valuation Report. All such evidence was not subject to any challenge. The calculation was entirely accurate. I allow HK$559,217 as claimed for the loss of rental income generated from Unit 138 in full. 43.As to the loss of rental income generated from the Warehouse, the Plaintiff said that it was not able to rent out the Warehouse since the acquisition of the premises because of water seepage. The Plaintiff further said that it had tried to make use of the Warehouse for storage purposes but the water seepage was so serious that it could no longer be used from January 2008. Thus, the Plaintiff asks for loss of rental income generated from the Warehouse for the period from 2008 up to November 2022 when it parted with ownership of the Plaintiff’s Premises. Mr. Wong in his opening submissions prepared a table showing such loss for such period:
44.The fact that the Plaintiff was unable to rent out the Warehouse because of water seepage was unchallenged. The market rental value of the Warehouse was derived from the expert evidence of Sr. Wong in the Valuation Report. It was also unchallenged. I therefore allow the entire amount of HK$2,009,490 for the loss of rental income generated from the Warehouse in full. 45.The second set of loss of profit is the loss of income generated from the provision of service. Mr. Chan clarified what such service meant when he testified. Basically, his evidence was that the Plaintiff also provided secretarial services to tenants and other clients who were not tenants. 46.Mr. Wong submitted that the average monthly income generated from the provision of secretarial services was about HK$7,734. Mr. Wong also provided this Court with comprehensive schedules annexed to his written closing submissions containing the figures of service fee received and relevant bundle page references for the period from 2013 to February 2018. 47.Despite the industry of Mr. Wong, I fail to see any correlation between the water seepage in the Plaintiff’s Premises and the loss of profit generated from the provision of secretarial services. The Plaintiff’s pleaded case is that the water seepage in the premises was persistent since the day of acquisition. I would expect to see continuous drop in the income derived from the provision of such services. However, as I observe from the said schedules in Mr. Wong’s closing submissions, the amount received for secretarial services would go up and down in a year. Therefore, I refuse to allow any damages reflecting the loss generated from the provision of secretarial services to clients. 48.For loss of profit, given the above analysis, I only allow loss of rental income generated from Unit 138 and the Warehouse, totaling HK$2,568,707 (HK$559,217 + HK$2,009,490). D3. Costs of repair 49.The Plaintiff claims two sets of repair costs. 50.The first set of repair costs is in relation to the general maintenance and repair works carried out by Yee Bo from time to time over the years in the Plaintiff’s Premises. The Plaintiff said that it had engaged Yee Bo since about October 2004 for such repair works. The Plaintiff is not trying to recover all such repair costs incurred from October 2004 onwards. Mr. Wong referred me to two batches of invoices issued by Yee Bo to the Plaintiff. The first batch was for the period from January 2012 to February 2018, totaling HK$888,000. The second batch was for the period from March 2018 to February 2020, totaling HK$230,000. The two batches of invoices give a total of HK$1,118,000. The Plaintiff only attributes 18% (i.e. HK$201,240) to the water seepage problem of the Plaintiff’s Premises in accordance with the estimation made by Mr. Tam. 51.The second set of repair costs is in relation to the renovation costs for converting the Plaintiff’s Premises for self-use in December 2020 in order to mitigate its loss. The Plaintiff contended that as a result of the persistent water seepage in the Plaintiff’s Premises, it had engaged Yee Bo for such renovation works, incurring a total of HK$1,242,210. 52.The total of two aforesaid sets of repair costs is HK$1,443,450 (HK$201,240 + HK$1,242,210). 53.Mr. Wong submitted that the Plaintiff would only claim 1/4 of the said repair costs because the affected areas in the Plaintiff’s Premises, namely, Unit 138 and the Warehouse, that were attributable to the 2nd Defendant amounted to only about 1/4 of the total area of the entire premises. The Plaintiff thus claims HK$360,862.50 (HK$1,443,450 x 1/4) for repair costs. 54.As a matter of law, damages for costs of repair and reinstatement is recoverable for physical damage caused to the property by the nuisance, and so is the damages for the chattels damaged in addition: McGregor on Damages, 22nd edition, at §40-19. The overarching principle in awarding damages is one of reasonableness. 55.As regards the first set of repair costs, the invoices issued by Yee Bo give a total of HK$1,118,000. This amount was supported by documentary evidence. As to the apportionment of 18% to account for remedying the water seepage problem in the Plaintiff’s Premises as suggested by Mr. Tam, Mr. Wong confirmed that there was no expert evidence in that regard. Mr. Tam did not attend court to testify. However, Mr. Tam had been the contractor responsible for maintenance works and repair works in the Plaintiff’s Premises for a long time. He even attended the premises for such works on a monthly basis. The percentage of apportionment as suggested by him was unchallenged. On balance, I agree with such percentage of apportionment. 56.As regards the second set of repair costs relating to the conversion of the Plaintiff’s Premises for self-use, the claim amount of HK$1,242,210 was supported by documentary evidence. I also find it reasonable for the Plaintiff to have carried out such works and incurred such costs. Firstly, I have taken into account the long history and continuous nature of the water seepage in the Plaintiff’s Premises. Secondly, the Plaintiff even had to shut down its business on 1 January 2018 because of the water seepage. Mr. Chan testified that the Plaintiff’s clients came to do business and they had no choice but to vacate the premises because of the persistent water seepage and the associated hygiene problem. 57.As to the claim for only 1/4 of the total repair costs, I have considered all the evidence, especially the Three Reports and the relevant floor plans contained therein, and come to the conclusion that such fraction was reasonably adopted. I allow HK$360,862.50 for repair costs in full. D4. General damages for distress and inconvenience 58.It is settled law that a corporate plaintiff can claim and recover general damages for distress and inconvenience: China Fair Land (Qingdao) Ltd v Lo Sum Sum [2024] 5 HKLRD 104, per DDJ Isaac Chan, at §§55-68. 59.There is no hard and fast rule to fix the amount of damages for distress and inconvenience. Each case has its own facts and features. I entirely agree with the observations made by HHJ Andrew Li in Lam Tin Kwan & Anor v Teamwell Corporation Limited [2019] HKDC 1593 at §141:
60.Mr. Wong invited this Court to award HK$120,000 under this head. 61.I have considered all the relevant evidence and circumstances of the water seepage in the Plaintiff’s Premises, especially:
62.The Plaintiff was severely affected by the nuisance caused by the water seepage in the Plaintiff’s Premises over a long period of time. In my judgment, an award of HK$120,000 as damages for distress and inconvenience is appropriate. D5. Summary of damages 63.In summary, I assess damages in favour of the Plaintiff as follows:
64.The damages to be awarded to the Plaintiff is capped at HK$3,000,000 because of the monetary jurisdictional limit of the District Court. 65.According to §7 the Order of Madam Registrar M. Soong dated 13 May 2025, the liabilities of the 1st and 2nd Defendants towards the Plaintiff shall be joint and several. Credit has to be given to the Settlement Sum (i.e. HK$2,000,000) in awarding damages in favour of the Plaintiff. Hence, I allow damages in the sum of HK$1,000,000 to be payable by the 2nd Defendant to the Plaintiff. E. Disposition 66.By reason of the foregoing, I order that:
67.Lastly, I thank Mr. Wong for his assistance.
Mr. Ernest Wong, instructed by KCL & Partners LLP for the Plaintiff The 2nd Defendant was not represented and did not appear | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment