China Dyeing Works, Ltd v. Phonetime Industries Ltd

HCA004052/1984

BETWEEN

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Coram: Jackson-Lipkin, J. in court.

Dates of Hearing: 

Date of delivery of Judgment: 1st July 1986 at 3.43 p. m.

Appearances: Chong for the Plaintiff.

Pritchard for the Defendant.

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JUDGMENT

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1. For twenty-one days I have been addressed on leaking ladies' lavatories, enlarged orifices and inadequate diaphragms and female parts devoid of a good screw and female parts inadequate to hold such screws as were supposed to lodge firmly in them.

2. I was also invited to inspect and I did, on two separate days, view the premises in question. An immense amount of evidence has been put before me, most of which in the end proved to be either irrelevant or unhelpful; irrelevant as far as I am concerned, and unhelpful to either side. I am not going to commence, or even conclude, this judgment with a series of complaints about the way it has been prepared and presented. I made the position perfectly clear to counsel at the outset when questions of discovery, inspection, length of time for hearing, advices on evidence and merits were all gone into. Even to-day I still do not have the final list of documents from either party.

3. At all material times the plaintiff has been the registered and beneficial owner of the greater part of a new factory building in Tsuen Wan known as C.D.W. Building. I have been over it, and I am greatly impressed by the way in which it is maintained and managed.

4. After the Occupation Permit was issued, the plaintiff, as is customary, prepared Deeds of Mutual Covenant for use by possible future owners. There has been put before me one such Deed, dated the 30th October 1982, between the plaintiff and another potential owner, (who eventually did in fact become an owner), (Farah) Far East Limited and a management company, Chinney Property Management Limited.

5. The defendant entered into two leases with the plaintiff concerning premises on the 13th floor of the building: one on the 25th May 1983 which, having regard to the way the documentation has been prepared, not unexpectedly is dated 25th May 1980 (although the stamp office makes it quite clear it is 1983, and so do the dates in both the preamble and the term and the schedule on page B29). That related to units D, E and F on the 13th floor. I am concerned with those units only marginally.

6. On the 7th July 1983 the defendant took a lease of a four-year term from the 7th July 1983 of units A, B and C. that is a document to which I shall return in due course.

7. The factory premises were, as one would expect of a new building, just a bare space, and had to be put in order before the defendant could use it for its own purposes. The defendant did that, and commenced to use the premises for the manufacture, principally, of telephones, although I am told that it did, at some time, it matters not when, also manufacture wireless sets. The telephones are of a portable nature, as appears from exhibit 18.

8. On the 10th day of the New Year, that is to say, on the 13th February 1984, there was a discharge of salt water from unit C on the 13th floor which, having run out through the door at the back of the defendant's premises on to the lift lobby, found its way - and it no longer matters how - into a duct carrying busbars of the electrical supply system for the factory. The salt water, which is highly corrosive, ran down those busbars and caused considerable damage to the electrical system of the whole building, thus, it is said, causing loss and damage to the plaintiff and putting the plaintiff at risk of claims from other occupants of parts of the building in respect of the time when their units were unable to function due to lack of electricity.

9. As at to-day, no such claim has been advanced, or if it has, I have not been informed of it. As is customary in Hong Kong, I have pleadings resembling Jacob's coat. I have a red statement of claim, a green defence and counterclaim and a green reply and defence to counterclaim.

10. The plaintiff now puts its claim thus: -

(1)    Breach of covenant (of the Tenancy Agreement); and

(2)    (a)     Negligence;

11. In other words negligence simpliciter and negligence arising out of the doctrine of res ipsa loquitur.

12. There was a large number of other claims, all of which have been abandoned, and, as is customary in Hong Kong, abandoned at a late stage after investigation. The counterclaim, again at a late stage, was abandoned, and what I am left with is a Defence which denies negligence, denies breach of Covenant, admits the discharge of water and, to put it in its simplest form, relies on latent defect.

13. The Reply and Defence to counterclaim contains a number of matters which should have been in the Statement of Claim, but, be that as it may, they include this: The plaintiff avers that, by reason of the wording of-the Tenancy Agreement, there was incorporated into that Agreement the terms of the Deed of Mutual Covenant: There is also a very large number of averments with which I am no logner called to deal, and which, consequently, I do not propose to mention.

14. We now know that all the water came from the right hand ladies' water closet in the right hand-most of all the lavatories on the 13th floor in unit C. The leak came from the cistern of that water closet.

15. In the course of the hearing we distinguished, and in the course of this Judgment I will distinguish, between the "W.C. " in question and what has been called the "toilet", which is an area, a tiled area, with an entrance door, which comprises, on the women's side, wash basins, an open space and two W.C. cubicles.

16. As one goes in through the door, one sees that the left-hand wall has, at its foot, and quite near to the left hand of the two W. C. s, a hole, which is meant to be a rectangle, but which is very irregular, the interior measurement of which, presumably due to negligent overseeing of the workmen, is smaller than what was intended, because the hole in the concrete is certainly of a lower height and of a narrower width than the hole in the tiles themselves. That is a hole in the partition wall, the other side of which is the men's "toilet", which consists of water closets, urinals and wash hand basins: It has also a door.

17. Set in the floor of the men's "toilet" is a floor drain. It is a hole in the concrete into which is set a small metal grille, not one with holes, but just with lines, (the usual sort of grille one sees on floors of bathrooms and lavatories all over Hong Kong). It has a trap, or "S" bend as it is more commonly called in households, but that trap is within the curtilage of the factory unit of the floor below, the 12th floor. If ever it were blocked, it could be cleared only by either the management gaining access under their rights, or the defendant gaining access with permission, to it by entering the factory below.

18. Water, as I say, escaped from the cistern, went through the ladies' "toilet", went through the factory, and then went out to the factory door causing the damage that I have already described. According to the plaintiff, the damage was caused because the water that flooded from the ladies' W. C. into the ladies' toilet was unable to escape, as was intended, to the men's toilet by going through the hole in the wall, and, therefore, was prevented from going down the floor drain.

19. At one time it was suggested the floor drain was blocked, but there was no evidence to support that, and it has, in the end, been conceded that that should no longer be relied on. What is alleged is that the hole in the partition wall was blocked in some way, (and I will come to that shortly), so as to prevent the water from flowing through and draining away properly. The result was an accumulation of water, says the plaintiff, in the ladies "toilet" to such extent that it flowed out from that toilet, partly flooded unit c and ran out through the door into the lift lobby.

20. So far as the plaintiff's liability to its co-owners and other tenants are concerned, there is no longer any dispute between the parties that the plaintiff is entitled to an indemnity from the defendant, and I do not need to deal with that issue in this judgment. Counsel will endeavour to put before me an agreed wording of the order to be made, granting to the plaintiff a declaration that it is entitled to an indemnity.  If agreement is not reached, then I shall have to determine the wording for myself.

21. I will deal with the evidence in due course. I will commence this afternoon, because of the lateness of the hour, in dealing with the contractual point, which is the one that will take the least time, and I will endeavour to dispose of it before I rise at half-past four. Having not had time to prepare a written judgment, this judgment will perforce need some tidying, which it will get when I receive the draft from the Court Shorthand Writers, but the substance of it will remain as pronounced by me to-day and tomorrow.

22. I will start, therefore, with the contractual claim, by looking at the lease of unit C. That appears in the agreed bundle of documents between B166 and 168. It provides, as I said, for a term of four years from the 7th July 1983, notwithstanding the plea in the red statement of claim that it was for three years.

23. Clause 1 is the letting clause containing the term, reserving the rent as set out in the schedule, exclusive of rates and monthly management charges, the remuneration of the manager and other expenses payable to the manager, and giving the usual - what I may call - "rent-free allowance" that one meets in Hong Kong for incoming tenants to new premises.

24. Clause 2 deals with payment. 2(a) deals with payment of the rent reserved "in the manner aforesaid", that is what I have just referred to in clause 1, and other charges due "in the manner hereinafter mentioned". Clause 2(b)(iii) binds the tenant to pay and discharge punctually during the term monthly contributions to the costs, charges and expenses for the maintenance and management of the building chargeable in respect of unit C "as provided under the Deed of Mutual Covenant" (hereinafter referred to as the "said Deed of Mutual Covenant") relating to the building ..... and unless and until otherwise revised the monthly management charges shall be $5,600.00. ".

25. There is, therefore, right at the beginning, of this Tenancy Agreement, a reference to the Deed of Mutual Covenant, and it is said that the reference there put the defendant on notice as to the contents of Deed of Mutual Covenant as early as 7th July 1983.

26. Clause 2(f) bound the tenant to maintain and keep in tenatable repair and condition, and among other things, the water closets.

27. Clause 2(j) provided that the tenant covenanted not to do or permit to be done in or upon the said premises or any part thereof anything which may or become a nuisance, annoyance, damage or disturbance to the landlord or the tenants or occupiers of the other part of the said building.

28. Clause 2(k) bound the defendant to pay the Landlord for all damages caused by or resulting from any negligence or other acts of the tenant or his employees, servants, work-people to the said premises or to the landlord's adjacent or other premises.

29. Clause 2(p), which is the mainstay of the plaintiff's contractual claim, reads as follows, and I shall omit the irrelevant parts:-

"Not to do or suffer to be done any act which shall amount to a breach or non-observance or non-performance of any of the terms, covenants or conditions contained and/or referred to in the said Deed of Mutual Covenant. "

30. The plaintiff urges upon me that that clause in the Tenancy Agreement means that the tenant, that is the defendant, must observe the terms of the Deed of Mutual Covenant as if it were an owner, and, indeed, Mr. Chong urges upon me that it can only mean that, for all intents and purposes, the defendant in this case must be treated as if a signatory to all the obligations contained in the Deed of Mutual Covenant, (to which I shall shortly come).

31. Clause 2(y) provides that at the expiration or sooner determination of the Tenancy Agreement the defendant should deliver up to the plaintiff the said premises in its original state and in such good repair and condition as aforesaid together with anything added and there are various other Covenants about maintenance.

32. Under clause 4(e) there is this provision:

"For the purpose of these presents any act default or omission of the employees, agents, servants, visitors, work-people, customers or Tenant shall be deemed to be the act default or omission of the Tenant. "

33. Clause 4(j) reads and I shall read only the relevant part:

"The Tenant shall fully and effectually indemnify the Landlord from and against all claims and demands made against the Landlord by any person in respect of any loss damage or injury caused by or through or in any way owing to the overflow of water. "

34. And that last, as I said, has given rise to the very proper concession by Mr. Pritchard that the plaintiff is entitled to a declaration that it is entitled to an indemnity. It read on:

"or owing to the negligence or default of the defendant, his servants, agents or licensees or to the defective or damaged condition of the interior of the premises or any fixtures or fittings for the repair for which the tenant is responsible. "

35. On that basis, therefore, the plaintiff says that the defendant must be treated as if a party to the Deed of Mutual. Covenant, which is to be found at pages B208 - 271, and it behoves me to deal in some detail with that before coming to my analysis.

36. The "Indenture" contains definitions, and the only definition with which I shall deal in any detail, is that of "owner", which appears at B212, and is defined thus:

"Owners" shall mean the First Owner, the Second Owner "(and the Second Owner in this particular case is Farah Far East Limited)" and any person who may hereafter become the registered owner or mortgagee of Any undivided part(s) or share(s) in the Land and the Building including joint tenants or tenants in common and its or his or their executors administrators successors and assigns and references to the Owner or Owners shall mean the Owner or Owners for the time being whose undivided parts or shares in the Land and the Building entitled him or them to the sole and exclusive right to hold use occupy and enjoy that part of the Building ...",

and there are certain provisos. I will note at this stage - although I will have to come back to it and deal with it in greater detail later - that it does not say:-

"and including any person who may hold of or from or through the First Owner, the Second Owner or any person who may hereafter become the registered owner or mortgagee of any divided part or parts of shares in the land and building",

and there is no reference at all to ordinary tenants.

37. The Deed is divided into what are called sections. Section 1, which starts at B215, deals with the rights of owners and it includes the right of every owner to assign mortgage, lease, licence or disposes of parts of the building, but provides that any such sale assignment, mortgage, lease, licence or disposal shall be expressly subject to and with the benefit of this Deed. There is no doubt, therefore, that the plaintiff in this case was under a contractual obligation to Farah to make the leases in favour of the defendant expressly subject to and with the benefit of this Deed: The question is, "Did it?"

38. Section 2, which begins at B216, deals with easements, rights and privileges, the benefit of which is held by the owners of equal undivided shares. Section 3, which begins at B218, deals with easements, rights, privileges, subject to which each owner of undivided parts or shares and building holds his, her or its premises. Section 4, which begins on page B219, deals with covenants, provisions and restrictions to be observed and performed by the owners. To that I shall have to return in due course after this recital, because I have to deal with its clauses in greater detail. Section 5 deals with management, and it begins at page B228. Section 6 deals with what is called extinguishment and starts at page B248, and that deals with the extinction of rights in the event of fire, typhoon, earthquake, subsidence or other cause so as to render the building substantially unfit for habitation. Section 7 deals with Owners, committees and meetings, that begins at B249. Section 8, which begins at B252, deals with provisions affecting the external walls and roof and common areas of the building. Section 9, which begins at page B254, deals with special provisions such as common areas which are under the sole and absolute control of the manager and prohib ts any other from entering into, altering or connecting things inside, and deals with wircless and television aerials, and public notice boards. Section 10, which begins at B255, is a control of advertising, of projections and of laundry. Section 11, which begins at page B256, deals with special rights, powers, privileges and authorities of the First Owner, that is the plaintiff. Section 12, which begins on page B257, contains a number of miscellaneous provisions, with which I do not need to deal.

39. I will now return shortly to my analysis. Thanks to the assistance of Mr. Chong this afternoon, I have not had to do personal research into the qualifications and duplications between the Tenancy Agreement and Deed of Mutual Covenant. He tells me they are as follows: Clause 2(b)(i) of the tenancy Agreement, on B167, is equivalent to clause 2 of the Deed of Mutual Covenant, on page B219: clause 2(b)(ii), also at B167, is equivalent to clause 2 of the Deed of Mutual Covenant, on B219: Clause 2(b)(iii), on B167, is equivalent to 3 in the Deed, at B219: Clause 2(f), at B169 is equivalent to clause 10, at B221: Clause 2(j), at B172, is equivalent to clause 35 at B226: Clause 282, at B170, is equivalent to 37, at B227: And clause 2(5) at 175 is the equivalent of clause 1 of section 10 and clause 19 of section 4, at pages B255 and B223 respectively.

40. I now go back to clause 2(p) of the Tenancy Agreement at B174:

"Not to do or suffer to be done any act which shall amount to a breach or nonobservance or non-performance of any of the terms covenants or conditions contained and/or referred to in the said Deed of Mutual Covenant. "

41. Mr. Pritchard says to me that that cannot in fact invoke, as it is supposed to invoke, the whole of the Deed of Mutual Covenant and treat the tenant as an owner, because that would need expressly to be done, as indeed the Deed of Mutual Covenant requires; but what it can do is to prohibit the tenant from doing something which, although not done qua owner, could directly put the landlord, that is the plaintiff, in breach of its, the landlord's, obligations under the Deed of Mutual Covenant. "Suffer to be done" needs no explanation, but the tenant is, by clause 2(p), not to allow the landlord to do anything, which he can prevent, which would amount to an owner's breach by the landlord.

42. I have approached the problem in a slightly different way because I have asked why should it be necessary, if the Deed of Mutual covenant, by clause 2(p), is incorporated into the Tenancy Agreement, to make provisions in the Tenancy Agreement which are already quite apparent in the Deed of Mutual Covenant? It occurred to me that whoever drew this Tenancy Agreement, was doing it either without knowledge of the obligation to which I have referred, namely expressly to incorporate these obligations and benefits, or was trying to get the best of both worlds by making a passing reference in two clauses to the Deed of Mutual Covenant, and hoping that the obligations alone would thereby be placed on the poor tenant.

43. The question which I ask myself is: Why should there be, in the Tenancy Agreement, matters which would be wholly unnecessary if the Deed of Mutual Covenant had been incorporated. For example, I start with 2(b)(iii). 2(b)(iii) refers to an obligation to pay under the Deed of Mutual Covenant sums of money which it says "unless and until otherwise revised" should be $5,600 for management fees; but, if the obligation in the Tenancy Agreement is to carry out all the obligations of the Deed of Mutual Covenant, then all one has to do is to turn to the Second Schedule to the Deed of Motual Covenant (which appears at pages B264 to 267) and there one would see immediately the provisions quantified (which, in fact, amount to the sum of $5,600 for units A, B and C).

44. I will deal with the other matters under this aspect before I come to analyse Mr. Pritchard's view of this, at not before 10.30 tomorrow. I had better say, Gentlemen, not before 11 o'clock tomorrow. Not before 11, 1 shall continue.

Adjourned at 4.30 p. m.

2nd July 1986.

11.43 a. m. Hearing resumes.

Appearances as before.

Court: I was dealing yesterday evening with the Lease as a matter of pure construction, and you will recall that I found some difficulty in accepting the submission of Mr. Chong that clause 2(p) of the Lease, on B174, imported into the Lease all the terms and conditions and obligations of the Deed of Mutual Covenant. I did, in passing, refer to the contractual obligation that the plaintiff had with Farah to put into any such lease an incorporating clause bringing in all the rights and benefits of the Deed of Mutual Covenant, but that is a fact that I cannot take into account in the construction of the Lease. I must look at the Lease as it is, and see if Mr. Chong's contention is correct.

45. I have already referred to clause 2(b) sub-paragraphs (i), (ii) and (iii) of the Lease, and I ask myself: Why on earth those are necessary, having regard to the fact that the same provisions appear in the Deed of Mutual covenant.

46. Clause 2(f) of the Lease, at B169, relates to an obligation to keep and maintain in tenantable repair and condition the inside of the premises. But then so does clause 10 and. part of clause 11 of the Deed of Mutual covenant and P ask myself: Why is clause 2(f) necessary, if the Deed of Mutual Covenant is in force as between the plaintiff and the defendant in the much wider and far reaching wording of the Deed of Mutual Covenant.

47. Another example is 2(h)(ii), at B170, which deals with airconditioning plants. That is also provided for in the Deed of Mutual Covenant and I ask myself why that should be necessary. It appears in the Deed of Mutual Covenant, at B227, in clause 37. If clause 37 were imported by clause 2(p) into the Lease, what was the necessity for 2(h)(ii)?

48. Then I turn to clause 2(j), which appears at B172/3, and which relates to nuisance. But nuisance is dealt with in clauses 10 and 11 and 35 of the Deed of Mutual Covenant appearing respectively on page B221 and (the relevant part of clause 35) on B227.

49. Again, if I look at clause 2(u), which appears on B175, that is dealt with in clause 19 of the Deed of Mutual covenant of B223 and I ask myself again: Why is it necessary to include it in the Lease if the Deed of Mutual Covenant is imported into the Lease.

50. Now, I am not going to indulge in a further exercise of going through all of these. If Counsel wish me to do so, I shall be quite happy in due course to annex to the judgment a list of this duplication, but I cannot see that it is really necessary.

51. I have come to the conclusion as a matter of pure construction that clause 2(p) prima facie does not import the Deed of Mutual Covenant. I then have to consider something else.

52. "If it does not", says Mr. Chong, "that deprives it of all meaning, and the Court should always seek to avoid finding a clause devoid of all meaning. " I did point out to him that clause 2(p) covers not only the doing but the suffering to be done of alleged offending acts; the suffering to be done, of course, would put an obligation on the defendant to prevent the plaintiff from doing anything on the demised premises that would amount to an owner's breach under the Deed of Mutual covenant. What in effect Mr. Chong is saying to me is that the doctrine of "ut res magis valeat quam pereat" should apply, and that, if I find that my construction of the Lease deprives 2(p) of any meaning, then my construction must, ipso facto., be wrong. I have examined that plea of Mr. Chong, and I find that I am able to do so in such a way that satisfies both his view on the matter and mine simultaneously. I do not believe that clause 2(p) is a meaningless clause. It means what it says. I have dealt with the "suffering to be done". I will deal now with the "doing". There is in the Deed of Mutual covenant a number of things which, if the tenant did them, would put the Landlord in breach of the Landlord's obligations qua owner under the Deed of Mutual Covenant. I am not going to go through all of those. I will mention some and, as a matter of convenience, I will mention but those to which Mr. Pritchard drew my attention.

53. Clause 11 of the Deed of Mutual Covenant, for example, reads thus:

"No partitioning shall be erected or installed which does not leave clear access for fire exits and no windows shall be wholly or partially blocked or the light and air therefrom in any way obstructed. "

That does not say, you will notice, "no owner shall erect or install. " The clause continues, however, "No owner will use or permit or suffer . . . " etc. . Quite clearly, therefore, if the defendant were, on my construction of clause 2(p), to erect partitioning which did not leave clear access for fire exits - (in the Deed of Mutual Covenant it is "fire exists" but that is neither here nor there) - that would put the plaintiff in breach of the Deed of Mutual Covenant. It would not put the defendant in breach of the terms of the Deed of Mutual Covenant, it would put the plaintiff in breach, and that is what I believe clause 2(p) covers in the opening three words.

54. Another example is in clauses 15 and 16 of the Deed of Mutual Covenant, at B222. They do not begin with the words "no owner shall" as, for example, do other clauses on the same page, B222, namely clauses 13, 14 and 17. If, therefore, the defendant were to use what are described as "garbage disposal areas" in a manner other than that prescribed by the manager, it would put the plaintiff in breach of clause 16 of the Deed of Mutual Covenant, but it would not put the defendant in breach of clause 16; the defendant would be in breach of clause 2(p).

55. Similarly with clause 19, on B223. Clause 19, as is to be expected, comes between clause 18 and clause 20. Clause 18 and clause 20 provide what "no owner" shall do. Clause 19 makes no reference to "no owner". If, therefore, the defendant were to put up external signs, signboards, notices, advertisements, flags, banners, poles, cages, brackets' flower shelves or other projections, the defendant would be putting the plaintiff in breach of clause 19; the defendant would not be in breach of clause 19, but the defendant would be in breach of clause 2(p).

56. On B224, there appears clause 25 and it follows clauses 21, 22, 23 and 24 on the same page, each of which provide what "no owner" shall do. Clause 25 does not so provide. The following clauses do, 26, 27, 28 etc. . If, in the interest of hygiene, the defendant. were to hang clothing or laundry outside the building, that would put the plaintiff in breach of the plaintiff's obligations qua owner under clause 25. It would not put the defendant in breach of clause 25, but it would put the defendant in breach of clause 2(p) because it was doing something which amounted to an owner's breach.

57. I have, in the course of that analysis, referred to "owner's breach" frequently, and the reason is quite simply this: The way the Deed of Mutual Covenant is drawn, with certain exceptions which I have mentioned, the obligations and covenants of positive and negative are all "owner's" obligations; owner's positive covenants, owner's negative covenants: And "owner" is so defined in the Deed of Mutual Covenant, as I mentioned yesterday, as to exclude tenants of owners. I believe that that is sufficient to dispose of that point and, in so far as the plaintiff's claim is based in contract, it fails.

58. I now pass to the plaintiff's claim in negligence. This falls into two parts. The first part is what I call "negligence simpliciter" and what I mean by "negligence simpliciter" is this: The plaintiff says, "You've been negligent. "; the defendant says, "Oh,- no, I haven't. "; and the plaintiff says, "Oh, yes, you have. ". Now, that allegation appears in the amended Statement of Claim, the denial in the re-amended Defence and the reiteration of the allegation in the re-amended Reply. The burden of proof of such negligence falls on the plaintiff.

59. That negligence by yesterday had been narrowed down by the plaintiff to three specific allegations. It was either yesterday evening or the evening before the plaintiff conceded that there were but three matters: The lack of maintenance work in the cistern in question; allowing the hole between the ladies "toilet" and the men's "toilet" to be blocked; and failing timeously to inspect the cistern or the hole.

60. The other part of the negligence claim is this: The plaintiff says, "I let you some premises to run as a factory. I built it in accordance with plans approved by the Public Works Department (or whatever it is now called). I installed water installations, which were approved by the Water Services Department. Everything was working perfectly all right, because I had an excellent system of watchmen, and nobody reported anything wrong. You ran the factory. Water ran out, and, therefore, the fault is yours - res ipsa loquitur. "; to that the defendant says, "Oh, no, there was a latent defect in the ball valve cistern which you supplied to me; the orifices were too small; the diaphragms were of the wrong type and did not function as they should have done; none of them had a good screw; those which did, had a defective female part which could not hold the screw; and the result was a leak. ". For such a plea, the burden of proof is on the defendant. That is quite clear from certain authorities, to which I will come in due course.

61. It is at this point that I become schizophrenic, because I was very dissatisfied with the non-expert evidence adduced by the plaintiff. I was very impressed by the non-expert evidence adduced by the defendant. On the vital parts of the positive allegation by the plaintiff, I did not believe the principal witness for the plaintiff.

62. I will return to all that in a moment, but what it means is that, on that allegation of negligence where the burden of proof is on the plaintiff, I find that the plaintiff has not discharged that burden and has failed to prove negligence. But, when it comes to the res ipsa loquitur plea met by a plea of latent defect, where the burden of proof is on the defendant, I am not satisfied that the defendant has discharged the burden of proof; it has not done what it could have done to shift the burden of proof back to the plaintiff; in other words, that the lacunae in the defendant's evidence are such that I must find for the plaintiff. It is only in the fairy-land world of the courts that such a situation can arise, because the allegation is negligence. Nonetheless, that is the state of the law as I find it, and that is how I am obliged to deal with this matter.

63. Let me deal with that part of the negligence action where the burden of proof lies on the plaintiff.

64. Lack of maintenance work in the cistern in question: The whole thing about lavatory cisterns is that you leave them alone unless something happens. When something happens, you repair them. The evidence adduced by the defendant was that certain lavatories in unit E leaked, and the cleaning amahs reported it. It was a nuisance to them because, every morning when they went in, there was water on the floor, and the maintenance man went to have a look. Sure enough, water was seeping out, as it so often does with W. C. cisterns of the older type, through the overflow pipe, wetting the floor. So he adjusted the screw and that stopped the leak. Anyway, he went back regularly to have a look, and the leak seemed to have been cured; and then later, occasionally, he went to have a look and, lo and behold, one day the situation was exactly as before - the fault lying either with the screw in its thread; or the screw in its composition or the screw thread of the female part, which is attached to the lever, into which the screw goes and is meant thereby to be held, or the diaphragm; or a combination of all of those. Happily, I do not have to find which it was.

65. The maintenance man replaced the ballcock valves, and that was all right. He did not get a report from anywhere else, so he did not do that anywhere else. I cannot see that the plaintiff has proved negligence in a lack of maintenance work on the cistern in question.   Why should there be any work on the cistern in question, if it was working all right?

66. Failure timeously to inspect the cistern. Why inspect it if it is not doing anything wrong? I cannot see the plaintiff has proved anything there.

67. Failure timeously to inspect the hole between the women's and men's "toilets". Why should the hole be inspected if the premises are regularly cleaned, and, on the evidence put before me, I find, on the balance of probabilities that they were regularly cleaned. There was no need, therefore, for the hole to be inspected. If there was some suspicion that it was blocked, then someone would look through it, of course, but if there was no such suspicion, why should they need "timeously to inspect" it? I find there also that the plaintiff has failed to discharge the burden of proof on it, to prove that anything done was wrong.

68. The last is allowing the hole, the hole to which I have just referred, to be blocked, and here the evidence turns on a Mr. Ng. In order to decide whose evidence one prefers, a judge has many functions, as I have so frequently said. First of all, one has to observe the demeanour of the witness, the manner in which the witness gives evidence, the manner in which the witness answers questions, the directness and seeming frankness of the witness, whether the witness answers the questions or tries to avoid them; then one has to look at the witness's own evidence for internal self-contradictions. Then one has to look at the witness's evidence taken in the totality of the evidence adduced, and then one has to take the evidence of the witness in its contradictions with other witnesses either on the same side or called by the opposing party. It is not an easy function and, having regard to something said by Mr. Chong, I must observe that a judge comes to conclusion of whose evidence he prefers, and which side succeeds, on the balance of probabilities, not by a single glance, not merely by demeanour or bearing, but by a combination of all the factors to which I have referred and, in this respect, I would wish (respectfully, of course) to adopt something I myself said in the case of LAM Ngai-kuen & LAM Tan-fai and Ocean Tramping Co. Ltd. & Anor. on the 7th and 8th of February 1984: -

"The 1st-plaintiff is quite clearly literate. Although the Chinese agreement which the 1st defendant put forward to shut out her and her children is typed in proper Chinese - and not the attempt at Chinese which one sees in documents elsewhere - she was able to read it without any difficulty. She had been at a good school in China and was properly educated, although she had no higher education. However, I would not assess her as being an intelligent woman. There were very long pauses at times between the asking of a question and its being answered. That is something I have to consider. There were certain conflicting answers, and, indeed, in relation to the events surrounding her signing the documents, some very conflicting answers indeed; and that is what I have to consider. But I am not sitting in The Strand, I am sitting in Sun Hung Kai Centre in Hong Kong, and I have before me a Chinese witness; and my view, if I were sitting in London, of a witness giving evidence in the way in which that lady gave evidence might be very different from the view I take in the light of my own experience in this Colony. ".

As I say, that is the attitude that I adopt and will continue to adopt so long as I am permitted to sit here, constantly reminding myself that I am an English-born, English-trained, British experienced judge dealing with Cantonese speakers, Fukien speakers, Hakka speakers, etc. born in this part of the world, and I am deeply conscious of the difference between accuracy in English which depends on the ipsissima verba and accuracy on Chinese which depends on the context, and sometiems not merely the context of a sentence but of a series of sentences.

69. Now, I have digressed out of deference to certain submissions made to me by Mr. Chang. However, I am unshaken in my feeling that Mr. Ng was a wholly unsatisfactory witness and, in so far as that part of his evidence relates to the hole between the women's and the men's "toilet" being blocked by plastic bags, sheets of wrapping paper of the size described by him, sheets of what he was pleased to call "foam rubber" of the size described by him, and a mop of the size, and standing at the angle described by him, that he was not telling me the truth.

70. The plaintiff, accordingly, fails to prove to me that that hole was blocked, and that the blockage was the cause of the leak. I did not believe Mr. Ng and I mince no words about it. Yes, some of the other witnesses were unsatisfactory, but none was as unsatisfactory as he.

71. Parenthetically, I will add that I have spent over four hours in the. premises, not merely the suit premises, in the building, maybe nearer five hours. I have been in most of the ladies' lavatories, some of the men's lavatories, round the production lines, in the storage areas, up and down the stairs, in the switch room, at and in ducts, on lift lobbies and so on, and I bear in mind what I have seen and the things that I did not see, and it is not without interest that there were two things that I did not see. One was the ubiquitous Hong Kong mop, which I would have expected to find in every ladies' lavatory in the building but this, of course, is a modern building for modern young ladies and no mop was to be seen.

72. The second was the absence of wrapping paper of the type and size described by Mr. Ng, which was not, and I accept never had been, in use in the premises. The only example of wrapping paper was found by Mr. Chong and me in a waste-paper basket beside one of the girls on the production line, not in sheets but in the same shape as had contained a parcel, obviously a box. It had been discarded properly into the waste-paper basket. That was the only thing that remotely resembled the wrapping paper of the type described by Mr. Ng. But Mr. Ng was not referring to paper that had wrapped things. He was referring to sheets of wrapping paper in stacks.

73. That is not all. Those are just two matters that have flashed through my memory as I am giving this judgment, an extemporary judgment, which, if I had stepped down and written it, would have been infinitely shorter, and more precise, but then I would have detained the parties for further days, which is something that I have tried to avoid, especially as I have a long fixture commencing tomorrow.

74. I now pass to the latent defect, and here a sadness descends on me. If only the defendant's previous solicitors had fulfilled their professional obligations, this case would have been easier for plaintiff, for defendant and for Judge. If only the difficulties facing the new solicitors for the defendant had not been so great that they were unable timeously to act, I would have had before me the builder, the plumbing contractor and various other people concerned with the installations in this building, because it is clear on the documentary evidence presented to me, and on the physical evidence put before me, it is quite clear that those who entered into contracts with the plaintiff were in breach of them and did not supply that which they contracted to supply.

75. It is equally clear that that which they did supply was inferior in quality to what was required by the contracts they entered into, not merely different from, but inferior in quality to, and it is a thousand pities that I am not able here and now to deal with compensation to the plaintiff and the defendant that would probably be quite simple to assess for those breaches of contract.

76. There is a series of reports dealing with the burden of proof on defendants where defects in equipment supplied by other people are put forward as defences and dealing with the extent of the burden of proof in the manner in which it can be discharged.

77. Barkway v. South Wales transport Company Limited⁽¹⁾ (which those in charge of The Law Reports considered unnecessary to report, as appears from [1950] A. C. 185) appears in its verbatim state, unrevised by Judges or Counsel,in the All England Reports. Lord Porter deals with this matter at pp. 394 to 395, where he refers to the doctrine of res ipsa loquitur, and says this:

"The doctrine is dependent on the absence of explanation, and, although it is the duty of the defendants, if they desire to protect themselves, to give an adequate explanation of the cause (of the accident), yet, if the facts are sufficiently known, the question ceases to be one where the facts speak for themselves, and the solution is to be found by determining whether, on the facts as established, negligence is to be inferred or not. ".

From p. 398E to p. 399E, he deals with the sort of evidence that the respondent in that appeal ought to have adduced if it was to succeed in discharging the onus placed on it by the doctrine and its consequences. Lord Normand dealt with it equally between pp. 400H and 403E.

78. Moore v. R. Fox & Sons⁽²⁾, which is a decision of the Court of Appeal, deals again with this doctrine. Lord Evershed deals with the matter at pp. 606 to 607; at pp. 610/611 he said:

"I take first the alternative favoured by the judge, that the plaintiff had rightly said that this was a case of res ipsa loquitur and had, therefore, thrown upon the defendants the onus of explaining the accident so as to absolve themselves from the implication of negligence.

As I understand the law upon this subject which has been expounded in the cases, the so-called rule applies where the res, that is the "thing" itself, without more, leads to the inference of negligence. ..... The foundation of all subsequent authority is found in Scott v. London and St. Katherine Docks Co. The language of Erle C. J., which is the basis of all that has since followed, was: 'But where the thing is shown to be under the management of the defendant or his servants, and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence, in the absence of explanation by the defendants, that the accident arose from want of care. In my judgment this passage is directly applicable to the facts of the present case; for the thing, that is the machine, was 'under the management of the defendant or his servants, and the accident was such as in the ordinary course of things does not happen if those who have the management use proper care' - a fact corroborated by the evidence of Mr. Whittaker. Furthermore, the sum of the defendants' evidence was not to explain the accident but to show that it was inexplicable.

Agreeing, therefore, with the judge that this was a case of res ipsa loquitur, I am unable to agree that the defendants so explained the accident as to discharge the onus thrown upon them. ".

That case was distinguished in Walsh v. Holst & Co. & Ors. ⁽³⁾, but I have looked at that Report and it does not touch on this particular aspect of the matter, and that case itself was distinguished later.

79. The next is the case of Davie v. New Merton Board Mills Ltd. and another⁽⁴⁾, which is the case of the drift which flaked. Passages in certain speeches (at pp. 646 & 650) make it quite clear that he who alleges a "latent defect" bears a heavy burden to cover all the ground in its defence.

80. The next case to which I wish to refer is Pearce v. Round Oak Steel Works Ltd.⁽⁵⁾. That was a case where a defendant who did not call any evidence having alleged "latent defect", failed for having not done so. Lord Denning, M.R. said at p. 681:-

"The contractor does not satisfy the burden on him unless he shows not only that there was a latent defect which was due to metal fatigue, but also in acquiring the machine and his dealings with it he took all reasonable care to see that it was in good order and condition. ";

Later he said, at pp. 681H - 682A: -

"The defendants did not call any evidence. The judge regarded their failure as decisive. He said: 'I think the plaintiff has given sufficient evidence to put the burden on the defendants to say that they have taken reasonable precautions. It requires an answer. If there was a specification on it, then it ought not to have been used; if there were no drawings then they ought to have made certain enquiries. ' It seems to me that the reasoning of the judge cannot be faulted when one has regard to the burden of proof of which I have spoken. It is a pity the defendants left the case as it was, calling no evidence. They ought, it seems to me, to have called an engineer or manager with them at the time the machine was acquired and to say what was done about the drawings, or the circumstances in which they acquired it, so as to show there was no want of reasonable care on their part. But they left that part of the case uncovered. The judge was right in his approach and I would dismiss this appeal. ".

Edmund Davies, L. J. said, at p. 682F - G: -

"..... but such speculation was in no sense necessary for the decision and does not impair the conclusion at which the learned county court judge arrived, namely, that the defendants had not discharged their duty of showing that they exercised, in the words of Lord Radcliffe in Barkway v. South Wales Transport Co., Ltd. '... as much are as could reasonably be required of them in guarding against this particular danger'. I confess to my pleasure at being able to arrive at such a conclusion in conformity with the decided cases in circumstances where a workman is injured as the plaintiff was and the defendants furnish no explanation at all of why that accident occurred. ".

Lastly, there is the case of Henderson v. Henry E. Jenkins & Sons & another⁽⁶⁾, Lord Reid said at pp. 290/1:-

"In their defence the respondents admitted that the accident was caused by a sudden brake failure and pleaded that this resulted from a latent defect which occurred without any fault on their part and the existence of which was not discoverable by the exercise of reasonable care by them. Their case is that they have proved that regular inspection of the outer, visible part of these tubes is all that ordinary practice requires, that they did that, and that they were not bound to do more. But the extent of the owner of the vehicle is or ought to be aware of any facts which should indicate to him that some unusual defect may have developed which would not be disclosed by the normal kind of inspection.

It is proved that neither the Ministry of Transport nor the manufacturers advocate removal of these pipes for inspection. Normally it appears that they can safely be left in situ at least until a major overhaul is due, which one witness says should take place after about 300,000 miles. It is said that salt can cause corrosion but most lorries encounter salt not infrequently either near the sea or when passing over snow which has been treated with salt. But there is nothing in the evidence to suggest that any case has occurred where corrosion from this cause has caused a sudden brake failure. If such cases were known I would find it incredible, looking to the extreme danger to the public from sudden failure of the brakes of a lorry of this weight, that any responsible authority would approve the present practice. But on the other hand suppose the owner knew that some highly corrosive liquid was spilled over his vehicle, I would find it equally incredible that any responsible authority would approve of his merely examining the vehicle, for it is proved that even steam cleaning may not remove everything from crevices behind these pipes.

If there were nothing in the evidence to indicate a probability that something unusual must have happened to this lorry to cause the very unusual type of brake failure which the learned trial judge has held in fact occurred here, then undoubtedly the respondents would have proved that they had exercised all proper care in this case. But if the evidence indicates a likelihood that something unusual has occurred to cause a breakdown, then I do not see how the owner can say that he has exercised all proper care unless he can prove that he neither knew nor ought to have known of any such occurrence. For if he did know of it he would have been bound to take adequate steps to prevent any resulting breakdown. It may well be that it would be sufficient for him to prove that he had a proper system for drivers reporting all unusual occurrences and that none had been reported to him.

But in this case the respondents led no evidence as to the history of this lorry other than the evidence of the fitter to which I have referred. It may be that they could have proved that so far as they knew or could have discovered by reasonable inquiry nothing unusual ever happened to it which could have led to this corrosion. Or it may be that they did know of something but did not realise the possible danger resulting from it though they ought to have done so. We do not know. They had to prove that in all the circumstances which they knew or ought to have known they took all proper steps to avoid danger. In my opinion they have failed to do that, and I am therefore of opinion that this appeal should be allowed. Damages have been agreed to be £5,700. ";

Lord Donovan said at p. 299: -

"It was for the respondents to deal with these matters by evidence. They were asserting, and had to prove, that they exercised all reasonable care; but whether they had or not depended upon what the facts were in the foregoing respects. Yet on these matters they chose to give no evidence at all. The result was that they failed to establish their defence and should have lost the case.''

and Lord Pearson said, at p. 303: -

I will do no more at this stage save only to say that I am quite satisfied, on the authorities, that the burden on the defendant in this case, having put up the defence of "latent defect" to the plea of res ipsa loquitur, included a duty to explain to me what happened, or indeed what did not happen, in this ladies' lavatory between the time of taking over occupation of the premises and the time when the premises were put into operation and the commencement of the system of maintenance by the gentleman who has been referred to as "M. D. Chan".

81. There should have been some evidence of whether or not those men or women ever went near those lavatories. There was none.

82. There was no evidence that the ball valves had ever been inspected either when taking over the premises or at the conclusion of the period of "decoration", as it is euphemistically described. No such evidence was adduced before me.

83. There was no evidence to shew to indicate to me to some extent the frequency and duration of use of the ball valves in this particular ladies' lavatory.

84. Two experts have been called before me, but nobody has given me any evidence of the extent of user required before plastic fatigue should manifest itself either in the screw or in the female part, which apparently failed to hold the screw, or in the diaphragm.

85. No evidence was adduced before me of the system of checking by cleaners and their duties, if any, to report to M. D. Chan. I know they once did when it got so bad that it was a confounded nuisance to them. But there was no evidence at all of the system.

86. These were duties, onerous, I know, but they were duties, of proof that fell on the defendant once the plea of "latent defect" was put up to the plea of res ipsa loquitur. They do not necessarily arise in a straightforward, what Mr. Chong has called "Common Law plea", of negligence, which I have already dealt with.

87. There is no evidence to exclude the possibility that exhibits 13A, 14A and 15A were put in during the period of decoration or since. I know it will be said that that is onerous for the defendant, but some effort should have been made, however slight, and it was not.

88. What I am saying, in other words, is the defendant has not covered certain gaps which it should have covered to discharge that burden of proof.

89. I know, and I have borne in mind very carefully, and I have given anxious consideration to, the fact that there is a large number of these rather nasty ball valves installed in the whole building, I know that they are not good, it has been proved to me; I know that only two leaks were reported to M. D. Chan, and everything else functioned until the inexplicable happened, but the burden on the defendant in this case is not to explain the inexplicable, but to cover itself, to cover facts which could be used to explain a failure of this kind, for example, abuse, misuse, an insufficient reporting system of leaks, an insufficient system of inspection, and so on, most of which would be irrelevant where the burden of proof of negligence lay on the plaintiff.

90. I do not believe that an analysis of all the evidence of the deficiencies of exhibits 13, 14 and 15 is going to assist either party. I do not believe it is incumbent upon me to embark on such an exercise, having come to the conclusion which I have, for the reasons which I have given. Also it would be very unfair if I were to do my own personal analysis on the evidence of Mr. Stokes, Mr. Thompson and Mr. Tang of these ball valves and have it appear in a judgment to the possible prejudice of the other parties, who are inevitably to be brought in by the defendant or by the defendant and the plaintiff in future actions, and I hope that that self-restraint commends itself to those appearing before me.

91. It fellows, therefore, that the plaintiff must succeed to the agreed extent on its statement of claim, that is $698,800, and in the terms of a declaration handed in to and initialled by me.

(1)    [1950] 1 All E. R. 392

(2)    [1956] 1 Q.B. 596

(3)    [1958] 1 W.L.R. 800

(4)    [1959] A.C. 604

(5)    [1969] 3 All E.R. 680

(6)    [1970] A. C. 282

Representation:

Solicitors: Fan & Fan for the Plaintiff.

Hampton, Winter & Glynn for the Defendant.