Madam Wong Choi Kiu v. Poon Pan Wo Nelson

HCA002482/1988

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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Coram: Master Chan in Court

Dates of Hearing: 21 September 1989 and 6 March 1990

Date of Judgment: 9 March 1990

Date of Delivery: 19 March 1990

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ASSESSMENT OF DAMAGES

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1. In March 1986, the Plaintiff engaged the Defendant to construct a 3-storey modern village house at Lot No.777, D.D. 225, Ha Yeung Village, Clear Water Bay, Sai Kung, Mew Territories for the price of $365,510.00. When the house was handed over to the Plaintiff, a number of defects and outstanding works were discovered. By these proceedings the Plaintiff claimed damages for breach of agreement. No notice of intention to defend having been filed, interlocutory judgment for damages to be assessed with interest and costs were obtained on 7th May 1988. A notice of assessment of damages was taken out on 25th January 1989. Due to a failure to give proper notice to the Defendant, the assessment was adjourned twice.

2. The assessment was heard by me on 21st September 1989 when it was adjourned part-heard. Before the resumed hearing on 6th March 1990 the Plaintiff amended the Statement of Claim, with the leave of Court, to revise the detail particulars of defects and outstanding works.

3. In essence the defects can be grouped into (i) leakage at various parts of the house, (ii) cracks on ceilings and walls, (iii) cracked tiles, (iv) settlement of area outside the house, (v) absence of water and electricity supply, (vi) poor drainage, and (vii) jammed main entrance door. The defects were verified by a surveyor, one Kwok Shek Tong (P.W.1), who was the author of 2 reports, dated 23rd August 1988 and 1st March 1989. Photographs showing the defects were attached to the first report. The said defects were also verified by the Plaintiff in her evidence. I accept the evidence adduced on behalf of the Plaintiff and find the defects and outstanding works as pleaded in the Amended Statement of Claim proved.

4. P.W.1 assessed the repair costs to be in the total sum of $67,000.00 in his first report. In his second report in March 1989, he revised the figures by an additional sum of $27,000.00. It was discovered that the original estimate of $13,000.00 for repairing the roof was inadequate as local repairing was found to be impossible and the entire roof would have to be re-covered to make it waterproof. A sum of $40,000.00 would be required to do the roof properly. The total estimate thus became $94,000.00 as at August 1988. He further adjusted the figure by 20% to up-date it to $112,800.00. However, he said if the works were done in October 1986, when the house was handed over to the Plaintiff, the total costs ought to be about $70,000.00 only. It is to be noted that the figure of $67,000.00 contained a sum of $10,000.00 for "contingency" as P.W.1 said the exact nature of the repairs was unknown and he had no specifications in hand.

5. The Plaintiff said she had spent $10,000.00 odd in polishing the floor in 1987. She had also caused the outside of the house to be repainted at a cost of a few hundred dollars, and a wooden door replaced for $1,100.00. She said she had been obtaining her water supply from neighbours. She also obtained her electricity supply from an unspecified source by unspecified means. Though the Plaintiff's case was originally presented on the basis of an estimate for repair works to be carried out, it transpired during the course of the Plaintiff's evidence that a contractor had actually been appointed and repair work had commenced in the summer of 1989, prior to the hearing in September 1989. At the resumed bearing in March 1990, she said a contractor called Lo Tin Hei was engaged to carry out the required repairs save and except the works relating to the electricity/water supply and plumbing. She said the agreed price was $80,000.00, $75,000.00 of which had been paid. A receipt dated 16th October 1989 was produced in support of the claim. Lau Kwun Lam (P.W.3), her son, was also called to verify the engagement of the said contractor. In fact, the Plaintiff knows little about the whole matter as it was her daughter and P.W.3 who handled the same. P.W.3 further said quotations in the region of "$32,000.00 odd" and "$12,000.00 odd" were received for doing the electricity and plumbing jobs respectively.

6. The Plaintiff is entitle to recover the excess of the repair costs over the contract price for the construction of the house. However, this must be subject to the normal duty to mitigate loss. It was held in the leading case of Mertens v. Home Treehold Co. [1921] 2 K.B. 526, at pages 535-536, by Lord Sterndale that:-

"The building owner must set to work to build his house at a reasonable time and in a reasonable manner, and is not entitled to delay for several years and then, if prices have gone up, charge the defaulting builder with the increased price."

7. There has been a delay of almost 3 years before any substantive work was commenced to make good the defects. The Plaintiff attributed the reason to an alleged reluctance on the part of contractors to carry out the repairs before a "completion certificate" has been obtained. She said she was told that it was a trade practice that a contractor would issue such a certificate on completion of the job. She said as no such certificate was issued by the Defendant, no contractor would dare to take up the job. I do not accept her evidence on this excuse. The existence of such an alleged trade practice would mean that a defaulting contractor can frustrate any attempt of the victim owner to engage another contractor to repair the defects by not issuing such a "completion certificate". I am not satisfied from her hearsay evidence that such a trade practice could or did exist. She further said though the contractor agreed to complete the repair works within 2 months, the same have not been completed even as at the March hearing (i.e. after almost 9 months). She said it was because someone had told the contractor that she might not have money to pay him. However, the receipt clearly indicated a payment of the full contract sum less $5,000.00 in October 1989. She was unable to explain further. I am satisfied that there existed an unexplained delay in effecting the bulk of the said repair/outstanding works, since the handing over of the house in October 1986 until the commencement of the work in the summer of 1989. In the premises, any increase in the costs of such works brought about by inflation consequential on the delays must be ignored in the assessment as being too remote to be recoverable. She being the author of her own misfortune in respect of the increased costs can only recover damages on the basis of the costs as at October 1986 when the defects were discovered. I accept the expert's evidence that the said defects would have cost $70,000.00 to remedy in October 1986. As the Defendant was only paid the sum of $343,000.00, there is an outstanding balance of $22,510.00 ($365,510.00 - $343,000.00) due to the Defendant under the contract for completing the job. The sum of $70,000.00 must, in the premises, be reduced by $22,510.00.

8. The costs of polishing the floor in 1987 and the replacement of the door (at an unknown date) were not included in the expert's estimate. We, however, said the inflation between October 1986 and April 1987 should be 10%. P.W.1 said $15,000.00 would be a reasonable sum for the flooring work. The Plaintiff said it cost her "$10,000.00 odd". I accept the sums of $10,000.00 and $1,000.00 to be the probable costs for the flooring work and the replacement door in October 1986, and I so award such sums as damages. In the premises, damages for the extra costs suffered by the Plaintiff to acquire the house she was promised under the contract would be in the total sum of $58,490.00:-

9. The Plaintiff also claimed a sum of $10,000.00 to $20,000.00 as compensation for the discomfort and inconvenience for having to live in a leaking house without proper water and electricity supply. The contractor doing the repairs agreed to complete the work in 2 months. There is no evidence to suggest that all other repairs/outstanding works, including the application for proper water and electricity supply, could not also be completed within the same period. The Plaintiff's unpleasant living conditions ought to be confined to 2 months had prompt actions been taken to remedy the situation. Two cases were cited to me by the Plaintiff in support of the claim, Jackson v. Horizon Holidays Ltd. [1975] 1 W.L.R. 1468 and Javis v. Swans Tours Ltd. [1973] 1 Q.B. 233. In both cases Lord Denning firmly established that a claim could lie for discomfort, inconvenience and distress resulting from a breach of agreement by a tour agency to provide a pleasant and enjoyable holiday as promised. Such claims are frequently made in cases founded on negligence in the construction of the house. In Hadori & Ano. v. T.C. Durley Hill & Partners (1989) 6 CLD 02-13, a sum of £2,500.00 was awarded on top of repair costs in a claim for survey negligently carried out. In Warner & Ano. v. Basildon Development Corporation (1989) 6 CLD 04-01, £250.00 was awarded as general damages for inconvenience and loss for a defective foundation. References to this issue can also be found in McGregor on Damages, 15th edition, at page 677 paragraph 1095:-

"In Rawlings v. Rentokil Laboratories recovery was allowed for legal fees incurred in abortive attempts to sell the defective house and for the discomfort and inconvenience caused to the plaintiff in living in the house in its defective state. By contrast, it was held in Hutchison v. Harris, where the work was to the plaintiff client's house which she was acquiring not to live in as her home but to resell at a profit, that these was no reasonable contemplation that distress or vexation would be caused so that an award for that should not be made."

It is not clear whether the 2 cases cited by the learned editor were claims  based on breach of agreement or on tort. Regrettably, the actual report of both cases were not available. Nevertheless, there can be no justifiable ground to deny recovery of such damages in contract when such is recoverable in tort. Non-pecuniary loss is recoverable for a breach of contract. In Burton v. Pinkerton, (1867) L.R. 2 Ex. 340, damages were awarded for inconvenience and discomfort to a seaman who was wrongly set down at a foreign port in breach of his contract of employment. Hobbs v. L.S.W. Ry., (1875) L.R. 10 Q.B. 111, is another example where damages were awarded to a passenger who was set down by the railway company at a wrong station and had to walk several miles home in a wet night. Such damages had been awarded for physical inconvenience, though not mere anguish or disappointment without actual physical inconvenience. I am satisfied that the physical inconvenience and discomfort suffered by the Plaintiff having to live in a leaking house without proper electricity and water supply ought to be compensated. A sum of $5,000.00 would adequately compensate the Plaintiff for her said sufferings.

10. In the premises, the damages to be awarded to the Plaintiff is in the total sum of $63,490.00. As the Plaintiff only brought on the assessment for actual hearing 16 1/2 months after obtaining interlocutory judgment, and the hearing was thereafter adjourned to accommodate the Plaintiff; interest on the said sum of $63,490.00 will only run as from today, and at the judgment rate.

11. In view of the amount of the damages awarded, there will be an order nisi for party and party costs of the assessment to the Plaintiff on the District Court scale.

12. Dated this 9th day of March 1990.

Representation:

Mr. Hoy instructed by Alick Au & Massie for Plaintiff.

Defendant - Poon Pan Wo Nelson trading as Thorough Construction Company (Absent)