Nils E. Thomsen and Another v. Johnson Burglar Alarms Co. Ltd.

HCA011674/1998

HCA 11674 of 1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 11674 of 1998

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Coram: Deputy High Court Judge To in Court

Dates of Hearing: 17-18, and 24 September 2001

Date of Judgment: 12 October 2001

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J U D G M E N T

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Background:

1.The Plaintiffs, Mr and Mrs Thomsen, are husband and wife and the occupiers of a low rise apartment in Bowen Road. In April 1988, the Defendant security alarm service company installed a six-zone security and burglar alarm system in the premises. Zone 3 of the system covers the balcony area, which is secured by six sets of infra-red beam emitters. If the beams became mis-aligned for whatever reason, a false alarm would be created. Initially, the Plaintiffs subscribed to a maintenance programme for the system with the Defendant, but they were not satisfied with the Defendant's service. Then they discontinued the maintenance programme and called on the Defendant for repairs as and when problems arose.

2.On 3 July 1997, a false alarm at Zone 3 occurred. Mr Thomsen telephoned the Defendant and requested for repairs. Mr Fong, a technician of the Defendant, attended the premises. Because of the heavy rain, he was unable to adjust the alignment of the infra-red beam emitters installed in the balcony. Thus he by-passed Zone 3 and re-set the system. Without either by-passing Zone 3 or adjusting the alignment, the entire system could not be activated and the other five zones would also be left without protection.

3.Between the late hours of 1st or early hours of 2nd November 1997, the premises was burgled by a person or a number of persons who entered the master bedroom through the balcony and stole a substantial quantity of jewellery from the Plaintiffs' safes. At the time, the Plaintiffs were attending a social function and were not in the premises.

4.The above factual background is not in dispute. The only disputes as to facts are whether on 3 July 1997 Mr Fong had verbally informed the Plaintiffs' maid, Miss Guansing, about the by-passing and whether he had left her a service certificate to that effect.

5.There is also no dispute that the Defendant owed the Plaintiffs a duty of care when providing its services on 3 July 1997. The dispute is as to the scope of that duty of care and whether that duty has been discharged. The other legal issues are causation and contributory negligence on the part of the Plaintiffs.

The request for service:

6.Initially, there was some dispute as to what precisely was said over the telephone between Mr Thomsen and Mr Lam (whom Mr Thomsen mistook as a Mr Chan) of the Defendant. According to Mr Lam, Mr Thomsen requested for a technician to check and repair the alarm system, if possible. That qualification is denied by Mr Thomsen who said he requested the Defendant to "fix" the alarm system. However, as the evidence unfolds and as the legal issues surface, the dispute assumed no real significance. Certainly, at the time of the telephone call, the parties had no definite idea what was wrong with the system. By answering the call, the Defendant could not be assumed to have undertaken to complete the repair on the same day. Mr Thomsen had antiques and valuables in his apartment and was about to proceed on vacation leave out of Hong Kong. He must be anxious to have the system repaired before going on leave. It is unlikely that he would have asked for the repair to be made only if possible. I accept his evidence that he requested the Defendant to fix the alarm system, which was malfunctioning. However, even if I were to hold otherwise, the same question still remains, i.e. what is the scope of the duty of care owed by the Defendant.

The technician's conversation with Miss Guansing:

7.The technician, Mr Fong, attended the Plaintiffs' premises at about 5 p.m. He was no stranger to the premises as he had been there on many previous occasions, including the latest one on 19 June 1997. He went straight to the pantry where the control panel was and worked on it. Then he went to the balcony and then returned to work on the control panel. He left after about half an hour.

8.According to Mr Fong, he diagnosed the problem as mis-alignment of the infra-red beams, but it could not be adjusted because of the rain. The only thing he could do to re-activate the system was to by-pass Zone 3, otherwise the entire system could not function. So he by-passed Zone 3 in the control panel. He told Miss Guansing in English, "Raining problem, disconnect Zone 3." He wrote out the service certificate and asked Miss Guansing to write down the address of the premises and to sign on the certificate. Then he repeated the same words to her in English and pointing at the certificate at the same time. She indicated that she understood by smiling. The words he wrote on the certificate are as follows:

"Because Zone three required. Now Zone three to be disconnect. The alarm system in good operated."

9.According to Miss Guansing, Mr Fong did not say anything when he entered the premises. He just worked on the control panel and examined the infra-red beam housing. He told her he had finished and asked her to write down the address of the premises, which she did. Then Mr Fong said, "and your signature", and she signed on the certificate. He did not say "raining problem, disconnect Zone 3", nor did he give her the certificate or leave it behind. This was the first time she had dealing with Mr Fong as in the past it was the other maid, Miss Ramos, who attended to Mr Fong.

10.Mr Fong retracted from what he said in his witness statement that he had informed Miss Guansing that after the disconnection of Zone 3 the remainder of the system could still function properly and that Miss Guansing nodded her head to indicate that she understood. Whoever prepared his witness statement would not have written those words down without his instruction. Those words are so clear that they could not have been written down by misunderstanding. But Mr Fong denied that that was what had happened. I think he was trying to minimize his role in the incident.

11.Another significant departure of his evidence from his witness statement is that he had not mentioned in his witness statement that he had told Miss Guansing twice, "raining problem, disconnect Zone 3". These words are very significant and material. One wonders why they were missing in a well prepared witness statement and why they were not recorded in the certificate. But instead, he chose to write down something so incomprehensible and grammatically incorrect. If he had said those words, he would have written them down in the certificate. They were so much simpler to say and write. I think he is exaggerating and concocting his evidence in court.

12.I find Mr Fong an inconsistent witness and I do not believe in his evidence. Miss Guansing is not a very impressive witness either. She appears to have difficulties in understanding the questions asked of her. However, I am satisfied that she is an honest witness. I accept her evidence and reject Mr Fong's except where it is consistent with the Plaintiffs' case. I find that Mr Fong was not very conversant in English and did not take the trouble to speak to Miss Guansing. As Miss Guansing said, he went straight to the pantry and worked on the control panel without saying anything. I find that he had not told Miss Guansing anything about the work he had performed on the system on 3 July 1997.

The Service Certificate:

13.According to Mr Fong, he gave a copy of the service certificate to Miss Guansing. He demonstrated in court how he would in the usual course tear the certificate from the pad, give the customer's copy to the client and then fold up the office copy and put it at the back of the pad. He said that was what he normally did. Miss Guansing denied ever having been given any copy. She said if she had been given a copy of the certificate, she would have placed it on Mrs Thomsen's desk. In that event, Mr Thomsen would have seen the certificate.

14.Mr Thomsen said he checked Mrs Thomsen's desk as she was on holiday with the children out of Hong Kong. He did not notice the certificate. If he had, he would have contacted the Defendant because the certificate, as he now sees it, is ambiguous as it referred to a disconnection to be made in the future but also certified that the system was in good operating condition. He was about to go on leave and was certainly very concerned that the security alarm system was in proper working order. I have no doubt that Mr Thomsen who cared to install a security alarm system to protect his home and to install roller shutters over the bedroom windows must view security as a top concern, particularly as he would be going away for a long vacation. I have no doubt that Mr Thomsen had not seen the certificate.

15.The issue is whether Mr Fong had given a copy of the certificate to Miss Guansing. There is no reason for Mr Fong not to give a copy to Miss Guansing, as he had already procured Miss Guansing to sign on the certificate. But if he had, there is no reason why Miss Guansing would have ignored it and would not have given it to Mr Thomsen. There are several possibilities. Mr Fong would have subconsciously folded the customer's copy with the office copy and put it at the back of the pad without giving it to Miss Guansing. He might have simply left it in the pantry without physically handing it over to her and the copy went astray. Mr Fong might also have deliberately withheld the certificate pending a follow up visit to adjust the alignment of the infra-red beams (see Paragraph 34 below). Miss Guansing might have received the certificate but misplaced it. Either of them would find it equally convenient to lie about having given or not having received the certificate so as to minimize their responsibility over the matter.

16.In view of my adverse finding of credibility against Mr Fong, I prefer the evidence of Miss Guansing. I find that Mr Fong had not given a copy of the certificate to Miss Guansing. If he had simply left it behind, he had not sufficiently brought it to the notice or attention of Miss Guansing or Mr Thomsen and the copy had gone astray.

The Defendant's duty of care:

17.It is not the Plaintiffs' case that the Defendant had undertaken to rectify the fault. There is no dispute that by sending a technician to carry out the repair, the Defendant, being a supplier acting in the course of a business, was under a duty to exercise such reasonable care, skill and diligence in carrying out the repair as is appropriate in the circumstances, whether as a matter of implied contractual term, or as the general duty of care at common law or under section 5 of the Supply of Services (Implied Terms) Ordinance, Cap 457. Mr Yin refers to Tai Hing Cotton Mill v Liu Chong Hing Bank [1986] AC 80 at 107 and submits that where the parties are in a contractual relationship, their mutual obligations in tort cannot be any greater than those to be found expressly or by necessary implication in their contract. I agree and in my view in the absence of express contractual terms, the duty of care, skill and diligence under implied contractual term, or in tort or under the Supply of Services (Implied Terms) Ordinance are all the same.

18.What then is this duty? The Defendant was asked to "fix", i.e. to repair a security alarm system. There are two important starting points in considering the nature and extent of this duty. Firstly, a person installs an alarm system because he has or is likely to have valuable property to protect inside his premises. It is foreseeable that if the repair is not carried out properly the customer requesting the repair would be exposed to serious risks and would suffer substantial loss. Secondly, only a company licensed under the Security and Guarding Services Ordinance, Cap 460 may provide security work including installing, maintaining or repairing a security device. A degree of confidence is therefore imposed on these licensed companies to exercise care, skill and diligence in the execution of their work in a responsible and professional manner. Codes of practice and industry standard may be referred to in deciding the scope and standard of the duty of care. In general, these companies must exercise such care, skill and diligence in the execution of their work as will in all the circumstances ensure that the customer will be adequately protected and will be adequately warned of any danger or inadequacies in the protection as a result of the work executed.

19.Pursuant to section 6 of the Security and Guarding Services Ordinance, the Security and Guarding Services Industry Authority specified in Gazette No 41/1995 that all intruder alarm sensors, detectors, control panels and signaling equipment should be designed to Underwriters Laboratories Inc Standard or British Standard or equivalent. Section 4.5 and 4.6 of British Standard BS4737 regarding maintenance of records provides as follows:

"4.5 Corrective maintenance record

There should be a record of the date and time of receipt of each request for emergency service, together with the date and time of completion of corrective maintenance and the necessary action(s) carried out.

This information should be kept for at least 2 years after the emergency call to which it refers.

The results of a corrective maintenance inspection should be entered on a maintenance visit record and the signature of the subscriber or his representative obtained on the record. A copy of the record should be given to the subscriber.

This information should be kept for at least 15 months after the inspection to which it refers.

NOTE: If a preventative maintenance inspection is made at the same time as the corrective maintenance visit, separate visit records should be completed.

4.6 Temporary disconnection record

There should be a record of any temporary disconnection of the alarm system or of any part of it. This should identify which part of the system and the associated detectors or signalling equipment is not operable. The reason for the disconnection and the date and time of disconnection and of subsequent reconnection should be given. A signed authorization for each disconnection should be obtained from the subscriber or his representative. This authorization should be kept for least 3 months after reconnection."

20.Mr Yin submits that BS4737 applies to preventative maintenance record keeping and not corrective or ad hoc maintenance record keeping as in the present case. However, so far as section 4.5 is concerned, it is expressly applicable to corrective or ad hoc maintenance record keeping.

21.While it can be argued that section 4.6 is applicable only to preventative maintenance record keeping, the spirit of the section is that temporary disconnection of an alarm system or any part of it is a step to be taken with utmost caution and the subscriber must be informed of the disconnection, the reason for the disconnection and consents to the disconnection. Hence, the subscriber's signed authorization is required for each disconnection. As a disconnection exposes the customer to serious risks and likelihood of substantial damage, a licensed security company should handle any disconnection in a responsible and professional manner. Thus in my view, the spirit applicable to preventative maintenance record keeping must be equally applicable to ad hoc maintenance record keeping.

22.Summing up from these observations, I conclude that disconnection of the system or part of it is a very serious step to be taken. It exposes the user, whether a subscriber to a preventative maintenance programme or a non-subscriber, to a certain degree of risk and likelihood of substantial loss. Hence the same duty of care applies to a subscriber or a non-subscriber. Such disconnection should only be effected if it is inevitable and only on a very temporary basis pending adequate follow up. If such by-passing is inevitable, the company making the disconnection owes the user of the system a duty to inform him of the disconnection and a duty to take follow up action.

23.To discharge the duty to inform, the company must ensure that the user is well informed of the disconnection, well informed of the need for follow up action, that he understands the risks he is being exposed to while the system or part of it is disabled and consents to the disconnection.

24.The company should also take such follow up action as is appropriate in the circumstances to have the system fully re-connected, unless the user having been well informed of the risks as above decides otherwise. Here the standard of care differs in the case of a subscriber from a non-subscriber. For the subscriber, the position is governed by the maintenance contract. Usually, the security company is obliged under the terms of the contract to restore the system as soon as possible to its full capacity. Subject to the terms of the maintenance contract, it may have to do so at its own costs. For the non-subscriber, what follow up action is appropriate depends on the extent of the initial service agreement and all the circumstances, such as the cost of the follow up repair, availability and cost of spare parts, and whether the duty to inform has been properly discharged. If the initial agreement is to repair and restore the system, the contract has not been performed until the system has been restored or the agreement otherwise terminated for example by notice that the system could not be repaired. Hence, in addition to the duty to inform, the company should arrange follow up repairs and provide quotations if appropriate, unless the user having been informed of the repairs required decides not to have the repairs. If the initial agreement is to check the system and/or effect minor repairs, then the contract would only be performed when those minor repairs have been completed. If it turns out that substantial repairs are required, the duty ends with the duty to inform and perhaps to give a quotation for the repairs and offer to follow up. If the repairs, though of a minor nature, could not be effected during the initial visit, it would be incumbent on the company to make a second follow up visit to complete the repair. In general, follow up repairs may form the subject matter of a separate contract, in which case the company is free not to offer the service, provided it has duly discharged its duty to inform. The company may, for example, be unable to effect follow up repairs due to lack of spare parts or expertise or failure in reaching agreement with the user as to the cost of repairs.

Breach of duty of care:

25.The Defendant contracted to fix or repair the alarm system. The problem was a mis-alignment of the infra-red beams which necessitated a minor repair but which could not be carried out because of the rain. Hence, it was reasonable and even inevitable to have Zone 3 by-passed so as to re-activate the rest of the system and give the Plaintiffs at least a five-zone protection. There could be no complaint as to the disconnection. The issue is whether the duty to inform and the duty to take follow up action have been discharged.

26.The Defendant ought to know that after making the by-pass, the control panel became a source of misrepresentation and a cause of misunderstanding. Despite that Zone 3 had been by-passed, when the system was turned on, the red indicator for Zone 3 was not lit up which indicated that there was no problem with Zone 3, while the green indicator was on showing that the system was functioning properly. This would give the user the false impression that the whole system including Zone 3 was functioning properly. Indeed that was what Mr Thomsen thought, and in my view, very reasonably so. Prudence would require the Defendant to have the situation clearly explained to Miss Guansing or Mr Thomsen and to ensure that it is understood by them.

27.The Plaintiffs have been using the system for ten years and should be reasonably familiar with the system and fully aware of the risks involved should any zone be by-passed and of the need to have follow up repairs. Thus had Mr Fong informed the Plaintiffs that Zone 3 had been disconnected and that the indicator light for Zone 3 in the control panel was inoperative or misleading, I would consider that sufficiently discharged the duty to inform in the circumstances. However, on the facts, I reject Mr Fong's evidence that he had told Miss Guansing that Zone 3 had been disconnected and that he had given her a copy of the service certificate.

28.Even if Mr Fong had given a copy of the service certificate to Miss Guansing, that would not have sufficiently discharged the duty to inform. While I have sympathy for the Defendant because of Mr Fong's inadequacy in English, one must take an objective view and ask oneself what meaning the language used in the certificate conveys to a reasonable man with a reasonable understanding of the English language and of the surrounding circumstances. The certificate is ambiguous. The first sentence, "because zone three required", is meaningless. The second sentence certifies that "now Zone three to be disconnect". That must mean for some reason, Zone 3 has to be disconnected in future. The word "now" may be inconsistent with disconnection in future, but is also inconsistent with the zone having been disconnected in the past and with the last sentence. That last sentence which certifies that "the alarm system in good operated" is fatal. Despite the clumsiness in the language, it must mean that the whole system and not just part of it is now in good operating condition. In summary, the certificate gives no hint that Zone 3 has been disconnected or that follow up repairs are required. Thus even if that certificate had been given to Mr Thomsen, it could not have discharged the Defendant's duty to inform.

29.Mr Fong is not conversant in English. Mr Thomsen and Miss Guansing can not speak Chinese. It is therefore up to the Defendant to ensure that Mr Thomsen or Miss Guansing knew Zone 3 was disconnected. So far as the Defendant sought to rely on the service certificate, it should ensure what was written on the certificate was comprehensible. If it was not, because of Mr Fong's inadequacy of the English language, it should ensure that someone competent in the English language would subsequently speak or write to Mr Thomsen and inform him of the disconnection and the risks involved. That had not been done.

Duty to follow up:

30.Mr Thomsen requested for repairs. At that stage it was not known what was the extent of repairs necessary. Though Mr Thomsen was not a subscriber of maintenance programme, he was nevertheless a regular customer and the Defendant had been last provided service about two weeks ago. It must be their understanding that if the system need minor repairs, the Defendant would carry out the repairs. If the repairs were likely to be substantial or costly, the Defendant would give Mr Thomsen a quotation and seek his instruction before executing the repair. As it turned out, the repair required was just a re-alignment, though it could not be carried out there and then because of the rain. It would have been the Defendant's duty to complete the repair by making an appointment to come again as soon as possible or, out of caution, inform Mr Thomsen of the problem and the need to charge for an additional visit. If the Defendant decided not to provide the follow up repair for any reason, including Mr Thomsen's refusal to pay for the additional visit, it should bring that to Mr Thomsen's notice after discharging its duty to inform of the disconnection, the risks and need for follow up repairs.

31.On the facts, Mr Fong knew follow up visit to adjust the re-alignment was necessary. The defence case is that Mr Lam decided to wait for Mr Thomsen's call. He may be acting on the basis that the service certificate had been sufficiently brought to Mr Thomsen's notice. Even if it had, the certificate is ambiguous. In view of the very onerous duty to inform, that the indicator for Zone 3 had become inoperative or misleading, the inadequacy of Mr Fong's English and the ambiguity of what was written on the certificate, the Defendant should take the initiative either to perform the follow up repairs or seek instruction from Mr Thomsen. Had Mr Thomsen been informed that Zone 3 had been disconnected and that the Defendant was prepared to offer follow up repair at additional charge, then it would be up to the Plaintiffs to decide whether to have the follow up repair by the Defendant or by another security company or not at all. However, the Defendant had not done so. It is clearly in breach of its duty to perform follow up repairs.

32.Despite the visit on 3 July 1997, the Plaintiffs have not been invoiced for the services. Mr Fong said that if the Plaintiffs were a subscriber for the maintenance programme, he would have effected follow up service, i.e. re-align the infra-red beams, as soon as possible. As they were not, he reported the work he did to his section head, Mr Lam. Mr Lam told him to wait for notification from Mr Thomsen and to perform the follow up work only if requested. According to Mr Lam, he thought Mr Thomsen might call him again for follow up service unless he decided to go to another company for assistance. He therefore withheld the service certificate without passing it to the accounts department for issue of invoice. Thereafter he forgot about the whole matter. Hence the Plaintiffs have never been invoiced for the service on 3 July 1997.

33.I find such explanation very strained and incredible. The Defendant was asked to repair the system. Mr Fong found that it needed a simple re-alignment, which was the usual problem with that system. He could not adjust the alignment because of the rain. As a temporary measure, he disconnected Zone 3 so as to re-activate the rest of the system. He knew that exposed the Plaintiffs' premises to risk of unalarmed intrusion. On his evidence, he considered the work not yet complete and required follow up. Hence he did not sign his name against the corresponding entry in the service record. He said he was told by Mr Lam to withhold follow up action because the Plaintiffs were not subscribers. Both Mr Fong and Mr Lam realized the need to take follow up action as soon as possible if the Plaintiffs were a subscriber. Considering the very minor repair that was required but the very serious risk the Plaintiffs were being exposed to, I find the explanation of Mr Fong and Mr Lam so ridiculous as to be incredible. The irresistible inference is that the Defendant, whether it be Mr Fong or Mr Lam, simply overlooked the outstanding follow up work required and hence neglected to follow up and to issue the invoice. The distinction they drew about subscriber and non-subscriber is just a convenient excuse to cover up their neglect.

Causation:

34.Mr Yin submits that in the ordinary course of events, the Plaintiffs' alarm system would have been inspected at least once between 3 July 1997 and 1 November 1997 as part of routine maintenance and it was reasonable for the Defendant to expect a routine inspection would have been performed. He submits by not subscribing for preventative maintenance the Plaintiffs assumed the obligation to maintain the system and the responsibility for not discovering the disconnection which such routine inspection would have revealed. He submits that the Plaintiffs' failure to maintain was an unexpected intervening act which broke the chain of causation and relieved the Defendant of liability. He referred to the following passage in Charlesworth & Percy on Negligence, 9th Edition at paragraph 5-65 in support of his argument:

"Finally, the situation must be considered where the defendant anticipates that a third party will do some intervening act and, if he is reasonably entitled to rely upon that other doing so, he may be relieved of liability. In actions based on negligence against the manufacturers, retailers, repairers and transferors of goods, if no examination of the goods is anticipated, the damage is not too remote. On the other hand at common law, if such manufacturer, retailer, repairer or transferor of goods reasonably could have expected an intermediate examination or some important instruction to be carried out, he could and may still be able to avoid liability for damage arising from the defect which would have been disclosed by such examination, or more certainly for the damage arising from the failure to carry out the instructions properly."

35.The principle referred to by Mr Yin is applicable where an intermediate examination would reasonably have been expected or some important instructions would reasonably have been followed. For example, instruction for skin test for a noxious hair dye: see Parker v Oloxo Ltd [1937] 3 All ER 524 and Holmes v Ashford [1950] 2 All ER 76; or where the work would be inspected by some authority charged with ensuring compliance with certain standards: see Buckner v Ashby & Horner [1941] 1 KB 321. The scope of operation of this principle is very limited. Intermediate examination or compliance with instruction must reasonably be expected. Mere warning of the dangers of the product supplied is insufficient: see Good-Wear Treaders v D & B Holdings (1979) 98 DLR (3d) 59.

36.In the present case, as a matter of good practice, BS4737 recommends service inspection of an alarm system once every three months. This is only what the industry regards as a matter of prudence, but is not a routine which consumers are reasonably expected to observe. Many alarm systems are sold in the market without maintenance agreement. In particular, the Defendant knew the Plaintiffs were not subscribers of such a maintenance programme and that they only called on its services on an ad hoc basis as and when required. The Plaintiffs were precisely the sort of persons from whom a routine three monthly inspection could not reasonably have been expected.

37.Further, I think the principle referred to by Mr Yin has to be carefully applied. The Plaintiffs requested for repairs. The Defendant is a licensed security company, whose business it was to provide such repair service. It has contracted to carry out repairs for the Plaintiffs and to do so by exercising reasonable care, skill and diligence. At the time of the contract, it must be in the contemplation of the parties that if the Defendant is in breach of its duty to exercise reasonable care, skill and diligence, the premises will be unprotected and the Plaintiffs will suffer damage if someone burgles into the premises. The Plaintiffs relied on the Defendant's care and skill. It cannot lie in the Defendant's mouth to say despite you pay me for my care and skill, yet if I do my work negligently, you will and you should check it out yourself in the next routine inspection in three months.

38.This is not a case where the Plaintiffs had by their own act or neglect rendered the system inoperative, for example, by failing to ensure the battery is charged or defective wires or light bulbs replaced. Nor is this a case where a fault has developed through time or lack of maintenance as to render the alarm system inoperative. This is nothing of the sort. There is nothing that the Plaintiffs have done or have failed to do which have broken the chain of causation. What happened was simply that Zone 3 has been by-passed and the Plaintiffs were not informed.

39.So far as causation is concerned, I think the proper test is that set out by Stuart-Smith LJ in Allied Maples Group v Simmons & Simmons [1995] 1 WLR 1602 at 1609 to 1610:

"In these circumstances, where the plaintiffs' loss depends upon the action of an independent third party, it is necessary to consider as a matter of law what it is necessary to establish as a matter of causation and where causation ends and quantification of damage begins.

(1) What has to be proved to establish a causal link between the negligence of the defendants and the loss sustained by the plaintiffs depends in the first instance on whether the negligence consists of some positive act or misfeasance, or an omission or non-feasons. In the former case, the question of causation is one of historical fact. The court has to determine on the balance of probability whether the defendant's act, for example the careless driving, caused the plaintiffs loss consisting of his broken leg. Once established on balance of probability, that fact is taken as true and the plaintiff recovers his damage in full. ...

(2) If the defendant's negligence consists of an omission, for example to provide proper equipment, given proper instructions or advice, causation depends, not upon a question of historical fact, but on the answer to the hypothetical question, what would the plaintiff have done if the equipment had been provided or the instruction or advice given? This can only be a matter of inference to be determined from all the circumstances."

40.Thus the issue is what would the Plaintiffs have done if Mr Thomsen had been informed of the disconnection of Zone 3. According to Mr Thomsen, had he known that Zone 3 had been disabled or was otherwise not functioning properly, he would have telephoned the Defendant immediately and instructed that a full repair be carried out prior to his going on vacation and he would never have left the security alarm system only partially repaired or Zone 3 unprotected. He certainly considered the balcony a vulnerable point and hence increased the number of infra-red beam emitters there. I have no doubt about his evidence.

41.On Mr and Mrs Thomsen's evidence and those of the caretaker and cleaner on duty, the caretakers have been given standing instructions that they should alert the police immediately should the security alarm went off for more than one minute. Thus if Zone 3 had been functioning properly on the night of 1 or 2 November 1997, when the burglar(s) entered the balcony, the security alarm system would have been triggered. The alarm would have been sounded and the flood lights turned on. If that was not sufficient to deter the burglar(s), the police would have been alerted and arrived before the burglar(s) could have enough time to break open the safes and leave with the jewellery. In all the circumstances, the loss could have been avoided. By by-passing Zone 3 without informing the Plaintiffs, the Plaintiffs lost a real or substantial chance of avoiding the loss. I am satisfied that causation is established and the damage is not remote whether in contract or in tort.

Contributory negligence:

42.Mr Yin relied on the Plaintiffs' failure to carry out routine maintenance or inspection as their contributory negligence. I do not think the Plaintiffs owed the Defendant any duty to carry out routine inspection on the system to rectify the Defendant's neglect. They contracted with the Defendant for its services and were entitled to rely on its skill, care and diligence. Nothing of what they had done or failed to do have broken the chain of causation. Similarly nothing of what they had done or failed to do have contributed to the disconnection. What caused the loss was the by-pass and the failure to inform. I would attribute no fault to the Plaintiffs and dismiss the Defendant's claim for contributory negligence.

Conclusion:

43.Accordingly, I am satisfied that the Defendant is in breach of the duty to exercise reasonable skill, care and diligence implied under the contract to repair or at common law or by section 5 of the Supply of Services (Implied Terms) Ordinance and as a result the Plaintiffs suffered loss. I therefore enter judgment on liability with damages to be assessed against the Defendant and make an order nisi that the Defendant shall pay the Plaintiffs' costs to be taxed, if not agreed.

Representation:

Mr Anderson Chow, instructed by Messrs Dibb Lupton Alsop, for the Plaintiffs

Mr Michael Yin, instructed by Messrs Paul C W Tse & Co., for the Defendant

Please refer to CACV3616/2001 for the relevant appeal(s) to the Court of Appeal.