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Property and Building Management Law Alert - July 2017
Submitted by // K Bowers, Partner / Solicitor Advocate
20 July 2017


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Missed opportunity to investigate the cause of water seepage

Crystal Bright Holdings Ltd v Allen Industries Ltd - [2017] HKCU 1398

This case concerned a water seepage incident. The Plaintiff was the registered owner of the 3rd floor ("Property") of a building (''Building''), and the Defendant was the registered owner of Flat 4A of the Building ("Flat 4A").

Background

The Plaintiff alleged that water seepage from Flat 4A into the ceiling of the Property on the floor below started during about September 2014 (''Water Seepage''). The area adjacent to the light well of the Property was affected (''Affected Area''), and Flat 4A's toilet was immediately above the Affected Area. 


The two main issues in the case were:-

1. whether Flat 4A was the source of the Water Seepage; and

2. the amount of damages, if the Defendant was found liable.

Source of the Water Seepage

The expert witnesses disagreed about the source of the Water Seepage. The Plaintiff's expert (''P's Expert'') carried out three tests, and thought that the Water Seepage was caused by the leaked waste water pipes and defective waterproof flooring in the toilet of Flat 4A. On the other hand, the Defendant's expert (''D's Expert'') argued that because the dilapidated wall surfaces of the light well had become weak points, which had allowed water to seep inside the Property, this was the "most possible" source of the Water Seepage.

The Court also observed the following two peculiarities:-

(1) neither expert had visited the property of the other side to carry out an inspection; and

(2) both expert witnesses had carried out their surveys at different times.

On issue (1), the Court found that a water seepage survey done without entering the property of the other side was ''undesirable'' and that it would take this into consideration when assessing each side's expert evidence before deciding which version was more probable.

On issue (2), D's expert carried out his survey about 8 months after P's Expert conducted her survey. D's Expert conducted his survey 7 months after the Plaintiff had finished the repair works to the ceiling and walls of the Affected Area, and the Defendant's tenant had also converted the toilet in Flat 4A into storage space in the area immediately above the Affected Area. The Court held that ''…owing to the lapse of time and the aforesaid change of circumstances, D's expert missed the opportunity to carry out tests in Flat 4A to ascertain the source of water seepage'' since D's Expert could only rely upon a visual inspection to finish his survey.

The Court also held that even D's Expert's so-called "most possible" cause of the Water Seepage (through the light well) had never been put to the test, and that consequently, his opinion lacked credibility. Almost none of the tests done or data collected by P's Expert was challenged by D's Expert. The Defendant's main challenge to the Plaintiff based on "no water usage" in Flat 4A was no longer valid after the tenant moved in during September 2014. The Court was therefore of the view that on the whole, the evidence of P's Expert prevailed over that of D's Expert, and found the Defendant liable for the Water Seepage.

Damages - Repair Costs

The Defendant's main challenge to the Plaintiff's claim for repair costs was that there was no evidence of actual payment. Seeing as there was no evidence to contradict the evidence of the Plaintiff's witnesses and its disclosed documents on this issue, the Court was satisfied that the Plaintiff had overcome its burden of proof that (on the balance of probabilities) it had incurred the repair costs. The Court also found the repair costs of HK$121,914 to be reasonable, and that the Defendant was liable to repay this amount to the Plaintiff.

Damages - Loss of enjoyment of the property

The Plaintiff also claimed for loss of enjoyment of the Property. The parties could not agree on whether it was a claim for general or special damages. The Court stated that ''…It is trite law that general damages are usually concerned with non-pecuniary losses like …inconvenience and discomfort in water seepage cases''. Although the Plaintiff used the Property as a warehouse, and its goods (which were previously placed in the Affected Area) were relocated for fear of water damage to the goods, it did not claim that it had incurred additional storage costs due to the relocation exercise.

The Court ruled in favour of the Plaintiff, and held that such a claim for loss of enjoyment should be classified as general damages ''...for the inconvenience it suffered when being deprived from using the Affected Area''. However, in circumstances where there was no evidence of the quantity or volume of goods relocated or the inconvenience caused by the relocation exercise, and where the period of the Water Seepage was no more than 3 months, the Court ruled that the claim was in the least serious category, and awarded a sum of HK$10,000 under this head of loss and damage (far less than the Plaintiff's claim for HK$80,000).

Comment

This case demonstrates that experts engaged to ascertain the cause of water seepage (or any damage to property) should carry out tests as expeditiously as possible to avoid missing the opportunity to do so before any material changes. They should also be given the opportunity of inspecting all of the properties concerned. Furthermore, general damages may also be claimed for inconvenience and discomfort in water seepage cases.

 

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