8 April 2021
In the recent case of Cheng Pan & Anor v Yau Lai Wah, HCA 376/2015, the Court held the Defendant liable for loss and damage caused by water leakage from his property into a neighbouring property, which resulted from the Defendant’s contractors carrying out works to pipes located in the Defendant’s property.
Background
The Plaintiffs and Defendant were neighbours, with the Defendant’s property (a residential unit with flat roof) being on the first floor directly above the Plaintiffs’ property (used to run an estate agency business) on the ground floor.
Sometime in 2010, the Defendant engaged a contractor (Hung Yat) to carry out certain works on internal pipes located in the Defendant’s property (2010 Works). On 8 February 2015, soiled water, containing human waste and urine, leaked into the Plaintiffs’ property and the Defendant engaged Hung Yat to carry out certain other works on pipes located in the Defendant’s property (2015 Works).
The Plaintiffs’ Case
The Plaintiffs’ case was that since around 8 February 2015, large quantities of soiled water had been continuously escaping from the Defendant’s property into the Plaintiffs’ property and that such was caused by the Defendant’s negligence and also constituted a breach of the Deed of Mutual Covenant (DMC) and a nuisance. The negligence alleged, included the making of unauthorised modifications and/or alterations to the water pipes or drainage system in the Defendant’s property, thereby causing the water leakage and failing to ensure inspection, maintenance or repairs to prevent such leakage.
The Plaintiffs’ claimed (i) HK$200,000 (estimated cost of concrete repair and redecoration works on the structural ceiling); (ii) HK$40,000 (estimated cost of insurance for reinstatement works); (iii) HK$40,000 (estimated cost of protection, general cleaning and sterilization); and (iv) HK$30,000 (estimated cost of packing, transportation and temporary storage for before and after the reinstatement works); (v) loss of enjoyment and use of the premises and/or loss of rental. The Plaintiffs also sought an injunction restraining the Defendant from allowing water to escape from her property so as to cause a nuisance.
Defendant’s Defence
The Defendant averred that in about 2011 or 2012 she had been informed by the building management office of water seepage problems in the Plaintiffs’ property and with the consent of the Incorporated Owners (IO), had engaged a contractor to re‑route the part of the common sewers and pipes that were located in the Defendant’s property (i.e. the 2010 Works).
The Defendant averred that on or around 8 February 2015, she received an oral complaint from one of the Plaintiffs of water seepage from the Defendant’s property and that upon investigation, the Defendant’s contractor informed her that the common sewage pipes and manhole connecting the entire building located in the Plaintiffs’ property were clogged. However, since the Plaintiffs refused the Defendant’s offer to unclog the manhole and common sewage pipes, the Defendant had no alternative but to instruct her contractor to carry out unclogging works, which involved re-routing parts of the common sewage pipes located in the Defendant’s property (i.e. the 2015 Works). The 2015 Works were commenced on about 9 February 2015, the Defendant said, and were completed within a week, after which there was no longer any water seepage problem in the Plaintiffs’ property.
The Defendant said that the damages claimed by the Plaintiff in relation to any escape of soiled water allegedly caused by the alterations to the common sewers or pipes were not reasonably foreseeable at the time and likewise loss of rental income was too remote and/or not reasonably foreseeable.
Plaintiffs’ Reply
In their Reply, the Plaintiffs averred that even if the Defendant had obtained the consent of the IO to re-route the common sewers and pipes located in the Defendant’s property, the re‑routing works were still unauthorised modifications and/or alterations, since the Defendant had failed to obtain the Building Authority’s consent. Further, the leakage was caused by the negligence of the Defendant (or her tenants or agents) and/or constituted a nuisance, irrespective of whether the Defendant had obtained the consent of the IO and/or the Building Authority.
Cause and source of the leakage
The Court found that it was part of the 2010 Works contracted by the Defendant that the floor of the flat roof was changed and the waterproofing membrane re‑laid and in the course of changing the floor of the flat roof, the Defendant elevated the floor and caused the original communal soil pipes to be embedded under the floor of the flat roof. Further, (as agreed by the experts) the original communal sewage pipe embedded in the floor of the flat roof of the Defendant’s property was leaking, and soiled water seeped down into the Plaintiffs’ property. The waterproofing system of the floor of the flat roof, whilst not the source of the leakage, was defective and could not hold the leakage.
The Court said that on a balance of probabilities the Plaintiffs had established, that the source of water was from the Defendant’s property and it did not accept that the congestion of any of the manholes was the cause of the leakage on 8 February 2015.
Was the leakage caused by the Defendant’s negligence?
By modifying the flat roof and embedding and re‑routing the original soil pipes, the Defendant had, the Court said, rendered the embedded pipes and waterproofing membrane physically inaccessible for repairs by the IO. Given the literal close proximity between the Plaintiffs’ and Defendant’s properties and the obvious foreseeability of loss, it was fair, just and reasonable to impose a duty upon the Defendant to keep the embedded soil pipes and the waterproofing membrane in proper repair. By failing to keep the flat roof, the embedded soil pipes and waterproof membrane under repair so as not to allow any soiled water to leak into the Plaintiffs’ property, the Defendant had breached her duty, the Court said, which breach was causative of the Plaintiffs’ losses.
Further, the Court held that by embedding the communal pipes in the elevated floor and by elevating the floor of the flat roof, and failing to keep the flat roof and its floor which embedded the communal pipes in good repair, the Defendant had breached the DMC.
Was the leakage a nuisance?
The Court held that the seepage of soiled water interfered with the Plaintiffs’ enjoyment of their property, was not ordinary domestic use of premises, and constituted a private nuisance.
Was the water leakage caused by the re-routing works?
The Defendant’s expert had agreed under cross-examination that the water leakage continued after the 2015 Works. The Court found that despite the 2015 Works, there remained seepage from the Defendant’s property, the waterproofing of the floor of the flat roof remained defective, and the seepage remained unabated.
Were the re‑routing works on the common sewage pipes carried out in accordance with the required standard?
The experts agreed that the statutory requirement of Building (Standards of Sanitary Fitments, Drainage Works and Latrines) Regulations and workmanship for re‑routing of common sewage pipes running off the flat roof was technically achieved by the appointed contractor. However, the Defendant’s expert accepted during cross‑examination that the 2015 Works were covered by the Minor Works Control Scheme and the Buildings Department was required to be notified of the same and had not been. Accordingly, the Court said, the 2015 Works were in that sense unauthorised works.
Conclusion on liability
On the basis of its findings, referred to above, the Court held that the Plaintiffs had established their case on liability against the Defendant on all bases of negligence, breach of DMC and nuisance.
Cost of remedial works to stop leakage and repair damage
The Court accepted that the costs of repair must be reasonable in that the work must be necessary and the charges not extravagant.
The Plaintiffs’ expert estimated the cost of remedial works to be HK$495,000 and the Defendant’s expert estimated them to be HK$155,000. The Court assessed damages under this head at HK$405,000, after disallowing an item of HK$90,000 for “Quality supervision by a qualified building professional and site foreman”.
Damages for loss of enjoyment and/or rental income
The Plaintiffs accepted that the open market rental value of their property was HK$42,000.00 per calendar month. The Plaintiffs claimed for loss of enjoyment and use of their property, or alternatively, loss of rental income for periods from 8 February 2015 (totaling 48 months). The Plaintiffs claimed that of their 1050 ft2 property, 495 ft2 had been and was still unusable. They therefore claimed HK$42,000 x (495/1050) x 48 months (8 February 2015 to 20 February 2019) = HK$950,400.
However, since the Plaintiffs’ property had never been rented out and had been used by the Plaintiffs for their business, the Court held that there was no basis for claiming loss of rental income.
As regards loss of enjoyment, the Court accepted the Defendant’s submission that the law is that there is no scientific way of translating inconvenience and discomfort into a sum of money, and the award had to be a conventional sum. The Court also took into consideration that the leakage on 8 February 2015 was a serious one, soiled water was involved and the discomfort and inconvenience was considerable. The Court also took into account, however, that the situation had been improving since March 2018 and the Court did not accept that the parts of the Plaintiffs’ property which may remain affected were entirely unusable. In any event, the Court said, the front part of the Plaintiffs’ property (which could still be used) would be most valuable to their business, and a pro rata calculation was not appropriate. The Court assessed damages under this head at HK$400,000.
Permanent Injunction
The Court took into consideration that the leakage had improved and the observations made by the Court of Appeal in Chiu Hung Shun, Paul v So Ka Tai, unrep, CACV 136/2005 (also a water leakage case), namely that injunctions are only to be granted where necessary, appropriate and just and will not generally be granted where damages provide an adequate remedy. In that case, the Court said that in a water leakage case, the obvious remedy, in the absence of special circumstances, was simply a mandatory injunction to effect due repairs and no more. In the present case, the Court therefore declined to make a permanent injunction.
Comments
Unauthorised alteration of drainage systems in multi-storey buildings has caused serious public hygiene concerns in the current pandemic. This judgment is a timely reminder to flat owners carrying out such alteration works that they may be liable for substantial damages, not to mention time and costs incurred in litigation, which appears to have taken more than 5 years to conclude in the present case.
For further information, please contact:
Kwok Kit Cheung, Partner, Deacons
kwokkit.cheung@deacons.com.hk
