HUI TUNG v. WORLD WIN CONSULTANTS LTD

DCCJ 428/2021

[2022] HKDC 155

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 428 OF 2021

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BETWEEN

	HUI TUNG	Plaintiff
and
	WORLD WIN CONSULTANTS LTD （偉成顧問有限公司）	Defendant

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Before: Deputy District Judge Tracy Chan in Chambers (Open to Public)

Date of Hearing: 8 February 2022

Date of Decision: 31 March 2022

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DECISION

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1.  This is the defendant’s application for leave to appeal against my costs order (“Costs Order”) made after dismissing plaintiff’s Order 14 application (“the Decision”). The Costs Order made was for costs to be in the cause of the Action.

2.  It is the defendant’s case that the Costs Order was wrong in principle. In support, it is set out in the Intended Notice of Appeal that when exercising its discretion the court has erred in the following regards:-

a. failed to give sufficient weight to its finding that “the Plaintiff does not have a case to stand on its own feet” (Ground 1);

b. failed to take into account that the plaintiff in his supporting affirmation did not verify the facts that he based upon for the application for summary judgment (Ground 2); and

c. departing from the norm of costs order when the summons is being dismissed (Ground 3).

3.  Perhaps it is worth a few words to clarify the mistake which called for the corrigendum before parties’ submissions on this appeal are discussed. In paragraph 28 of the Decision I said “The application is dismissed with costs. Having heard submissions on costs I find the appropriate order is costs be in the cause with counsel certificate.” Not surprisingly the plaintiff wrote to seek clarification. Upon checking the Decision, it was found that the phrase “with costs” was mistakenly not deleted after I had decided to make an order for costs be in the cause of the Action. The defendant then took out an application for leave to appeal against the Costs Order.

4.  Mr Lo for the plaintiff said I had a second chance to think it over and the Costs Order appeared in the Corrigendum must be a well-considered one. It has to be pointed out that rightly or wrongly, my decision on costs was made before the Decision was handed down. It was plainly a mistake which skipped my attention. Upon being informed of the same I immediately directed a corrigendum to be issued accordingly to reflect my original decision to award costs in the cause of the Action.

5.  Mr Lam has raised 3 Grounds in support of his leave application. I shall deal with Ground 3 first.

Ground 3

6.  Mr Lam submitted the usual order upon dismissing an Order 14 application should be with costs and to be paid forthwith. He also pointed out to the court, with the help of a copy of transcript of the Summons hearing (“Transcript”)[1] , that at the conclusion of the hearing of the Summons, Mr Lo submitted that the usual costs order to be awarded should be “costs in the cause” and “that is quite a usual order”. Mr Lam submitted that Mr Lo was retracting his stance at the present hearing for leave.

7.  Mr Lo said that the court in dismissing an Order 14 application is not bound to order costs against the unsuccessful applicant. Instead, the court has a wide discretion to make other costs order that it thinks fit. He referred the court to read Order 62 rule 5 which directs the court to have regard to the conduct of the parties when considering what would be an appropriate costs order. He gave no clear reply to Mr Lam’s submission on his retracting his position.

8.  In reply, Mr Lam said Order 62 should not be engaged as this is an interlocutory application and the court is not dealing with costs order after trial. Further, if conduct was to be considered, the conduct of the plaintiff should be considered as well.

9.  I have read the Transcript. Mr Lo did not only submit that “costs in the cause” in Order 14 Application is quite a usual costs, in fact he said “we proposed that the costs should be in the cause in this particular application.” This submission became clear to the court with the assistance of the Transcripts. This had not been given due weight by the court when it exercised its discretion. I agree with Mr Lam that there is a reasonable prospect of success on this Ground, leave is therefore granted.

Ground 1

10.  Mr Lam submitted that this is a case outside Order14 as it falls under Order 14, rule 7:-

“(1) If the plaintiff makes an application under rule 1 where the case is not within this Order or if it appears to the Court that the plaintiff knew that the defendant relied on a contention which would entitle him to unconditional leave to defend, then, without prejudice to Order 62 and in particular to rule 4(1) thereof, the Court may dismiss the application with costs and may require the costs to be paid by him forthwith.”

11.  Mr Lam said the defence has been made out clearly. Paragraph 8(18) of the Defence set out their criticism on the Report saying that Ms Mak was not the one who conducted the investigation and that it had not identified the source of the seepage. In fact in his oral submission made before the court at the Summary Judgment Application, Mr Lam brought up the point of non-compliance of Order 38 on the part of Ms Mak if the Report is treated as expert evidence. His conclusion is therefore that the evidence in the Report could not be considered by the court at the interlocutory stage for its inadequacy as a statement of fact or for its non-compliance with Order 35. I would say that the defence case in resisting the Application is made stronger at the hearing. I do not agree that the application is outside Order14 as stipulated in Order 14 rule 7. I do not agree that the plaintiff’s case was inherently unfit for summary judgment. Leave to appeal under Ground 1 is refused.

Ground 2

12.  Mr Lam took a point that there was inherent defect in the Summons as the plaintiff has failed to verify the facts to be relied on. He said the location of source of seepage in Unit H and the Affected Area in Unit J were marked on a plan attached to Mr Hui’s affirmation (“HT-2”)[2]. It was however different from the plans attached to the Statement of Claim[3] and the one prepared by Ms Mak[4]. In reply Mr Lo said that it was clearly a mistake on the markings in HT-2. Mr Lam said if it was a mistake, it should be amended but it was not, nor was there any explanation given as to why this mistake occurred.

13.  Having read the plans and considered parties submissions, I agree with Mr Lo’s submission that it was a mistake which should not have caused any confusion in the Application. Further, this point has not been taken by Mr Lam at the hearing of the Application and the court has not been invited to take note of this inconsistency. Even if this point was taken earlier, this would not be taken in the defendant’s favour and would not have affected the exercise of the court’s discretion on costs. There being no reasonable prospect of success, leave is not granted for Ground 2.

Conclusion

14.  For reasons set out above, leave is granted to the defendant to appeal against the Costs Order on Ground 3 as set out in the Draft Notice of Appeal.

15.  Costs of the leave application be in the cause of the appeal.

	( Tracy Chan )
	Deputy District Judge

Mr Lo Anthony P.W., instructed by Y.T. Szeto & Co, for the plaintiff

Mr Lam Abel leading Mr Koon Jay, instructed by Ho & Tam, for the defendant

DCCJ 428/2021

[2021] HKDC 1492

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 428 OF 2021

-------------------------

BETWEEN
	HUI TUNG	Plaintiff
and
	WORLD WIN CONSULTANTS LTD. （偉成顧問有限公司）	Defendant

-------------------------

Before: Deputy District Judge Tracy Chan in Chambers (Open to Public)

Date of Hearing: 15 November 2021

Date of Decision: 20 December 2021

 

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DECISION

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1.  This is an application taken out by the plaintiff asking for summary judgment on its claim for loss and damages caused by the Water Leakage Problem.

2.  The abbreviation used by the parties in the pleadings and skeleton submissions will be adopted in this decision.

3.  The parties in these proceedings are owners of two neighboring units.  The plaintiff asked that summarily judgment be entered for its claim because from the undisputed and indisputable facts there are no tribal issues left for the court to determine.

4.  According to the plaintiff the claim is simple and straight forward.  The main issue for the court to determine is whether the Water Leakage Problem was caused by water escaped from the Master Washroom in the unit owned by the defendant (“Unit H”).  According to Mr Lo who appeared for the plaintiff this issue could be determined summarily in favour of the plaintiff on evidence now put before the court.

5.  In his submissions, Mr Lo maintained that the plaintiff could rely on the Report to make out their claim in this application.  The Report was however subject to criticism made by the defendant.  Background of the claim and how the Report was commissioned shall be set out below.  The defendant’s argument in opposition shall be discussed as well.

Background

6.  There is no dispute that the plaintiff found traces of water leakage inside his unit, (“Unit J”).  After some discussions with Ms Chow who represented the defendant, Mr Hong was engaged by the plaintiff to inspect both units to find out the source of the Water Leakage Problem.  According to the plaintiff, Mr Hong came back with suggestions which the defendant refused to follow.  Some interim measures were instead taken i.e. applying two layers of waterproof materials in the Cubicle inside the Master Washroom[1]. It was not disputed that the Water Leakage Problem continued.

7.  After some discussions and negotiations between the parties, another contractor was to be appointed again to carry out investigation.  The defendant gave its consent to the contractor recommended by the lawyer of the plaintiff.  After investigation, the Report was produced by Ms Mak of Fu Lam on 22 January 2021[2].

8.  The plaintiff now seeks to rely on the Report to prove its claim without a trial.  Mr Lam, counsel for the defendant, submitted that the Report could not be produced as expert evidence as it has failed to comply with the requirements set out in various rules under Order 38;

(i)  rule 35 A (duty to help the court within his expertise);

(ii)  rule 36 (leave of court or parties’ consent to produce);

(iii)  rule 37 B (duty to provide expert witness with a copy of code of conduct);

(iv)  rule 37 C (expert witness’s declaration on duty to court).

9.  Mr Lam further submitted that it could not be produced as statement of facts as Ms Mak, the author, did not carry out the tests by herself.  She only based upon the data collected by somebody else to give her comments.  The data relied on by her must be hearsay and the comments given by her is opinion which could only be given by an expert. 

10.  Mr Lam further submitted that there was no evidence to show that at the time of signing off the Report, Ms Mak was anticipating that the Report would be used in court.  Even at a later time when a quotation was issued by Fu Lam (the “Quotation”) pursuant to suggestions made in the Report, there was no evidence to show that Fu Lam was aware of the commencement of these proceedings.  Mr Lam submitted that reading from the Caveats in the Report, one would come to the reasonable conclusion that Ms Mak or Fu Lam did not expect or anticipate the Report to be produced as evidence in court proceedings.

11.  Paragraph 5 under the subtitle of Caveats set out the limits of the Report.  Under paragraph 5.1 it is stated that “This report is deemed confidential to the appointed party for the specific purposes to which it refers. It may be disclosed to other parties assisting the client in respect of that purpose and parties for the purpose of dispute settlement, but the client shall not disclose the report to the third parties without our written consent.”  Under paragraph 5.2 it stated that “Neither the whole nor any part of this report nor any reference thereto may be included in any documents, circular and statement without our approval on the form and content in which it will appear.”  One could reasonably understand from these two paragraphs that the purpose of the Report was restricted to those set out under paragraph 1.6[3]; and the user(s) is restricted to “the appointed parties”. Litigation was not within the contemplation of Ms Mak at that time.

12.  I am of the view that the paragraphs above suggest that the non-compliance of Order 38 rules 35-37 was not only technical but goes directly to the issue of admissibility of the Report as there remains a serious question of whether Ms Mak has prepared the Report to assist the court.  

13.  Further, it is the position of the defendant that the Report is inadequate and discloses serious factual questions, for example, when it said that color water test was carried out at the Cubicle for 24 hours there was no statement or evidence on the follow-up site inspection to check for the results.  It is apparent from the Report that site inspection lasted for about one hour on the day of inspection only[4].

14.  Mr Lam submitted further that there was no finding made on the source of water leading to the Water Leakage Problem.  No reason was given in support of the conclusion that water seepage was due to hollow wall and floor tiles.  According to Mr Lam, this statement might have suggested the path of the water flow but the source remained unknown.  This conclusion on the path was not supported by reasons either. 

15.  Mr Lam also criticised the Report for its having failed to adequately address and consider the Enclosed Area or water pipes there inside as potential source of the Water Leakage Problem.  Ms Mak acknowledged that there was a pipe duct inside the Master Washroom, it was not inspected on the day of inspection[5]. She did not give a reason why it was not inspected but it seemed it could not be done without opening up the pipe duct. She might need consent from the parties for that to be done. It was one of the suggestions made at the end of the Report by Ms Mak that this pipe duct should be checked[6]. Her suggestion was echoed by the Quotation in which an item was included as “Check the condition inside the pipe duct and repair or replace damaged pipes” for HK$10,000.  Mr Lam said the pipe duct referred to by Ms Mak in the Report and the Quotation was the Enclosed Area which, the defendant, said to be housing water pipe(s).

16.  Mr Lam referred the court to read a floor plan to see that the Enclosed Area was marked as blue and according to the Legend on the floor plan, they are common parts[7]. He drew the attention of the court to the fact that the same facilities were present in each and every unit in the residential part of the development.  As they are common parts or common facilities, the defendant could not do anything to it without the consent of the management of the development.

17.  Mr Lo submitted in reply that the pipe(s) inside the Enclosed Area as an alternative source of the Water Leakage Problem was a red herring.  He said there was not a shred of evidence pointing to the presence of water pipe(s) inside the Enclosed Area.  This has not been pleaded in the Amended Defence and was only raised for the purpose of opposing this application. 

18.  On this point what I could say at this stage is that there is evidence pointing to the possibility of water pipe(s) embedded inside the Enclosed Area. Ms Mak had considered the pipe duct also but did not inspect the same.  She gave her opinion that it was “believed” to be in a low possibility that it was the source of the Water Leakage Problem[8]. She did not or perhaps could not exclude the possibility.  Further, in fact, the possible alternative source of water has been pleaded in the Amended Defence.  See paragraph 18 therein[9].

19.  As pointed out by Mr Lam, throughout the Report, Ms Mak drew no conclusion on the source of leakage.  I agree that to read the Report in its entirety, the conclusion on the source of leakage was unidentified and a suggestion was made by Ms Mak to check the pipe duct.  From this evidence, I accept that the pipe duct is another possible cause of the Water Leakage Problem and probably it is outside the reach of rhe defendant without consent of the management. This must be an issue on liability to be tried.  

20.  For these reasons I do not find that the Report could be relied on to make a final judgment at this stage.  The non-compliance of Order 38 certainly added more difficulties on the part of the plaintiff.  The submissions that it is a report on fact could not assist either. 

21.  Is there other evidence which the plaintiff could rely upon in this application apart from the Report?  Mr Hui Tung, the plaintiff, has filed an affirmation.  He has tried to persuade the court that there is sufficient evidence to enter judgment at the interlocutory stage.  For example, he said in paragraph 8 of his 1^st Affirmation that Mr Hong, the contractor first appointed to deal with the Water Leakage Problem found that the water found in Unit J came from the Cubicle inside Unit H.  Water escaped through the hollow wall tiles and floor tiles of the cubicle.  Again, it did not state the source of water but only the path it travelled.  This evidence is hearsay and little weight could be attached.  There was no evidence that the content of the statement was true either.  

22.  Mr Hui Tung also said in the 2^nd affirmation that “the only possible source of water seepage found in Unit J and the only possible cause of water seepage conditions in the affected area in light of the factual development was water emanating from the Master Washroom of Unit H. Absolutely, there is nothing to do with the alleged water seepage from the water pipes allegedly inside the Affected Area.”

23.  He basically relied on the fact that (i) water seepage ceased flowing from Unit H after Miss Chow moved away and (ii) there were red color stains left in the underlay beneath the marble flooring which show water escaped from Unit H to Unit J during the dyed-water test[10].

24.  In reply Mr Lam referred the court to study the photographs showing the wood-flooring planks and marble tiles.  I agree with him that without more it could not show that they were tainted by red-colour dye water. The fact that water seepage stopped after Ms Chow moved away was neither here nor there. There is no evidence before me to say whether there was water traveling through the water pipe(s) in the pipe duct when nobody used water in Unit H or whether the water main was turned off when the flat was left vacant.

25.  Another point made by Mr Hui Tung in his 2^nd Affirmation is that “leakage of the water pipes as alleged by the defendant…. common sense tells that the extent of the water seepage would be much heavier as the water pipes used for supply of fresh water must carry with pressure and the leakage would increase substantially as time goes by.”  The court cannot agree that common sense can discern what he said is right or wrong.  There was no evidence to support his remarks apart from his saying that this was the view of his solicitors.

26.  Having read the documents and heard submissions at the hearing I do not agree with the plaintiff that there are no tribal issues remained for determination by way of a proper trial.  I do not agree that the plaintiff has made out a claim which could stand on his own feet at this stage.  I do not think I have to go into other areas of their arguments.  The application is dismissed with costs.  Having heard submissions on costs I find the appropriate order is costs be in the cause with counsel certificate.

27.  Since parties are represented, I do not think I need to give directions on how the case should move forward.  I do hope that parties could explore the ways to deal with the matter amicably by alternative means. 

( Tracy Chan ) Deputy District Judge

Mr Lo Anthony P W, instructed by Y T Szeto & Co, for the plaintiff

Mr Lam Abel , instructed by Ho & Lam, for the defendant