FONG YUEN TUNG NICOLE v. PONG YUEN KONG

HCA 939/2022

[2024] HKCFI 1673

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 939 OF 2022

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D E C I S I O N

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Introduction

1.  On 12 April 2024, I gave judgment in favour of the Plaintiff immediately after the assessment of damages hearing, ordering the Defendant to pay damages to the Plaintiff in the sum of HK$115,500 with interest.  I also made an order nisi that the Defendant do pay the Plaintiff’s costs of the action including the costs of the assessment of damages (and all costs reserved)  on party and party basis, with certificate for counsel, to be taxed if not agreed (“Costs Order Nisi”).  The written reasons were handed down on 19 April 2014 ([2024] HKCFI 1061). 

2.  By a summons dated 26 April 2024, the Plaintiff applied to vary the Costs Order Nisi to the effect that the Defendant do pay the Plaintiff’s costs on party and party basis until 28 August 2023 and on indemnity basis thereafter. 

Procedural Matters

3.  On 26 April 2024, I directed that the Plaintiff’s variation application be disposed of on paper, and I gave directions for the parties to file evidence and to lodge written submissions. 

4.  In compliance with my directions, the Plaintiff filed and served the affirmation in support on 7 May 2024.  The Defendant has not filed any affirmation in opposition within the 14 days stipulated or at all.  It was then up to the Plaintiff to lodge her written submissions by 28 May 2024, and the Plaintiff did so on 31 May 2024.  The Defendant has not lodged any written submissions. 

5.  On 31 May 2024, the Plaintiff took out another summons seeking retrospective leave to file / lodge her affirmation in support and her written submissions out of time. 

6.  I directed that the Plaintiff’s leave application be also disposed of on paper, and I gave leave to the Defendant to lodge written submissions should he wish to oppose the application.  The Defendant has not lodged any submissions. 

7.  It should be noted that actually the Plaintiff’s affirmation in support was filed on time, so no retrospective leave needs to be given.  The written submissions were late by three days, which is not serious. In any event, the Defendant has not raised any objection. 

8.  I will therefore make an order that notwithstanding paragraph 3 of my order dated 26 April 2024, retrospective leave be given to the Plaintiff to lodge and serve her written submissions on 31 May 2024.  I make no order as to costs on the Plaintiff’s summons dated 31 May 2024. 

9.  Having read the affirmations of service, I am satisfied that the Plaintiff has served the papers on the Defendant and that the Defendant has had the opportunity to oppose the variation application.  I will proceed to dispose of the variation application in the absence of evidence and written submissions in opposition from the Defendant. 

Analysis

10.  The Plaintiff made her variation application on the strength of a sanctioned offer previously made by her. 

11.  The solicitors for the Plaintiff issued a written sanctioned offer on 31 July 2023, where it was offered that the Plaintiff would accept a sum of HK$17,500 (inclusive of interest)  in full and final settlement of her claim, and that the Defendant do pay the Plaintiff’s costs to be taxed on the High Court scale if not agreed.  It was stated that the offer related to the whole of the Plaintiff’s claim.  Thus, the mandatory requirements relating to the form and content of a sanctioned offer under Order 22 rule 5 of the Rules of the High Court have been complied with. 

12.  In the said written sanctioned offer, the possible consequences of not accepting the offer were set out.  The Defendant was also reminded that if he wished to accept the offer, he should accept it within 28 days, otherwise he could accept it only if the parties agreed on the liability for costs or with leave.  

13.  To comply with Order 22 rule 6, the Plaintiff’s solicitors did send the sanctioned offer to the Defendant at the Defendant’s premises (ie Flat D on 3^rd Floor, Kingsfield Garden)  and at Flat D, 2^nd Floor, Cannon Garden, No 68 King’s Road, Hong Kong (another usual and last known address of the Defendant)  by registered post on 31 July 2023.  The post to the Kingsfield Garden address was returned, but the post to the Cannon Garden address was not, and the Post Office’s track and trace records show that this registered post was delivered on 1 August 2023.  I accept that there has been valid service of the sanctioned offer on the Defendant. 

14.  The Defendant has not accepted the sanctioned offer.  Order 22 rule 24 is applicable as the Defendant was held liable for more than the proposals contained in the sanctioned offer.  In my judgment, I ordered the Defendant to pay damages in the sum of HK$115,500 with interest, whereas the Plaintiff’s sanctioned offer was for the Defendant to pay her HK$17,500 inclusive of interest. 

15.  Therefore, pursuant to Order 22 rule 24(3), I may order that the Plaintiff is entitled to her costs on the indemnity basis after the latest date on which the Defendant could have accepted the offer without requiring the leave of the Court.  In considering whether to do so, under rule 24(5), I shall take into account all the circumstances of the case including the terms of the sanctioned offer, the stage in the proceedings at which the sanctioned offer was made, the information available to the parties at the time when the sanctioned offer was made, and the conduct of the parties with regard to giving or refusing to give information for the purposes of enabling the offer to be made or evaluated. 

16.  It is well established that the onus is on the Defendant to show that in view of all the circumstances of the case it is unjust to make an order under Order 22 rule 24(3): Chan Wai Chung v China Travel Service (Hong Kong)  Limited & Ors[2023] HKCFI 1442 at §31. 

17.  The Defendant has not filed any evidence or submissions to suggest that it would be unjust for me to make an order under rule 24(3), and in any event I do not think it would be unjust for me to do so, considering the following matters:-

(1)  Compared to the Plaintiff’s claim for damages, the offer to accept HK17,500 (inclusive of interest)  was a genuine offer to settle.  It was not a mere “tactical step” to secure the benefit of Order 22: see Kai Min Fashion (HK)  Ltd v Fond Express Logistics Ltd [2013] 1 HKC 563 at §§12-14. 

(2)  The sanctioned offer was made well ahead of the assessment of damages hearing which was fixed to be heard on 12 April 2024. 

(3)  On 20 April 2023 (ie more than three months prior to the sanctioned offer), the Plaintiff filed her witness statement for the assessment of damages hearing.  In her statement, the Plaintiff clearly set out the basis of her claim for damages in the sum of HK$115,500.  The Defendant had the necessary information to evaluate the sanctioned offer. 

18.  As stipulated in Order 22 rule 12(1), a sanctioned offer is made when it is served on the offeree.  According to Practice Direction 19.2, service by way of registered post is deemed to have been effected on the fourth working day after posting, subject to proof to the contrary.  As noted above, the Plaintiff has adduced evidence to prove that the service was actually effected on 1 August 2023 and she does not have to rely on the deeming provision.  The latest date on which the Defendant could have accepted the sanctioned offer without leave is therefore 28 August 2023, and indemnity costs should be awarded from 29 August 2023 onwards. 

Disposition

19.  I order that the Costs Order Nisi be varied as follows – the Defendant do pay the Plaintiff’s costs of the action including the costs of the assessment of damages (and all costs reserved)  on party and party basis until 28 August 2023 and on indemnity basis thereafter, with certificate for counsel, to be taxed if not agreed. 

20.  As to the costs of the variation application itself, I make an order nisi that the costs of and occasioned by the summons dated 26 April 2024 be to the Plaintiff on party and party basis, to be taxed if not agreed.

Messrs Ong & Chung, for the Plaintiff

The Defendant was not represented and did not lodge any written submissions

HCA939/2022

[2024] HKCFI 1061

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 939 OF 2022

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REASONS FOR JUDGMENT

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Introduction

1.  At all material times, the Plaintiff has been the registered owner of the premises known as and situate at Flat C on 2^nd Floor, Kingsfield Garden, 1 Comfort Terrace, Hong Kong (“Plaintiff’s Premises”), and the Defendant has been the registered owner of the premises known as and situate at Flat D on 3^rd Floor, Kingsfield Garden (“Defendant’s Premises”).

2.  On 29 July 2022, the Plaintiff issued the Writ of Summons in this action against the Defendant for negligence and/or breach of a deed of mutual covenants in relation to an ongoing incident of water seepage allegedly originating from the Defendant’s Premises. 

3.  In default of Defence, the Plaintiff applied by way of a summons dated 28 October 2022 for interlocutory judgment.  On 24 November 2022, Recorder Sit SC granted the application and ordered, among others, that the Defendant do pay the Plaintiff damages to be assessed.  This is the consequent assessment of damages.

The hearing

4.  Pursuant to the order made by Master Andy Ho on 26 October 2023, this action was set down for assessment of damages on a date to be fixed.  On 1 February 2024, the Plaintiff filed a Notice of Appointment of Assessment of Damages, whereby the assessment of damages hearing was fixed on 12 April 2024 at 14:30. 

5.  At the hearing before me, the Defendant was absent.  I noted that the Plaintiff’s solicitors had served the said order of Master Andy Ho, the Notice of Appointment of Assessment of Damages and the opening submissions and hearing bundles for this hearing on the Defendant by way of ordinary post to the Defendant’s Premises as well as another address at Flat D, 2^nd Floor, Cannon Garden, No. 68 King’s Road, Hong Kong, being another usual and last known address of the Defendant.  I was satisfied that the Defendant should have had notice of this hearing and I proceeded with the hearing in his absence.

6.  At the end of the hearing, I granted final judgment in favour of the Plaintiff, ordering the Defendant to pay damages in the sum of HK$115,500.00 (plus interest).  I indicated that my reasons would be handed down later, which I now do.

The evidence

7.  The Plaintiff herself filed a witness statement and testified in court.  According to her, she purchased the Plaintiff’s Premises in February 2022.  On or about 13 May 2022, the renovation workers she engaged informed her that they noted water seepage at the ceiling and walls of the maid’s quarters in the Plaintiff’s Premises.

8.  Upon the discovery of the water seepage, she contacted the Defendant and the owner of Flat C on 3^rd Floor, Kingsfield Garden.  They asked the Plaintiff to engage an expert to locate the source of the water seepage.  As a result, the Plaintiff engaged an architect and authorized person, Mr. Pau Chi Hoi of Tappro, to conduct testing.

9.  According to the report of Mr. Pau dated 26 June 2022, the water seepage was caused by defective drainage pipe(s)  and water supply pipe(s)  at the Defendant’s Premises. 

10.  The Plaintiff thus commenced this action.  After obtaining interlocutory judgment in default, which included a mandatory injunction ordering the Defendant to halt the water seepage problem and to carry out repairs, the Defendant has failed and/or refused to carry out the requisite repair work to date.

11.  The Plaintiff claims that she paid a total sum of HK$18,000.00 for the expert report prepared by Mr. Pau of Tappro by way of two instalments.  

12.  Further, in February 2023, she engaged a company called Eighty Three Design Group Ltd to carry out temporary repairs to the damaged areas in the maid’s quarters, such repair work including treatment for rust, plastering and painting and installation of a false ceiling.  She paid a total sum of HK$17,500.00 for the said repair works.

13.  In addition to the aforesaid special damages, the Plaintiff also claims general damages for nuisance, distress, discomfort and inconvenience in the sum of HK$80,000.00.  During examination-in-chief, the Plaintiff deposed that a false ceiling was installed in the maid’s quarters to prevent falling slab caused by water seepage.  As a result, she could now only place a single bed there for one maid, instead of a bunk bed for two maids.

Assessment of damages

14.  The Plaintiff claims a total sum of HK$115,500.00, comprising (1)  the fee for the expert report of Mr. Pau of HK$18,000.00; (2)  the cost of the temporary repairs done by Eighty Three Design Group of HK$17,500.00 and (3)  general damages of HK$80,000.00.

15.  It is well established that reasonable investigation costs for water seepage incurred by a plaintiff before commencement of action, including costs in engaging experts and in preparing investigation reports, are recoverable as damages: see Polysoon Investment Limited v Lau Moon Kan & Anor [2022] HKDC 211 at §§219-220; Man Kwong Kau & Anor v Wong Wai Hong [2023] HKDC 664 at §§40-41.

16.  I accept that engaging an expert in identifying the source of water seepage was a reasonable step to take, and the investigation cost of HK$18,000.00 paid to Tappro was reasonable.  The actual payment by the Plaintiff is supported by two receipts dated 1 June and 28 June 2022 respectively.  I would therefore allow the Plaintiff’s claim for investigation cost in full.

17.  In addition, I would allow the Plaintiff’s claim for costs of the temporary repairs.  It can be seen from the photos produced by the Plaintiff that part of the ceiling and walls in the maid’s quarters were damaged by water seepage.  As shown in the quotation issued by Eighty Three Design Group Ltd,  the repair works were confined to the affected areas in the maid’s quarters.  Considering the damage to the maid’s quarters and the fact that the repairs were meant to render the quarters habitable, I agree the repairs were reasonable.  The Plaintiff’s payment of the repair costs was supported by the receipt dated 25 February 2023.  This head of claim is thus allowed in full. 

18.  As to the Plaintiff’s claim for general damages, as a matter of law, such damages are recoverable as held by the Court of Appeal in So John & Anor v Lau Hon Man & Ors [1993] 2 HKC 356 at 358I.  The Plaintiff prayed reliance on Choi Man Wing & Anor v Wong Tang Hoi Alice [2018] HKDC 901; there the court awarded general damages of HK$80,000.00 in a water seepage case where the problem had affected the master room toilet and guest room toilet for over two years.

19.  I agree that the scenario in this case is similar to that in Choi Man Wing (supra).  In this case, the water seepage was first discovered in May 2022 and to date the Defendant still has failed and/or refused to carry out repairs.  Moreover, as a result of the temporary repair work, a false ceiling had to be installed in the maid’s quarters, which has rendered the Plaintiff’s plan to place a bunk bed and to accommodate two maids there unworkable.  I consider general damages in the sum of HK$80,000.00 appropriate and reasonable in the circumstances.

20.  In her Statement of Claim, the Plaintiff claimed other special damages including renovation work to reinstate and/or redecorate the Plaintiff’s Premises.  She has in her written opening submissions confirmed that she would not pursue those other claims.

Conclusion

21.  Final judgment for the Plaintiff is entered against the Defendant in the sum of HK$115,500.00, with breakdown as follows: investigation cost of HK$18,000.00, repair cost of HK$17,500.00 and general damages of HK$80,000.

22.  Interest on the sum of HK$115,500.00 is awarded at the HSBC prime rate +1% per annum from 29 July 2022 (i.e. the date of the Writ of Summons)  to the date of judgment and thereafter at judgment rate until payment.

23.  Costs should follow the event.  At the invitation of the Plaintiff, I have made an order nisi that the Defendant do pay the Plaintiff’s costs of the action including the costs of the assessment of damages (and all costs reserved)  on party and party basis, with certificate for counsel, to be taxed if not agreed.

Mr Roger So, instructed by Ong & Chung, for the Plaintiff

The Defendant was not represented and did not appear