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01 September 2020
The Court of Appeal recently considered the general principles for granting summary judgment (judgment without trial) in the context of cases involving 'water leakage' between apartments above and below one another. In Selvaraj v O'Brien,(1) the Court of Appeal reversed a lower court judgment that awarded summary judgment to the plaintiff who was the owner of the apartment which had been affected by a water leak to (among other things) the ceiling of his lounge. The judgment of the Court of Appeal is as traditional an application of the principles for awarding summary judgment (particularly, in the context of water leakage disputes between neighbours) as the lower court's judgment is bold. Summary judgment is difficult to obtain in Hong Kong, save for simple debt-type actions. However, there tend to be few winners in neighbour disputes involving water leakage which are ripe for alternative dispute resolution, provided there is goodwill on both sides. Given that most residents in Hong Kong live in high-rise apartments, disputes involving water leakage are a subject matter that could also benefit from some sort of pre-action protocol in non-urgent cases.
The plaintiff is the owner of a residential apartment immediately underneath the defendant's residential apartment in the same building. His apartment suffered from the effects of a water leak sometime between June 2016 and January 2019. The plaintiff relied on two inspection reports both commissioned by the building department and food and environmental hygiene department joint office – their respective inspection tests were carried out in December 2017 and August 2018. Both inspection reports appear to have concluded that the source of the water leak allegedly came from a bathroom floor and a bathroom in the defendant's apartment.
The plaintiff commenced a legal action against the defendant in November 2018. He alleged that the origin of the water leak came from the defendant's apartment – it appears that the focus of the allegations concerned a bathroom in the defendant's apartment. These allegations were strenuously denied by the defendant. In short, the defendant's defence appears to have raised the following points:
In December 2018, the plaintiff applied for summary judgment. The issue for determination by the lower court was whether the defendant had discharged the evidential burden on her to show that she had a believable defence.
In a bold and understandable judgment, the lower court awarded summary judgment to the plaintiff.(2) The judge appears to have considered that the defendant had:
The lower court's judgment was handed down in March 2019, after what appears to have been full argument based on the parties' affidavits (sworn statements) and documentary evidence.
The defendant applied to the lower court for permission to appeal and this was denied by the lower court.(3) One might have expected things to end there, the court's judgment being an exercise of discretion. However, no doubt given the disputed facts and (on the face of it) the technical issues that arose, the defendant applied for and obtained permission to appeal from the Court of Appeal on 5 December 2019.
The issue for determination by the Court of Appeal was whether the lower court had correctly applied the test for the grant of summary judgment based on the available evidence.
In an interesting and fully reasoned judgment, the Court of Appeal allowed the defendant's appeal and granted her unconditional permission to defend the case to trial.
The Court of Appeal's judgment sets out the applicable principles for the grant of summary judgment, particularly in the context of a nuisance dispute arising out of a claim involving water leakage between neighbouring apartments. The judgment notes that identifying the source of a leak is essential in order to attach liability to a defendant in a water leakage case and, on basic principles, all that a defendant had to do to defeat an application for summary judgment was to put forward evidence that their defence was believable. The Court of Appeal noted that a defendant did not have the burden of proving where a water leak came from and (as the lower court had noted) there was no presumption that a water leak came from the apartment above.
Addressing the three points raised by the defendant, the Court of Appeal held as follows:
As a result, the Court of Appeal considered that the lower court had erred in awarding summary judgment and allowed the defendant's appeal. Interestingly, the Court of Appeal ordered that the plaintiff pay the defendant's costs of the appeal and of the applications for leave to appeal – however, the Court of Appeal also ordered that the costs of the summary judgment application and lower court hearing fall to be determined according to the outcome of the case at trial (should the case get that far) on the basis that the successful party pays the unsuccessful party's costs (to be assessed by the court, if not agreed).
The judgments of the lower court and the Court of Appeal, while coming to very different conclusions, are both understandable. On the evidence presented to the lower court, there clearly appears to have been some water leakage to the plaintiff's apartment and normally inspection reports (based on, for example, dye tests or forensic imaging) would be telling. However, as the Court of Appeal noted, this was a case where the defendant had put forward some evidence that her apartment was unoccupied at the material times. Further, as the Court of Appeal has ruled on numerous occasions, summary judgment is not appropriate for cases where there are disputed facts based on credible grounds – this has become part of the Court of Appeal's mantra over the years;(5) it is especially pertinent in nuisance-type disputes.
Nuisance disputes involving water leakage are common in Hong Kong, particularly in older buildings. They can cause significant damage, not to mention anxiety to the parties involved – for example, physical loss and damage, consequential losses, diminution in value and distress. In such disputes, expert evidence is crucial. However, often that evidence will have to be tested on cross-examination at trial.
Given the prevalence of water leakage grievances and their significance to people's lives and wellbeing (especially as more people work from home) these disputes could greatly benefit from more alternative dispute resolution and from a specific pre-action protocol (in non-urgent and lower-value cases). As is often the case, there are few outright winners or losers.
For further information on this topic please contact David Smyth or Warren Ganesh at RPC by telephone (+852 2216 7000) or email (email@example.com or firstname.lastname@example.org). The RPC website can be accessed at www.rpc.co.uk.
David Smyth is an accredited mediator in Hong Kong.
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