Eric Cumine Associtates (A Firm) v The Wharf (Holdings) Ltd

Judgment Date16 December 1987
Year1987
Judgement NumberHCCL48/1985
CourtHigh Court (Hong Kong)
HCA013431H/1983 WHARF PROPERTIES LTD AND ANOTHER v. ERIC CUMINE ASSOCIATES, ARCHITECTS ENGINEERS & SURVEYORS (A FIRM) AND OTHERS

H.C.A. 13431 of 1983 and
C.L. 48 of 1985

HEADNOTE

This was a claim against architects for professional negligence. The clients alleged that the architects had failed to ensure maximization of the development value of the clients' site.

HELD : On the facts, the architects had exercised a reasonable degree of skill and care in the discharge of their duties, and the claim therefore failed.

(Observations on the use and value of expert evidence.)

1983 No. 13431

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

BETWEEN

WHARF PROPERTIES LIMITED 1st Plaintiffs
THE WHARF (HOLDINGS) LIMITED
(formerly The Hongkong & Kowloon Wharf & Godown Company, Limited)
2nd Plaintiffs

and

ERIC CUMINE ASSOCIATES, ARCHITECTS ENGINEERS & SURVEYORS (A FIRM) and OTHERS 1st Defendants

___________________________

1985. No. C. L. 48

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

BETWEEN

ERIC CUMINE ASSOCIATES (A FIRM) Plaintiffs

and

THE WHARF (HOLDINGS) LIMITED
(formerly The Hongkong & Kowloon Wharf & Godown Company, Limited)
1st Defendants
WHARF PROPERTIES LIMITED
(formerly Harbour City Limited)
2nd Defendants

___________________________

Coram: The Hon. Mr. Justice Godfrey in Court

Dates of Hearing: 2nd June 1987 to 23rd July 1987, and 12th October 1987 to 13th November 1987

Date of Delivery of Judgment: 16th December 1987

___________

JUDGMENT

___________

1. The Plaintiffs in this action (1983 No. 13431) are Wharf Properties Limited and The Wharf (Holdings) Limited ("the clients"). This judgment is concerned with their claim in the action for damages for professional negligence against Eric Cumine Associates, a firm of architects, engineers and surveyors ("the architects").

2. The clients retained the architects to act for them in connection with the development of Kowloon Marine Lot 11 ("KML 11"), the site (ultimately) of the mixed commercial and residential development known familiarly as Ocean Centre and Harbour City and which includes a number of office blocks and the Marco Polo and Prince Hotels. The clients complain about the advice given (and the advice not given) to them by the architects in connection with the development, as a result of which (say the clients) they were denied the opportunity to turn KML 11 to better advantage; but the clients do accept that any proposal for development of KML 11 would have been subject to commercial and legal constraints.

3. As to commercial constraints, the clients owned other property in the vicinity of KML 11 and it would not have been appropriate for the architects to submit proposals for redevelopment which (if carried out) would have adversely affected that other property. For this reason, for example, options such as low cost, high density housing, or the division of KML 11 into sections for the erection of the maximum number of monolithic office blocks, were ruled out at an early stage, although they might have provided better returns.

4. As to legal constraints, KML 11 was subject to the provisions of the Crown Lease dated 12th March 1910 under which it was held, so that (save to the extent to which the Crown could be persuaded to grant any necessary release or modification) any proposals for redevelopment would have to take account of these provisions (which, however, like those of most Crown Leases of that age, were actually not unduly restrictive in character). More important were the constraints imposed by the general law. One such constraints was that KML 11 was within an area which (because of its proximity to the airport) was subject to restrictions precluding the erection within that area of any building over 200 ft. in height. (In fact, this particular constraint is not a bone of contention between the parties). For present purposes, the most important constraints were those imposed by the Buildings Ordinance, Cap. 123 and the subsidiary legislation made thereunder, which (among other things) imposed constraints on the development of KML 11 in respect of site coverage and plot ratio (the plot ratio of a development is the number obtained by dividing the gross floor area of the intended building by the area of the site on which it is to be erected). The constraint as to plot ratio is a bone of contention, and arguments about it have occupied most of the time the Court has devoted to considering this case. The first argument arises because (say the architects) the constraints as to plot ratio imposed by the legislation were tightened by a circular letter ("circular 58") issued by the Director of Public Works to all authorised architects on 20th May 1971 and concerned with large sites, so that any proposals for KML 11 (which was a large site) had to take into account (as the architects did) the provisions of this circular. The clients do not accept this, and so here the first battle line is drawn. But even if the clients are right and the architects were wrong, it does not necessarily follow that the architects were negligent in treating circular 58 as imposing constraints with which their proposals needed to conform. However (say the clients) the architects were negligent; because in fact they knew, or ought to have known, that their proposals could safely ignore the plot ratio constraints imposed or expressed to be imposed by circular 58. Here the second battle line is drawn. If the architects lose both these battles, then, so far as circular 58 is concerned, they lose the war, at any rate over liability : I shall not at this stage consider damages.

5. Although the legislation imposes plot ratio constraints, in some particular instances "exemptions" from them are provided, some by way of administrative concession. The clients say that the architects' proposals put to and accepted by the clients failed to utilize these exemptions to the best or at least the proper advantage, and that this failure was negligent. The architects do not accept this. I shall not at this stage consider damages in this respect, either.

6. With this brief conspectus of the main issues I turn to the legislative background.

7. I start with the primary legislation, which is the Buildings Ordinance, Cap.123. Part II of the Buildings Ordinance is concerned with control of buildings. It includes section 16(1), which confers on the Building Authority a power on specified grounds to refuse approval of any plans of building works. Three grounds are material to a resolution of the issues in this case, namely (d), (g) and (p). Under (d), the Building Authority may refuse to approve any plans where "the carrying out of the building works shown thereon would contravene" (among other things) "any approved or draft plans prepared under the Town Planning Ordinance". Under (g), the Building Authority may refuse to approve any plans where "the carrying out of the building works shown thereon would result in a building differing in height, design, type or intended use from buildings in the immediate neighbourhood or previously existing on the same site". Under (p), the Building Authority may refuse to approve any plans of building works where "in the case of building works to be carried out on the site which in his opinion ought to be provided with streets having adequate connection to a public street, he is not satisfied that such streets are or will be provided". Ground (p) was not in the Buildings Ordinance at all material times; it was enacted only on 3rd August 1973, after the date of the initial retainer of the architects in relation to KML 11.

8. I turn to the subordinate legislation, made under Section 38(1)(c)(iii), which confers on the Governor in Council a power by regulation to provide for the planning and design of buildings, including (among other things) plot ratio. Such provision is made in part III of the Building (Planning) Regulations ("the regulations"). Regulations 19, 19A, 20 and 21 contain provisions relating to permitted site coverage and permitted plot ratio. The permitted site coverage and permitted plot ratio for any site are to be ascertained by reference to the First Schedule to the regulations. A distinction is drawn between domestic and non-domestic buildings. A distinction is also drawn between class A, class B and class C sites; to put it shortly, a class A site is a site, not being a class B or class C site, that abuts on one street; a class B site is a corner site that abuts on two streets, and a class C site is a corner site that abuts on three streets (an island site is also a class C site). Regulation 22 provides for the permitted site coverage and permitted plot ratio to be exceeded in certain cases. Regulation 23 contains provisions supplementary to regulations 19, 20, 21 and 22. The detailed provisions of the said regulations and of the First Schedule are material and accordingly I reproduce them in Annexure 1 to this judgment.

9. I return to the primary legislation. Section 42(2) provides (so far as is material) as follows : "Where in the opinion of the Building Authority special circumstances render it desirable he may permit a modification of the provisions of this Ordinance". There is, therefore, a power of modification available to the Building Authority under which, in a proper case, he may, be persuaded to relax the constraints otherwise imposed upon building on a particular site. The power of modification extends not only to the provisions of the Ordinance but also to the provisions of any regulations made thereunder.

10. I turn now to circular 58. The background to circular 58 is that for many years the Government had held the view that it was in the public interest to follow a policy of systematic...

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