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The Hong Kong Electric Co Ltd v Kin Wing Foundationds Ltd

Judgment Cited authorities 9 Cited in Precedent Map Related
Vincent
Judgment Date20 August 2015
Year2015
Judgement NumberHCCT10/2011
Subject MatterConstruction and Arbitration Proceedings
CourtHigh Court (Hong Kong)
HCCT10/2011 THE HONG KONG ELECTRIC CO LTD v. KIN WING FOUNDATIONDS LTD

HCCT 10/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 10 OF 2011

_______________

BETWEEN
THE HONG KONG ELECTRIC COMPANY, LIMITED Plaintiff

and
KIN WING FOUNDATIONDS LIMITED Defendant

_______________

Before: Mr Recorder Patrick Fung SC in Court
Dates of Hearing: 18-22, 25-27 November 2013,3-7 and 17 November 2014
Date of Handing Down Judgment: 20 August 2015

_______________

JUDGMENT
_______________

1. This is an action by the plaintiff against the defendant for damages arising out of the damage to an underground electric cable owned by the plaintiff.

2. The damages claimed are relatively insubstantial, in the sum of $4,612,606.12. There was originally a counterclaim by the defendant for damages to be assessed which was eventually not pursued.

3. It is unfortunate that the parties did not find themselves able to come to any settlement or even any meaningful agreement regarding the expert evidence. As a result, the case had to be tried over a total of 14 days with the factual evidence having been completed in stage 1 of the trial and the expert evidence having to commence after a lapse of 12 months in stage 2. Needless to say, the legal costs will have far exceeded the amount at stake between the parties.

BACKGROUND FACTS

4. The defendant was the foundation contractor for a hotel development at Nos 96‑106 Java Road, North Point (“the Site”).

5. The Site was handed over by its owner to the defendant on 3 February 2009. By that time the original buildings on the Site, namely, a 1973 built 5‑storey building at Nos 96‑98 Java Road and a 1950 built 3‑storey building at Nos 100‑106 Java Road, had already been demolished and cleared to ground level. The underground foundations of those two buildings had not been removed.

6. There was also a hoarding (“the Hoarding”) erected on the north side of the Site separating the Site from the pavement right outside it on Java Road. The inside face of the Hoarding consisted of concrete walls (“the Concrete Face”) except at the entrance from Java Road into the Site. There is a dispute between the parties as to the position of the Concrete Face in relation to the lot boundary and the site boundary. More about this later.

7. By a letter dated 3 February 2009, the defendant wrote to the plaintiff to seek the latter’s assistance in providing information about its then existing underground facilities in the vicinity of the Site.

8. The defendant was required to break up only those parts of the foundations of the original two buildings on the Site which would obstruct the sinking of the bored piles and the driving of the sheet piles into the ground for the foundation of the proposed hotel building.

9. Whilst the defendant was waiting for a reply from the plaintiff, on 6 February 2009, the defendant began the process of hand‑digging trial pits at various places within the Site in order to locate whatever foundations and utilities there might be below the ground level.

10. On 11 February 2009, the defendant exposed a 2.6 metre‑deep reinforced concrete structure at the north side of the Site adjacent to and along Java Road at roughly Nos 96‑ 98 Java Road.

11. The defendant has appended to its Defence and Counterclaim a sketch marked as “Sketch A” showing, inter alia, the necessary details (according to the defendant) regarding the said reinforced concrete structure, the trial pit dug by the defendant, the building line, the Hoarding and the Concrete Face and the cable in question with exact measurements. I annex hereto as Annexure 1 a copy of Sketch A.

12. Not surprisingly, the plaintiff takes issue with the accuracy of various matters depicted by Sketch A and has produced another sketch of its own which I shall deal with below.

13. Going back to the said reinforced concrete structure exposed by the defendant in the process of hand‑digging, it will be seen from Section Y – Y in Sketch A that it has been described as “The Foundation” consisting of the “Stem”, the “Heel” and the “Toe” (“the Foundation”).

14. The Stem and the Heel were broken up by the defendant on 12 February 2009. The Toe was left intact because it extended beyond the Concrete Face into Java Road.

15. On the morning of 16 February 2009, the defendant received a letter dated 12 February 2009 (“the 12 February Letter”) from the plaintiff. That letter enclosed, inter alia, several plans showing the electric cables along Java Road in the vicinity of the Site. The relevant parts of that letter read as follows:

“ Enclosed are part plans showing the approximate positions of this Company’s electricity supply lines in the vicinity of your proposed works. … Please note that the plans show the record of our electricity supply lines at the time the plans were prepared. … Since our electricity supply lines are energised and our enclosed plans show only their approximate, rather than exact, positions, it is imperative that your contractors and employees exercise extreme care during any works that may be required and take all necessary steps and measures to prevent accidents to personnel and to our electricity supply lines. We are enclosing a copy of our ‘General Practice on Execution of Excavation and Construction Work near Underground Electricity Cables’ for your guidance. You are required to read through this document carefully and follow the guidelines therein strictly in the course of your works. Moreover, you are required to follow strictly the requirements as stipulated in the Code of Practice on Working near Electricity Supply Lines issued in accordance with the provision of the Electricity Supply Lines (Protection) Regulation under the Electricity Ordinance (Cap. 406), by the Electrical and Mechanical Services Department (the ‘Code of Practice’). Remember electricity supply lines when damaged and joints if improperly handled, may explode and cause death or injury to your employees or the general public and may lead to a suspension of our supply of electricity to many domestic, commercial and industrial users. We also enclose a pamphlet showing the precautionary measures for working close to our cables, and a copy of letter dated 8th August 2008 from Electrical and Mechanical Services Department concerning the safety requirements related to works in vicinity of electricity supply lines for your attention.”

16. One of the plans enclosed with the 12 February Letter marked as “Map No. 11 SEG 103, II SEG 1D4-A4VTC” (“the Letter Plan”) gives an indication of depth of the electric cables laid underneath the pavement along the length of Java Road, including that Section just outside the Site, as being “1.68m”. It is to be noted that this piece of information given by the plaintiff is heavily relied on by the defendant as one of the reasons why it should not be responsible for the accident.

17. The defendant continued to work on the Site at its north‑western corner by the use of a mechanical excavator.

18. At about 2:35 pm on the same day, ie 16 February 2009, there was a sudden explosion at the part of the Site being worked by the defendant. The trench which had been excavated by the defendant became filled with a dark brown oil-water mixture. At the same time, the plaintiff detected through its control system a tripping (ie an automatic shutting off of electricity) in one of its 132 KV cable circuits in the vicinity of the Site.

19. It later transpired that one of the 132 KV cables (“the Cable”) in the vicinity of that part of the Site being worked by the defendant had been damaged and the dark brown oil-water mixture had leaked out from the Cable.

20. The plaintiff alleges that the damage to the Cable had been caused by the defendant who should be held responsible for the loss and damage suffered by the plaintiff. The defendant denies that the damage to the Cable had been caused by itself or that it should be responsible for the loss and damage suffered by the plaintiff. Hence, this action.

THE PLAINTIFF’S CASE AS PLEADED

21. The Statement of Claim pleads that the damage to the Cable was caused by the negligence on the part of the defendant. In paragraph 7 thereof, it refers to the investigation by a Mr Fred S K Lee (“Fred Lee”) of the plaintiff and his discovery that “there were flashover marks on the tip of a hydraulic breaker of the defendant’s mechanical excavator found on the Site”.

22. The Statement of Claim also pleads a breach of statutory duties on the part of the defendant regarding Section 10 of the Electricity Supply Lines (Protection) Regulation (“the Regulation”) and the Code of Practice on Working Near Electricity Supply Lines (2005 Edition) (“the Code of Practice”) issued under Section 15 of the Regulation.

23. By the “Answers To Request For Further And Better Particulars Of The Plaintiff’s Answer To Request For Further And Better Particulars Of The Statement Of Claim Dated 9 November 2011” filed by the plaintiff on 8 May 2012, the plaintiff stated: “It is the Plaintiff’s case that the only cause of damage to the Underground Cable was direct contact between the Defendant’s mechanical excavator and the Underground Cable.”

24. There has been considerable argument between Mr Scott SC, leading counsel for the defendant, and Mr Fung SC, leading counsel for the plaintiff, as to whether the pleading by the plaintiff relates to the defendant’s mechanical excavator fitted with a hydraulic breaker (as depicted by the model marked as Exhibit D2) or with a bucket (as depicted by the model marked as Exhibit D1). There has also been a lot of discussion about the meaning of the expression “backhoe” as appearing in one of the internal reports by Fred...

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