Owner Ding XX and his family were away from Shenzhen when rainwater pipe blockage caused backflow due to rain, resulting in water damage to the house. Ding XX entrusted lawyer Cheng Quan to sue the XX Property Management Company for compensation. The property management company claimed the pipe blockage was caused by Ding XX's improper renovation, not their responsibility. Lawyer Cheng used recordings, witness statements, appraisal reports, and photos as evidence to prove the property management company's undeniable liability. The first-instance court adopted Lawyer Cheng's opinion, determining the house loss at 68,865 yuan, including 58,364.9 yuan for repairs and 10,500 yuan for Ding XX's rental costs during repairs (calculated at 3,500 yuan per month for 3 months), ruling that the property management company bear 70% of the loss, compensating Ding XX 48,205.5 yuan. The property management company appealed, but the second-instance court upheld the original verdict, and Ding XX received due compensation.

Civil Judgment of the Intermediate People's Court of Shenzhen City, Guangdong Province

(2008) Shen Zhong Fa Min Wu Zhong Zi No. 581

Appellant (original defendant) Shenzhen XX Property Management Co., Ltd., located on the first floor of Guomao XX Building, Renmin South Road, Luohu District, Shenzhen.

Legal representative Wang XX, Chairman.

Authorized agent Zhao XX, lawyer of Guangdong XX Law Firm.

Respondent (original plaintiff) Ding XX, male, Han ethnicity, residing at Room XXX, Building XX, XX Garden, Futian District, Shenzhen.

Appointed agent Cheng Quan, lawyer of Guangdong Zhiming Law Firm.

The appellant, Shenzhen XX Property Management Co., Ltd., appealed to this court against the civil judgment (2007) Shen Fu Fa Min San Chu Zi No. 1964 rendered by the Shenzhen Futian District People's Court regarding a dispute over property damage compensation. This court formed a collegial panel to hear the case, which has now been concluded.

The court of first instance found that Ding XX was the owner of Room XXX, Building XX, XX Garden, Futian District, Shenzhen, and that the Futian XX Garden Property Management Office, a subsidiary of Shenzhen XX Property Management Co., Ltd., was the property manager of the premises. In early June 2007, the property in question suffered damage due to waterlogging. Regarding the disputed cause of the waterlogging, Ding XX submitted to the court an audio recording of a conversation between Ding XX and his lawyer and the staff of Shenzhen XX Property Management Co., Ltd. after the incident, to prove that the waterlogging was caused by rainwater backflow due to a blocked rainwater pipe. The content of the conversation showed that the parties primarily disputed whether the rainwater pipe was blocked by decoration waste causing the waterlogging. The staff of Shenzhen XX Property Management Co., Ltd. did not deny the fact that the waterlogging was caused by the blocked rainwater pipe. As this evidence was formed when Ding XX returned to Shenzhen on June 20, 2007, and communicated with Shenzhen XX Property Management Co., Ltd. the next day, it was close in time to the incident, before litigation commenced, and the conversation generally reflected the true intentions of both parties, possessing strong credibility and capable of proving the cause of the waterlogging incident. Witness Huang XX personally experienced the process of both parties inspecting the scene after the incident, and his testimony regarding the blocked rainwater pipe was relatively truthful and credible. The above evidence corroborated each other, confirming that the waterlogging was caused by rainwater backflow due to a blocked rainwater pipe. Although Shenzhen XX Property Management Co., Ltd. denied that the blocked rainwater pipe was the cause of the waterlogging, it provided no contrary evidence, nor did it apply to the court for an appraisal of the cause. Moreover, while denying the fact of the blocked rainwater pipe, it also claimed that Ding XX's improper decoration caused the blockage, which was contradictory and unreasonable, and thus not accepted.

Additionally, regarding the scope of property management duties of Shenzhen XX Property Management Co., Ltd., the "Property Management Contract" signed on May 17, 2007, between Shenzhen XX Property Management Co., Ltd. and the XX Garden Owners' Committee stipulated in Article 2 "Entrusted Management Matters" that the common facilities and equipment of the building's main structure, including shared water supply and drainage pipes and downpipes, were to be repaired, maintained, managed, and operated by Shenzhen XX Property Management Co., Ltd.

Furthermore, Ding XX admitted during the trial that at the time of the incident, Ding XX and his family were not in Shenzhen, and the property was vacant. Shenzhen XX Property Management Co., Ltd. had notified Ding XX by phone on May 10, 2007, about water seepage in the unit below, and subsequently contacted Ding XX several times. Ding XX did not discover the waterlogging until returning to Shenzhen from elsewhere on June 20, 2007.

Additionally, during the trial, the court commissioned Shenzhen XXX Asset Appraisal Land and Real Estate Appraisal Consulting Co., Ltd. (hereinafter referred to as the appraisal company) to assess the damage to the property caused by the waterlogging. On October 30, 2007, the appraisal company issued the "Asset Appraisal Report" (Shen XX Appraisal Report No. 2-31005), determining the property loss at 68,865 yuan, including repair costs of 58,364.9 yuan and Ding XX's rental loss during the renovation period of 10,500 yuan (calculated at 3,500 yuan per month for 3 months). During the trial's evidence examination, neither party raised objections to the appraisal report.

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The court of first instance held that the "Property Management Contract" signed by the XX Garden Owners' Committee on behalf of all owners and Shenzhen XX Property Management Co., Ltd. was legally valid and binding. As an owner within this property management area, Ding XX legally enjoys the rights under this property management contract, and Shenzhen XX Property Management Co., Ltd. shall provide property services to the owner in accordance with the contract terms. According to the contract, the repair, maintenance, management, and operational services for shared water supply and drainage pipes, including downpipes, are the responsibility of Shenzhen XX Property Management Co., Ltd. The daily maintenance and management of rainwater pipes fall within the scope of their property management duties. To ensure the normal operation of rainwater pipes, Shenzhen XX Property Management Co., Ltd. should regularly inspect and clear them. Shenzhen XX Property Management Co., Ltd. failed to fulfill these obligations under the property service contract, leading to rainwater backflow and flooding, causing property damage to Ding XX. Therefore, Shenzhen XX Property Management Co., Ltd. shall bear liability for compensation. After receiving a phone call from Shenzhen XX Property Management Co., Ltd. on May 10, 2007, regarding water leakage in the downstairs unit, Ding XX did not take sufficient notice and delayed returning home to inspect the leakage until June 20, 2007, thus bearing some responsibility for the expansion of the water damage and shall bear 30% of the losses. The industrial and commercial inquiry fees, postage, and transportation expenses incurred by Ding XX for the lawsuit are not direct losses caused by Shenzhen XX Property Management Co., Ltd.'s breach of contract. Ding XX's claim for compensation for these losses lacks legal basis and is not supported. In accordance with Articles 8, 107, and 119(1) of the Contract Law of the People's Republic of China, and Articles 15(2) and 36 of the Property Management Regulations, the judgment is as follows: 1. The property management contract relationship between Ding XX and Shenzhen XX Property Management Co., Ltd. is valid; 2. Shenzhen XX Property Management Co., Ltd. shall compensate Ding XX for economic losses caused by the water damage in the amount of 48,205.5 yuan (compensation amount = total loss of 68,865 yuan × 70%) within 10 days from the effective date of this judgment; 3. Ding XX

After the judgment, Shenzhen XX Property Management Co., Ltd. refused to accept it and filed an appeal with this court. The appeal states: First, the first-instance judgment had unclear factual findings. 1. The appellee could not prove that he was not in Shenzhen when water entered his apartment. During the first-instance trial, the appellee only provided a boarding pass without a year, only showing the month and date, with an unclear ID number. There was no other evidence to prove that he was not in Shenzhen from mid-to-late May to early June 2007, let alone that no one was living in his apartment. Therefore, the appellee should bear responsibility for failing to clean up the water ingress and for the resulting increased losses. 2. The appellee should bear the burden of proving that the water entering his apartment was rainwater. According to the principle of "who claims, who provides evidence" under the Civil Procedure Law and Article 2 of the Supreme People's Court's Provisions on Evidence in Civil Proceedings, a party has the responsibility to provide evidence for the facts on which its claims are based. Based on these legal provisions, the appellee failed to provide evidence that the water entering his apartment was rainwater and should bear the legal consequences of failing to provide evidence. From May 10, 2007, when the appellant's management staff notified the appellee that water from his apartment was leaking into the unit below, to the afternoon of June 21, 2007, when the appellee negotiated with the appellant's management staff (as evidenced by the appellee's recording), nearly a month and a half had passed (because the appellee had illegally installed a water pipe on his balcony, the water entering the apartment could also have come from the pipe). By the time the appellee discussed the water ingress with the appellant's management staff, there was no longer any water in the apartment. Therefore, the appellee should legally bear the burden of proving what type of water entered the apartment. 3. The appellee did not have a certificate of acceptance for the renovation, so he could not prove that his renovation did not block the rainwater pipe. From the evidence provided by the appellee to the first-instance court, it can be seen that the appellee and the renovation company did not have a certificate of acceptance. According to Article 30, Paragraph 1 of the Measures: "After the completion of residential interior decoration and

It is determined that the appellee did not sign a decoration and renovation management service agreement with the appellant, and thus the appellant has no obligation to provide services for the appellee's renovation. On the contrary, according to Article 30, Paragraph 1 of the "Measures," the appellee is obligated to clear the rainwater pipe that it blocked. Since the appellee failed to do so, resulting in the blockage of the rainwater pipe, the appellee should be held legally responsible. If any damage occurs, the appellee should bear the liability, and the appellant should not assume any responsibility. 6. The failure of the first instance to add additional defendants and conduct an on-site inspection resulted in the facts of the case not being clarified. The rainwater pipe is also a shared pipe for seven homeowners. Based on the audio evidence provided by the appellee, it can be proven that the blockage of the rainwater pipe was caused by renovation waste. Recently, only the appellee has been renovating their home, and the upstairs homeowners should also prove that they are not responsible for the blocked rainwater pipe. The appellant requested the first-instance court to add Shenzhen XX Property Management Co., Ltd. as a defendant and conduct an on-site inspection to verify the authenticity of the photos provided by the appellant. The purpose is twofold: First, to prove that the rooftop involved in this case is very clean, has not been modified recently, and it is impossible for renovation waste to enter the rainwater pipe from the rooftop. The rainwater pipe in question has a mesh at its entrance, preventing debris and other items from entering. If the rainwater pipe is blocked, it can only be caused by users during use. If the upstairs homeowners of the appellee caused the blockage, they should bear responsibility; if the appellee's renovation caused the blockage, the appellee should bear responsibility. Second, the appellant did not mismanage the rainwater pipe. On the contrary, the fact that a gap was opened at the lower end of the rainwater pipe for unclogging demonstrates the appellant's management of the problematic pipe. Thus, the first-instance court's decision to hold the appellant liable for compensation without clarifying the facts lacks factual and legal basis. 7. The witness has an interest in the appellee, and their testimony should not be accepted. The witness called by the appellee is an employee of the appellee and has an interest in the appellee. Therefore, the witness's testimony is biased and

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II. The judgment of the first instance erred in the application of law, and this case should be adjudicated in accordance with the "Measures for the Administration of Interior Decoration and Renovation of Residential Buildings." When applying the law to determine the facts and render a judgment, the court should first apply specialized legal provisions. The "Measures for the Administration of Interior Decoration and Renovation of Residential Buildings" (Ministry of Construction Order No. 110), effective as of May 1, 2002, is a specialized legal regulation concerning interior decoration and renovation. In adjudicating this case, the court should prioritize this law over others. This law serves as the legal basis for determining matters related to interior decoration and renovation of residential buildings, including the legal relationships in the management of such activities, the acceptance of interior decoration and renovation, and the rights and obligations between the renovator and the renovation enterprise. The appellee engaged in serious illegal acts during the interior decoration and renovation process and failed to conduct a comprehensive acceptance inspection with the renovation personnel in accordance with this law (no evidence of acceptance was provided), nor was there any clarification regarding the unclogging of the rainwater pipe. In determining the facts, the court should have applied this law to adjudicate the case. The first instance court's failure to apply this legal provision in determining and adjudicating the case constitutes an error in the application of law. In summary, the first instance court found that the blockage of the rainwater pipe caused water ingress into the appellee's premises and ordered the appellant to bear liability for compensation. However, it failed to recognize the appellee's responsibility for violating the "Measures for the Administration of Interior Decoration and Renovation of Residential Buildings" and blocking the rainwater pipe, thereby protecting the appellee's illegal acts. This constitutes a failure to clearly ascertain the facts. The first instance court's failure to apply the "Measures for the Administration of Interior Decoration and Renovation of Residential Buildings" in adjudicating this case is an error in the application of law. The appellant requests that the court of second instance ascertain the facts of this case in accordance with the law and dismiss all claims of the appellee. III. Regarding the burden of proof, the appellee has no evidence to support its factual claims, such as whether the water was tap water or rainwater, nor is there any evidence to show the weather conditions during the relevant period. IV. On the issue of

The appellee, Ding XX, argues in defense: First, the first-instance judgment has clear findings of fact and correct application of law, and requests that the original judgment be upheld. Second, the appellant’s grounds for appeal are untenable, lacking factual and legal basis, and should be dismissed according to law. The appellant’s claim of unclear factual findings is unfounded. The appellant has presented eight grounds for appeal, which are self-contradictory. The second ground states that the damage to the house was caused by rainwater, while the third, fourth, and fifth grounds all presuppose the occurrence of rainwater backflow. Moreover, the court of first instance, based on the evidence presented by both parties and the trial proceedings, has already rendered a fair judgment. The appellant’s representative supplemented additional grounds for appeal, the first part of which denies rainwater backflow, identical to the first ground of appeal. This case involves property damage arising from a property management contract. As the owner, a party to the contract, the appellant has the right to choose between a claim for breach of contract or tort. However, the fundamental legal relationship between the parties is based on the property management contract. Therefore, the...

The argument that the case nature was improperly changed is untenable. The appellant had already submitted audio evidence during the first instance trial, confirming the issue of rainwater backflow. The appellant attributed the responsibility for the rainwater backflow to the renovation that occurred six months prior. However, the renovation approval form submitted by the appellant indicates that the appellee's renovation activities were entirely under the appellant's management and control. As for the witness testimony, both its form and content comply with legal requirements. Therefore, the appellant's objection to the admissibility of the evidence solely based on the witness's identity is one-sided and extreme, and cannot serve as grounds for excluding this evidence. Regarding the appraisal report, it was produced by a third party commissioned by the court through notarized and professional procedures. The rental costs for the property are a necessary and inevitable expense arising from the restoration process of the damaged property in this case. Thus, including this loss in the appraisal is within the scope of the entrusted evaluation and does not exceed it. The first-instance court's decision to admit this evidence is reasonable and lawful. The first reason stated in the first part of the appellant's appeal is untenable. Ding XX and Shenzhen XX Property Management Co., Ltd. are the parties to the property management contract. The appellant's claim that the case should be adjudicated in accordance with the legal provisions of the Residential Renovation Management Measures is also untenable.

The facts found by this court are consistent with those found in the original judgment, and this court confirms the facts found in the original judgment.

This court holds that the "Property Management Contract" signed by the XX Garden Owners' Committee on behalf of all owners and Shenzhen XX Property Management Co., Ltd. is legally valid and legally binding. The original court correctly applied the law in finding that Ding XX, as an owner within the property management area, is entitled to the rights under the property management contract. Shenzhen XX Property Management Co., Ltd. shall provide property services to the owners in accordance with the property management contract. According to the contract, the repair, maintenance, management, and operation services for the shared water supply and drainage pipes and downspouts are the responsibility of Shenzhen XX Property Management Co., Ltd., and the daily maintenance and management of rainwater pipes fall within the scope of its property management duties. To ensure the normal operation of rainwater pipes, Shenzhen XX Property Management Co., Ltd. shall regularly inspect and clear them. The failure of Shenzhen XX Property Management Co., Ltd. to fulfill these property service contract obligations led to rainwater backflow causing flooding, resulting in property damage to Ding XX. The original court correctly applied the law in ordering Shenzhen XX Property Management Co., Ltd. to bear compensation liability.

In summary, the original judgment has clear factual findings and correct application of law, and should be upheld. The appellant's grounds for appeal are unfounded and should be dismissed. Pursuant to Article 153, Paragraph 1, Item (1) of the Civil Procedure Law of the People's Republic of China, the judgment is as follows: Appeal dismissed, original judgment affirmed. The second-instance case acceptance fee of RMB 1,005 shall be borne by the appellant. This judgment is final.

Presiding Judge Xu XX

Judge Ke XX

Acting Judge Yang XX

Clerk Cai XX

Intermediate People's Court of Shenzhen City, Guangdong Province

June 27, 2008