MCST No 473 v De Beers: Recovery of Payments & Maintenance Obligations

In Management Corporation Strata Title No 473 v De Beers Jewellery Pte Ltd, the High Court of Singapore heard a claim by the Management Corporation Strata Title No 473 ('the MC') against De Beers Jewellery Pte Ltd ('De Beers') for unpaid maintenance contributions. De Beers counterclaimed for reimbursement of $370,000, alleging unjust enrichment by the MC, who had unlawfully demanded the sum as a condition for approving conversion works. De Beers also sought a declaration regarding the maintenance of the roof above their units. The court found that the payments were unlawful and recoverable as money had and received under a mistake of law. The court also declared that the MC, not De Beers, was legally obliged to maintain the roof.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Order accordingly.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

MCST No 473 sued De Beers for unpaid fees; De Beers counterclaimed for unjust enrichment, seeking recovery of payments made under mistake of law and a declaration regarding roof maintenance.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Management Corporation Strata Title No 473PlaintiffCorporationPartialPartial
De Beers Jewellery Pte LtdDefendantCorporationWonWon

3. Judges

Judge NameTitleDelivered Judgment
Judith PrakashJudgeYes

4. Counsels

Counsel NameOrganization
Benjamin SimKelvin Chia Partnership
Harpreet SinghDrew & Napier
Gerald KuppusamyDrew & Napier

4. Facts

  1. The MC is the management corporation of People`s Park Complex.
  2. De Beers owns 18 residential units in People`s Park Complex.
  3. De Beers paid the MC $200,000 in January 1992 as a contribution towards lift modernisation.
  4. De Beers paid the MC $170,000 in August 1993 towards the cost of maintaining new common property.
  5. The MC demanded these payments as a condition for approving De Beers`s conversion works.
  6. De Beers converted four penthouse units into 18 maisonette units.
  7. The roof above the 18 units was not reflected in the strata title plan as being part of any of the lots.
  8. The MC sought to impose a condition that De Beers maintain the roof above the 18 units.

5. Formal Citations

  1. Management Corporation Strata Title No 473 v De Beers Jewellery Pte Ltd, Suit 1053/2000, [2001] SGHC 206

6. Timeline

DateEvent
People`s Park Complex completed.
De Beers purchased four penthouse units at a mortgagee sale.
De Beers requested the MC`s approval for conversion work.
Sub-committee of the MC discussed the proposed conversion of the four penthouses.
Council of the MC decided to proceed with modernisation of the existing lifts.
The MC wrote to De Beers stating it had no objection to the proposed conversion subject to certain terms and conditions.
De Beers submitted renovation plans to the MC for endorsement.
The MC replied that they were prepared to approve the renovation plans only on receipt of De Beers`s undertaking to comply with the various terms and conditions set out in their letter.
De Beers accepted the condition that the roof of each maisonette was to be maintained by the individual owner of the maisonette at the latter`s own cost.
De Beers paid $200,000 to the MC.
Extraordinary general meeting of the MC was called to approve certain special works.
De Beers submitted strata subdivision plans for the MC`s endorsement.
Council meeting was held to discuss De Beers`s plans for subdivision of the strata title lots.
Mr Wong`s estimate was given to the council.
Mr Wong wrote to De Beers setting out the terms and conditions imposed by the council for endorsement of the strata subdivision plans.
De Beers replied with a counter-offer of $100,000.
Mr Ow was invited to attend the council meeting.
The council agreed to reduce the contribution to $170,000.
De Beers paid $170,000.
The MC commenced action against De Beers to recover arrears of maintenance contributions and other payments.
The MC obtained judgment for the principal amount of their claim but execution on the judgment was stayed until the trial of De Beers` counterclaim.
Decision Date

7. Legal Issues

  1. Mistake of Law
    • Outcome: The court held that the rule precluding recovery of money paid under mistake of law could no longer be maintained and recognition should be given to a general right to recover money paid under mistake, whether of fact or law, subject to the defences available in the law of restitution.
    • Category: Substantive
    • Sub-Issues:
      • Recoverability of payments made under mistake of law
    • Related Cases:
      • [1998] 4 All ER 513
  2. Unjust Enrichment
    • Outcome: The court found that the MC had been unjustly enriched by the payments made by De Beers.
    • Category: Substantive
  3. Laches
    • Outcome: The court held that De Beers was not barred from recovery on the ground of laches.
    • Category: Procedural
  4. Estoppel
    • Outcome: The court held that the defence of estoppel was not available to the MC.
    • Category: Procedural
  5. Change of Position
    • Outcome: The court held that the defence of change of position was not available to the MC.
    • Category: Procedural
  6. Management Corporation's Powers
    • Outcome: The court found that the MC did not have the power to levy the charges in the manner they did.
    • Category: Substantive
  7. Maintenance of Common Property
    • Outcome: The court declared that the MC, not De Beers, was legally obliged to maintain the roof above the 18 units.
    • Category: Substantive
  8. Intention to Create Legal Relations
    • Outcome: The court found that there was no intention to create legal relations between the parties, as De Beers was in the position of an applicant for a license and the MC was in the position of the issuing authority.
    • Category: Substantive

8. Remedies Sought

  1. Return of $370,000
  2. Interest on sums awarded
  3. Declaration that the MC is legally obliged to maintain the roof
  4. Declaration that De Beers is not legally obliged to register any covenant in respect of the roof maintenance

9. Cause of Actions

  • Money had and received
  • Unjust enrichment

10. Practice Areas

  • Commercial Litigation
  • Real Estate Law

11. Industries

  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
MCST No 980 v Yat Yuen Hong CoCourt of AppealYes[1993] 1 SLR 555SingaporeCited to emphasize the essential feature of the Land Titles (Strata) Act, which is the levying of contributions in proportion to share value.
Jacklin v Proprietors of Strata Plan No 2795Holland JYes[1975] 1 NSWLR 15New South WalesCited to support the principle that the financial burden of common property is to be shared by all proprietors in common in shares according to their respective unit entitlements.
Kleinwort Benson v Lincoln City CouncilHouse of LordsYes[1998] 4 All ER 513EnglandCited as the primary authority for the abrogation of the mistake of law rule, establishing a general right to recover money paid under mistake, whether of fact or law.
Bilbie v LumleyLord EllenboroughYes[1802] 2 East 469EnglandCited as the origin of the common law rule that payments made under a mistake of law were not recoverable, which was later overturned by Kleinwort Benson.
Kelly v SolariUnreportedYes[1835-42] All ER Rep 320EnglandCited as a case that approved Bilbie v Lumley, reinforcing the mistake of law rule.
Serangoon Garden Estate v Chye MarianUnreportedYes[1959] MLJ 113SingaporeCited as an example of the application of the common law rule regarding mistake of law in Singapore.
Borneo Motors (S) v William Jacks & Co (S)Court of AppealYes[1992] 2 SLR 881SingaporeCited to show that the Court of Appeal observed that the law requires a person who receives money, to which he is not entitled, to repay the person who paid it, unless the mistake is one of law.
Air Canada v British ColumbiaSupreme Court of CanadaYes[1989] 1 SCR 1161CanadaCited as an example of a common law jurisdiction that abolished the mistake of law rule.
David Securities v Commonwealth Bank of AustraliaHigh Court of AustraliaYes[1992] 175 CLR 353AustraliaCited as an example of a common law jurisdiction that abolished the mistake of law rule.
Woolwich Equitable Building Society v IRCUnreportedYes[1993] AC 70South AfricaCited as an example of a common law jurisdiction that abolished the mistake of law rule.
Woolwich Equitable Building Society v IRCHouse of LordsYes[1993] AC 70EnglandCited to show that the case contained a detailed review of the colore officii line of cases and extended the principle of those cases so as to allow a building society to recover tax payments which had been levied on it pursuant to legislation which turned out to be ultra vires, although the payments were made voluntarily rather than by reason of compulsion imposed by the revenue authority.
British South Africa Co v De Beers Consolidated MinesUnreportedYes[1910] 2 Ch 502EnglandCited as authority for the proposition that an exclusive right granted by a landowner to a third party to exercise rights over his land is not a `monopoly`.
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour LtdLord WrightYes[1942] 2 All ER 122EnglandCited to show that any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is to prevent a man from retaining the money of or some benefit derived from another which it is against conscience that he should keep.
Westdeutsche Landesbank Girozentrale v Islington London BCLord Browne-WilkinsonYes[1996] 2 All ER 961EnglandCited to show that the common law restitutionary claim is based not on implied contract but on unjust enrichment: in the circumstances the law imposes an obligation to repay rather than implying an entirely fictitious agreement to repay.
Lipkin Gorman v KarpnaleUnreportedYes[1991] 2 AC 548EnglandCited to show that change of position is a distinct defence to a claim for restitution.
Seagate Technology v Goh Han KimCourt of AppealYes[1995] 1 SLR 17SingaporeCited to show that the availability of the defence of change of position depends on whether the defendant`s position has so changed that it would be inequitable in all the circumstances to require him to make restitution or restitution in full to the plaintiffs.
Beale v KyteNeville JYes[1907] 1 Ch 564EnglandCited to show that in all cases of mistake in order that laches or acquiescence may be a defence there must be notice of the error, and time runs from the date of the notice and not from the time when the errors is committed.
Rees v De BernardyRomer JYes[1896] 2 Ch 437EnglandCited to show that where a person has once a right to rescind a contract he does not lose that right merely by acting upon it or by delay in impeaching it, so long as he remains in ignorance of his right and the position of parties remains substantially the same.
Ching Mun Fong v Liu Cho ChitWoo Bih Li JCYes[2000] 4 SLR 610SingaporeCited to show that the claim there for moneys had and received was founded on an oral contract even though the subject matter of the contract did not materialise.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Land Titles (Strata) Act (Cap 158, 1999 Ed)Singapore
s 3 Land Titles (Strata) Act (Cap 158, 1999 Ed)Singapore
s 12 Land Titles (Strata) Act (Cap 158, 1999 Ed)Singapore
s 30(2) Land Titles (Strata) Act (Cap 158, 1999 Ed)Singapore
s 42 Land Titles (Strata) Act (Cap 158, 1999 Ed)Singapore
s 48 Land Titles (Strata) Act (Cap 158, 1999 Ed)Singapore
Limitation Act (Cap 163, 1996 Ed)Singapore
s 6 Limitation Act (Cap 163, 1996 Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Management corporation
  • Subsidiary proprietor
  • Strata title
  • Common property
  • Mistake of law
  • Unjust enrichment
  • Conversion
  • Subdivision
  • Lift modernisation
  • Roof maintenance
  • Laches
  • Estoppel
  • Change of position

15.2 Keywords

  • Management corporation
  • Strata title
  • Mistake of law
  • Unjust enrichment
  • Common property
  • Singapore

17. Areas of Law

Area NameRelevance Score
Strata Titles90
Restitution85
Property Law80
Contract Law75
Chancery and Equity70
Mistake of Law70
Money had and received65
Administrative Law60
Colore Officii50
Laches45
Civil Procedure40
Estoppel40
Change of position35
Construction Law30

16. Subjects

  • Restitution
  • Strata Titles
  • Contract Law
  • Real Property Law