Management Corporation v De Beers: Recovery of Unlawful Payments for Condo Conversion

In a suit before the High Court of Singapore, Management Corporation Strata Title No 473 (the MC) sued De Beers Jewellery Pte Ltd (De Beers) to recover arrears of maintenance contributions. De Beers counterclaimed for reimbursement of $370,000, alleging unjust enrichment due to unlawful payments demanded by the MC as a condition for approving conversion works. Judith Prakash J ruled in favor of De Beers, finding the payments unlawful and ordering their repayment with interest, and declared that the MC was responsible for maintaining the roof above De Beers' units.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Defendant on Counterclaim

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

MCST sued De Beers for arrears. De Beers counterclaimed for unlawful payments extracted for conversion approval. Court ruled for De Beers.

1.7 Decision Date

30 July 2001

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Management Corporation Strata Title No 473	Plaintiff	Corporation	Partial	Partial	Benjamin Sim
De Beers Jewellery Pte Ltd	Defendant	Corporation	Won	Won	Harpreet Singh, Gerald Kuppusamy

3. Judges

Judge Name	Title	Delivered Judgment
Judith Prakash	Judge	Yes

4. Counsels

Counsel Name	Organization
Benjamin Sim	Kelvin Chia Partnership
Harpreet Singh	Drew & Napier
Gerald Kuppusamy	Drew & Napier

4. Facts

The MC sought to recover arrears of maintenance contributions from De Beers.
De Beers counterclaimed for reimbursement of $370,000, alleging unjust enrichment.
De Beers had converted four penthouse units into 18 maisonette units.
The MC demanded $200,000 for lift modernization and $170,000 for maintenance of new common property.
De Beers paid the amounts to obtain the MC's approval for the conversion.
The MC did not obtain approval from the Commissioner of Buildings for the additional contributions.
The roof above the 18 units was common property.

5. Formal Citations

Management Corporation Strata Title No 473 v De Beers Jewellery Pte Ltd, Suit 1053/2000, [2001] SGHC 207

6. Timeline

Date	Event
1970-01-01	People's Park Complex completed.
1988-09-01	De Beers purchased four penthouse units at a mortgagee sale.
1988-12-01	De Beers instructed architects to commence work on the conversion process.
1989-01-18	De Beers requested the MC's approval for the conversion work.
1989-01-25	Sub-committee of the MC discussed the proposed conversion.
1989-04-10	Council of the MC decided to proceed with modernisation of the existing lifts.
1989-04-13	MC stated terms and conditions for conversion approval.
1990-04-03	MC replied to formal renovation plans.
1990-04-20	De Beers accepted condition to maintain the roof.
1992-01-01	De Beers paid $200,000 to the MC.
1992-09-01	Extraordinary general meeting of the MC was called to approve certain special works.
1993-02-01	De Beers submitted strata subdivision plans for the MC’s endorsement.
1993-02-19	Council meeting held to discuss De Beers’ plans for subdivision.
1993-03-23	Mr. Wong’s estimate given to the council.
1993-05-05	Mr. Wong wrote to De Beers setting out the terms and conditions imposed by the council.
1993-06-28	De Beers replied with a counter-offer of $100,000.
1993-07-23	Mr. Ow attended the council meeting.
1993-08-17	Council agreed to reduce the contribution to $170,000.
1993-08-25	De Beers paid $170,000.
2000-12-01	The MC commenced action against De Beers.
2001-02-19	The MC's application for summary judgment was heard.
2001-07-31	Judgment delivered.

7. Legal Issues

Unjust Enrichment
- Outcome: The court found that the MC had been unjustly enriched by the payments made by De Beers.
- Category: Substantive
Mistake of Law
- Outcome: The court held that payments made under a mistake of law are recoverable.
- Category: Substantive
Validity of Charges Levied by Management Corporation
- Outcome: The court held that the MC had no power under the Act to levy the $200,000 contribution on De Beers and acted unlawfully in not complying with the requirements of s 42(5) regarding the $170,000 contribution.
- Category: Substantive
Responsibility for Maintaining Common Property
- Outcome: The court declared that it is the MC and not De Beers who is legally obliged to maintain the roof above the 18 units.
- Category: Substantive
Laches
- Outcome: The court held that De Beers is not barred on the ground of laches.
- Category: Procedural
Estoppel
- Outcome: The court held that estoppel was not available as a defence because the essential element of representation is absent.
- Category: Procedural
Change of Position
- Outcome: The court held that the MC is not entitled to rely on this defence.
- Category: Procedural

8. Remedies Sought

Return of $370,000
Interest on sums awarded
Declaration regarding obligation to maintain the roof
Declaration regarding covenant in respect of strata certificates of title

9. Cause of Actions

Unjust Enrichment
Money Had and Received

10. Practice Areas

Commercial Litigation
Real Estate Law

11. Industries

Real Estate

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
MCST No. 980 v Yat Yuen Hong Co Pte Ltd	Court of Appeal	Yes	[1993] 1 SLR 555	Singapore	Cited to emphasize the essential feature of the Act is the levying of contributions in proportion to share value.
Jacklin & Ors v Proprietors of Strata Plan No 2795	N/A	Yes	[1975] 1 NSWLR 152	New South Wales	Cited to support the principle that each proprietor has a right to have the body corporate's duty performed in relation to all of the common property at the cost and expense of all proprietors in proportion to unit entitlements.
Kleinwort Benson Ltd v Lincoln City Council	House of Lords	Yes	[1998] 3 WLR 1095	England	Cited as the authority that the rule precluding recovery of money paid under mistake of law could no longer be maintained.
Bilbie v Lumley	N/A	No	[1802] 2 East 469	N/A	Cited as the origin of the rule that payments made under a mistake of law were not recoverable.
Kelly v Solari	N/A	Yes	[1841] 9 M&W 54	N/A	Cited as a case that approved Bilbie v Lumley.
Serangoon Garden Estate Ltd v Marian Chye	N/A	Yes	[1959] MLJ 113	Singapore	Cited as an example of the common law rule being applied in Singapore.
Air Canada v British Columbia	Supreme Court of Canada	Yes	[1989] 1 SCR 1161	Canada	Cited as a case where the rule was abrogated in Canada.
David Securities Pte Ltd v Commonwealth Bank of Australia	High Court of Australia	Yes	[1992] 66 ALJR 768	Australia	Cited as a case where the rule was abrogated in Australia.
Willis Faber Enthoven (Pty) Ltd v Receiver of Revenue	N/A	Yes	[1992] (4) SA 202	South Africa	Cited as a case where the rule was abrogated in South Africa.
Borneo Motors (S) Pte Ltd v William Jacks & Co (S) Pte Ltd	Court of Appeal	Yes	[1992] 2 SLR 881	Singapore	Cited as a case where 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.
Woolwich Equitable Building Society v Inland Revenue Commissioners	N/A	No	[1993] AC 70	N/A	Cited as a case that contained a detailed review of the colore officii line of cases.
British South Africa Co v De Beers Consolidated Mines Ltd	N/A	No	[1910] 2 Ch 502	N/A	Cited as authority for the proposition that an exclusive right granted by a land owner to a third party to exercise rights over his land is not a ‘monopoly’.
Ching Mun Fong v Liu Cho Chit	N/A	No	[2000] 4 SLR 610	Singapore	Cited as a case where Woo Bih Li JC held that the claim there for monies had and received was founded on an oral contract even though the subject matter of the contract did not materialise.
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd	N/A	Yes	[1942] 2 All ER 122	N/A	Cited to support the principle that any civilised system of law is bound to provide remedies for cases of unjust enrichment.
Westdeutsche Landesbank Girozentrale v Islington London BC	N/A	Yes	[1996] 2 All ER 961	N/A	Cited to support the principle that the common law restitutionary claim is based not on implied contract but on unjust enrichment.
Beale v Kyte	N/A	Yes	[1907] 1 Ch 564	N/A	Cited to support the principle 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 Bernardy	N/A	Yes	[1896] 2 Ch 437	N/A	Cited to support the principle 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.
Lipkin Gorman v Karpnale	N/A	Yes	[1991] 2 AC 548	N/A	Cited to support the principle that change of position is a distinct defence to a claim for restitution.
Seagate Technology Pte Ltd v Goh Han Kim	Court of Appeal	Yes	[1995] 1 SLR 17	Singapore	Cited to support the principle that 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.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Land Titles (Strata) Act (Cap 158)	Singapore
Land Titles (Strata) Act (Cap 158) s 12(2)	Singapore
Land Titles (Strata) Act (Cap 158) s 42	Singapore
Land Titles (Strata) Act (Cap 158) s 42(5)	Singapore
Land Titles (Strata) Act (Cap 158) s 42(4)	Singapore
Land Titles (Strata) Act (Cap 158) s 42(6)	Singapore
Land Titles (Strata) Act (Cap 158) s 48	Singapore
Land Titles (Strata) Act (Cap 158) s 3	Singapore
Limitation Act (Cap 163) s 6	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Management Corporation
Subsidiary Proprietor
Common Property
Strata Title
Conversion
Unjust Enrichment
Mistake of Law
Laches
Estoppel
Change of Position

15.2 Keywords

strata title
management corporation
unjust enrichment
mistake of law
common property
conversion
Singapore

16. Subjects

Strata Title
Restitution
Real Property
Condominium Law

17. Areas of Law

Restitution
Strata Title Law
Contract Law
Administrative Law