Leung Moon Cheung v. 中國海外物業服務有限公司

HCSA 17/2020 and
HCSA 37/2020
(Consolidated)

[2022] HKCFI 937

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 17 OF 2020 and 37 OF 2020

(ON APPEAL FROM SMALL CLAIMS TRIBUNAL CLAIM

NO 34437 OF 2019)

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(Consolidated by the Order of the Honourable Mr Justice Poon dated
27 November 2020)

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JUDGMENT

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INTRODUCTION

1.This is the Claimant’s appeal and the Defendant’s cross appeal against the decisions of Deputy Adjudicator Ms Ching Wai Ying, Eliza (“Adjudicator”) in SCTC 34437/2019 at the Small Claims Tribunal (“Tribunal”). In her decisions, the Adjudicator refused to award part of the Claimant’s claims for overpayment of management fees and on the other hand, rejected the Defendant’s defence of estoppel, acquiescence and/or waiver.

2.At the hearing of the present appeal, the parties agreed that the Adjudicator was mistaken in not properly assessed the overpayments and the only issue remains for determination is whether the Adjudicator was wrong in rejecting the Defendant’s defence.  If the Claimant succeeds, he shall be awarded the whole sum^[1]. And if the Defendant succeeds, the whole claim of the claimant shall be dismissed.

BACKGROUND

3.At the material times, the Defendant has been the building manager of the multi-storey building where the Claimant’s property (Flat 603, Xing Hua Centre, 433 Shanghai Street, Mong Kok) is situated. 

4.In a previous case of SCTC 23399/2018 at the Tribunal, the Defendant sued the Claimant unsuccessfully for alleged arrears in management fees.  In that case, Deputy Adjudicator Mr G T Lung (as he then was) found that the Defendant had adopted a method of calculation of management fees not in accordance with the DMC and the Claimant had in fact overpaid in the past.

5.As a result of the ruling of Mr Lung, the Claimant brought his claim under the present case for management fees overpaid to the Defendant during the period between August 2013 and January 2019 and interests accrued thereon.

THE DEFENDANT’S DEFENCE

6.The Defendant relied on the doctrine of estoppel by convention as applied by His Honour Judge Lam (as Lam PJ then was) in the Lands Tribunal^[2] and approved by the Court of Appeal in the case 麗苑業主立案法團對韓炳基及另一人^[3]. 

7.This case concerned an amount of “reserved fees” the levy of which had not been properly resolved in an owners’ meeting.  The applicant had paid for the said fees for more than 6 years and claimed the Incorporated Owners (“IO”) for refund.  The court held that it would be unjust to the IO and other owners should he be allowed to do so. 

8.The same principle has been followed by numerous other cases^[4] in the Lands Tribunal including claims on refund of management fees calculated not in accordance with the DMC. 

9.Ms Becky Wong, counsel for the Defendant, submitted that the managements fees were paid by all owners on the common assumption between the owners, including the Claimant, and the Defendant that the management fees were charged in accordance with the DMC.  The money was spent for the benefits of all owners.  It would be unjust to allow the Claimant to now claim for refunds.

DISCUSSION

10.The Claimant and other owners had all along been paying management fees calculated from a wrong footing.  It was not until the ruling of Mr Lung that the Defendant realized they made a mistake.   Obviously there existed a common assumption between the owners, including the Claimant and the Defendant, that the management fees were charged in accordance with the DMC.

11.Mr Dan Leung, counsel for the Claimant, submitted that the present case can be distinguished from the cases relied on by the Defendant.  Mr Leung submitted that the other cases involved Incorporated Owners which can represent the owners whereas the Defendant is a property manager charging fees.

12.Mr Leung also submitted that the Claimant has no knowledge of the mistake on calculation of the management fees and hence did not acquiesce to paying the wrong fees.

13.It is also Mr Leung’s submission that the Adjudicator has made a finding of fact that the Claimant had not consented, accepted, acquiesced and/or waived the overpayment of management fees which cannot be disturbed on appeal.

14.I disagree with Mr Leung.  The principle of estoppel by convention is that, in simple terms, there existed a common assumption between the parties which had been acted upon for such time that a party’s deviation from which is unjust and unconscionable.

15.The matters mentioned by Mr Leung have not much relevance on the operation of the principle. 

16.Although to arrive at a decision the Adjudicator must make certain findings of fact for the principle to operate, the issue as to whether an estoppel or acquiescence exists is a matter of law and facts.  In my judgment, the Adjudicator did not have a proper understanding of the law in approaching the issue.

17.There was a clear common assumption between all owners and the Defendant that the management fees were calculated in accordance with the DMC and such assumption had been acted upon for so many years.  As submitted by Ms Wong, it would be unjust to the other owners and the Defendant to allow the Claimant to, in a sense, deviate from the common assumption in asking for refund of the management fees.

18.In my judgment, an estoppel by convention had been clearly made out.

DISPOSITION

19.The appeal of the Defendant sustained.  The awards of the Adjudicator quashed.

20.As the Claimant succeeded on the issue of quantum of the award, I make an order nisi that 50% of the Defendant’s costs of the appeal be borne by the Claimant, to be taxed if not agreed.

Mr Leung, Dan, instructed by Yip, Tse & Tang, for the claimant.

Ms Wong, Becky B.Y., instructed by Chung & Kwan, for the defendant.