Overpayment of management fees: acquiescence

In Wong Pun-Man v Tung Fat Industrial Building (IO) ([1996] 1 HKDLR 32, LT) a DMC provided for the payment of management fees by the owners of the shops and flats in the building. The flats initially paid management fees at a higher rate than the shops. The DMC provided for any increases to be ‘in like proportion’. The increases were unanimously agreed at annual owners’ meetings. Copy notices of the revised fees were then prominently displayed in the building and sent to each owner. For several years, the fees were not increased ‘in like proportion’ and the fee increases for the shops were steeper than for the flats. The shop owners made the payments demanded but then realised that the DMC had not been followed and sought to recover the over-payments. They failed; they had acquiesced in the over-payments. They knew (or must be taken to have known) of the terms of the DMC and had paid nonetheless. There had been detrimental reliance and it would be unconscionable to re-open the accounts.

The Tribunal left open the questions as to whether the effect of the acquiescence was merely suspensory (having no effect on future rights) and as to the impact of the (the new) Building Management Ordinance from 1994 onwards.

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