Case Law[2023] ZAGPJHC 1401South Africa
Waterford Estate Homeowners Association NPC v Riverside Lodge Body Corporate and Others (24576/2021) [2023] ZAGPJHC 1401; [2023] 4 All SA 565 (GJ) (10 August 2023)
High Court of South Africa (Gauteng Division, Johannesburg)
10 August 2023
Headnotes
liable individually in accordance with their participation quota under the Memorandum of Incorporation and Articles of Association.
Judgment
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# South Africa: South Gauteng High Court, Johannesburg
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## Waterford Estate Homeowners Association NPC v Riverside Lodge Body Corporate and Others (24576/2021) [2023] ZAGPJHC 1401; [2023] 4 All SA 565 (GJ) (10 August 2023)
Waterford Estate Homeowners Association NPC v Riverside Lodge Body Corporate and Others (24576/2021) [2023] ZAGPJHC 1401; [2023] 4 All SA 565 (GJ) (10 August 2023)
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sino date 10 August 2023
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 24576/2021
(1)
REPORTABLE:
YES
/ NO
(2)
OF INTEREST TO OTHER JUDGES: YES/NO
(3)
REVISED: YES/NO
DATE:
10/08/2023
In the matter between:
WATERFORD
ESTATE HOMEOWNERS
ASSOCIATION
NPC
Applicant
and
RIVERSIDE
LODGE BODY CORPORATE
1
st
Respondent
101
OWNERS OF UNITS IN RIVERSIDE
2
nd
to 102
nd
Respondents
LODGE SECTION TITLE
SCHEME
MABASO
KHOSI
103
rd
Respondent
COMMUNITY
SCHEMES OMBUD SERVICE
104
th
Respondent
THE
CHAIRPERSON OF THE BOARD OF THE
105
th
Respondent
COMMUNITY SCHEMES
OMBUD SERVICE
THE
CHIEF
OMBUD OF THE COMMUNITY SCHEMES
106
th
Respondent
OMBUD SERVICE
THE
OMBUD FOR THE GAUTENG REGIONAL OFFICE
107
th
Respondent
THE MINISTER OF HUMAN
SETTLEMENTS
OF
SOUTH
AFRICA
108
th
Respondent
JUDGMENT
MAKUME,
J
:
Introduction
[1]
I
n this matter the applicant seeks an order
in the following terms:
1.1
Declaring section 39(1)(c) read with section 39(1)(e) of the
Community Schemes Ombud Services Act
[1]
(“the CSOS Act”) unconstitutional in so far as it affords
an Adjudicator power to:
a)
declare
that a contribution levied is “unreasonable”,
b)
grant
an order for the adjustment of a contribution to a reasonable amount;
and
c)
grant
an order for the payment or repayment of a contribution pursuant to a
declaration that a contribution levied is “unreasonable.”
1.2
Reviewing and setting aside certain decisions of the Adjudicator (the
103
rd
respondent) on the grounds as set out in section 6(2) of the
Promotion of Administrative Justice Act
[2]
(“PAJA”).
The parties
[2]
The applicant is a non-profit company and is the Home-Owners
Association of a residential development known as Waterford
Estate
which comprises of 328 residential units made up as follows:
a)
215
full title erven.
b)
101
Sectional Title Units in Riverside Lodge Sectional Title Scheme.
c)
12
Section Title Units in Waterford Villas Sectional Title Scheme.
[3]
The first respondent is a body corporate of the 101 Sectional Title
Units making up the Riverside Lodge Sectional Title
Scheme. Its
duties are set out in Section 3(1) of the Sectional Titles Schemes
Management Act
[3]
(“STSM”).
[4]
The second to 102
nd
respondents are the individual owners
in the Riverside Lodge Sectional Title Scheme.
[5]
The 103
rd
respondent is the Adjudicator appointed in terms
of section 21(2)(b) of the CSOS Act. It is the latter respondent
whose decisions
made in terms of section 51 and 54 of the CSOS Act
are sought to be reviewed by the Applicant.
[6]
The 104
th
to 108
th
respondents are the
statutory functionaries in terms of the CSOS Act and other related
constitutional and legislative measures
for purposes of administering
sectional title schemes.
Background
facts
[7]
It is common cause that sometime during the year 2005 issues arose
between the applicant and the first respondent regarding
contributions payable by the against the first respondent
claiming payment of the amount of R 160 514 plus interest
and
costs. A second set of summons was issued in which the applicant
claimed payment of R1 027 139.39 being for outstanding
levies for the period of 1 March 2006 to 1 February 2007.
[8]
A settlement agreement was concluded by the parties which agreement
catered for:
a)
Settlement
of historic debt.
b)
The
security expenses of the estate were divided as follows: 64% for the
west portion and 36% for the east portion.
c)
The
monthly levy to be paid by the first respondent to the applicant was
fixed at R 48 970 per month.
d)
A
formula was adopted which would henceforth be the only deciding
factor in determining levies to be paid by the first respondent
to
the applicant.
[9]
The first respondent is a scheme within the bigger Waterford area.
The estate as a whole is divided into east and west.
The first
respondent is situated on the west side being on the boundary along
Witkoppen Road it comprises of 24 blocks of apartments
totalling the
101 Sectional Title Units.
[10]
The settlement agreement was put into effect and as a result by
November 2008 the first respondent’s outstanding levies
had
been cleared. However, some years later during October 2015 the first
respondent fell into arrears with payments and owed the
applicant an
amount of R 105 854.37.
[11]
The applicant gave the first respondent notice of cancellation of the
settlement agreement. The Directors of the applicant
unilaterally
commenced to determine contributions payable by the Sectional Title
owners directly on the basis that such sectional
title owners were
members of the applicant. The first respondent as well as the
Sectional Title owners refused to make payment.
[12]
The applicant made application in terms of section 38 of the CSOS Act
against the respondents for payment of the contributions
levied on:
12.1 The first respondent
for the period of 1 January 2017 to the 28 February 2018 plus
interest.
12.2 Payment by Unit
Owners for the period commencing 1
st
March 2018 with
interest.
[13]
Ms Mabaso Khosi the 103
rd
respondent was duly appointed as
Adjudicator in terms of the provisions of section 48 of the CSOS Act.
The applicant sought relief
at Adjudication in terms of Section
39(1)(e) of the CSOS Act for:
13.1 Payment
of levies and contributions levied upon the respondents in accordance
with the settlement agreement and/or
the Memorandum of Incorporation
and Articles of Association.
13.2 That
such amounts to be paid by the first respondent on behalf of the
Sectional Title owners.
13.3
Alternatively that each of the Sectional Title Owners being second to
102
nd
respondents be held liable individually in
accordance with their participation quota under the Memorandum of
Incorporation and
Articles of Association.
13.4
Further in the alternative
and in terms of section 47 of the Sectional Title
Act of 1986:
a)
A determination under
section 39(3)(a) or (b) requiring the first respondent to record a
new Scheme Governance Provisions consistent
with the Memorandum of
Incorporation and Articles of Association of the applicant
specifically requiring the first respondent as
representative of the
Sectional Title Owners to collect and pay the applicant’s
levies payable by the owners to the applicant
once a month on or
before the 7
th
day of every month.
[14]
The first respondent filed its counterclaim for adjudication seeking
the following relief:
14.1 That it
be declared that the contributions levied by the applicant on the
respondents have been incorrectly determined
and thus unreasonable.
14.2 That the
contributions be adjusted to a correct or reasonable amount more
specifically that the levy be varied
on the proposition of gross
municipal valuation of each section currently being 9.94% premised on
a participation quota model.
[15]
The first respondent also raised three defences to the relief sought
by the applicant which defences dovetail with their counterclaim;
the
defences are:
15.1 That the
contributions in respect of the 2017 and 2018 financial year were not
calculated in accordance with the
agreed formula;
15.2 The
contributions levied on the unit owners since March 2018 are
unreasonable; and
15.3 The Unit
Owners are not members of Waterford and Waterford is accordingly not
entitled to claim contributions from
them directly;
15.4
Waterford is only entitled to claims contributions from Riverside for
non-payment to Waterford.
The adjudicator’s
findings and awards
[16]
On 10 March 2021 the Adjudicator made the following findings which
are now the subject of this review application:
16.1 The
first respondent was ordered to pay the sum of R 621 854.32 to the
applicant plus interest at the prescribed
rate of interest from date
of delivery of the order.
16.2 As
regard the counterclaim, the relief sought in terms of section
39(1)(e) of the CSOS Act is upheld and the applicant
is to repay the
sum of R44 034.44 in respect of the electricity consumption plus
interest thereon at the prescribed rate of
interest from 14 February
2020.
16.3 The
relief in terms of section 39(1)(e) of the CSOS Act is upheld and the
applicant is to pay the sum of R 939 151.56
to the respondents
plus interest thereon at the prescribed interest rate from date of
delivery.
16.4 The
amount held in security is to be refunded to the respondents with
interest earned thereon.
16.5 Each
party to pay own costs.
[17]
It is this decision that the applicant seeks to be declared
unconstitutional as well as to be reviewed and set aside on the
basis
that such decision amounts to administrative action as envisaged
under PAJA.
The defences
The
defences raised by the first, second to 102
nd
respondents
[18]
The respondents have raised the following points in
limine
:
18.1 That the
applicant has no
locus standi
on the basis that the
Adjudicator’s decision is not reviewable under PAJA. The
respondents argue that the relief sought by
the applicant is not
supported by any of the provisions contained under PAJA.
18.2 The
respondents maintain that the applicant has failed to establish a
cause of action in that the terms of the
Agreement concluded on the
14 October 2007 between the applicant and the first respondent
contained a clause that in the event
of a dispute such a dispute
would be referred to either the Chairperson of the Eagle Canyon Home
Owners Associations or the Chairperson
of the Dainfern Home Owners
Associates whose decision would be final. The applicant failed to
refer the dispute to agreed mediation
instead referred the matter to
the Ombudsman who in the interest of justice referred the matter for
Adjudication. The respondents
maintain that the Adjudicator’s
findings are final and binding on the parties.
18.3 The
respondents argue that the applicant’s review application is
malicious, frivolous and vexatious and is
nothing but a strategy to
delay payment to the respondents as ordered by the Adjudicator.
18.4 That the
applicant failed to exhaust internal remedies thus rendering the
application premature. This argument
is subject to a finding that the
application has been correctly brought in terms of PAJA which the
respondents dispute.
18.5 That the
review application has lapsed for failure to comply with the
provisions of section 7(1) or section 6(2)
of PAJA.
The
defence raised by 104
th
to 107
th
respondents
[19]
These respondents make common cause with the defences raised by the
first 102 respondents. The respondents argue that the applicant’s
assertion in seeking an order declaring that section 39(1)(c) of the
CSOS Act is unconstitutional as well as a declaration that
the words
“unreasonable” and/or reasonable be severed from section
39(1)(c) is flawed.
[20]
These respondents submit that the reasonableness criteria in section
39(1)(c) of the CSOS Act does not offend the constitution.
The
108
th
respondent
[21]
The Minister of Human Settlement also opposes the granting of the
relief and makes common cause with the arguments raised by
the 107
th
respondent. It is further argued by the Minister that the applicant
is conflating issues by misconstruing an interpretation of
an
agreement between itself and the first respondent and an
interpretation of the provisions of section 39(1)(c) of the CSOS Act.
[22]
The Minister maintains that the Adjudicator exercised his powers as
provided for in section 39(1)(c) of the Act and that the
applicant
has not directed the Court to the provisions that it seeks to rely on
in order to demonstrate that the impugned provisions
are
unconstitutional.
The
issues
[23]
The final determination of this matter rests on two aspects. Firstly,
it is whether the Adjudicator’s decision is reviewable
or not.
Secondly, whether section 39(1) (c) read with Section 39(1)(e) of the
CSOS Act are unconstitutional in as far as the Section
affords the
Adjudicator certain power of a declaratory nature.
Is
the decision of the adjudicator reviewable?
[24]
Prayers 4,5,6,7,8,9,10,11,12 of the applicant’s notice of
motion set out those orders or decisions taken by the Adjudicator
which the applicant says are reviewable and should be set aside.
[25]
In paragraph 17.2 of their heads of argument the applicant seeks
judicial review on the grounds set out in section 6(2) of
the PAJA.
[26]
The respondents maintain that the decisions of the Adjudicator are
not reviewable in terms of PAJA as such decisions do not
amount to
administrative action as envisaged under PAJA.
[27]
Section 1 of PAJA defines administrative action as follows:
“
Administrative
action means any decision taken or any failure to take a decision,
by–
a)
An organ of state when –
i)
exercising a power in
terms of the Constitution or a provincial constitution; or
ii)
exercising public power or
performing a public function in terms of any legislation; or
b)
A natural or juristic
person, other than an organ of state, when exercising a public power
or performing a public function in terms
of an empowering provision,
which adversely affects the rights of any person and which has a
direct, external legal effect, but
does not include –
aa) the
executive power or function of the National Executive, including
powers or functions in Section 79(1) and (4),
84(2)(a), (b), (c),
(d), (f), (g), (h), (i) and (k), 85(2)(b), (c), (d), and (e), 91(2),
(3), (4) and (5), 92 (3), 93, 97, 98,
99 and 100 of the
Constitution.”
[28]
If I find that the decisions are reviewable it is only logical that
this Court must also determine, if the applicant has exhausted
internal remedies, if not, that the application is premature.
[29]
The first to 102
nd
respondents argue and make the point that the review of an award of
an Adjudicator granted in terms of the CSOS Act does not constitutes
administrative Action as envisaged in PAJA. The respondents place
reliance on the decision of the Supreme Court of Appeal in the
Trustees
for the Time Being of the Legacy Body Corporate v Bae Estates and
Escapes (Pty) Ltd and Another.
[4]
[30]
The facts and the final decision in the matter referred to above
dealt with a decision taken by Trustees who unilaterally decided
to
prohibit Bae Estate from operating within the Scheme controlled by
the Body Corporate in terms of their rules. Whilst the Supreme
Court
of Appeal found that the Trustees in taking that decision did not do
so within the ambit of PAJA as their decision was not
administrative
action it held in favour of Bae based on legality and irrationality.
[31]
Makgoka JA writing for the Court at paragraph 27 said the following:
“
It is important to
locate the trustees’ decision to prohibit Bae Estate from
operating in the Scheme, ‘within an empowering
provision’.
In other words, under what empowering provision did the trustees act
for that decision? The High Court said that
they acted in terms of
the Schemes Management Act. In coming to this conclusion, the High
Court failed to appreciate that the statutory
powers conferred on the
trustees by the Schemes Management Act, where relevant, regulate the
relationship between the body corporate
and the home-owners. This
case is not about that relationship. It is about a body corporate’s
relationship with a third party,
an estate agent. There is no
provision in the Act which empowers the trustees to prohibit an
Estate Agent from operating in the
scheme.”
[32]
It was on that basis only that the Supreme Court of Appeal found that
the trustees’ decision is not an administrative
decision as
envisaged in PAJA and was thus not reviewable in terms thereof.
[33]
This is not the case in this matter. An Adjudicator and his or her
functions cannot be compared to that of a trustee who operates
under
a completely different regulatory sphere. His Lordship Sher J in
Heathrow
Property Holdings No. 3 CC and Others v Manhattan Place Body
Corporate and Others
[5]
at paragraph 48 said the following:
“
Thus, in terms of
ss 39(1) – (7) of the Act an Adjudicator has a number of
express statutory powers in respect of financial,
‘behavioural’,
governance, management, regulatory and other issues pertaining to a
sectional title scheme, which a
court does not. In this regard, and
by way of an example, in respect of financial issues an adjudicator
has the power to make orders
(i) requiring a scheme to take out
insurance or to increase the amount thereof or (ii) to take action
under an insurance policy
to recover an amount, or (iii) to declare
that a contribution which was levied on owners is ‘unreasonable’
and that
it be adjusted to a ‘reasonable’ amount, and
(iv) may even grant an order requiring a tenant to pay over the
rental
which is payable under a lease agreement to the body corporate
and not to his landlord, until an amount which his due by the
landlord
to the body corporate has been settled.”
[34]
At paragraph 49 the learned Judge continues as follows:
“
Similarly, in
regard to the governance issues an adjudicator has the power to make
orders not only declaring a governance provision
to be invalid or
‘unreasonable’, but directing a scheme to amend or
substitute it with another provision.”
[35]
In
Turley
Manor Body Corporate v Pillay
[6]
the court rejected the argument that the exercise of powers of an
Adjudicator in terms of the Act do not amount to administrative
action. At paragraph 27 of the judgement the Judge says the
following:
“
An Adjudicator
appointed under the Act is not engaged upon private adjudication. The
Community Schemes Ombud Service is a juristic
person constituted
under the Act. The Service operates as a national public entity
listed in terms of the Public Finance Management
Act, which if
[sic]
of application to the Service. The Service is funded by public moneys
and reports ultimately to parliament. The functions of the
Service
includes dispute resolution. Dispute resolution under the auspices of
the Service is clearly a public not a private form
of dispute
resolution. An application made under the Act and lodged with the
Ombud if referred to Adjudication, does not permit
a person against
whom an order is sought to opt out of the process. If the
Adjudication makes an order it is binding and enforceable,
as if a
judgement of the Court. Adjudicator under the Act is thus not the
result of bilateral consent. It is a compulsory form
of public
disputes resolution.”
[36]
In the financial analysis, I find that the first point in
limine
raised by the respondent that the Adjudicator’s decision is not
reviewable under PAJA on the basis that it is not an administrative
decision is dismissed. The Adjudicator’s decision has correctly
been brought under the governing principle of PAJA. This
now brings
me to the second, fourth and fifth points in
limine
raised by
the respondent.
Second
and fourth points in limine
[37]
In the second point in
limine
the respondents maintain that
the applicant has no
locus standi
in that the Settlement
Agreement signed on the 14 October 2007 made provision that any
dispute between the applicant and first
respondent would be referred
to either the Chairperson of Eagle Canyon Home Owners Association or
the Chairperson of the Dainfern
Home Owners Association which
decision would be final and binding on the parties. Similarly, that
the applicant having decided
to refer this dispute to the Ombud had
in mind the finality of the dispute which decision would be binding.
[38]
The fourth point in
limine
which is closely associated to the
second point in
limine
is effectively that the applicant
should have first exhausted all the internal remedies as prescribed
by PAJA prior to launching
this review application in terms of PAJA.
[39]
I have already made a finding that the applicant was correct in
bringing this review application under PAJA as a result section
7(2)
of PAJA becomes relevant in as far as the first respondent maintains
that the applicant has failed to exhaust internal remedies.
Section
7(2) of PAJA reads as follows:
“
(a) subject to
paragraph (c), no court or tribunal shall review an administrative
action in terms of this Act unless any internal
remedy provided for
in any other law has first been exhausted.
(b) Subject to paragraph
(c), a court or tribunal must, if it is not satisfied that any
internal remedy referred to in paragraph
(a) has been exhausted,
direct that the person concerned must first exhaust such remedy
before instituting proceedings in a court
or tribunal for judicial
review in terms of this Act.
(c) A court or tribunal
may in exceptional circumstances and on application by the person
concerned, exempt such person from the
obligation to exhaust any
internal remedy if the court or tribunal deems it in the interest of
justice.”
[40]
In this matter the respondents rely on the provisions of clause 3.10
of the Settlement Agreement concluded in 2007 which reads
as follows:
“
Should
Waterford and Riverside not reach consensus on matter dealt with in
paragraph 3.9 above then the dispute shall be referred
to the
Chairman of Eagle Canyon Home Owners Association alternatively
Dainfern Home Owners Association for adjudication provided
that the
parties, members, trustees and their respective duly appointed
management agents do not serve or have not served on the
board of
Eagle Canyon Home Owners Association. The decision of the Chairman
shall be final and binding.”
[41]
The respondents say that the applicant chose not to approach the
chairs of both Eagle Canyon and Dainfern and preferred the
route of
the CSOS Act, in the result, the applicant should have realised that
the decision of the adjudicator would also be binding
and final in
the same spirit as expressed in the Settlement Agreement.
[42]
In reply the applicant says that clause 3.10 of the Settlement
Agreement cannot on any conceivable basis oust the jurisdiction
of
this Court to deal with this review application. The applicant
maintains that the parties had agreed not to implement clause
3.10 as
that Settlement Agreement had been cancelled with effect the 28
February 2018. The respondents dispute this.
[43]
The Constitutional Court in
Koyabe
and Others v Minister of Home Affairs and Others
[7]
strongly supported a duty to exhaust internal remedies describing it
as a valuable and necessary requirement of our law. Mokgoro
J held
that an aggrieved party must take reasonable steps to exhaust
available internal remedies she however, also stated that
the
requirements should not be rigidly imposed.
[44]
Hoexter in
Administrative
Law in South Africa
[8]
writes as follows:
“
In the application
of S 7(2), much depends on how the Courts interpret the adjective
‘internal’ and the phrase ‘any
other law’. In
my view these terms ought to be read restrictively to include
remedies specifically provided for in the legislation
with which the
case is concerned, and to exclude optional extras.”
[45]
In the matter of
Van
der Westhuizen v Butler
[9]
the court by citing Hoexter with approval said:
“
I agree with this
contention by the learned author. In this case, were one to give the
section the meaning contended for by the
respondents, it would be a
very wide interpretation of the section to include remedies which do
not appear clearly from the wording
of the section, and thereby would
result in the subversion of applicants’ right of access to a
court as constitutionally
enshrined.”
[46]
The phrase “any other law” in this matter is reference to
the CSOS Act and in reading the words restrictively such
remedy is
not provided for in the CSOS Act. In the result I have come to the
conclusion that the applicant was not compelled to
have referred the
matter to Chairperson of Dainfern or Eagle Canyon. Having said that,
it now brings me to the issue raised in
the point in
limine
that is whether the finding of the Adjudicator was final and binding.
Is
the adjudicator’s decision final and binding?
[47]
The respondents contend that the parties having agreed that a
decision of the Chair of Dainfern and Eagle Canyon would have
been
final and binding it therefore goes without saying that the same
principle should apply to a finding by an Adjudicator more
so that
the applicant withdrew its appeal.
[48]
In this regard the applicant rely once more on the fact that the
Settlement Agreement was cancelled with effect from 28 February
2018.
However, what is before this Court and was also before the
Adjudicator is an application by the applicant seeking relief
based
on the Settlement Agreement.
[49]
I have not been referred to any authority on this issue save to say
that the respondents rely on the principle of
pacta
sunt servanda
.
In the matter of
Mozart
Ice Cream Franchises (Pty) Ltd v Davidoff and Another
[10]
that case dealt with a restraint of trade. I say nothing more about
that.
[50]
Once more there is nothing in the CSOS Act which gives the
Adjudicator the right of finality and binding effect. The fact that
the applicant withdrew its appeal does not mean that it has no right
to approach the High Court on review. In the matter of
Kingshaven
Homeowners’ Association v Botha and Others
[11]
the court in dealing with this aspect said the following at paragraph
25–
“
The right of
appeal in terms of s 57 is not exclusive of the right of an aggrieved
party also to impugn the adjudicator’s
decision on review
grounds that might not involve ‘questions of law’ within
the meaning of that term in s 57.”
[51]
Adjudication orders or rulings have at all times been taken on review
in a number of cases in this division and in none of
them that I have
been referred to raise the objection that the Adjudicator’s
decision is final and binding and therefore
not capable of being
assailed on review save on PAJA requirements. Wilson AJ as he then
was in the matter of
Naidoo
v Chicktay N.O. and Others
[12]
held
as follows at paragraph 7–
“
There is no
dispute between the parties that the Adjudicator’s order
constitutes “administrative action” within
the meaning of
Section 1 of the Promotion of Administrative Justice Act 3 of 2000
(“PAJA”) and that it is susceptible
to judicial review.
That accords with the prevailing authority in this Division, which
holds that the narrow appeal against Adjudication
orders permitted
under section 57 of Community Schemes Ombud Services Act 9 of 2011
(“the CSOS Act”) does not exclude
PAJA’s
application (
Turley Manor Body Corporate v Pillay
2020 JDR
0430 (GJ) paragraph 8 to 30).”
[52]
These decisions serve to strengthen my resolution to dismiss this
point in
limine
I have also had regard to the provisions of
section 56(1) and (2) of the CSOS Act which read as follows:
“
ENFORCEMENT
OF ORDERS
56 (1) If an
adjudicator’s order is for payment of an amount of money or any
other relief which is within the
jurisdiction of a magistrate court,
the order must be enforced as if it were a judgement of such Court
and a clerk of such a Court
must on lodgement of a copy of the order
register it as an order in such Court.
(2) If an adjudicator’s
order is for payment of an amount if money or any other relief which
is beyond the jurisdiction of
the magistrate’s court, the order
may be enforced as if it were a judgement of the High Court, and a
registrar of such a
Court must, on lodgement of a copy of the order
register it as an order in such Court.”
[53]
There is a clear distinction between orders of Adjudicators which
fall within the ambit or jurisdiction of a Magistrate Court
and those
that fall within the jurisdiction of the High Court. In subsection
56(1) the words used are “the order must be
enforced”
whereas in 56(2) the words used are “the order may be
enforced.” This in my view says that the Adjudicator
having
made the order same was not final and stands to be challenged on
appeal or review.
[54]
I have also come to the conclusion that the review application is not
malicious, frivolous or vexatious. The Body Corporate
is acting on
behalf of owners of property at Waterford and has a duty which is
imposed on them in terms of section 3(1) of the
STSM. I have also
come to the conclusion that the review application is not premature
for reasons set out above. The points
limine
raised by the
first 102 respondents are dismissed.
[55]
This now brings me to the question whether there are any grounds
justifying the decision of the Adjudicator to be reviewed
and
secondly sections 39(1)(c) read with Section 39(1)(e) of the CSOS Act
is unconstitutional.
The
review
[56]
The decisions that the applicant seeks to have
reviewed are encapsulated in prayers 4 to 12 of the notice
of motion.
The decisions pertaining to orders for payment, repayment and refund
from one party to the other including interest
accrued therein. The
applicant relies to a large extent on the provisions of the
Settlement Agreement concluded on the 14 October
2007.
[57]
The dispute that served before the Adjudicator related to the
determination of reasonable levies to be paid by the first respondent
to the applicant relating to the estate as a whole. It is common
cause and not in dispute that second to 102
nd
respondents
are members of Riverside and as such are expected to contribute to
the running expenses of the estate being Waterford
as well as to the
running expenses of the body Corporate Riverside Lodge.
[58]
In the Settlement Agreement dated the 14 October 2007 the monthly
levies to be paid by the first respondent to the applicant
was fixed
at R 48 970. On 10 November 2017 the Directors of the applicant
arbitrarily cancelled the Settlement Agreement with effect
from 1
March 2018 and started to determine the contributions payable by
Riverside Lodge residents directly to Waterford on the
basis that the
Riverside Lodge members were also members of Waterford. The arbitrary
determination of levies increased from R 48 970
per month to
R121 790. It was on the basis of that increment that the first
respondent raised its counterclaim that the increment
was
unreasonable. The Adjudicator upheld that counterclaim and this is
what the review is all about. Was the Adjudicator wrong
in upholding
what the CSOS Act empowers her to do?
Are
the unit owners of the Sectional Title Units members of Waterford
[59]
This issue has been a long standing one since the first action
instituted which resulted in the 2007 settlement. It has always
been
the view of the applicant that the second to 102
nd
respondents are by virtue of their ownership automatically members of
Waterford this is denied by the first to 102
nd
respondents.
[60]
The Adjudicator in dealing with this vexed question referred to
Section 11(3)(b) of the Sectional Titles Act
[13]
and said that the conditions of title are clear and that there is no
need for an extensive interpretation. In her finding the Adjudicator
said the following:
60.1 That it
is the Body Corporate that is to become a member of the applicant
(Waterford).
60.2 There is
nowhere in the conditions of title where it is stated that the
Sectional Title Owners should also become
members of the applicant.
All that is stated is that the Sectional Title Owners should be made
aware that it is the Body Corporate
that is a member of the
applicant.
60.3
Ownership of the Units in Riverside was not made conditional on the
Sectional Owners becoming members of the applicant.
This is true as
it appears nowhere in the Sale Agreement nor in the Deeds of
Transfer.
60.4
Referring to the 1973 Companies Act as well as the 2008 Companies Act
the Adjudicator concluded that only persons
who are signatories to
the Articles of Association or who elect to subscribe to the
Memorandum of Association become members and
shareholders of that
company. None of the second to 102
nd
respondents have
contractually bound themselves to become members of the applicant.
60.5 The
applicant is a Voluntary Association and Membership created through
its Article and Memorandum of Association
can only be by agreement
and not by law.
[61]
The Adjudicator concluded that the Sectional Title Owners are not
members of the applicant. He found that it is the first respondent
who is a member of the applicant and is bound by the Rules of the
applicant that had been lawfully passed and adopted. The Adjudicator
found that the first respondent bears the responsibility of ensuring
that the Sectional Title Owners comply with the Rules of the
applicant and that all amounts owed by the respondent are only
payable by the first respondent.
[62]
In response to the findings by the Adjudicator that members of
Riverside Lodge are not automatically members of Waterford,
the
applicant says that the Adjudicator’s finding is bad in law.
[63]
The applicant refers firstly to section 2(a)(b) and (c) of the
Sectional Title Act in which reference is made that owners of
Units
in the Sectional Title Scheme also own common property in a scheme in
undivided shares in accordance with the provisions
of this Act. It is
contended that the Sectional Title Owners are also owners of Erf 645
and accordingly became members of Waterford.
[64]
It is common cause that Erf 645 is a consolidated Erf comprising of
Erf 380 and 381 and in the Township Establishment Condition
which the
applicant has made reference to in reliance to condition 4(f) the
requirements that each and every “owner of an
Erf in the
Township shall become a member of a Residents Association upon
transfer of the subdivided portion.” Such association
shall
have full responsibility for the proper functioning and proper
maintenance of the access Erf and the essential services contained
therein.
[65]
It is important to note that clause 4(9)(f) is specific to erven 431
and 432 which according to the conditions is zoned special
for access
purpose. In my view it does not refer to the consolidated erven 380
and 381.
[66]
Secondly, this clause is in conflict with conditions of title and
with specific reference to section 11(3)(b) of the Sectional
Title
Act. As the Adjudicator correctly found there is nowhere in the
condition of title which indicates that unit owners shall
become
members of the applicant all that the document says is that it is the
body corporate that becomes a member of the Home Owners
Association
and all that is required is that unit owner be made aware of that
situation. I accordingly find that the second to
102
nd
respondents are not members of the applicant.
Requirements
of a review application in terms of PAJA
[67]
It is a well-known principle of our law as enshrined in the
Constitution which requires that administrative action be lawful,
reasonable, and procedurally fair. The three components are codified
in section 6 of PAJA.
[68]
It is not in dispute that the Sectional Title Unit Owners are obliged
to make payment of contributions towards the expenses
of the
applicant. This was settled and agreed upon when the Settlement
Agreement was signed in the year 2007. In that agreement
a formula
was agreed upon as to how Waterford was to calculate what the members
of Riverside had to pay.
[69]
It was accordingly not surprising that when the applicant laid a
complaint with the office of the Ombud, the first respondent
raised
three main defences namely, firstly, that the contributions in
respect of the 2017 and 2018 financial years were not calculated
in
accordance with the formula secondly, that the contributions levied
on the Unit Owners since the
1 March 2018 were
unreasonable and lastly, that the Unit Owners were not members of
Waterford accordingly that Waterford had no
right to claim
contributions from them directly.
[70]
The onus fell on the applicant to demonstrate and indicate how and in
what instances did the Adjudicator act unlawfully, unreasonably
and
without following fair procedure.
[71]
The applicant contends that the decision that fell to be reviewed in
terms of section 6(2) of PAJA are the following:
a)
The decision in respect of
the contributions levied in respect of the 2017 and 2018 financial
year.
b)
Contributions levied in
respect of the 2019 and 2020 financial year.
c)
The membership of
Waterford.
d)
The charging of interest.
[72]
It is the Settlement Agreement that the Adjudicator applied in this
dispute hence it was agreed that the scope of the dispute
covered the
following aspects:
a)
Had
Waterford raised the levy in accordance with the formula in the
Settlement Agreement.
b)
If
not had the parties followed the consultative processes set out in
clause 3.9 of the Settlement Agreement and
c)
The
Adjudicator should determine the aforesaid dispute to avoid the
necessity of having to refer dispute to the chairperson of Eagle
Canyon Home Owners Association or the Chairman of the Dainfern Home
Owners Association.
[73]
The central and critical portions of the Settlement Agreement read as
follows:
3.8
The formula provides for no contributions to be made on the part of
Riverside to Waterford if and in respect of certain expenses
or
capital expenditure that are and may be incurred by Waterford.
3.9
However, to the extent that expenses or capital expenditure have to
be budgeted for or incurred which expenses and or expenditure
are not
provided for in the formula, then both parties shall:
3.9.1 first
determine the necessity of such expenses
3.9.2 the costs of
and relating to such expenses and then
3.9.3 the
contribution to be made by Riverside, if any;
3.10
Should Waterford and Riverside not reach consensus on matters dealt
with in 3.9 above then the dispute shall
be referred to the Chairman
of the Eagle Canyon Home Owners Association for Adjudication. The
decision of the Chairman shall be
final and binding.
[74]
At paragraph 48 of its Founding Affidavit the applicant says that the
parties agreed that the Adjudicator was called upon to
decide the
following issues:
a)
Whether the disputed line
items in the 2017 and 2018 budgets (the disputed line items) were
contained in or covered by the formula.
b)
In the event that the
Adjudicators were to find that one or more of the disputed line items
were not contained in or covered by
the formula whether Waterford and
Riverside complied with the process as set out in clause 3.9.1 to
3.9.3 of the Settlement Agreement
(the dispute resolution process).
c)
Whether Riverside is in
the alternative estopped from disputing the correctness of the levies
for the 2017 and 2018 financial years.
d)
In the event that the
Adjudicators were to find that:
·
One
or more of the disputed line items were not contained in or covered
by the formula
·
Waterford
and Riverside did not substantially comply with the dispute
resolution process and
·
Riverside
is not estopped from disputing the correctness of the levies for the
2017 and 2018 Financial years.
·
The
Adjudicator should decide whether Riverside should contribute towards
such expenses.
[75]
It is perhaps useful at this stage to make reference to the findings
and directives made by the Adjudicator. In particular,
on the 11 June
2020 the Adjudicator issued what she termed the “Third Interim
Award.” In that award she affords the
applicant and the first
respondent an opportunity to attempt to reach an agreement in respect
of any dispute pertaining to their
respective calculations. The
Adjudicator concluded with the order that in the event that the
applicant and the first respondent
failing to submit figures then she
will proceed to make an order in terms of section 53(1)(b) of the
CSOS Act. That section reads
as follows:
“
The Adjudicator
may make an order dismissing the application if after investigation
(b) the applicant fails to comply with requirements
in terms of
section 51.”
[76]
Section 51 which deals with powers of an Adjudicator reads that “When
considering the application, the Adjudicator may
require the
applicant….to give the Adjudicator further information or
documentation.”
[77]
The Adjudicator is setting out what was required of her by the
parties also referred to clause 3.7 of the Settlement Agreement
which
reads as follows:
“
13.7 The Formula
shall henceforth be the only deciding factor determining the amount
of the levy to be paid by Riverside to Waterford.”
[78]
The Adjudicator dealt with all the disputed items and made a finding
that the disputed items were not part of the agreed formula
and
secondly that the parties did not engage in the consultative process
as envisaged in clause 3.9 of the Settlement Agreement.
[79]
The relevant clauses in the Settlement Agreement are clause 3.7, 3.8,
3.9 and 3.10. I have already made reference somewhere
in this
judgement and quoted clauses 3.8 and 3.9 and 3.10. I however now use
clause 3.7 which his critical and it reads as follows:
“
The formula shall
henceforth be the only deciding factor determining the amount of the
levy to be paid by Riverside to Waterford.”
[80]
The applicant’s case is that the disputed line items formed
part of the formulation and that they were agreed between
the parties
through the internal budgetary process in compliance with the
provisions of the Settlement Agreement.
[81]
The evidence presented before the Adjudicator does not support this
contention by the applicant. It is therefore the respondents’
case that the question of levies was arbitrarily decided upon by the
Directors of Waterford without consulting the first respondent
contrary to what had been agreed upon.
[82]
The argument by the applicant that the process of consultation
followed the internal budgeting meetings is belied by the undisputed
fact that the members of Riverside were not allowed to vote at the
two AGMs that of the 15 November 2016 and that of the 23 November
2017 because their levies were in arrears. It is at those meetings
where the disputed items were voted by the remaining members.
This
was arbitrary and the Adjudicator correctly made a finding in favour
of the respondents having followed the provisions of
the Settlement
Agreement.
[83]
As an example the applicant’s first witness Mr Donaldson in his
evidence testified that the disputed item “General
internet
fees” was not in the Settlement Agreement and should
accordingly not have been included in the levy calculations.
He
further conceded that the item “Printing and Stationery”
is a no contribution item in the formula and should also
not have
been included in the levy calculation. Mr Donaldson went on to
testify that the items “Ad Subscription” is
not an item
in the formula and should not have been included in the levy
calculation. He also conceded that the item “Ad
Property Rates”
should not have been included in the levy calculation as it was
specifically excluded in the formula. The
same applies with the item
“Refuse Removal” this was excluded in the formula.
[84]
There is an item titled “Repair and Maintenance Building.”
The buildings refer to two guard houses one on the East
and the other
on the West as well as Gazebo in the park. The complaints had been
that the formula only referred to the two guard
houses and not the
Gazebo.
[85]
The second witness for the applicant Mr Erasmus testified that the
“agreed formula” was applied every year and
the only
thing that changed was just the “item figures which he says
were informed by the yearly budgeted figure. He continued
to say that
circumstances changed between 2007 and 2015 as a result the approved
budgets contained adjustments to the formula which
he says were
approved by members in the annual general meeting. This argument is
untenable, there is evidence that members of the
first respondent
were excluded from voting on the disputed budget items at the AGM.
This can therefore not have been a consultation
process, it was
unilateral.
[86]
Interestingly the Adjudicator made a note that Mr Donaldson testified
that the 2007 agreement was never amended in writing
and that there
were no minutes of any meetings where the items were debated and
agreed upon.
[87]
Mr Noir who testified for the respondents in respect of items
“General interest Fees” said that the Settlement
Agreement provides that if a new item arises it has to be added to
the formula by agreement between the parties and that this was
no
complied with. Mr Noir also stated that the items sundry expenses
does not occur on a monthly basis. This was not challenged.
It was
put to Mr Noir by Counsel for the applicant that there is no
difference between “grounds and gardens” to this
Mr Noir
responded that if that is the case why are both items in the budget.
There was no response to that. Hardware was also not
covered by the
formula, so is the internet communication portal, secretarial fees,
subscription, website maintenance, legal expenses,
garden service
company, property rates, refuse removal, printing and stationery,
repairs and Maintenance of building, repairs and
maintenance of
grounds, repairs and maintenance sundry, major expenses, security
cameras and major hardware expenses.
[88]
Mr Jacobs also testified for the respondents and whilst conceding
that the Settlement Agreement was 12 years old and that things
have
changed still maintained that it does not mean that there should not
have been consultation before determining the levies
payable by
members of the first respondent. He remarked that the major item of
expenditure was just added on the budget by the
applicant without
having consulted the first respondent. This was indeed arbitrary and
oppressive behaviour for example when first
respondent demanded to
see the quote for the 4 security cameras which amounted to R370 000
this was denied.
[89]
As regards the consultative process which the applicant says was done
via the budget discussion this was disputed by Mr Jacobson.
He told
the Adjudicator that the Board of Waterford never involved him in any
budget discussions nor give him the sight of the
drafted financials
until it was emailed to all members and Sectional Title Owners a
month before the AGM. He says no discussion
took place prior to the
AGM. The AGM was only there to explain budget item and not to change
the items. He never approved any of
the disputed items on the budget.
[90]
It was put to Mr Erasmus for the applicant that Mr Jacobson denied
that there was any consultative process prior to approval
of budget
items he told the hearing that each portfolio Director made
submissions to the Financial Director on Portfolio needs
for the
following year and that Mr Jacobson was involved in the process
leading up to the approval of the budget in the year 2016.
Mr
Jacobson reiterated that there was never a meeting between the
Directors of Waterford and of Riverside to consider the necessity
of
items. He referred to an email dated the 20 November 2016 wherein the
Directors responded to a query as follows: “We will
deal with
it in the New Year we can’t deal with it now.”
[91]
Several other witnesses testified and in the end the issue was
crystallised into one namely that the disputed line items were
never
subjected to a process of consultation prior to them being voted at
the AGM. It was on that basis that the Adjudicator correctly
found
that there was no consultative process followed.
[92]
The applicant maintains that the Adjudicator’s decision was
materially influenced by errors of law within the meaning
of section
6(2)(d) of PAJA but has failed to set out any errors of law in the
finding.
[93]
It is trite law that the judicial review for lawfulness of the
exercise of discretion is unlike the remedy of appeal not concerned
with the merits. In the matter of
Rustenburg
Platinum Mines Ltd v Commission for Conciliation, Mediation &
Arbitration
[14]
the Court observed that in a review the question is not whether the
decision is capable of being justified but whether the decision
maker
properly exercised the powers entrusted to him or her. The focus is
on the process and on the way in which in the decision
maker came to
the challenged decision.
[94]
The applicant further alleges that the decision was not rationally
connected to the information before the Adjudicator within
the
meaning of section 6(2)(f)(ii)(cc) of PAJA and also not rationally
connected to the reason given for it by the Adjudicator
within the
meaning of Section 6(2)(f)(ii)(dd) of PAJA.
[95]
It is trite law that administrative action that fails to pass the
threshold of rationality is unlawful. The Supreme Court of
Appeal in
Minister
of Home Affairs and Others v Scalabrini Centre Cape Town and
Others
[15]
at paragraph 66 said the following:
“
Whether a decision
is rationally related to its purpose is a factual enquiry blended
with a measure of judg[e]ment. It is here that
Courts are enjoined
not to stray into executive territory.”
[96]
The setting of this standard does not mean that the Courts can or
should substitute their opinions as to what is appropriate
for the
opinion of those in which the power has been vested. The Adjudicator
in my view expressed her position rationally by taking
into
consideration not only the long history of dispute between the
parties that led to a Settlement Agreement but also analysed
the
evidence before her before making a finding. The Adjudicator took
into consideration the submissions by both the applicant
and the
first respondent into consideration before she made her findings.
[97]
The applicant contends that the Adjudicator made irrelevant
considerations into account and disregarded relevant consideration
as
an example at paragraph 157 of the Founding Affidavit, the applicant
states that the Adjudicator failed to deal with the Waterford
argument that it was in terms of the schedule implied law that owners
of the units in the scheme would be obliged to become members
of
Waterford. This is not true because in the respondents Answering
Affidavit reference was made to section 11(2) of the Sectional
Titles
Act as well as to Clause 3 of the Articles of Association of
Waterford which clearly indicates that it is the Body Corporate
of
Riverside which is a member of Waterford and not the individual Unit
Owners. Similarly, reliance on the Settlement Agreement
to argue that
the Unit Owners are members of Waterford is countered by the fact
that the applicant cancelled the agreement. This
in my view confirms
that even the applicant never considered the Unit members as members
of Waterford. It must also recall that
in one year Unit Owners were
refused the right to vote or participate at the AGM of Waterford.
Is
section 39(1)(c) and 39(1)(e) of the CSOS Act unconstitutional
[98]
The applicant seeks an order to declare both sections
unconstitutional on the basis that the sections were never intended
to vest the Adjudicator with the authority to declare a payment or
levy unreasonable.
[99]
Section 39 deals with the prayers for relief and read as follows:
“
An application
made in terms of section 38 must include one or more of the following
orders: (1) in respect of financial issues
c) an order
declaring that a contribution on owners or occupiers, or the way it
is to be paid, is incorrectly determined or
unreasonable, and an
order for the adjustment of the contribution to a correct or
reasonable amount or an order for its payment
in a different way;
e)
an
order for the payment or repayment of a contribution or any other
amount.”
[100]
The challenge to constitutionality of the clause was brought about by
the Adjudicator having found in favour of
the first respondent on its
counterclaim. In paragraph 129.23 and 129.4 of her finding the
Adjudicator concluded as follows:
“
129.23 With
regard to 1 March 2018 to 28 February 2019 levies the Applicant
decided to adopt the formula in determining the
Respondents
contribution. As this was the formula successfully applied for more
than 10 years, I find that the application thereof
was fair and
reasonable to the extent that only the line items in the formula were
levied. My findings on the line items above
should thus be applied in
calculating how much is owed to the Respondents in this regard
129.24
With regard to the 1 March 2019 to 29 February 2020 levies I find
that the calculation of the RSL’s
contribution based on the
entire Estate’s expenses on a 1:1 basis was unreasonable and
unfair. This is irrespective of the
Directors discretionary discount
of 45%. The said levies should thus be recalculated based on the
Municipal valuation method proposed
by Mr Leonard which is 9.94% of
the Estate expenses.”
[101]
The respondents in their statement setting out their counterclaim
said the following:
d)
However,
at the outset it is placed on record that the respondents are not
adverse to paying levies to the applicant.
e)
what
is disputed and has been disputed for a significant amount of time is
the legitimacy and quantum of the levies that the applicant
seeks to
impose on the respondents and which the applicant now seeks to claim.
f)
As
will be detailed below the levies have been imposed arbitrarily and
in breach of an agreement reached between the applicant and
the first
respondent.
g)
It
is for this reason that the respondents seek an order declaring that
a contribution levied on the respondents has been incorrectly
determined or is unreasonable and an order for the adjustment of the
contribution to a correct of reasonable amount.
[102]
In their response to this portion the counterclaim all that the
applicant stated in their Replying Affidavit is
the following:
“
The Adjudicator
has no jurisdiction to declare that a contribution which was levied
before the date of the commencement of the CSOS
Act (7 October 2016)
was incorrectly determined or unreasonable.”
[103]
There was never a challenge that the clause was unconstitutional. It
is brought for the first time in this review
application. The CSOS
Act specifically sets out that the Adjudicator is entitled to make an
order in terms of section 39(1)(c)
which is an order declaring that a
contribution levied on owners or occupiers or the way it is to be
paid is incorrectly determined
or unreasonable and to make an order
for the adjustment of the contribution to a correct or reasonable
amount.
[104]
It is worth noting that the words “reasonable” and
“unreasonable” appear also in section
39(3)(d); section
39(4)(d) and (e); 39(6)(d) and (f). The applicant is not challenging
the constitutional validity of the power
or the relief that an
Adjudicator is entitled to make in those sections. I agree that to
make bold submissions that the Adjudicator
was not empowered to
reduce the contribution is without valid basis. Prayers 1 and 2 of
the first respondents’ counter application
shows that the
findings made by the Adjudicator fall within the scope of the dispute
that she was required to rule on in terms
of the empowering statute.
[105]
The challenge to constitutionality of section 39(1)(c) and (e) is
opposed by the 104
th
to 108
th
respondents as
well. Counsel for those respondents made common cause in their heads
with the second to 102
nd
respondents.
[106]
The writer Herbstein and Van Winsen in
Civil
Practice of the High Court of South Africa
[16]
write as follows:
“
The Constitution
also makes provisions in Section 172(1)(a) for its own special form
of declaratory order in that once it finds
a law to be inconsistent
with the Constitution, it has no discretion, it must declare such law
to be invalid to the extent of its
inconsistency. It differs from the
conventional declaratory order in that the purpose of the latter is
limited to an order that
will be binding on the litigants, in the
sense of it being
res judicata
between them, whereas in
relation to a questions of constitutional validity an objective
approach is taken.”
[107]
This logic was espoused by the Constitutional Court in
Ferreira
v Levin N.O. and Others; Vryenhoek and Others v Powell N.O. and
Others
[17]
at
paragraph 26 as follows:
“
The answer to the
first question is that the enquiry is an objective one. A statute is
either valid or ‘of no force and effect
to the extent of its
inconsistency’. The subjective positions in which parties to a
dispute may find themselves cannot have
a bearing on the status of
the provisions of a statute under attack. The Constitutional Court,
or any other competent Court for
that matter, ought not to restrict
its enquiry to the position of one of the parties to a dispute in
order to determine the validity
of a law. The consequence of such a
(subjective) approach would be to recognise the validity of a statute
in respect of one litigant,
only to deny it to another. Besides
resulting in a denial to equal protection of the law, considerations
of legal certainty being
a central consideration in a constitutional
state, militate against the adoption of the subjective approach.”
[108]
This is precisely what the applicant seeks to achieve in its flawed
submission of unconstitutionality of section
39(1)(c) and (e). It is
common cause that the CSOS Act was promulgated to
inter alia
regulate Community Schemes and provide for a dispute resolution
mechanism scheme.
[109]
Section 4(1) describe what the CSOS hopes to achieve, which is to:
“
(a) develop and
provide a dispute resolution service in terms of this Act;
(b) provide training for
conciliators, adjudicators and other employees of the Service; [and]
(c) regulate, monitor and
control the quality of all sectional titles scheme governance
documentation and such other scheme governance
documents as may be
determined by the Minister by notice in the
Gazette
.”
[110]
Section 4(2) provides that in performing its function the CSOS:
“
(a) must
promote good governance of community schemes;
(b) must provide
education, information, documentation and such services as may be
required to raise awareness to owners, occupiers,
executive
committees and other persons or entities who have rights and
obligations in community schemes, as regards those rights
and
obligations; [and]
(c) must monitor
community scheme governance.”
[111]
All that the applicant says in paragraph 117 of their heads is that
section 39(1)(c) affords the Adjudicator an
unguided and unfettered
discretion which renders the section unconstitutional.
[112]
The applicant’s assertion is self-contradictory in that it
concludes that despite a constitutionally compliant
reading of the
section being possible it still requires some interpretative work
which the Adjudicator according to the applicant
did not perform.
[113]
This to me does not make sense. The Adjudicator is not required to
interpret the section it is clear what her
powers are. The
Applicant’s constitutional attack is based on the allegation
that the CSOS Act is vague because it does not
provide a definition
on how to determine “reasonable”.
[114]
The argument by the applicant is also flawed in that the parties had
between themselves decided on a formula which
they all agreed was
reasonable and to now argue that the Adjudicator has an extra task of
determining reasonableness is in my view
far-fetched.
[115]
The word “reasonable” is not new to the legislation in
this country it is found in almost all statutes
where an organ of
state or bodies have to take action or exercise discretion. Examples
of such legislation is section 33(1) of
the Constitution also section
24(b), 25(5) and 32(2). I have also earlier in this judgement pointed
out to other section of the
CSOS Act in which the word “reasonable”
is used. There is therefore nothing strange or magical about the use
of that
word.
[116]
An Adjudicator is required to make a determination not based on his
or her subjective assessment but rather on
what is reasonable
applying the objective test (See:
Ferreira v Levin N.O.
supra).
[117]
The Minister as well as the CSOS respondents make the point that the
provisions of section 39(1)(c) are clear
and the correct
interpretation thereof will be to understand the thinking of the
legislature which they say is to have a mechanism
to resolve
disputes. The Minister makes a valid point that the Adjudicator does
not use his own method to determine the contribution
to be paid but
rather he or she is required to analyse the facts and evidence
provided to enable him or her to determine what is
reasonable or
unreasonable. In this matter there was also an agreed formula.
[118]
The applicant has not directed the Court to the provisions that it
seeks to rely on in order to demonstrate that
the impugned provisions
are unconstitutional. The Adjudicator in his or her investigation is
guided by the provisions of section
50 of the CSOS Act. He or she
must observe the principles of due process of law, act quickly and
with as little formality and technicality
as is consistent with a
proper consideration of the application and lastly must consider the
relevance of all evidence. It is once
an Adjudicator has followed
that process that it can be safely concluded that they acted
reasonably and as guided by the merits
of each case.
[119]
I have come to the conclusion having read the evidence in the hearing
and analysed the submission in this review
application that the
Adjudicator acted within the four corners of the provisions of the
Act. In the result the applicant’s
contention that section
39(1)(c) read with section 39(1)(e) is unconstitutional falls to be
dismissed.
Costs
[120]
The applicant pursued a challenge on the Constitutionality of Section
39(1)(c) and 39(1)(e) on weak and unsubstantiated
basis and is
accordingly not spared the issue of costs as in (
Biowatch
Trust v Registrar, Genetic Resources, And Others
[18]
).
That challenge had no merits and was bound to be vehemently opposed
by all parties and correctly so.
Order
[121]
The Application to review the finding of the Adjudicator is
dismissed.
[122]
The applicant is ordered to pay the taxed party and party costs of
all the respondents including the costs of
Senior Counsel where two
Counsels were involved.
Dated
at Johannesburg on this day of August 2023
M
A MAKUME
JUDGE
OF THE HIGH COURT
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Appearances:
DATE OF HEARING
: 15
MARCH 2023
DATE OF JUDGMENT
:
AUGUST 2023
FOR
APPLICANT
: ADV
FH OOSTHUIZEN
WITH ADV
DJ SMIT
INSTRUCTED BY
: WARRENER
DE AGRELA
&
ASSOCIATES
FOR 1
ST
TO
102
ND
RESPONDENTS : ADV
S JACKSON
INSTRUCTED BY
: MESSRS
EUGENE MARAIS
ATTORNEYS, SANDTON
FOR 104
TH
TO
107
TH
RESPONDENTS : ADV
T MANCHA
INSTRUCTED
BY : MESSRS
SEANEGO ATTORNEYS
FOR 108
TH
RESPONDENT : ADV
MAKAMU
INSTRUCTED
BY : THE
STATE ATTORNEY
[1]
9
of 2011.
[2]
3
of 2000.
[3]
8
of 2011.
[4]
2022
(1) SA 424 (SCA).
[5]
2022
(1) SA 211 (WCC).
[6]
2020
JDR 0430 (GJ).
[7]
2010
(4) SA 327 (CC).
[8]
Hoexter
Administrative
Law in South Africa
2ed (Juta & Co Ltd.) at 540-541.
[9]
2009
(6) SA 174
(C) at 188 B – C.
[10]
2009
(3) SA 78 (C).
[11]
2020
JOL 48430 (WCC).
[12]
2022
JDR 3522 GJ.
[13]
95
of 1986.
[14]
2007
(1) SA 576
(SCA) at 31.
[15]
2013
(6) SA 421
(SCA).
[16]
Herbstein and Van Winsen
Civil
Practice of the High Court of South Africa
5ed.
(Juta & Co Ltd.) at 1446 – 1447.
[17]
1996
(1) SA 984 (CC).
[18]
2009
(6) SA 232
(CC)
sino noindex
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