Authority Versus Legal Capacity To Act - Sectional Title Schemes | Legal Articles

 

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Authority Versus Legal Capacity To Act - Sectional Title Schemes

Before the coming into force of the Sectional Titles Schemes Management Act (8 of 2011) and the Community Schemes Ombud Services Act (9 of 2011), disputes involving owners and Body Corporates were adjudicated upon by the Courts.

Community Schemes Ombud Services

The need for a cost effective and quicker settlement process for disputes was realised, resulting in the promulgation for and setting up of the Community Schemes Ombud Services (CSOS).

Amongst its responsibilities is the adjudication of disputes in community living schemes, vetting of conduct and Management Rules, educating members of Sectional Title Schemes or Homeowners Associations etc.

In approaching the CSOS with disputes, parties must show sufficient cause that they have the locus standi to bring disputes as is required in many if not all adjudication forums.

Community Schemes Ombud Services

Durdoc Centre Body Corporate v Singh 2019 (6) SA 45 (KZP)

The issue of what constitutes legal standing of a party in CSOS disputes was decided in the case of Durdoc Centre Body Corporate v Singh 2019 (6) SA 45 (KZP).

As a background it must be noted that Section 38 (1) of the CSOS Act provides that ‘any’ party may make application for adjudication of a dispute if that person is a party to the dispute or is materially affected by the dispute.

The Respondent was a Manager of Ashdin Holdings which owned some units at Durdoc Centre. The Body Corporate at Durdoc Centre managed the centre on behalf of the unit owners and also managed the raising of levies, including for electricity. However, no supply of electricity went to the units owned by Ashdin Holdings. The Manager of Ashdin then lodged an application to CSOS to have the Body Corporate refund the levies collected for electricity. The adjudicator ruled in favour of the complainant, being the Manager of Ashdin.

The Body Corporate then appealed the decision on a point of law, and as one of the grounds of appeal cited that the Manager of Ashdin had no locus standi to bring the dispute before the CSOS. It further argued that the units were owned by Ashdin Holdings, the Manager was not affected by the dispute nor had sufficient material interest and therefore could not bring the dispute. The Adjudicator in the CSOS forum had found that the Manager was acting on authority as the Manager of the affected party, although the dispute was lodged in his name personally.

The Court clarified that a difference lies between capacity to commence litigation because of sufficient close interest in such litigation and its outcome on one hand, and on the other hand, mere authority to act. The Court held that the right to lodge disputes was attributed to owners of the units, and not authorised personnel, who however can as well drive the litigation process on behalf of the owner. In this instance it was found that the Manager of Ashdin was not the owner of the units and had no material interest in the Scheme, therefore he lacked the legal standing to bring the dispute. The appeal was upheld.

Further it must be noted that the right of appeal in CSOS disputes is only limited to questions of law and not facts of the matter. This means that an appeal may only be lodged in the event the Appellant is of the view that the Adjudicator erred in applying relevant law and its principles to the dispute.

Van Deventer & Van Deventer Attorneys

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