Brief Summary

Sectional Titles — Exclusive use rights — Applicant sought cession of exclusive use rights to parking bay P12 from the body corporate, asserting entitlement based on prior cession to predecessor-in-title and inclusion in title deed — First respondent contended that P12 vested in it as common property following the predecessor's death and failure to formally cede rights — Court held that the applicant's right to exclusive use of P12 was valid and enforceable, despite the absence of a formal cession, as the applicant had paid for and enjoyed the use of the bay — Counter application by second respondent regarding parking bay P13 dismissed as it was determined to be common property without exclusive use rights.

Comprehensive Summary

Summary of Judgment

1. Introduction

The matter concerned an opposed motion application for final relief in the Western Cape Division of the High Court, Cape Town. The applicant, Allen Dennis Le Roux, sought relief arising from the status and control of two parking bays (P12 and P13) within the Dunrobin Sectional Title Scheme SS 64/1980. The first respondent was The Dunrobin Body Corporate, the second respondent was Stephani Laura Scheer, and the third respondent was The Registrar of Deeds, Cape Town.

The procedural posture was motion proceedings on the papers. Due to lockdown restrictions, the parties agreed that the application and the second respondent’s counter-application would be determined without oral argument, supplemented by additional written submissions. The applicant also pursued a late amendment to the notice of motion, which was not opposed.

The general subject-matter concerned exclusive use rights in sectional title law, specifically whether the applicant could compel the registration of a cession of exclusive use rights in respect of parking bay P12 (originally ceded to his predecessor-in-title but never ceded to him), and what consequences followed for the status and management of parking bay P13 (accepted to be common property).

The second respondent brought a counter-application seeking a declarator that P12 must remain vested in the body corporate as common property by virtue of the statutory vesting provision. The applicant conceded that if the main issue about P12 was decided against him, then the counter-application would follow.

2. Material Facts

It was common cause that the applicant purchased and took transfer of his apartment in 2001. The applicant’s title deed recorded that the purchase price included an exclusive use area, and the applicant paid transfer duty on the value of the apartment together with that exclusive use component. The parking bay at the centre of the primary dispute was parking bay P12.

It was also common cause that, prior to the applicant’s purchase, the applicant’s predecessor-in-title had obtained a notarial cession of the exclusive use rights over P12 from the body corporate in 1994, following a body corporate resolution taken on 14 January 1993 allocating various bays to owners. However, when the applicant took transfer in 2001, P12 was not ceded to him as contemplated by the statutory regime governing transfer of exclusive use rights. The applicant’s predecessor-in-title later died, and the applicant contended that this made it impossible to procure registration of the cession “in the usual manner” through the normal sequence of transactions.

On the facts accepted by the court as material, the applicant had for many years enjoyed undisturbed use of P12, to the exclusion of others, and he had paid the levies raised by the body corporate in relation to that exclusive use area. The body corporate had treated P12 in practice as an exclusive use area utilised by the applicant.

At the point when transfer to the applicant was registered, the predecessor-in-title ceased to be a member of the body corporate. As a result, the exclusive use right (still registered in the predecessor’s name) vested in the body corporate by operation of section 27(4)(b) of the Sectional Titles Act 95 of 1986.

In respect of P13, it became common cause during the proceedings that P13 constituted common property. The second respondent’s deed of transfer (and that of her predecessor-in-title) contained no reference to any exclusive use area, and there was no notarial deed of cession in favour of the second respondent or her predecessors for P13. The 1993 resolution had recorded an allocation of P13 to the second respondent’s predecessor-in-title, but P13 was never formally ceded, and the resolution was not treated as creating transferable exclusive use rights for successors-in-title.

A further factual component addressed in the reasoning related to access and practical use. The papers indicated that the configuration and positioning of P12 and P13 meant that parking in P13 could obstruct access to P12, because access to P12 required a turning circle that partly utilised the space represented by P13. While the respondents disputed the extent of this practical impossibility, the court treated the management obligations in the regulatory framework as addressing the interference problem in substance.

3. Legal Issues

The central legal question was whether the applicant was entitled to an order authorising and compelling the registration of a cession of exclusive use rights over P12 to him, relying primarily on section 33(1) of the Deeds Registries Act 47 of 1937. This raised an issue of the application of law to largely common-cause facts, namely the legal consequences of the failure to effect a cession to the applicant at transfer, the statutory vesting of the right in the body corporate, and whether section 33 could be used to achieve registration where the usual transactional sequence could not be followed.

A closely related question was whether the vesting of the exclusive use right in the body corporate under section 27(4)(b) of the Sectional Titles Act 95 of 1986 operated as an unqualified vesting that precluded the applicant from compelling transfer, particularly in circumstances where the applicant’s predecessor-in-title had died and could not execute a cession.

A further legal issue arose regarding P13 and scheme governance. The court had to determine whether P13 was common property unencumbered by exclusive use rights, whether any exclusive use rights had ever been granted to the second respondent in relation to P13, and whether the body corporate could be interdicted from allocating or alienating P13 in a manner that would impede access to P12. This involved evaluating statutory and regulatory constraints on body corporate decision-making, including whether allocation of exclusive use areas via rules would be tantamount to alienation and whether such allocation could unfairly prejudice a member.

4. Court’s Reasoning

The court approached P12 on the basis that the exclusive use right had vested in the body corporate by operation of law once the predecessor-in-title ceased to be a member, but the decisive question was whether the applicant nonetheless fell within the scope of section 33(1) of the Deeds Registries Act 47 of 1937. The court accepted that an exclusive use right is treated as immovable property by virtue of section 27(6) of the Sectional Titles Act 95 of 1986, which aligned with the applicant’s reliance on section 33 as a mechanism to secure registration in circumstances where the “usual manner” was not available.

In construing section 33(1), the court placed weight on the statutory language permitting relief to “any person who acquired in any manner” the right to ownership of immovable property registered in another’s name, where registration cannot be procured in the usual way and in the normal sequence of successive transactions. In the court’s view, on the facts of this case, that formulation could encompass the applicant’s position because he had bought the apartment on terms that included the exclusive use area, his title deed recorded that inclusion, and yet the cession was not registered to him as required.

A significant element of the court’s reasoning was the contrast between the applicant’s title deed and the second respondent’s title deed. The court regarded it as material that the applicant’s deed of transfer expressly recorded that the consideration included the exclusive use area, whereas there was no such reference in the second respondent’s deed. This difference supported the conclusion that the applicant had acquired a registrable entitlement to the exclusive use rights over P12, even though registration had not occurred in the proper statutory form at the time.

The court engaged with and relied upon the reasoning in McKersie v SDD Developments (Western Cape) Ltd 2013 (5) SA 471 (WCC). In that matter, as discussed in the judgment, the court had observed that an obligation on a body corporate to transfer may arise from a contractual obligation that is effectively delegated to it by operation of law, rather than requiring a direct contract between the applicant and the body corporate. The body corporate’s contention that it had no contractual obligations because it was not a party to the applicant’s sale agreement was treated as unduly “clinical” in the particular circumstances, given the documentary record in the applicant’s title deed and the long-standing practical treatment of the bay as exclusively used by the applicant.

The court rejected the contention that granting relief to the applicant would constitute a “new allocation” of exclusive use rights. Instead, it treated the relief as giving effect to rights that had already been acquired and reflected in the applicant’s title documentation, but which could not be perfected by the normal route because of the failure to register the cession at transfer and the subsequent death of the predecessor-in-title. The court also reasoned that it could not have been the legislature’s intention that the body corporate should be enriched at the applicant’s expense in circumstances where the applicant had paid for the exclusive use rights in both the purchase price and transfer duty.

In addressing arguments about amendments to section 27(4)(b) and the phrase “free from any mortgage bond or registered real right,” the court invoked the presumption against retrospectivity. It reasoned that it was not the legislative intention that successive amendments should retrospectively alter the vesting consequences already triggered, or require a re-creation of exclusive use rights in relation to P12. On the court’s reasoning, the rights that vested in the body corporate in 2003 remained vested, and the applicant’s complaint was not about creating new rights but about perfecting registration in his name through section 33.

On P13, the court’s reasoning proceeded from the accepted position that P13 was common property and that no exclusive use rights had been granted to the second respondent by cession or valid resolution that bound successors-in-title. The court then considered whether the body corporate could allocate P13 in a manner that obstructed P12. It referred to the Sectional Titles Schemes Management Regulations (rule 30(e)) requiring the body corporate to take reasonable steps to ensure that a member or occupier does not do anything to an exclusive use area that has a material negative effect on the value or utility of another section or exclusive use area. On this footing, the court accepted that the body corporate could not implement a decision that would impede access to P12.

The court further reasoned that the body corporate may only alienate or let common property in terms of a unanimous resolution under the Sectional Titles Schemes Management Act 8 of 2011, and that any purported allocation of exclusive use areas by amending rules would, in substance, be tantamount to an alienation. The court considered that such steps could not properly be implemented where they would have an unfairly adverse effect on a member’s established rights of use and access.

Finally, the court dealt briefly with the late amendment. Because the amendment was unopposed and the court’s substantive findings on the merits were sufficient to dispose of the dispute, it considered it unnecessary to enter into detailed analysis of the amendment’s merits beyond granting it insofar as necessary.

5. Outcome and Relief

The court granted the amended relief in favour of the applicant. It declared that the 1993 special resolution allocating P13 to a predecessor did not constitute an allocation of exclusive use rights to successors-in-title, and it declared that no exclusive use rights over P13 had been granted to the second respondent. It declared P13 to be common property unencumbered by exclusive use rights, and interdicted the body corporate from alienating, letting, or allocating P13 as an exclusive use area for vehicle parking by resolution, rule, or otherwise.

On the main issue, the court held that the applicant was entitled, by virtue of section 33 of the Deeds Registries Act 47 of 1937, to receive cession of the exclusive use rights over P12 from the body corporate by way of a unilateral cession of the exclusive use rights still registered in the predecessor’s name under the relevant deed of cession. The court directed and authorised the applicant, the body corporate, and the Registrar of Deeds to take the necessary steps under the relevant statutes and deeds office requirements to procure registration of the cession to the applicant within 90 days. It further ordered that access to P12 may not be obstructed or infringed in any manner.

The court dismissed the second respondent’s counter-application with costs. On costs in the main application, the court ordered the body corporate to pay 75% of the applicant’s costs and the second respondent to pay 25% of the applicant’s costs, all on the party-and-party scale including counsel and supplementary heads. The body corporate was prohibited from recovering its legal costs from the applicant via levies (including special levies). The applicant was ordered to pay the costs occasioned by the amendment application.

Cases Cited

McKersie v SDD Developments (Western Cape) Ltd 2013 (5) SA 471 (WCC)

Legislation Cited

Deeds Registries Act 47 of 1937 (section 33)

Sectional Titles Act 95 of 1986 (sections 27(3), 27(4)(a), 27(4)(b), 27(6), and references to section 27(1)(a) and 27(1)(c) as discussed)

Sectional Titles Schemes Management Act 8 of 2011 (including section 2 and section 5(1)(a) as referenced)

Rules of Court Cited

No specific rules of court were cited in the judgment.

Held

The court held that the applicant, who purchased a sectional title unit on terms that included an exclusive use area and whose title deed reflected that inclusion, was entitled to invoke section 33(1) of the Deeds Registries Act 47 of 1937 to procure registration of exclusive use rights over parking bay P12 in his name where registration could not be achieved in the usual manner due to the failure to effect cession at transfer and the subsequent death of the predecessor-in-title.

The court held further that the statutory vesting of the registered exclusive use right in the body corporate under section 27(4)(b) of the Sectional Titles Act 95 of 1986 did not, on the facts, preclude authorising steps to effect cession to the applicant, and that granting such relief was not properly characterised as a new allocation of rights.

In relation to P13, the court held that it was common property unencumbered by exclusive use rights, that the 1993 allocation did not create exclusive use rights for successors-in-title, and that the body corporate was prohibited from allocating, letting, or alienating P13 for parking in a manner that would impede the applicant’s access to P12.

LEGAL PRINCIPLES

Section 33(1) of the Deeds Registries Act 47 of 1937 was applied on the basis that it provides a mechanism whereby a person who has acquired the right to ownership of immovable property registered in another’s name, but cannot procure registration in the usual way and in the normal sequence of successive transactions, may obtain a court order authorising registration in their name. In this judgment, that mechanism was applied to an exclusive use right treated as immovable property under the sectional titles statutory framework.

The vesting of an exclusive use right in a body corporate under section 27(4)(b) of the Sectional Titles Act 95 of 1986 was treated as a statutory consequence of a member ceasing to be a member while the exclusive use right remains registered in that member’s name. The court’s reasoning proceeded on the basis that such vesting, in the circumstances presented, did not negate the applicant’s acquired entitlement reflected in the transaction and title documentation, and did not require the re-creation of exclusive use rights as a new allocation.

The court applied the principle (as discussed with reference to McKersie) that, in appropriate circumstances, an obligation on a body corporate to effect transfer of exclusive use rights may arise not from a direct contract with the purchaser, but from the operation of law in the sectional title context, particularly where the purchaser’s acquisition and title documentation reflect the inclusion of the exclusive use entitlement.

In relation to scheme governance and interdictory relief, the court applied the regulatory obligation that a body corporate must take reasonable steps to prevent conduct that materially negatively affects the value or utility of another section or exclusive use area. It also treated the allocation of exclusive use rights via amending rules as, in substance, akin to alienation of common property, requiring compliance with the statutory requirements for alienation and being constrained by considerations of unfair adverse effect on members.

Le Roux v Dunrobin Body Corporate and Others (10268/2019) [2020] ZAWCHC 53 (9 June 2020)