About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2015
>>
[2015] ZAGPJHC 38
|
|
Mogane v Rosen N.O and Another (27303/14) [2015] ZAGPJHC 38 (4 February 2015)
IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG LOCAL
DIVISION, JOHANNESBURG)
CASE NO. 27303/14
DATE: 04 FEBRUARY
2015
In
the matter between:
SABINA
MAPHURE
MOGANE
.............................................................................................
Applicant
And
KONRAD
ROSEN
N.O
................................................................................................
First
Respondent
NADYUA
TREVUSH
N.O
.......................................................................................
Second
Respondent
JUDGMENT
VERMEULEN,
AJ
[1]
The Applicant is the owner of a unit in a failed sectional title
development known as “
the Kemptonian”
(“
the
development”
). The development has failed in the sense that
the financial affairs of its body corporate, appointed in terms of
the Sectional
Titles Act, No. 95 of 1986 (“
the
Sectional
Titles Act”
>), were in such disarray that application was
made for the appointment of the Respondents as administrators of the
body corporate,
in terms of
Section 46(1)
of that Act. In terms
of the provisions of
Section 46(3)
of the
Sectional Titles Act, the
administrators have the powers and duties of the erstwhile body
corporate of the development and exercise such powers to the
exclusion
of the body corporate.
[2]
The general powers and duties of the body corporate, which are
assumed by the administrators upon the latter’s appointment,
include the power to establish for administrative expenses a fund
sufficient in the opinion of the body corporate for the repair,
upkeep, control, management and administration of the common property
(including reasonable provision for future maintenance and
repairs),
for the payment of rates and taxes and other local authority charges
for the supply of electric current, gas, water,
fuel and sanitary and
other services to the building, land and any premiums of insurance,
and for the discharge of any duty or
fulfilment of any other
obligation of the body corporate.
[1]
[3]
The owners are required to make contributions to such fund for the
purposes of satisfying any claims against the body corporate.
The
body corporate determines the amounts to be paid by the owners by
levying contributions from them in proportion to the
quotas of their
respective sections. In general, the administrators have the
same powers as the body corporate to control,
manage and administer
the common property for the benefit of all owners.
[2]
The aforesaid duties and functions of the body corporate lie at
the heart of the legal relationship between it and the owners
and are
also definitive of the relationship between the administrators and
the owners of units in the development, in the light
of the fact that
the administrators, upon their appointment, effectively displace the
body corporate.
[4]
The main objectives behind the appointment of the Respondents as
joint administrators of the development were, of course, to
restore
the body corporate to solvency from the shambolic state to which its
finances had been reduced at the time of the administrators’
appointment, and to ensure that the new body corporate is this time
properly empowered to withstand the seemingly entropic tendency
of an
organisational entity such as the body corporate, to revert to a
state of chaos. All things being equal, the administrators’
appointment would accordingly amount merely to a temporary
stewardship of the affairs of the body corporate, to be renounced as
soon as its affairs had been restored to normality.
[5]
The appointment of the Respondents as administrators commenced on 16
February 2010, by order of this Court; on 9 September 2011
the
aforesaid appointment was extended for 36 months effective from 17
February 2011 and on 18 February 2014 the appointment was
again
extended for a further period of 12 months. In terms of the original
order granted in 2010, the administrators were entitled
to be
rewarded for their services at the rate of R400 per hour. This rate
was increased to R500 per hour pursuant to the last order
granted.
The appointment of the Respondents as administrators, unless extended
again, will accordingly lapse on 17 February 2015.
[6]
In her founding affidavit, the Applicant states that she wrote a
letter to the Respondents, addressed to their agents, Prime
Property
Investments on 10 April 2014, requesting the following information
and/or documentation:-
“
I
would like the following information to be furnished to me in
writing:-
1.
the status of the debt which is owed to the Municipality in which
judgment was obtained? Is there a payment plan that was
reached? How much has been paid so far and how much is
outstanding? Can I get a copy of the settlement agreement with
the Municipality?
2.
Whether the administrators (Respondents) have appointed service
providers to render services like cleaning, security, plumbing,
financial advice, legal services etc? If so how much is being
paid for such service monthly?, and what method was used to
ensure
that the service providers are contracted at a competitive price
bearing in mind the status of the finances which resulted
in the
Administrators being appointed?
3.
The copies of the contracts or terms of services with the service
provider mentioned in 2 above?
4.
Whether there is a plan by the Administrators to hold a meeting with
the owners of the units to address them on variety of issues
pertaining to the Kemptonian building?
5.
How much has been paid to date as salaries for the two
Administrators, from the time they started to work to date?
6.
Whether there is any skills transfer plan or programme that the
Administrators has in order to capacitate the unit owners so
as to be
able to form and run a strong body corporate when the term of the
Administrators come to an end?”
[7]
I have only quoted the part of the letter containing the actual
request for information. In the unquoted concluding paragraph
of the
aforesaid letter, the Applicant stated that the requested information
should be transmitted per telefax to a number stated
in the aforesaid
letter. In paragraph 10 of her founding affidavit, the
Applicant states that she believes that it is her
right, as the owner
of a unit, to protect her investment and therefore that she, like all
other owners, has a right to know what
the current expenses being
incurred by the Respondents are and whether such expenses are
documented.
[8]
In paragraph 12 of her founding affidavit she contends that she has a
right to scrutinise the documents requested and to ask
clarificatory
questions where she does not understand, since the Respondents
obtained the funds to administer the building from
the owners of the
units, like herself.
[9]
She stated in her founding affidavit that she received no response to
her aforesaid letter and that, in terms of Section 58
of the
Promotion of Access to Information Act, No. 2 of 2000 (“
PAIA”
),
the Respondents must be regarded as having refused the request.
[10]
In paragraph 21 of the Applicant’s founding affidavit it is
contended that the information requested is in the public
interest,
as it is important to know the role played by people in the position
of the Respondents, “…
who avail themselves as right
people to be entrusted with the management of the funds of the unit
owners, a fiduciary and privileged
position”
.
[11]
She complained, furthermore, that the Respondents “
have
never had any open meeting since they were appointed
”.
[12]
In paragraph 24 of her founding affidavit she contended that, in the
absence of “
an open meeting”
to discuss the
finances, obligations, progress and challenges of the development,
the rights of the owners can only be guaranteed
through the request
in terms of the Act.
[13]
In their answering affidavit, the Respondents contended that they
did, in fact, respond to the request for information/documentation
by
way of an e-mail sent to the Applicant’s work e-mail address,
instead of to the fax number supplied by the Applicant.
The
Second Respondent, who deposed to the answering affidavit, stated
that the e-mail address to which the aforesaid e-mail in
response to
the applicant’s request for information was sent, is the e-mail
address which the Respondents have on their records
as belonging to
the Applicant and to which they normally send e-mail communications
addressed to the Applicant. I may add,
at this point, that the
Applicant, in her replying affidavit, denied having received the
aforesaid e-mail and explained that her
employer, SARS, had installed
filtering software which would tend to divert e-mails as bulky as the
one sent by the Respondents
and that that is in all likelihood the
reason why she never received the response as aforesaid. In argument,
Mr Kela, who appeared
for the Applicant, submitted that in failing to
direct their response to the Applicant’s letter to the clearly
stated facsimile
number specified therein for this purpose, blame for
the non-receipt of their response lies with the Respondents and that,
in these
circumstances, they must be taken to have refused to supply
the information sought, pursuant to the deeming provision in section
58 of PAIA. I am not certain that the conclusion contended for
necessarily follows but, as I understood Mr Roux, who appeared for
the Respondents, their position in any event effectively amounts to a
refusal to comply with the request in its terms, at least
insofar as
the settlement agreement and the services agreements are concerned,
in as much as they contend that the request is not
cognisable in
terms of PAIA, alternatively, that the information sought has already
been supplied.
[14]
In their answering affidavit, the Respondents took certain points
in
limine
, being that the application is defective in that the
records requested in terms of PAIA have not been specified.
This point
was, to all intents and purposes, abandoned when it became
clear that the Applicant was persisting with the application only
insofar
as it pertains to the request for a copy of a settlement
agreement between the Respondents and the Kempton Park Municipality
and
for copies of such service agreements as may have been concluded
with service providers by the Respondents. Accordingly, nothing
further need be said about this point. It was further argued
that the entire application constitutes an abuse of the Court
process
in that the Applicant had failed to follow the required procedures in
terms of the Prescribed Management Rules promulgated
in terms of
Section 37(1)(q)
of the
Sectional Titles Act. In
my view, this
point is not a true point
in limine
and is, in reality,
intertwined with the merits of the application. It was also
argued as such. I shall deal with this
point in the course of
my assessment of the merits of the application.
[15]
On the merits of the Applicant’s request, the Respondents
contended that they had in fact responded to the Applicant’s
request by way of a letter dated 6 May 2014, e-mailed to the e-mail
address supplied by the Applicant for purposes of correspondence
with
the Respondents in general, in which letter each and every request of
the Applicant was allegedly addressed.
[16]
In addition, it was contended on behalf of the Respondents that the
information requested by the Applicant is available in
terms of the
Sectional Titles Act and
that the Applicant could have inspected all
of the records of the Kemptonian Body Corporate in terms of the
provisions of this
Act.
[17]
In assessing the competing contentions of the parties it is necessary
to determine, first, whether the Applicant’s request
for
information and/or documentation is cognisable as a request for
information in terms of PAIA. In terms of the provisions
of
Section 3 of PAIA, the Act applies to (a) a record of a public body,
and (b) a record of a private body regardless of when the
record came
into existence. “
Record”
is defined in Section 1 of PAIA as “
any
recorded information – (a) regardless of form or medium; (b) in
the possession or under the control of that public or
private body
respectively, and (c) whether or not it was created by that public or
private body respectively”
.
The content of these provisions, as well as the general scheme of the
Act, make it plain that what may be requested in terms
of PAIA is a
record of either a public or private body, to the extent that such
record contains any
recorded
information. The concept controlling the scope of application of the
Act, despite the title of the Act, is the concept of a “
record”
,
not “
information”
.
[3]
This is not, in the main, what the Applicant’s request
relates to. The Applicant, in her aforesaid letter, save
in the
two respects detailed hereunder, requests explanations rather than
records. The only documents which would qualify
as records in
terms of PAIA, are the copy of the settlement agreement with the
Municipality (requested in terms of paragraph 1
of the letter) and
the copies of the services contracts with service providers (referred
to in paragraph 3 of the letter).
The remainder of the
information requested constitutes requests for explanations, for
which the Act makes no provision. If PAIA
had included unrecorded
information within its sweep, this would plainly have rendered the
operation of the Act unworkable. As
far as its form is concerned, the
Applicant’s request for those records qualifying as such in
terms of PAIA (“
the
requested records”
),
complies with the requirements as to the content of a request as
prescribed by Section 53(2)(a) of PAIA.
[18]
The next question, as far as the requested records are concerned, is
whether the Respondents in their capacity as the joint
administrators
appointed in the place and stead of the body corporate, fall to be
regarded as a “
public
body”
as defined in PAIA. The reason for this enquiry is that, should
the entity from whom the records are sought be a public body,
the
“
requester”
may have access to such record as a matter of right, unless a valid
ground for refusal of access exists. If, on the other
hand,
access to the records of a private body is sought, the requester must
establish that such record is required for the exercise
or the
protection of a right, before the issue as to the existence of a
valid ground for refusal even arises. The question
whether the
body concerned is public or private, depends upon an analysis of the
activity or function exercised by the body at
the time when the
request is made.
[4]
In
terms of Section 1 of PAIA, a “
public
body”
is defined as meaning:-
“
(a)
any department of state or administration in the National or
Provincial sphere of Government or any Municipality in the local
sphere of Government; or
(b)
any other functionary or institution when –
(i)
exercising a power or performing a duty in terms of the Constitution
or a Provincial Constitution; or
(ii)
exercising a public power or performing a public function in terms of
any legislation;”
[19]
The Respondents are manifestly not a Department of State or
administration in the National or Provincial sphere of Government
nor
are they a Municipality or a functionary or institution exercising a
power or performing a duty in terms of the Constitution
or a
Provincial Constitution. In my view, none of the functions
performed by the Respondents can reasonably be classified
as public
by nature, since the functionaries concerned are plainly not pursuing
any public interest; on the contrary, the avowed
objective by which
their appointment as administrators is animated, is to restore the
body corporate of a privately owned sectional
title development to
solvency. The same may be said in connection with the
Respondents’ powers which, regard being
had to their source,
nature, subject matter and the question whether these powers involves
the discharge of a public duty,
[5]
are, likewise, plainly private by their nature. The
Respondents’ powers and functions, although derived from the
provisions
of the
Sectional Titles Act, via
their appointment by
order of Court, are plainly limited in their application to this
particular development. The “
control
test”
in terms of which the issue as to the extent of State control of the
body concerned, if any, is used to determine the question
yields the
same result.
[6]
The
reference, by the Applicant, to the fiduciary nature of the
Respondents’ office in this regard, can have no impact
on this
aspect of the Respondents’ appointment.
[7]
It follows from the aforegoing that the status of the Respondents for
purposes of PAIA is that they are a private body.
The nature of
the documents requested confirms the categorisation of the
Respondents as a private body.
[20]
The result of the aforegoing categorisation is that it becomes
incumbent upon the Applicant to show that the records requested
are
required for the exercise or protection of any rights (
vide
Section 50(1)(a)
of PAIA). The proper interpretation of the words
“
required
for”
has spawned a considerable number of decisions in various of the
Provincial and Local divisions, both in terms of the Interim as
well
as the Final Constitution.
[8]
The leading decisions by the SCA are
Cape
Metropolitan Council v Metro Inspection Services
(Western
Cape)
2001 (3) SA 1013
(SCA),
Clutchco
(Pty) Ltd v Davis
2005 (3) SA 486
(SCA),
Unitas
Hospital v Van Wyk and Another
[2006] ZASCA 34
;
2006 (4) SA 436
(SCA),
MEC
for Roads and Public Works, Eastern Cape, and Another v Intertrade
Two (Pty) Ltd
2006 (5) SA 1
(SCA) and
Claase
v Information Officer, South African Airways (Pty) Ltd
2007
(5) SA 469
(SCA).
[21]
In the
Clutchco
-decision, it was pointed out that the right of
access to records reposing in the control of a private body is far
from untrammelled
and further, that the expression “
required
for the exercise or protection of any … rights”
is
also to be found in item 23(2)(a) of Schedule 6 to the Constitution,
which was judicially considered in
Shabalala v Attorney-General
Transvaal and Another
1995 (1) SA 608
(T). In this decision
Cloete, J. held that the word “
required”
is
capable of a number of meanings ranging from “
desired”
through “
necessary”
to “
indispensable”
(see
Khala v Minister of Safety and Security
1994 (3) SA 218
(W) at 224G – 225E). He held that “
required”
in Section 23 conveys an element of need: the information does
not have to be essential, but it certainly has to be more than
“
useful”
(see
S v Sefadi
1995 (2) SACR 667
(D) at 671d) or “
relevant”
(see the
Khala
decision,
supra
, at 238D – F) or simply “
desired”
.
[22]
In
Nortje and Another v Attorney-General Cape
1995 (2) SA 460
(C) at 474G, Marais, J. held that “
required”
meant
not “
needs”
but “
reasonably required”
.
[23]
In
Le Roux v Direkteur-Generaal van Handel en Nywerheid
1997
(4) SA 174
(T), it was emphasised that it is incumbent upon an
applicant for information to “
lay a proper foundation for
why that document is reasonably ‘required’ for the
exercise or protection of his rights
”.
[24]
In
Cape Metropolitan Council v Metro Inspection Services
(Western Cape)
,
supra
, at 1013, Streicher, JA stated,
at paragraph 28 “…
in order to make out a case for
access for information in terms of s 32, an applicant has to state
what the right is he wishes to
exercise or protect, what the
information is that is required and how that information would assist
him in exercising or protection
that right”
.
[25]
The SCA in the
Clutchco
-decision
came to the conclusion, at paragraph 13, that “
reasonably
required”
in the circumstances is about as precise a formulation as can be
achieved, provided that it is understood to connote a substantial
advantage or an element of need. The Courts have been understandably
reluctant to positively define the meaning of the word “
require”
in
the context of the provisions of PAIA, because the question whether
access to a particular record is required in a given case
in order to
exercise or protect a right is, in essence, a fact-driven enquiry,
the resolution of which ultimately depends vitally
upon the nature of
the right asserted, the nature of the record sought and the other
relevant facts of each matter.
[9]
[26]
In the present matter, the Applicant is the owner of a unit in the
development which the Respondents have been appointed to
administer
temporarily, in the place and stead of the body corporate, of which
the Applicant is a member
ex
lege
.
[10]
By law,
[11]
the
Respondents, having stepped into the shoes of the body corporate, are
required to discharge their duties of administration
in the interests
of the owners and in administering the fund, established in terms of
Section 36(1)
of the
Sectional Titles Act, the
Respondents occupy a
position of trust
vis-à-vis
the Applicant, to the same extent as the elected trustees would have
occupied, had they not been discharged. This position
carries
with it a duty to account to the Applicant and all other
owners/occupiers who contributed to the fund. The duty arises
from the relationship of trust which necessarily exists between the
administrators and the owners of units, as an incident of such
relationship.
[12]
None
of the Court orders in terms of which the Respondents were appointed
as administrators vary or detract from this duty
in any way.
[27]
The body corporate, furthermore, upon their reinstatement after the
discharge of the administrators, will be liable for debts
incurred by
the administrators during their regime. The individual owners, such
as the Applicant, can ultimately be held personally
liable for debts
owed by the body corporate,
pro
rata
to
their quotas. The existence of a duty to account is confirmed
by the Management Rules, promulgated pursuant to the
Sectional Titles
Act, the
provisions whereof determine the extent of the commensurate
right on the part of the owners of units in a sectional title
development
as a body to an accounting, and the extent of the right
of access to the books of account and records of the body corporate
by
each individual owner.
[13]
[28]
Rule 35(2) of the Management Rules provides that, on the application
of any owner, registered mortgagee or of the managing
agent the
trustees shall make all or any of the books of account and records
available for inspection by such owner, mortgagee
or managing agent.
The Respondents, in paragraph 6.3 of the answering affidavit,
contends that the Applicant’s application
for information in
terms of PAIA constitutes an abuse, in that the Applicant has not
followed “
the required procedures
” in terms of the
aforesaid rule, “
which allows inspection (not copying) of
the Kemptonian Body Corporate records”
. The fact of
the matter is, however, that there are no prescribed procedures for
an owner to enforce inspection of the books
and records of the body
corporate in terms of rule 35(2), other than to make application for
such access. This, the Applicant
has done.
[29]
The use of the word “
inspection”
in Rule 35(2) of
the Management Rules does not, in my view, mean that an owner is not
entitled to take or request copies of the
records inspected, as the
Respondents would have it. To hold that the word “
inspection”
in the Rule should be taken literally so as to limit an owner
requiring access to the books of account to commit such books to
memory, or to attempt to copy the books in longhand would amount to
an absurdity which does not conform to the object or purpose
of the
Rules. Such a construction would render the owner’s right
of access to the books of account and records of the
body corporate
illusory in most cases. The business records and books of account of
a body corporate are, by their very nature,
lengthy documents
containing a plethora of figures comprehensible only to
professionally qualified bookkeepers or accountants.
Often, the only
sensible way in which the true import of records of this type will be
capable of ascertainment, will be to submit
the books and records in
issue for perusal and consideration by an accountant. In these
circumstances, the only way in which
the documents may sensibly be
considered, is for the owner’s accountant to accompany him on
the inspection, or for copies
of the books and records to be supplied
to the owner so that he may have them scrutinised by an expert.
The documents, moreover,
are not the type of record that could be
copied in any way other than by the photocopying process which, in my
view, is the only
manner in which reasonable content is to be given
to the owner’s right to inspect the books of account and
records of a body
corporate within the meaning of Rule 35(2) of the
Management Rules, promulgated pursuant to the
Sectional Titles Act.
[30
]
In
Khunou and Others v Fihrer & Son
1982 (3) SA 353
(W) at
359H – 360A, in the context of Rules 35 and 37 of the Uniform
Rules of Court, similar reasoning was adopted to dispense
with a
broadly similar contention in terms of which it was sought to
restrict the right to require copies of discovered documents
to be
exchanged pursuant to Rules 35 and 37 of the Uniform Rules of Court.
The Court, in that case, pointed out that an overly
literal
interpretation of the Rules of Court should be guarded against, and
that, on the contrary, the Rules should be widely construed
in
consonance with the complex commercial life of the day, where a
photocopying machine had become as indispensable as a typewriter
and
almost as ubiquitous.
[31]
In the meantime, since the
Khunou
-decision
was reported, we have passed into the 21
st
century; the previously ubiquitous typewriter has itself been reduced
to a rare and quaint relic of the past, whilst commercial
life is
certainly no less complex today than it was at the time when this
decision was reported. Indeed, we are currently
firmly
ensconced in the so-called “
information
age”
,
where information is instantaneously replicated and transmitted
worldwide via the internet and the so-called “
social
media
”
in less than the blink of an eye. This phenomenon tends to
render information to which an applicant is entitled in
terms of PAIA
time-sensitive, in the sense that undue delay in the production of
access thereto may well render the information
ultimately
useless.
[14]
[32]
The duty to account involves a duty to keep the accounts up to date,
to allow the inspection of the books and to give information
when
necessary.
[15]
In
Mead
v Clarke
[16]
,
in regard to the duty to keep accounts up to date and to allow the
inspection of books, it was held:-
“
it
was the plain duty of the defendant [the agent], once he has accepted
the mandate, to perform his work in connection with the
plaintiff’s
[the principal’s] affairs in such a manner that the plaintiff,
at any time he demanded
,
could obtain a full and accurate statement of accounts from the
defendant, a statement that would enable him to ascertain with
precision the exact dealings of the defendant with his affairs.”
[33]
In
Martin
v Scorgie
[17]
,
De Villiers, J. agreed with the view expressed in Bowstead on
Agency
(10
th
ed., p. 98) and described it as a principle of our law also, that a
broker as agent must give his principal full and accurate information
of what he has done in carrying out the mandate and full and accurate
information of the contract concluded by him.
[18]
[34]
The extent of the duty to furnish an account is also well illustrated
by Millin, J. in
Hansa
v Dinbro Trust
(Pty)
Ltd
[19]
.
In this case, the Court also dealt with a broker/principal
relationship and expressed the agent’s duty to account
in the
following terms:- “
He
has at all
[reasonable]
times
to be ready with correct accounts of his dealings and transactions.
He has got to keep accounts. It is not sufficient
for him to
say ‘here are my books and here are my vouchers’.
You are at liberty to go through them and make up
an account for
yourself”
.
[35]
In
Jacobsohn
v Simon and Pienaar
[20]
,
at a time when an action was pending between the principal and his
agent, the principal sought access to the agent’s books
and
vouchers relative to a transaction which the agent had effected on
behalf of the principal. The agent sought to deny
the principal
access on the basis that the principal had at his disposal the
discovery machinery in terms of the rules. The Court
held that the
agent’s obligation to permit inspection is a continuing one
resting on an agent throughout the agency and even
thereafter.
The Court observed that, no doubt, the corresponding right must be
exercised reasonably and at convenient times,
but that the
principal’s right of access is not affected by the fact that
access to the documents sought could be obtained
by way of an
alternative remedy, such as the rules relating to discovery.
[36]
The decisions referred to above each refer to different aspects of
the duty to account which saddles an agent in relation to
his
principal. The Respondents in the present matter are, of course, not
strictly speaking agents of the body corporate. Inasmuch
as the
administrators, upon their appointment as such, replace the body
corporate and fulfil their functions to the exclusion of
the body
corporate, they can not be regarded as such. The nature of the office
of an administrator appointed in terms of
section 46(1)
of the
Sectional Titles Act is
, in my view, more closely analogous to that
of a mandatory, whose mandate is derived from the provisions of the
Sectional Titles Act and/or
the Court order in terms of which he was
appointed.
[37]
Van Zyl
,
J.
in
Totalisator
Agency
Board
OFS v Livanos
1987
(3) SA 283
(W) at 290J-292E, pointed out that the essential
difference between an agent and a mandatory is the fact that the
mandatary does
not represent the mandator and that, in the result,
the mandator does not become a party to any contractual relationship
concluded
by the mandatary with a third party during the execution of
the mandate.
[21]
[38]
But that which the mandatary, the agent and the person in a position
of trust have in common, is a duty to account to the
mandator/principal/beneficiary; this duty, in my view, also saddles
the respondents, because the essential attributes of their office
are
such that it necessarily attracts such a duty.
[39]
The settlement agreement between the Respondents and the
Municipality, which presumably regulate the terms upon which the body
corporate’s debt to the Municipality in respect of the arrears
for municipal charges became repayable, is manifestly a material
part
of the records of the respondents’ administration of the
affairs of the body corporate and constitutes an important
milestone
in the Respondents’ administration as such. The service
agreements with service providers to the body corporate
fall within
the same ambit. Both categories of document form part of the
business records of the body corporate, which the
Applicant is
entitled to inspect in terms of Rule 35(2) of the Management Rules
and to which she enjoys a right of access in terms
of the duty to
account arising from the trust between the Respondents and each
contributor to the fund administered by them. At
the very least,
access to these records would contribute to affording the Applicant
with an understanding of the composition of
material portions of the
expenditure incurred in relation to the Respondents’
administration of the affairs of the body corporate
of this
development. The said records are therefore required to
exercise a right vesting in the Applicant.
[40]
The Respondents do not dispute the Applicant’s complaint that
the Respondents have never convened a meeting of owners
and/or
occupiers of units, as provided for in Rule 51 of the Management
Rules, promulgated pursuant to the
Sectional Titles Act. On
the
contrary, the Respondents’ managing agent, in paragraph 4 of
its response to the Applicant’s request for information,
stated
with equanimity that the terms of the order pursuant to which the the
Respondents were appointed as administrators of the
affairs of the
body corporate do not require them to hold meetings with the owners
and/or occupiers. This may be so, but the Respondents’
failure
to do so nevertheless detracts materially from the transparency of
their management and control of the affairs of the defunct
body
corporate.
[41]
As pointed out above, the Respondents were appointed in 2010 already;
this means that for the best part of four years, the
owners and/or
occupiers of the development have been denied the facility of
interacting with the Respondents as a properly constituted
body.
The benefits of interaction between the owners and/or occupiers with
the Respondents on an organised basis at a duly
constituted general
meeting of the owners/occupiers are indisputable. It is only
when the owners/occupiers are allowed to
interact with the
Respondents as a duly constituted body, that the owners’
grievances or concerns can properly be aired,
and that questions can
be directed to the Respondents for their comment to the general body
of owners/occupiers. The letters addressed
at the discretion of the
Respondents to the individual owners/occupiers, whilst no doubt
constituting a useful means of communication,
are nevertheless no
proper substitute for interaction between the Respondents and the
owners of the units at a duly constituted
general meeting. Absent
interaction with the owners as a body in general meeting, the
Respondents not only retain total control
over the flow of
information to the owners, but also conduct their administration of
the Body Corporate in total isolation from
the views of the owners as
a body. This is not conducive to transparency in the
Respondents’ administration of the
affairs of the body
corporate; on the contrary, it leaves the owners as a body out in the
cold, as it were, where the decisions
of the Respondents are
presented to the owners as a
fait accompli
. Such a
regime is not the one envisaged in terms of the
Sectional Titles Act,
nor is
it consonant with the constitutional values envisaged in
Section 1 of the Constitution. It is, accordingly, precisely the sort
of situation which falls within the purview of the objects of PAIA,
and which is sought to be addressed by the provisions of the
Act.
[42]
The Respondents’ contention that each and every enquiry by the
Applicant was addressed in the Respondents’ answering
e-mail is
not correct. The request in paragraph 1 of the Applicant’s
letter, for a copy of the settlement agreement between
the
Respondents and the Kempton Park Municipality was not responded to by
the Respondents. Neither did the Respondents respond
to the request
for copies of such service agreements as must be in existence, for
instance, with the managing agent of the Respondents.
[43]
It is necessary to refer also to the provisions of Section 6(b) of
PAIA, in terms of which it is provided that nothing in the
Act
prevents the giving of access to a record of a private body in terms
of any legislation referred to in Part 2 of the Schedule.
Part
2 of the Schedule only contains a reference to the National
Environment Management Act, No. 107 of 1998. The Minister
has not
complied with his duty in terms of Section 86 (1) of PAIA, within 12
months of the promulgation of Section 6, to produce
a Bill in
Parliament, proposing the amendment of Parts 1 and 2 of the Schedule,
to include the provisions of legislation which
provide for or promote
access to a record of either a public or a private body, as the case
may be.
[44]
In terms of Section 86(2) of PAIA, until the amendment of the Act
contemplated in sub-Section (1) takes effect, access may
be given in
terms of any other legislation not referred to in the Schedule which
provides for access to a record of a public or
private body in a
manner which is not materially more onerous than the manner in which
access may be obtained in terms of Part
2 or 3 of this Act,
respectively.
[45]
The only apparent difference between access to the records sought in
terms of the
Sectional Titles Act and
access to the same records in
terms of PAIA, is that the provisions of Rule 35(2) of the Management
Rules, Annexure 8 to the Act,
prima facie
entitle an
inspection only of the documents therein referred to, rather than a
right to obtain copies of such documents, which latter
form of access
would be the usual one granted to a requester in terms of PAIA. As
I have already pointed out, however, the
right to inspect documents
in terms of Rule 35(2) of the Management Rules must, upon a proper
construction, be taken to include
the right to obtain copies of the
documents so inspected. If I am correct in this regard, the
difference between the regimes
of access provided for in terms of the
two Acts is apparent rather than real and access may have been given
in terms of the Management
Rules. However, because of the
Respondents’ view that some or the other process specific to
the Management Rules is required
before access to documents may be
granted in terms of such Rules, or because of their view that the
Management Rules allow an inspection
only and not the copying of
documents they, in effect, declined access to the documents
altogether. They did so by opposing
the Applicant’s
application for access in terms of PAIA and by rendering the
Applicant’s access to the documents in
terms of the Management
Rules subject to restrictions which they had no right to impose. If
this were not the case, they could
have tendered copies of the
documents sought in terms of the Management Rules, which they did not
do; the form of access they tendered
was an inspection without the
right to take copies, which falls short of that which the Applicant
is entitled to in terms of PAIA.
[46]
If I am wrong in my conclusion that the right to inspect documents in
terms of Rule 35(2) of the Management Rules includes
the right to
receive copies of such records, then the provisions of the Management
Rules in terms of which access to documents
may be granted are indeed
more onerous than the equivalent provisions in terms of PAIA. In
either event, the Applicant must
be held to be entitled to access to
the remaining documentation sought by her in terms of PAIA.
[47]
The Respondents, furthermore, contended that there is a judgment
against the Applicant for outstanding arrear levies and other
charges, which is currently on appeal. It was submitted in the heads
of argument filed on behalf of the Respondents that the records
sought by the Applicant pertains to and forms the basis of the appeal
and that the application falls to be dismissed on this basis,
in
terms of Section 7 of PAIA. Even if the stated premises, if
established, would justify the dismissal of the application (about
which I express no view), the fact is that there is no mention in the
affidavits of such a defence, and no evidence is proffered
in
sustenance thereof. The defence can accordingly not be sustained.
[48]
I am accordingly at large to grant any order that is just and
equitable as provided for in Section 82 of PAIA.
In
my view, the following would be such:
1.
The decision by the Respondents not to
grant the Applicant access to the settlement agreement between the
Respondents and the Kempton
Park Municipality relating to the
indebtedness of the body corporate of the Kemptonian sectional title
development to the Municipality,
and such written service agreements
as are in existence between any service provider to the body
corporate of the Kemptonian and
the Respondents is hereby set aside.
2.
The Respondents are ordered to provide the
Applicant with copies of the aforesaid documents within 5 (FIVE) days
of the service
on them of this order.
3.
The Respondents shall pay the Applicant’s
costs.
VERMEULEN,
AJ
TO:
THE
REGISTRAR OF THE HIGH COURT
JOHANNESBURG
Date
of Hearing: 9 December 2014
Date
of Judgment: 04 February 2014
APPEARANCES:
ADV
D Z KELA
Instructed
by
:
MKHIZE
ATTORNEYS
For
the Applicant
Suite
305 E, Killarney Office Towers
Killarney
Mall
60
Rivonia Road
Killarney
Tel.:
(011) 486-0290
Fax:
086 566 7910
Ref.:
N Mkhize
ADV
C ROUX
Instructed
by
:
ARNOLD
JOSEPH ATTORNEYS
For
the Respondents
3
rd
Floor, 16 Baker Street
Rosebank
Tel:
(011) 447-2376
Fax:
(011) 447-6313
Ref.:
A Joseph/mjp/15827
[1]
See
section 37(1)(a) and (b) of the Sectional Titles Act, No. 95 of 1986
(“
the
Sectional Titles Act”
>
)
[2]
See
section 46(3)
of the
Sectional Titles Act.
[3
]
Currie
and Klaaren;
The
Promotion of Access to Information Act Commentary
,
2002, para. 4.1, p. 41;
Sebastian
Roling;
Transparency and Access to
Information in South Africa, an Evaluation of the
Promotion of
Access to Information Act;
(unpublished
dissertation for the LLM degree at the University of Cape Town,
2007), at p. 19.
[4]
Mittalsteel
South Africa Ltd (formerly Iscor Ltd) v Hlatshwayo
2007
(1) SA 66
(SCA) para 10.
[5]
See
Institute
for a Democratic South Africa(IDASA) v ANC
2005
(5) SA 39
(C) at paras. 26-27.
[6]
See
Mittalsteel
South Africa Ltd (formerly Iscor Ltd) v Hlatswayo
2007
(6) SA 66
(SCA) at para. 9.
[7]
In
terms of
section 40(1)
of the
Sectional Titles Act, a
trustee stands
in a fiduciary relationship to the body corporate. In terms of
section 46(3) of the Act, an administrator appointed
in terms of
section 46(1) shall, to the exclusion of the body corporate, have
the powers and duties of
the
body corporate
(not the trustee), or such powers and duties as the Court may
direct. The fiduciary relationship, if there is one, accordingly
does not result from any provision of the
Sectional Titles Act. But
,
the fact is that an administrator, by virtue of his or her office,
administers funds belonging to the owners and, accordingly,
occupies
a position of trust in relation to the owners and occupiers of units
in the development, who must necessarily place
their confidence in
the administrator. See
Robinson
v Randfontein Gold Mining Co. Ltd
1921
AD 168
at 178-188;
Volvo
(Southern Africa) (Pty) Ltd v Yssel
[2009] ZASCA 82
at para 14. The administrator, furthermore,
administers funds which constitute “
trust
property”
,
as defined in
section 1
of the
Financial Institutions (Protection of
Funds Act) No. 28 of 2001
.
[8]
Inkatha
Freedom Party and Another v Truth and Reconciliation Commission and
Others
2000
(3) SA 119
(C);
Khala
v Minister of Safety and Security
1994 (4) SA 218
(W);
Le
Roux v Direkteur-Generaal van Handel en Nywerheid
1997 (8) BCLR 1048
(T);
Lebowa
Granite (Pty) Ltd v Lebowa Mineral Trust and Another
1999
(8) BCLR 908
(T;
Nortje
and Another v Attorney-General of the Cape and Another
1995 (2) BCLR 236
(C);
Van
Huissteen NO and Others v Minister of Environmental Affairs and
Tourism and Others
1995
(9) BCLR 1191
(C) and
Van
Niekerk v City Council of Pretoria
[1997] All SA 305 (T).
[9]
See,
for instance, the
Unitas
Hospital-
decision,
supra,
at
para. 18.
[10]
See
Section 36(1)
of the
Sectional Titles Act.
[11
]
See,
inter
alia
,
Section 37(1)(r)
of the
Sectional Titles Act.
[12
]
Nov
72.6, 7;
Censura
Forensis
1.17.15 n. 9;
RHR
1.16.8,
12;
Gr
1.9.10
, 11, 13;
Sande
Decisiones
Frisiae
2.19. 13;
Lybrechts
1.485;
Van
der Linden
1.5.3;
Holl
Cons
1.117;
2.323;
Utr
Cons
2.76 n 12; Voet 26.7.10;
Brunnemann
,
on
Dig
xxvi, 7, 58. Most of the common law writers referred to above,
deal with the relationship of trust and the fiduciary duty
of a
trustee arising therefrom in the context of the relationship between
guardian and ward. Van Leeuwen, at Cf.1.4.24.8
also deals with
the mandatary’s duty of good faith. In
David
Trust and others v Aegis Insurance Co Ltd and others
[2000] ZASCA 108
;
2000
(3) SA 289
(SCA), in paragraph 20, the Court said:- “
The
contract is one of mandate. The mandate given by each
plaintiff to Katz Salber was to invest and administer funds
entrusted to it by the plaintiff concerned and collected by it from
the plaintiff’s debtors. These funds were to be
invested
in a bank, in this case Investec and Trust bank respectively.
It is one of the
naturalia
of each such contract, as it is of the contracts of mandate in
general, that the mandatory is obliged, first, to perform his
functions faithfully, honestly, and with care and diligence and,
secondly, to account to his principal for his actions …
”.
The duty to account is one of the
naturalia
of every relationship of trust created by agreement. It exists
also, for instance, in agency.
Vide
Kerr; The Law of Agency, 4
th
ed., p. 136.
[13]
In
terms of
Rule 25
, the duties and powers of the body corporate shall
be exercised or performed by the Trustees, subject to such
restrictions as
may be imposed by the owners in general meeting.
As far as the duty to account is concerned,
Rule 35(1)
obliges the
Trustees to keep books of account and records which fairly reflect
the financial position of the body corporate;
Rule 36(1)
requires
the Trustees to prepare annual financial statements and an estimate
of expenditure for each financial period of the
body corporate,
which must be placed before the annual general meeting. The
annual financial statements and estimates of
expenditure must also
be placed before each individual owner before the annual general
meeting in terms of
rule 36(1).
In terms of
rule 38(1)
the
trustees must, in addition, submit a trustees’ report to the
owners at the annual general meeting.
[14]
Roling,
op. cit. pp. 1-2
[15]
Kerr,
op. cit., p. 153.
[16]
1922
EDL 49
at 51.
[17]
1950
(4) SA 344
at 347.
[18]
The
latest edition of Bowstead at my disposal, being the 20
th
edition, in article 51, p. 283, confirms the position as stated in
Martin v Scorgie,
supra.
[19]
1949
(2) SA 513
(T) at 517.
[20]
1938
TPD 116
at 118.
[21]
See
Digest
17.1.20
pr.