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[2015] ZAGPJHC 236
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Fletcher and Another v Montega Body Corporate (13/34654) [2015] ZAGPJHC 236 (16 October 2015)
REPUBLIC
OF SOUTH AFRICA
SOUTH
GAUTENG HIGH COURT
JOHANNESBURG
CASE
NO: 13/34654
DATE:
16 OCTOBER 2015
In
the matter between:
FLETCHER,
GLORIA JUNE
PENELOPE
..................................................................
First
Applicant
FLETCHER,
DONOVAN
WHYNDAM
....................................................................
Second
Applicant
And
MONTEGA
BODY
CORPORATE
......................................................................................
Respondent
J
U D G M E N T
FISHER
AJ:
[1]
The First Applicant is the owner of a property in a sectional title
scheme known as “
Montega”
and situated in Sandown. The Second Applicant is the husband of
the First Applicant and a former trustee of the Respondent.
[2]
The First Applicant is thus a member of the Respondent by virtue of
section 36(1) of the Sectional Titles Act 95 of 1986 (“
the
Act”
). It is, in fact, only
the First Applicant who has
locus standi
in these proceedings. The First
Applicant took transfer of her unit in the scheme during 2007.
[3]
The dispute in this matter is about access by the Applicants to the
records of the body corporate. The Applicants rely
on the
provisions of section 37(1)(l) of the Act, read with Sectional Title
Management rules 34 and 35 for the relief they seek.
In
relation to the management rules, the Respondent has not adopted
rules that differ from the standard rules promulgated
under the Act
and thus such rules apply.
[4]
Section 37 of the Act provides as follows:
“
Functions
of bodies corporate
(1)
A body corporate referred to in section 36 shall perform the
functions entrusted to it by or under this Act or the rules, and
such
functions shall include-
...
(l)
to comply with any reasonable request for the names and addresses of
the persons who are the trustees of the body corporate
in terms of
the rules referred to in section 35, or who are members of the body
corporate;
”
[5]
Sectional title rules 34 and 35 provide as follows:
“
Minutes
34.
(1) The trustees shall-
(a)
keep minutes of their proceedings;
(b)
cause minutes to be kept of all meetings of the body corporate in a
minute book of the body
corporate kept for the purpose;
(c)
include in the minute book of the body corporate a record of every
unanimous resolution,
special resolution and any other resolution of
the body corporate.
(2)
The trustees shall
keep all minute books in perpetuity.
(3)
On the written application of any owner of registered mortgagee of a
unit, the trustees
shall make all minutes of their proceedings and
the minutes of the body corporate available for inspection by such
owner or mortgagee.
Books of Account
and Records
35.
(1)
The trustees shall cause proper
books of account and records to be kept so as fairly to explain the
transaction and financial position
of the body corporate, including –
(a)
a record of the assets and liabilities of the body corporate;
(b)
a record of all sums of money received and expended by the body
corporate and the matters
in respect of which such receipt and
expenditure occur;
(c)
a register of owners and of registered mortgagees of units and of all
other persons having
real rights in such units (insofar as written
notice shall have been given to the trustee by such owners,
mortgagees or other persons)
showing in each case their addresses;
and
(d)
individual ledger accounts in respect of each owner.
(2)
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.
(3)
The trustees shall cause all books of account and records to be
retained for a period of
six years after completion of the
transaction, act or operations to which they relate; Provided that
minute books shall be retained
for so long as the scheme remains
registered.
”
[6]
The First Applicant’s attorneys have withdrawn. She,
accordingly, prepared
the replying affidavit herself and argued the
matter in person.
[7]
The Applicants allege that they suspect mismanagement of the affairs
of the body corporate
by the board of trustees. They allege
that they seek the documents for the purposes of establishing this
mismanagement. The
First Applicant was, however, careful to emphasise
that she does not contend for any fraudulent conduct on the part of
the trustees
or the managing agent. It emerges that the genesis
of the dispute is the alleged failure of the Respondent to properly
fix
the roof of the complex, which the Applicants allege has caused
them expense and inconvenience. The Applicants contend that
they made numerous requests for the documents which are enumerated in
the notice of motion and that the trustees have been uncooperative
in
providing the documents.
[8]
The relationship between the Applicants and those trustees with whom
they have engaged,
appears to have broken down. The Applicants
also engaged at length with the management agent employed by the
trustees to
manage the complex. Similarly, the relationship
with this management agent, Berader Properties (Pty) Ltd (“
Berader
”)
and more specifically the employee seized with dealing with the
management of the complex on behalf of Berader, Mr Derek
Varkevisser
(“
Mr Varkevisser
”) has also broken down. Mr
Varkevisser deposed to the answering affidavit on behalf of the
Respondent.
[9]
The animosity between the Applicants and Berader and the board of
trustees has become
pronounced. It is my sense that it has
informed and fuelled the Applicants’ conduct in this matter.
During 2013
the Applicants reported Berader to the Estate Agency
Affairs Board and the Respondent’s auditors to their
professional council.
[10]
The Respondent contends that there is no merit in the Applicants’
allegations of maladministration.
This is not a matter which I
am called upon to resolve.
[11]
The Applicants eventually felt compelled to approach attorneys for
the purposes of securing the
documents which they sought. On 5
February 2013 the Applicants, through their then attorneys Kevin Hyde
Attorneys, demanded
in writing that the Respondent give them access
to a list of documents and financial records.
[12]
The demand for the documents was to the effect that the Respondent
produce such documents at
a meeting of the trustees scheduled for the
next day.
[13]
In response to such letter, and by letter of 6 February 2013, the
Respondent replied to the Applicants
that it would supply all the
information demanded by the Applicants, subject to any limitations by
law, at the offices of Berader.
The Applicants were asked to
supply three proposed dates for the inspection.
[14]
Somewhat inexplicably, the correspondence which followed from the
Applicants’ attorneys
reflected a reluctance to take up
this offer.
[15]
On 14 February 2013 the Respondent again extended the invitation to
meet and to inspect all documents
at Berader’s offices at a
mutually agreed date and time.
[16]
The Respondent contends that the meeting was tendered so that the
documentation requested by
the Applicants could not only be provided,
but also discussed and explained where necessary.
[17]
Again the Applicants did not accept this invitation. However,
approximately six months
later, on 15 August 2013, the Applicants
sent a letter to the Respondent repeating their demand for the same
documents described
in their demand of 5 February 2013, but now
seeking the documents until 2013. The Respondent was given an
election to provide
copies of the documents against payment of the
reasonable costs of copying or to allow attendance at the offices of
Berader to
inspect the documents. It was threatened in the
letter that if the election was not provided legal proceedings would
be instituted.
[18]
The applicants then proceeded to deliver the application on 17
September 2013.
[19]
On 20 September 2013 the Respondent again tendered inspection of the
documents. There was,
however, in such letter, a rider to the
tender being that the Respondent’s auditor be present during
the inspection at the
Applicants’ cost.
[20]
The parties then agreed that an inspection of all documents requested
would take place and that
the application would be suspended pending
this inspection.
[21]
During October 2013 correspondence passed between the parties in
relation to the logistics of
inspection of the documents, including
who would make copies of the documents, who would pay for such
copies, whether auditors
would attend and who would bear the costs
associated with such attendance. It suffices to say, in
relation to this correspondence,
that both parties appear to exhibit
an unreasonable and obstructive approach in relation to the carrying
out of the inspection.
It appears clear that the right to
inspect the documents had become more than a means to an end.
The parties had, by this
stage, gone to war with one another and the
inspection of the documents had become their battleground.
[22]
On 28 November 2013 dates were provided during December 2013 upon
which the Applicants would
attend at Berader’s offices in order
to inspect the documents. A letter written on 28 November 2013
for the purposes
of arranging this meeting stated that the Applicants
would attend at Berader’s offices “
with legal
representation in order to ensure that a full inspection takes place
and that our client is neither harassed nor abused
during such
inspection ...
”. Furthermore, it was stated that the
Applicants had gone to the lengths of making arrangements to bring
their own photocopier
to the inspection for the purposes of copying
the documents.
[23]
Pursuant to this letter a meeting ultimately took place at Berader’s
offices on 25 February
2014. This meeting was attended by the
Applicants and their legal representatives. It appears as if the
attendance of an
auditor was dispensed with. The Applicants indeed
brought their own photocopy machine. Mr Varkevisser alleges
that he had
prepared all the files containing all the documents that
the Applicants had requested in the application and in
correspondence,
that the documents were furnished to the Applicants,
and they and their representatives were left in an office to go
through the
documents at their leisure and to take any copies that
they deemed necessary.
[24]
The First Applicant complains that the documents furnished were found
to be disordered and that
there were no audit trails or reference
numbers on general ledger entries. She complains also that it
was difficult to locate
documents that she was looking for. A
complaint is also made that proxies which were specifically requested
were not supplied.
[25]
The Respondent concedes that certain of the proxies were not supplied
and the one service agreement
that was asked for was also not
supplied. Mr Varkevisser indicated that such documents were
missing from the records but
that he undertook to provide them if he
was able to find them in due course. I was advised in argument
that the proxies in
question are not to hand but that the service
agreement has been provided to the Applicants. In any event,
the provisions
of the Act to which reference is made above and the
management rules do not specifically entitle the Applicants to copies
of the
proxies.
[26]
Apart from the aforegoing, it is contended by the Respondent that all
documents in Berader’s
possession which were sought by the
Applicants in their demands in correspondence leading up to the
application and in the notice
of motion dated 17 September 2014 were
made available to the Applicants at this inspection on 25 February
2014. This is not
seriously disputed save, as aforesaid, that
the Applicants contend that they were unhappy with the fact that
there were no audit
trails or reference numbers in the general ledger
entries and that they had difficulty locating documents.
[27]
What is clear is that, on any version, there was an attempt on the
part of the Respondent to
provide such documentation as had been
requested and there were inordinate lengths undertaken by the
Applicants in relation to
the copying of documents in the presence of
their legal representatives.
[28]
Subsequent to the inspection of 25 February 2014 there was a
breakdown in the relationship between
the Applicants and their then
attorneys which led to the withdrawal of such attorneys. The
Applicants then obtained the services
of a new firm of attorneys,
Biccari Bollo Mariano Inc (“
BBM
”).
[29]
The entry of these new attorneys into the fray prompted advice to the
effect that the Applicants
should narrow their enquiry by further
identifying and specifying the documents that they sought.
Accordingly, the Applicants,
on the advice of their new attorneys,
sought to supplement the application with the addition of a further
list of documents.
[30]
A supplementary affidavit was put forward in this regard. It
bears mention that in such
supplementary affidavit it is stated on
behalf of the Applicants, that all the documents requested therein
fall under the original
notice of motion, but that same are being
specified in “
order to avoid any confusion
”.
[31]
There are vexatious elements to the list of documents sought in the
supplementary affidavit.
For example copies of “
all
‘unfounded allegations’
made by our client
”
are sought as is “
All information relating to the resolution
to oppose a special levy on the 25
th
of
February 2014
”. There is an interrogative approach
taken in the compiling of this new list that goes beyond what the
Applicants are
entitled to in terms of the Act and the management
rules.
[32]
The application to supplement the main application was opposed by the
Respondent. The Respondent
went as far as to file a Rule 30A
application in relation to the purported filing of such affidavit.
This is characteristic
of the level of animosity that has been
generated in this matter.
[33]
On 20 January 2015 the matter came before Sutherland J after it was
set down by the Applicants
on the unopposed roll. On such date
Sutherland J made an order to the effect that the Respondent was to
file an answering
affidavit in comprehensive terms dealing with both
the founding affidavit and the supplementary affidavit.
No decision
was made in relation to the admittance of the
supplementary affidavit. This dispute came before me. It is my
order in this
matter that the supplementary affidavit be accepted.
Such affidavit has been answered pursuant to the order of Sutherland
J and the Applicants have replied thereto.
[34]
The supplementary affidavit was preceded by a letter of demand for
the documents described therein,
which letter was sent during April
2014.
[35]
In response to such letter of demand on 5 May 2014, the Respondent
sent a letter in terms of
which it stated that the Applicants had had
access to “
each and every document that you now demand again
at the inspection of the 25
th
of February
2014 and in fact made copies of most of them
”.
[36]
It was stated further that, because access to the documents had
already been given, further access
would be given only if the
Applicants bore the reasonable costs of taking the documents out of
storage and making them available
to the Applicants and the costs of
an employee of Berader and an auditor being in attendance at a second
inspection.
[37]
The Applicants did not accede to these conditions, but it appears
that it was not disputed on
any real basis that access to the
documents had already been afforded them on 25 February 2014.
[38]
Whilst it may not be reasonable for conditions to be appended to the
inspection of documents
in the first instance, it is not unreasonable
that reasonable accommodations be asked for under circumstances where
access has
already been given to the Applicants at considerable
expense to the body corporate. It is implicit in the provisions
set
out above in the Act and in the Management Rules that the access
to the documents in question must be exercised reasonably.
[39]
In the circumstances I find that the Applicants have been allowed the
required access to all
the documents requested by them that are in
the possession of the trustees. Should the Applicants wish to proceed
against the Respondent
on the basis of a contention that it has not
kept proper records in that, on inspection, documents were found to
be missing or
not properly drawn up, it is obviously open to them to
do so. They cannot, however, use proceedings of this nature to
persist in
seeking an order for documents which the Respondent
contends it does not have in its possession and which contention the
Applicants
cannot gainsay.
[40]
It appears, however, that access to the documentation was only
afforded to the Applicants after the application was launched.
There
is furthermore no doubt that both parties have engaged in obstructive
and unreasonable behaviour in relation to the
inspection of the
documents. The disputes generated appear, for the most part, to be
unconnected to the true needs, rights, and
obligations of the
parties.
[41]
In all the circumstances I order as follows:
1.
The application is dismissed.
2.
Each party is to bear his/her/its own costs of the application.
DC
FISHER
Acting
Judge of the High Court
APPEARANCES
:
For
the Applicants
:
First
Applicant in person
(Tel:
(011) 782 7014)
For
the Respondent
:
Adv
R Goslett, instructed by Johann van Niekerk Inc.
(Tel:
(011) 482 2908. Ref: J van Niekerk/RC/MTC 101)
DATE
OF HEARING
12
October 2015
DATE
OF JUDGMENT
16
October 2015