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2023
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[2023] ZAFSHC 128
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Kobi v Trustees For The Time Being Of The De La Rey Body Corporate and Others (A68/2022) [2023] ZAFSHC 128; 2024 (1) SA 174 (FB) (14 April 2023)
FLYNOTES:
CSOS AND INCORRECT LEVY ACCOUNTS
PROPERTY
– Community schemes – CSOS – Jurisdiction –
Relief sought regarding incorrectly calculated
levy account
statements – Adjudicator incorrectly finding that CSOS
lacked jurisdiction – Dispute concerned financial
issues of
“an order declaring that a contribution levied on owners is
incorrectly determined or unreasonable”
as contemplated in
section 39(1)(c) – Community Services Schemes Ombud Services
Act 9 of 2011, ss 38 and 39.
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: A68/2022
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
In
the matter between:
DIKELEDI
PALESA KOBI
Appellant
And
TRUSTEES
for the time being of the
DE
LA REY BODY CORPORATE
First Respondent
R
REDDY
N.O.
Second Respondent
COMMUNITY
SCHEMES OMBUD SERVICES
Third Respondent
CORAM:
VAN ZYL, J
et
REINDERS, J
JUDGMENT
BY:
C REINDERS, J
HEARD
ON:
24 OCTOBER 2022
DELIVERED
ON:
14 APRIL 2023
[1]
Ms Dikeledi Palesa Kobi (the appellant) is the
owner of Unit 2 in the De La Rey Community Scheme (“the
property”) which falls under the auspices of the De La Rey Body
Corporate (as represented by the trustees, hereafter the
first
respondent/ “the Body Corporate”). It is common cause
that the Sceme falls within the meaning of the Community
Services
Schemes Ombud Services Act 9 of 2011 (“the Act”). On 19
September 2021 the appellant, through her attorney
of record, lodged
a dispute in terms of the Act with the third respondent, the
Community Schemes Ombud Services (the “CSOS”).
The second
respondent was the adjudicator who considered the application
(hereafter “the adjudicator”).
[2]
This appeal is brought in terms of s57
[1]
of the Act against an adjudication order made by the adjudicator on
17 March 2022 (“the order”), dismissing a claim
instituted by the appellant in terms of s 8 of the Act for relief
concerning alleged incorrectly calculated levy account statements.
The adjudicator dismissed the complaint on the basis that the third
respondent lacked jurisdiction to preside over the dispute.
[3]
The appellant instituted the appeal by way of motion proceedings on 4
May 2022 under case number 2030
/2020 claiming, amongst others,
relief in the following terms:
“
1.
Setting aside the Adjudication order of the second respondent dated
17 March 2022, under the auspices
of the third Respondent, under case
number
CSOS 3792/FS/21
,
in that the second respondent erred in law by finding that the third
respondent lacks jurisdiction to entertain the complaint
lodged by
the appellant.
2.
Remitting the dispute to the third Respondent, to convene and conduct
an adjudication afresh
(de novo)
, before an adjudicator other
than the second respondent,
alternatively
, that the above
Honourable Court replaces and/or corrects the Adjudication order of
the second respondent as it deems appropriate.”
[4]
The application was properly served on all respondents. The first
respondent did not oppose the relief
claimed and a notice to abide
was filed by the second and third respondents on 4 July 2022.
[5]
On 24 August 2022 the appellant issued and served on the respondents
a notice of appeal (termed “Amended
Notice of Appeal”).
A
summary of the grounds of appeal relied upon by the appellant in her
amended notice of appeal entails that second respondent erred
in law
in finding that:
“
5.1
…the third Respondent lacked jurisdiction to entertain the
complaint lodged by the Appellant.
5.2
…the relief sought does not fall within the ambit of the
relief that can be handed down in terms of
Section 39 of the
Community Schemes Ombud Service Act No 9 of 2011.
5.3
…the relief sought by Appellant would have the effect that
Community Schemes Ombud Service(CSOS) ‘steps
into the shoes of
the Trustees and have the ability to read the minds of the parties in
order to reach consensus on what is reasonable’;
and
5.4 …it
was unnecessary to deal with the merits of the Application.”
The
appeal, and the consequent notice of set down, were likewise properly
served on all respondents. There was no appearance for
the
respondents when the matter was heard.
[6]
The right to appeal to the Superior Court against an adjudicator’s
order as envisaged in s57 of
the Act, does not provide any procedural
directions concerning the lodging and prosecution of appeals
permitted in terms of s57.
We considered both the initial application
on motion proceedings as well as the notice of appeal in adjudicating
the appeal brought
in terms of s57.
[7]
S57 (2) of the Act provides that an appeal must be lodged within 30
days after the date of delivery
of the order of the adjudicator. The
appeal was instituted on 4 May 2022, thus just over two weeks outside
the prescribed time
period. Accordingly, we had to decide whether it
is within the court’s powers to grant condonation for the late
institution
of the appeal.
7.1 In
Baxter
v Ocean View Body Corporate and Others
[2]
Bins-Ward J (with whom De Wet AJ concurred) had occasion to consider
this question where the appeal was instituted outside the
time
period.
7.2
With reference to
Mohlomi
v Minister of Defence
[3]
where Didcott J noted that
the courts have no inherent power to condone non-compliance with
statutorily prescribed time limits,
Bins-Ward J stated that it does
not follow that the court does not have such powers in every case in
which a time limit for the
institution of court proceedings is
statutorily prescribed and has not been complied with. He then opined
that “there does
not, however, need to be to be an express
provision in the statute conferring a power of condonation. Depending
on the context,
the existence or conferral of such a power might in a
given case be implied upon a proper construction of the relevant
provisions
of a statute. Such an exercise was undertaken by the late
Appellate Division in analogous circumstances in
Phillips
v Direkteur vir Sensus
1959 (3) SA 370
(A).
[4]
The
learned judge stated that “(t)he court reviewed various common
law authority that supported the incidence of the power
of courts to
condone the bringing of appeals outside the prescribed time limits
and had regard to what the adverse practical effects
would be were
the statute in question construed to exclude such a power. It
concluded, on the basis of a broad contextual analysis,
that the
statute fell to be construed to imply a power in the court to condone
non-compliance with the prescribed time limit for
the lodging of an
appeal.”
[5]
7.3
Having applied the reasoning in
Phillips
supra
,
it was concluded that “…the exclusion of a power of
condonation could readily conduce to incorrect decisions that
could,
and should be, rectified being irremediably visited upon members of
community schemes. It is unlikely that the legislature
could have
intended such an effect. It would be irreconcilable with the objects
of the Act. The whole object of the CSOS Act is
to facilitate the
cost-effective and relatively informal resolution of community scheme
related disputes; cf.
Coral
Island Body Corporate v Hoge
[2019] ZAWCHC 58
(23 May
2019); 2019 (5) SA 158
(WCC) at para 8-11.
Its provisions should not be read in a way that would unreasonably
limit the proper ventilation of such disputes,
including in appeals
from the decisions of the Ombud Service.”
[6]
[8]
We align ourselves with the reasoning and view held by Binns-Ward J
and concluded that upon a proper
contextual consideration of the
provisions of s 57(2), the court does have the power, on good cause
shown, to condone non-compliance
with the 30-day prescribed time
limit. In view thereof that the delay was not inordinately long and
could not cause any material
prejudice to the respondents (taking
into account that the relief claimed was not disputed by the
respondents), and our prima facie
view that appeal appeared to have
merit we condoned the late institution of the appeal in the interest
of justice.
[9]
I now turn to the question whether the adjudicator erred in
dismissing the appellant’s claim.
It is not disputed that the
trustees of the first respondent are responsible for administering
the functions and powers of the
Body Corporate, including calculation
and furnishing of levy accounts or statements (“the
statements”). In her founding
affidavit the appellant states
that she received such statements from National Real Estates (NRE)
who was the managing agent of
the Body Corporate (ostensibly since
she became owner of the property). During 2015 the Body Corporate and
a company called Propell
Specialised Finance (Pty) Ltd (“Propell”)
entered into an agreement in terms whereof Propell would make loans
available
to the Body Corporate against security in the form of the
latter’s claims against owners in the Scheme. The agreement
made
Propell a collecting agent. Consequently, she received
statements from Propell, which amounts she queried with NRE as the
amounts
reflected therein were incorrect. Statements were send to her
simultaneously by NRE and Propell. The amounts due differed vastly,
with that of NRE for instance reflecting an amount of R 75 755.04
for the billing period of May 2021, whilst an amount of
R 313 826.81
was indicated in the statement of Propell for the same period.
[10]
The appellant avers that she continued in pursuing the issue of the
incorrectly determined amounts internally,
without any success,
leading to the lodging of the said dispute which entailed a dispute
resolution in respect of financial issues.
I do not find it necessary
for purposes of adjudicating this appeal to deal with the rest of the
history of this matter, save to
say that the dispute was eventually
referred to adjudication in terms of Section 48 of the Act read with
the provisions of clause
21.5.7 of the CSOS Practice Directive on
Dispute Resolution dated 1 August 2019. Written submissions as
requested by the adjudication
department of the CSOS were duly
furnished by appellant’s attorneys of record on 25 November
2021. The adjudication order
(which contains the reasons thereto) was
received via electronic communication on 17 March 2022.
.
[11]
I find it apposite to quote the more important sections of the Act
for determination of this appeal (also referred
to by the adjudicator
in reaching the conclusion that the relief claimed did not fall
within its jurisdiction).
11.1
Section 38
38(1) Any person may make
an application if such person is a party to or affected materially by
a dispute.
(2)
An application must be—
(a) made in the
prescribed manner and as may be required by practice directives;
(b) lodged with an ombud;
and
(c) accompanied by the
prescribed application fee.
(3)
The application must include statements setting out—
(a) the relief
sought by the applicant, which relief must be within the scope of one
or more of the prayers for the relief
contemplated in section 39
;
(b) the name and
address of each person the applicant considers to be affected
materially by the application; and
(c) the grounds on which
the relief is sought.
(4) …” (own
emphasis added)
11.2
Section 39
(39)
An application made in terms of section 38 must include one or more
of the following orders:
(1)
In respect of financial issues—
(a)….
(b) …
(c) 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 an order
for the adjustment of the contribution to a correct or reasonable
amount or an order for its payment
in a different way; …
(own
emphasis added)
[12]
In a document titled “ADJUDICATION ORDER”, the
adjudicator states under the heading “EXECUTIVE
SUMMARY”
that the relief applied for is in terms of “Section 39(1)(c) In
respect of financial issues…”,
and later “(t)he
relief sought the Applicant is for an order directing the respondent
arrives at a realistic amount taking
into account all the issues
raised”.
12.1
The adjudicator indicated that the matter is “adjudicated in
terms of the CSOS Act and the Practice
Directive on Dispute
Resolution, 2019 as amended and more specifically the amended
Practice Directive date 23 June 2020 which provides
under paragraph
8.2 ‘Adjudications will be conducted on papers filed by the
parties and any further written submissions,
documents and
information as requested by the appointed Adjudicator’. The
parties were requested to make written submissions.
The adjudication
was conducted on the 4
th
of January 2022 and an order is now determined.”
[7]
12.2 In
his evaluation the adjudicator stated that he had perused the
parties’ written submissions. It is
common cause that only the
appellant had made such submissions, and the first respondent failed
to do so. In fact, in paragraph
19 of his evaluation it was recorded
“(t)he Respondent has not submitted any responses”.
[8]
12.3 In
the appellant’s written submissions
[9]
the history of the dispute and all facts relied upon were set out
comprehensively. It stated that the appellant lodged an application
for dispute resolution on 19 September 2021 “in respect of
financial issues in terms of Section 39” of the Act. The
relief
sought was indicated as “…that the statements of account
sent by Propell to Miss Kobe be declared incorrectly
determined and
unreasonable.” The background facts relayed in the statement
was as set out as in paragraph [8] herein above.
Statements from both
NRE and Propell were annexed. The appellant submitted that a perusal
of the statements from Propell displayed
unreasonable legal fees,
interest being charged excessively and in contravention of the
applicable acts, collection fees and administrative
costs which
placed an adverse financial burden on owners of the units. It was
finally recorded in the statement that the statements
of account were
incorrectly determined and unreasonable.
12.4
The adjudicator stated that “the issue to be decided firstly is
whether the provisions of S38 of the
CSOS act No.9 of 2011 have been
complied with.”
[10]
It
is common cause that the appellant fully complied with the mandatory
requirements as set out in section 38 (2) and (3) including
the
subsections thereto. The reference to whether there was compliance
with s38 was ostensibly a reference to s38 (3)(a) that the
application must include statements setting out the relief sought by
the applicant, which relief must be within the scope of one
or more
of the prayers for the relief contemplated in s39. The adjudicator
then proceeded: “In order to found Jurisdiction,
the relief
sought must fall strictly within the ambit of the reliefs provided
for in Section 39. If it does not, then CSOS will
lack Jurisdiction.
In this case the relief sought does not fall within the ambit of the
relief that can be handed down in terms
of S39, and CSOS being a
creature of Statute is bound by the four corners of the Statute, and
cannot go outside of the powers conferred
upon it, even with consent
of all parties.”
[11]
12.5 In
reaching the conclusion that the appellant’s complaint be
dismissed on the basis that “CSOS
lacks Jurisdiction”
[12]
,
the adjudicator stated that “(t)he relief sought will have the
effect that CSOS steps into the shoes of the Trustees and
have the
ability to read the minds of the parties in order to reach consensus
on what is reasonable. This is a discretionary power
that CSOS is
devoid of, what we can do, is establish whether the amounts claimed
are justified or not, the reasonableness of which
is not given any
thought.
[13]
The amount must
be founded on cold hard facts, as the discretion to be reasonable or
not falls within the ambit of the Body Corporate
represented by the
Trustees.
[14]
”
[13]
In terms of s38(1) any person may make an application if such a
person is a party to or affected materially by
a dispute. The
appellant’s dispute resolution actions as mandated by the Act,
can leave no doubt that she is a person affected
materially by the
dispute consequent upon the statements in respect of levies (and
ancillary costs). The adjudicator’s reasoning
and finding that
the dispute did not fall within the ambit of s39 of the Act, cannot
be correct. In my view the documents before
him does not leave any
room for a conclusion other that the dispute concerned financial
issues of “an order declaring that
a contribution levied on
owners is incorrectly determined or unreasonable” as
contemplated in s39(1)(c) of the Act. The dispute
fell squarely
within this provision. In addition hereto, the adjudicator
could/should have made use of the powers of investigation
conferred
upon him in terms of s51 of the Act.
[15]
[14]
I am of the view that the adjudicator erred in finding that the
application did not fall within the ambit of s39
as a result whereof
the order must be set aside. This court does not have the power to
substitute the order of the adjudicator
with that of our own and
accordingly the matter falls to be referred back to the third
respondent. The appellant did not seek any
cost orders against the
respondent in the event that the appeal is not opposed.
[15]
Accordingly the following order is granted:
1.
The appeal in terms of Section 57 of the Community Services Schemes
Ombud Services
Act 9 of 2011 is upheld with no order as to costs.
2.
The adjudication order granted by the second respondent (under the
auspices of
the third respondent) under case number
CSOS
3792/FS/21
(
dated 17 March
2022
), is hereby set aside.
3.
The matter (dispute) is remitted back to the third respondent in
order to refer
the application, together with any submissions
thereto, to an adjudicator other than the second respondent to
convene and conduct
an adjudication
de novo
.
C
REINDERS, J
I
concur.
C
VAN ZYL, J
On
behalf of appellant:
Adv
RJ Nkhahle
Maduba
Attorneys
BLOEMFONTEIN
On
behalf of respondents:
No
appearance
[1]
s57 (1) of the Act reads:
‘
Right
of Appeal
57
(1) An applicant, the association or any affected person who is
dissatisfied by an adjudicator’s order, may appeal to
the High
Court, but only on a question of law.”
[2]
2023 (2) SA 205 (WCC)
[3]
[1996] ZACC 23
;
1996 (12) BCLR 1559
;
1997 (1) SA 124
(CC) at para 17
[4]
At para 5
[5]
At para 6
[6]
At para 7
[7]
At para 5
[8]
At para 19
[9]
Annexure “DPK 17”
[10]
At para 28
[11]
At para 28
[12]
At para 31
[13]
At para 29
[14]
At para 30
[15]
Section 51 reads:
Investigative
powers of adjudicator
51.
(1) When considering the application, the adjudicator may—
(a)
require the applicant, managing agent or relevant person—
(i)
to give
to the adjudicator further information or documentation;
(ii)
to give
information in the form of an affidavit or statement; or
(iii)
subject to
reasonable notice being given of the time and place, to come
to
the
office of the adjudicator for an interview;
(b)
invite persons, whom the adjudicator considers able to assist in the
resolution
of
issues raised in the application, to make written submissions to the
adjudicator
within a specified time; and
(c)
enter and inspect—
(i)
an
association asset, record or other document;
(ii)
any private area; and
(iii)
any common area,
including a common area subject to an exclusive use
arrangement.
(2)
The adjudicator must give reasonable notice to the executive
committee or
occupier
of any private area or common area to be entered in terms of
subsection (1)(c).
(3)
The association or any other person who is in possession of an
association’s
records
must, if required by an adjudicator and without payment of a fee—
(a)
allow the adjudicator access to the records within 24 hours after
being notified
of
the adjudicator’s requirement; and
(b)
provide the adjudicator with copies of the records.