About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2011
>>
[2011] ZASCA 143
|
|
Cassim and Another v Voyager Property Management (Pty) Ltd and Others, Cassim and Another v St Moritz Body Corporate (Pty) Ltd and Others (SCA) [2011] ZASCA 143; 2011 (6) SA 544 (SCA); [2011] 4 All SA 587 (SCA) (23 September 2011)
Links to summary
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no: 574/10
In the matter between:
SHEREEN
CASSIM
….....................................................................................................................
First
Appellant
NEILOPAHR
CASSIM
…............................................................................................................
Second
Appellant
and
VOYAGER
PROPERTY MANAGEMENT (PTY) LTD
…............................................................
First
Respondent
BELLAIR
MANAGEMENT SERVICES
t/a
BMS ESTATE AGENTS
…...............................................................................................
Second
Respondent
DEON
J J STRAUSS N O
…......................................................................................................
Third
Respondent
JUAN
LE FEVRE N O
…..........................................................................................................
Fourth
Respondent
In
Re:
SHEREEN
CASSIM
…........................................................................................................................
First
Plaintiff
NEILOPAHR
CASSIM
…...............................................................................................................
Second
Plaintiff
and
ST
MORITZ BODY CORPORATE
….............................................................................................
First
Defendant
VOYAGER
PROPERTY MANAGEMENT (PTY) LTD
…..........................................................
Second
Defendant
BELLAIR
MANAGEMENT SERVICES
t/a
BMS ESTATE AGENTS
…......................................................................................................
Third
Defendant
DEON
J J STRAUSS N O
….......................................................................................................
Fourth
Defendant
JUAN
LE FEVRE N O
…................................................................................................................
Fifth
Defendant
VERONICA
SWANEPOEL N O
…................................................................................................
Sixth
Defendant
Neutral citation:
Cassim v Voyager Property
Management (Pty) Ltd
(574/10)
[2011] ZASCA 143
(23 September
2011)
Bench:
CLOETE, PONNAN, SHONGWE, LEACH and SERITI JJA
Heard:
30 AUGUST 2011
Delivered:
23 SEPTEMBER 2011
Summary:
Sectional title scheme –
locus standi
of
unit owner to institute proceedings on behalf of body corporate –
s 41(1)
of the
Sectional Titles Act 95 of 1986
– owner obliged
to apply for a
curator
ad litem
to
investigate grounds and desirability of instituting proceedings.
___________________________________________________________________
ORDER
___________________________________________________________________
On
appeal from
:
KwaZulu-Natal High Court
(Durban)
(Van der
Reyden J sitting as court of first instance):
(a) The appeal is dismissed.
(b) The first respondent’s application to supplement the record
is dismissed with costs.
(c) Brink Property Administration is directed to reimburse the
appellants for such portion of the costs incurred by the appellants
as relate to the procuring of an additional copy of the appeal
record.
(d) The appellants are ordered to pay the costs of the appeal save
for those costs referred to in paragraphs (b) and (c).
___________________________________________________________________
JUDGMENT
___________________________________________________________________
PONNAN JA (CLOETE, SHONGWE, LEACH and SERITI JJA concurring):
[1] During 1992 the sisters Cassim - Shereen, the first appellant and
Neilopahr, the second appellant – together with their
now
deceased mother, purchased three sectional title units in what they
believed was a prestigious block of flats known as St Moritz,
which
is located at the corner of John Milne and West Streets in Durban.
The building which consists of 88 flats and three shops
appealed to
them because of its three street frontages, proximity to shops,
restaurants, the beach and the bus route.
[2] By 2001, however, the appellants, who lived in Johannesburg and
who had purchased their units as an investment, started to
become
concerned at what they perceived to be mismanagement of the building.
When their endeavours at securing information from
the managing agent
of the building and its body corporate came to nought they launched a
series of applications in the Durban High
Court. Of a veritable
avalanche of court applications only three, by way of background, are
alluded to. The first application sought
an order against the St
Moritz body corporate that it hold an annual general meeting (the
AGM) on 13 November 2004 to be chaired
by a person to be agreed by
the parties or, failing agreement, to be appointed by the President
of the Law Society of KwaZulu-Natal.
The second sought an order that
the appellants be entitled to be nominated as trustees and to vote at
that meeting. What prompted
the second application was an alleged
dispute between them and the body corporate as to whether they were
in default with the payment
of their levies in respect of their
units. If so, so contended the body corporate, they were precluded in
terms of the body corporate
rules from participating in the AGM. The
third application sought an order that an administrator be appointed
to the body corporate
in terms of
s 46
of the Sectional Titles Act 95
of 1986 (the Act) with such powers as were to include the power to
appoint a registered auditor
to conduct a forensic audit and to
scrutinise the books and financial affairs of the body corporate from
June 1999.
[3] On 13 November 2004 and pursuant to an order of court the AGM of
the body corporate was held. It was chaired by an attorney,
Mr
Lomas-Walker. That meeting came to be adjourned to 29 January 2005.
On the latter date both appellants were elected as trustees
of the St
Moritz body corporate. The others who also came to be elected members
were Mr J J Strauss, Mr J Le Fevre and Ms V Swanepoel.
[4] On 26 April 2005 the three applications were consolidated and
referred to trial with the notice of motion in each case to stand
as
the summons. In due course a declaration came to be filed in the
consolidated action. The declaration cited the St Moritz Body
Corporate (the Body Corporate) as the first defendant, Voyager
Property Management (Pty) Ltd (Voyager) as the second defendant,
the
managing agent of the building, Bellair Management Services (Bellair)
as the third defendant and Strauss, Fevre and Swanepoel,
the other
three trustees aside from the appellants elected at the AGM, as the
fourth, fifth and sixth defendants, respectively.
[5] Of the seven claims advanced in the declaration, only three,
namely claims C, D and E are relevant to this appeal. To the extent
here relevant, they read:
'
7.
CLAIM C
7.1 Both in terms of the
Sectional Titles Act and
Management
Rule 35(2)
, the Fourth, Fifth and Sixth Defendants are
obliged to make all or any of the books of account and records of the
First Defendant
available for inspection to owners.
7.2 At the Annual General Meeting of the First Defendant
on 29 January 2005, the First and Second Plaintiffs were appointed as
trustees.
7.3 Management
Rule 35(1)
and the
Sectional Titles Act
obliges
the trustees to cause proper books of account and records to
be kept so as fairly to explain the transactions and financial
position
of the First Defendant including:-
(a) a record of the assets and liabilities of the First
Defendant.
(b) a record of all sums of money received and expended
by the First Defendant and the matters in respect of which such
receipt
and expenditure occurred.
7.4 In order to comply with their obligations referred
to in paragraph 8.3 above, the Plaintiffs during the period from 2
February
2005 requested the Defendants to furnish them with copies of
the documents referred to in . . . in order to comply with their
obligations
as trustees.
7.5 In spite of such requests, the Defendants have to
date failed and/or refused to furnish Plaintiffs with copies of the
documents
referred to in Schedule "A".
8.
CLAIM D
. . .
8.5 Without the knowledge of, consultation with and
approval of approximately 32 owners and members of the First
Defendant including
the Plaintiffs and on 2 March 2004, the Fourth
and Fifth Defendants entered into a loan agreement with the Second
Defendant, in
terms of which agreement, the Fourth and Fifth
Defendants allegedly borrowed undisclosed sums of monies on behalf of
the First
Defendant from the Second Defendant.
8.6 As at 2 March 2004, the Fifth Defendant was not a
trustee duly appointed at an Annual General Meeting and consequently
he had
no authority to enter into the loan agreement on behalf of the
First Defendant nor could he bind the First Defendant thereto.
8.7 In terms of the Loan Agreement, . . . the Second
Defendant continues to advance monies to the First Defendant on a
monthly basis
to the prejudice of 32 of the members of the First
Defendant including the Plaintiffs.
8.8 The Loan Agreement concluded between the First and
Second Defendants on 2 March 2004 is invalid and of no force and
effect,
alternatively void for vagueness, further alternatively,
voidable at the instance of the First Defendant and falls to be set
aside
on the grounds as appear in paragraphs 8.9.1 to 8.14 inclusive
hereunder.
. . .
9.
CLAIM E
9.1 (i) Every owner is a member of the First Defendant
by virtue of the provisions of Section 36 of the Act.
(ii) By virtue of the provision of Regulation 35(i) of
the Act read with the Management Rule 35(i), the trustees shall cause
proper
books of account and records to be kept so as fairly to
explain the transactions 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.
(iii) The Plaintiffs were appointed trustees at the AGM
of 29 January 2005 and are both owners and members of the First
Defendant.
(iv) On 2 March 2004 the Second Defendant concluded the
Loan Agreement with the First Defendant.
(v) Plaintiffs as trustees and in compliance with their
duties of a fiduciary nature, are obliged to take this action on
behalf
of the First Defendant and pursuant to the provisions of both
Sections 35 and 41 respectively of the Act.
(vi) By virtue of the unlawful and irregular conduct on
the part of the Fourth and fifth Defendants as referred to in
paragraph
11 hereunder, the Plaintiffs as trustees are obliged to act
in the absence of the full board of trustees.
9.2 As owners and trustees and members of the First
Defendant, the Plaintiffs are entitled to statements of accounts with
supporting
documentation in respect of all the financial transactions
for the period of 2 March 2004 to date of trial, in terms of the Loan
Agreement concluded between the First Defendant and Second Defendant
including . . .
WHEREFORE
the Plaintiffs pray for orders as
follows:-
. . .
CLAIM C
3. Compelling the Second, Third, Fourth, Fifth and Sixth
Defendants to furnish the Plaintiffs with access to copies of the
documents
listed in Schedule "A" annexed hereto.
CLAIM D
4.1 Declaring that the Loan Agreement concluded between
the First and Second Defendants on 2 March 2004 is invalid and of no
force
and effect.
4,2 Cancelling the Loan Agreement concluded between the
First and Second Defendants on 2 March 2004.
4.3 The First and Third Defendants be interdicted from
paying any monies over to the Second Defendant and the Second
Defendant be
interdicted from receiving any monies from the First or
Third Defendants.
4.4 Interdicting and restraining the Second Defendant
from advancing and or lending any further monies to the First
Defendant in
terms of the Loan Agreement concluded between the
parties on 2 March 2004 and interdicting and restraining the First
Defendant
from receiving any further loan and/or monies from the
Second Defendant.
CLAIM E
5. Compelling the First and Second Defendant to render a
statement of account with supporting documentation to the Plaintiffs
in
respect of all the financial transactions for the period 2 March
2004 to 28 February 2005 in terms of the Loan Agreement concluded
between the parties on 2 March 2004, inclusive of all payments of
Value Added Tax by Second Defendant to service providers of First
Defendant as contemplated in Clause 18.2 of the Loan Agreement and
documentation of the proof of such reclaimed VAT estimated to
be R400
000-00.
. . .
8. Compelling the First, Second, Third, Fourth, Fifth
and Sixth Defendants to render a statement of account to the
Plaintiffs in
respect of:-
8.1 All levies collected for the period July 1999 to
date of trial on behalf of the First Defendant in respect of all 88
units in
the St Moritz building.
8.2 All payments supported by documentation made to the
Municipality in respect of electricity and water accounts on behalf
of the
First Defendant for the period July 1999 to date of trial.
8.3 All payments supported by documentation made to the
Municipality in respect of rates on behalf of the First Defendant for
the
period July 1999 to date of trial.
8.4 In respect of the Loan Agreement concluded between
the First and Second Defendant on 2 March 2004:-
(i) All loan amounts and monthly loans advanced by
Second Defendant to First Defendant for the period March 2004 to date
of trial.
(ii) All interest payments made by First Defendant to
Second Defendant for the period March 2004 to date of trial.
(iii) All levies paid over by First Defendant to Second
Defendant for the period March 2004 to date of trial.
(iv) All amounts due by First Defendant to Second
Defendant as at 13/11/04, 29/01/05 and 08/03/05 inclusive of all
charges.
(v) Disbursements and/or raising fees and/or
administrative fees and/or collection commission paid by the Second
Defendant to Third
Defendant for the period March 2004 to date of
trial.
(vi) All amounts paid by Second Defendant to Fourth and
Fifth Defendants in respect of interest referred to in Clause 1.1.5
of the
Loan Agreement dated 2 March 2004.
(vii) All VAT recovered from service providers acting on
behalf of First Defendant such as rates, electricity, classic
decorations,
plumbing, Titan Lifts etc.'
[6] In its plea to the declaration Voyager denied that the appellants
had locus standi to institute the proceedings in their capacity
as
trustees of the body corporate. It asserted, in the alternative, that
to the extent they may have had
locus standi
when they had
commenced the proceedings, that changed on the 29 August 2005 when by
order of court the entire board of trustees
was suspended.
[7] The appellants' declaration also elicited a special plea from the
third, fourth and fifth defendants in these terms:
‘
. . .
2.
The said Defendants plead that the Plaintiffs are non
suited in this matter on the grounds that
2.1 The Plaintiffs cite themselves in their personal
capacities in their numerous applications and actions.
2.2 Accordingly the Plaintiffs were bound to take action
against the said Defendants in terms of
Section 41
of the
Sectional
Titles Act No. 96 of 1986
, but failed to do so.
3.
The Plaintiffs claim in their Amended Declaration that
they acted as trustees but such averment does not assist them,
because
3.1 the Plaintiffs acted as trustees for the seven month
period 29 January 2005 to 29 August 2005 only and the majority of
their
legal challenges occurred outside this period of time.
3.2 the Plaintiff failed to plead that in acting as
trustees they obtained the authority of the majority of trustees to
so act in
terms of Section 22 of the Management Rules.
4.
The Plaintiffs claim in their amended Declaration that
they in their capacity as trustees, were obliged to launch the
actions and
application they did, on behalf of the Body Corporate,
the First Defendant.
5.
Since it is evident that the Plaintiffs acted in their
personal capacities they were obliged to comply with section 41 of
the Sectional
Title Act but failed to do so and in addition contrary
to the requirements of Section 41 of the Act, they proceeded to sue
the
Body corporate and claim costs against it, the very body they
claim to protect.
. . .
8.
In the premise the Plaintiffs do not have the locus
standi to bring their several legal challenges against the
Defendants.
9.
WHEREFORE the Third, Fourth and Fifth Defendants pray
that the Plaintiffs several actions and application be dismissed with
costs.'
[7] The consolidated applications proceeded to trial before Van der
Reyden J. On 7 August 2007 Voyager successfully applied as
a matter
of urgency for the issue of the appellants’ locus standi to be
adjudicated as a separated issue in terms of Rule
33(4). After
certain other legal skirmishes, none of which are relevant for
present purposes, the learned judge held on 11 June
2010:
'1. The First and Second Plaintiffs lack
locus standi
in respect of all claims in which they were obliged but failed to
follow the procedure provided for in
section 41
of the
Sectional
Titles Act and
more specifically lack
locus standi
in respect
of Claims C, D and E.
2. The First and Second Plaintiffs are to pay the
Second, Third, Fourth and Fifth Defendants' costs pertaining to the
Rule 33(4)
application and the hearing of argument on the issue of
locus standi
.'
Voyager opposed the appeal as did Strauss and Le Fevre. Ms Swanepoel
took no part in the proceedings either in this court or the
one
below. A further party, Brink Property Administrators (Brink), who
had been appointed as the managing agent of the body corporate
on 12
March 2006, also sought to oppose the appeal. I shall revert to Brink
and its participation in this appeal later in this
judgment.
[8] The present appeal with the leave of the learned trial judge
seeks to assail the conclusion that the appellants lacked
locus
standi
in respect of claims C, D and E. In my view, for the
reasons that follow, it is unassailable.
[9] Each of the appellants only served as a trustee of the body
corporate for a fairly brief period from 29 January 2005, when
they
were elected to that office, until 29 August 2005, when by order of
the high court all of the trustees (including the appellants)
were
suspended from continuing in office. That order still remains extant.
Once it issued, each could no longer thereafter act
qua
trustee. The effect was that they could not thereafter prosecute the
action that had been instituted to finality in that capacity.
To the
extent that they persisted in the action each could only have done so
in her capacity as an owner of a unit in the sectional
title scheme.
Indeed that was the thrust of the argument advanced before this
court. It is thus necessary to consider whether they
could have done
so
qua
owner.
[10] Section 41 of the Act, headed: 'Proceedings on behalf of bodies
corporate’, provides:
'(1) When an owner is of the opinion that he and the
body corporate have suffered damages or loss or have been deprived of
any benefit
in respect of a matter mentioned in section 36(6), and
the body corporate has not instituted proceedings for the recovery of
such
damages, loss or benefit, or where the body corporate does not
take steps against an owner who does not comply with the rules, the
owner may initiate proceedings on behalf of the body corporate in the
manner prescribed in this section.
(2)
(a)
Any
such owner shall serve a written notice on the body corporate calling
on the body corporate to institute such proceedings within
one month
from the date of service of the notice, and stating that if the body
corporate fails to do so, an application to the
Court under para
(b)
will be made.
(b)
If the body corporate
fails to institute such proceedings within the said period of one
month, the owner may make application to
the Court for an order
appointing a
curator ad litem
for
the body corporate for the purposes of instituting and conducting
proceedings on behalf of the body corporate.
(3) The Court may on such application, if it is
satisfied—
(a)
that the body corporate
has not instituted such proceedings;
(b)
that there are
prima
facie
grounds for such proceedings; and
(c)
that an investigation
into such grounds and into the desirability of the institution of
such proceedings is justified,
appoint a provisional
curator ad
litem
and direct him to conduct such
investigation and to report to the Court on the return day of the
provisional order.
(4) The Court may on the return day discharge the
provisional order referred to in ss (3), or confirm the appointment
of the
curator ad litem
for
the body corporate, and issue such directions as it may deem
necessary as to the institution of proceedings in the name of the
body corporate and the conduct of such proceedings on behalf of the
body corporate by the
curator ad litem
.'
[11] The jurisdictional facts provided for in s 41(1) are that an
owner be of the opinion that he, she or it and the body corporate
‘have been deprived of any benefit in respect of a matter
mentioned in s 36(6)’. Section 36(6) provides:
'The body corporate shall have perpetual succession and
shall be capable of suing and of being sued in its corporate name in
respect
of -
(a) any contract made by it;
(b) any damage to the common property;
(c) any matter in connection with the land or building
for which the body corporate is liable or for which the owners are
jointly
liable;
(d) any matter arising out of the exercise of any of its
powers or the performance or non-performance of any of its duties
under
this Act or any rule; . . . '
[12] In
Wimbledon Lodge (Pty) Ltd v Gore NO & others
2003
(5) SA 315
(SCA) Schutz JA stated (para 13):
‘
The jurisdictional facts that
an owner must establish in order to entitle him to apply for the
appointment of a
curator
are set out in s 41(1). They
are:
1. The owner must hold an opinion.
2. The opinion must be either (
a
)
that he and the body corporate have suffered damages (again
sic
)
or loss or (
b
) that he
and the body corporate have been deprived of a benefit in respect of
a matter mentioned in s 36(6).
3. The body corporate has not instituted proceedings for
recovery.’
The first two requirements proved uncontentious. In argument before
us it was accepted that the appellants held the opinion that
they and
the body corporate had suffered damage or loss in consequence of the
matters complained of by them. That leaves the third
requirement.
That it should be a requirement is a necessary counterpart to the
sections of the Act divesting individual owners
of control and
vesting it in the body corporate (
Wimbledon Lodge
para 14).
The enquiry envisaged is a purely factual one. On the facts here
present the body corporate has not instituted the proceedings.
That
one would have thought would be the end of the enquiry. But, says the
appellants, that requirement could not be met: first,
because the
appellants and the other trustees fell into two divergent camps who
were at loggerheads with each other, accordingly,
so the argument
went, it could hardly be expected of the appellants in those
circumstances to call upon the body corporate to institute
the
proceedings; and, second, the body corporate is for all practical
purposes an empty shell.
[13] As to the first: it appears to me that the section finds
application precisely when there is disharmony and disunity in the
body corporate. The more dysfunctional the body corporate, the
greater, I dare say, the need for a curator. On the view that I
take
of the matter, the argument advanced by and on behalf of the
appellants misconstrues the section. The section does not require
an
owner to cause the body corporate to act in a particular way if the
latter is unwilling to do so. All that is envisaged is for
an owner
to effect service of a notice on the body corporate calling upon it
within the stated period to institute the contemplated
proceedings.
Should it fail to do so the envisaged remedy available to the owner
is not to compel compliance with the notice but
rather to approach
the court for the appointment of a
curator ad litem
for the
purposes of instituting and conducting the proceedings on behalf of
the body corporate.
[14] As to the second: in terms of s 36(6) of the Act the body
corporate has perpetual succession. And whatever its current
limitations,
at the time that the proceedings commenced it was fully
functional and there was therefore no impediment to service of the
notice
being effected upon it. It follows that there was no
permanently existing impossibility then in relation to calling upon
it to
carry out such obligations and duties as were imposed upon it
by the Act. That may have changed with the grant of the order
suspending
all of the trustees from office. Since then the body
corporate has been dormant and therefore unable to act. In those
circumstances
there is much to be said for the suggestion that there
would be little point in calling upon the body corporate to institute
the
proceedings. Were that to be the case the maxim
lex non cogit
ad impossibilia
(the law does not compel the performance of
impossibilities) could be invoked (
Montsisi v Minister van Polisie
1984 (1) SA 619
(A) at 634E – 635A). There is authority for
the proposition that the maxim is applicable even in relation to the
performance
of statutory requirements (
Ex Parte Mackenzie NO
1960
(1) SA 793
(W) at 796E-F). It follows that in those circumstances
applicants in the position of the appellants can be authorised by a
court
to dispense with the notice requirement.
[15] The last string to counsel’s bow on this aspect of the
case was the following statement from
Wimbledon Lodge
(para
14): ‘If the body corporate is seen not to do its duty, then an
individual's powers may, to an extent, be restored’.
Plainly
what Schutz JA intended to convey was this: an individual’s
powers may to the extent provided for in s 41 be restored.
Indeed, as
Schutz JA pointed out (para 18), that accords with the general
principle at common law that where a wrong is done to
it, only the
company (in this case the body corporate) and not the individual
members may take proceedings against the wrongdoers
(
Foss v
Harbottle
[1843] EngR 478
;
(1843) 2 Hare 461
(67 ER 189)).
Schutz JA’s
statement thus affords no authority for the proposition that owners
who find themselves in the position of the
present appellants are
exempt from the provisions of s 41. The conclusion that I therefore
reach is that s 41 finds application
to the appellants.
[16] Were that conclusion to be reached, submitted the appellants,
their right of access to court guaranteed by the s 38 of the
Constitution would be infringed. Our Constitution enjoins us to adopt
a broad approach to standing. That serves to ensure that
constitutional rights enjoy the full measure of protection to which
they are entitled (
Ferreira v Levin NO & others
1996 (1)
SA 984
(CC) para 165). I, however, do not see s 41 as imperilling or
negating the right. On the contrary, s 41 provides a comprehensive
statutory right to an owner of a sectional title unit aggrieved at
the failure of the body corporate to act in respect of a matter
mentioned in s 36(6). The relief available to an owner in the
position of the appellants is to approach the court for the
appointment
of a
curator ad litem
to the body corporate, so
that he or she may investigate the events complained of and, if so
advised, take action aimed at somehow
remedying the position.
[17] The substance of the matter according to Schutz JA (
Wimbledon
Lodge
para 21) is that 'the body corporate is little more than
the aggregation of all the individual owners. Their good is its good.
Their
ill is its ill. The body corporate is not an island, whatever
the law of persons may say.' Section 41 is an important component
of
that structural scheme. On the one hand it filters out unmeritorious
claims by over zealous individuals. On the other it ensures
that
individuals complaining should have the advantage of the information
and the funds of their corporation in pursuing legitimate
claims. As
to whether a
curator
ought to be appointed, Schutz JA
expressed himself thus: ‘the court has a discretion under s
41(3), having regard to whether
it is satisfied that the body
corporate has not sued . . ., that there are
prima facie
grounds for such proceedings . . . and that an investigation into the
desirability of instituting proceedings is justified’
(
Wimbledon Lodge
para 26).
[18] No doubt a
curator ad litem
would obtain proper advice
and properly investigate the facts before taking any further legal
steps. Even then he or she would
have to first report to the court,
which may issue such directions as to it seems meet (s 41(4); see
Meridian Bay Restaurant (Pty) Ltd & others v Mitchell NO
2011
(4) SA 1
(SCA)). The facts of this case illustrate why a filter
mechanism is indeed necessary. At an annual general meeting of the
body
corporate held on 13 November 2004 the appellants proposed to
the meeting that it adopt a resolution that the Voyager contract be
terminated. The motion was put to the floor. It failed - the vote
being three (including the two appellants) ayes and fifteen nays
with
five abstentions. Despite failing by a substantial margin to carry
the day at the meeting the appellants thereafter approached
the high
court seeking amongst others precisely the selfsame relief. Fairly
serious allegations were levelled by them against the
previous
trustees of the body corporate. It was suggested that the Voyager
agreement was a collusive transaction that fell to be
set aside. At
that stage those allegations, notwithstanding the vehemence with
which they were asserted by the appellants, remained
precisely that –
untested allegations. One imagines that is precisely where a
curator
ad litem
would prove invaluable. To the
curator
would fall
the task of separating the wheat from the chaff.
[19] The real difficulty for the appellants in this case, however, is
that they did not impugn the constitutionality of s 41 or
any other
provision of the Act. Accordingly, to borrow from Mokgoro J in
Du
Toit v Minister of Transport
2006 (1) SA 297
(CC) para 29: ‘in
these circumstances, and in the circumstances of this case, the Act
cannot be bypassed’. Section
41 read with s 36(6) plainly
encompassed within its scope the three claims in respect of which the
appellants came to be non-suited
by Van den Reyden J. It follows that
the conclusion of the learned judge cannot be faulted and in the
result the appeal must fail.
[20] There remains the question of costs. The appellants submit that
the lack of
locus standi
defence should have been raised by
the respondents by way of exception. Accordingly, so the submission
went, the respondents should
only be entitled to costs as on
exception. In
Algoa Milling Company v Arkell and Douglas
1918
AD 145
, Innes CJ stated:
'The declaration as drafted disclosed no cause of
action, and should therefore have been excepted to. Had that been
done, there
would have been a speedy end of the litigation and the
heavy costs subsequently incurred would have been unnecessary. The
defendants,
therefore, will be entitled to such costs in the court
below as would have been incurred had they excepted to the
declaration.'
But as Greenberg JA made plain in
Cohen v Hayward
1948 (3) SA
365
(A) at 374:
'I do not think, however, that it was the intention of
the Court in the cases quoted to lay down an inflexible rule which
deprive
the Court of its discretion in regard to costs and disentitle
it, in a proper case, from departing from the rule.'
[21] However, as the following excerpts from the record reveal,
responsibility for the failure to expeditiously dispose of the
matter
on the preliminary point of
locus standi,
must regrettably be
laid squarely at the door of the learned trial judge.
'My personal view is this application for the removal of
[the appellants] on the basis of lack of
locus
standi
is that it's absolutely a waste of
time. If at the end of the day there is sufficient indication that
they never had
locus standi
then
obviously the Court can make an appropriate costs order.
. . .
[A]nd I made it quite clear to all the litigants that I
am going to see this case through right till the end, and I made it
quite
clear that my aim in this case is to see what can be done to
put St Moritz on an even keel again. If after the conclusion of this
case St Moritz still goes under, well, that's beyond my control. I've
also made it quite clear that the only people who were prepared
to
take up the cause of St Moritz were [the appellants], the two Cassim
sisters.
. . .
[T]his is a sincere call on the parties to reconsider
this application based on lack of
locus
standi
. I don't see any point in finding in
the second defendant's favour because it's just going to delay the
outcome of this case.
. . .
The issue is really
― it has been put on the back-burner and it will be decided at
the conclusion of this trial. I am not
in position to grant an order
against any of the parties at this stage. I will be in the best
position to decide what costs order
I sh
ould
make at the conclusion of the trial. I am not even going to call on
the other side. I am going to reserve costs.
. . . I am the person responsible for delaying this
decision on the issue of
locus standi
.
It's not a decision of any of the parties. I had a look at the papers
again. I reconsidered the situation and I made the declaration
in
court and I had reaction to that. So on what basis can I at this
stage penalise any of the parties with a costs order if the
initiative came from me?'
There is thus no warrant for limiting the respondents’ costs to
only those as on exception. In any event the appellants opposed
the
rule 33(4) application for the issue of their
locus standi
to
be decided preliminarily and separately from any other issue. They
must accordingly bear the consequences.
[22] The issue on appeal is a narrow one. The learned judge in the
court below cautioned: ‘the record that goes up to the
Court of
Appeal . . . must be absolutely material, crisp and to the point’.
That notwithstanding, the record that served
before this court
consisted of 20 volumes running to 1727 pages. It was replete with
all manner of irrelevant material. Before
us Voyager objected to the
record. It sought, moreover, to supplement the record. Its
application together with the proposed supplementary
pages ran to 128
pages. In short the additional material sought to be placed before us
was irrelevant to the adjudication of the
issue that served before us
on appeal. Properly analysed Voyager’s complaint amounted to
this: the appellants have included
irrelevant material in the record
and we (Voyager) will be prejudiced unless we are given an
opportunity to likewise file irrelevant
material. That proposition
merely has to be stated to be rejected. It follows that Voyager’s
application must fail and notwithstanding
the outcome of the appeal
it is appropriate that Voyager bear the costs of that application.
[23] I come now to Brink. On 29 August 2005 and pursuant to an
application to court by the first appellant, it was appointed as
the
interim administrator of the body corporate. On 12 May 2006 on the
application of both appellants Brink was released from its
duties as
interim administrator and appointed the managing agent of the body
corporate. During July 2007 both appellants launched
contempt of
court proceedings against Brink. That application was postponed from
time to time and eventually postponed sine die
on 23 May 2008. Brink
was not a Defendant in the main trial before Van der Reyden J, nor
was it a respondent in the
locus standi
proceedings. No relief
had been sought against it as the managing agent in the high court
and that which had been sought against
its predecessor had fallen
away. That notwithstanding, its attorney, who also represented
Strauss and Le Fevre, insisted that Brink
was a party to the appeal
and demanded on Brink’s behalf an additional copy of the appeal
record. Brink plainly had no interest
in the appeal. Brink was
represented in this court by the same counsel who represented Strauss
and Le Fevre. Thus the fact that
Brink chose to oppose the appeal
when it was not entitled to do so has in truth occasioned no real
extra costs to the appellants,
save for the additional record that
had to be procured by them. It follows that Brink should be directed
to reimburse the appellants
by paying to them the costs of that
additional record.
[24] In the result:
(a) The appeal is dismissed.
(b) The first respondent’s application to supplement the record
is dismissed with costs.
(c) Brink Property Administration is directed to reimburse the
appellants for such portion of the costs incurred by the appellants
as relate to the procuring of an additional copy of the appeal
record.
(d) The appellants are ordered to pay the costs of the appeal save
for those costs referred to in paragraphs (b) and (c).
_________________
V M PONNAN
JUDGE OF APPEAL
APPEARANCES:
For
1
st
Appellant A J H Bosman SC
Instructed
by:
Fathima
Karodia Attorneys
Durban
Naudes
Bloemfontein
For
2
nd
Appellant N Cassim (in person)
c/o
Fathima Karodia Attorneys
Durban
Naudes
Bloemfontein
For
1
st
Respondent: D G Tobias
Instructed
by:
Du
Toit Havemann & Lloyd
Durban
Bezuidenhouts
Inc
Bloemfontein
For
2
nd
Respondent: No appearance
For
3
rd
and 4
th
Respondents and E Levin
Brink
Property Administration
Instructed
by:
Chelin
& Associates
Glenwood
Bezuidenhouts
Inc
Bloemfontein