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[2017] ZAGPPHC 351
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Sunrise View Home Owners Association NPC and Another v Nepemalo (Pty) Ltd and Another (46279/2016) [2017] ZAGPPHC 351 (24 March 2017)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO:
46279/2016
DATE:
24/3/2017
In
the matter between:
SUNRISE
VIEW HOME OWNERS ASSOCIATION
NPC
First
Applicant
THE
BODY CORPORATE SUNRISE VIEW
II Second
Applicant
and
NEPEMALO
(PTY)
LTD
First
Respondent
THE
REGISTRAR OF DEEDS:
PRETORIA
Second Respondent
JUDGMENT
AC
SASSON, J
[1]
The applicants have launched an application ("the main
application") against the first and second respondents in terms
of which relief is sought against the first respondent (Nepemalo
(Pty) Ltd) arising from the sectional tittle scheme know and SS
Sunrise View Phase 2. In the main application an order is sought that
the registration of certain erven, forming part of this phase
of the
sectional scheme which were registered in the name of the first
respondent on 13 August 2003, be cancelled by the second
respondent
(the Registrar of Dees: Pretoria) within 60 days of the grant of the
order.
[2]
This
is
an
interlocutory
application pertaining to
the
locus
standi
of
the second
applicant
("the
body
corporate")
based
exclusively
on
the
provisions
of
section
36(6)(e) of the Sectional Titles Act ("the STA").
[1]
The STA was replaced with the Sectional Titles Schemes Management
Act
[2]
("the Act")
with effect from October 2016. More in particular, section 36(6) was
replaced and by section 2(7) of the
Act. Section 2(7) of the Act,
however, remained identical to its predecessor and reads as
follows:
"2 Bodies
corporate
(7) The body
corporate has perpetual succession and is capable of suing and of
being sued in its corporate name in respect
of-
(a)
any contract entered into by the body corporate;
(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; and
(e)
any claim against the developer in respect of the scheme if so
determined by special resolution."
[3]
I will continue to refer to the section 36 of the STA in light
of the fact that the parties have referred to this section in their
papers and their Heads of Arguments but with the understanding that
section 36(6) of the STA has been replaced by section 2(7)
of the Act
(which reads identically).
[4]
In this application the first respondent seeks a declaratory
that Vogel Inc. may not act on behalf of the body corporate by virtue
of the provisions of section 36(6)(e) and may not do so until they
have satisfied this court that they are so authorised in terms
of the
provisions of section 36(6)(e) of the Act.
[5]
It
is trite that a body corporate of a sectional title may sue and be
sued in its own name subject to the express provisions of
section
36(6)(a) - (e) of the STA.
Put
differently, a body corporate does not have
locus
standi
to
sue or to be sued in respect of a cause of action which is not
provided for in section 36(6) of
the
STA.
In
respect of
any claim
against a
developer,
section 36(6)(e) specifically provides that a special resolution
needs to be obtained to sue the developer.
The
rationale for this requirements is set out in the matter of
Body
Corporate of
Greenwood
Scheme v 7512 Sandown (Pty)
Ltd
and
others:
[3]
"In my view, the
amendment does nothing more than limit the action against the
developer to the fact that a special resolution
needs to be obtained
to sue the developer. I am of the view that it was the requirement of
the special resolution which
caused a legislator to
make the amendment and not the creation of a right to sue
the developer which did not
formerly exist. Indeed, a reading of s
36(6) without the amendment does not indicate that there is any limit
in relation to the
body corporate's ability to sue the developer.
Section 36(6)
(e)
refers
to an action against the developer in respect of 'the scheme', which
in turn is defined to mean 'a development scheme' and
the latter is
defined to mean a scheme in terms of which a building or buildings
situated or to be erected on land within the area
of jurisdiction of
the local authority is or are, for the purposes of selling, letting
or otherwise dealing therewith, to be divided
into two or more
sections, or as contemplated in the proviso to s
2(a),
and
that 'developer' is in turn defined to mean a person who is the
registered owner of land, situated within the area of jurisdiction
of
a local authority, on which is situated or to be erected a building
or buildings which he has divided or proposes to divide
into two or
more sections in terms of the scheme, or the holder of the right
referred to in s 25 to extend a scheme, or his successor
in title.
In
this sense, it is plain that the legislator intended that litigation
so
fundamental
to the interests of owners could not be commenced without the express
consent of three quarters of them, hence the rationale
for the
amendment, which relates more to the requirement of
a
sanction
and the procedural safeguard of a special resolution than the
creation of an action which did not exist before. (A
special
resolution in
terms
of
the
definition
section means
a
resolution
passed by
a
majority
of not less than three fourths of the votes (reckoned in
value)
and not less
than
three
fourths of
the
votes (reckoned in number) of members of the body corporate who are
present or represented by proxy or by representative recognised
by
law at
a
general
meeting of which at least 30 days' written notice, specifying the
proposed resolution, has been given.)
[4]
It
by no means follows that a legislator intended to limit such actions
against the
developer
(save procedurally as stated above) and
to
further
limit
the
action against the architect or the director of a developer. On
the
contrary, I am of the view that it was the intention of the
legislator to merely limit actions against the developer by providing
that such actions could not be instituted without a special
resolution. The requirement of a special resolution ensures
collective
decision-making and
consensus
of more
than a majority of members."
[5]
[6]
The first respondent contends that the main application
resorts under section 36(6)(e) of the STA whilst the applicants
contend
that the main application resorts under section 36(6)(c) and
(d) of the STA
[7]
On behalf of the body corporate it was submitted that it is
not necessary to have obtained a special resolution as section
36(6)(e)
is not applicable to the relief sought in the main
application which is, according to the argument, in relief sought in
the form
of a "declaratory". More in particularly, it was
submitted that the relief sought in the main application does not
comprise
a "claim" against the developer but is aimed at
enforcing sections of the STA in respect of the unlawful registration
of units and where property reverts back to the communal property
upon the lapse of a real right of extension.
[8]
I do
not agree with the submission that section 36(6)(e) is not applicable
in light of the following common cause facts: Section
36(6)(e) of the
STA specifically provides for "any claim" which the body
corporate seeks to prosecute against a developer
concerning the
scheme.
If
regard is had to
the relief
sought in the main application, there is no doubt that the relief
sought by the body corporate fails within the ambit
of "any
claim". The submission that the seeking of a declaratory cannot
constitute a "claim" is overly simplistic
in light of the
fact that this section provides for "any claim".
Furthermore, section 36(6)(e) of the STA is the only
section that
refers to "any claim" against a "developer" and
hence the only section that grants
locus
standi
to
a body corporate in respect of claims against developers. In this
regard it is of particular importance to note what the Supreme
Court
of Appeals held in
Oribel
Properties 13 (Pty) Ltd v Blue Dot Properties 271 (Pty) Ltd.
[6]
The SCA made it clear that a body corporate only has perpetual
succession and therefore capable to sue in its own corporate name
in
respect of the five matters referred to
in section
36 of the
STA
More in
particular,
the SCA made it clear that in normal circumstances only the owners of
a property or the joint owners of the common property
(which
is owned by them jointly) would be able to sue. Section 36 enables a
body corporate to sue in its own corporate name in those
instances
specifically identified in section 36. A body corporate has no
contractual relationship with a developer. The provisions
of section
36(6)(e), however, makes it possible to sue a developer despite the
absence of such a contractual relationship:
"[24] A body
corporate is constituted by law, and it is charged with
responsibility for the enforcement of the rules and the
control,
administration and management of the common property for the benefit
of all members. A body corporate has perpetual succession
and is
capable of suing or suing in its own corporate name in respect of the
five matters referred to. Some of the powers, such
as the one in
paragraph (a), are only declaratory but the power granted in
paragraph (b) - and in some circumstances paragraph
(c) as well -
gives it an entitlement it would otherwise not have had. Under normal
circumstances only all the owners of the common
property, ie the
owners of the sections, would have been able to do so jointly as the
common property is owned by them jointly.
Section 36(6)(e) also
bestows a power it would not otherwise have had on the body
corporate: there is no contractual arrangement
between the developer
and the body corporate and, while there may be cases where a
developer is contractually bound to a sectional
owner to give effect
to the scheme, the body corporate is in no such relationship with the
developer. However, s 41 is not intended
to detract from the powers
enjoyed by the owner of a section to institute proceedings where his
own rights whether of ownership
in his unit or otherwise are
infringed. In addition, the owner of a section who is prejudiced by a
developer's failure to comply
in this manner, may apply to court in
terms of s 25(13) for an order for proper compliance with the terms
of the reservation or
other relief, including damages. Such an owner
is, in other words, given the required standing to enforce strict
compliance with
the reservation. This is essentially the relief
prayed for by the appellants in this case. The body corporate is
empowered by s
36(6)(e) to institute proceedings against the
developer 'in respect of the scheme; if so determined by special
resolution'. This
general power of the body corporate, however, does
not detract from the specific right given to the individual owner
under s 25(13)."
[9]
In light of the above it is concluded that the body corporate
is only able to proceed in the main application if so determined by
special resolution. In the event the first respondent's interlocutory
application should succeed.
[10]
Order:
1.
Vogel Inc. was/is not authorised to bring the main application on
behalf of the second applicant in that
the second applicant has not
complied with the provisions of section 36(6)(e) of the Sectional
Titles Act 95 of 1986 (as amended
by section 2(7)(e) of the Sectional
Titles Scheme Management Act 8 of 2011).
2.
Vogel Inc. may no longer act for the second applicant until they have
satisfied this Court that they
are so authorised in terms of the
provisions of section 36(6)(e) of the Sectional Titles Act 95 of 1986
(as amended by section
2(7)(e) of the Sectional Titles Scheme
Management Act 8 of 2011).
3.
The applicants are directed to pay the costs of this application
jointly and severally the one paying
the other to be absolved.
_____________________
AC
BASSON
JUDGE
OF THE HIGH COURT
Appearances:
For
the first and second applicants
:
Adv AJ Swanepoel
Instructed
by:
Vogel Incorporated
For
the first respondent:
AG South SC
Instructed
by
:
MacRobert Inc.
[1]
Act 95 of 1986.
[2]
Act 8 of 2011.
[3]
1999 (3) SA 480
(W) at 485B-486A.
[4]
My emphasis.
[5]
At 458C - 485 A.
[6]
2010 JDR 0596 (SCA) at par 24.