SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case Number: A39/2023
In the matter between:
BELLA ROSA THREE Appellant
HOME OWNERS ASSOCIATION
(Registration Number: 1951/000009/06)
and
ANNEKE BRANDT First Respondent
(Identity Number: 6[…])
THE COMMUNITY SCHEMES
OMBUD SERVICE Second Respondent
MNINAWA BANGILIZWE Third Respondent
___________________________________________________________________
JUDGMENT DELIVERED ELECTRONICALLY ON 06 SEPTEMBER 2024
___________________________________________________________________
MANGCU-LOCKWOOD, J
A. INTRODUCTION
[1] The appellant seeks review and an appeal against the decision of the third
respondent in his capacity as an adjudicator appointed by the second respondent
(“the CSOS” ). Although the matter was not opposed, after hearing argument on
behalf of the appellant the Court issued Directives inviting the CSOS to del iver an
explanatory affidavit in respect of certain questions, and to attend the postponed
proceedings, which was complied with. After the hearing, both the appellant and the
CSOS were permitted to submit further written submissions, for which we are
grateful.
[2] The appellant is a homeowners’ association which is a community scheme as
defined in the Community Schemes Ombud Service Act 9 of 2011 ( “the Act”). On 20
September 2021 the first respondent became owner of erf 3 [...], Unit 1[...] situated in
Bella Rosa Bellville, Western Cape , and accordingly became a member of the
community scheme. At the time, the property was vacant, with no construction ever
having been undertaken by the previous owner . From October 2021 the appellant
imposed a building penalty against the account of the first respondent, on the basis
that no building construction had commenced on the property within the period
prescribed in the appellant’s constitution.
[3] It is not disputed that the first respondent did not receive the monthly
statements until 13 December 2021, apparently due to an email address error, by
which time three months’ worth of building penalties were reflected in her monthly
statement, together with interest . Almost immediately, she addressed emails to the
appellant challenging the imposition of the building penalty. The parties were not able
to resolve the issue, and on 31 May 2022 the first respondent referred a complaint to
the CSOS by completing the prescribed dispute resolution form.
[4] The relief sought by the first respondent was that “ the unreasonable and
therefore incorrect imposed fines /penalties be rescinded”. The complaint was
accepted by the CSOS in terms of section 38(1) of the Act. The appellant was
granted an opportunity to deliver written submissions in response to the complaint in
terms of section 43 , which were delivered on 21 November 2022 and set out its
basis for charging the building penalties, based on section 10(b) and (c) of its
constitution, the contents of which I deal with below. The first respondent submitted a
reply on 28 November 2022, and on 16 January 2023 the appellant submitted final
written submissions. The matter was referred to conciliation in terms of section 47
but remained unresolved, and a certificate of non -resolution and referral to
adjudication was issued on 14 December 2022, in terms of section 48.
[5] The adjudicator defined the dispute as an application which sought relief in
terms of section 39(1)(c) of the Act. He held that, although the appellant was entitled
to levy the building penalties against the first respondent, no fair procedure had been
followed. It was because of the unfair procedure, and specifically section 39 of the
appellant’s Master Owners’ Association constitution (“the master constitution” ), that
he found that the penalties were invalid. The order granted by the adjudicator was
that “the fines against [the first respondent] are invalid; and [the appellant] is ordered
to remove the fines from the [first respondent’s] levy statement, within 14 days of this
order”.
B. THE REVIEW
[6] Although the appellant adopted the double -barrelled approach endorsed in
Kingshaven Homeowners’ Association v Botha 1 in terms of which a party in its
circumstances may bring both an appeal and a review, it argued that the review
ground deserved consideration first because, if successful, it would obviate the need
to determine the appeal. The review is based on section 6(2)(a)(i) of the Promotion
of Administration of Justice Act 3 of 2000 ( “PAJA”), and it is argued that the
adjudicator was not authorised by the Act to make the decision that he did.
[7] The appellant relies on two grounds in this regard, and both were not raised at
the CSOS proceedings, with the latest one only being raised aft er the hearing of the
matter in this Court. Both grounds seek to challenge the jurisdiction of the CSOS and
the adjudicator to determine the matter. The first belated challenge to jurisdiction was
the main reason that this Court invited the CSOS to participate in these proceedings
1 Kingshaven Homeowners’ Association v Botha and others [2020] ZAWCHC 92 (4 September 2020)
para [25]. See also Manor Body Corporate v Pillay and Others [2020] ZAGPJHC 190 (6 March 2020).
because in terms of section 42(1) of the Act , it is the body that performs the sifting
function of rejecting an application if the relief sought is not within its jurisdiction.
[8] Although the issues raised by the appellant are questions of law which could
ordinarily be the subject of an appeal in terms of section 57 of the Act, the fact that
they were not raised previously raises questions of fairness, in particular, towards the
first respondent who did not participate in these proceedings. As a result, the Court is
mindful of the caution sounded by the Constitutional Court in Barkhuizen v Napier 2,
where the following was stated:
“The mere fact that a point of law is raised for the first time on appeal is not in
itself sufficient reason for refusing to consider it. If the point is covered by the
pleadings, and if its consideration on appeal involves no unfairness to the other
party against whom it is directed, this Court may in the exercise of its discretion
consider the point. Unfairness may arise where, for example, a party would not
have agreed on material facts, or on only those facts stated in the agreed
statement of facts had the party been aware that there were other legal issues
involved. It would similarly be unfair to the other party if the law point and all its
ramifications were not canvassed and investigated at trial.”3
[9] A similar statement was recently made by the Constitutiona l Court in
Regenesys Management (Pty) Ltd t/a Regenesys v Ilunga 4, where it was stated that
a court may raise a point of law mero motu if the point does not need any new
evidence to be led and if it would not be unfair to one or both parties for the court to
consider and take into account that point of law. The parties agree that these
principles find application to these proceedings even though the y were made in
slightly different contexts. I agree.
[10] With this background in mind, I now consider t he grounds of review. The first
ground, as set out in the founding affidavit, is that the first respondent’s application to
2 Barkhuizen v Napier [2007] ZACC 5 ; 2007 (5) SA 323 (CC) (4 April 200 7). Footnotes omitted. See
also Naude and Another v Fraser [1998] ZASCA 56; 1998 (4) SA 539 at 558 B-C.
3 See also Naude and Another v Fraser [1998] ZASCA 56; 1998 (4) SA 539 at 558 B-C.
4 Regenesys Management (Pty) Ltd t/a Regenesys v Ilunga and Others (CCT 220/22) [2024] ZACC 8;
2024 (7) BCLR 901 (CC); [2024] 8 BLLR 777 (CC); (2024) 45 ILJ 1723 (CC) (21 May 2024) para 43.
the CSOS fell within the ambit of section 41(1) of the Act , which provides that “an
application for an order declaring any decision of an association or an executive
committee to be void may not be made later than 60 days after such a decision has
been taken”. The appellant states that its decision to levy the building penalties was
made in September 2021, and the first respondent’s application was only submitted
to the CSOS o n 31 May 2022 , more than 60 days had elapsed, and accordingly it
was out of time. The argument continues that, since no condonation application was
made in terms of section 41(2) for the ombud to condone the late submission of the
first respondent’s application , the adjudicator did not have the jurisdiction to
determine the complaint and acted ultra vires when he did so.
[11] The first issue arising is whether the first respondent’s complaint is one in
which she sought a declaratory order that a decision of the appellant or its executive
committee was ‘void’. Although the terms are not defined in t he Act, it nevertheless
draws a distinction between void and invalid decisions. That is apparent when one
has regard to the provisions of subsections 39(4)(b), 39(4)(c) and 39(4)( e) 5 in which
decisions may be declared as either void or invalid. Two instances of void decisions
are mentioned, and that is in sections 39(4)(c)(i) and 39(4)(e). In terms of the former,
an applicant may seek an order declaring that a resolution purportedly passed at a
meeting of the executive committee, or at a general meeting of the association was
void. In terms of section 39(4)(e) an applicant may seek an order declaring that a
particular resolution passed at a meeting is void on the ground that it unreasonably
interferes with the rights of an individual owner or occupier or the rights of a group of
owners or occupiers.
5 The relevant provisions in section 39(4) provide as follows:
“In respect of meetings –
…
(b) an order declaring that a purported meeting of the executive committee, or a purported
general meeting of the association, was not validly convened;
(c) an order declaring that a resolution purportedly passed at a meeting of the executive
committee, or at a general meeting of the association
(i) was void; or
(ii) is invalid;
…
(e) an order declaring that a particular resolution passed at a meeting is void on the ground that it
unreasonably interferes with the rights of an individual owner or occupi er or the rights of a group of
owners or occupiers.”
[12] The first respondent sought neither of the two forms of relief. What she
sought was an order that “ the unreasonable and therefore incorrect imposed
fines/penalties be rescinded”. She did not seek an order setting aside the contents of
a resolution reached a t a meeting. She could not have made such a request,
because she was referred to no contents of a meeting or resolution as a basis for
imposing the penalties against her.
[13] Properly understood, her complaint was that the penalties were imposed
unfairly and unreasonably upon her. In the correspondence attached to her
complaint, she made clear that she understood the rationale for the rules relating to
the building timeframes having previously lived in a community scheme . It is
therefore difficult to conclude that the first respondent sought an order declaring that
a decision was void, within the meaning of the Act. Rather, what she sought was an
order to the effect that the imposition of the fines was unfair and unreasonable and
accordingly invalid, as opposed to void. This is why it is understandable that the
adjudicator held that the penalty fines against her were ‘invalid’.
[14] Whilst section 41(1) imposes a time limit of 60 days for applicants seeking an
order declaring a decision of an association or an executive committee to be void,
there is no similar time limitation in respect of invalid or unreasonable decisions. One
can understand the rationale for creating a distincti on in this regard. Where a
decision is possibly void, the need for legal certainty is greater, h ence the time limit
of 60 days. Here, the appellant relies on provisions contained in a constitution which
on its face is dated October 2011 . At the very least, the content of the specific
provisions relied upon indicates that they were in place by 10 February 2010 .
Accordingly, by 31 May 2022 when the first respondent referred her dispute to the
CSOS there could have been no concerns about the legal certainty of the provisions
of the constitution, and there would have been no reason for the express time bar in
section 41(1). I am accordingly unable to agree that the first respondent sought an
order in terms of section 41(1).
[15] To make matters worse, the appellant’s challenge based on section 41(1) and
(2) is accompanied by a complaint in the founding papers that its decision was
“made in September 2021”, and came to the first respondent’s attention “as early as
October 2021” . There is no support in the record for a decision made by it in
September 2021. No such decision was referred to, even in its heads of argument.
[16] There is also no evidence that such a decision came to the attention of the
first respondent as early as Oct ober 2021. That averment is refuted by the
appellant’s own version at the CSOS, where it clarified in its submissions dated 21
November 202 2 that due to a “ bona fide error” the first respondent’s account
statements for the months of October and November 20 21 had been sent to the
incorrect e-mail address. This was confirmed by the correspondence attached in the
CSOS proceedings in which the first respondent complained that she only became
aware of the accounts on 13 December 2021 after they had been addresse d to the
incorrect email address. As a result, there was no dispute before the adjudicator that
the first time that the first respondent became aware of the accounts was in
December 2021.
[17] It is correct that there is no evidence of a condonation application having been
made by the first respondent , given that the complaint was only referred on 31 May
2022. While it is not for this court to determine any such condonation application
given the narrow ambit of powers it is accorded in terms of the Act, there are some
significant considerations which warrant consideration.
[18] The application to the CSOS was made with reference to the correspondence
between the first respondent and the appellant , all of which was attached to the
dispute referral . It is evident from that correspondence that the first respondent
disputed the penalty immediately upon discovering it and conveyed that she would
seek advice on the matter. She sent another e-mail on 8 March 2022, setting out the
essence of her complaint t o the appellant. In the email of 8 March 2022, she stated
that since she ha d just bought the property and was awaiting approval of building
plans and rights, it was physically impossible to expect her to start building
immediately upon registration of the property into her name. In light thereof, she
argued that it would have been reasonable to have been awarded the same time
periods as the previous property owners before penalties could be charged.
Furthermore, she argued that she could not be held liable for the previous owner’s
failure to build within the prescribed time period. There was no response from the
appellant until 12 May 2022. The dispute was referred just under 3 weeks later.
[19] The contents of the e -mail of 8 March 2022 indicate that the first respondent
was seeking to persuade the appellant to rescind the imposition of a penalty against
her by considering the arguments she raised . It is not unreasonable to infer that ,
after the e-mail of 8 March 2022 she was awaiting the outcome of her request for the
appellant to set aside the penalty . That is not an unreasonable inference given that,
up until the correspondence of 12 May 2022, there is no evidence that the appellant
had provided the first respondent with an y explanation for the building penalties , or
responded to her queries relating to the reasonableness of the timing thereof. That is
particularly significant given that the very constitutional provision s - clauses 10(b)
and (c) - that the appellant relies upon provide for possible agreement for extension
of the building timeframes between the parti es. It provides, amongst other things,
that t he purchaser or its successor in title may negotiate with the appellant for an
extended period for the completion of the construction on the property. Her conduct
of awaiting a response fell within the ambit of that clause.
[20] The first explanation for the penalties from the appellant appeared in the
communication of 12 May 2022, in which the appellant set out the contents of
subsections 10(b) to (d) of its constitution. Thereafter, the appellant stated as follows:
“Based on the above extract from the constitution, even though you are a new owner
you are bound to the penalty until completion of your house. This is something that
the sellers of the property should have disclosed to you. Therefore we unfortunately
cannot reverse the penalty on your account or provide you with any form of relief .”
The highlighted portion makes clear that the appellant understood that the first
respondent was prevailing upon it to reverse the penalty or to provide some form of
relief. This understanding was confirmed by the first respondent’s response of 23
May 2022 in which she firstly complained that the appellant had taken two and a half
months to reply. Then she stated as follows: “Despite our serious concerns and
objections, which you seem to completely ignore and fail to address, we now know
your position and decision. We will make use of our option to raise this issue with the
CSOS”.
[21] It is therefore clear from the correspondence that in both parties’ minds at the
time, the first respondent sought to change the appellant’s mind regarding the
imposition of the penalties , and a decision in that regard was only conveyed to her
on 12 May 2022 , albeit unsatisfactory to the first respondent . In my view, that is the
decision that would be the subject of an application in terms of section 41(1), if that
provision were held to be applicable to this matter, especially if one has regard to the
provisions of the constitution already referred to which contemplate po ssible
engagement between the parties.
[22] All of this was before the adjudicator, and was known to the appellant, which
explains why it did not complain about the delay in that forum. This is why I consider
it unfair for the appellant to now raise the issue in these proceedings , because the
facts were so stark ingly obvious between the parties that the issue of delay never
arose. Had the appellant raised it there the first respondent and the adjudicator
would have had regard to the contents of the correspondence outlined above , in
arriving at the conclusion that there was no delay o r that there was a good
explanation for any delay which might have ensued.
[23] The appellant later expanded its grounds for review, and this was after the
appeal hearing, apparently pursuant to an exchange with the bench. I preface this
part of the discussion by stating that, e ven though the CSOS was permitted to
deliver written submissions in reply, the first respondent, who did not participate in
the proceedings, did not obtain such an opportunity and did not receive notice of the
new argument. Neither was the argument raised at the CSOS proceedings, similar to
the earlier jurisdiction point already discussed.
[24] The appellant’s new argument is that the relief sought by the first respondent
is not catered for by the Act because it (the Act) does not provide relief relating to a
contractual penalty, which was the subject of the dispute. Furthermore, the relief
granted by the adjudicator does not fall within any of the relief available in terms of
section 39(1)(c) because the first respondent was not seeking the setting aside of a
‘contribution’ which is the subject -matter of subsection (c). Accordingly, the
adjudicator lacked the jurisdiction to determine the dispute, and the only relief
available to the first respondent was to approach the High Court.
[25] The adjudicator gave no reasons for characterizing the dispute as one falling
within the forms of relief available in terms of section 39(1)(c). Since the appellant
did not raise the issue before the CSOS, neither of the parties paid any attention to it
in their written or oral submissions. And the CSOS did not reject the application in
terms of section 42, as it was entitled to do, on the basis that it lacked jurisdiction to
determine the dispute, or that the dispute should rather have been dealt with in a
court of law. In other words, all the parties, including the appellant accepted that the
CSOS and the adjudicator had jurisdiction to determine the matter.
[26] The issue requires interpretation of the provisions of the Act, taking into
account the well-known interpretative principles espoused in Endumeni6 and
Capitec7. The stated purpose of the Act includes the need “to provide for a dispute
resolution mechanism in community schemes”. A ‘dispute’ is defined as “a dispute in
regard to the administration of a community scheme between persons who have a
material interest in that scheme, of which one of the parties is the association,
occupier or owner, acting individually or jointly” . There is no dispute that the matter
between the parties in this matter meets the requirements of this definition.
[27] In terms of section 38, read with section 39, any person to make an
application if such a person is a party to or is affected materially by a dispute,
provided that the application must set out relief that is within the scope of one or
more of the prayers for relief contemplated in section 39 and must include one or
more of the orders set out in section 39. Section 39(1)(c) provides as follows:
“An application made in terms of section 38 must include one or more of the
following orders… in respect of financial issues -
…
(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
6 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA).
7 Capitec Bank Holdings Limited and another v Coral Lagoon Investments 194 (Pty) Ltd and others
2022 (1) SA 100 (SCA).
order for the adjustment of the contribution to a correct or reasonable
amount or an order for its payment in a different way…” (my emphasis)
[28] The appellant argues that the dispute did not involve a contribution but a
penalty. In this regard it refers to the definition of ‘contribution’ which is contained in
section 3(1) of the Sectional Titles Schemes Management Act 8 of 2011 8. The Act
defines neither term , and creates no distinction when defining the bounds of
jurisdiction. It also does not oust the jurisdiction of the CSOS relating to penalty
disputes. And as I have already indicated, it defines a dispute in wide terms , which
implies that penalties are included in its ambit. The same may be observed regarding
the term ‘financial issues’ employed in the opening sentence of section 39(1). It is
similarly not defined and is cast in wide terms. It has not been suggested that the
first respo ndent’s dispute d oes not involve financial issues. The first respondent
queried amounts levied on her as being incorrectly and unfairly determined and
unreasonable, and what she sought as relief was rescission of what she termed
“unreasonable and incorrect imposed fines/penalties”.
[29] Nor does the Act exclude disputes relating to contractual disputes, whether
expressly or impliedly. As the CSOS correctly observes in its written submissions,
such an exclusion would undermine its mandate and would severely limit the options
available to parties , and would force them to approach the High Court whose
proceedings can be prohibitively expensive. Such an approach would be contrary to
the stated objectives of the Act, which include the promotion of quick and affordable
access to justice through a relatively cheap and informal dispute resolution
mechanism.9
[30] There furthermore does not appear to be a rational basis for distinguishing
between contributions and penalties if one has regard to the fact that, in either event,
one is dealing with a contractual issue. The case law confirms that an instrument
such as a constitution between a homeowners’ association and its members
8 A ‘contribution’ was previously defined and levied in terms of the now repealed Sectional Titles Act
1986.
9 See Coral Island Body Corporate v Hoge 2019 (5) SA 158 (WCC).
constitutes a contract between th em.10 The relationship between them is contractual
in nature. If penalties were excluded from the jurisdiction of the CSOS because they
are contractual in nature , that would apply to all disputes affected by what is
described in the Act as ‘scheme governance documentation’.
[31] Most significantly, o ur courts have endorsed the adjudication of disputes
relating to building penalties by adjudicator s acting under the auspices of the CSOS.
One such matter is Chapman's Bay Estate Homeowners' Association v Lotter 11
which was decided in this Division. The matter turned on the interpretation of a
building penalty clause contained in the constitution of a homeowners’ association. In
terms of the relevant provision in that constitution, a building penalty was imposed
because the previous owner had failed to develop the property within the time
stipulated in the constitution of the homeowners’ association, which, in that case was
a period of three years after transfer.
[32] The court held that the responsibility to construct a dwelling within three years
after transfer is a personal obligation undertaken on the basis of the contractual
nature of the constitution. However, based on the interpretation of the specific
clause, the court held that the obligation in that case could not be transferred to new
owners.12 Significantly, the relief granted by the court was a substitution order,
because the court was of the view that it was “entitled to grant an order which the
adjudicator would have been entitled to grant under section 54 of the Act, mutatis
mutandis”13. It was on that basis that the homeowners’ association in that case w as
ordered to desist from imposing penalty levies in terms of clause 9.10 of its
constitution upon any owners in the Estate other than those who took transfer of their
properties from the developer. Thus, the court confirmed the power of an adjudicator
to determine a dispute relating to building penalties.
10 Mount Edgecombe Country Club Estate Management Association II RF NPC v Singh and
others 2019 (4) SA 471 (SCA) at para [19].
11 Chapman's Bay Estate Homeowners' Association v Lotter and Others (9387/2022) [2023] ZAWCHC
35 (24 February 2023).
12 See paras 42 and 45.
13 See para 58.
[33] Another relevant matter is the recent case of Stone River Management
Association NPA v Mashoko and Others 14 in which a homeowners’ association
sought, amongst other forms of relief, the payment of unpaid building penalties. 15
Similar to this matter, t he penalty levies were imposed due to failure to complete
building operations within the period specified in the memorandum of
incorporation (“MOI”) of the homeowners’ association. The adjudicator granted an
order for the payment of the arrear levies and interest but ordered the appellant to
remove the building penalty from the first respondent’s levy statement, wit hin
fourteen (14) days upon receipt of the order.
[34] After interpreting the provisions of the MOI, the court held 16 that the first
respondent was contractually bound to its terms, which provided for the building
penalty, and that the adjudicator had failed to give effect to the terms thereof.
Importantly, the court referred the dispute relating to the building penalty back to the
adjudicator17, because the adjudicator had failed to consider the defence raised by
the first respondent regarding why he failed to comply with the period prescribed in
the MOI for commencing building works.
[35] Thus, the court in that matter confirmed the power of an adj udicator to
determine a dispute relating to a building penalty. Although it did not specify the
provisions of the Act in terms of which an adjudicator is entitled to adjudicate such a
matter it did refer to the following in its discussion: section 2 which provides that the
purpose of the Act is to provide for a dispute resolution mechanism in community
schemes; section 39 which sets out the relief that can be sought from the
adjudicator; section 39(1)(e) which relates to financial issues and provides for an
order for the payment or re -payment of a contribution or any other amount; and
section 50 which sets out the adjudicator’s duties during the investigation.18
14 Stone River Management Association NPA v Mashoko and Others (A2023/035929) [2024]
ZAGPJHC 800 (23 August 2024).
15 See para 3.
16 See paras 24, 28-29 and 31.
17 At para 37.3.
18 See para 32.
[36] The case law is accordingly against the latest argument raised by the
appellant on this issue . In my view, the review must be dismissed , based on all the
considerations discussed in this section.
C. THE APPEAL
[37] Section 57(1) of the Act provides for a statutory right to appeal as follows: “ 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.”
Thus the provision allows for the setting aside of a decision on the narrow ground
that it was founded on an error of law.19 It is akin to the third type of appeal identified
in Tikly v Johannes20 which amounts to “ a review, that is, a limited rehearing with or
without additional evidence or information to determine, not whether the decision
under appeal was correct or not, but whether the arbiters had exercised their powers
and discretion honestly and properly.”21
[38] The ground of appeal as contained in the founding affidavit is that the
adjudicator failed to have regard to the fact that the appellant ’s constitution , and
specifically clause 10(b) and (c) thereof, is a contract between the appellant and the
first respondent in terms of which the latter agreed to be bound. And by focusing on
the procedure followed by the appellant, the adjudicator effectively amended the
constitution, instead of simply applying its provisions. The second basis for appeal is
that the adjudicator e rroneously referred to the appellant’s C onduct Rule 23 and
section 39 of its master constitution , and also incorrectly interpreted that rule when
he found that the appellant was required to issue a notice before imposing the
building penalties.
[39] The relevant clauses of the appellant’s constitution, subclau ses 10(b) and (c),
provide as follows:
19 See Trustees for the Time Being of the Avenues Body Corporate v Shmaryahu and Another 2018
(4) SA 566 (WCC) para 25.
20 Tikly v Johannes 1963 (2) SA 588 (T) at paras 590 - 591.
21 See Trustees for the Time Being of the Avenues Body Corporate v Shmaryahu and Another para
25; Chapman's Bay Estate Homeowners' Association v Lotter and Others (9387/2022) [2023]
ZAWCHC 35 (24 February 2023) paras 8 -12.
“(b) The following condition is applicable to all the owners of single title
erven and will also bind their successors in title, namely:
Should the construction of the buildings to be erected on the within mentioned
property not be commenced with within a period of 18 months from date of
original sale of the property from the Developer, Bella Rosa Development
(Pty) Ltd, to the first buyer thereof, and completed within 30 months from date
of original sale of the property from the Developer, Bella Rosa Development
(Pty) Ltd, to the first buyer thereof (or such extended period as may be agreed
upon by the Purchaser or its successor in title and the Bella Rosa Three
Homeowners Association) the Bella Rosa Three Homeowners Association will
be entitled to levy a penalty equal to 10% of the original purchase price of the
Property, which penalty shall be payable after 30 months from date of sale as
aforesaid and thereafter every year until the buildings are completed t o the
satisfaction of the Local Authority and the Bella Rosa Three Homeowners
Association. All buildings on the Property shall be constructed in accordance
to the architectural design guidelines as laid down by the Bella Rosa Three
Homeowners Association.
(c) From the 10th of February 2010, the penalty specified in clause (b) shall be
reduced to twice (2 times) the monthly levy payable monthly in advance on or before
the 1st day of each month, until the buildings are completed to the satisfaction of the
Local Authority and the Master Owners’ Association. The penalty shall be payable in
addition to the ordinary monthly levy pay -able by the Owner of the Erf. All buildings
on the Erf shall be constructed in accordance to the Design Guidelines of the Master
Owners’ Association.”
[40] There was no dispute about the interpretation of the above provisions
between the parties. From their plain wording, the clauses bind all owners of single
title erven as well as their successors in title. A construction upon property is required
to commence within 18 months of the date of the original sale of the property from
the Developer to the first buyer, and must be completed within 30 months of the
original sale of the property from the Developer to the first buyer. The purchaser or
its successor in title may negotiate with the appellant for an extended period for the
completion of the construction on the property. The applicable penalty levy is equal
to 10% of the original purchase price of the property, and is payable after 30 m onths
from date of sale, and thereafter every year until the building work is completed to
the satisfaction of the Local Authority and appellant. Furthermore, with effect 10
February 2010, the penalty levy is calculated at twice the monthly levy payable ,
monthly in advance on the first day of each month, until the building construction is
completed to the satisfaction of the Local Authority and the Master Owners’
Association. The penalty is payable in addition to the ordinary monthly levy payable
by the owner of the erf.
[41] As I have already mentioned , the adjudicator accepted that the first
respondent was bound by these provisions .22 In that regard, he specifically
mentioned the case of Mount Edgecombe Country Club Estate Management
Association II (RF) NPC v Singh and Others 23 - also relied upon by the appellant in
these proceedings - in which it was held 24 that when home -owners purchase
property and become members of a homeowners’ association, they agree to be
bound by its rules and the relationship between them is contractual in nature.
Accordingly, I cannot find that the adjudicator failed to have regard to the contractual
nature of the relationship between the parties, or to the contractual implications of
the appellant’s constitution.
[42] The adjudicator also held that the appellant failed to follow a fair procedure
before imposing the penalties against the first respondent because it failed to issue a
notice in writing and to afford the first respondent an opportunity to remedy the
breach or t o make submissions in writing if she disputed the breach . In this respect
the appellant argues that that the adjudicator erred by not stopping his inquiry once
he made a finding that the first respondent is bound by the constitutional provisions.
[43] Such an approach, however, would be contrary to the appellant’s
constitutional provisions. In terms of clause 10(b), the prescribed period for
commencement and completion of the building work s is subject to “such extended
22 See paragraphs 6.19, 6.20, 6.22, 6.27 of the adjudication order.
23 Mount Edgecombe Country Club Estate Management Association II (RF) NPC v Singh and Others
(323/2018) [2019] ZASCA 30; 2019 (4) SA 471 (SCA) (28 March 2019)
24 See para 19.
period as may be agreed upon by th e Purchaser or its successor in title and the
[appellant]”. This provision contemplates that an agreement might be reached
between the parties regarding the possible extension of the prescribed periods for
building works. It is not difficult to understand why a successor in title might seek to
extend the prescribed timeframes, because they would only obtain transfer of the
property after sale from the original buyer. By then, time would be working against
them, and the timeframes would need to be adjusted, especially where no building
work has commenced, as was the case here. Thus, the premium of engaging with
the homeowners’ association in those circumstances with a view to reaching
agreement regarding adjusted timeframes is high. This the constitution reco gnized
by including a provision allowing for possible agreement to extend the timeframes.
[44] The need for such a clause is demonstrated by the facts of this case, because
the first respondent pointed to impossibility of performance within the prescribed
times. In her email of 8 March 2022, she stated as follows:
“…we had just bought the land, so there is no way physically possible that we
could have had plans passed and… the property instantaneously. Since we
can(sic)not be expected to perform inhuman feats, your company will be hard
pressed proving the legality of your demand.”
[45] In her submiss ions dated 28 November 2022, she set out the practical
difficulties she experienced in obtaining building approval which were d ue, in part, to
covid-19. It is relevant in this regard that the computation of the timeframe prescribed
for the commencement and completion of building works involves the tenure of the
old owner as well as that of the first respondent. Even if the penalties themselves are
not inherited or accrued from the previous owner, the computation of the prescribed
period involves both tenures. Commencement is calculated from 18 months of the
original sale, and completion must be within 30 months of the original sale. And yet,
contrary to what was argued before us, the constitutional provisions place a personal
contractual obligation upon the first respondent because effectively the non -
compliance of the previous owner, whether in part or in full, is attributed to her as a
breach of the constitutional obligations.
[46] That being so, it is self -evident that the first respondent as the new owner
would, at the very least, have had to be afforded an opportunity to remedy the
alleged breach. It is common cause that this was not done. Instead, when the first
respondent received the first statement, it was backdated by three months’ worth of
building penalties, plus interest. This, in circumstances where the very constitutional
provision upon wh ich the appellant relies contemplates that an agreement might be
reached between the parties regarding the possible extension of the prescribed
periods for building works, as contemplated in clause 10(b).
[47] The correspondence already referred to clearly indicates that the first
respondent attempted to engage the appellant in this regard. Specifically, the first
respondent referred to the timing of imposing the penalties, stating as follows:
“We have no issue with the rule per se and understand the importance of this
rule and we will be abiding by a requirement to start building within a
reasonably prescribed. And to have finished the build before the end of the
second year of our ownership of this ground.”
[48] Later, she stated –
“[The appellant] has issued our fine /penalty included in the first statement we
ever received and even backdated it. There has never been a meeting with us
and [the appellant] in connection with this unilaterally imposed fine. We have
not been granted a reasonable opportunity to make representations. This fine
was imposed despite not following correct procedures… The fine is in
contravention of our constitutional rights as we cannot be held liable for the
previous owner's failure to build within the prescribed period. It would however
have been reasonable to have awarded us the same time periods as the first
owners were awarded and we would have gladly adhered to such a demand”.
[49] It is evident from these quoted portions that the first re spondent’s conduct of
seeking to engage the appellant was within the contemplation of the constitutional
provision that provides for agreement regarding possible extension of the
timeframes. The provision contemplates submissions such as the ones she made,
for consideration by the appellant. How else would agreement be reached otherwise,
within the contemplation of the constitutional provisions?
[50] Regrettably, the first respondent’s pleas fell on deaf ears. The
correspondence indicates that the appellant was impervious to the possibility of
extending the timeframes, let alone setting aside the penalties. It instead set out the
contents of clause 10, and informed her that the penalties could not be reversed and
that no other form of relief could be provided to her and she w as advised to contact
the CSOS if she wished for the penalties to be reversed. This conduct by the
appellant was unreasonable and contrary to the spirit of the constitutional provision
in question.
[51] It is no wonder that the the adjudicator raised the issue of procedural fairness.
The appellant had effectively determined a penalty for a breach of its constitutional
provisions, without ever having afforded the first respondent an opportunity to
remedy it . In terms of the constitutional provisions, she had a right to make
representations regarding possible extension of the timeframe s, and was not
afforded such opportunity by the appellant. For example, it only came out during the
CSOS proceedings that she eventually obtained building approval on September
2022. Having denied the appellant the opportunity to make such representations, the
question that arises is whether, and on what basis, the appellant was entitled to
impose the penalties against the first respondent. On application of the con stitutional
provision in question, it had no such right until it had at least engaged with the first
respondent’s concerns. Accordingly, I am inclined to agree with the conclusion of the
adjudicator that building penalty was unreasonably and unfairly impos ed and was as
a result invalid.
[52] It is true that t he adjudicator incorrectly applied the provisions of section 39 25
of the appellant’s master constitution and conduct rule 2326. Those provisions are not
25 Section 39 of the master provision provides as follows:
“(a) If the conduct of a Member or Occupier or his family members, guests, visitors, clients,
employees, workers or contractors constitute a nuisance in the opinion of the Trustees or the
Subcommittee as may be appointed by the Trustees, or a breach of the Conduct Rules, the Trustees
or the Sub-committee, may:
(i) informally (in person, or via telephone call, e -mail, or postal mail) notify the Member and Occupier
(if applicable) of the nuisanc e or contravention, and request the Member and Occupier (if applicable)
relevant to the interpretation of clause 10 because they concern behavioural issues,
not building penalties. Thus the adjudicator made an error when he held that the
appellant was required to follow the procedure in terms of cond uct rule 23 as read
with clause 39 of the master constitution, before imposing the penalty levy in terms
of clause 10 of the constitution. However, given that this Court has reached the same
conclusion as he did, I do not consider the error to be material.
[53] Since the matter was not opposed, the appellant did not seek a costs order.
However, as I have indicated, the court invited the CSOS to participate in these
proceedings primarily because of the jurisdiction points argued by the appellant,
which required explanation by the CSOS. Then, after the appellant’s request to
submit further written submissions after the hearing, the CSOS also requested an
opportunity to reply thereto. Although the Court is grateful for the reply, it is not
sufficient grounds in my view to award a cost order in their favour.
D. ORDER
[54] For all the above reasons, the review and the appeal are dismissed, with no
order as to costs.
______________________________
N. MANGCU-LOCKWOOD
Judge of the High Court
I agree, and it is so ordered.
______________________
V. SALDANHA
to offer a clear resolution of the issue, or
(ii) by written notice inform the Member and Occupier (if applicable) of the nuisance or contravention
and warn the Member of Occupier (if applicable) that if he fails to remedy the contravention and/or if
he persists in such conduct or contravention, a penalty will be imposed on the Member, or
(iii) by written notice impose a penalty on the Member.”
26 Conduct Rule 23 provides as follows:
“If the conduct of an owner or occupier or his family members, visitors, guests, clients, employees,
workers or contractors constitute a nuisance or a contravention of these rules, the Trustees may
impose a penalty on the owner in accordance with clause 39 of the Constitution.”
Judge of the High Court
APPEARANCES
For the appellant : Adv A Brink
Instructed by : Bornman and Hayward Attorneys
R Mortz
For the respondents : Adv T Mpahlwa
Instructed by : Mapongwana Attorneys Inc.
S Mchunu