OFFICE OF THE CHIEF JUSTICE
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)

Case NO: 18382 /2021
REPORTABLE : NO
OF INTEREST TO OTHER JUDGES: NO

In the MATTER between :

ASHWOOD CENTRE BODY CORPORATE PLAINTIFF

and

HALDENBY ESTATES (PTY) LTD DEFENDANT

Coram: Kholong, AJ
Date of hearing: 10 February 2025
Date of Judgement: 18 March 2025


JUDG MEN T


2 KHOLONG AJ

Introduction

1. In this action , the question the Court is asked to determi ne is whether the
plaintiff, Ashwood Centre Body Corporate has levied contributions required of
defendant, lawfully , thereby entitling plaintiff to the relief it seek s in the amended
particulars of claim.

2. The Plaintiff is Ashwood Centre Body Corporate , a body corporate of a sectional
title development made up of both residential and commercial sections .

3. The defendant, Haldenby Estates (Pty) Ltd, is a member of plaintiff in terms of
Section 2(1) of the Sectional Title Schemes Management Act1 (herein -after
“the Act” ) by virtue of its ownership of 3 sectional title units within the
development.

Background

4. Plaintiff seeks recovery of arrear levies due by the defendant in the amount of
R1104 323.11 for the period December 2018 to October 2021 . In the plea dings ,
defendant had inter alia denied that plaintiff had correctly calculated the
defendant’s contributions on levies due. This position was abandoned at the trial
and quantification of the amount due accordingly ceased to be an issue of
dispute requiring determination.

5. It was not in dispute between the parties that defendant is a member of the
Plaintiff by virtue of ownership of units 2, 6 and 7 within the sectional title
development . That defendant has an obligation to pay levies and special

1 Act No 8 of 2011.
3 contributio ns to Plaintiff if the levies are raised lawfully and in accordance with
the Sectional Title Schemes Management Act .

6. By agreement , the parties thus limited the evid ence led at the trial to the issue of
whether or not the plaintiff lawfully raised the levi es due by the defendant in
terms of the Act. The only issue for determination was therefore whether or not
the plaintiff complied with the provisions of Section 3(2) of the Act.

7. Section 3(2) and (3) of the Act reads as follows:

“Liability for contributio ns levied under any provisions of subsection (1),
save for special contributions contemplated by subsection (4) , accrues
from the passing of a resolution to that e ffect by the trustees of the body
corporate, and may be recovered by the body corporate by an application
to an ombud from the persons who were owners of units at the time
when such resolution was passed: Provided that upon the change of
ownership of a unit, the successor in title becomes liable for the pro rata
payment of such contributions fro m the date of change of such
ownership .

Any special contribution becomes due on the passing of a resolution in
this regard by the trustees of the body corporate lev ying such contribution
and may be recovered by the body corporate by an application to an
ombud from the persons who were owners of units at the time when such
resolution was passed : Provided that upon the change of ownership of a
unit, the successor in title becomes liable for the pro rata payment of such
contributions from the date of change o f such ownership ”.

Plaintiff’s evidence

4 8. Plaintiff led the evidence of Mr. M. Anvary . The evidence is that this witness is a
trustee and chairperson of plaintiff. H e testified that the levies by the members
were considered, decided and voted upon at the Annual General Meetings
(AGMs) . That Coral International Asset Managers managed the development on
behalf of plaintiff and as part of its duties issued monthly levy statements to all
members.

9. Mr. Anvary drew this Court’s attention to various minutes of th e AGMs in
explaining the conduct and recording of proceedings pre, during and post AGMs .
Relevant to the issues in dispute , he testified that defendant took transfe r of its
units in 2017. That defendant prior to taking transfer had attended the 2017 AGM
and that Mr. S Burnett of defendant had been elected as a trustee of Plaintiff at
that 2017 AGM. That therefore Defendant is aware of its responsibilities to pay
levies.

10. In this regard Mr. Anvary drew this Court’s attention to resolutions taken by the
trustees to ratify the approval of levies payable by members. He explained the
content of the trustee resolutions taken on 18 October 2016; 21 June 2017; 21
January 2019 and 31 July 2019. He explained that the resolutions were
presented and signed after the co nclusion of the AGMs and after members had
voted on and confirmed the levies to be contributed by members .

11. He testified that the purpose of the resolutions were to ratify the levies
chargeable to members as voted by members at the AGM . That resolutions we re
signed by either himself or a certain Mr. Oma r. He testified that it was their
practice from inception of the scheme, as he was a member from the beginning,
to at tend to resolutions regarding levies in the manner he explained. That no
member of plaintif f, including defendant had ever taken issue with the resolutions
regarding the levies payable. That defendant had failed to make payment of its
monthly contributions . That this c onduct prejudiced plaintiff as that has caused
strain on resources and financi al sustainability of the scheme.
5
12. In argument , Counsel for the Plaintiff contended that the nature of the
relationship between the trustees and the Plaintiff is such as to compel trustees
to manage the affairs of plaintiff in a manner that is beneficial fo r all its members
in terms of Section 8 of the Act. That Section 3 of the Act allows for the passing
of a resolution by trustees authorizing the total amount of levies that plaintiff can
charge. He argues that such resolution was passed annually.

13. Counsel for Plaintiff contends that from the minutes of the AGMs , it is clear that
defendant was represented. He participated and contributed to engagements and
thus would h ave been aware of its obligations. That therefore the resolutions
passed on raising levies at the AGMs complies with the requirements of section
3(2) of the Act. That the Court must take cognizance of the fact that these
resolutions start with the following wording:

“Resolution to Ratify Levies Chargeable to All Members of the Ashwood Centre
Body Corporate ”

14. That ordinary meaning of the word ‘ ratify ’ means to approve and sanction
formally. He argues that the purpose of the resolution adopted at the AGM w as
to ratify the levies as agreed by the members in compliance with the provisions of
Secti on 3(2) of the Act. That the fact that the resolution purports to ratify the
adoption of a resolution by members is indicative of compliance with section 3(2)
of the Act. That there would be no purpose in the signing of a resolution ratifying
a decision al ready taken by members on levies, if not for compliance with section
3(2) of the Act. He states that the resolutions must be read in the context of how
the trustees adopted resolutions for purposes of section 3(2) of the Act.

15. He avers that whilst defendan t now accepts the correctness of the calculations ,
they still refuse to pay the accrued levies to plaintiff ’s prejudice. That the purpose
of the Act could never have been to place formalistic hurdles in the way of
6 recovery of arrear contributions. That the mischief the Act sought to remedy is
the unsustainability of a section title development as a result of member’s failure
to contribute. That a formalistic approach to Section 3(2) of the Act should be
avoided, especially given that the amounts claimed are not disputed. That the
resolutions although not perfectly worded, achieve the purpose envisaged by
section 3(2) of the Act and should be accepted as lawful resolutions.

Defendant’s Evidence

16. The defen se led the evidence of Mr. S Burnett . This witness tes tified that he had
been a trustee of the Plaintiff. That he was involved with the body corporate
between 2017 and 2019 . That even before acquiring a property whilst exploring,
he was invited to meetings. He testified that he was no t presented with a
resolu tion for consideration as trustee related to levies whilst in office after the
2017 AGM and had not seen the resolution testified on by Mr. Anvary. He
confirmed that defendant no longer disputed the Plaintiff’s levy calculation and
the amount claimed. He c onceded that defendant never previously took issue
with plaintiff’s resolutions when it refused to make payment of its contributions
and that the dispute had always been about the levy calculations.

17. Counsel for the defendant argues that if regard is had t o the requirements of
Regulation 10(1), it is clear that in order to recover a contribution from a member,
the body corporate must have determined the amount to be raised as a
contribution, and the trustees must have passed a valid resolution to that effec t,
which has to be signed by two trustees or one trustee and the managing agent .

18. Defendant denied that plaintiff lawfully levied the contributions. In this regard
defendant stated that sections 3(2) and 3(3) of the Act have not been complied
with. He argu es that the documents on pages 463 to 467 of the bundle are not
valid resolutions as contemplated by the Act. He contend s that said documents
don’t have the signatures of the two trustees or signature of a trustee and a
7 managing agent as required . That all of them have a single signature. That being
so they are not valid resolutions of trustees as required by sections 3(2) and (3).

19. He argues that the resolution to ra tify levies as set out in page 463 for example
were never intended to be resolutions of tru stees but recordal of resolutions of
members in a general meeting . This seen especially against the minutes of
trustees as set out on page 462.

The Law

20. Regulation 10(1) pursuant to the Act provides :

“No document signed on behalf of the body corpor ate is valid and binding u nless
it is signed on the authority of a trustee resolution by

(a) Two trustees or the managing agent, in the case of a clearance certificate
issued by the body corporate in terms of section 15B(30(i)(aa) of the
Sectional Titles Act; and
(b) Two trustees or one trustee and the managing agent, in the case of any other
document”.

21. In The Body Corporate of the Sorronto Sectional Title Scheme, Parow v
Leozette Koordom2 the Court held that a resolution is a resolution if signed in
the manner di ctated in terms of Regulation 10(1)(b). Regulation 10(1)(b) of the
Statutory Management Rules reads:

“No document signed on behalf of the body corporate is valid an d binding unless
it is signed on the authority of a trustee resolution by –


2 (5439/2021)[2022] ZAWCHC 99 ; 2022 (6) SA (WCC) (26 May 2022) at para 7.
8 (a) Two trustees o r the managing agent , in the case of a clearance certificate…;
and
(b) Two trustees or one trustee and the managing agent in the case of any other
document” .

22. The document signed by Mr M. Anvary alone3 is neither signed by Mr. Anvary
and another trustee nor M r. Anvary and the managing agent as required by the
Act and the Regulation. Accordingly, it is not a valid resolution of trustees .
On the face of it the “resolution to ratify levies chargeable to all members of the
Ashwood Centre Body Corporate” deals with “meeting of members”. It proceeds
to state “members resolve..”. This Court, consequently, finds it difficult to pass
these resolutions in spite of the explanation by Mr. Anvary, as resolutions of
trustees. It accepts the evidence of Mr. Burnette as truste e at least between 2017
and 2019 that no trustee meeting was called whilst he was in office to ratify the
contributions.

23. This Court accepts that given how the busin ess had been run at least until the
point of dispute. Mr Anvery would sign the disputed doc uments as set out on
page 463 to 467 of the record and that these would serve the dual purpose of
covering the AGM and trustees meeting. But that conduct in and of itself does not
meet the requirements of the Act and the Regulations. The Regulations for
example stipulate how meetings of trustees are to be called. The evidence on
record on balance favours the defense that no such meeting of trustees was
called as expla ined by Mr. Burnette.

24. More importantly, this court considers it fatal to plaintiff’s claim that said
resolutions are not in accordance with the requirements of Regulation 10,
rendering them invalid and not binding. This Court concurs with defendant’s
contention that properly calling a simple meeting of trustees could have cured
this defect. Non of these disputed documents were signed by two trustees or in

3 Record pages 463 to 467.
9 the alternative a trustee and a managing agent as required. The require ment of
sections 3(2) and (3) h ave thus not been met rendering the disputed documents
invalid resolutions .

Conclusion

25. In the result, this Court finds that plaintiff has not made out a case for the relief it
seeks and the action stands to be dismissed with costs .

Costs

26. Plaintiff and Defendant requested costs . Costs follow the result .

27. This Court considers that in present c ircumstances , Plaintiff must pay costs on a
party to party scale.

Order

28. Accordingly , I make the following order :

IT IS ORDERED THAT:

1. The relief sought by Plaintiff is denied.

2. Plaintiff will pay Defendant costs of this action on a party scale .


____________________
S S T KHOLONG
ACTING JUDGE: WESTERN CAPE DIVISION

10
Appearances:

For the Plaintiff : Adv. J Bence
Instructed by BDP Attorneys

For the Defendant : Adv. A. Brink
Instructed by Biccari Bollo Mariano Inc