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[2018] ZASCA 16
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Mobile Telephone Networks (Pty) Ltd and Another v Spilhaus Property Holdings (Pty) Ltd and Others (208/2017) [2018] ZASCA 16; 2018 (3) SA 396 (SCA) (15 March 2018)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
no: 208/2017
In
the matter between:
MOBILE
TELEPHONE NETWORKS (PTY) LTD
FIRST APPELLANT
ALPHEN
FARM ESTATE IN CONSTANTIA (PTY) LTD
SECOND APPELLANT
and
SPILHAUS
PROPERTY HOLDINGS (PTY) LTD
FIRST RESPONDENT
JAN
ARSEEN JORIS DE DECKER
SECOND RESPONDENT
THE
TRUSTEES FOR THE TIME BEING OF
THE
RIETVLEI
TRUST
THIRD RESPONDENT
MARTIN
RYMAN
FOURTH RESPONDENT
JADE
ANN
RYMAN
FIFTH RESPONDENT
FRANCES
ILSE
HILLS
SIXTH RESPONDENT
THE
TRUSTEES FOR THE TIME BEING OF
THE
RISTELLE INVESTMENT TRUST
SEVENTH RESPONDENT
RENE
ADELE
LARSEN
EIGHTH RESPONDENT
SUSAN
MARTIN
N.O.
NINTH RESPONDENT
MICHAEL
BLACK
N.O.
TENTH RESPONDENT
PAMELA
GOLDIE BUCKHAM
ELEVENTH RESPONDENT
ALYSON
ROSLYNNE RINK
TWELFTH RESPONDENT
RAPHAEL
UNIT 104 (PTY) LTD
THIRTEENTH RESPONDENT
MARC
ANDRE PAUL MARIE COSSE
FOURTEENTH RESPONDENT
JANE
HANDSLEY PORTER
FIFTEENTH RESPONDENT
L
Y INVESTMENTS (PTY) LTD
SIXTEENTH RESPONDENT
JANET
BEYER RUSSEL
SEVENTEENTH RESPONDENT
QUELLE
FOUNDATION
EIGHTEENTH RESPONDENT
CHEROKEE
ROSE PROPERTIES 199 CC
NINETEENTH RESPONDENT
RONALD
ALEXANDER RINK
TWENTIETH RESPONDENT
Neutral
citation:
Mobile Telephone
Networks (Pty) Ltd & another v Spilhaus Property Holdings (Pty)
Ltd & others
(208/2017)
[2018]
ZASCA 16
(15 March 2018)
Bench:
Ponnan, Saldulker and Swain JJA and
Plasket and Makgoka AJJA
Heard:
23 February 2018
Delivered:
15 March 2018
Summary:
Sectional title scheme –
locus
standi
of unit owners to institute
proceedings – matter falling within
s 41(1)
of the
Sectional
Titles Act 95 of 1986
– owners obliged to apply for the
appointment of a
curator ad litem
.
ORDER
On
appeal from
:
Western
Cape Division, Cape Town (Williams AJ sitting as court of first
instance):
(1)
The appeal is upheld with costs including those consequent upon the
employment of two counsel.
(2)
The order of court below is set aside and substituted by:
‘
The
application is dismissed with costs, such costs to include those of
two counsel.’
JUDGMENT
Ponnan
JA (Saldulker and Swain JJA and Plasket and Makgoka AJJA concurring):
[1]
Sectional title ownership consists of three elements, namely
individual ownership of a section, joint ownership of the common
parts of the sectional title scheme and membership of a body
corporate.
[1]
The
registered title-holder of a unit is the owner of the section, joint
owner of the common parts of the scheme and a member of
the body
corporate.
[2]
Thus, a
person, buying into a sectional title scheme, enters into a series of
interlocking relationships. The Sectional Titles Act
No 95 of 1986
(the Act)
[3]
introduced
several new concepts into our law. By providing for the division of
land and buildings comprising a development scheme
into sections and
common property, it created an entirely new composite
res
,
called a unit, which consists of a section and an undivided share in
the common property.
[4]
The section is considered the principal component, with the undivided
share in the land and other common property inextricably
linked
thereto as an accessory.
[5]
The Act also
created an entirely new form of composite ownership, namely separate
ownership of a section coupled with joint ownership
of the common
property. Sectional owners own the common property collectively in
undivided shares in accordance with the provisions
of the Act.
[6]
[2]
The question raised by this appeal is whether the owners in a
sectional title scheme had the requisite
locus
standi
to seek interdictory relief in relation to the common property. The
Western Cape Division, Cape Town (per Williams AJ) answered
that
question in favour of the owners. The issue arises for determination
against the backdrop of the following facts: Until its
subdivision in
terms of the Act, Erf 377 Constantia was owned by the second
appellant, Alphen Farm Estate in Constantia (Pty) Ltd
(Alphen). On
subdivision, two so-called precincts were established, namely a
historic precinct and a residential precinct. The
historic precinct,
which has remained the property of Alphen, comprises sections 1 and 2
of the sectional title scheme. The residential
precinct consists of
sections 3 to 19 of the scheme. Between them, the respondents
[7]
own those 17
units. Located within the historic precinct is the original Alphen
Hotel (which has been declared a provincial heritage
site in terms of
the
National Heritage Resources Act No 25 of 1999
) and commercial
office buildings.
[3]
Shortly after registration of the sectional title scheme, litigation
ensued between various owners in the scheme. The litigation
was
settled and a settlement agreement was made an order of court, in
terms of which management rules, conduct rules and guidelines
were
agreed upon by the parties. According to those rules, the body
corporate consists of four trustees – two of whom are
elected
by the owners of units in the residential precinct (the residential
precinct trustees) and two by the owner (Alphen) of
the units in the
historic precinct (the historic precinct trustees). In the event of
any deadlock between the historic and residential
precinct trustees,
such deadlock must be referred for resolution to a referee, who is
obliged to take into account and be guided
by the guidelines at all
times.
[4]
Prior to the subdivision and coming into existence of the sectional
title scheme, the first appellant, MTN Mobile Telephone
Networks
(Pty) Ltd (MTN) and Vodacom (Pty) Ltd (Vodacom), on the one hand, and
Alphen, on the other, concluded agreements of lease
pursuant to which
2G cellular antennae were installed on a rooftop of one of the
buildings, namely the Mill Range building, which
is located within
the historic precinct. On 10 October 2012 one of the historic
precinct trustees sought the consent of the two
residential precinct
trustees, for MTN and Vodacom to upgrade their existing cellular
installations on the Mill Range building
from 2 to 3G, which consent
was granted on the same day. On or about 1 November 2013 the upgraded
antenna was erected, by the installation
of a fake chimney some five
metres in height. At the same time the base station equipment, which
since inception was housed within
the hotel building, was also
upgraded.
[5]
During December 2013 the City of Cape Town (the City) served a notice
on Alphen to the effect that the base station had been
erected in
contravention of the National Building Regulations and Building
Standards Act No 103 of 1977 as ‘no prior written
approval for
the erection of such building [had] been obtained from the [City]’.
Alphen was ordered to ‘obtain written
approval for the said
unauthorised building work,
by
submitting and having building plans approved within 60 days
’.
Failure to comply, so the notice stated, ‘constitutes a
criminal offence in terms of . . . the National Building
Regulations’.
[6]
On 21 January 2014 Mr Pieter van Staden of Warren Petterson Planning
(WPP) wrote to the City:
‘
[P]lease
be informed that we have been appointed by MTN (and the property
owner) to prepare and submit the necessary applications.
Please be
advised that the legislation requires Council’s Consent before
we would be able to submit the Building Plan.
Once
the Consent Use Application has been approved, we will submit the
Building Plan. This may take some time, around 6 months,
depending if
objections are received.’
At
a meeting of the trustees of the scheme on 19 February 2014 the
residential precinct trustees confirmed that they were withdrawing
their consent to the upgrade because, as it was put, ‘significant
new issues have come to the fore, which they were not aware
of at the
time’.
[7]
On 3 April 2014 WPP lodged an application with the City for
‘[c]onsent use, council’s approval, consent [in terms
of]
Title Deed, [and] amendment of Title Deed condition to permit
existing rooftop cellular communications infrastructure’.
In
response, on 9 May 2014 the City addressed a letter to WPP pointing
out that the application is incomplete and cannot be processed
because certain information and documents are missing including ‘a
Power of Attorney signed by all registered owners (all
sectional
title unit owners) as the proposal is located on common property’.
By then nine of the residential precinct owners
or their
representatives had already deposed to affidavits objecting to the
installation. On 14 May 2014 the attorney for the residential
precinct owners wrote to Alphen asserting that the cell-phone mast
installation, which had been installed on the common property,
was
illegal. The letter also pointed out that Alphen’s application
to the City for land use approval was made without the
consent of all
owners in the scheme and that this rendered the application
defective.
[8]
Impasse having been reached, on 1 August 2014 the residential
precinct owners (the present respondents) applied to the high
court
for an order directing: (a) MTN to remove the cellular network base
transceiver station together with associated infrastructure,
cabling
and support structure; and (b) Alphen to co-operate to the extent
necessary in the removal of the installation. MTN and
Alphen opposed
the application. In addition, they launched a counter application
seeking the postponement of the main application
pending inter alia:
(a) the final determination of the consent use application lodged
with the City; (b) the amendment of the title
deed; (c) the approval
of any required building plans in respect of the infrastructure; and
(d) the joinder of Vodacom as a party
to the proceedings.
[9]
At the commencement of the hearing before Williams AJ, the learned
judge was informed that the matter had been settled as between
the
respondents and Vodacom – the latter having since been joined
as a party to the proceedings. In terms of the settlement
agreement,
Vodacom undertook to ‘disconnect its cellular services
presently installed on the roof of the Mill Range building’
and
to ‘remove all its equipment, infrastructure, cabling and
support structures associated with the cellular network base
transreceiver station installed on the roof of the premises at its
own expense’.
[10]
The application thereafter proceeded as against Alphen and MTN. At
the conclusion of those proceedings Williams AJ issued the
following
order:
‘
23.1.
The first respondent is ordered to remove the cellular network base
transceiver station which has being installed
on the roof of the Mill
Range building in Sectional Title Scheme New Court at Alphen,
registered under scheme number 449/2006,
situated at remainder erf
377,Constantia, together with associated infrastructure, cabling and
support structures (collectively,
‟
the
cellphone mast installation
”)
and to have completed such removal, including the making-good of the
Mill Range building by 3 December 2016;
23.2.
The second respondent is ordered to cooperate to the extent necessary
in the removal of the cellphone mast
installation;
23.3.
The respondents’ application for a postponement/stay is
dismissed with costs;
23.4.
The respondents are ordered to pay the applicants’ costs of
suit in respect of both the main application
and the respondents’
application for a postponement/stay thereof, such costs to include
the costs attendant upon the employment
of two counsel;
23.5.
The respondents’ liability for costs shall be joint and
several, the one paying, the other to be absolved.’
[11] The
case advanced on the papers by the respondents is that the
infrastructure is unlawful in as much as: first, it breaches
the
zoning scheme regulations in at least two respects; and second, it
was erected in breach of two conditions registered against
the title
deed of the property. Williams AJ agreed, holding ‘from the
correspondence exchanged between the City and [WPP],
there have
clearly been breaches
inter alia of
the zoning scheme and the
Title Deed restriction’. But, argue the appellants, unlike
conventional owners, sectional title owners are
burdened by the provisions of the Act, the rules and the resolutions
of the body
corporate. That being so, so the argument goes, as the
infrastructure is situated on common property,
s 41(1) of the
Act finds application.
[12]
Section 41 of the Act,
[8]
headed ‘Proceedings on behalf of bodies corporate’,
reads
:
‘
(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 the 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 paragraph
(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 to 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 ….’
[13] 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)’.
[9]
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;
and
(e)
any
claim against the developer in respect of the scheme if so determined
by special resolution.’
[10]
[14]
The
body corporate is constituted in terms of the Act.
[11]
It is
charged with the responsibility of enforcing the rules and the
control, administration and management of the common property
for the
benefit of all members.
[12]
In
Wimbledon
Lodge (Pty) Ltd v Gore NO & others
,
[13]
Schutz JA pointed out:
‘
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.’
[15]
Here, the first requirement is uncontentious. So too the third. That
the third (which is a purely factual enquiry) should be
a
requirement, said Schutz JA, is a necessary counterpart to the
sections of the Act divesting individual owners of control and
vesting it in the body corporate.
[14]
As Malan JA
pointed out in
Oribel
Properties 13 (Pty) Ltd & another v Blue Dot Properties 271 (Pty)
Ltd & others
:
[15]
‘
A
body corporate has perpetual succession and is capable of suing or
[being sued] 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’.
[16]
To satisfy s 41(1), the adverse events must be suffered not only by
the owner but by the body corporate as well, ‘for
the reasons
that the “and” in “he and the body corporate”
not only ordinarily conveys a conjunctive meaning,
but that the word
is twice succeeded by the plural verb “have”, indicating
that both he and the body are being referred
to. Moreover, one would
hardly expect that the legislature would require the body corporate
to sue in matters which did not concern
it.’
[16]
S
ection
41(1) refers in the alternative to matters upon which an opinion may
be formed, including the deprivation of a benefit in
respect of a
matter mentioned in s 36(6). Does the contemplated action fall within
any of those subdivisions? Starting with s 36(6)
(c)
,
which confers the power to sue in respect of ‘any matter in
connection with the land or building for which the body corporate
is
liable or for which the owners are jointly liable’.
It
is common cause that the Mill Range building and the mast are located
on common property.
That
being so, it seems to me that subsection
(c)
is satisfied. If this be not correct, another basis is provided by s
36(6)
(d)
,
which gives the body corporate the power to sue in respect of ‘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’. To those provisions may be added
s 37(1) which, to
the extent here relevant, provides:
‘
A
body corporate referred to in section 36 shall perform the functions
entrusted to it by or under this Act or the rules, and such
functions
shall include –
(k)
to comply with any notice or order by any competent authority
requiring any repairs
to or work in respect of the relevant land or
building or buildings;
.
. . .
(n)
to ensure compliance with any law relating to the common property or
to any improvement
of land comprised in the common property;
.
. . .
(r)
in general, to control, manage and administer the common property for
the benefit
of all owners.’
[17]
I am of the opinion that it will be competent for the body corporate
to institute action in some or other form in relation
to the matters
which are the subject of the litigation here.
Indeed,
such a conclusion 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.
[17]
For, as Schutz JA put it '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.'
[18]
The conclusion that I therefore reach is that s 41, which 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), finds application.
[19]
[18] The
body corporate has not instituted the proceedings. Nor, has it been
called upon by the respondents to do so. However, say
the
respondents, they can hardly be expected to do so inasmuch as the
trustees fall into two divergent camps who are at loggerheads
with
each other.
Cassim v Voyager Property Management (Pty) Ltd
dealt with a similar contention thus:
‘
[I]t
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.’
[20]
[19] The
relief available to an owner in the position of the respondents is to
approach the court for the appointment of a
curator
ad litem
to the body
corporate, so that the curator may investigate the events complained
of and, if so advised, take action aimed at somehow
remedying the
position.
[21]
Section 41 is an important component of the overall 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.
[22]
As to whether a
curator
ought to be appointed,
Schutz JA stated: ‘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’.
[23]
No doubt a
curator ad litem
would obtain proper advice
and properly investigate the facts before taking any further legal
steps. Even then, the curator would
have to first report to the
court, which may issue such directions as to it seems meet.
[24]
[20] In
the result the appeal must succeed and it is accordingly upheld with
costs including those consequent upon the employment
of two counsel.
It follows that the order of the court below must be set aside and in
its stead must be substituted an order dismissing
the application
with costs including those of two counsel.
_________________
V
M Ponnan
Judge
of Appeal
APPEARANCES:
For
First Appellant:
M Basslian SC (with him T K Manyage)
Instructed
by:
Mashiane
Moodley Monama Inc., Cape Town
Lovius
Block Attorneys, Bloemfontein
For
Second Appellant:
R W F MacWilliam SC
Instructed
by:
Lawrence
Whittaker Attorneys, Constantia
Lovius
Block Attorneys, Bloemfontein
For
Respondents:
B
J Manca SC (with him K Reynolds)
Instructed
by:
Shepstone
Wylie, Cape Town
Phatshoane
Henney Attorneys, Bloemfontein
[1]
Du Bois
Wille’s
Principles of South African Law
9 ed at 564.
[2]
Wille’s
at 564
[3]
The Act has
been substantially amended by the Sectional Titles Schemes
Management Act 8 of 2011 (the STSMA), which came into operation
before the commencement of these proceedings in the court below on 7
October 2010.
[4]
Van der
Merwe
Sectional
Titles Share Blocks and Time-Sharing
2015 para 1.9.
[5]
Willie’s
at 564.
[6]
Section
2
(c)
.
[7]
Spilhaus Property Holdings (Pty) Ltd (1
st
Respondent); Jan Arseen Joris De Decker (2
nd
Respondent); The Trustees for the time being of the Rietvlei Trust
(3
rd
Respondent); Martin Ryman (4
th
Respondent); Jade Ann Ryman (5
th
Respondent); Frances Ilse Hills (6
th
Respondent); The Trustees for the time being of the Ristele
Investment Trust (7
th
Respondent); Rene Adele Larsen (8
th
Respondent); Susan Marin N.O. (9
th
Respondent); Michael Black N.O. (10
th
Respondent); Pamela Goldie Buckham (11
th
Respondent); Alyson Roslynne Rink (12
th
Respondent); Raphael Unit 104 (Pty) Ltd (13
th
Respondent); Marc Andre Paul Marie Cosse (14
th
Respondent); Jane Handsley Porter (15
th
Responden); L Y Investments (Pty) Ltd (16
th
Respondent); Janet Beyer Russel (17
th
Respondent); Quelle Foundation (18
th
Respondent); Cherokee Rose Properties 199 CC (19
th
Respondent); Ronald Alexander Rink (20
th
Respondent).
[8]
Section 41
has been repealed by the STSMA. A similarly worded provision is to
be found in s 9 of the STSMA.
[9]
Cassim
& another v Voyager Property Management (Pty) Ltd & others,
Cassim & another v St Moritz Body Corporate (Pty)
Ltd &
others
2011
(6) SA 544
(SCA) para 11.
[10]
A similarly
worded provision is to be found in s 2(7) of the STSMA.
[11]
Section 36(1).
[12]
Section 36(4).
[13]
Wimbledon Lodge (Pty) Ltd v
Gore NO & others
2003
(5) SA 315
(SCA) at para 13.
[14]
Wimbledon Lodge
para
14.
[15]
Oribel
Properties 13 (Pty) Ltd & another v Blue Dot Properties 271
(Pty) Ltd & others
[2010] 4 All SA 282
(SCA) para 24.
[16]
Wimbledon
Lodge
para 20.
[17]
See
Wimbledon Lodge
para
18; see also
Foss v
Harbottle
(1843) 2 Hare
461 (67 ER 189).
[18]
Wimbledon Lodge
para
21.
[19]
Cassim
para
16.
[20]
Ibid p
ara
13.
[21]
Cassim
para 16.
[22]
Cassim
para
17.
[23]
Wimbledon Lodge
para
26
[24]
Section
41(4); see
Meridian Bay
Restaurant (Pty) Ltd & others v Mitchell NO
2011
(4) SA 1
(SCA).