Hayes v Body Corporate Riverside Cottage (6869/2016) [2017] ZAGPPHC 364 (23 June 2017)

IN

THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION. PRETORIA

Case No: 6869/2016

NOT

REPORTABLE

NOT

OF INTEREST TO OTHER JUDGES

NOT

REVISED

23/6/2017

In the matter between:

BRIAN

ANTHONY OTWAY

HAYES Applicant

and

BODY

CORPORATE RIVERSIDE

COTTAGE Respondent

JUDGMENT

STRIJDOM AJ

Date of Judgement:

INTRODUCTION:

1. The Applicant, as an owner of a unit located within the body corporate riverside Cottage, has launched an application in terms of Section 4 I (1) of the Sectional Titles Act, 95 of 1968, prior to the commencement of the Sectional Title Schemes Management Act, No. 8 of 2011, which commenced on 7 October 2016.

2. Section 41 has now been repealed by Section 20 of Act 8 of 2011.

3. The relief sought is now provided for within the ambit of Section 9 of Act 8 of 2011, which reads ad idem to that of the previous Section 41.

APPLICABLE LAW:

4. This application is to be adjudicated on the basis of the provisions of Section 41(1) of the Sectional Titles Act, 95 of 1986 (as amended) ("the Act") that reads as follows:

"(1) When an owner is of the opinion that he and the body corporate have suffered damages or loss or have been deprived of any benefit in respect of a matter mentioned in section 36(6), and the body corporate has not instituted proceedings for the recovery of such damages, Joss 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 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 for an order appointing a curator ad /item 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;

(c) that an investigation into such grounds and into the desirability of the institution of such proceedings is justified, appoint a

provisional curator ad litem and direct him to conduct such investigation and to report to the court on the return day of the provisional order.

(4) The Court may on the return day discharge the provisional order referred to in subsection (3) or confirm the appointment of the curator ad litem for the body corporate and issue such directions as it may deem necessary as to the institution of proceedings in the name of the body corporate and the conduct of such proceedings on behalf of the body corporate by the curator ad litem. "

5. Section 36(6) of the Act to which reference is made in Section 41(1) reads as follows:

"(6) The body corporate should 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;

(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

(d) any claim against the developer in respect of the same if so determined by special resolution."

6. This application is opposed by the Respondent on the basis that the jurisdictional requirements for the appointment of a curator have not been satisfied by the Applicant.

7. The jurisdictional requirements for the appointment of a curator are as follows:

7.1 The owner must hold an opinion;

7.2 The opinion must be either -

(a) that he and the body corporate have suffered damages or loss; or

(b) that he and the body corporate have been deprived of a benefit in respect of a matter mentioned in Section 36(6);

7.3 The body corporate has not instituted proceedings for recovery.

8. The Court has a discretion 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.

9. Counsel for the Respondent contends that the required notice in terms of the Act dated 8 September 2015 is fatally defective.[1]

10. It is suggested by counsel for the Applicant that the first requirement, being that of locus standi, has been met in that the Applicant has delivered the notice required in terms of Section 41(2)(a).

11. The notice (Annexure "D') that was sent to the Respondent reads, inter alia, as follows:

"1. He as owner holds an opinion as to the fraudulent conduct and/or theft and/or mismanagement of the Body Corporate;

2. His opinion is that he and the Body Corporate have suffered damages and/or loss and that he and the Body Corporate have been deprived of a benefit in respect of Section 36(6)(c) .... "

12. In my view the notice is fatally defective for the following reasons:

12.1 The notice does not identify the person or entity against who the Respondent must institute proceedings. From the Applicant's notice it appears as if the Body Corporate has com mitted fraud or theft and that the Body Corporate should institute proceedings against itself. The section does not intend proceedings by the Body Corporate against itself. It is therefore not clear against whom the Body Corporate must institute proceedings and what those proceedings should endeavour to achieve;

12.2 The notice does not convey any information in respect of what alleged damages or loss have been suffered by the Applicant and Body Corporate; neither does it contain any information about the alleged benefit in respect of a matter mentioned in Section 36(6) of which the Applicant and Body Corporate have been deprived.

13. As to whether a curator ought to be appointed, the Court has a discretion under Section 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.

14. The Applicant was given an opportunity to rectify and remedy the fatally defective notice by addressing a letter to the attorney of the Applicant.[2] The Applicant did not avail himself of this opportunity.

15. It is common cause that the body corporate has not instituted any proceedings for the obvious reasons that there is no indication in the notice what type of proceedings must be instituted and against whom.

16. In my view the application cannot succeed. The Applicant did not satisfy the first jurisdictional requirement of which would be a proper and effective notice in terms of the provisions of Section 41(2)(a) of the Act. It is therefore not necessary to consider the rest of the jurisdictional requirements.

17. For the reasons given, I am of the view that the application must be dismissed.

18. In the result the application is dismissed with costs.

SIGNED AT PRETORIA ON THIS THE 9th DAY OF JUNE 2017.

J.J.

STRIJDOM ACTING JUDGE

NORTH

GAUTENG HIGH COURT

Counsel for Applicant: Adv. P.A. Venter

Attorney for Applicant: E. Beyers

Counsel for Respondent: Adv. G.F. Heyns

Attorneys for Respondent: Seymore Du Toit & Basson

[1] Annexure “E” on page 36 of the indexed papers [2] Annexure "R3" to opposing papers on page 361 of indexed papers.

[1] Annexure “E” on page 36 of the indexed papers

[2] Annexure "R3" to opposing papers on page 361 of indexed papers.