Extra Dimensions 121 (Pty) Limited v Body Corporate of Marine Sands and Another (AR121/2017) [2018] ZAKZPHC 69 (24 August 2018)

Extra Dimensions 121 (Pty) Limited v Body Corporate of Marine Sands and Another (AR121/2017) [2018] ZAKZPHC 69 (24 August 2018)

The court held that the body corporate, by passing a special resolution that modified the liability of sectional owners to contribute towards levies, acted outside its statutory powers under the Sectional Titles Act. The modification of levy contributions should have been effected through a management rule, requiring a unanimous resolution, not a conduct rule adopted by special resolution. The scheme cannot have two different schedules of participation quotas, and the absence of a unanimous resolution was fatal. The conduct rule introduced was in conflict with section 37(1)(d) and therefore invalid. Consequently, the resolution and related amendments were declared invalid and of no force...

Citation
[2018] ZAKZPHC 69
Parties
Appellant: Extra Dimensions 121 (Pty) Limited; Respondent: Body Corporate of Marine Sands; Respondent: Registrar of Deeds, Pietermaritzburg
Court
Kwazulu-Natal High Court, Pietermaritzburg
Jurisdiction
South Africa
Judgment Date
24 August 2018
Case Number
AR121/2017
Procedural Posture
Civil Appeal / Appeal From Judgment of Masipa Aj; Leave Granted by Supreme Court of Appeal
Outcome
Appeal upheld; order of the court a quo set aside and substituted.
Judges
Steyn, Van Zÿl, Ploos van Amstel
Legal Topics
Sectional Titles Act, Participation Quota, Levy Contributions, Ultra Vires Resolution, Management Vs Conduct Rules
Land and Property Civil Procedure Sectional Titles Act Participation Quota Levy Contributions Ultra Vires Resolution Management Vs Conduct Rules

Case Brief

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Parties

Extra Dimensions 121 (Pty) Limited

Appellant

Body Corporate of Marine Sands

Respondent

Registrar of Deeds, Pietermaritzburg

Respondent

Procedural Posture

Civil Appeal / Appeal From Judgment of Masipa Aj; Leave Granted by Supreme Court of Appeal

Legal Issues

  1. 1 Whether the special resolution passed by the body corporate modifying levy contributions was ultra vires the Sectional Titles Act and therefore invalid.
  2. 2 Whether the body corporate could lawfully amend participation quotas via a conduct rule rather than a management rule.
  3. 3 Whether the absence of a unanimous resolution rendered the modification of levy contributions invalid.

Ratio Decidendi

The court held that the body corporate, by passing a special resolution that modified the liability of sectional owners to contribute towards levies, acted outside its statutory powers under the Sectional Titles Act. The modification of levy contributions should have been effected through a management rule, requiring a unanimous resolution, not a conduct rule adopted by special resolution. The scheme cannot have two different schedules of participation quotas, and the absence of a unanimous resolution was fatal. The conduct rule introduced was in conflict with section 37(1)(d) and therefore invalid. Consequently, the resolution and related amendments were declared invalid and of no force...

Court Disposition

Appeal upheld; order of the court a quo set aside and substituted.

Orders

  • The appeal is upheld with costs.
  • The order of the court a quo is set aside and substituted with: The special resolution passed by the first respondent on 23 August 2012 that modified the members' liability for levy contributions of the Marine Sands Sectional Scheme is declared invalid.