Vervoer NV De Nys v De Kock NO and Others (19662/18) [2018] ZAWCHC 177 (18 December 2018)

IN THE HIGH COURT OF SOUTH AFRICA

[EASTERN CIRCUIT LOCAL DIVISION, GEORGE]

Case no. 19662/18

In the matter between:

VERVOER NV DE NYS Applicant

(Registration no. 2016/481691/10

Incorporated in Belgium)

and

ADV GPC DE KOCK N.O First Respondent

COMMUNITY SCHEMES OMBUD SERVICE Second Respondent

THE HILL HOUSE BODY CORPORATE Third Respondent

DARON QUINTON SMIT Fourth Respondent

Heard: 28 November 2018

JUDGMENT DELIVERED ON 18 DECEMBER 2018

SHER, J:

1. This is an application for an Order staying the execution of a so-called ‘adjudication order’ which was made by the

first respondent herein on 2 October 2018 in terms of the provisions[1] of the Community Schemes Ombud Service Act,[2] pending the outcome of an appeal which was lodged in respect of part thereof.

2. The Act[3] introduced a dispute resolution service referred to as a ‘Community Schemes Ombud Service’ for the resolution of disputes between persons who have a material interest in regard to the administration of any ‘community scheme’[4] which for the purposes of this matter includes sectional title development schemes such as the one known as ‘Hill House’,

which is administered by the third respondent.

3. The application is opposed by third and fourth respondents on the limited grounds[5] that this Court allegedly lacks jurisdiction to grant the Order sought and that it is not one which the Court is competent to make in terms of the provisions of s 57(3) of the Act.

The factual background

4. In September 2016 the applicant acquired ownership of sections 13, 21 and 26 in the Hill House scheme, together with an undivided share in the common property (being Erf 43 Plettenberg Bay and the buildings situated thereon), in accordance with its pro rata share thereof, as per its participation quota.

5. The land on which the scheme is located is situated in Main Road, Plettenberg Bay in an area which in terms of the applicable municipal zoning and town planning scheme is zoned for ‘business use’. According to the Bitou Municipality this allows for the property to be used ‘for all manner of businesses’(sic). Given the zoning the Hill House scheme is one which allows for so-called ‘mixed’ use ie both residential and commercial use. Consequently, sectional units on the ground floor are being used for a variety of business purposes, whilst units on the floors above the ground floor are used as residences.

6. Shortly after purchasing its units the applicant decided to open a restaurant in section 26. It originally envisaged a Belgian beerhall themed facility but after considering numerous objections which were lodged by the Hill House body corporate and its members it revised its concept to a more conventional eatery.

7. After obtaining all necessary municipal approvals and a liquor licence the restaurant opened its doors on 1 January 2018. Some 4 months later, on 19 April the applicant received a notice in terms of the Act[6] informing it that fourth respondent, who is the owner of a section in Hill House in which he lives, had made application for the resolution of a dispute which he had lodged in terms of Act 9 of 2011, in relation to the operation of the restaurant, which he alleged was being conducted in a manner which constituted a nuisance to owners of units in the scheme. After an unsuccessful conciliation process the matter proceeded to adjudication before the first respondent, who was appointed by the Ombud (second respondent) to adjudicate the matter. Pursuant to a hearing which was held, on 2 October 2018 first respondent made an order[7] directing the applicant to remove all water and gas pipes and gas bottles which had been installed on the common property (in order to service the restaurant) within 14 days, and in the event that the restaurant was thereafter still operational, directing the applicant to ensure that its service ended daily at 17h00 and that it closed its doors by 18h00, in order to prevent the ‘creation of a nuisance’ (sic). The directive to remove the water and gas installations from the common property was based on a finding that the applicant had failed to obtain the necessary prior consent for the installation from the owners of units in the scheme.

8. On 29 October 2018 the applicant lodged an appeal (with the Registrar of this Court in George), against the second part of the order ie the directive in regard to daily termination of service and closure of the restaurant. It did not lodge an appeal in respect of the directive that it was to remove all water and gas installations from the common property. Simultaneously therewith it sought an undertaking from third and fourth respondent that execution of the entire adjudication order would be stayed in its entirety, pending the appeal, but the respondents were not willing to accede thereto.

Jurisdiction

9. Jurisdiction is the power or ‘competence’ which a court has to hear and determine a dispute, and to give effect to any judgment or order it may make pursuant thereto. Where jurisdiction is placed in issue in relation to the subject matter of a dispute, whether a court is competent to adjudicate it is determined by the nature of the proceedings and the relief sought [8] therein. It is thus determined on the basis of the pleadings[9] from which the court must construe what the essence or basis is of the legal issues which require resolution.[10]

10. Insofar as the court’s power or competence may be challenged in relation to the parties before it, the Superior Courts Act[11] provides that a division of the High Court shall have jurisdiction over all persons residing or being within its (statutorily defined)

territorial area of jurisdiction.[12] In addition, the Court will also have incidental jurisdiction over any person who is outside of its territorial area of jurisdiction

where such person is joined as a party to any cause in relation to which the Court has jurisdiction.[13]

11. The respondents contend that this Court lacks jurisdiction on a number of grounds. These pertain both to the subject matter of the dispute in the appeal, as well as to the parties before the Court.

12. Although it is common cause that both third and fourth respondent as well as the immovable property of which section 26 forms part are physically located in Plettenberg Bay, which falls within the territorial area of jurisdiction of this Court,[14] the respondents claim that because the first respondent is an adjudicator who resides and works in Cape Town, and was engaged by

the second respondent from its regional office in Cape Town, which falls ‘outside’ of this Court’s area of territorial

jurisdiction as a Circuit Court, and the appeal concerns proceedings which were held before him and in relation to which he made a decision and an order pursuant thereto in Cape Town, this Court, as a Circuit Court sitting in George, cannot entertain the matter. However during argument the respondents conceded that the fact that the second respondent is a national public entity[15] which has a national head office in Sandton, Johannesburg and regional offices in certain provinces, including the Western Cape,

and that it makes use of adjudicators from Cape Town which it appoints for the purpose of resolving disputes (and who might make

determinations in Cape Town), will not necessarily serve as a bar to it being cited and brought before this Court, provided the Court has jurisdiction over the person of certain of the other parties before it, and the cause which is before it.

13. In seeking to develop the non-jurisdiction argument further respondent’s counsel contended that as the appeal against first respondent’s adjudication order was lodged with the Registrar of this Court, whilst it was sitting on Circuit in George, it was defective as this Court could not hear the appeal because it did not have the statutory power to hear appeals, and it was only the Western Cape division sitting in Cape Town which could do so. Thus, it was submitted this Court had no power to interdict the operation of the adjudication order pending the appeal.

14. The Superior Courts Act provides that a division of the High Court has the power to hear and determine appeals[16] and reviews[17] from all magistrates’ courts which fall within its area of territorial jurisdiction. The respondents point out that the Superior Courts Act further provides[18] that, except where it is in terms of any law required or permitted to be otherwise, for the hearing of any appeal a court of a division must be constituted before 2 judges, whereas in contrast to this the Act provides that a circuit court of a division must be presided over by a single judge.[19]

15. In the light of these provisions Erasmus[20] is of the view that inasmuch as the Act does not provide for a circuit court to be constituted before more than one judge, in discharging its duties it therefore cannot hear appeals or any other cases where a quorum of 2 or more judges is required. However, in Nedbank v Norris[21] Goosen J held that a Circuit Court (in casu the Port Elizabeth local division of the Eastern Cape division) constituted a court of a Division, within the meaning of s 14 of the Act, and as such it exercised the authority of the Division, irrespective of where it sat, and provided it was constituted in accordance with the numbers required, it could hear appeals or reviews at its local seat.

16. In an attempt to further rebut this part of the respondents’ argument the applicant points out that the appeal which it has lodged is not an appeal strictu sensu in the traditional sense of the word in terms of the Superior Courts Act and the Rules of Court, but a limited statutory right of ‘appeal’ on a point of law which is afforded to it in terms of the provisions of s 57 (3) of the Community Scheme Ombud Services Act.

[1] To wit ss 39(2)(a) and (d).

[2] Act 9 of 2011.

[3] Which came into operation together with, and on the same date as, the Sectional Titles Schemes Management Act 8 of 2011.

[4] Defined in s 1 as any scheme or arrangement in terms of which there is shared use of, and responsibility for, parts of land and buildings.

[5] A complaint that the deponent to the founding affidavit lacked authority to depose thereto was abandoned and not proceeded with at the hearing of the matter.

[6] S 43.

[7] In terms of s 39(2)(a) and (d) of the Act.

[8] Estate Agents Board v Lek 1979 (3) SA 1048 (A) at 1063F; Gallo Africa Ltd v Sting Music (Pty) Ltd 2010 (6) SA 329 (SCA) at para [6].

[9] Chirwa v Transnet [2007] ZACC 23; 2008 (4) SA 367 (CC) at 425E.

[10] Gcaba v Minister of Safety & Security 2010 (1) SA 238 (CC) at 263C.

[11] Act 10 of 2013.

[12] S 21(1).

[13] S 21(2).

[14] Ordinarily a Court in whose area of jurisdiction an immovable property is situated (as the forum rei sitae) has the jurisdiction to deal with any legal action in connection with that property, including any ancillary claim or proceeding in relation thereto.

[15] In terms of s 3 of Act 9 of 2011 it is an entity listed in terms of the Public Finance Management Act and its executive authority is vested in the Minister of Human Settlements.

[16] S 21(1)(a).

[17] S 21(1)(b).

[18] In s 14(3).

[19] S 7 (2).

[20] Superior Court Practice A2-10E.

[21] 2016 (3) SA 568 (ECP)

[22] 2018 (4) SA 566 (WCC).

[23] Id para [1], relying on the distinction made in Tikly v Johannes 1963 (2) SA 588 (T) at 590-591, between (i) an appeal in the wide sense, which allows for a complete rehearing and a fresh determination on the merits of the matter and (ii) an appeal in the ‘ordinary strict’ sense ie a re-hearing on the merits and a determination limited to whether the decision was right or wrong and (iii) a review ie a limited rehearing not as to whether

the decision was correct or not but whether the decision-maker exercised his powers and discretion 'honestly and properly'.

[24] Cf The Trustees, Avenues Body Corporate which concerned an appeal in terms of s 57(1) of the Community Schemes Ombud Service Act, which was heard by two judges.

[25] Such as so-called ‘automatic’ reviews in terms of ss 302- 303 of the Criminal Procedure Act 51 of 1977, which are considered to be akin to a statutory right of appeal for unrepresented accused who are convicted and sentenced by magistrates of less than 7 years’ experience to imprisonment exceeding 3 months or to fines in excess of R6000.

[26] According to Erasmus n 20 while a Circuit Court is sitting it can exercise all the powers which the division in which area it was established can exercise.

[27] S 173.

[28] Mokone v Tassos Properties CC 2017(5) SA 456 (CC) at 475B-477F.

[29] Zokufa v Compuscan (Credit Bureau) 2011 (1) SA 272 (ECM) 282G-I.