By Auren Freitas dos Santos
On 27 February 2026, the High Court of South Africa (Johannesburg) handed down an important judgment providing clarity on section 16 of the Sectional Titles Schemes Management Act 8 of 2011 (“STSMA”).
The decision confirms that the High Court retains jurisdiction to appoint an administrator for a sectional title scheme, despite section 16 referring specifically to applications being brought in the Magistrates’ Courts of South Africa.
For trustees, managing agents, and owners involved in sectional title disputes or body corporate governance issues, the judgment clarifies an important procedural question: which court can place a body corporate under administration?
BACKGROUND TO THE CASE
The applicant owned multiple units in a large sectional title scheme in Randburg. It alleged that the body corporate had been severely mismanaged for several years.
The alleged problems included:
- widespread levy arrears,
- significant municipal debt, and
- ongoing governance instability within the body corporate.
As a result, the applicant applied to the High Court for an order placing the body corporate under administration.
The body corporate opposed the application on two grounds:
1. Jurisdiction: It argued that section 16 of the STSMA assigns the power to appoint administrators exclusively to the Magistrates’ Court.
2. Merits: It contended that the scheme’s affairs were improving under an executive managing agent appointed through the Community Schemes Ombud Service (CSOS).
THE JURISDICTIONAL QUESTION
The primary legal question before the court was whether section 16 of the STSMA removed the High Court’s power to appoint administrators, leaving the Magistrates’ Court with exclusive jurisdiction.
Historically, under section 46 of the repealed Sectional Titles Act 95 of 1986, only the High Court could appoint administrators.
However, section 16 of the STSMA provides that certain parties “may apply to a Magistrate’s Court” for such an appointment.
This wording created uncertainty about whether:
- the Magistrates’ Court had exclusive jurisdiction, or
- both courts had concurrent jurisdiction.
THE COURT’S INTERPRETATION
The High Court confirmed that both the High Court and the Magistrates’ Court have concurrent jurisdiction to appoint administrators in sectional title schemes.
Justice Wilson reached this conclusion through a detailed analysis of:
- the wording of section 16,
- the broader structure of the STSMA, and
- the purpose of the legislation.
Key considerations included:
1. Statutory Context
The STSMA defines “Court” as the High Court and assigns several powers specifically to that court, including:
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- appointing a curator ad litem for a body corporate,
- joining members personally where judgments against the body corporate remain unsatisfied, and
- declaring a building destroyed.
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The court found no rational basis for removing the administrator appointment power from the High Court while retaining these other powers.
2. Purpose of the Legislation
One of the objectives of the STSMA is to improve access to remedies within community schemes.
Allowing the Magistrates’ Court to appoint administrators expands access to relief because it is generally cheaper, faster, and more accessible.
However, removing the High Court’s jurisdiction would restrict, rather than expand, access to remedies.
3. Meaning of the Word “May”
The court held that when section 16 states that parties “may apply to a Magistrate’s Court”, it does not mean that they must do so.
Instead, it means the Magistrates’ Court is an additional forum for applications to appoint a sectional title administrator.
In other words, both the High Court and the Magistrates’ Court have the power to place a body corporate under administration.
A NOTE ON “OUSTER” – WHERE DOES THE COURT’S POWER COME FROM?
An interesting aspect of the judgment is the court’s discussion of the legal principle known as “ouster of jurisdiction.”
In simple terms, an ouster clause is a provision in legislation that removes a power from a court that it would otherwise have. Courts generally interpret legislation cautiously in this regard. Unless Parliament clearly states that a court’s jurisdiction has been removed, courts usually assume that the jurisdiction still exists.
Earlier cases dealing with the question of the High Court’s power to appoint administrators relied on this principle. They reasoned that because the STSMA does not clearly state that the High Court can no longer appoint administrators, the High Court’s power must still exist.
However, Justice Wilson pointed out an important technical problem with that reasoning.
He explained that the power to appoint a sectional title administrator never existed in common law in the first place.
Under South African common law, a building could not be divided into separate ownership portions. The owner of the land automatically owned the entire building as well.
The concept of sectional title ownership — where different people own different parts of a building and share the common areas — only exists because legislation created it.
The system of sectional ownership was introduced by the Sectional Titles Act 66 of 1971, and later refined by the Sectional Titles Act 95 of 1986 and the STSMA.
Because sectional title schemes themselves are created by statute, the mechanisms used to regulate them — including the appointment of an administrator — are also purely statutory remedies.
In other words, courts do not have an inherent power to appoint administrators in sectional title schemes. They can only do so if legislation gives them that power.
The court therefore explained that the question is not whether the STSMA removed (“ousted”) the High Court’s power.
Instead, the correct question is: Does the STSMA itself grant or imply a power for the High Court to appoint administrators?
After interpreting the Act, the court concluded that section 16 does indeed imply that the High Court retains this power, alongside the Magistrates’ Court.
This means the High Court’s jurisdiction survives not because it was never removed, but because the legislation properly interpreted still allows it.
The judge emphasised that identifying the true source of a court’s power is important when dealing with carefully designed statutory systems like sectional titles.
Relying on the concept of “ouster” in this context risks obscuring the real legal foundation of the power, which ultimately lies in the statute itself.
WHY THE APPLICATION FAILED
Although the High Court confirmed its jurisdiction, it ultimately refused to appoint an administrator.
Section 16 of the STSMA requires two findings before a body corporate can be placed under administration:
- Serious financial or administrative mismanagement, and
- A reasonable probability that administration will enable the body corporate to meet its obligations and comply with the Act.
While the court accepted that the scheme had historically been mismanaged, it found that:
- a CSOS-appointed executive managing agent had begun stabilising the scheme,
- municipal debt had been significantly reduced, and
- levy collection processes had improved.
Because the applicant failed to demonstrate that an administrator would perform better than the executive managing agent, the second requirement was not satisfied.
The court therefore dismissed the application with costs.
PRACTICAL IMPLICATIONS FOR SECTIONAL TITLE SCHEMES
The judgment provides several important takeaways for trustees, managing agents, and legal practitioners:
1. Concurrent Jurisdiction
Applications to appoint administrators can clearly be brought in either the High Court, or the Magistrates’ Court.
2. Administration Is a Drastic Remedy
The court reaffirmed that placing a scheme under administration is a remedial but drastic intervention that should only occur when governance within the scheme has fundamentally broken down.
3. Executive Managing Agents May Be a Viable Alternative
Where an executive managing agent is already improving governance and financial stability, courts may be reluctant to displace that arrangement with a court-appointed administrator.
CONCLUSION
This judgment provides valuable clarification on the interpretation of section 16 of the STSMA and resolves an important jurisdictional question that had remained uncertain since October 2016.
While the decision confirms that the High Court retains jurisdiction to appoint administrators, it also reaffirms that courts will exercise this power cautiously and only where clearly justified by the evidence.
For sectional title schemes experiencing governance or financial crises, the judgment highlights the importance of demonstrating not only mismanagement, but also that administration is likely to provide a meaningful solution.
If you have any questions regarding this topic, feel free to contact us at info@theadvisory.co.za for a no-obligation quote.
Specialist Community Scheme Attorney (LLB, LLM), Auren Freitas dos Santos, is a Director of The Advisory, a boutique consultancy specialising exclusively in community schemes law. Reach out to him via email at info@theadvisory.co.za for a no-obligation quote to discuss this topic in more detail.
