By Auren Freitas dos Santos
Introduction:
On 12 May 2023, the South Gauteng High Court, Johannesburg reviewed and set aside a decision made by the Community Scheme Ombud Service (CSOS), and more specifically the Gauteng Provincial Ombud, to accept a dispute resolution application. The case involved a homeowners association and an owner. The court examined the jurisdiction of the CSOS and whether it was correct in accepting the application for adjudication.
Background:
The homeowners association manages the affairs of its members and enforces rules and regulations within the estate. The owner, being a member of the scheme, was alleged to have violated several rules within the estate. The association took internal actions, imposing penalties and issuing warnings. In response, the owner sent emails complaining about the association’s handling of the matter and the alleged incompetence of the association’s staff. Subsequently, the owner applied to the CSOS for dispute resolution, seeking amongst other things a personal apology for the association’s alleged incompetence.
The Gauteng Provincial Ombud accepted the application, prompting the association to challenge this decision in the High Court on the basis that the owner’s application ought to have been rejected in terms of section 42 of the CSOS Act, which states that an Ombud must reject an application by written notice to the applicant if inter alia, he is satisfied that the dispute should be dealt with in a court of law or other tribunal of competent jurisdiction.
Issue for Determination:
The main issue before the court was whether the CSOS’s acceptance of the dispute resolution application was administratively correct in accordance with the CSOS Act.
Legal Principles and Reasons for the Judgment:
The court analysed the relevant provisions of the CSOS Act and concluded that the owner’s application was incomplete and that the relief sought by the owner was of a personal nature and not related to the issues covered under section 39 of the CSOS Act.
Specifically, the court noted that the CSOS had requested additional information, which was not provided by the owner, which rendered the application incomplete and that the relief sought by the owner was of little concern to the common interest of the members of the association and therefore ought to have been rejected as required by section 42 of the CSOS Act.
The CSOS defended its decision, claiming that its acceptance of the owner’s application was motivated by the general approach to reconcile disputes between the schemes and their members. It argued that section 39(7) of the CSOS Act allowed acceptance of applications not specified in section 39 and it also contended that technical reasons, such as an incomplete application, should not be grounds for rejection.
The court ultimately ruled in favour of the association, highlighting that the CSOS had no discretion to accept the application if it did not meet the requirements of the CSOS Act. The incomplete nature of the application, with significant missing information and the personal nature of the relief sought, rendered it unsuitable for the CSOS’s dispute resolution process.
Therefore, the court found that the CSOS had acted beyond its powers by accepting the application for dispute resolution.
Order:
As a result, the court found that the CSOS had acted beyond its powers by accepting the application for dispute resolution and the decision taken by the Gauteng Provincial Ombud was reviewed and set aside.
Interestingly, the CSOS was ordered to pay the costs of the application. We speculate that this order was made because the matter involved a review application, which should not be mistaken for an appeal application under section 57 of the CSOS Act. In a previous article, we discussed a High Court judgment that declared the CSOS immune from costs orders pertaining to appeal applications. You can read the article by following this link.
Conclusion:
This judgment highlights the importance of adhering to the requirements set out in the CSOS Act when submitting dispute resolution applications and the limitations of the CSOS’s jurisdiction in accepting certain types of disputes.
In our experience, there is a concerning trend of the CSOS blindly accepting dispute resolution applications that clearly exceed their jurisdiction or are incomplete. This places an unfair burden on respondents, who are forced to submit written representations to defend against these applications within the stringent 7-day deadline, often leading to significant legal expenses. We hope that this ruling will compel the CSOS to exercise greater scrutiny in evaluating applications before accepting them.
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.
Contact him at www.theadvisory.co.za or email info@theadvisory.co.za for assistance with any disputes at or against the CSOS.
