Judge Wilson sets the record straight on body corporate record sharing and the Promotion of Access to Information Act

By Ané de Klerk

For years now the industry has seen tension between members applying for access to bodies corporate’s books of account and/or records, and trustees and/or managing agents’ apprehension to do so based on their understanding of the requirements set out in the Promotion of Access to Information Act (“PAIA”). In February of this year, a dispute on this subject was finally heard in the South Gauteng High Court with the judgment handed down by Judge Wilson last month finally providing clarity on the appropriate process to be followed when owners apply for this type of information to be made available to them in terms of Prescribed Management Rule (“PMR”) 26(2).

In the case in question a body corporate applied to the Court to review and set aside an Adjudication Order issued by the Community Schemes Ombud Service (“CSOS”) in terms of section 6 of the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”). The adjudication order directed the body corporate to hand over some of its bank statements, which the adjudicator concluded the member was legally entitled to in terms of the Sectional Titles Schemes Management Act.

In short, the facts of the case were as follows:

• A member had asked to see bank statements reflecting the state of the body corporate’s administrative fund and a statement of the fund’s expenses for July and August 2022.
• On receipt of the request for information, the body corporate referred the member to a PAIA manual it had prepared.
• The body corporate was of the opinion that PAIA applies to a member’s request for any information held by the body corporate.
• It further held that any request made under PAIA would not be unreasonably refused.
• The member, on the other hand, felt that the body corporate’s reliance on PAIA amounted to a tactic aimed at concealing information which she was legally entitled to in terms of the PMRs.

The basis of the body corporate’s application to Court to review the Adjudication Order was that it disagreed with the adjudicator’s conclusion that the member was entitled to see the bank statements and argued that any such entitlement is not regulated by the Sectional Titles Schemes Management Act, but by PAIA instead. Their argument was that the Adjudication Order is wrong because the member had not applied for the bank statements in terms of PAIA. The question before the Court was therefore whether or not PAIA applies to a request made for such information.

In summary Judge Wilson found as follows:

• PAIA does not apply to the member’s request to hand over specific bank statements.
• This does not imply that a member is entitled to unrestricted access to bank statements generally.
• The member’s right to access the particular bank statements is the result of the body corporate’s statutory obligation, under PMR 26(2), to make its books of account available for inspection.
• The purpose of this obligation is set out in PMR 26(1)(a)(iv), being to ensure that the member has the information necessary to enable her to “assess the body corporate’s financial situation”.
• Accordingly, if the documents the member is entitled to access contain more information than is necessary to “assess the body corporate’s financial situation”, the unnecessary information may be redacted.
• Such redaction(s) allow the body corporate to protect any confidential information which may be contained in the bank statements, as long as the member does not need to see said information in order to assess the body corporate’s financial situation properly.
• The body corporate has the discretion to decide whether and to what extent information should be redacted, subject to the member’s right to challenge the redactions before the Community Schemes Ombud.

Judge Wilson further explained that PAIA does not apply to the member’s request to see bank statements because:

“it was never intended to apply in situations where a duty to disclose information arises from (a) pre-existing legal relationship between a person seeking information and the person holding that information.”

He continued to explain that PAIA is only intended to apply where a person seeking information from a private body would not otherwise have any right to it, stating firmly and in no uncertain terms:

“to hold otherwise would lead to absurd results, mostly by imposing an additional burden on the exercise of existing rights of access to information.”

Judge Wilson’s main reasons as to why PAIA does NOT apply to a member’s application for access to information it is legally entitled to in terms of Sectional Titles legislation are as follows:

1. Despite postdating the adoption of PAIA by 15 years, the PMRs do not mention PAIA and/or applying for access to information in terms thereof at all.
2. The wording used in PAIA and the PMRs is inconsistent with one another (for example, key concepts such as “request” and “application” have completely different meanings in these different pieces of legislation.)
3. PAIA’s purpose is to facilitate access to information in circumstances where the requester would not otherwise have any legal right to it; not to displace other legislation which provides for defined rights of access to information to individuals embedded in specific legal relationships.

Again, without mincing words, Judge Wilson clearly states:

“it would be truly perverse to encumber specific statutory rights of access to information with the machinery of PAIA, which is manifestly designed to kick-in only when no such specific rights exist. (…) To subject a body corporate member’s rights under the Management Rules to the strictures of PAIA seems to me to be a needless encumbrance, without foundation in the Constitution, or in PAIA itself.”

ON REQUEST VS ON APPLICATION

An interesting element of the matter that Judge Wilson also dealt with in his judgement was the difference between a member’s right to information “on application” versus “on request”.

Members are entitled to certain information “on request”. For example:

• records of debits and credits on a particular member’s account must be provided to that member “on request” in terms of PMR 25(7); and
• per PMR 27(4), members are entitled to see the documents set out in PMR 27 on “written request”.

The fact that this information is to be shared “on request” means that the member has an unqualified right to the specific information. On the other hand, members are entitled to other information “on application”. For example:

• records and books of account as are necessary to allow a member to assess the body corporate ’s financial situation per PMR 26(2).

According to Judge Wilson, the phrase “on application” is meant to facilitate a consideration of the extent to which the information to be disclosed is necessary to allow the person entitled to it to assess a body corporate ’s financial situation. The trustees or managing agent providing access to the information is therefore required to apply their minds when doing so, but must remain mindful of the fact that access to some personal information of other members may be a necessary incident of a member’s rights under the PMRs.

IN CONCLUSION

In this case, Judge Wilson found that PAIA does not apply to an application for books of account made by a member in terms of PMR 26 (2) and importantly, held that PAIA is not intended to apply to situations in which a duty to disclose information arises from a pre-existing legal relationship between the person seeking information and the person or body holding that information.

Specialist Community Scheme Attorney (BA, LLB), Ané de Klerk, is a Director of The Advisory, a boutique consultancy specialising exclusively in community schemes law. Her focus is legal education, which includes presenting seminars and running online and in-person training programs and courses. You can reach out to her via email at info@theadvisory.co.za to request an obligation-free quotation for assistance with accessing body corporate records.