CSOS’s Misguided Rejections: How CSOS Incorrectly Rejects Certain Disputes

By Auren Freitas dos Santos

In this second edition of “A Call for Change: Addressing the Shortcomings of CSOS,” we delve further into the interpretative difficulties faced by the Community Schemes Ombud Service (CSOS), now focusing on section 41 of the Community Schemes Ombud Services Act. Previously, we discussed how the CSOS’s misinterpretation of section 3(1)(c) of the Sectional Titles Schemes Management Act has impacted sectional title schemes.

The CSOS, designed to offer a quick, informal, and cost-effective way to settle community scheme disputes, has been entrusted with broad inquisitorial powers. These are to be exercised by qualified conciliators and adjudicators who aim to resolve disputes without the complexities of legal representation, except in rare instances.

Where disputes pertaining to community schemes fall within the ambit and purview of the CSOS Act, they are in the first instance to be referred to the Ombud for resolution, and a court is not only entitled to decline to entertain such matters as a forum of first instance, but may in fact be obliged to do so, save in exceptional circumstances.

It is clear that the majority of disputes must be processed through the CSOS, preventing a bypass to the High Court and avoiding the risk of ‘forum shopping’ by wealthier litigants. This forces most disputes into the CSOS system.

Understanding that the CSOS is typically the only option for aggrieved parties to resolve disputes is critical for this article because we have seen an alarming trend of parties being denied access to the CSOS. Their applications are rejected due to purported non-compliance with the time limits outlined in section 41(1) of the CSOS Act. Such rejections prevent parties from utilising the very system designed to provide a quick, informal, and cost-effective way to settle community scheme disputes.

Section 41(1) of the CSOS Act states that: “An application for an order declaring any decision of an association or an executive committee to be void, may not be made later than 60 days after such a decision has been taken.”

It is clear that this time limit applies to applications relating to decisions taken by an executive committee or a general meeting of an association that are void.  There are only two instances under the CSOS Act in terms of which an applicant may seek an order to declare a decision to be void.  These are –

1. 1. Section 39(4)(c)(i) of the CSOS Act – which refers to a prayer for relief in respect of meetings for an order declaring that a resolution purportedly passed at a meeting of the executive committee, or at a general meeting of the association was void; and
   2. Section 39(4)(e) of the CSOS Act – which refers to a prayer for relief in respect of meetings for an order declaring that a particular resolution passed at a meeting is void on the ground that it unreasonably interferes with the rights of an individual owner or occupier or the rights of a group of owners or occupiers.

However, in our experience, the CSOS often extends the 60-day time limit to all types of applications, including those intended to declare decisions as invalid or unreasonable, contrary to the Act’s provisions. This misapplication leads to the arbitrary denial of access to justice, as applications are rejected if not submitted within this timeframe, even when the CSOS Act does not impose such a limit for invalid or unreasonable decisions.  There are two instances under the CSOS Act in terms of which an applicant may seek an order to declare a decision to be invalid or unreasonable.  These are –

1. 1. Section 39(4)(c)(ii) of the CSOS Act – which refers to a prayer for relief in respect of meetings for an order declaring that a resolution purportedly passed at a meeting of the executive committee, or at a general meeting of the association is invalid; and
   2. Section 39(4)(d) of the CSOS Act – which refers to a prayer for relief in respect of meetings an order declaring that a motion for resolution considered by a general meeting of the association was not passed because the opposition to the motion was unreasonable under the circumstances, and giving effect to the motion as was originally proposed, or a variation of the motion proposed.

The extended application of section 41(1) of the CSOS Act leads to the unwarranted rejection of applications under sections 39(4)(c)(ii) and 39(4)(d) that are made more than 60 days after a decision. This misapplication unfairly subjects these applications to a time limit they were not meant to fall under, leading to an arbitrary denial of justice for applicants. This issue stems from the CSOS’s failure to understand and implement the provisions of section 41(1) of the CSOS Act.

We believe that this error is caused by the CSOS’s misunderstanding or conflation of the terms “void” and “invalid”.  In the legal context the terms “invalid” and “void” have distinct meanings and different implications.  In simple terms, a decision will be void if there was no legal basis upon which to make the decision or if the decision exceeded the powers of the person or entity making the decision.  On the contrary, a decision will be invalid if it was not taken in the correct manner.

In the context of a community scheme, decisions made by the association or executive committee can be either void or invalid based on certain criteria. For example, if the trustees of a body corporate approve the sale of common property, such a decision will be void because trustees do not possess such powers and the trustees will never be able to remedy the situation because a unanimous resolution of the members of the body corporate is required in such a case.

However, in terms of the same example, if the members adopt a unanimous resolution to sell the common property, but the body corporate fails to give the required 30 days notice of the meeting at which the unanimous resolution was tabled, such a decision will be invalid. However, the body corporate would be capable of remedying the situation by reconvening a special general meeting with the correct notice.

Time limits are placed on challenging void decisions to ensure legal stability and prevent endless disputes over past actions. For invalid decisions, flexibility is usually given regarding time limits because parties might not immediately realise a decision’s flaw. This system balances correcting wrongs while maintaining legal predictability.

Section 39(4) of the the CSOS Act clearly provides that the adjudicator can declare a resolution purportedly passed at either a meeting of the executive committee or at a general meeting either void, invalid or unreasonable. Section 41(1) of the CSOS Act specifically states that an application to declare a decision void must be made within 60 days. No mention is made of the word ‘invalid’ or “unreasonable” (i.e. no mention is made of section 39(4)(c)(ii) or 39(4)(d) of the CSOS Act). There is, according to the CSOS Act, a clear distinction between these terms.  If the legislature intended section 41(1) to apply to applications to declare decisions invalid, it would have said so.

Despite this clear distinction, the CSOS continues to reject applications in terms section 39(4)(c)(ii) or 39(4)(d) of the CSOS Act that were made later than 60 days after such a decision has been taken.

Facing such a rejection from the CSOS typically forces individuals to consider a High Court review under the Promotion of Administrative Justice Act, an option that is costly and inaccessible for many. Therefore, the most effective strategy for instigating genuine reform is to address this issue head on. We believe that by raising public awareness, stakeholders will begin to actively press the CSOS into reconsidering their blinkered approach to this issue.  This will in turn ensure that the CSOS fulfils its promise to provide access to quick, affordable, specialised, and reliable justice that community scheme stakeholders rightfully deserve.

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. We invite you to reach out to us at info@theadvisory.co.za to share any frustrations you’ve encountered when dealing with the CSOS that you’d like us to address in this series. Your insights are invaluable in shaping our mission to advocate for necessary reforms.