By Auren Freitas dos Santos
In sectional title governance, trustees serve as the operational backbone of a body corporate, executing decisions and managing day-to-day affairs. However, their actions must align with their actual or ostensible authority to protect both the body corporate and third parties interacting with it. Acting without proper authorisation can lead to invalid actions, wasted resources, and serious legal repercussions.
Ensuring that trustees have the necessary authority to act on behalf of a body corporate is therefore one of the fundamental principles in sectional title management. The recent case of Metro Body Corporate v Diem and Others serves as a cautionary tale, highlighting the severe legal and financial consequences of acting without proper authorisation. While this judgment addresses several important issues, it emphasises a key takeaway: trustee authority is non-negotiable.
The judgment begins with a powerful statement:
“For those who litigate the law in the name of others without their approval and those who break the law and enter its citadels with unclean hands, expect not its generosity nor look to it for reward.”
In this case, a trustee initiated litigation ostensibly on behalf of the body corporate without obtaining valid authorisation. The trustee relied on questionable resolutions signed by close family members, raising issues of bias and validity. The court found that the trustee had failed to comply with the prescribed management rules (PMRs) under the Sectional Titles Schemes Management Act (STSMA), which rendered the litigation unauthorised.
As a result, the court dismissed the application and awarded significant costs against the trustee in his personal capacity. Importantly, the trustee was held accountable even though he was not formally a party to the litigation.
There are many lessons to be learned from this case, but the most important one in my opinion is that trustees cannot shield themselves behind the body corporate when acting improperly. Trustees must ensure that they understand their roles, the limits of their authority, and the importance of obtaining proper resolutions before acting on behalf of the body corporate.
When acting on behalf of the body corporate it is important for trustees to remember that they must act within the scope of their authority and that their actions should serve the best interests of the body corporate, not personal agendas.
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 at info@theadvisory.co.za should you require any assistance with trustees .
