SUMMARY
| Spilhaus Property Holdings (Pty) Ltd and 18 Others (the “Applicants”) are the lawful owners of units in a sectional title scheme, situated in Cape Town (the “Sectional Title Scheme”). Mobile Networks (Pty) Ltd (the “First Respondent”) and Alphen Farm Estate in Constantia (Pty) Ltd (the “Second Respondent”), are the Respondents in the above matter. A Leave to appeal Application which was brought by the Applicants, considered the issue of whether the Sectional Titles Act, No 95 of 1986 (the “Act”) deprived individual owners in a sectional title scheme of their locus standi to enforce their rights pertaining to a zoning scheme applicable to the area where the sectional title is situated, whereby the breach of the zoning regulation occurs on the common property. The above issue required the Court to consider the wording of section 41 of the Act, dealing with proceedings on behalf of the body corporate , which had to be read with sections 36(6) (dealing with the instances in which the body corporate shall have perpetual succession and shall be capable of suing and of being sued in its corporate name), as well as section 37(1) (dealing with the functions of the bodies corporate entrusted to it by or under the Act or the rules). BACKGROUND Prior to the registration of the Sectional Title Scheme, the whole piece of land belonged to the Second Respondent. During this time, the Respondents entered into a Lease Agreement, whereby the First Respondent would be permitted to install a 2G cellular antenna on the property (the “Lease Agreement”). Subsequent to the conclusion of the Lease Agreement, the piece of land was subdivided into two areas, namely the historical precinct and the residential precinct. The historical precinct consisted of a hotel and commercial office buildings. The residential precinct comprised of residential units, which were owned by the Applicants (hereinafter referred to as the “Precincts”). After its inception, several Management Rules were adopted, and a body corporate was established upon the date of registration of the Sectional Title Scheme. On or about 10 October 2012, the residential precinct trustees granted their consent to the historic precinct’s trustees in order to upgrade the 2G antenna on the property (installed by the First Respondent) to a 3G antenna (the “Structure”). The property on which the Structure was erected became known as the common property on the date of registration of the Sectional Title Scheme. The Structure erected by the First Respondent did not comply with the zoning scheme regulations imposed by the local authority, being the City of Cape Town and was found to be illegal. In this regard, the residential precinct trustees later withdrew their consent. HIGH COURT The Applicants approached the High Court (the “court a quo”) for relief, seeking that the First Respondent remove the Structure and that the Second Respondent be ordered to cooperate with the removal of the Structure. The Respondents’ first argument was that the Applicants lacked legal standing in the view that the Sectional Title Scheme and the body corporate existed, therefore they could not institute the relevant proceedings. The Respondents relied on section 41 of the Act (now section 9 of the Sectional Titles Schemes Management Act, No. 9 of 2011), which section states that an owner may only institute proceedings on behalf of the body corporate when such owners and the body corporate have suffered damages or loss or have been deprived of any benefit in respect of a matter in terms of section 36(6). Further, that the body corporate had the necessary legal standing to do so. The second argument was that the requirements of an interdict were not met. The court a quo concluded that the Applicants did have locus standi and that they did satisfy the requirements of a mandatory interdict, which the Applicants sought. The court a quo ordered that the Structure be removed, and the Second Respondent cooperate with the First Respondent during the removal of same. The Respondents appealed to the Supreme Court of Appeal (the “SCA”). THE SCA The SCA held that section 41 of the Act applied to the present matter and consequently that the Applicants had no legal standing to institute proceedings. The SCA’s reasoning was that the only remedy available to owners of a unit in terms of section 41, was the appointment of a curator ad litem, provided that the conditions imposed by the section are met. The SCA overturned the order granted by the court a quo and dismissed the application with costs. The Applicants proceeded to seek leave to appeal against the SCA’s order. CONSTITUTIONAL COURT On appeal, the Constitutional Court (the “CC”) stipulated that in the event that legislation is capable of various interpretations, an interpretation which promotes access to justice should be preferred, as entrenched in the Bill of Rights in terms of section 39(2) of the Constitution. The CC noted that legal standing is necessary for the exercise of the right of access to court. A litigant mat not have its dispute resolved where such a litigant has no legal standing. Therefore, an interpretation of legislation which denies a litigant of their legal standing would affect the litigant’s right to access to court. Further, the CC noted that it did have jurisdiction to adjudicate the matter on the basis that there were various constitutional issues which had to be considered. The decision to grant or refuse leave would only be determined once a balancing exercise had been concluded by the CC. A significant factor the CC considered, which supported the granting of leave, was that the SCA’s Judgment had the ability of ‘stripping thousands of sectional title owners of standing in all matter where section 41 applies’. In Bruce v Fleecytex Johannesburg CC [1998] ZACC 3; 1998 (2) SA 1143 (CC); 1998 (4) BCLR 415 (CC), the court held that when considering applications for leave to appeal against SCA decisions, the prospects of success are of fundamental importance and where an appeal is the only remedy available to the Applicant and if there are reasonable prospects that the appeal will succeed, then these factors amount to compelling reasons for this court to grant leave. The CC held that the factors necessitating the refusal of leave are outweighed by those which support the granting of leave in this matter. Further, section 41 of the Act provides conditions which must be met before an owner may seek the appointment of a curator ad litem One of those conditions is to show that both the Applicant and the body corporate in the matter had suffered damages or loss. If the owner is able to show that it ha suffered damages, then an Applicant relying on section 41 would not be successful and therefore, that Applicant would be left without a remedy for such damage or loss suffered, unless they may rely on the common law for recovery of damages |
HELD
| The CC held that the SCA’ interpretation of section 41 would lead to absurd results and also create an unequal “protection and benefit of the law”. Thus, the Applicants’ claim was a self-standing claim, and that their legal standing flowed from a zoning scheme regulation which was imposed for the protection of the interests of all surrounding owners, such as the Applicants. The CC held that it was common cause that the relevant zoning scheme was not followed. The Applicant in whose interest the zoning scheme was passed had a right to enforce it. Thus, in the given circumstances, the Applicants did not need to show that they have suffered special damages |
VALUE
| In certain circumstances, owners in sectional title schemes will be able to institute proceedings in respect of common property, to the exclusion of the body corporate. These circumstances include, those relating to zoning, town-planning and building laws and other such regulations/laws where the owners’ interests are affected. |
Written by Katya Oberzhitsky and Jennifer Stoler
