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Homeowner levies are defined as mandatory monthly payments made by property owners within a sectional title scheme or estate to a body corporate or Homeowners Association. These levies are used to ensure the necessary upkeep of the estate's common property, including the costs of security, cleaning, repairs and maintenance. In this regard, it is quite common for disputes to arise between homeowners and the relevant body corporate or Homeowners Association relating to the payment of these levies.
In The Pecanwood Estate Homeowners' Association NPC v Vongani Titi Raymond Ntsanwisi and Another the Pecanwood Estate Homeowners' Association NPC ("the plaintiff") instituted an action against Mr and Mrs Ntsanwisi ("the defendants") out of the North West Division of the High Court, Mahikeng. A key issue in this case was whether the cause of action (which entailed the non-payment of levies due and payable by the defendants to the plaintiff) should have been referred to the Community Schemes Ombud Services, instead of the High Court.
Background facts
In terms of the plaintiff's memorandum of incorporation, any person who is a registered owner of any residential stand within the Pecanwood Estate shall become a member of the plaintiff and be liable to pay the monthly levies. In this case, the defendants owned erf 385 within the Pecanwood Estate and were allegedly in arrears in the amount of ZAR1 849 749,65 as at the date of summons.
When the matter was set down for hearing before the High Court, the defendants argued that the plaintiff's cause of action was regulated by the Community Schemes Ombud Service Act 9 of 2011, and as such, should have been referred to the Community Schemes Ombud Services for conciliation, and if unsuccessful, then to adjudication. Importantly, the defendants did not directly challenge the jurisdiction of the High Court as they submitted that the High Court had concurrent jurisdiction with the Community Schemes Ombud Services.
However, they argued that the High Court has a discretion on whether to hear or refer the matter to another appropriate forum. It was submitted that this discretion should be exercised in this case given that it would be more cost effective as well as convenient since the Community Schemes Ombud Services would be better positioned to deal with this dispute as it involves the debatement of an account. Furthermore, a party dissatisfied with the outcome would be entitled to appeal to the High Court. The defendants accordingly requested that the action be stayed pending its referral to the Community Schemes Ombud Services.
The plaintiff argued that it would not be appropriate to refer this matter to the Community Schemes Ombud Services, as there was no real dispute between the parties. This is because a failure to pay does not constitute a real dispute, and the defendants were not disputing the amounts levied or that the plaintiff was not properly constituted.
The matter before the High Court
In its judgment, it was held that the High Court, as well as the Magistrates' Courts, retain concurrent jurisdiction with the Community Schemes Ombud Services on matters failing within the Community Schemes Ombud Service Act, subject to other jurisdictional requirements. In this regard, the High Court may order that a matter be heard in the Magistrates' Court, or another specific forum, if the circumstances of a specific case so warrant. However, a party approaching the High Court in a matter which should have been brought before another forum bears the risk of being subjected to a punitive costs order, despite its success.
The High Court rejected the defendants' argument that an adjudicator in the Community Schemes Ombud Services would be better positioned than a judge to deal with this matter The High Court stated that our law does not recognise the legal doctrine of forum non conveniens which allows a court to decline jurisdiction over a case, if it determines that another court or forum is more appropriate and convenient to hear the matter
The High Court held that the Community Schemes Ombud Services Act does not require an aggrieved party to first exhaust the provisions of the Act before approaching a court. In other words, the Act does not oust the jurisdiction of the High Court. Nevertheless, the High Court warned that it should not be approached on all aspects relating to the Act. In some instances, the adjudicator or the ombud would be the primary point of contact, but that should be determined on a case by case basis.
The High Court ultimately found that there were no exceptional circumstances, which warranted a referral of the matter to the Community Schemes Ombud Services, and accordingly dismissed the defendants' special plea of lack of jurisdiction and ordered costs to be costs in the cause.
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