A Case Report on Zybutz v Helianthus BC: What Happens When CSOSA Section 39(4)(d) and STSMA section 6(9) Overlap?
By Prof. Graham Paddock
The case of Zybutz v Body Corporate of Helianthus and Others (Case No. 17944/23) was an appeal against an Community Schemes Ombud Service (CSOS) Adjudicator’s order. The applicant, Michael David Zybutz, appealed to the Western Cape High Court on the basis of an error of law after the adjudicator dismissed his application for alterations to his section and surrounding common property due to a lack of jurisdiction.
This report summarises the key legal issues, the adjudicator’s decision, and the Court’s ruling, with a focus on the application of the CSOS Act 9 of 2011 (CSOSA), Sectional Titles Schemes Management Act 8 of 2011 (STSMA), and relevant principles regarding disputes within community schemes.
Background
The dispute originates from the applicant’s attempts, dating back to 2014, to obtain the Body Corporate’s approval for extensions and alterations to his section and surrounding common property in the sectional title scheme known as Helianthus. The alterations, approved by the City of Cape Town subject to the final building plan approval, would affect the common property, so a Body Corporate special resolution was needed.
Over several years, Zybutz sought approval from the Body Corporate at various meetings, resulting in a written settlement in 2022, made subject to a special resolution approving elements of the building plans. However, disagreements arose regarding the alterations, leading to repeated failures to achieve the required special resolution, even after the applicant made changes to accommodate concerns. Following these rejections, Zybutz lodged a complaint with the CSOS and sought relief in terms of section 39(4)(d) of the CSOSA, alleging unreasonable opposition to the resolution.
Adjudicator’s Decision
The Adjudicator dismissed Zybutz’s application, directing him to submit his complaint to the Chief Ombud under section 6(9) of the STSMA, which allows an owner unable to obtain a special or unanimous resolution to approach the Ombud for relief. The Adjudicator found that because this was a consent the Ombud could give, a CSOS adjudicator lacked jurisdiction to decide on the matter.
Appeal to the High Court
Zybutz appealed this ruling to the Western Cape High Court, arguing that the Adjudicator made an error of law by misinterpreting sections of the CSOSA and the STSMA. He contended that his application properly fell within the scope of section 39(4)(d) of the CSOSA, which allows an applicant to seek an order declaring that opposition to a motion for a resolution was unreasonable and giving effect to the motion as originally proposed. Furthermore, Zybutz argued that the Body Corporate’s rejection of his alterations was inconsistent with prior decisions and motivated by personal interests rather than legitimate concerns about the common property.
The respondents—other unit owners and the Body Corporate—opposed the appeal, defending the Adjudicator’s ruling that the matter fell within the jurisdiction of the Chief Ombud, not the Adjudicator.
Court’s Findings
The High Court, per Acting Judge Sidaki, found that the Adjudicator erred in dismissing Zybutz’s application on jurisdictional grounds. The Court held that:
- The application properly fell within the scope of the CSOSA, and the Adjudicator was competent to determine whether the Body Corporate’s refusal to approve the alterations was unreasonable.
- The Adjudicator failed to adequately assess the reasonableness of the Body Corporate’s refusal, particularly in light of the minimal impact the proposed alterations would have on other unit owners.
- The statutory framework of the CSOSA and STSMA provides a clear dispute resolution pathway, and the Ombud Service, including its adjudicators, is the appropriate forum for resolving disputes involving sectional title schemes.
The Court set aside the Adjudicator’s decision and remitted the matter to the CSOS for reconsideration before a different Adjudicator. Costs were awarded to the applicant jointly and severally against the opposing respondents.
Conclusion
The Zybutz case underscores the importance of properly interpreting the jurisdictional scope of the CSOSA and STSMA when dealing with disputes in community schemes. The Court’s decision affirms that:
- CSOS adjudicators must engage substantively with the merits of an application,
- The CSOSA must be read with the STSMA when a sectional title dispute is dealt with,
- STSMA section 6(9) is permissive but not prescriptive, i.e. it does not imply that an extraordinary process must be followed to resolve the dispute underlying such an application, and
- A STSMA section 6(9) application must be submitted under CSOSA sections 38 and 39.
Comments
While an Ombud does have the power to reject an application they decide should be dealt with in a court of law or other tribunal of competent jurisdiction, when an application is based on a prayer in section 39 of the CSOSA and is referred to an adjudicator, they cannot decide they have no jurisdiction to hear it because they believe it should be differently processed by the CSOS.
It is clear that applications under sections 39(4)(d) of the CSOSA and 6(9) of the STSMA may overlap, and that the CSOS has jurisdiction to deal with prayers for relief that are not mentioned in CSOSA section 39 when they are based on statutes that authorise applications to the CSOS.
This case serves as:
- a direction to CSOS as to how STSMA section 6(9) application must be handled,
- a significant precedent for bodies corporate and owners in sectional title schemes facing issues where special or unanimous resolutions are required,
- a reminder to bodies corporate of the need for consistent and fair administration of owner’s affairs, and
- a caution to sectional owners to act in good faith when considering other owners’ requests for special or unanimous resolutions.
Article reference: Paddocks Press: Volume 19, Issue 9.
This article is published under the Creative Commons Attribution license.
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