On 17 June 2022, the Western Cape High Court handed down a judgment in terms of which it declared that the Community Schemes Ombud (“the CSOS”), its staff members and its adjudicators are all immune from costs orders in respect of legal proceedings instituted against the CSOS in the High Court.
The judgment in question was handed down in respect of an application made by the CSOS against the Stonehurst Mountain Estate Owners Association in which the CSOS challenged a cost order against it in favour of the Association, after the Association successfully appealed an adjudication order handed down by a CSOS adjudicator.
The CSOS successfully challenged the cost order against it on the basis of section 37(1) of the Community Schemes Ombud Service Act (“the Act”), which provides that “In performing their functions in terms of this Act, the chief ombud, an ombud, a deputy ombud and an adjudicator have the same privileges and immunities from liability as a judge of the High Court.”
The Judge considered the provisions of the Act and found that it is clear from section 37(1) of the Act that the chief ombud, an ombud, a deputy ombud and an adjudicator are all immune from costs orders. In addition, the Judge held that in terms of section 33 of the Act, the CSOS and any of its employees are only liable for loss or damage if they act unlawfully, in a grossly negligent manner, or in bad faith.
The Judge noted that although the ruling of the adjudicator may have been wrong, the issue of costs against the CSOS (and for that matter, the adjudicator) should not even have arisen in relation to the appeal in light of the aforementioned provisions of the Act and ultimately the Judge ordered that there shall be no order as to costs against the CSOS in respect of the appeal.
This judgment, which effectively absolves the CSOS from any liability in respect of successful appeals against incorrect adjudication orders, is arguably problematic in my opinion, as it removes any impetus for the CSOS to properly administer CSOS applications and for adjudicators to make well-considered and informed adjudication orders, given that there will be no consequences for the CSOS following a successful appeal.
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.
Article reference: Paddocks Press: Volume 17, Issue 8.
Specialist Community Scheme Attorney (LLB, LLM), Auren Freitas dos Santos, is the Director of The Advisory, a boutique consultancy specialising exclusively in community schemes law.
This article is published under the Creative Commons Attribution license.
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