Express Model Trading 289 CC v Dolphin Ridge Body Corporate

Dolphin Ridge Body Corporate, established under the Sectional Titles Act 95 of 1986, applied for the winding-up of Express Model Trading 289 CC, the developer and owner of several units in the Dolphin Ridge sectional title scheme. Express Model had persistently failed to pay monthly levies owed to the body corporate, despite a statutory demand served in terms of s 69(1) of the Close Corporations Act 69 of 1984. The arrears initially amounted to approximately R137,000 and later increased substantially. A provisional winding-up order was granted in August 2010. Thereafter, an undisclosed third party paid certain arrear levies to the provisional liquidator. Despite this, further levies accrued, and Express Model continued to be unable to meet its ongoing obligations. In February 2012 a final winding-up order was granted. Leave to appeal was ultimately granted by the Supreme Court of Appeal, but the appeal lapsed due to Express Model’s failure to timeously file heads of argument. Express Model sought condonation for the delay, which was opposed by the body corporate.

The application for condonation was dismissed with costs, including the costs of two counsel. Express Model was ordered to pay the costs incurred by the body corporate in opposing the lapsed appeal.

The case is significant for reaffirming the strict approach of the Supreme Court of Appeal to condonation applications and compliance with procedural rules. Substantively, it clarifies that payment of a debt by a third party does not necessarily deprive a creditor of locus standi in winding-up proceedings where there is a recurrent obligation, and that a body corporate remains a prospective creditor in respect of ongoing sectional title levies.