Wimbledon Lodge (Pty) Ltd, a unit owner in a sectional title scheme known as Harbour’s Edge in Gordon’s Bay, alleged that the developer, Casisles Coastal Property Investments CC, controlled by one Scharrighuisen, fraudulently registered a sectional plan materially different from the plan attached to the deeds of sale. The registered plan increased the number and area of sections by appropriating large portions of what should have been common property, without enlarging the building and without informing purchasers. The additional sections were registered in the names of Casisles and a related company, Harbour’s Edge Commercial Properties Holding (Pty) Ltd, both later placed in liquidation. Using voting power derived from these fraudulently acquired sections, the liquidators voted down resolutions authorising the body corporate to take action against the developer and its related entities. Wimbledon applied under s 41 of the Sectional Titles Act 95 of 1986 for the appointment of a curator ad litem to investigate and, if appropriate, institute proceedings on behalf of the body corporate. The High Court dismissed the application, and Wimbledon appealed to the Supreme Court of Appeal.
The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order appointing a provisional curator ad litem to the Harbour’s Edge Body Corporate to investigate the grounds and desirability of instituting proceedings, including rectification of the sectional plan and/or claims for damages, and to report to the High Court on the return day.
The case is a leading authority on the application of s 41 of the Sectional Titles Act and the circumstances in which an individual owner may trigger action on behalf of a body corporate. It affirms that fraudulently obtained voting power cannot be relied upon in sectional title governance and that resolutions defeated by such votes may be deemed passed. The judgment also clarifies the body corporate’s standing to pursue claims against a developer for pre- and post-incorporation fraud affecting common property, reinforcing the protective purpose of sectional title legislation.