Trustees of Kalgaro Body Corporate v Miletic C.M & K

The applicant, the Trustees of Kalgaro Body Corporate, brought an application to the Community Schemes Ombud Service (CSOS) under section 38 of the Community Schemes Ombud Service Act 9 of 2011, seeking relief in terms of section 39(1)(e) for payment of arrear levies and related amounts. The body corporate alleged that, as at 1 November 2023, the respondents, Mr C.M. and K. Miletic, were jointly indebted to it in the amount of R50 049.06 in arrear levies. The application was lodged on 18 September 2023. The applicant attached the necessary trustee resolution authorising the proceedings, and the adjudicator found that the applicant had complied with the internal dispute-resolution requirements. Conciliation failed and the matter was referred to adjudication. A section 43 notice was issued to the respondents, but they filed no response. The adjudication therefore proceeded on the papers and on largely undisputed facts.

• Whether the applicant body corporate was properly authorised and entitled to approach CSOS for relief under the CSOS Act.
• Whether the respondents, as owners in a community scheme, were liable to pay the outstanding levies claimed by the applicant.
• Whether the applicant had established, on a balance of probabilities, entitlement to an order under section 39(1)(e) of the CSOS Act for repayment of arrear contributions.
• Whether it was appropriate to grant structured instalment relief and a default clause requiring payment of the full outstanding amount upon breach.

The application succeeded. The respondents were jointly ordered to pay the applicant R50 049.06 within two months of the award. The first payment of R8 341.50 was due on 1 January 2024, followed by equal monthly instalments on the first day of each subsequent month. If the respondents defaulted on any payment, the full amount of R50 049.06 would become payable within 30 days of the first default. No order as to costs was made.

A body corporate that is properly authorised by trustee resolution, has complied with the CSOS procedural requirements, and proves outstanding levies on a balance of probabilities is entitled to relief under section 39(1)(e) of the CSOS Act for payment of arrear contributions by owners. In a community scheme, owners are bound by the applicable rules and statutory framework requiring payment of levies, and in the absence of any rebutting evidence, an adjudicator may grant payment relief on the undisputed papers.

The adjudicator made broader observations that CSOS is the correct and primary forum for community-scheme disputes, citing High Court authority to the effect that courts may decline to entertain such matters as forums of first instance absent exceptional circumstances. The adjudicator also referred to CSOS circular guidance on rule amendments concerning members' access to financial information, impermissible restrictions linked to non-payment of levies, and non-recoverability of travel and CSOS dispute-resolution costs under scheme rules. These remarks were not strictly necessary to the finding on the respondents' liability for arrear levies.

The decision illustrates the role of CSOS as the primary specialist forum for community-scheme disputes, especially disputes about unpaid levies. It reinforces that a body corporate may obtain relief under section 39(1)(e) of the CSOS Act for repayment of arrear contributions where it is properly authorised, has complied with procedural requirements, and proves the arrears on a balance of probabilities. It also reflects the contractual and statutory obligation of owners in sectional title or similar schemes to comply with conduct rules and pay levies when due.