Barnard NO v Regspersoon van Aminie en ’n Ander

The appellant was the curator of the insolvent estate of the Smit spouses, who owned a sectional title unit in the Aminie scheme in Pretoria. After sequestration, the curator sold the unit at public auction, where the bondholder purchased the property. To effect transfer, section 15B(3)(a)(i)(aa) of the Sectional Titles Act 95 of 1986 required a clearance certificate from the body corporate confirming that all monies due in respect of the unit had been paid or provided for. The body corporate (first respondent), acting through its managing agent (second respondent), demanded payment of R19 183.17 before issuing the certificate. This amount included outstanding sectional title contributions (some older than two years at the date of sequestration), interest, and legal costs incurred in recovering the arrear contributions. The curator disputed liability for the legal costs and for contributions older than two years, relying on section 89 of the Insolvency Act 24 of 1936.

The appeal was dismissed with costs. The body corporate was entitled to withhold the clearance certificate until payment of all outstanding contributions, including those older than two years, as well as interest and legal costs incurred in recovering the contributions.

The case confirms and extends the protective mechanism afforded to bodies corporate under section 15B of the Sectional Titles Act. It establishes that a body corporate enjoys a powerful de facto preference in insolvency, extending beyond contributions to include legal costs and interest. The judgment also clarifies that sectional title contributions are not “taxes” for purposes of section 89 of the Insolvency Act, thereby excluding the two-year limitation applicable to municipal rates and taxes. This decision is significant for conveyancing practice, insolvency administration, and the financial viability of sectional title schemes.