Carl Coertzen & 5 Others v The Trustees of Normandie Body Corporate

Six applicants, all unit owners and members of Normandie Estate in Moreleta Park, Pretoria, brought a dispute-resolution application to the Community Schemes Ombud Service (CSOS) under s 38 of the Community Schemes Ombud Service Act 9 of 2011. They sought financial relief under s 39(1)(d) and (e), namely an order that a forensic or other audit be conducted into the body corporate’s finances and that Mr Von Wielligh repay R168 000 allegedly received. The dispute arose from concerns about the body corporate’s finances, including matters referred to as 'Project New Day', and events at a special general meeting held on 8 November 2022. The applicants contended that the trustees and certain individuals were aware of their grievances, but that they were not afforded a fair opportunity to present them at the meeting because of hostility, disruption, and alleged slander. The respondent trustees raised a preliminary point that the applicants had not exhausted internal remedies, alleging that no proper written internal complaint or formal request for investigation or meeting had been made before approaching CSOS.

• Whether the applicants had exhausted the internal dispute-resolution remedies required by clause 9 of the CSOS Practice Directive before approaching CSOS.
• Whether the adjudicator should entertain the merits of the applicants’ claims for an audit and repayment under s 39(1)(d) and (e) of the CSOS Act despite the preliminary objection.
• Whether the applicants had shown sufficient reason why internal processes could not be followed.
• Whether the body corporate should first address the financial complaints through an internal meeting process consistent with the Prescribed Management Rules and audi alteram partem.

The application was dismissed. The adjudicator ordered that the relief sought by the applicants against the respondent be dismissed, with no order as to costs.

A CSOS adjudicator may decline to determine the merits of an application for financial relief under s 39 of the CSOS Act where the applicant has failed to exhaust internal dispute-resolution mechanisms required by clause 9 of the CSOS Practice Directive, and has not sufficiently established that such internal processes could not reasonably be followed. Where issues have not been properly ventilated internally, especially through accessible meeting mechanisms contemplated by the Prescribed Management Rules, dismissal of the application is justified.

The adjudicator observed that the CSOS Act does empower an adjudicator to order an audit of a body corporate’s accounts, and referred to s 26(5)(a) concerning independent audits of annual financial statements. The adjudicator also commented that special or general meetings may be held through alternative accessible methods under PMR 17(10), and cautioned the respondent that the applicants should be allowed to address their concerns and that audi alteram partem must be respected. The order also contains an apparent reference to dismissal under ss 39(1)(c) and (d), although the application was described elsewhere as being under s 39(1)(d) and (e); the text does not explain this inconsistency.

The decision is significant within CSOS and community schemes jurisprudence because it emphasises the importance of exhausting internal dispute-resolution mechanisms before invoking CSOS adjudication. It illustrates that even where an applicant alleges hostility or unfair treatment at a meeting, CSOS may still decline to determine the merits if the adjudicator is not satisfied that internal processes were properly pursued or shown to be unavailable. The order also underscores the relevance of the CSOS Practice Directive and the Prescribed Management Rules in managing disputes within body corporates.