Central Developments Tshwane (Pty) Ltd and Another v Body Corporate of Twee Riviere Aftree Oord

The appellants were developers of Twee Riviere Aftree Oord, a retirement village consisting of 448 sectional title units. The respondent Body Corporate alleged defects in the design and construction of portions of common property, specifically the foundations of courtyard and patio walls, caused by the developer's negligence. The Body Corporate instituted two actions in the Gauteng High Court seeking damages calculated by reference to the cost of remedying the alleged defects. The causes of action were primarily in delict based on negligence, with alternative claims based on latent defects or misrepresentations. The developer raised a special plea contending that the Body Corporate was precluded from suing because it had not secured a special resolution of members as required by s 2(7)(e) of the Sectional Title Schemes Management Act 8 of 2011 before commencing action. The Body Corporate had not obtained such a resolution either before commencing proceedings or at all.

• Whether a body corporate requires a special resolution under s 2(7)(e) of the Sectional Title Schemes Management Act 8 of 2011 to sue a developer for damages arising from defects in common property
• Whether the source of a body corporate's power to sue for damage to common property lies in s 2(7)(b) or s 2(7)(e) of the Act
• Whether the failure to obtain a special resolution can be cured by subsequent ratification
• The proper interpretation and interplay between s 2(7)(b) and s 2(7)(e) of the Sectional Title Schemes Management Act

The appeal was dismissed. The High Court order was set aside and replaced with an order that: (1) The special plea is dismissed; (2) Each party is to pay its own costs relating to the preparation and argument of the special plea; (3) Each party is to pay its own costs of the appeal.

A body corporate has the power under s 2(7)(b) of the Sectional Title Schemes Management Act 8 of 2011 to sue in its own name for damage to common property, regardless of whether the defendant is the developer of the scheme. This power exists independently of s 2(7)(e) and does not require a special resolution of unit owners. Section 2(7)(e), introduced by amendment in 1992, was intended to confer additional powers on bodies corporate to sue developers in respect of the scheme, not to remove or restrict the existing power under s 2(7)(b) to sue for damage to common property. The language and context of s 2(7)(b) contains no limitation precluding its use against developers.

The court noted it was unnecessary to decide whether an action by a body corporate under s 2(7)(b) is a form of representative action on behalf of section owners, or to consider what obligations a successful action may impose on bodies corporate vis-à-vis section owners. The court also observed that the issue of whether the absence of a special resolution can be cured by subsequent ratification was not properly before it given the conclusion reached. The court noted that when this issue does arise for determination, consideration should be given to the background and purpose of s 2(7)(e) and the differing approaches in the majority and minority judgments in Neugarten v Standard Bank of South Africa Ltd 1989 (1) SA 792 (A). The court commented that the decision in Body Corporate of Greenwood Scheme was correct in result but only coincidentally, as the reasoning was flawed in suggesting that s 36(6)(e)'s requirements were merely procedural.

This case provides important clarification on the powers of bodies corporate under the Sectional Title Schemes Management Act 8 of 2011. It establishes that s 2(7)(b) provides a general power for bodies corporate to sue for damage to common property without requiring a special resolution, even when the claim is against the developer. The judgment clarifies the relationship between s 2(7)(b) and s 2(7)(e), holding that s 2(7)(e) confers additional powers rather than restricting existing ones. This is significant for sectional title developments as it facilitates bodies corporate pursuing claims for defective construction or design of common property without the procedural hurdle of obtaining special resolutions from all unit owners. The decision ensures practical enforceability of bodies corporate's obligations to repair and maintain common property and aligns with their statutory duty to insure buildings. The case corrects the earlier approach in Body Corporate of Greenwood Scheme and provides guidance on statutory interpretation in the sectional title context.