Derman v Trustees of Fairpark Body Corporate

The applicant, Lynne Derman, is the registered owner of unit 6 in the Fairpark sectional title scheme in Fairland, Johannesburg. Fairpark's 2018 conduct/house rules had allowed pets subject to strict conditions and written trustee permission. The body corporate later changed the conduct rules to introduce a no-pets policy, approved at an AGM in 2019, formally adopted on 16 September 2020, and later certified by CSOS in March 2023. The applicant objected to the change. At an AGM in 2021, members voted to retain the no-pets policy because of the small size of the scheme's yards/gardens and prior problems with owners and tenants failing to control or properly care for pets. At the applicant's instance and that of other owners, a special general meeting was held on 17 May 2023 to consider amending conduct rule 4.1. The vote was evenly split: four units supported retaining the no-pets rule and four units supported amendment to permit pets subject to conditions. Because a special resolution requiring 75% support was not achieved, the rule remained unchanged. The applicant then applied to CSOS under s 39(3)(d)(iii) for an order declaring the governance provision unreasonable and requiring amendment of the no-pets policy to permit pets under suitable conditions.

• Whether Fairpark conduct rule 4.1, imposing a no-pets policy, was an unreasonable scheme governance provision under section 39(3)(d)(iii) of the CSOS Act.
• Whether the respondent body corporate had unreasonably denied permission to amend the rule or to allow pets.
• Whether the applicant had exhausted the scheme's internal processes for amending conduct rules before approaching CSOS.
• Whether CSOS could grant relief where no special resolution supported by the required 75% of members had been obtained to amend the conduct rule.

The application for relief under section 39(3)(d)(iii) of the CSOS Act was refused and dismissed as misconceived in terms of section 53(1) of the CSOS Act. No order as to costs was made.

Where a sectional title scheme's conduct rules may be amended only by special resolution, an applicant seeking CSOS relief under section 39(3)(d)(iii) must show more than dissatisfaction with an existing rule; the applicant must establish that the governance provision is unreasonable and that the relevant internal amendment process has been properly pursued. If members vote on the proposed amendment and the required 75% majority is not achieved, and there is no evidence that a duly supported amendment was unreasonably refused, the application to compel amendment is premature or misconceived and should be dismissed.

The adjudicator observed that, if the applicant has since garnered more support among members, she may request another special general meeting and submit a proposal setting out the basis for amendment so as to obtain the required 75% vote. The adjudicator also noted the statutory right of appeal to the High Court on a question of law only. These remarks were advisory and not necessary to the dismissal of the application.

The decision is significant in community schemes law because it confirms that CSOS adjudication will not ordinarily be used to bypass internal governance mechanisms prescribed by scheme rules and the Sectional Titles Schemes Management Act. It underscores that amendment of conduct rules requires compliance with the applicable special-resolution threshold and that a mere disagreement with a democratically retained rule does not, without more, establish unreasonableness or justify CSOS intervention. The case also illustrates the distinction between a trustees' decision and a decision of members in general meeting.