The applicants are ex-spouses and registered co-owners of a sectional title unit in Salt River, Cape Town. They divorced on 6 September 2011, and the first applicant purchased the second applicant's half share. Transfer could not proceed because the Body Corporate (BC) refused to issue a levy clearance certificate due to an alleged debt of R134,225.05 for historic arrear levies, interest, and collection charges (mainly from 2011-2016). The BC's insurers (second and third respondents) paid this sum to the BC under a subrogated insurance policy. Neither applicant was ever a trustee of the BC. The applicants sought a declarator that the claim had prescribed under the Prescription Act 68 of 1969.
Declaratory order granted that the historic arrear levy debt of R134,222.05 has prescribed. The Body Corporate is precluded from relying on that debt to withhold a levy clearance certificate under s 15B(3)(a)(i)(aa) of the Sectional Titles Act. The applicants were ordered to pay the first and third respondents' costs of the striking-out and conditional applications. Each party otherwise to bear its own costs.
Under the Sectional Titles Schemes Management Act 8 of 2011, the 'governing body' of a body corporate consists of its trustees, not its ordinary members. Therefore, the impediment to prescription contained in s 13(1)(e) of the Prescription Act 68 of 1969 (which delays completion of prescription where the debtor is a member of the creditor juristic person's governing body) does not apply to an ordinary unit owner who is not a trustee. Claims for arrear levies against non-trustee members prescribe within the normal three-year period.
The court acknowledged Professor Van der Merwe's argument that ordinary sectional title members are closer to members of a close corporation (who fall under the s 13(1) impediment) than shareholders of a company, and that levies owed by ordinary members may almost never prescribe. However, the court declined to follow this view, reasoning that the STSMA makes trustees the governing body and that the legislative scheme would be undermined if every member were deemed part of the governing body. The court also noted that ordinary members are not without remedy if trustees fail in their duties, as s 9(1) of the STSMA allows a member to initiate proceedings on behalf of the body corporate.
This case clarifies a contentious area of South African sectional titles law and prescription. It resolves the debate sparked by academic commentary suggesting that ordinary members of a body corporate might fall within s 13(1)(e) of the Prescription Act, which would effectively mean levy debts against members almost never prescribe. The judgment affirms that only trustees are members of the governing body for prescription purposes, meaning bodies corporate must act timeously (within three years) to recover levies from ordinary members. This has significant practical implications for the management of sectional title schemes and the enforcement of levy obligations.