Mohamed Dewan v Directors of Welgelegen Homeowners Association

The applicant, Mohamed Dewan, is the registered owner of Erf 25730 in Welgelegen Estates, George, Western Cape. He brought an application to the Community Schemes Ombud Service (CSOS) under sections 38 and 39(1)(c) of the Community Schemes Ombud Service Act 9 of 2011 against the Directors of Welgelegen Homeowners Association, a community scheme. Dewan complained that the HOA had unlawfully and unethically imposed a 1% special levy on owners upon the sale of their properties, and that non-payment resulted in the HOA refusing to issue levy clearance certificates. He contended that such a levy could not be instituted without a constitutional amendment. The respondent filed no written submissions. Before the adjudicator made a substantive determination, the applicant reported in final written submissions that at the scheme's annual general meeting the special levy had been regarded as unconstitutional and unfair, members voted against it, and the decision to impose it was reversed. The applicant confirmed that the dispute had accordingly been resolved amicably.

• Whether the 1% special levy imposed by the homeowners association was incorrectly determined, unlawful, or unreasonable within the meaning of section 39(1)(c) of the CSOS Act.
• Whether the applicant was entitled to an order declaring that the 1% special levy could not be instituted without an amendment to the scheme's constitution.
• Whether any live dispute remained for adjudication after the members reversed the decision to impose the special levy at the annual general meeting.

The adjudicator ordered that the matter had been settled between the parties and that the file be closed. No order as to costs was made.

Where, before final determination, the applicant confirms that the impugned levy decision has been reversed and the dispute has been resolved amicably, there is no longer a live dispute for determination under the CSOS Act; the matter is moot and it is appropriate for the adjudicator to record the settlement and close the file rather than grant substantive relief.

The adjudicator made general remarks that evidence considered must be relevant to the issues in dispute and that the standard of proof is on a balance of probabilities. The order also noted the statutory right of appeal to the High Court under section 57 of the CSOS Act on a question of law only. No substantive obiter on the legality of the levy itself was given because the matter was treated as settled and moot.

This matter is significant mainly as an illustration of CSOS practice rather than as a substantive precedent. It shows that where the underlying dispute in a community scheme is resolved internally before adjudication is finalized, the adjudicator may treat the matter as moot and close the file without making a merits determination under section 39(1)(c). It also reflects the role of CSOS in disputes about levies and financial contributions in homeowners associations.