Olive Groove Body Corporate v A.A Rahman & A. Fortuin

The applicant, Olive Groove Body Corporate, is the body corporate of a sectional title scheme in Lotus River, Western Cape. The respondents, A.A Rahman and A. Fortuin, are the joint owners of Unit 13 in the scheme and therefore members of the body corporate. The body corporate raised a special levy to fund rehabilitation work on the complex identified in a 2017 Surespec report and confirmed by an updated structural engineer's report. Members were notified of the special levy and given a grace period to pay in four equal monthly instalments of R3 000 from October 2022 to January 2023 without interest. Interest at 15% would apply after 15 January 2023 on outstanding amounts. The respondents failed to pay their special levy contribution in full. The applicant alleged that statements and letters of demand were sent, but no response was received. As at 21 April 2023, the outstanding amount was R12 301.88. The applicant also stated that an earlier CSOS challenge to set aside the special levy had been refused and the levy upheld. The respondents filed no submissions in the present matter.

• Whether the respondents, as owners in the sectional title scheme, were liable to pay the special levy contribution raised by the body corporate.
• Whether the body corporate was entitled under section 39(1)(e) of the CSOS Act to an order for payment of the outstanding special levy amount.
• Whether interest at 15% compound per annum was recoverable on the outstanding amount.
• Whether any deferred payment or instalment order could be made in the absence of information about the respondents' financial position.

The application was granted. The respondents were ordered to pay Olive Groove Body Corporate R12 301.88 plus 15% compound interest per annum, as per the signed trustee resolution, from the date of the order. Payment had to be made within 30 days of the order, the one paying the other to be absolved. If the respondents failed to pay as ordered, the full outstanding amount would become immediately due and payable. No order as to costs was made.

An owner in a sectional title scheme is legally obliged under the STSMA to pay special levy contributions validly raised by the trustees for necessary unforeseen expenses not provided for in the annual budget. Where a body corporate proves that such a levy was raised, that the owner was notified, and that the amount remains unpaid, CSOS may grant relief under section 39(1)(e) of the CSOS Act ordering payment of the outstanding amount and applicable interest. In the absence of evidence regarding the debtor's financial position, deferred or instalment payment relief is not warranted.

The adjudicator made broader explanatory remarks about the role of levies in the effective functioning of sectional title schemes, the unfair burden placed on compliant owners when others default, and the general distinction between ordinary levies and special levies. The adjudicator also observed that it is advisable for trustees to prepare and sign a suitable resolution when raising a special levy, and commented generally that parties to CSOS disputes ordinarily bear their own costs.

This adjudication illustrates the enforceability of special levies within sectional title schemes through the CSOS process. It confirms that body corporates may recover unpaid special levy contributions from defaulting owners where the levy was validly raised for necessary unforeseen expenditure. It is also significant for showing that, in the absence of opposition or evidence from a defaulting owner, CSOS may grant payment of the full amount claimed and decline to structure instalment relief without evidence of the debtor's financial circumstances.