The Directors of Tidal Lagoon Shareblock Pty Ltd v Caroline Hall and Robert McCann

The applicant, The Directors of Tidal Lagoon Shareblock Pty Ltd, is a shareblock company and community scheme under the Community Schemes Ombud Service Act 9 of 2011 (CSOS Act). The respondents, Caroline Hall and her brother Robert McCann, are joint holders of the relevant shareblock interest, which entitled them to occupy apartment 20, also referred to as unit 9, in the scheme at Warner Beach, KwaZulu-Natal. The first respondent lives overseas, while the second respondent occupied the unit. The applicant alleged that the unit had fallen into an appalling and uninhabitable condition; that the electricity supply had been disconnected because of non-payment to the municipality; that the second respondent used candles in a unit containing bedding and belongings on the floor, thereby creating a fire risk; that he brought vagrants into the unit, creating a security risk; and that he chipped away at the walls throughout the night and early morning, causing a serious noise nuisance to other residents. The directors and residents had repeatedly asked him to stop and the managing agent had sent several emails to the first respondent seeking assistance, but the situation remained unresolved. The first respondent did not meaningfully dispute the material allegations. Instead, she provided background about family disputes concerning her late father, stated that her brother was emotionally broken after his wife's death, admitted that he had moved two vagrants in with him, and said she had only a half share and left matters in the applicant's hands. The second respondent filed no response.

• Whether the conduct of the second respondent constituted a nuisance under section 39(2)(a) of the CSOS Act.
• Whether the adjudicator should order the respondents to refrain from specific conduct, including chipping walls at night, inviting vagrants into the scheme, and burning candles in the unit.
• Whether the respondents, as joint holders of the shareblock interest, could be ordered under section 39(6)(b)(i) of the CSOS Act to repair and restore the unit to a habitable standard.
• Whether the applicant had proved its case on a balance of probabilities in the absence of any substantive denial by the respondents.

The application was upheld. The adjudicator declared the second respondent's conduct to be a nuisance under section 39(2)(a) of the CSOS Act and ordered him, with immediate effect, to desist from chipping the walls of apartment 20/unit 9 at night, inviting vagrants into the scheme and allowing them to stay with him, and burning candles in the apartment. In terms of section 39(6)(b)(i), the respondents were ordered jointly to carry out the necessary repairs to the unit so as to bring it to a habitable standard in line with other apartments in the scheme within 5 months of receipt of the adjudication order. No order as to costs was made.

In a residential shareblock scheme, the holder or joint holders of the shareblock interest and the occupier of the relevant unit are obliged to use and maintain the unit in a manner consistent with the rights, safety, and comfort of other residents. Under sections 39(2)(a) and 39(6)(b)(i) of the CSOS Act, an adjudicator may order cessation of conduct constituting an objectively unreasonable nuisance and may require repairs to a private unit where its condition and use create disturbance, security concerns, or fire hazards. Where the applicant's allegations are not substantively disputed, and are supported by surrounding evidence, the applicant can discharge the onus on a balance of probabilities.

The adjudicator remarked that there is a paucity of legal precedent concerning residential shareblock schemes because many have been converted to sectional title and shareblock schemes have become something of an anachronism in South Africa, especially outside KwaZulu-Natal. The adjudicator also expressed sympathy for the sad personal circumstances described by the first respondent, but noted that such circumstances do not permit a co-owner to 'wash her hands' of responsibilities owed to the scheme.

This decision is significant in the community schemes context because it confirms that the CSOS adjudication framework can be used to address both behavioural nuisance and the physical deterioration of a private unit in a shareblock scheme. It illustrates that shareblock holders and occupiers remain subject to obligations analogous to those found in other community schemes: they must not create unreasonable disturbances or safety risks for other residents and must maintain their unit to an acceptable standard. The adjudicator also confirmed that a co-holder of a shareblock interest cannot avoid responsibility merely because another co-holder is the actual occupier. The ruling is particularly useful because reported authority on modern residential shareblock disputes is limited.