Trustees of Formosa Garden Village Housing Scheme for Retired Persons Body Corporate v Alda Mills and Hardy Mills

The applicant, the Trustees of Formosa Garden Village Housing Scheme for Retired Persons, is the executive organ of a community scheme under the Community Schemes Ombud Service Act 9 of 2011 (CSOS Act). The first respondent, Alda Mills, had signed a contract with the applicant for the admission of her father, Mr Schalk Engelbrecht, to the applicant's frail care facility. The applicant alleged that payments due under that frail care contract had not been made since October 2022 and claimed an amount of R112,305.20. The applicant sought relief under section 39(1)(e) of the CSOS Act for payment of that amount. It also alleged that the second respondent, Hardy Mills, had caused a nuisance through correspondence and by raising his voice at the frail care facility, and sought behavioural relief under section 39(2)(a). The respondents filed joint submissions raising points in limine of misjoinder and non-joinder, contending that they were neither members nor occupiers in the scheme and had no material interest in it, and that there was accordingly no CSOS dispute capable of resolution under section 38 of the Act.

• Whether the respondents had locus standi in relation to the community scheme dispute contemplated by section 38 of the CSOS Act
• Whether the dispute was one between persons with a material interest in the scheme as required by the CSOS Act
• Whether CSOS had jurisdiction to determine claims arising from an alleged breach of a frail care contract
• Whether the relief sought under sections 39(1)(e) and 39(2)(a) of the CSOS Act was competent on the facts
• Whether any issue of non-joinder or misjoinder affected the adjudication

The application was dismissed. The adjudicator ordered that the relief sought by the applicant against the respondents in terms of sections 39(1)(e) and 39(2)(a) was misconceived and accordingly dismissed in terms of section 53(1)(a) of the CSOS Act. No order as to costs was made.

A CSOS adjudicator may entertain only disputes concerning the administration of a community scheme between persons who have the requisite material interest in the scheme as contemplated by section 38 of the CSOS Act. Where the respondents are neither members nor occupiers nor otherwise persons with a material interest in the scheme, and the true source of the dispute is an alleged breach of an external contract such as a frail care agreement, CSOS lacks jurisdiction and relief under section 39 is incompetent.

The adjudicator discussed the principles of joinder and non-joinder with reference to Fluxmans Incorporate v Lithos Corporation of SA (No 2) 2015 (2) SA 322 (GJ) and Knoesen and Another v Huijink-Maritz and Others [2019] ZAFSHC 92, observing that parties need only be joined where they have a direct and substantial interest in the order. The adjudicator also noted that even if Mr Engelbrecht had been joined, this would not have altered the outcome because no relief was sought against him and the dispute would still have remained contractual in nature.

The decision is important in clarifying the limits of CSOS jurisdiction. It confirms that CSOS dispute-resolution mechanisms are confined to disputes concerning the administration of a community scheme between persons with a material interest in that scheme, and cannot be used to enforce ordinary contractual claims lacking the required nexus to scheme governance or membership. It also reinforces that the forms of relief in section 39 cannot be stretched to cover disputes that are, in substance, external contractual claims.