Trustees of Olive Grove Body Corporate v R. L. Hendricks

The applicant, the Trustees of Olive Grove Body Corporate, brought an application under section 38 of the Community Schemes Ombud Service Act 9 of 2011 (CSOS Act) against the respondent, R. L. Hendricks, the owner of Unit 3 in Olive Grove Body Corporate, Cape Town. The body corporate alleged that the respondent had failed to pay levy contributions, including a special levy, and that as at 1 October 2023 the outstanding amount was R15 143,09. The applicant relied on the scheme’s conduct rules, especially Rule 11, which provides that levies are due monthly and that interest may be charged on arrears at the highest legally allowable rate. The applicant also relied on the trustees’ resolution of 2 August 2022 regarding interest. The respondent did not file any response or opposing submissions despite being invited to do so. A certificate of non-resolution had been issued and the matter proceeded to adjudication on the papers.

• Whether the CSOS adjudicator had jurisdiction under section 39(1)(e) of the CSOS Act to order payment of outstanding levies.
• Whether the applicant had established, on a balance of probabilities, that the respondent owed arrear levies in the amount of R15 143,09.
• Whether the body corporate was legally entitled to recover the outstanding levy contributions and interest from the respondent as a unit owner.

The application was upheld. The respondent was ordered to pay the applicant R15 143,09 in outstanding levies, with interest as determined by the trustees’ resolution of 2 August 2022, in four equal instalments of R3 785,77 starting on 1 November 2023, with the final instalment due on 1 February 2023 as recorded in the order. If the respondent failed to make payment, the full outstanding amount would immediately become due and payable. No order as to costs was made.

A CSOS adjudicator may, under section 39(1)(e) of the CSOS Act, order a unit owner to pay outstanding levies and related interest where the body corporate provides evidence of the arrears and the applicable rules or resolutions establishing the obligation to pay. Owners in a community scheme are bound by the scheme’s conduct rules and duly adopted levy resolutions, and arrear contributions may be recovered through CSOS proceedings.

The adjudicator made general observations about the standard of proof in civil matters, namely that facts are determined on a balance of probabilities with regard to relevance, reliability and credibility. The order also set out the parties’ statutory right of appeal under section 57 of the CSOS Act, noting that any appeal lies to the High Court only on a question of law. The order’s reference to the final instalment being due on 1 February 2023 appears to be a clerical error, as it post-dates an order granted on 3 October 2023 and follows instalments commencing on 1 November 2023.

The decision illustrates the CSOS’s role as a statutory forum for efficient recovery of community scheme levies. It reaffirms that body corporate members are bound by scheme rules and trustee resolutions relating to levies and special contributions, and that an uncontested statement of account can suffice to prove indebtedness on a balance of probabilities in CSOS adjudication proceedings. It also shows the interaction between the CSOS Act and the Sectional Titles Schemes Management Act in enforcing financial obligations within sectional title schemes.