Trustees of Pelican Park Body Corporate v Solver Property Management

The applicant, the Trustees of Pelican Park Body Corporate, appointed the respondent, Solver Property Management, as managing agent under a management agreement concluded on 17 March 2023. The body corporate later became dissatisfied with the respondent’s services and alleged service delivery failures, a breakdown in the relationship, and unlawful withholding of the body corporate’s funds. The applicant further contended that the management agreement was procedurally irregular because it had been signed by two trustees without a majority resolution of the board of trustees. On 1 July 2023 the trustees passed a resolution to terminate the respondent’s services and notified the respondent in writing. When the respondent refused to accept the termination, a special general meeting of members was convened on 27 July 2023, where members also voted in favour of terminating the respondent’s appointment. The respondent disputed the validity of the special general meeting and contended that the termination did not comply with the management agreement, including a clause requiring disputes to be referred to mediation/adjudication. The dispute was referred to the Community Schemes Ombud Service, conciliation failed, and the matter proceeded to adjudication on the papers.

• Whether the body corporate/trustees had the legal right under section 39(5)(b) of the CSOS Act and the Prescribed Management Rules to terminate the appointment of the managing agent.
• Whether the trustees’ resolution of 1 July 2023, with or without the subsequent special general meeting resolution, validly terminated the management agreement.
• Whether the respondent was obliged, following valid termination, to hand over the body corporate’s records, documents and any funds in its possession or control.
• Whether the respondent’s objections to the procedure followed at the special general meeting affected the validity of the termination.

The application was granted. The adjudicator declared that the management agreement concluded on 17 March 2023 was lawfully terminated in terms of PMR 28(8), in line with the trustees’ resolution of 1 July 2023 and the termination letter of the same date. The respondent was directed to provide the applicant or its nominated representative with all necessary documents and/or funds in its possession or control requested by the applicant within 10 days of receipt of the order. No order as to costs was made.

Under section 39(5)(b) of the CSOS Act and PMR 28(8), a body corporate or its trustees may terminate a managing agent’s appointment by ordinary resolution in accordance with the management agreement and the Prescribed Management Rules. Once the appointment is validly terminated, PMR 27(7) obliges the managing agent to deliver to the body corporate all relevant records, documents and items under its possession or control within the prescribed period.

The adjudicator noted the applicant’s complaint that the original management agreement may have been procedurally flawed because it was signed by two trustees without a majority trustees’ resolution, but the decisive basis for the order was the trustees’ authority to terminate under PMR 28(8), so the possible invalidity of the initial contract was not necessary to the outcome. The adjudicator also referred generally to evidentiary principles such as relevance, credibility and proof on a balance of probabilities; these were explanatory observations rather than independent legal holdings.

The decision is significant in community schemes law because it confirms that, under the CSOS Act read with the Prescribed Management Rules, trustees/body corporates have the authority to terminate a managing agent’s appointment by ordinary resolution in accordance with the applicable rules and contract. It also reinforces the post-termination duty of a managing agent to hand over scheme records and property promptly. The ruling illustrates the remedial role of the CSOS in disputes over management services in sectional title and community scheme governance.