Trustees of Semarja Body Corporate v Sivine Sizwe Gwadiso

The applicant, the Trustees of Semarja Body Corporate, brought an application under section 38 of the Community Schemes Ombud Service Act 9 of 2011 (CSOS Act) against the respondent, Sivine Sizwe Gwadiso, owner of Unit 54 in the scheme. The dispute concerned arrear levies owed to the body corporate. The application was signed and lodged on 12 April 2023. The applicant alleged that final demand letters had been sent to the respondent and submitted the scheme conduct rules, demand letters, a trustees' resolution authorising the managing agent to represent the body corporate, and a levy statement initially reflecting an amount of R30 900.00 inclusive of interest. The respondent did not dispute liability substantively, but stated on 12 May 2023 that he would start servicing the debt at the end of that month. After the matter was referred to adjudication following a certificate of non-resolution, the adjudicator requested further documents, including a levy statement showing the accumulation of arrears and a trustees' resolution authorising interest. The applicant supplied these. The updated levy statement showed that in 2023 the respondent had made only one payment of R4 000.00 on 14 September 2023 and that the outstanding amount had increased to R49 030.69. The body corporate charged interest at 10% per annum compounded monthly pursuant to a written trustees' resolution.

• Whether the respondent, as owner of a sectional title unit, was liable for payment of arrear levies to the body corporate.
• Whether the applicant had proved on a balance of probabilities the amount owing by the respondent.
• Whether the body corporate was entitled to charge interest on overdue levies under rule 21(3)(c) of the prescribed management rules.
• Whether an adjudicator under section 39(1)(e) of the CSOS Act had the power to order payment of arrear contributions and related amounts.
• Whether fairness and justice justified allowing payment of the arrears by monthly instalments rather than immediate payment in full.

The application was granted. The respondent was ordered to pay the applicant R49 030.69 plus interest at 10% per annum, by monthly instalments of R4 000.00 until paid in full. The first payment was due on or before 30 November 2023, with subsequent payments due on or before the last day of each succeeding month. If the respondent defaulted on any instalment, the full outstanding balance would immediately become due and payable. The order did not absolve the respondent from liability for ongoing monthly levies and ancillary payments. No order as to costs was made.

An owner of a unit in a sectional title scheme is liable for levies as an incident of ownership, and such liability accrues pursuant to the trustees' resolution contemplated in section 3(2) of the STSMA. A body corporate may recover arrear levies through CSOS under section 39(1)(e) of the CSOS Act. Where the body corporate proves the indebtedness on a balance of probabilities and produces a valid written trustees' resolution authorising interest, it is entitled to an order for payment of the arrears together with interest on overdue amounts.

The adjudicator observed that, although arrear levy matters are commonly resolved by ordering immediate payment in full within a specified time, the economic hardship caused by the Covid-19 pandemic constituted extraordinary circumstances justifying a more flexible instalment-based order in the interests of justice and fairness. These remarks were discretionary and contextual rather than necessary to establish the respondent's liability.

This decision is significant in community schemes and sectional title practice because it reaffirms that levy liability is an incident of ownership and that bodies corporate may recover arrear contributions through the CSOS mechanism under section 39(1)(e) of the CSOS Act. It also illustrates the evidentiary requirements for proving arrear levies and interest, including the need for trustees' resolutions and supporting levy statements. The order further shows the flexibility of CSOS adjudicators to craft payment arrangements that balance enforcement of scheme obligations with fairness considerations.