Zybutz v Body Corporate of Helianthus and Others

The applicant, Michael David Zybutz, owns a unit in Helianthus, a sectional title residential building in Cape Town. The first respondent is the Body Corporate of Helianthus, and the second to sixth respondents are owners of other units. Since 2014, the applicant sought Body Corporate approval for alterations involving extensions and improvements to his unit that would affect common property. The City of Cape Town granted land use departures in 2015, and later approved amended building plans. However, the Body Corporate repeatedly refused to pass the necessary special resolutions to approve the building plans. The applicant alleged that members of the Body Corporate acted unreasonably, inconsistently, and without bona fides in withholding approval. A written settlement agreement was reached with the fifth respondent, conditional on the Body Corporate's special resolution approving all elements of the building plans. At a special general meeting on 17 February 2023, not all alterations were approved. On 31 May 2023, the applicant lodged an application with the Community Schemes Ombud Service (CSOS) under section 38 read with section 39(4)(d) of the CSOS Act, seeking an order declaring that the opposition to the motion for resolution was unreasonable. The Adjudicator dismissed the application, finding he lacked jurisdiction and that the applicant should instead approach the Chief Ombud under section 6(9) of the Sectional Titles Schemes Management Act (STSMA). The applicant appealed to the High Court on questions of law.

• Whether the Adjudicator erred in law by failing to apply the reasonableness requirement when assessing the application under section 38 read with section 39(4)(d) of the CSOS Act.
• Whether the Adjudicator erred in law by interpreting section 6(9) of the STSMA as ousting his jurisdiction to determine the application.
• Whether the pathway to approach the Chief Ombud for relief under section 6(9) of the STSMA requires following the dispute resolution mechanism prescribed in Chapter 3 of the CSOS Act.
• Whether the Adjudicator had jurisdiction to hear an application under section 38 of the CSOS Act where the applicant sought relief for unreasonable refusal to pass a special resolution.

1. The appeal is upheld. 2. The order of the Adjudicator refusing the application is set aside. 3. The applicant's application in terms of section 39(4)(d) of the CSOS Act is remitted to the Community Schemes Ombud Service for hearing before a different staff member of the Ombud Service in order to determine the merits of the application. 4. The first, third, fourth, fifth and sixth respondents shall be jointly and severally liable for the applicant's costs of suit, on the 'C' scale.

Where an owner in a sectional title scheme is unable to obtain a special or unanimous resolution from the body corporate and seeks to approach the Chief Ombud for relief under section 6(9) of the Sectional Titles Schemes Management Act, the pathway to such relief must follow the dispute resolution mechanism prescribed in Chapter 3 of the Community Schemes Ombud Service Act. The CSOS Act provides the only alternative dispute resolution mechanism for all community schemes, including sectional title schemes. An Adjudicator has jurisdiction to hear applications brought under section 38 read with section 39(4)(d) of the CSOS Act challenging the unreasonableness of a body corporate's refusal to pass resolutions, and it is a material misdirection on a question of law to dismiss such an application for lack of jurisdiction on the basis that the applicant should have approached the Chief Ombud under section 6(9) of the STSMA.

The court noted that when evaluating reasonableness of an impugned decision of a body corporate, an adjudicator should assess factors such as the nature of the decision, the identity and expertise of the decision-maker, the range of factors relevant to the decision, the reasons given for the decision, the nature of competing interests involved, and the impact of the decision on the lives and well-being of those affected, as set out in Bato Star Fishing. The court further observed that the Adjudicator acknowledged the minimal effect of the applicant's proposed changes on other owners but failed to weigh or explore this factor appropriately in the analysis.

This case clarifies the relationship between the Community Schemes Ombud Service Act and the Sectional Titles Schemes Management Act in the context of dispute resolution for sectional title schemes. It establishes that section 6(9) of the STSMA is not a separate, standalone procedure for approaching the Chief Ombud, but rather an alert to an available recourse that must be pursued through the dispute resolution mechanism in Chapter 3 of the CSOS Act. The judgment affirms that Adjudicators under the CSOS Act have jurisdiction to consider the reasonableness of body corporate decisions in refusing special resolutions, and provides guidance on the proper factors to consider in such a reasonableness assessment, drawing on Bato Star principles adapted to the community schemes context.