In a landmark decision, the Supreme Court of Appeal (SCA) provided much needed clarity regarding whether parties involved in sectional title disputes are required to first approach the Community Schemes Ombud Service (CSOS) for relief, or whether they may institute proceedings directly in the High Court. 

For several years, the decision in Heathrow Property Holdings No 33 CC and Others v Manhattan Place Body Corporate and Others was the leading case on this issue. In that matter the Court held that disputes pertaining to community schemes should generally be referred to CSOS as a forum of first instance, and that a Court was entitled to decline to entertain such matters unless “exceptional circumstances” could be proven. As a result, litigants could not simply approach the High Court for the sake of convenience.

Fortunately, the SCA has now revisited this position in Parch Properties 72 (Pty) Ltd v Summervale Lifestyle Estate Owner’s Association and Others, clearing up this uncertainty in a unanimous decision confirming the High Court’s inherent jurisdiction and that litigants can in fact, approach the High Court as a forum of first instance without having to prove exceptional circumstances. 
 

BACKGROUND

Parch Properties 72 (Pty) Ltd, the appellant in the matter, is the owner of an erf that was developed into garden cottages, with a design similar to the dwellings in, and which has become fully integrated with, the neighbouring Summervale Lifestyle Estate. The Summervale Lifestyle Estate Owners’ Association (Summervale HOA) has since 2010 recognized Parch Properties as a member of Summervale and has charged levies in respect of the garden cottages. Parch Properties accordingly sought declaratory relief from the Western Cape High Court for an order declaring, inter alia, that its development on the erf be included in the definition of “Area” in the constitution of the Summervale HOA. The application was opposed by the Summervale HOA.
 

JURISDICTION AND CHOICE OF FORUM

One of the central issues before the SCA was whether the High Court correctly assumed jurisdiction to entertain the matter as a court of first instance, without the dispute first being referred to CSOS. In considering the issue of jurisdiction, the SCA looked at the provisions of the CSOS Act and the purpose for which it was established, which was to provide an expeditious and informal cost-effective mechanism for the resolution of disputes. 
Section 38(1) of the CSOS Act provides that any person who is a party to or affected by a dispute may make an application to the Ombud. This section indicates that parties have a choice of forum and the CSOS Act does not explicitly or implicitly exclude a party from approaching the High Court for relief. The SCA confirmed that CSOS was “designed to co-exist with the court system, providing the parties with a choice of a forum, not to replace it entirely”. The SCA accordingly confirmed that “exceptional circumstances” did not need to exist for the High Court to entertain the matter.
 

PRACTICAL IMPLICATIONS

Whilst CSOS remains an accessible and cost-efficient forum for resolving community scheme disputes, the Parch Properties judgment confirms that litigants are not compelled to approach CSOS first. Parties dealing with more complex matters, or matters requiring urgent relief, can be comforted in the fact that they may approach the High Court directly, without having to satisfy the threshold of “exceptional circumstances”.  

This decision provides important certainty for developers, bodies corporate and scheme members alike, and reaffirms the High Court's role in resolving community scheme disputes.