High Court invalidates security protocol

By Auren Freitas dos Santos

What are the implications for trustees’ authority?

Introduction
In 2022, we had the privilege of providing expert guidance and counsel to a reputable law firm in Johannesburg. Our assistance played a crucial role in their successful appeal of a CSOS adjudication order in the High Court of South Africa, Gauteng Local Division, Johannesburg.

The court’s decision, delivered on 23 April 2023, may have significant implications for future cases where sectional title trustees unilaterally impose rules and protocols aimed at regulating residents’ conduct. This article provides an overview of the case and highlights the key findings of the court.

Background
The trustees of the sectional title scheme in Sandton introduced a security protocol to enhance safety measures for food deliveries within the scheme. The protocol required delivery personnel, including services like Uber Eats, to check in with the on-duty security guard using the intercom system. Deliveries were restricted to the main gate, and residents had to collect their packages there. In exceptional cases, if gate collection was impractical, delivery personnel could access the complex only when accompanied by the respective resident. The protocol was approved by a simple majority vote of the body corporate members.

The Challenge
“All security procedures, which may be instituted from time to time, including any operating procedures agreed to between the Body Corporate and any security company charged with rendering security services at the complex shall be abided by.”

Adjudicator’s Decision and Appeal
The CSOS adjudicator found that the security protocol did not amount to an amendment of the conduct rules but rather represented security measures adopted by the trustees under conduct rule 9(e). Consequently, the protocol did not require approval from the Community Schemes Ombud Service. Dissatisfied with this ruling, the appellant lodged an appeal with the High Court.

Court’s Findings
The court examined whether the security protocol constituted a conduct rule and analysed its adoption process. The appellant argued that the protocol fell within the definition of a conduct rule, while the trustees contended that it was merely a security measure aligned with conduct rule 9(e) to enhance security at the scheme.

The court concluded that the security protocol, by significantly altering the conditions for access to the scheme, effectively introduced a new conduct rule or amended the existing rules. It emphasised that conduct rules regulate residents’ behaviour and specify what they may or may not do. The court noted that although the protocol aimed to enhance security, it cannot be unilaterally introduced by the trustees under conduct rule 9(e), as this would disregard proper legislative procedures and enforcement by the body corporate.

Regarding the adoption process, the court rejected the argument that the approval at the special general meeting constituted a directive given to the trustees in terms of section 7(1) of the Sectional Titles Schemes Management Act and that the trustees were obliged to act on the resolution by approving the security protocol. It ruled that the requirements to validly adopt and implement a conduct rule as outlined in section 10(2)(b) of the Sectional Titles Schemes Management Act were not met, and the trustees were not empowered to unilaterally depart from these requirements.

Conclusion
The High Court invalidated the security protocol, declaring it a conduct rule under the Sectional Titles Schemes Management Act and ordering its removal from the scheme’s governance provisions. The body corporate was instructed to grant immediate access to all deliveries and delivery personnel. Additionally, the trustees and the body corporate were jointly and severally ordered to cover the appellant’s party-and-party costs for the appeal.   Interestingly, the court also ordered that the body corporate shall not recover a pro rata share of the contribution towards the costs from the appellant.

This ruling highlights the importance of adhering to proper procedures when introducing conduct rules in sectional title schemes. It serves as a precedent for similar cases and emphasises the need for sectional title trustees to act within the boundaries of their authority.