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On 10 July 2024, the High Court of South Africa, Gauteng Division, Johannesburg, delivered a significant judgment in the matter of SA Lund and MJ Baard v. Community Schemes Ombud Service (CSOS), Andre Andreas (the CSOS Adjudicator) and the Devon Place Body Corporate.
The case, presided over by Wanless J, delved into crucial issues concerning procedural fairness in adjudications by CSOS and the application of the Promotion of Administrative Justice Act 3 of 2000 (PAJA).
Background
The applicants are joint owners of a sectional title unit in Devon Place Body Corporate (the BC). Disputes arose between the applicants and the BC over structures and maintenance on their rooftop exclusive-use area, leading to proceedings initiated by the BC at CSOS. The adjudicator’s award favoured the BC and dismissed the applicants’ claims. Consequently, the applicants sought judicial review to set aside the award and for the dispute to be reheard by CSOS.
Key legal issues
- Extension of time limits and condonation under PAJA: The applicants filed their review application approximately seven and a half months late, outside the three-month limit prescribed by PAJA.
- To proceed, they needed the court to extend this period and condone the delay. The court emphasised the importance of finality in administrative decisions and the public interest, highlighting that undue delay can prejudice respondents and affect public administration.
- Procedural fairness: The adjudicator decided the matter ‘on the papers’ without holding an oral hearing or allowing/ requiring the parties to present evidence under oath. The court found this process procedurally unfair, lacking adherence to the fundamental requirement of fair administrative action that both parties be given an adequate opportunity to be heard.
- Reviewability of the Adjudicator’s award: The court considered whether the award should be reviewed and set aside due to procedural irregularities and potential errors of law. The judgment highlighted similar precedents, such as the Silver Lakes Homeowners Association case, reinforcing the necessity for adjudicators to conduct hearings fairly and transparently.
Court’s findings
Wanless J extended the time limit for filing the review application and condoned the delay, citing the applicants’ reasonable efforts to resolve the dispute and their personal difficulties. The court emphasised that any prejudice to the BC was largely self-created and that the interests of justice favoured granting condonation.
The judgment reaffirmed that CSOS adjudications must comply with procedural fairness standards. The lack of a proper hearing and reliance on unverified submissions led the court to conclude that the CSOS2088/GP/20 award was reviewable and ordered it reviewed and set aside. The court ordered CSOS to rehear and reconsider the dispute from the beginning.
Costs
The court ordered the BC to pay the costs of the application, rejecting the argument that the BC, as a victim of procedural flaws, should not bear these costs. The judgment underscored the principle that costs should follow the result unless unusual circumstances exist.
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Furthermore, the court expressed the opinion that Parliament should consider amending subsection 33(b) of the CSOS Act by removing the CSOS’ protection from liability arising from its adjudicators’ ‘gross’ negligence, so as to balance the CSOS’ interests with those of the parties to its proceedings, and commented that this amendment would be in the interests of justice and in conformity with the principles of the South African constitutional democracy.
Conclusion
The Lund v. CSOS judgment serves as a critical reminder of the standards required in CSOS conciliations and adjudications. It underscores the importance of procedural fairness and timely judicial review in maintaining the integrity of dispute resolution processes within community schemes. This judgment will undoubtedly influence future CSOS adjudication procedures and provide valuable guidance to all parties on the need to ensure and insist on fair administrative practices.
