Angelfish Investments 536 CC v Body Corporate of Orient Gardens

• Jurisdiction: South Africa
• Judge: Stretch AJ
• Judgment Date: 26 February 2013
• Docket Number: 9362/2012
• Court: KwaZulu-Natal High Court, Pietermaritzburg
• Hearing Date: 23 November 2012
• Citation: 2013 JDR 1189 (KZP)

Stretch A J:

[1]

This is an application in terms of section 46 of the Sectional Titles Act 95 of 1986 ("the Act") for Mr Andrè Grundler ("Grundler") to be appointed to act as the respondent's administrator.

[2]

The application, which was accompanied by a certificate of urgency, was enrolled for hearing on 26 October 2012 with a few days' notice to the respondent and the occupiers of the residential units at Orient Gardens.

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[3]

On that day three representatives appeared in person for the respondent. The matter was adjourned to 8 November 2012 and on that day was adjourned to be heard as an opposed motion on 23 November 2012.

[4]

The crisp issues for determination are the following:

[4.1]

whether the applicant has made out a case for urgency;

[4.2]

whether there exists a need for the appointment of an administrator and if so, whether Grundler is a suitable appointee.

[5]

The applicant (a close corporation) is the owner of eight of 54 units which form part of scheme 804 of Orient Gardens, being a sectional title scheme ("the scheme"). The applicant's sole member is Mr Kadarnath Maharaj ("Maharaj"). Its chief executive officer is Darshi Harase, who has been duly authorised to launch these proceedings on the applicant's behalf. The applicant's member, Maharaj, is not only also a co-director of a company by the name of New Order Investments 29 Pty Ltd (hereinafter referred to as "the developer") but also, it seems, was/is his own attorney, the applicant's attorney, the developer's attorney, and at least during August 2011, also the respondent's attorney.

[6]

The applicant seeks for the appointment of an administrator for the scheme, averring, in an affidavit deposed to by its chief executive officer, that the respondent has failed in its fiduciary duties to the

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owners and other interested parties in a number of respects which I shall deal with in due course.

[7]

The applicant contends that, by virtue of this failure, a wall supporting a bank collapsed onto the applicant's units on the weekend of 7 September 2012. The applicant says that the collapse was due to the lack of maintenance of a burst water pipe and the heavy rains during that weekend. This the applicant says has in turn impacted on the stability of the road.

[8]

It is for these reasons that the applicant says it has brought this urgent application for the appointment of Grundler as an administrator.

[9]

On the question of urgency itself the applicant's representative, Darshi Harase, says the following on oath:

'This application has become urgent in that the repairs to the wall and other damages needs urgent attention and at this stage the applicant is funding the repairs but the repairs need to be overseen by a responsible person for and on behalf of the Respondent but that is not possible as there is no such person responsible and hence the administrator needs to be appointed to take control of the affairs of the Body corporate.'

[10]

The Chair of the respondent, Ms Zibonisle Ngcobo ("Ngcobo"), who has deposed to an affidavit on the respondent's behalf, argues that the applicant has failed to make out a case for urgency. She, in

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turn, says that Orient Gardens came into being as a single phase in 1991. Ninety-eight per cent of the trustees were 'Africans' and they managed their affairs well. The development and construction of this first phase was of a high standard and there were no complaints about drainage, sewerage, plumbing and the like.

[11]

However, in 2007 the applicant's member (Maharaj) began developing the second phase and erected three units in excess of that determined by the regulations and the engineering specifications, resulting in the properties being 'squeezed' next to each other severely affecting the storm-water drainage, the sewerage and the plumbing. I digress to mention that Maharaj (wearing his developer's hat) and his co-developer deny that too many units were built and refer on oath to various plans, diagrams and certificates which would be made available at the hearing of the application, but as it transpired, were not.

[12]

Maharaj, she contends, sold the units with fake water meters which are still on the property (this too is disputed). Ethekwini Water Sanitation ("EWS") inspected the property at the behest of the respondent and it was found that the developer and the plumber had made illegal connections and that the plumbing was sub-standard and 'hopeless'.

[13]

She avers that at all times the trustees of the respondent have been playing an active role in championing the cause of the unit owners of Orient Gardens. She seems to be of the view that the

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reason why the applicant has launched this application (which she describes as a fruitless one which has been brought behind the respondent's back) is because Maharaj 'is concerned about the hurdles and challenges he has to face with the municipality's enforcement unit.'

[14]

Ngcobo goes on to describe in her affidavit that a meeting was held in 2011 with the developer of Orient Gardens, Maharaj and a representative of the municipality, who presented Maharaj with a snag list to be attended to by mid October 2012. This did not happen which ultimately resulted in the respondent approaching a building inspector who conducted an inspection in loco and found that sewerage pipes had not been secured and storm water drainage had been laid incorrectly.

[15]

In July 2012 the respondent was advised by the building inspectors that they had attempted to contact Maharaj in connection with these problems but that he had failed to respond, resulting in the problem being referred to the municipality's law enforcement unit.

[16]

In Ngcobo's opinion, the wall referred to by the applicant's deponent did not collapse due to rain and pre-existing badly maintained plumbing (which is apparently the version of the applicant), but because the pipe was exposed due to a fatal construction error on the part of the developer. The wall (as a result of heavy rain) collapsed onto the pipe, causing it to burst. She says that after the wall had collapsed a crisis committee was formed consisting

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of five members of the respondent, the chief executive officer of the municipality's law enforcement unit, and the building inspectors.

[17]

Ngcobo avers that the municipality's law enforcement unit was still in the process of investigating and attempting to correct the 'transgressions' of Maharaj (qua developer) when these urgent application papers were served on the respondent and the unit owners out of the blue. At no stage, she says, did Maharaj ever suggest the need for an administrator, and they were taken completely by surprise...