Cassim and Another v Voyager Property Management and Others
Jurisdiction | South Africa |
Judge | Cloete JA, Ponnan JA, Shongwe JA, Leach JA and Seriti JA |
Judgment Date | 11 September 2011 |
Citation | 2011 (6) SA 544 (SCA) |
Docket Number | 574/10 |
Hearing Date | 30 August 2011 |
Counsel | AJH Bosman SC for the first appellant. Second appellant in person. DG Tobias for the first respondent. No appearance for the second respondent. E Levin for the third and fourth respondents. |
Court | Supreme Court of Appeal |
Ponnan JA (Cloete JA, Shongwe JA, Leach JA and Seriti JA concurring):
[1] During 1992 the sisters Cassim — Shereen, the first appellant, and G Neilopahr, the second appellant — together with their now-deceased mother, purchased three sectional title units in what they believed was a prestigious block of flats known as St Moritz, which is located at the corner of John Milne and West streets in Durban. The building which consists of 88 flats and three shops appealed to them because of its three street frontages, proximity to shops, restaurants, the beach and the bus route. H
[2] By 2001, however, the appellants, who lived in Johannesburg and who had purchased their units as an investment, started to become concerned at what they perceived to be mismanagement of the building. When their endeavours at securing information from the managing agent I of the building and its body corporate came to naught they launched a series of applications in the Durban High Court. Of a veritable avalanche of court applications only three, by way of background, are alluded to. The first application sought an order against the St Moritz body corporate that it hold an annual general meeting (the AGM) on 13 November 2004 to be chaired by a person to be agreed by the parties J
Ponnan JA (Cloete JA, Shongwe JA, Leach JA and Seriti JA concurring)
A or, failing agreement, to be appointed by the President of the Law Society of KwaZulu-Natal. The second sought an order that the appellants be entitled to be nominated as trustees and to vote at that meeting. What prompted the second application was an alleged dispute between them and the body corporate as to whether they were in default B with the payment of their levies in respect of their units. If so, so contended the body corporate, they were precluded in terms of the body corporate rules from participating in the AGM. The third application sought an order that an administrator be appointed to the body corporate in terms of s 46 of the Sectional Titles Act 95 of 1986 (the Act) with such powers as were to include the power to appoint a C registered auditor to conduct a forensic audit and to scrutinise the books and financial affairs of the body corporate from June 1999.
[3] On 13 November 2004 and pursuant to an order of court the AGM of the body corporate was held. It was chaired by an attorney, D Mr Lomas-Walker. That meeting came to be adjourned to 29 January 2005. On the latter date both appellants were elected as trustees of the St Moritz body corporate. The others who also came to be elected members were Mr JJ Strauss, Mr J le Fevre and Ms V Swanepoel.
[4] On 26 April 2005 the three applications were consolidated and E referred to trial with the notice of motion in each case to stand as the summons. In due course a declaration came to be filed in the consolidated action. The declaration cited the St Moritz Body Corporate (the body corporate) as the first defendant, Voyager Property Management (Pty) Ltd (Voyager) as the second defendant, the managing agent of the building, Bellair Management Services (Bellair), as the third defendant F and Strauss, Le Fevre and Swanepoel, the other three trustees aside from the appellants elected at the AGM, as the fourth, fifth and sixth defendants, respectively.
[5] Of the seven claims advanced in the declaration, only three, namely claims C, D and E are relevant to this appeal. To the extent here G relevant, they read:
'Claim C
Both in terms of the Sectional Titles Act and management rule 35(2), the fourth, fifth and sixth defendants are obliged to make all or any of the books of account and records of the first defendant H available for inspection to owners.
At the annual general meeting of the first defendant on 29 January 2005, the first and second plaintiffs were appointed as trustees.
Management rule 35(1) and the Sectional Titles Act obliges the trustees to cause proper books of account and records to be kept so as fairly to explain the transactions and financial position of the I first defendant including:
a record of the assets and liabilities of the first defendant.
a record of all sums of money received and expended by the first defendant and the matters in respect of which such receipt and expenditure occurred.
In order to comply with their obligations referred to in paragraph 7.3 J above, the plaintiffs during the period from 2 February
Ponnan JA (Cloete JA, Shongwe JA, Leach JA and Seriti JA concurring)
2005 requested the defendants to furnish them with copies of the A documents referred to in . . . in order to comply with their obligations as trustees.
In spite of such requests, the defendants have to date failed and/or refused to furnish plaintiffs with copies of the documents referred to in Schedule A. B
Claim D
. . .
Without the knowledge of, consultation with and approval of approximately 32 owners and members of the first defendant including the plaintiffs and on 2 March 2004, the fourth and fifth defendants entered into a loan agreement with the second defendant, C in terms of which agreement, the fourth and fifth defendants allegedly borrowed undisclosed sums of moneys on behalf of the first defendant from the second defendant.
As at 2 March 2004, the fifth defendant was not a trustee duly appointed at an annual general meeting and consequently he had no authority to enter into the loan agreement on behalf of the first D defendant nor could he bind the first defendant thereto.
In terms of the loan agreement, . . . the second defendant continues to advance moneys to the first defendant on a monthly basis to the prejudice of 32 of the members of the first defendant including the plaintiffs.
The loan agreement concluded between the first and second E defendants on 2 March 2004 is invalid and of no force and effect, alternatively void for vagueness, further alternatively, voidable at the instance of the first defendant and falls to be set aside on the grounds as appear in paragraphs 8.9.1 to 8.14 inclusive hereunder.
. . .
Claim E F
Every owner is a member of the first defendant by virtue of the provisions of section 36 of the Act.
By virtue of the provision of regulation 35(i) of the Act read with the management rule 35(i), the trustees shall cause proper books of account and records to be kept so as fairly to explain the transactions and financial position of the body G corporate including:
a record of the assets and liabilities of the body corporate;
a record of all sums of money received and expended by the body corporate and the matters in respect of which such receipt and expenditure occur. H
The plaintiffs were appointed trustees at the AGM of 29 January 2005 and are both owners and members of the first defendant.
On 2 March 2004 the second defendant concluded the loan agreement with the first defendant.
Plaintiffs as trustees and in compliance with their duties of a I fiduciary nature, are obliged to take this action on behalf of the first defendant and pursuant to the provisions of both sections 35 and 41 respectively of the Act.
By virtue of the unlawful and irregular conduct on the part of the fourth and fifth defendants as referred to in paragraph 11 hereunder, the plaintiffs as trustees are obliged to act in the absence of the full board of trustees. J
Ponnan JA (Cloete JA, Shongwe JA, Leach JA and Seriti JA concurring)
A As owners and trustees and members of the first defendant, the plaintiffs are entitled to statements of accounts with supporting documentation in respect of all the financial transactions for the period of 2 March 2004 to date of trial, in terms of the loan agreement concluded between the first defendant and second defendant including. . . .
B Wherefore the plaintiffs pray for orders as follows:
. . .
Claim C
Compelling the second, third, fourth, fifth and sixth defendants to furnish the plaintiffs with access to copies of the documents listed in Schedule A annexed hereto.
C Claim D
Declaring that the loan agreement concluded between the first and second defendants on 2 March 2004 is invalid and of no force and effect.
Cancelling the loan agreement concluded between the first and D second defendants on 2 March 2004.
The first and third defendants be interdicted from paying any moneys over to the second defendant and the second defendant be interdicted from receiving any moneys from the first or third defendants.
Interdicting and restraining the second defendant from advancing E and or lending any further moneys to the first defendant in terms of the loan agreement concluded between the parties on 2 March 2004 and interdicting and restraining the first defendant from receiving any further loan and/or moneys from the second defendant.
F Claim E
Compelling the first and second defendant to render a statement of account with supporting documentation to the plaintiffs in respect of all the financial transactions for the period 2 March 2004 to 28 February 2005 in terms of the loan agreement...
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