Judicial Review of the Enforcement of Sectional Title Rules: Administrative Action or Common-Law Review? Trustees for the time being of the Legacy Body Corporate v Bae Estates and Escapes (Pty) Ltd

Abstract

In Bae Estates and Escapes (Pty) Ltd v Trustees for the time being of the Legacy Body Corporate 2020 4 SA 514 (WCC) the Supreme Court of Appeal (SCA) considered a resolution by the trustees of a sectional title scheme that an estate agent Bae Estates and Escapes was not allowed to enter or exercise any economic activities in the scheme. The resolution was based on a conduct rule which enabled the trustees to disallow specific estate agents to sub-let units in the scheme on a short-term basis. The Western Cape Division of the High Court found that the resolution was unlawful, wrong, procedurally unfair and arbitrary and therefore reviewable. The High Court considered two requirements of the definition of "administrative action" in the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and held that the resolution of the trustees constituted administrative action in terms of PAJA and was as such reviewable under PAJA. On appeal the Supreme Court of Appeal considered whether the trustees' conduct should be considered an administrative act reviewable under PAJA or alternatively be reviewed under the common law in terms of section 33 of the Constitution. After analysing the three requirements of administrative action to determine whether the conduct of the trustees had to be determined under PAJA, the SCA held that the conduct of the trustees did not fulfil any of these requirements and reviewed their conduct under the common law. In this case note the three requirements for administrative action are discussed in view of the special nature of the body corporate and the rules of a sectional title scheme. The body corporate is a statutory juristic person that is automatically established on the opening of a sectional title register and therefore not consensual in nature, like common law clubs, companies or retirement schemes. Furthermore, its rules are regarded as the product of the quasi-legislative function of a statutory body, which rules must be approved by the Ombud Service for Community Schemes before the opening of the sectional title register. Although the outcome of the judgment would have been the same, the juridical basis would have been more accurate if the SCA had taken into consideration the special nature of a sectional title scheme, which brings the conduct of the trustees within the ambit of administrative action under PAJA.