In my previous article, I discussed how prospective purchasers can establish whether the scheme is pet friendly or not. In this article, I will discuss a recent CSOS adjudication order that sets out the principles that must be considered when trustees exercise their discretion to give consent for keeping a dog in the scheme.
Parties
The Applicant in this dispute was a new owner in a scheme located in the Western Cape. The Respondent was the residential sectional tile scheme located in the Western Cape and was represented by a duly authorized trustee.
Facts
The Applicant contended that when she purchased her unit it was advertised as a pet friendly. The Applicant made an offer to purchase the unit on 26 September 2022 after receiving confirmation that the scheme was pet friendly (in the form of a copy of the Scheme’s Conduct Rules) from the estate agent. The Scheme’s Conduct Rules allow for pets with the trustees’ consent. It states:
“1. An owner shall not, without the consent of the trustees, which approval may not unreasonably be withheld, keep an animal, insect, reptile or bird (hereafter a ‘pet’) in a section or on common property.
2. All owners and occupiers keeping a pet in terms of sub-rule (1) above, r in respect of any rules in force prior to the adoption of these rules shall comply with the following:
(a) dogs shall only be allowed on the common property if controlled on a leash.”
The Applicant submitted that the estate agent contacted the Managing Agent of the Scheme to enquire how to apply for permission to keep a pet. The Managing Agent responded that dogs will not be allowed. The Sellers of the unit then delivered a letter to the Trustees, who verbally responded that dogs are not allowed. On 18 October the Managing Agent sent a letter to the Sellers advising that a precedent had been set and that the Trustees were not willing to grant approval for the Applicant to keep her dog in the unit. All correspondence and conversations in regard to the seeking of approval were therefore handled by the Sellers and the Estate Agent. The property was officially transferred to the Applicant on 22 November 2022. The first time that the Applicant dealt with the Trustees directly was at the Scheme’s Annual General Meeting (the “AGM”) held on 30 November 2022.
It must be noted that the agenda for the AGM did not set that there would be a special resolution taken to change the pet Conduct Rule. At the meeting, a vote was taken and 93.60% of members voted against keeping dogs and 3.35% voted in favour of keeping dogs. The Applicant contended that some owners have multiple pets in the Scheme. Furthermore, she submitted that her dog is neutered.
Relief sought by the Applicant
The Applicant sought an order setting aside the Trustees’ decision denying her permission t keep a pet. More specifically the relief applied for was in terms of section 39(4)(c) of the Community Schemes Ombud Service Act 9 of 2011 for an order declaring that a resolution purportedly passed at a meeting of the trustees was invalid.
Respondent’s submissions
The Respondent submitted that the Scheme was established in 1996 and since that time the mandate to owners has always been that no dogs are permitted, and trustees have in the past received applications for dogs which have been declined. The Respondent submitted that allowing the Applicant to keep the dog would cause disharmony and would create a precedent and also subject the trustees to allegations of not performing their duties. The Respondent submitted that they placed the matter on the agenda for the AGM and that they received sufficient votes to amend the Conduct Rule to reflect that dogs are not permitted in the Scheme. These amended Conduct Rules were submitted to CSOS ON 13 January 2023 for approval. The Respondent confirmed that as of 23 February the Scheme had not yet received approval of the amended Conduct Rules. The Respondent submitted that prior to signing the offer to purchase the Applicant knew that the Trustees would not grant consent for the dog and that the Applicant attended the AGM and participated in the vote
The relief sought by the Respondent
The Respondent requested that the application be refused and that the Applicant be ordered to remove her dog from the Scheme.
The evaluation
The Adjudicator decided that the matter needed to be decided on based on the existing Conduct Rules, and not in terms of the amended filed Conduct Rules, as those had not yet been approved or certified by the CSOS. The Applicant’s application to keep her dog had been made in terms of the existing Conduct Rules and should have been decided on based on those rules.
Trustees are appointed by the members of a scheme to manage the Body Corporate’s affairs. Management Rule 9 provides that apart from executing the duties as set out in the STSM Act, the Trustees must control, manage, and administer the common property as well as enforce the Conduct Rules in place. Conduct Rule 1 gives the Trustees the power and discretion to grant permission to keep a pet. The object of the powers given to the Trustees is to enable them to do justice to the fiduciary duties which attach to that office.
The Trustees cannot unreasonably deny permission but must consider the circumstances of the request as well as the best interests of the Scheme. The Trustees cannot blanket refuse, and each case must be decided on its merits. The Trustees may set conditions that the owner must abide by, otherwise, the consent can be withdrawn. These rules aim to avoid nuisance so that all residents enjoy living in their units. Trustees must consider each case individually, which was decided in Body Corporate of The Laguna Ridge Scheme No 152/1987 v Dorse 1999 (2) SA 512 (D) where it was held that the trustees are obliged to individually consider each request for permission to keep a pet and to base their decision on the facts and circumstances of the particular case. They are not entitled to refuse an application on the basis that they are afraid of creating a precedent. The trustees were, in this case, found to have been grossly unreasonable and held to have failed to apply their minds when they refused a lady permission to keep a small dog.
The Adjudicator stated that the issue was not about the reasonableness of Conduct Rule 1, but rather whether the Trustees exercised their discretion, and applied their mind considering the application to keep the dog. The reason for the refusal as it appeared on the submissions was that the Trustees allude to the fact that if consent was granted to the Applicant it would cause disharmony in the Scheme and subject the Trustees to allegations of them not performing their duties. It was further mentioned that if consent was granted it would create a bad precedent in the Scheme and it would open the floodgates for other owners and occupiers to apply for consent to keep dogs.
The Trustees went on to mention that since the establishment of the Scheme in 1996, the mandate of the owners was and always has been that no dogs must be permitted in the Scheme. However, the Scheme’s Conduct Rules actually allow the keeping of dogs with the Trustee’s consent. The Trustees further submitted that they have in the past received applications to keep dogs and they have all been declined in accordance with the aforesaid mandate. The Respondent submitted that as such a precedent has been set, the Trustees were not willing to grant approval for the Applicant to keep her dog.
It is clear that the Trustees adopted a policy decision and a blanket approach to the issue of keeping dogs in the Scheme, and failed to exercise their discretion created by Conduct Rule 1. In NBS Boland Bank Ltd v One Berg River Drive CC and Others, Deeb, and Others VAbsa Bank Ltd; Friedman v Standard Bank of SA
Ltd 1999 (4) SA 928 SCA, the SCA dealt with the old Roman law adage that discretion unless unfettered, must be exercised arbitrio bono viri. Van Heerden
DCJ, writing for the full bench, stated in para 25:
“it is I think, a rule of our common law that unless a contractual discretionary power was clearly intended to be completely unfettered, an exercise of such a discretion must be made arbitrio bono viri… this entails that the decision of a good man is required; put differently, the majority are obliged to act reasonably and to exercise reasonable judgement”.
It, therefore, follows that the Trustees cannot unreasonably withhold permission. The Trustees should carefully consider any application to keep a dog and should discuss and consider the issue at a Trustee meeting. Trustees are obliged to individually consider each request for permission. They must base their decision of the facts and circumstances of the case. The resolution to either grant or refuse consent
should be recorded in the minutes of their meeting, giving reasons that illustrate that they have applied their minds to the application.
The current Rules do not create an absolute ban on the keeping of pets but rather grant the Trustees the discretion to consider such applications. Considering the above principles laid down by the court in the Laguna Ridge matter, it is clear that the Trustees took irrelevant considerations into account, and they ignored the relevant circumstances pertaining to the applicant’s request for consent. The manner in which the Trustees went about their decision-making process, as recorded in the communication between the parties, clearly indicates that the Trustee’s decision was flawed and is contrary to the tenets as set out in the NBS Boland case. They are not entitled to refuse an application on the basis that they are afraid of creating a precedent as referred to in the letter from the Managing Agent dated 18 October 2022, and as set out in their submissions. Similarly, the Trustees are not entitled to simply apply a general policy as in such circumstances the trustees had not truly applied their minds.
In general, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct and acting or deciding after the various possibilities have been considered. The exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures, or specific standards. The exercise of discretion and independent judgment implies that one has the authority to make an independent choice, free from immediate direction or supervision. However, discretion and independent judgment can be exercised even if the decision or recommendation is reviewed at a higher level.
When a decision hinges upon the exercise of discretion the reasons should be given. Such reasons should take into account those factors which are legally relevant to the issue in question and should not simply consider whether the facts of the case are the same as in a previously decided case. Such factors are determined by considering the purpose of the exercise of discretion in its context. The Adjudicator stated that he should only interfere in the manner in which the Trustees had exercised their discretion if it is decided that the Trustees had not exercised their discretion in accordance with the proper principles, or that they had done so in an unreasonable way and had thus exceeded the proper limits of their discretion.
The construction of Conduct Rule 1 suggests that when the Rules were adopted, members of the Body Corporate at the time deemed keeping dogs feasible within the Scheme, otherwise the Body Corporate would have opted for an absolute ban. Members decided to give Trustees the discretion to decide on a case-to-case basis whether the keeping of a pet should be allowed. It seems like the Trustees did not recognise the full worth of this discretion granted by Conduct Rule 1. This is evident from the approach adopted by the Trustees when they dealt with the Applicant’s request.
The Trustees reached their decision through an erroneous approach that since the establishment of the scheme in 1996, the mandate from the owners was and always has been that no dogs must be permitted. From this approach, it is clear that the Trustees ignored Conduct Rule 1 which permitted the keeping of dogs with Trustee consent. It is evident that the Trustees laboured under the impression that under no circumstances can dogs be kept in the scheme. This is evident in the broad reasons given by the trustees in denying consent as stated in the letter dated 18 October 2022. The letter dated 18 October 2022 does not reflect any reasoning process that the Trustees underwent in the Applicant’s request but rather adopted a general approach and general reasoning. The Trustee’s reasoning did not focus on the Applicant’s personal circumstances.
It is also evident from the letter dated 18 October 2022 that the Trustees decided Applicant’s application based on the proposed amendment of the Conduct Rule to disallow the keeping of dogs. The proposed amendment has not been effective yet. It is therefore clear that the application was decided on an intended proposition to amend the Conduct Rule and not on the existing Conduct Rule which allowed the keeping of dogs with trustee consent. The Trustees must therefore recognise and acknowledge the powers given to them by the Conduct Rules.
The Adjudicator decided that in the circumstances and on the totality of the evidence, there is sufficient evidence to warrant his interference with the Trustee’s decision and consequently the application was granted. This case does not set a precedent in the Scheme, as each case must be decided on its own merit. The Trustees must apply their minds to the circumstances of each case.
The order
The following order was made:
- The Trustees’ resolution refusing the Applicant’s request to keep her dog was declared invalid and was set aside.
- The order has the effect of a resolution or decision of the Trustees in terms of Conduct Rule 1 applicable to the Scheme. As such the Applicant’s request to keep her dog was approved subject to conditions.
- The Trustees were ordered to formulate and furnish the Applicant with conditions of the approval.
- The Trustees were ordered to furnish the Applicant with such conditions within 14 days from the date of the order.
