Case discussion on SS Glen High v Kruger NO (2023/055133) [2024] ZAGPJHC 1059 (10 September 2024)

Introduction

This case was heard on 28 August 2024 and decided on 10 September 2024 by De Beer AJ (Acting Judge of the High Court, Gauteng Division). The application was for summary judgment as embodied in rule 32 of the Uniform Rules of Court.

The Parties

The Applicant is a body corporate duly established by virtue of its registration in terms of the Sectional Titles Act. The Respondent acts ex officio as the duly appointed executor of the Estate Late Takesure Tembo (“Tembo”) who was the registered owner of Unit in the Scheme. Tembo became a member of the Body Corporate by virtues of section 2(1) of the Sectional Titles Schemes Management Act 8 of 2011 (the “STSM Act”).

The Applicant’s case

The Applicant in the supporting affidavit relies on a deponent who acts as the manager, employed by its managing agent, and who has all the documentation under his control. The deponent claims to have access to and personal knowledge of the same. The Applicant relies on the fact that the monetary value of its claim is capable of prompt and easy ascertainment or calculation. The statements presented for prompt calculation are annexed to the supporting affidavit.

The body corporate’s function to collect levies

The functions of a Body Corporate are specifically set out in section 3 of STSM Act, which stipulates that the Body Corporate must:

“3.1. establish and maintain both an administrative and reserve fund;

3.2.  require owners, whenever necessary, to make contributions to such funds, which includes the provisions of electricity, water, and sewage, where the owners concerned are responsible for such funds;

3.3.  determine amounts to be raised for the purpose of such administrative and reserve funds, as well as contributions towards electricity, water, and sewage, where the owners concerned are responsible for such funds; and

3.4.  determine such administrative and reserve fund contributions in proportion to an owner’s participation quota.”

In terms of section 3(2), Tembo, by virtue of his membership to the body corporate, is liable to make payment to the body corporate for all contributions levied by the Body Corporate, together with all charges relating to utilities and consumption charges on a monthly basis.

In terms of section 4(i) of the STSM Act, a body corporate is entitled to do all things reasonably necessary for the enforcement of the rules and for the management and administration of the common property. The STSM Act, and particularly sections 3 and 4 thereof remain binding on the owner, and any failure on the part of any owners of any section to ensure that payment of the levies or any other amounts due to the body corporate is paid as such, the body corporate shall be entitled to claim same from the owner. 

The Applicant has the authority, as set out in section 3(2) to appoint its managing agent. In terms of section 4(a) of the STSM Act, a body corporate shall have the powers to appoint such managing agents and employees as the Applicant deems fit. Accordingly, the Applicant through is managing agents, imposed levies, community scheme ombud service levies, special levies and legal costs recovering arrear contributions in an amount of R 322 966.82. The Applicant in its supporting affidavit relies on the manager employed by the managing agent that stated that: “All the documentation pertaining to this application is under my control. I have access thereto, and indeed possess personal knowledge thereof. I am able to depose to all aspects pertaining to this matter under oath and hereby duly do so. Where I rely on information conveyed to me by others, I believe such information to be correct and have no reason to believe otherwise”. He continues and confirms the cause of action and the indebtedness in the amount of R 322 966.82 by attaching statements detailing the amounts and/or charges levied, being the total amount which consists of outstanding levies, community schemes ombud services levies, special levies, interest related charges, and legal costs in terms of the mandate entrusted upon him.

The Respondent’s opposition

The Respondent opposed the summary judgment application by raising three defences to the prevent the granting thereof.

1. Lack of personal knowledge

The Respondent incorrectly contends that the deponent refers to himself as the appointed portfolio manager of the Plaintiff. On the evidence, the deponent refers to himself as the duly appointed portfolio manager of the Applicant, employed with the Managing agent of the Applicant.

The Respondent contended further that a portion of the amount claimed emanates from outstanding charges, levies and special levies imposed through a previous managing agent, Norma Wallace Property Management. The duties have subsequently been taken over by the current managing agent, Earle Blue. The Respondent argued that the deponent had insufficient personal knowledge and is unable to verify the correctness of total amount of R 322 966.82. The Respondent submitted that the confirmation aforesaid amounts to inadmissible hearsay evidence and on which no reliance can be placed.

In Maharaj v Barclays National Bank Ltd, Corbett JA, in considering the requirement that the affidavit should be made by the plaintiff himself ‘or by any other person who can swear positively to the facts’, stated:

“Concentrating more particularly on requirement (a) above, I would point out that it contemplates the affidavit being made by the plaintiff himself or some other person who can swear positively to the facts. In the latter event, such other person’s ability to swear positively to the facts is essential to the effectiveness of the affidavit as a basis for summary judgment; and the Court entertaining the application therefor must be satisfied, prima facie, that the deponent is such a person. Generally speaking, before a person can swear positively to facts in legal proceedings they must be within his personal knowledge. For this reason the practice has  been adopted, both in regard to the present Rule 32 and in regard to some of its provincial predecessors (and the similar rule in the magistrates’ courts), of requiring that a deponent to an affidavit in support of summary judgment, other than the plaintiff himself, should state, at least, that the facts are within his personal knowledge (or make some averment to that effect), unless such direct knowledge appears from other facts stated . . . . The mere assertion by a deponent that he can swear positively to the facts (an assertion which merely reproduces the wording of the Rule) is not regarded as being sufficient, unless there are good grounds for believing that the deponent fully appreciated the meaning of these words . . . . In my view, this is a salutary practice. While undue formalism in procedural matters is always to be eschewed, it is important in summary judgment  applications under Rule 32 that, in substance, the plaintiff should do what is required of him by the Rule. The extraordinary and drastic nature of the remedy of summary judgment in its present form has often been judicially emphasised . . . . The grant of the remedy is based upon the supposition that the plaintiff’s claim is unimpeachable and that the defendant’s defence is bogus or bad in law. One of the aids to ensuring that this is the position is the affidavit filed in support of the application; and to achieve this end it is important that the affidavit should be deposed to either by the plaintiff himself or by someone who has personal knowledge of the facts.Where the affidavit fails to measure up to these requirements, the defect may, nevertheless, be cured by reference to other documents relating to the proceedings which are properly before the Court . . . . The principle is that, in deciding whether or not to grant summary judgment, the Court looks at the matter at the end of the day on all the documents that are properly before it . . . .” [Own emphasis.]

In Rees and Another v Investec Bank  relying on Barclays National Bank Ltd v Love (quoted with approval in Maharaj at 424B – D) the following is said:

“We are concerned here with an affidavit made by the manager of the very branch of the bank at which overdraft facilities were enjoyed by the defendant. The nature of the deponent’s office in itself suggests very strongly that he would in the ordinary course of his duties acquire personal knowledge of the defendant’s financial standing with the bank. This is not to suggest that he would have personal knowledge of every withdrawal of money made by the defendant or that he personally would have made every entry in the bank’s ledgers or statements of account; indeed, if that were the degree of personal knowledge required it is difficult to conceive of circumstances in which a bank could ever obtain summary judgment.” [Own emphasis.] 

Taking the nature of the deponent’s office into consideration it suggests very strongly that he would in the ordinary course of his duties acquire personal knowledge of the outstanding levies, community schemes ombud services levies, special levies, interest related charges. The knowledge also further appears from other stated facts and documents that were placed before the Actig Judge. As per Shackleton Credit Management v Microzone Trading supra, first-hand knowledge of each and every fact is not required. Furthermore, trhe Respondent did not dispute the authenticity of any documents transferred from the erstwhile managing agent to the current one, nor did she raise or reflected incorrect computed amounts/levies charged. The Respondent solely relies on the ‘verification’ of the correctness thereof. The reliance on the ‘verification’ is without disputing the authenticity and correctness of the amounts. The total outstanding amount is in my view clear and capable of prompt ascertainment.

The managing agent, Earle Blue is a corporate entity responsible for managing the accounts of the Applicant and the deponent may well legitimately rely on the records in its possession, also those taken over by it. The Acting Judge confirmed that a new manager can verify the correctness of the amount. It is not to suggest that she would have personal knowledge of every amount levied or that she is responsible for every entry, but that she has it under her control. The levies, special levies and charges imposed were not disputed. The Acting Judge decided that the deponent had the requisite knowledge for the purposes of summary judgment.

• A premature institution of action because of a section 34(1) notice served in terms of the administration of estates act.

The question up for determination here was whether the delivering of a section 34(1) notice in terms of the Administration of Estates Act precludes a creditor from enforcing its claim against a deceased estate. In Nedbank Ltd v Steynit was held by Brand JA that the claims procedure provided for by the Administration of Estates Act does not prevent a creditor from instituting action. Counsel for the Respondent failed to provide case law that militates against this.

The delivering of a section 34(1) notice in terms of the Administration of Estates Act therefore does not deprive a creditor of his right to institute action. The Applicant may avail itself of the common-law remedies to claim an outstanding debt, and the failure to deliver a notice cannot serve as a defence in summary judgment proceedings.

• Claim that the amount is not liquidated

The Respondent disputed the liquidity of the amount with specific reference to the legal costs incurred in recovering outstanding levies and charges. Counsel for the Respondent referred to the management rule 25(5) “The body corporate must not debit a member’s account with any amount that is not a contribution, or a charge levied in terms of the Act or these rules without a member’s consent or the authority of a judgment or order by a judge, adjudicator or arbitrator.” [Own emphasis], and submitted that the legal costs in the amount of R 17 316.45 have not been taxed or agreed to as provided for in management rule 25(5) and therefore the amount cannot be construed as liquidated. Counsel for the Respondent incorrectly referred me to management rule 25(5), in fact rule 25(4) deals with reasonable legal costs and disbursements as taxed or agreed. Management rule 25(5), inter alia, deals with levying charges where a member consents to it.

The question of legal costs incurred by a body corporate in the collection of arrear levies and the recovery thereof came up for adjudication in previous judgments. The question of untaxed legal costs and whether it can be added to a member’s account together with other arrear levies and interest was raised in The Body Corporate Marsh Rose v Steinmuller and Others (“Marsh Rose”)Although the court was primarily concerned with this question to determine the issuing a levy clearance certificate for the purposes of section 15B(3)(a)(i)(aa), the principles enunciated nevertheless will apply to summary judgment matters.

In Marsh Rose, the majority judgment, with reference to the management subrules 25(4) and 25(5), per Motojane J, held:

“The amount of collection and legal costs claimed before a clearance certificate could be issued is R 57 395.80. These costs have not been taxed or agreed to as provided for in section 25(5) of the STSMA and are accordingly unlawfully levied as the amount is not due.” The minority judgement as per Adams J, however held: “Maybe it is apposite at this juncture to deal with the issue of the legal charges, which, according to the first respondent, should not be included in the payments due under s 15B(3)(a)(i)(aa). The trial court agreed with the first respondent on this issue. I don’t. I find support for my view in Barnard NO v Regspersoon van Aminie en ‘n Ander, in which the SCA held that, in giving expression to the intention of the provision [s 15B(3)(a)(i)(aa)] to give effective protection to the body corporate, it was clear that the contributions were covered by the provision and therefore the relevant legal costs also fell within the ambit of the provision. I am therefore of the view that the Body Corporate was entitled to insist on the legal costs being paid before issuing the clearance certificate. To say that these costs should have been taxed, as did the first respondent, is, in my view, not sustainable…” [Own Emphasis]

The aforesaid matter then served before the supreme court of appeal, Body Corporate, Marsh Rose v Steinmuller and Others  and with reliance on Barnard NO v Regspersoon van Aminie en ‘n Ander it was held that:

“ … the question arose whether the embargo covered not only arrear levies and interest, but also legal costs incurred by a body corporate in seeking to recover amounts due to it by the owner of a unit. This court held that the legislature intended to give to a body corporate effective protection. It reasoned that a body corporate was merely a collective of owners of units who shared expenses. If one owner fails to meet their obligations, the burden fell on others, hence the need for an effective remedy. This court concluded that legal costs incurred in recovery of amounts due to body corporate fell within the ambit of the protection afforded by s 15B(3)(a) of the Act.” [Own Emphasis]. Notwithstanding the costs being untaxed, it was held that it does form part and ought to be included and paid before a clearance certificate stands to be issued. The Supreme Court of Appeal did not directly labour upon the question of untaxed legal costs, but it would appear, followed and sustained the minority finding by Adams J, thereby implying that it is not necessary for the legal costs to be taxed. But it is prudent to note that the Supreme Court of Appeal in its judgment referred to ‘legal costs incurred’. Therefore, in my view where ‘legal costs are incurred’ by a Body Corporateit need not be taxed. Management rule 25(4) is qualified by the Supreme Court of Appeal where it refers to ‘as taxed’. It is clear from the Supreme Court of Appeal’s judgment that untaxed legal costs formed part of the monies due by a member. Thus, the legal costs incurred in recovering arrear amounts in casu need not be taxed for its inclusion to the levies and other charges for the purposes of summary judgment.

Section 15B(3)(a)(i)(aa) of the Sectional Titles Act confers upon a body corporate a statutory right to resist transfer of a unit in the scheme until all moneys due to it have been paid or it is satisfied that the arrangements for their payment have been made. The monies due are inclusive of legal costs. Therefore, the entitlement to add such costs to a members account is manifest.

The Acting Judge then looked to the wording rule 25(4) of the rules and regulations to the Sectional Title Scheme Management Act that stipulate that: “A member is liable for and must pay the body corporate all reasonable legal costs and disbursements, as taxed or agreed by a member, incurred by the body corporate in the collection of arrear contributions or any other arrear amounts due and owing by such member to the body corporate, or in enforcing compliance with these rules, the conduct rules of the Act.” [Own Emphasis]. The subrules 25(4) and 25(5) refer to either consent to or agreed by a member. The Acting Judge then stated that the question that must be answered then is what the ‘consent’ or ‘agreed to’ entails?

In this matter the conduct rules of the Body Corporate determine: “If the Body Corporate or the Trustees instruct a firm of Attorneys in connection with or arising out of any infringement by an occupant of any provision of these rules, such occupant shall be liable to reimburse the Body Corporate on demand for all its legal costs incurred in respect thereof on an Attorney Client basis.” [Own Emphasis]. The emphasis placed on reimbursement of costs incurred on an attorney client scale. The conduct rules are rules that the Respondent consented to upon becoming a member. There is an underlying agreement to be bound by it. The Respondent upon becoming a member ‘consented’ and/or ‘agreed’ to reimburse the body corporate on demand, for all its ‘legal costs incurred’, thereby, also further satisfying the requirements in subrules 25(4) and 25(5).

Accordingly, the legal costs incurred in this matter need not be taxed to be included in the claim. Subrules 25(4) and 25(5) are further satisfied in that the Respondent consented and or agreed that such legal costs so incurred be reimbursed which constitutes a liquidated amount for the purposes of summary judgment.

The Acting Judge then me drew a distinction between “legal costs incurred” and legal costs that are claimed by its primary source or provider, the legal representative. In the latter case it is trite law that attorney’s fees (legals costs) do not constitute a liquidated debt until ascertained and determined by taxation. See Blakes Maphanga Inc v OUTsurance Insurance Co Ltd. In the matter before me, the amount of legal costs was already incurred by the Body Corporate and stands to be reimbursed by the Respondent. By reason of it already having been incurred by the Body Corporate, it forms a liquidated amount that has been determined which needs not be taxed. It constitutes a liquidated amount that can be included in the determination of the liquidated amount owed for summary judgment purposes. Therefore, the untaxed legal costs could be included to form part of the monies due to the Applicant, and the total outstanding amount is capable of being promptly computed and established.

Decision on Respondent’s defence

The Respondent conceded that the amount is due and payable. The Respondent in her plea relies on the provisions of section 34 of the Administration of Estates Act as defence. She pleads that in the circumstances the claim is premature, and that Applicant ought to wait until the property is sold, thereby entitling the Applicant to place reliance on section 15B(3)(a)(i)(aa) of the Sectional Titles Act by refusing a clearance certificate until all outstanding monies are paid. The Respondent admits that the amount is due and payable, although not immediately. Accordingly, it was decided that Respondent was only causing a delay by filling a plea and opposing the summary judgment application.

The Respondent also does not dispute the authenticity of the documents utilised to determine the liquidated amount. There is ‘some onus of proof’ on a Respondent resisting summary judgment. The test is whether the opposing affidavit sets out facts which, if proved at the trial, will constitute a defence. The Respondent’s opposing affidavit failed to set facts which constitutes a defence.

In the exercise of a discretion on liquidity a court must not only look at the summons in order to decide whether a claim is for a liquidated amount of money; the defence disclosed in the defendant’s opposing affidavit must also be taken into account.  The Respondent’s defence does not bring about any doubt as to the amount claimed can be easily determined by way of a calculation.

A liquidated amount of money is an amount which is either agreed, or which is capable of speedy and prompt ascertainment, which is left to the individual discretion of a judge. The Acting Judge was satisfied that the amount for summary judgment purposed can be determined and is capable of being the subject of summary judgment.

In this matter, the Applicant had complied with the requirements of rule 32, and the Respondent had no bona fide, triabledefence and summary judgment was awarded.

The order

Summary judgment was awarded in the amount of R 322 966.82 with interest on the aforesaid amount at the rate of 11.25 % interest rate per annum from 08 June 2023 to date of payment. Costs of the suit on the magistrate’s court scale as between attorney and client which include VAT was awarded.

Conclusion

I am glad to see the application of the decision in Marsh Rose in the correct interpretation in Barnard No v Regspersoon van Aminie en ‘n Ander 2001 3SA 973 (SCA) paras 18-19, where it was clearly stated that monies due to the body corporate did not only include levies but also included legal costs incurred to recover the levies due on a unit was confirmed.

WRITTEN BY DR CARRYN DURHAM