By Willie Roos, CEO of Stratafin and Sectional Title Law Specialist
In the dynamic landscape of sectional title governance, few issues cause more confusion and conflict than the lawful imposition and recovery of levies. Two High Court decisions, the recent Ashwood Centre BC v Haldenby and the earlier matter of Body Corporate of Central Park v Mosa, appear at first glance to be contradictory. However, a closer inspection reveals a crucial doctrinal difference. The distinction turns on the difference between legislative authority and procedural compliance.
Understanding the Statutory Framework
To properly appreciate the difference, we must begin with the Sectional Titles Schemes Management Act (STSMA). Section 3(1) assigns the obligation to raise levies to the body corporate, comprising of owner, through the budget approval process. Thereafter it is required in terms of the Act that the trustees have to pass a resolution adopting that budget (as required by section 3(2)) and only then does liability for contributions accrue. By contrast, special contributions under section 3(4) may be levied by trustees acting alone.
The following legislative sequence in respect of a validly raised levy is as follows:
- Owners approve budget
- Trustees adopt it via resolution
- Levy liability accrues (s 3(2))
Central Park: Compliance in Substance, Lapse in Procedure
In Central Park v Mosa, the Gauteng High Court dealt with a body corporate that had:
- Secured owner approval of the budget,
- Passed a valid trustee resolution adopting that budget,
- But failed to send notices required by PMR 25(1).
The court held that this procedural oversight could not override the statutory accrual of liability under section 3(2). Subordinate legislation, including prescribed management rules, cannot negate rights granted in the primary statute. Thus, judgment was granted against the unit owner.
The core finding is that the trustees did what the law required, they passed a resolution but failed to send notice to owners as is required by PMR 25 (1). The omission of notices was a procedural misstep, not a substantive failure.
Ashwood Centre matter: Substantive Legislative Failure
In contrast with the Central Park matter, in the Ashwood Centre BC v Haldenby matter, the body corporate relied on resolutions that:
- Were passed at AGMs, by owners, not trustees,
- Were later “ratified” by a document signed by only one trustee,
- Lacked formalities required by PMR 10 (two trustee or one trustee plus the managing agent signatures),
- Were not presented as independent resolutions of the trustees as a governance body.
The Court found that no valid trustee resolution existed. Since section 3(2) requires that levy liability accrues only from such a resolution, the claim had no legislative basis. No amount of procedural forgiveness could cure the absence of the core statutory trigger.
The core failure was thus as follows: No evidence of a proper trustee decision means legal basis to claim the levies.
A Cautionary Lesson for Bodies Corporate
The contrast between these cases underscores a vital lesson for all stakeholders in community schemes: The difference between a procedural mistake and a legislative omission is not merely academic—it is dispositive.
- If the trustees pass a resolution, minor procedural flaws like late notices or informal communication may not invalidate the claim.
- But if no resolution exists, or if it fails the statutory requirements (e.g., signatures, quorum, format), the right to recover levies does not arise at all.
Conclusion: Formalism, Function, and Fidelity to the Law
Ashwood Centre matter is not a rejection of pragmatism; it’s a reminder of the foundational importance of process that creates rights. The Central Park matter reminds us that minor administrative lapses should not defeat the lawful functioning of community schemes. Together, these judgments chart a balanced path forward for trustees, owners, and managing agents. To avoid the fate of Ashwood Centre matter, trustees must ensure that a formal, compliant resolution is passed and recorded and a failure to do so is not.
By Willie Roos, CEO of Stratafin and Sectional Title Law Specialist
