THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 149/2022
In the matter between:

THE BODY CORPORATE OF MARSH ROSE
(SECTIONAL TITLE SCHEME NO: SS269/2012)
APPELLANT

and

ARNO STEINMULLER
FIRST RESPONDENT

THE STANDARD BANK OF
SOUTH AFRICA LIMITED
SECOND RESPONDENT

THE SHERIFF OF HALFWAY HOUSE
THIRD RESPONDENT

HAASBROEK & BOEZAART
INCORPORATED
FOURTH RESPONDENT

Neutral citation: The Body Corporate of Marsh Rose v Steinmuller and Others
(149/2022) [2023] ZASCA 143 (2 November 2023)
Coram:
DAMBUZA AP, ZONDI, MOLEMELA, GOOSEN and MOLEFE
JJA
Heard:
15 March 2023
Delivered: 2 November 2023

Summary:  Property law – Sectional Titles Act 95 of 1986 – reliance on transfer
registration embargo established in terms of s 15B(3)(a)(i)(aa) of the Sectional
Titles Act – whether purchaser at a sale in execution is entitled to challenge the
amount payable to a body corporate and to compel issue of clearance certificate.

ORDER

On appeal from: Gauteng Division of the High Court, Johannesburg (Matojane
J with Nichols AJ concurring and Adams J dissenting, sitting as court of appeal):
1 The National Association of Managing Agents NPC is granted leave to
intervene in the appeal as co-appellant.
2 The costs occasioned by the opposition to the application to intervene are to be
paid by the first respondent.
3 The appeal is upheld with costs, including the costs of two counsel where so
employed.
4 The order of the full court is set aside and replaced with the following order:
‘1. The appeal is upheld with costs, including the costs of two counsel where so
employed.
2. The order of the high court is set aside and replaced with an order dismissing
the application with costs, including the costs of two counsel where so employed.’

JUDGMENT

Molefe and Goosen JJA (Dambuza AP, Zondi and Molemela JJA
concurring):

Introduction
[1] This appeal concerns the interpretation of s 15B(3)(a)(i)(aa) of the
Sectional Titles Act 95 of 19861 (the Act) (hereinafter the ‘embargo provision’)

1 Section 15B(3)(a)(i)(aa) of the Sectional Titles Act 95 of 1986 provides that:
‘(3) The registrar [of deeds] shall not register a transfer of a unit or of an undivided share therein, unless there is
produced to him –
(a) a conveyancer’s certificate confirming that as at date of registration –

in the context of a sale in execution. For a property in a sectional title scheme to
be transferred into the name of a purchaser, the body corporate must issue a
clearance certificate. The embargo provision, however, entitles a body corporate
to refuse to issue such certificate until all moneys owed to it in respect of the
property have been paid, or provision has been made, to the satisfaction of the
body corporate, for the payment thereof.

[2] The appeal is against the decision of the Full Court of the Gauteng Division
of the High Court, Johannesburg (the full court), which ordered the appellant, a
sectional title body corporate, to issue a clearance certificate in respect of a
property sold in execution, against the security of an amount paid into the
purchaser’s (the first respondent) attorneys’ trust account, pending the outcome
of proceedings to be instituted by the appellant for the recovery of amounts owing
in respect of the property. The appeal is with the special leave of this Court.

The facts
[3] On 30 January 2018, the first respondent, Mr Steinmuller, purchased unit
24 of the sectional title scheme Marsh Rose (the property) at a sale in execution
conducted by the third respondent, the Sheriff of Halfway House (the Sheriff).
The property had been attached and sold in execution at the instance of the second
respondent, the Standard Bank of South Africa Limited (Standard Bank). Prior to
the sale in execution, the appellant, the Body Corporate of Marsh Rose (the body
corporate), had also taken judgment against the previous owner of the property in
an amount of R43 380.09. The judgment debt was still outstanding when Mr
Steinmuller bought the property at the sale in execution.

(i)(aa) if a body corporate is deemed to be established in terms of section 2(1) of the Sectional Titles Schemes
Management Act, that body corporate has certified that all moneys due to the body corporate by the transferor in
respect of the said unit have been paid, or that provision has been made to the satisfaction of the body corporate
for the payment thereof.’

[4] During February 2018, the body corporate provided Mr Steinmuller with
an amount that it alleged was due to it in respect of the property in the sum of
R312 903.21 (the clearance figures) to be paid before it would issue the clearance
certificate. On 19 February 2018, Mr Steinmuller’s attorneys requested the body
corporate to provide documents upon which the aforesaid amount was based,
together with all the resolutions authorising the levying of the charges reflected
in the clearance figures. On 17 April 2018, the body corporate provided Mr
Steinmuller’s attorneys with a reconciled account in the amount of R295 044.81,
which included charges for levies, water consumption and sewerage services, an
arrear cost liability, interest charges and legal fees.

[5] Mr Steinmuller, was, in terms of clause 4.4 of the conditions of sale in
execution, obliged to pay all levies due to the body corporate in terms of the Act,
or amounts due to a homeowners’ association or other association which rendered
services to the property. He refused to pay any amount other than the levies due
to the body corporate and demanded that he be furnished with the ledgers
detailing the amounts claimed in respect of levies for the relevant period, as well
as resolutions by the body corporate trustees in respect of the interest charged
thereon.

The litigation
[6] The body corporate refused to supply the information requested on the
basis that Mr Steinmuller was not the owner of the property and was thus not
entitled to the information. This led to Mr Steinmuller launching an application
in the Gauteng Division of the High Court, Johannesburg (the high court) for an
order that the body corporate sign all papers, and take all the steps necessary to
facilitate the transfer of the property into his name, and that an amount of
R150 000 be paid by him into his attorney’s trust account as security in relation
to the levies due to the body corporate.

[7] The high court, per Wanless AJ, granted the order. It increased the tendered
amount of R150 000 and ordered him to pay R250 000 into his attorney’s trust
account as security to be held for any claim that the body corporate might have
in respect of the property. The R250 000 was calculated by specifically excluding
the judgment debt amount of R43 380.09 which had been obtained by the body
corporate against the previous owner of the property. The high court held that a
judgment debt is not a debt owed to the property. The order further provided that
the body corporate was to institute an action or refer to arbitration its claim against
Mr Steinmuller and any other party in respect of the property, within ten days of
the granting of the order.

[8] On appeal by the body corporate, the full court held that under the embargo
provision a transferee could make provision for payment of a debt owed to the
body corporate as at date of registration, instead of making the actual payment,
provided that such arrangement is to the satisfaction of the body corporate. The
full court found further that the high court was entitled to assess whether the
security in the form tendered by Mr Steinmuller was sufficient to oblige the body
corporate to issue the clearance certificate. The full court accordingly dismissed
the appeal with costs.

Intervention application
[9] At the hearing of the appeal before this Court, the National Association of
Managing Agents NPC (NAMA), a registered non-profit company comprising of
approximately 400 members, sought leave to intervene as co-appellant. Its
intervention application was premised on its status as a representative of property
managing agents, regional and national service providers, and community scheme
members. NAMA’s contention was that: (a) the judgment debt owed by the
previous owner retains the character of the underlying causa as an amount due in

respect of the property; (b) the security put up by Mr Steinmuller does not satisfy
the requirements of the embargo provision; and (c) it would be impossible for the
body corporate to produce the clearance certificate so that transfer can take place.

[10] Mr Steinmuller opposed NAMA’s intervention application on the basis
that, firstly, NAMA does not have a direct and substantial interest in the subject
matter of the appeal, other than a purely financial interest. And secondly, that
NAMA wished to re-litigate the same issues that were ventilated in the high court,
and that would prejudice him by delaying the prosecution of the appeal.

[11] The law regarding leave to intervene requires the applicant to show that it
has some right which is affected by the order issued. This was articulated by the
Constitutional Court as follows:
‘It is now settled that an applicant for intervention must meet the direct and substantial interest
test in order to succeed. What constitutes a direct and substantial interest is the legal interest in
the subject-matter of the case which could be prejudicially affected by the order of the Court.’2

[12] It is recognised in our law that associations that exist to promote the
interests of their members have the power to intervene in litigation that affects
those interests.3 NAMA submitted that it brings this application to assert and
protect the rights of its members who may be prejudiced by the judgment of this
Court, especially the rights encapsulated in the embargo provision.

[13] The full court found that the debt for arrear levies owing by the erstwhile
owner is ‘converted’ into a simple judgment debt payable by the erstwhile owner,
which does not impede the transferability of the property to Mr Steinmuller. In

2 South African Riding for the Disabled Association v Regional Land Claims Commissioner and Others [2017]
ZACC 4; 2017 (5) SA 1 (CC); 2017 (8) BCLR 1053 (CC) paras 9-10.
3 Johannesburg Society of Advocates and Another v Nthai and Others [2020] ZASCA 171; 2021 (2) SA 343
(SCA); [2021] 2 All SA 37 (SCA) para 33.

this Court, NAMA argued that this finding has the effect of watering down the
security offered to body corporates in terms of the embargo provision, in that
legal costs no longer attach to the property and judicial novation has taken place.
It was contended that bodies corporate may then be left in the invidious position
that they cannot recover amounts due by an erstwhile owner who has no property
to satisfy the judgment debt. The findings of this Court, NAMA argued, will
influence the issuing of clearance certificates, and in turn the transfer of properties
by the Registrar of Deeds, and this will, in turn, adversely affect the property
industry in the country.

[14] Mr Steinmuller’s contention that NAMA may not intervene because it only
intends to ‘re-litigate’ the application, has no merit. It is not a requirement of an
application to intervene that the intervening party may only refer to an issue that
has not been raised by the parties to the litigation, and/or that it is limited to the
introduction of new perspectives to the court or arguments not advanced by any
other parties.4 The issue of the contractual undertaking will only raise a new angle
for consideration in determining Mr Steinmuller’s liability (if any) to pay the
body corporate. NAMA’s intervention will also not prejudice Mr Steinmuller, as
there will not be any delay in the prosecution of the appeal. The hearing of the
intervention application was heard on the same day as the appeal.

[15] The legal interest advanced by NAMA on behalf of its members satisfies
the requirements set out by the Constitutional Court. We are therefore satisfied
that NAMA made out a proper case to intervene in this appeal as co-appellant and
is accordingly admitted. There was, in our view, no proper basis to resist the
intervention application. The costs occasioned by the opposition, if any, ought to
be paid by Mr Steinmuller.

4 Nash and Others v Cadac Pension Fund (In Curatorship) and Others [2021] ZASCA 144 (SCA) para 18.

The issues on appeal
[16] The appeal turns upon a narrow compass. The primary question concerns
the status of the parties and, by extension, whether the body corporate’s reliance
upon the statutory embargo is open to challenge at the instance of Mr Steinmuller.
A secondary question concerns the terms of the order of the high court which, as
we shall demonstrate, cannot stand irrespective of the interpretation given to the
embargo provision.

[17] The statutory embargo provided by s 15B(3)(a)(i)(aa) of the Act is, in
form, similar to that provided by s 118(2) of the Municipal Systems Act. It serves
broadly similar purposes. Its operation and effect, however, provides protection
for a particular class of property owners who hold units of property as individual
owners within a sectional title scheme and as co-owners of common property in
such scheme. A body corporate, established or deemed to be established in terms
of the Act, is not an owner of property. It manages the common property on behalf
of the common owners.

[18] The purpose of the embargo provision is to assist bodies corporate in
recovering amounts owed by the owners of the units in the scheme, without the
necessity of resorting to expensive and time-consuming litigation. In Willow
Waters Homeowners Association (Pty) Ltd v Koka NO and Others (Willow
Waters),5 this Court was concerned with an embargo provision similar to the one
in s 15B(3)(a)(i)(aa) of the Act, which was incorporated in a title deed. It
examined similar embargo provisions in s 89(1) of the Insolvency Act 24 of 1926
(the Insolvency Act), and s 118 of the Local Government: Municipal Systems Act

5 Willow Waters Homeowners Association (Pty) Ltd v Koka NO and Others [2014] ZASCA 220; 2015 (5) SA 304
(SCA); [2015] 1 All SA 562 (SCA).

32 of 2000 (the MSA).6 In terms of s 118 of the MSA, the registrar may only
register the transfer of an immovable property upon the production of a certificate
issued by the municipality confirming that all moneys due to the municipality
have been paid. This Court held that:
‘It is accepted that these statutory embargoes serve a vital and legitimate purpose as effective
security for debt recovery in respect of municipal service fees and contributions to bodies
corporate for water, electricity, rates, and taxes etc. Thus, they ensure the continued supply of
such services and the economic viability and sustainability of municipalities and bodies
corporate in the interest of all the inhabitants in the country.’7

[19] Mr Steinmuller purchased a unit in a sectional title scheme at a sale in
execution in 2018. The sale was authorised by a court order obtained at the
instance of Standard Bank against the registered owner of the unit. The sale was
subject to published conditions of sale8 which provided that the purchaser was
liable to pay the purchase price, amounts due to the municipality, transfer costs
and commission, and:
‘4.4.2 All levies due to a Body Corporate in terms of the Sectional Titles Act, 1986 (Act No.
95 of 1986) or amounts due to a Home Owner’s or other association which renders services to
the property.’

[20] When property is sold in execution, a contract comes into existence
between the sheriff who gives effect to the court order and the purchaser whose
bid is accepted. The execution creditor (in this case Standard Bank) is not a party
to the contract. The obligation to pay the purchase price and other stipulated
monies and to comply with the conditions of sale rests upon the purchaser.9  This
is a contractual obligation.

6 Ibid para 24.
7 Ibid para 25.
8 Published in terms of Rule 46(8).
9 Cf Rule 46(11) which provides for summary cancellation of the sale by a judge upon a report of the sheriff,
should the purchaser not comply with their obligations.

[21] In Mpakathi v Kgotso Development CC and Others10, this Court stated that:
‘The purpose of execution is the enforcement of the court’s judgment; to which end the
proceedings are driven throughout by the judgment creditor for its exclusive benefit (subject to
the rights of preferent creditors), through the Sheriff acting in his or her executive capacity.’

[22] Rule 46 (13) provides that the sheriff shall give transfer of the property
against payment of the purchase price and upon performance of the conditions of
sale. The sheriff is empowered to do everything necessary to effect registration
of transfer and anything so done is as effective as if the sheriff was the owner of
the property. In Ivoral Properties (Pty) Ltd v Sheriff, Cape Town, and Others,11
it was held:
‘A Sheriff may not sell immovable property attached pursuant to duly executed writ of
execution otherwise than by way of a public auction and his authority is created and
circumscribed by the provisions of Uniform Rule 46 (see Schoerie NO v Syfrets Bank Ltd and
Others 1997 (1) SA 764 (D) at 771G; 773J-774A). When a Sheriff disposes of property in
pursuance of a sale in execution he acts as an ‘executive of the law” and not as an agent of any
person. When a Sheriff, as part of the execution process, commits himself to the terms of the
conditions of sale, he, by virtue of his statutory authority, does so in his own name and may
also enforce it on his own (see Sedibe and Another v United Building Society and Another 1993
(3) SA 671 (T) at 676A-C). A sale in execution of immovable property entails two distinct
transactions namely, the sale itself and the passing of transfer pursuant thereto (see Schoerie
NO v Syfrets Bank Ltd (supra) at 778A-B). Although Uniform Rule 46 does not specifically
empower a Sheriff to institute proceedings in order to enforce the contract embodied in the
conditions of sale, such power is implicit in the duty to see that transfer is passed and the
provisions of Uniform Rule 46(13) which impose an obligation upon him to do anything
necessary to effect registration of transfer. If that were not so the Sheriff’s only remedy, in the
event of a purchaser failing to carry out any of his or her obligations under the conditions of
sale, would be to approach a Judge in Chambers for the cancellation thereof in terms of
Uniform Rule 46(11) and would allow recalcitrant purchasers at sales in execution to avoid
their obligations almost with impunity.’

10 Mpakathi v Kgotso Development CC and Others [2006] 3 All SA 518 (SCA); 2005 (3) SA 343 (SCA) para13.
11 Ivoral Properties (Pty) Ltd v Sheriff, Cape Town, and Others 2005 (6) SA 96 (C) para 66. Cf Menqa v Markom
[2008] 2 All SA 235 (SCA) para 27 fn 17.

[23] If a purchaser does not fulfil a condition of sale, the sheriff may either seek
cancellation of the sale in terms of rule 46 (11) or enforce the terms of the sale
agreement. Rule 46(14) regulates the process of distribution of the proceeds of
the sale which are collected by the sheriff. It requires payment of the proceeds
into an account administered by the sheriff and the production of a plan of
distribution in accordance with the scheme of preference applicable to writs of
attachment filed with the sheriff. Unlike the embargo provision created by s 118
of the Municipal Systems Act, the embargo in this case does not establish a
preferent claim except in relation to its effect in insolvency.12 This does not
detract from the vital purpose served by the embargo provision.13

[24] In this case the conditions of sale provided for recovery, by the sheriff, of
levies payable to the body corporate as a component of the consideration payable
by the purchaser. It is against this backdrop that the issues raised in the appeal
must be decided. Following the sale in execution, the body corporate provided an
account of the monies payable to it. Mr Steinmuller, however, raised queries
about the amount due and after further details were furnished regarding the
calculation of the amount, he objected to payment of that which the body
corporate said was payable. He sought information, including resolutions adopted
by the body corporate to raise interest upon outstanding levies and similar
records. When the body corporate refused to provide this information, he
launched the application before the high court.

12 Nel NO v Body Corporate of the Seaways Building and another (Nel) 1996 (1) SA 131 (A); First Rand Bank
Limited v Body Corporate: Geovy Villa (Geovy Villa) [2004] 1 All SA 259 (SCA) para 22, 27.
13 Cf. Nel and Geovy Villa fn 12 above. See also Willow Waters fn 5 above.

[25] Mr Steinmuller’s right to take transfer of the property arises from contract.
He only acquires an enforceable right upon fulfilment of the conditions of sale.
His right operates against the sheriff and not the body corporate. It is the sheriff
who must determine whether Mr Steinmuller has fulfilled his obligations. And if
he has not fulfilled his obligations, then it is for the sheriff to enforce the
contractual obligations or cancel the sale.

[26] The body corporate is not a party to the agreement of sale. The fact that
clause 4.4.2 of the conditions of sale refers to ‘levies’ and not, as in the language
of s 15B(3)(a)(i)(aa), to ‘all monies’ due to the body corporate, can have no legal
bearing upon the rights of the body corporate. The embargo confers upon the
body corporate a statutory right to resist transfer of a unit in the scheme until all
monies due to it have been paid or it is satisfied that arrangements for their
payment have been made.

[27] In Barnard NO v Regspersoon van Aminie en ‘n ander,14 the question arose
whether the embargo covered not only arrear levies and interest, but 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 the body
corporate fell within the ambit of the protection afforded by s 15B(3)(a) of the
Act.15

14 Barnard NO v Regspersoon van Aminie en ‘n ander [2001] 3 All SA 433 (A).
15 Ibid para 15 – 18.

[28] Assuming, therefore, that the conditions of sale limit what Mr Steinmuller
is contractually bound to pay (as was contended by him in disputing the account
of the body corporate), his payment of that limited amount might entitle him to
demand that the sheriff give transfer. He cannot, however, demand that the body
corporate should accept his limited payment and therefore provide a clearance
certificate upon which transfer could occur. That is so, for the simple reason that
unless the contract of sale binds the body corporate, its statutory right remains
unaltered. Mr Steinmuller’s contractual right to transfer cannot limit the body
corporate’s statutory right to refuse to issue a clearance certificate until all monies
due to it are paid.

[29] To give transfer, the sheriff must obtain a conveyancer’s certificate that all
monies due to the body corporate have been paid. The body corporate would, as
a matter of law, remain entitled to refuse to provide the certificate until the
conditions of the embargo are met. There could be no suggestion that it was acting
unreasonably or unlawfully. The only question that could then arise, is whether
the conditions of sale stipulated by Standard Bank and published prior to the sale
in execution binds the body corporate. That was not, however, what this case was
about. The effect is that whatever dispute there may notionally be regarding what
is due to the body corporate, it is not a dispute to which Mr Steinmuller is a party.
He has no legal interest in that dispute.

[30] His right to compel transfer of the property lay against the sheriff. To
obtain it he was required to establish that he had met the conditions stipulated by
the contracting party. Mr Steinmuller, however, sought no relief against the
sheriff. This brings us to the orders which were granted by the high court.

[31] Paragraph 1 of the high court order provides that:

‘The [the body corporate] is to sign any and all papers and take any steps necessary, for the
transfer of the property known as Section 24 of the Sectional Scheme Marsh Rose, SS269/2012,
Country View Extension 1 Township (‘the property’), to [Mr Steinmuller], subject to paragraph
2 hereof.’

[32] One is immediately struck by the fact that the order requires the body
corporate to give transfer of the property. Yet, the body corporate is not the
registered owner of the property and cannot give transfer as ordered. Furthermore,
the property is the subject of attachment at the instance of Standard Bank and has
been sold at a sale in execution. The provisions of rule 46, discussed above,
plainly confer upon the sheriff the functions of an executive of the law who is
authorised, for the purposes of transfer, to act as if the sheriff is the registered
owner of the property.

[33] Paragraph 1 of the order is, in this context, not a competent order and
cannot stand. Notionally, what the order seeks to achieve is that the body
corporate must consent to a conveyancer’s certificate being issued in terms of the
embargo provision. For the reasons already explained, that relief is not available
to Mr Steinmuller.

[34] Paragraphs 2, 3, 4, 5 and 6 deal with the provision of security for the
payment of a claim which the body corporate is required to institute against Mr
Steinmuller ‘and any other party’. This aspect of the case elicited considerable
debate about the meaning of that phrase which contemplates provision being
made to the satisfaction of a body corporate, for the payment of the amount due
to it. The debate concerned whether it encompassed the provision of security, as
may be regulated by a court, for payment of a disputed amount claimed by a body
corporate.

[35] In our view we do not reach that question because, as we have found, Mr
Steinmuller has no legal interest in the determination of the amount claimed by
the body corporate, nor whether it was due and payable. There are, in any event,
inherent difficulties with the orders granted by the high court which are
dispositive.

[36] The order stipulates an amount to be provided for security against a claim
to be instituted by the body corporate. The body corporate, however, has no claim
against Mr Steinmuller, nor any person other than the registered owner of the
unit. Its claim relates to charges and levies against the property which were raised
in terms of the Act. Such claim cannot lie against Mr Steinmuller, nor against
Standard Bank or the sheriff. Section 15B does not create a statutory claim against
a purchaser to whom transfer must be given. It is an embargo provision which
provides security for the payment of amounts due by the owner of the unit. It
serves to compel payment of those amounts by preventing the owner from giving
transfer to a purchaser until the debt to the body corporate has been paid. The
operation of the embargo is not altered because the sale occurs by way of
execution or as part of the liquidation of an insolvent estate. As was observed by
this Court in Geovy Villa16, in the context of insolvency:
‘The practical effect of the statute is that, assuming the availability of funds, a body corporate
will be paid before transfer of immovable property is effected. A reasonable mortgagee and
body corporate might arrive at an accommodation where there are insufficient funds available
to cover the total of the debts owing to both parties – but neither is obliged in law to do so.’

[37] The order requiring institution of action by the body corporate against Mr
Steinmuller cannot, as a matter of law, be carried into effect. It follows that the
appeal must succeed. Insofar as costs are concerned those should follow the result
and include the costs of two counsel where employed.

16 Geovy Villa fn 12 above para 26.

[38] We make the following order:
1 The National Association of Managing Agents NPC is granted leave to
intervene in the appeal as co-appellant.
2 The costs occasioned by the opposition to the application to intervene are to be
paid by the first respondent.
3 The appeal is upheld with costs, including the costs of two counsel where so
employed.
4 The order of the full court is set aside and replaced with the following order:
‘1. The appeal is upheld with costs, including the costs of two counsel where so
employed.
2. The order of the high court is set aside and replaced with an order dismissing
the application with costs, including the costs of two counsel where so employed.’

__________________
D S MOLEFE
JUDGE OF APPEAL

__________________
G GOOSEN
JUDGE OF APPEAL

Appearances

For the appellant:
K Lavine and A Naidoo
Instructed by
Alan Levy Attorneys Inc, Johannesburg

Matsepes Attorneys, Bloemfontein

For the first respondent:
C van der Merwe
Instructed by:
Vermaak Marshall WellBeloved Inc, Johannesburg

Phatshoane Henney Attorneys, Bloemfontein

For the intervening party:
J P Daniels SC and A Kohler
Instructed by:
Schuler Heerschop Pienaar Attorneys, Johannesburg

Lovius Block Inc, Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL
From:
The Registrar, Supreme Court of Appeal
Date:

2 November 2023
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does not
form part of the judgments of the Supreme Court of Appeal
The Body Corporate of Marsh Rose v Steinmuller and Others (149/2022) [2023] ZASCA 143 (2
November 2023)

The Supreme Court of Appeal (the SCA) today upheld an appeal against an order of the full court of
the Gauteng Division of the High Court, Johannesburg (the full court) which confirmed an order of the
high court, directing a body corporate to issue a clearance certificate to permit transfer of a unit in the
sectional title scheme.
Mr Steinmuller (who was the first respondent in the appeal) purchased a unit in the Marsh Rose
sectional title scheme at a public auction in January 2018. The property had been attached and sold in
execution by Standard Bank of SA Ltd (Standard Bank) pursuant to a judgment obtained against the
registered owner of the property. The conditions of sale stipulated that in addition to the purchase price,
Mr Steinmuller was obliged to pay ‘all levies’ due to the Body Corporate of Marsh Rose (the body
corporate). When Mr Steinmuller was informed of the amount payable, he objected. He called for a
detailed account. A detailed ledger was provided by the body corporate. Mr Steinmuller objected to the
interest charges, and legal costs which were included. He called for proof by the body corporate of
resolutions entitling it to raise interest, and documents proving the amounts due. The body corporate
refused to provide the information sought on the basis that Mr Steinmuller was not the registered owner
of the property.
Mr Steinmuller brought an application in the high court to direct the body corporate to take all steps
necessary to give transfer of the property. He tendered provision of security for the payment of amounts
due to the body corporate pending resolution of an action by the body corporate to claim payment from
him of amounts proved to be due. The tender of security was made to meet the requirements of s
15B(3)(a)(i) of the Sectional Titles Act 95 of 1986 (the Act).
Section 15B(3)(a)(i)(aa) provides that the registrar of deeds shall not register the transfer of a unit in a
sectional title scheme unless there is produced a conveyancer’s certificate confirming that the body
corporate has certified that ‘all monies due’ by the transferor have been paid or that provision has been
made for payment.
The high court granted an order compelling the body corporate to furnish the certificate. It ordered Mr
Steinmuller to pay an amount of R250 000 into his attorney’s trust account. This amount was to be held
in trust as security for payment of the amounts due to the body corporate. The high court ordered the
body corporate to institute either action proceedings or an arbitration claim against Mr Steinmuller within
10 days of the order to permit the determination of the amount due to it.
The body corporate appealed to the full court. The full court, in a split decision, dismissed the appeal,
thereby confirming the high court’s order.

Special leave to appeal was granted by the Supreme Court of Appeal (the SCA). At the hearing of the
appeal, the National Association of Managing Agents NPC (NAMA), applied for leave to intervene in
the appeal. NAMA averred that it represented a significant number of managing agents of bodies
corporate. Its members had a direct interest in the interpretation of s 15B(3) of the Act and its application
in circumstances such as the present. It averred that the order of the high court would have profound
consequences for bodies corporate and that it would render the statutory embargo protection
ineffective.
The SCA granted an order admitting NAMA as a co-appellant. It ordered Mr Steinmuller to pay the costs
of opposition to the application.
Regarding the merits of the appeal, the SCA found that the position and interests of the parties was
regulated by Rule 46 of the Uniform Rules. The Sheriff was empowered by a court order permitting
execution to sell the property by public auction. Standard Bank, as the execution creditor, was entitled
to stipulate conditions of sale. The conditions of sale constituted the terms upon which Mr Steinmuller
entered into the contract to purchase the property. The SCA held that the contract, as a matter of law,
was concluded between Mr Steinmuller and the Sheriff. It stated that upon performance of his
contractual obligations, Mr Steinmuller was entitled to cancel performance by the Sheriff. Equally, it
held the Sheriff was entitled to compel performance by Mr Steinmuller. Neither Standard Bank, nor the
body corporate were parties to the contract.
The SCA held that Mr Steinmuller had no legal interest in the determination of the amount due to the
body corporate. The debt owed to the body corporate was that owed by the registered owner of the
unit.
The SCA further held that even if it was accepted that the conditions of sale obliged Mr Steinmuller only
to pay ‘levies’ rather than ‘all monies’ due to the body corporate, that the contractual term did not limit
the statutory right conferred upon the body corporate by s 15B(3)(a)(i)(aa). Mr Steinmuller’s claim to
transfer, assuming compliance with his contractual obligations, lay against the Sheriff and not the body
corporate.
The SCA further held that the high court order compelling the body corporate to give transfer was not
competent, since the body corporate was not the owner of the property. In any event, the transfer of the
property was regulated by Rule 46 since it involved a court ordered sale by the Sheriff as an executor
of the law. The SCA held that the broader question of provision of security did not arise. It stated that
the order requiring the body corporate to institute action against Mr Steinmuller to recover what was
due to it, was unsustainable since the body corporate had no cause of action against Mr Steinmuller.
The SCA therefore upheld the appeal. It replaced the high court order with one dismissing the
application with costs, including those of two counsel.
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