THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case number : 521/06
Reportable

In the matter between :

BODY CORPORATE OF GREENACRES

APPELLANT

and

GREENACRES UNIT 17 CC

FIRST RESPONDENT
GREENACRES UNIT 18 CC

SECOND RESPONDENT

CORAM :
HARMS ADP, CLOETE, LEWIS, PONNAN et COMBRINCK JJA

HEARD :
13 NOVEMBER 2007

DELIVERED :     28 NOVEMBER 2007

Summary: Sectional Titles Act 95 of 1986: Arbitration: Management rule 71(1)
interpreted.

Neutral citation: This judgment may be referred to as Body Corporate of
Greenacres v Greenacres Unit 17 CC [2007] SCA 152 (RSA).

_________________________________________________________

CLOETE JA/

CLOETE JA:

[1] The appellant is the Body Corporate of Greenacres, a body corporate as
contemplated in s 36 of the Sectional Titles Act1 and to which it would be convenient
to refer as ‘the body corporate’. The first respondent is Greenacres Unit 77 CC
which, as its name implies, is the registered owner of unit 17 in the Greenacres
sectional title scheme. It would be convenient to refer to the first respondent as ‘the
owner’. The relief sought on appeal does not concern the second respondent (the
registered owner of another unit in the Greenacres sectional title scheme) and it
should not have been joined in these proceedings.

[2] The body corporate claims that it is owed levies and electricity charges in
respect of the unit by the owner. The owner’s defence to the claim is that it
undertook, at its expense, work for the completion of parts of the common property,
which the body corporate was obliged to undertake but which it had requested the
owner to perform; and that the body corporate’s claim was extinguished by set-off.
The parties’ rival contentions were set out in pleadings in an action instituted in the
Randburg Magistrate’s Court. Those proceedings were withdrawn by the body
corporate and arbitration proceedings instituted. The owner delivered a special plea
alleging that the latter proceedings were not competent in that only a court of law
could determine the body corporate’s claim. The arbitrator held that the dispute
between the parties was indeed arbitrable.  The court a quo (Snyders J), in a
judgment which has been reported as Greenacres Unit 17 CC v Body Corporate of
Greenacres,2 held the contrary at the suit of the owner who was the first applicant
before that court. The body corporate (which was the first respondent) has appealed
to this court with the leave of the court a quo.

[3] The legislative framework relevant to the appeal is the following. Section 35(1)
of the Act provides:

1 95 of 1986.
2 [2006] 4 All SA 78 (W).

‘A scheme shall as from the date of the establishment of the body corporate be controlled and
managed, subject to the provisions of this Act, by means of rules.’
Section 35(2) provides:
‘The rules shall provide for the control, management, administration, use and enjoyment of the
sections and the common property, and shall comprise ─
(a)
management rules, prescribed by regulation . . . .
(b)
conduct rules, prescribed by regulation . . . ‘.
Regulation 303 provides in subregulation (1) that4 the management rules as
contemplated in s 35(2)(a) shall be the rules set out in Annexure 8, and in
subregulation (5) that the conduct rules as contemplated in s 35(2)(b) shall be those
rules set out in Annexure 9, to the regulations. Regulation 39 provides:
‘The provisions of the Arbitration Act, 1965 (Act 42 of 1965), shall, insofar as those provisions can be
applied, apply mutatis mutandis with reference to arbitration proceedings under the Act.’
Management rule 71(1) was subsequently inserted5 into Annexure 8. It provides:
‘Any dispute between the body corporate and an owner or between owners arising out of or in
connection with or related to the Act, these rules or the conduct rules, save where an interdict or any
form of urgent or other relief may be required or obtained from a Court having jurisdiction, shall be
determined in terms of these rules.’
The rule goes on to provide for the procedure for arbitration and to prescribe time
limits within which steps are to be taken.

[4] The issue in the present proceedings revolves primarily around the correct
interpretation of the third saving provision in rule 71(1), namely:
‘Save where . . . any form of . . . other relief may be required or obtained from a Court having
jurisdiction.’
This provision cannot be interpreted literally as covering any relief which a court may
grant, for then it would be as wide as the rule itself and operate to negate it. That
would plainly be absurd.

[5] In my view the key to the interpretation of the provision at issue is the wide

3 Of the regulations made in terms of s 55 of the Act and contained in GN R664 published in
Government Gazette 11245 of 8 April 1988.
4 Subject to subregulations (2) and (3), which are irrelevant for present purposes.
5 By GN R1422 contained in Government Gazette 18387 of 31 October 1997.

wording of the operative part of the rule. The word ‘any’, which introduces the rule, is
‘a word of wide and unqualified generality’.6 Each of the phrases ‘arising out of’, ‘in
connection with’, and ‘related to’ is also of wide import and the combination of all
three evidences an intention on the part of the Legislature to cast the net as widely
as possible. The inclusion of the Act and the conduct rules with the management
rules is in itself an indication that the Legislature wished to regulate by arbitration
almost every dispute which might arise between a body corporate and an owner, and
between the owners themselves. The same intention appears from rule 71(8)7 which
reads as follows:
‘Notwithstanding that the Arbitration Act, No. 42 of 1965, makes no provision for joinder of parties to
an arbitration without their consent thereto, should a dispute arise between the body corporate and
more than one owner or between a number of owners arising out of the same or substantially the
same cause of action, or where substantially the same order would be sought against all the parties
against whom the dispute has been declared, such party shall be automatically joined in the
arbitration by notice thereof in the original notice of dispute given in terms of sub-rule (2).’

[6] Against this background the saving provision at issue should in my view be
interpreted narrowly as excluding only such relief as an arbitrator is not competent to
give, whether by virtue of the provisions of the Act or otherwise. The last part of the
rule should accordingly be read as follows: save where an interdict or any form of
urgent relief may be required, or other relief has to be obtained, from a court having
jurisdiction. The purpose behind the inclusion of the provision was in my view to
make it clear that although the operative part of the rule is to be interpreted widely for
the purpose of ascertaining what disputes have to be subjected to arbitration, it is not
to be interpreted as conferring jurisdiction on an arbitrator to grant all forms of relief
which may be sought consequent upon such determination; and accordingly, if the
relief sought cannot be granted by an arbitrator, arbitration on a dispute which would
otherwise fall within the operative part of the rule, would nevertheless not be
competent in terms of the rule.

6 Per Innes CJ in R v Hugo 1926 AD 268 at 271.
7 Inserted by GN R438 contained in Government Gazette 27561 published on 13 May 2005.

[7] So far as the Act is concerned, two examples may be given where an
arbitrator will not have jurisdiction: s 46 and s 48. Section 46 deals with the
appointment of an administrator who, to the exclusion of the body corporate, has
some or all of the powers of the body corporate. The discretion whether or not to
appoint an administrator, to determine which powers of the body corporate shall be
vested in the administrator, and to remove the administrator is vested in the court, ie,
in terms of the definition in s 1, the provincial or local division of the High Court
having jurisdiction. Section 48 deals with the destruction of, or damage to, building(s)
comprising the scheme. It confers wide powers on a court. A court may make an
order that the building(s) shall be deemed to have been destroyed8 and
‘impose such conditions and give such directions as it deems fit for the purpose of adjusting the effect
of the order between the body corporate and the owners and mutually among the owners, the holders
of registered sectional mortgage bonds and persons with registered real rights’9.
A court may also10 authorise a scheme for the rebuilding and reinstatement in whole
or in part of the building(s), and for the transfer of the interests of owners of sections
which have been wholly or partially destroyed, to the other owners; and in this regard
the court:
‘may make such order as it may deem necessary or expedient to give effect to the scheme.’
A dispute in relation to any of the matters in respect of which a discretion is vested in
the court by the Act could not be determined by an arbitrator acting under rule 71 of
the management rules, for such an interpretation of the rule would have the
impermissible consequence that the rule would conflict with the Act.

[8] More general examples of relief, which an arbitrator is not competent to give
and which the saving provision must also be interpreted as covering, would be an
order for the inspection or the preservation of property, pending the resolution of a
dispute relating to such property. The power to make such orders is conferred on a
court11 in terms of s 21(1)(e) of the Arbitration Act read with regulation 39 made

8 Section 48(1)(c).
9 Section 48(2).
10 Section 48(3).
11 Defined in s 1 of the Arbitration Act to mean any court of a provincial or local division having
jurisdiction.

under the Act quoted in para 3 above. An arbitrator acting under s 71(1) would not
have this power.

[9] It was submitted on behalf of the body corporate that because of the express
wording of the saving provision at issue (‘may be obtained’) the meaning to be given
to the saving provision should extend also to relief that may (not only must) be
sought from a court. That was the approach of the court a quo, which reasoned:12
‘[T]he saving provision has to be read to exclude interdictory relief, urgent relief and any other relief
which may be required or obtained from a court having jurisdiction. Other relief obtains practical
content if read with section 37(2) which empowers a body corporate to recover levies from an owner
by way of action in a court of competent jurisdiction. The recovery of levies is therefore relief which
may be required or obtained from a court having jurisdiction and would fall within the ambit of the
saving provision of rule 71(1).’
Section 37(2) provides:
‘Any contributions levied under any provision of subsection (1)13, shall be due and payable on the
passing of a resolution to that effect by the trustees of the body corporate, and may be recovered by
the body corporate by action in any court (including any magistrate’s court) of competent jurisdiction
from the persons who were owners of units at the time when such resolution was passed.’
The submission on behalf of the body corporate was that rule 71 (which makes
arbitration compulsory) cannot contradict s 37(2) (which permits an action in a court)
because a regulation which is inconsistent with the statute under which it was made,
is invalid under the Constitution according to the doctrine of legality.14 But properly
understood, the rule and the section deal with two different situations. In order for the

12 Above, n 2, at 80h-j.
13 Which obliges a body corporate to establish for administrative purposes a fund, and to require the
owners, whenever necessary, to make contributions to the fund for the purposes of satisfying any
claims against the body corporate.
14 Pharmaceutical Manufacturers Association of SA : In re ex parte President of the Republic of South
Africa 2000 (2) SA 674 (CC) para 50.

rule to operate, there must be a dispute.15 Absent a dispute ─ for example, where an
owner ignores a demand for payment of levies or simply refuses, without more, to
pay them ─ there can be no arbitration, as there is nothing for an arbitrator to
determine;16 and the body corporate is entitled to institute a court action in terms of s
37(2) for recovery of the levies. It was submitted on behalf of the body corporate that
this would give rise to an anomaly as an owner might raise a dispute in the court
proceedings and then require arbitration.17 But such a situation frequently arises in
the case of consensual arbitrations. What happens is that the court proceedings are
stayed, the dispute goes to arbitration and, if determined in favour of the claimant,
the consequent arbitral award can be made an order of court to enable the claimant
to execute against the respondent. The whole purpose of rule 71 is to provide an
expeditious and inexpensive method of determining disputes and the operative part
of the rule is formulated in wide terms, as I have already pointed out. I see no reason
why a dispute as to the liability of an owner to pay levies should be excluded from its
operation and there is in my view no basis to do so.

[10] For the sake of completeness I shall deal also with the argument advanced on
behalf of the body corporate. It was that the saving provision should be read as
being limited to an interdict, and other relief in connection with the interdict, granted

15 Rule 71(2) also provides for a ‘complaint’ to be referred to arbitration. The first reference to
‘complaint’ in the rule was inserted by GN R438 contained in Government Gazette 27561 published
on 13 May 2005. That rule now provides:
‘If such a dispute or complaint arises, the aggrieved party shall notify the other interested party or
parties in writing and copies of such notification shall be served on the trustees and the managing
agents, if any and should the dispute or complaint not be resolved within 14 days of such notice,
either of the parties may demand that the dispute or complaint be referred to arbitration . . .’.
(Underlining supplied.)
It may be that an arbitrator is called upon to investigate a complaint and act as a mediator; or it may
be that the complaint has to have given rise to a dispute before the services of an arbitrator must be
engaged (which is the view of Butler, The Arbitration of Disputes in Sectional Schemes under
Management Rule 71 (1998) vol 9 Stellenbosch Law Review 256 at 260). It is not necessary for the
purposes of the appeal to express any opinion in this regard.
16 Withinshaw Properties (Pty) Ltd v Dura Construction Co (SA) (Pty) Ltd 1989 (4) SA 1073 (A) at
1079B-G; Parekh v Shah Jehan Cinemas (Pty) Ltd 1980 (1) SA 301 (D) at 304E-G.
17 It is not necessary to consider the position where no demand for arbitration is made by the owner. It
may be that the court action would continue, as in the case of a consensual arbitration; or it may be
that a body corporate is obliged to proceed to arbitration under rule 71 because legislation requires
such a dispute to be resolved by arbitration. If the latter is the position, a court could raise the point
mero motu.

as a matter of urgency. This submission was influenced by what Prof Butler has
suggested in an article,18 namely:
‘The reference to “other relief” should clearly not be taken literally and should be restricted to urgent
relief similar to an interdict which is directed at preventing serious prejudice to one party pending the
arbitrator’s award or to ensuring that a party will still be in a position to comply with the award.’
Cleaver J (D Potgieter AJ concurring) in his unreported judgment in Balmoral
Heights No 39 BK v The Trustees for the Time Being of the Balmoral Heights Body
Coporate19 was inclined to Prof Butler’s view, but did not come to a definite
conclusion. With respect, I see no reason to confine the saving provisions in rule 71
to urgent relief, or to relief granted in connection with or similar to an interdict. The
phrase ‘or other relief’ is used in contradistinction both to an interdict and to urgent
relief; ‘other’ does not mean ‘similar’; and the relief excluded may be neither urgent
nor dependent on an interdict being granted.20

[11] I therefore conclude that the arbitration provisions prescribed by rule 71 are
applicable to disputes described in sub-rule (1) between the parties there referred to,
save where an interdict or any form of urgent relief is required, and save where an
arbitrator is not competent to grant the relief sought. It follows that the arbitrator was
correct in determining that the dispute between the Body Corporate and the owner
was arbitrable and the court a quo was incorrect in finding the contrary.

[12] The following order is made:
(1)
The appeal is allowed, with costs.
(2)
The order of the court a quo relating to the first respondent on appeal (the first

18 Above, n 15, at 264.
19 CPD case A698/2001; 4 October 2002; para 14. In that matter an owner claimed loss of rental
income as damages from the body corporate which, the owner alleged, had failed to maintain the
common property with the result that water penetrated the unit owned by it. The court correctly upheld
a special plea that the dispute had to be arbitrated under rule 71 because it arose out of the  body
corporate’s alleged failure to comply with its duties under the Act. (The court no doubt had in mind the
duty imposed by s 37(1)(j) viz ‘properly to maintain the common property (including elevators) and to
keep it in a state of good and serviceable repair’).
20 For example, an order for the inspection of property ─ see para 8 above.

applicant in the court a quo) is set aside and the following order is substituted:
‘The first applicant’s application is dismissed, with costs.’

______________
T D CLOETE

JUDGE OF APPEAL

Concur:  Harms ADP
Lewis JA
Ponnan JA
Combrinck JA
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
28 November 2007
Status:
Immediate
Please note that the media summary is intended for the benefit of the
media and does not form part of the judgment of the Supreme Court of
Appeal

BODY CORPORATE OF GREENACRES v GREENACRES UNIT 17 CC

1.
The Supreme Court of Appeal today decided that all disputes
between a body corporate of a sectional title scheme and an owner, and
between owners amongst themselves, which arise out of the Sectional
Titles Act, the management rules and the conduct rules, must be
submitted to arbitration ─ unless the arbitrator is not competent to grant
the relief sought (such as an interdict).
2.
The body corporate brought arbitration proceedings against an
owner for payment of arrear levies. The owner’s defence was that he

had paid for the completion of certain parts of the common property at
request of the body corporate and that the amount owing to him in
consequence exceeded the amount due to the body corporate.
3.
The owner argued that the Act permitted the body corporate to
recover unpaid levies in a court and that this is the procedure it should
have followed. The SCA held that court procedure was apposite only
where there was no dispute to be arbitrated upon, but where there was a
dispute, an arbitrator had to be appointed to resolve it unless the relief
sought could not be granted in arbitration proceedings.

--ends--