In the case of Reddy and Another v Cedar Lakes Homeowners Association NPC and Others, the Johannesburg High Court reversed the findings of an Adjudicator appointed in terms of the Community Schemes Ombud Service Act, 2011 ("the Act"). The court found that the Adjudicator had failed to account for relevant evidence and that his application of the law was incorrect.
Background
A trust-owned immovable property within the Cedar Lakes Estate ("the Estate") in Fourways had improvements made which included the installation of a new garage door with a mirror exterior finish.
The trustees did not apply for approval from the Estate's Homeowners' Association before the installation but made such an application after the fact. The Homeowners' Association refused the request to install the garage door and demanded that the garage door be removed.
The Estate's architectural rules require all garage doors to be of a timber finish and that any other finishing must first be approved by the Homeowners' Association. The trustees wrote to the Homeowners' Association and requested consent which was refused. The trustees then raised the point that other properties within the Estate had similar unique finishing on the garage doors and requested reasons as to why their application was refused. The Homeowners' Association did not respond to the trustees.
Aggrieved by the refusal, the trustees then referred the matter to the Adjudicator. The Adjudicator found in favour of the Homeowners' Association stating that the Homeowners' Association did not act unreasonably when exercising its discretion in refusing the application.
Still aggrieved, the trustees applied to the court to reverse the findings of the Adjudicator. The trustees argued that the Adjudicator failed to exercise his discretion reasonably, properly and fairly in light of the evidence produced by the trustees.
Legislative Scheme
Section 50(a) of the Act provides that "the adjudicator must investigate an application to decide whether it would be appropriate to make an order, and in this process the adjudicator must observe the principles of due process of law".
Section 50(c) of the Act provides that "the adjudicator must consider the relevance of all evidence".
Section 57(1) of the Act provides that "An applicant, the association or any affected person who is dissatisfied by an adjudicator's order, may appeal to the High Court, but only on a question of law".
The court's findings
The court referred to the case of Stenersen & & Tulleken Administration CC v Linton Park Body Corporate and Another. In doing so, the court reiterated the principle that a court cannot reconsider the findings of fact by the Adjudicator. The court is limited to considering whether the adjudicator:
- Applied the correct law;
- Interpreted the law correctly; and/or
- Properly applied the law to the facts as found by the Adjudicator.
The court found that the Adjudicator did not consider all the evidence before him as he was obliged to do in terms of section 50(c) of the Act. This was apparent from the Adjudicator's failure to account for the evidence of inconsistencies in the approval of similar garage doors by the Homeowners' Association. Accordingly, the court found that had the Adjudicator considered such evidence, he would have concluded that the Homeowners' Association acted inconsistently and thus unreasonably in refusing to consent to the trustees to install the garage door with unique finishing.
Furthermore, the court found that the inconsistent application of the Estate's rules by the Homeowners' Association, resulted in an error of law.
As such, the Adjudicator's decision was set aside, and the trust was permitted to keep the garage door.
Conclusion
Where an Adjudicator appointed in terms of the Act does not consider all evidence that is before him/her, this provides a party, aggrieved by the Adjudicator's decision, an avenue to have such a decision considered by a court. A court is however confined to determining whether the application of the law by the Adjudicator was correct and not whether the findings of fact by the Adjudicator is correct. When a court finds that an Adjudicator has not accounted for an entity's inconsistent application of their rules, this will result in the Adjudicator making an error of law.
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