PLAYING BY THE RULES? Assessing the Ombud’s Assessments

In the past, judgments issued by our High Courts have played a significant, indeed crucial role in the development of our sectional title law, particularly as to how statutory and regulatory provisions are to be interpreted and applied. This is no different to any other area of our statutory law. Our entire legal system is to a large extent reliant on the precedential value of published court rulings.

Will the introduction of the Ombud Service detract from the continued development of sectional title law?

The Ombud Service has three basic functions in respect of sectional title schemes, namely to:-

  • consider and approve (or reject) rules amended from the prescribed sets;
  • to provide safe storage for the rules of individual sectional title schemes; and
  • to adjudicate upon disputes in sectional title and other community schemes.

That such functions are important, even essential, cannot be disputed. The first obvious problem is that decisions by adjudicators have no value as precedents for the development of sectional title law. Also, the ‘policies’ of the Ombud Service as to assessment of rules remain unknown, and it is difficult for trustees, managing agents and their legal representatives to evaluate beforehand whether particular rules will be found acceptable or not.

The latter problem is perhaps something that could be addressed by the Ombud Service by means of regular bulletins to stakeholders.

Due to the fact that the Ombud Service is currently taking its very first steps in the world of community schemes, very little is known about its policies, functionality and effectiveness. It is fair to say that the Service has probably been somewhat overwhelmed by the process of registrations, combined by the fact that so many owners have grabbed the opportunity to present their complaints, justified or not, to the Ombud for expected intervention.

The feedback received from trustees and managing agents about the registration process is not good, but this should improve as the initial process is being finalised.

As far as the standard of adjudication is concerned, my first impression, based upon personal experience, is excellent. One could only hope that such high standard will be maintained in the long run, and that the service will be able to cope with the expected volumes.

I should also add that in terms of section 58(2) of the Ombud Service Act, the service must publish and make available for inspection by the public copies of orders made, including the reasons for the finding. This would be helpful, although such published orders will not create precedents.

My first impression of the Ombud’s assessment of rules, based upon personal exposure, is somewhat less than excellent and indeed worrisome as to how the assessment of rules are to be conducted in future.

In a particular set of Conduct Rules presented for assessment by my firm, the members have, by special resolution, adopted a prohibition against the slaughter of animals and poultry on the common property or within a section. The assessment of the Ombud Services was as follows:-

‘This rule is undesirable. The scheme can allow slaughter subject to compliance with By-Laws and Meat Safety Act and adequate notice to the Body Corporate.’

This ruling does not really explain why the rule is undesirable. Is anything that is not forbidden by the law beyond the reach of the members for the purpose of rule- making?

The rejection of this Conduct Rule, adopted by the majority of members by special resolution, amounts to denial of the democratic foundations of rule-making. If a rule which is not in conflict with the prescribed rules, the Act or any other legislation, and adopted by 75% of members at a general meeting, cannot be held to be valid because there might be a minority which is not in agreement, it means that the majority is being deprived of their ability to make reasonable rules.

Or must a rule prohibiting animal slaughter on the common property or in a section be regarded as unreasonable ?

MCS COURIER (Tertius Maree) Issue 55 / August 2017


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