What's the Verdict? - Lazelle Paola, Partner, Cox Yeats Attorneys

The question whether a residential estate's roads may or may not be controlled by its governing homeowners association has finally been answered. On 28 March 2019, the Supreme Court of Appeal handed down judgement on the appeal in the matter of the Mount Edgecombe Country Club Estate Management Association II (RF) NPC v Singh & Others (323/2018) [2019] ZASCA 30 (28 March 2019).

The matter concerned the lawfulness of certain of the 'road rules' of the homeowners association which empower it to police the road network within the residential estate, including the issuing of penalties for speeding.

The relevant 'road rules' which two aggrieved residents/ members had sought to have declared unlawful were the following:

7.1.2 The speed limit throughout the Estate is 40 km/h. Any person found driving in excess of 40 km/h, will be subject to a penalty. The presence of children and pedestrians as well as many undomesticated animals such as buck, monkeys, mongoose, leguaans and wild birds means that drivers need to exercise additional caution when using the roads.

7.3.2 Operating any vehicle in contravention of the National Road Traffic Act within Estate 2 is prohibited.

When the matter had first come before the KwaZulu- Natal High Court, Topping AJ, dismissed the application to set aside the rules. However, on appeal to a Full Bench of the KwaZulu-Natal High Court the judgement of Topping AJ was set aside and the aforementioned rules of the homeowners association, were declared invalid. The declaration of invalidity of the road rules was however suspended for a period of twelve months to afford the homeowners association an opportunity to obtain the necessary authorisations and/ or consents under the National Road Traffic Act, 93 of 1998. The homeowners association was granted leave to appeal the matter to the Supreme Court of Appeal.

In what is regarded as a landmark ruling the Supreme Court of Appeal decided that on the evidence presented to it that the estate's internal roads are not public roads. The Court also went on to hold that the approach of the Full Bench could not be supported even on the assumption that the roads within the estate were regarded as public roads. Supreme Court of Appeal Judge Visvanathan Ponnan in his judgement held that:

"It cannot be said that ordaining a lower speed limit within the estate than that prescribed by national legislation goes beyond promoting, advancing and protecting the interests of the... members or is unreasonable. This is especially so given the presence of children, pedestrians and animals (both domesticated and undomesticated) upon or in the immediate vicinity of the roads themselves. Rule 7.3.2 goes no further than to record that the operating of vehicles in contravention of the Act within the estate is prohibited. I fail to see why that is prohibited."

In summary, the Supreme Court of Appeal found that:

In regulating the roads, the homeowners association was not usurping the functions reserved to the authorities under the National Road Traffic Act nor contravening the provisions of that Act

There is no conflict between the rules and the National Road Traffic Act

The rules are contractually binding on members and are enforceable against them

The fact that the rules provide additional contractual requirements for the operation of vehicles on the roads in the estate does not mean that the rules have a public law content

There is no need for the homeowners association to seek authority from the MEC or the local municipality to regulate the conduct on the estate's road network 

The appeal succeeded and the Supreme Court of Appeal set aside the order of the Full Bench and substituted it with an order dismissing the appeal to the Full Bench save for the declaration of invalidity of certain domestic worker rules which was not appealed, and which still stands.

The judgement confirms the right of homeowners associations to regulate the conduct of members through a system of rules and reaffirms that the relationship between a homeowners association and its members is founded in contract. That having been said homeowners associations must still ensure that their particular rules are lawful and that they satisfactorily regulate conduct including, but not limited to, conduct on their internal road networks.

At the time of writing it still remains to be seen whether the decision will be taken on appeal to the Constitutional Court. 

Lazelle Paola is a Partner at Cox Yeats Attorneys practicing in the Property Services Law Team. Lazelle specialises in property, commercial and notarial work, conveyancing and local government law including town planning and litigation. From a commercial law and conveyancing perspective, Lazelle acts on behalf of several major financial institutions, multinational companies, Home Owners Associations and Body Corporates and has been involved in a wide range of high profile projects, as well as the establishment and administration of various residential estates in KZN Lazelle can be contacted on: T: 031 536 8500 or via email: lpaola@coxyeats.co.za