SCA JUDGMENT CLARIFIES THE APPROPRIATE DISPUTE RESOLUTION FORUM FOR COMMUNITY SCHEME STAKEHOLDERS

The Community Schemes Ombud Service (CSOS) was established to provide accessible and cost-effective dispute resolution services to stakeholders in the community scheme sector. However, the creation of CSOS has resulted in confusion surrounding whether the parties may approach the High Court for disputes or whether CSOS holds exclusive jurisdiction. A common misconception is that it is mandatory for all disputes to be referred to CSOS before proceeding to the High Court. The judgment in Parch Properties 72 (Pty) Ltd v Summervale Lifestyle Estate Homeowner’s Association and Others (2025) has provided necessary clarity on whether disputes must first be referred to CSOS or whether, in certain circumstances, parties may approach the High Court directly.

In the case of Parch Properties 72 (Pty) Ltd v Summerdale Lifestyle Estate Homeowner’s Association and Others (2025)

Parch Properties 72 (Pty) Ltd (Parch Properties) had developed garden cottages on a section of land adjacent to Summervale Lifestyle Estate. Parch Properties attempted on several occasions to amend the definition of “Area” in the constitution of the Summervale Lifestlye Estates Homeowner Association to include the garden cottages. After years of unsuccessful attempts, Parch Properties approached the Western Cape Division of the High Court for an order declaring its developments to form part of the Summervale Lifestyle Estate, however they were yet again unsuccessful. The respondents relied upon the common misconception that the High Court did not have the jurisdiction to hear the matter and further argued that the High Court’s role was limited to appeals and reviews arising from CSOS decisions.

In the Supreme Court of Appeal (SCA), the issue of jurisdiction was addressed. The Court explained that the purpose of the Community Scheme Ombud Services Act 9 of 2011 (CSOS Act) is to provide quick and affordable dispute resolution services to resolve community scheme disputes. The SCA further stressed the legal principle that the High Court retains its inherent jurisdiction unless it is implicitly or expressly excluded by statute. The SCA clarified that the CSOS Act neither implicitly nor expressly ousts the jurisdiction of the High Court in community scheme disputes but was rather created to function alongside the courts. Put simply, this judgement confirms that parties have the freedom to elect either CSOS or the High Court as an appropriate forum for dispute resolution.

A look to the future in dispute resolution for community schemes

The judgment in Parch Properties 72 (Pty) Ltd v Summervale Lifestyle Estate Homeowner’s Association has dispelled the assumption in the community schemes sector that stakeholders must first approach CSOS before they may go to court. Disputes of a complex legal nature, parties seeking immediate relief, and disputes requiring determination based on legal principles are but a few of the instances that would benefit from approaching the High Court directly.  

While this judgment has endorsed approaching the High Court when it is necessary, the intention is not to disregard the services of CSOS. CSOS remains a platform for all stakeholders to utilise as an alternative dispute resolution service that is cost-effective and provides access to justice. Stakeholders should be cautioned from bypassing CSOS and going straight to the High Court if the dispute may have been adequately handled by CSOS. Parties must be cautioned to not over burden the High Court merely because they would like to bypass CSOS. Should parties bypass CSOS without a justified reason to do so, the court possesses the discretion to grant cost orders in respect of matters that would have been more appropriately dealt with at CSOS and have wasted the courts time and resources.

Conclusion

While maintaining that CSOS remains a valuable resource for dispute resolution which provides access to justice, the Parch Properties judgment has confirmed that parties need not go to CSOS first before they are allowed to approach the High Court. In a nutshell, this judgment does not oust the jurisdiction of the High Court nor does it disregard the importance of CSOS for matters related to community schemes but rather illustrates the viability of both forums.

Written by Bailey Stewart

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