What happens when a former trustee becomes involved in a dispute with a body corporate, and then attempts to rely on information obtained during his tenure as trustee to advance his own case?
More importantly, what happens when the Court is asked to accept confidential information as evidence, where that information was obtained in a position of trust and is then used for personal benefit?
In the recent judgment of Chanyana v Trustees of Sunset Villas Body Corporate and Another, the Gauteng Division of the High Court delivered an important reminder that community scheme governance does not end when a trustee leaves office. The duties of confidentiality, discretion, and proper conduct continue to matter, particularly where a former trustee seeks to use internal information against the scheme.
The appellant was the registered owner of a unit in the scheme and had previously served as a trustee of the body corporate. He challenged legal costs that had been debited to his levy account after summons was issued for arrear levies. His case included an argument that the summons had been issued prematurely, and that the body corporate had failed to follow an alleged internal process in relation to payment arrangements.
One of the most interesting aspects of the matter was the evidence on which the appellant attempted to rely. He sought to place before the adjudicator correspondence relating to another owner’s legal representative. That correspondence had been obtained by him during his tenure as trustee. The adjudicator refused to accept that correspondence into evidence, finding that it was privileged information, that it had been obtained while the appellant was a trustee, and that it could not be used for his personal benefit.
The former trustees appealed the adjudication order and the Court agreed with the adjudicator.
It found that the adjudicator was correct in disallowing the evidence on the basis of confidentiality and relevance. The Court also made it clear that a letter relating to one unit, which in fact concerned negotiations, did not create a precedent for other owners and did not prove the existence of a binding procedure that had to be followed before summons could be issued.
The broader message is clear. Executives are entrusted with sensitive information because they are required to perform governance functions on behalf of the community scheme. They may receive attorney correspondence, settlement proposals, account information, and internal instructions that ordinary members may not otherwise have access to. That access is not a licence to store up ammunition for a future personal dispute. Nor does it entitle a former executive to convert confidential scheme information into a litigation strategy.
Being a scheme executive is more than just a title. It requires trust. It requires confidentiality. It requires executives to understand that the information they receive in office is not theirs to use as they please. When that boundary is crossed, the Courts are prepared to look beyond the document itself and ask how it was obtained, why it is being used, and whether it is relevant at all.
This judgment is not a warning against owners raising legitimate complaints. Community schemes must always act lawfully, fairly, and within the scope of their rules and statutory framework. However, it is a warning against dressing factual disagreements up as legal disputes, relying on confidential information obtained in a position of trust, and expecting the Court to rescue a case that was not properly established before the adjudicator.
At HP Inc., we understand that effective community scheme enforcement is not only about recovering arrear levies. It is about ensuring that every step is procedurally defensible, properly authorised, and supported by the correct evidence. It is also about protecting schemes from opportunistic challenges, misplaced governance arguments, and attempts to misuse confidential information obtained through positions of trust.
Should you require any assistance, do not hesitate to contact us.
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