Is the current CSOS dispute resolution process lawful? The Advisory

On the 23rd of June 2020, during the early stages of the National COVID-19 Lockdown, the Community Schemes Ombud Service (“CSOS”) published an amendment to the Practice Directive on Dispute Resolution, 2019 which continues to apply to this day.

The amendment boiled down to doing away with the requirement of face-to-face adjudication proceedings and introduced written motion proceedings as a replacement in terms of which disputes are to be decided on papers filed by the parties. Paragraph 8.1 and 8.2 of the abovementioned amended Practice Directive provides that:

8.1    No face-to-face Adjudications will be conducted.

8.2    Adjudications will be conducted based on papers filed by the parties and further written submissions, documentation and information as requested by the appointment Adjudicator”.

In essence, prior to June 2020 all disputes referred to adjudication were deemed action proceedings where the appointed Adjudicator in the presence of the applicant and respondent would have an opportunity to consider all the facts and evidence of the matter. This included, but was not limited to, written submissions, oral evidence and cross examination and if necessary an inspection in loco.

Currently, as a result of the amendment to the Practice Directive, all matters referred to adjudication are now deemed application proceedings which are based on, but not limited to, written submissions, electronic correspondence and photographs but specifically excludes in-person hearings.

The major concern with the current dispute resolution process lies within the difference between action and motion proceedings. Action proceedings are used when there is a real and substantial dispute of fact between the parties which needs to be presented and argued orally. In contrast thereto, motion proceedings are utilised where there is no material factual dispute and the only real issues to be decided are points of law and written submissions are deemed as sufficient evidence.

The question to be asked is whether this amendment to the Practice Directive can be seen as lawful under the Promotion of Administrative Justice Act, 3 of 2000 (“PAJA”) which underscores that all administrative action must be “lawful, reasonable and procedurally fair”.

It is clear as day that when an applicant approaches the CSOS to assist with settling a dispute, such dispute will obviously involve a real and substantial dispute of fact that will typically require oral evidence to be led and site inspections to be held.  By denying parties their right to present oral evidence in a face-to-face setting, the CSOS is arguably infringing on the parties fundamental right to administrative action that is lawful, reasonable and procedurally fair, as required by section 33(1) and (2) of the Constitution of the Republic of South Africa, and as set out in the PAJA .

The National COVID-19 Lockdown has been lifted as from 5 April 2022 and one would have logically expected a retraction of the amendment to the Practice Directive on Dispute Resolution to follow shortly thereafter, however the CSOS has not shown any signs of moving back to face-to-face adjudication hearings.

Based on the above, a good argument can be made that the amendment to the Practice Directive on Dispute Resolution issued on the 23rd of June 2020 by CSOS is unlawful and stands to be reviewed and set aside in terms of the PAJA and we call on all stakeholders in the community schemes industry to place pressure on the CSOS to reinstate face-to-face adjudication hearings.

Article reference: Paddocks Press: Volume 17, Issue 5.

Specialist Community Scheme Attorney (LLB, LLM), Auren Freitas dos Santos, is the Director of The Advisory, a boutique consultancy specialising exclusively in community schemes law.

This article is published under the Creative Commons Attribution license.

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