Is it possible for trustees to establish a ‘policy’ regarding pets?
May owners’ actually instruct trustees as to how a ‘pets policy’ must be implemented?
In terms of section 39(1) of the Act the owners may from time to time issue directives or
impose restrictions upon trustees regarding their functions. Such a directive or restriction
is issued by an ordinary majority vote at a general meeting. This is in fact a compulsory
item on the prescribed agenda for the annual general meeting, but this of course does not
mean that the owners must issue directives or impose restrictions at the AGM. Nor does it
mean that this can only be done at the AGM, and can it in fact be done at any general
meeting. In the normal course of events notice of the intention to issue directives or
impose restrictions will have been given as part of the agenda for the meeting. However, a
matter could also arise during the course of a meeting which requires instructions from
the members. This could in my view be in order, depending upon the nature of the
matter.
A question which arises is whether the powers of owners to direct or restrict is subject to
any limitations. It is a subject previously mentioned and the conclusion then was that
owners do not have an unrestricted power to instruct. Obviously they cannot issue
instructions which are illegal or contrary to the provisions of the Act.
With regard to the two questions posed above, my answer to the first is that it should be
assumed that there is no such thing as a ‘policy’ in sectional title management, unless it
has been captured in the rules.
Are the owners, however, in terms of section 39(1) entitled to instruct the trustees
regarding the pets issue?
In my view any expression of the owners’ wishes at a general meeting can be no more
than an opinion poll which the trustees may take into account when exercising their
discretion, as they must in terms of Conduct Rule 1(1). They must still make a decision
which is objectively reasonable, and the wishes of the majority of owners is only one of
the aspects which they should consider.
A related question is whether members may impose restrictions upon trustees regarding
maintenance of the buildings. In this regard trustees should be careful: The duty to
maintain is a statutory injunction which cannot be ignored or avoided, and in terms of
Section 39(1) it is a duty which must be exercised by the trustees. But the same provision
also makes it clear that the exercising of trustees’ functions are subject to directives given
and restrictions imposed by the members.
The judicious interpretation seems to be that the members are allowed to issue directives
or impose restrictions as part of a maintenance plan or schedule, but that members are
never entitled to instruct the trustees not to maintain. A typical example would be where,
in a mixed use scheme, the majority of owners feel that the body corporate should not be
responsible for maintenance of certain elements of the common property used only in
respect of certain commercial sections, and the trustees are instructed accordingly. Such
an instruction would be ultra vires the powers of the members and the trustees would be
obliged to ignore it. The proper way to address the situation is to make a special,
reasonable management rule in terms of Section 32(4) by which the entire or a portion of
the costs of maintenance of the area in question is assigned to the commercial owners.
The above are two examples where owners are not authorised to issue instructions to the
trustees. It must not be forgotten that trustees are appointed to perform specific
functions and that they are required to exercise certain discretions. Trustees should be
careful not to evade their fiduciary duties by referring certain decisions to the members
and then to accept directives which the members are not authorised to give.
Tertius Maree
MCS Courier Issue No 45
