Access to Financial Records in Sectional Title Schemes: PAIA vs. Management Rules

Introduction

A discussion of the case of Montrose Mews Body Corporate v Moela (2023/019308) [2024] ZAGPJHC 198; 2024 (5) SA 291 (GJ) (7 March 2024)

In the context of sectional title schemes, a fundamental question arises: Should a unit owner have the right to inspect the financial records of their body corporate without needing to navigate overly complex procedural frameworks like the Promotion of Access to Information Act (PAIA)? This question is at the heart of a recent legal case involving Montrose Mews Body Corporate and Ms. Beauty Mmanto Mokoka, a member of the body corporate. The case highlights the tension between specific statutory rights of access to information and the broader provisions of PAIA.

Legal Framework

The legal landscape governing sectional title schemes in South Africa is primarily shaped by the Sectional Titles Act of 1986 and the Sectional Titles Schemes Management Act of 2011. These acts provide the framework for establishing and managing sectional title developments, including the rights and obligations of owners and the governance of common property. Additionally, PAIA plays a significant role in ensuring transparency by providing individuals with the right to access information held by public and private bodies.

Key Legislation Overview

• Sectional Titles Act of 1986: Focuses on the establishment and registration of sectional title schemes.
• Sectional Titles Schemes Management Act of 2011: Regulates the management and administration of these schemes.
• Promotion of Access to Information Act (PAIA): Ensures access to information, promoting transparency and accountability.

Facts of the Case

The case involves Montrose Mews Body Corporate, a sectional title scheme, and Ms. Beauty Mmanto Mokoka, a member of the body corporate. Ms. Mokoka requested access to bank statements reflecting the state of Montrose Mews’ administrative fund and its expenditure for specific months. This request was motivated by concerns over financial irregularities and a poor auditor’s report. Montrose Mews referred her to follow the PAIA process for accessing the information.

The Court’s Decision

The High Court of South Africa, Gauteng Division, was asked to review an adjudication order by Mr. Matlose Moela, acting as an adjudicator for the Community Schemes Ombud Service. The order directed Montrose Mews to provide Ms. Mokoka with the requested bank statements. Montrose Mews challenged this order, arguing that PAIA should apply to Ms. Mokoka’s request.

The court ruled that PAIA does not apply to Ms. Mokoka’s request for the bank statements. Instead, her right to access this information is governed by the Sectional Titles Schemes Management Act and its regulations, specifically Management Rule 26(2). This rule requires the body corporate to make its books of account available to members upon application, allowing them to assess the body corporate’s financial situation.

The court noted that PAIA is intended for situations where a person has no pre-existing right to information. In contrast, Ms. Mokoka’s request falls under a specific legal relationship between her and the body corporate, where her rights are already defined by the Management Rules.

Key Points from the Judgment

• PAIA’s Application: PAIA does not apply to requests for information arising from pre-existing legal relationships, such as those between a body corporate and its members.
• Management Rules: Members have a right to access financial records necessary to assess the body corporate’s financial situation under Management Rule 26(2).
• Redactions: The body corporate may redact information not necessary for assessing its financial situation, such as personal details.

Conclusion

The Montrose Mews case highlights the distinction between PAIA and specific statutory rights of access to information. It emphasizes that PAIA is meant to supplement existing rights rather than replace them. This ruling is significant for sectional title schemes, as it clarifies how members can access financial information without needing to invoke PAIA.

For individuals dealing with similar issues, understanding the specific legal framework governing their situation is crucial. In cases involving sectional title schemes, the Sectional Titles Schemes Management Act and its regulations provide clear guidelines on access to financial records.