Advice needed on the legal side

[James Cready]

Good Day
I was hoping that someone could perhaps shed light on an issue for me. I am currently a trustee (for two months) of a body corporate and a resident has launched a threat of legal action against the trustees. The story that lead up to this is as follows:
The complex makes use of garden services but each unit may elect to have his own enclosed garden serviced for a nominal fee. Now this lady apparently cancelled the garden services for her unit 5 years ago, but it was only picked up 6 months ago that she is still paying. One of the Trustees (only became a trustee 7 months ago), a very vigilant finance lady picked up that this lady was being charged for garden service on her account.
So one of the trustees went to this lady and asked her if she is using the garden service because as far as they know, she has paving on her entire yard. She said no she is not using garden service as she cancelled the garden service 5 years ago already.

Yet, for all that time she was being charged garden services on her account. Now she does not have proof of cancellation as she did not cancel in writing. We can see that the garden service didn't invoice for her unit for some time (problem is that the company was changed a few times during that period as well) but that she was being billed for it on her levy invoice. She never picked up that she was still paying for the garden services all that time, but now that the trustees brought it under her attention, she is adamant that the body corporate must repay her the R 6K odd.

Now in this year, even the bank account for the complex have changed due to some issues with the previous bank account to which access could not be gained as the signees all left or died.
Now legally, what is the duty of the current Trustees in this situation? If she takes legal action what case will she have and will our main defence (namely that she never cancelled in writing) stand? Will the old group of trustees, those who were Trustees during that 5 year period, be held accountable?

I'd appreciate any advice regarding this please.

Regards
James Cready

 

[P924]

Won't it be cheaper just to pay it back? It seems fair as well. Will also cause way less issues...

 

[AchmatK]

Don't know what you can do legally but if it was me I would either request a refund or have the credit passed to my levy account and not pay any levy until its cleared.

 

[James Cready]

Won't it be cheaper just to pay it back? It seems fair as well. Will also cause way less issues...

Well, if it goes legal, absolutely it will be cheaper. Maybe it is fair, but when did she cancel again? And with whom? How? All unanswered questions which puts us in a difficult spot. With regards to less issues, problem is, the people here have major issues by default already and if we pay her back we may have 24 other people and issues on our back instead of just one.
If we do pay her back we won't pay in lump sum anyway, we'll pay it back over the same period that she paid it by means of credit on her account. The trustees who picked it up 6 months ago, decided that they will pay her back for the 4 months since the new account was opened and since when they were trustees.

But ya, I don't know

 

[James Cready]

Don't know what you can do legally but if it was me I would either request a refund or have the credit passed to my levy account and not pay any levy until its cleared.

OK, but do you have proof that you cancelled it? When did you and with whom? How much do we credit? Do we simply take her word that it was 60 months or 50 something...? She doesn't even have an exact date. That is our biggest problem, when was it cancelled exactly?
OK, I guess we can go back and check garden services invoices since that period forward to make sure.

 

[Billy]

She has been charged for a service which was not provided. Refund her for this period only. Otherwise require proof of cancellation if the BC was previously paying for the service.

"We can see that the garden service didn't invoice for her unit for some time (problem is that the company was changed a few times during that period as well) but that she was being billed for it on her levy invoice."

 

[AchmatK]

OK, but do you have proof that you cancelled it? When did you and with whom?

If it was me I would have sent an email. I do however purge my archived emails every couple of years so might not have records if it were to go beyond two years.

You mentioned that the garden service would bill additionally for this. This could indicate when last they billed her via the BC for this additional work and could be considered as the date the service was terminated.

 

[sSslik]

Hi James,

I'm not a legal expert and as such my comments are only opinions. I'm chairman of a complex and we deal with similar issues from time to time. The rule I live by is this: show me the written proof

Whether it's a pet agreement, payment plan or whatever, unless it is down in writing, you cannot be held accountable for promises made by others as anyone can then tell you that they've been promised something. So unless she has it in writing, it was not cancelled. Having said that ...... logic should prevail, however it sounds as though you've been paying the garden services with the monies collected from her. So unless you can get the garden services to see the same logic (they did not service her garden because it's paved) you will cause more problems refunding her than doing nothing.

People love to threaten with a court case - few follow through. She may very well be right, but unless it cannot be proved, you will set a dangerous precedent if you refund her without a paper trail. Trustees SHOULD make the difficult choices.

 

[James Cready]

Don't know what you can do legally but if it was me I would either request a refund or have the credit passed to my levy account and not pay any levy until its cleared.

PS. I am sure if it was you, you would have picked u that you are charged incorrectly the very first month after you cancelled as well. She just never queried it, kept paying for 5 years without ever even ass much as querying it. These are the things that simply don't add up.

 

[James Cready]

If it was me I would have sent an email. I do however purge my archived emails every couple of years so might not have records if it were to go beyond two years.

You mentioned that the garden service would bill additionally for this. This could indicate when last they billed her via the BC for this additional work and could be considered as the date the service was terminated.

Ya, well one should cancel in writing but anyway she didn't. I agree with you, we can actually see when last they billed her. We are scared also to set a precedent for such behaviour, so people think that trustees are responsible to check every person's billing instead of the individual himself.

 

[AchmatK]

PS. I am sure if it was you, you would have picked u that you are charged incorrectly the very first month after you cancelled as well. She just never queried it, kept paying for 5 years without ever even ass much as querying it. These are the things that simply don't add up.

I probably would have. I have a unit in a complex that I'm renting out. Even though I have an automated payment going off to the managing agent, I still check the levy invoices they send me every month to check that my payments are being allocated.

 

[James Cready]

Hi James,

I'm not a legal expert and as such my comments are only opinions. I'm chairman of a complex and we deal with similar issues from time to time. The rule I live by is this: show me the written proof

Whether it's a pet agreement, payment plan or whatever, unless it is down in writing, you cannot be held accountable for promises made by others as anyone can then tell you that they've been promised something. So unless she has it in writing, it was not cancelled. Having said that ...... logic should prevail, however it sounds as though you've been paying the garden services with the monies collected from her. So unless you can get the garden services to see the same logic (they did not service her garden because it's paved) you will cause more problems refunding her than doing nothing.

People love to threaten with a court case - few follow through. She may very well be right, but unless it cannot be proved, you will set a dangerous precedent if you refund her without a paper trail. Trustees SHOULD make the difficult choices.

Thanks!
Tough work this isn't it?
Ya I agree 100% with the comment about it having to be in writing. With regards to the garden service though, fact is they charge a fee for common property and then a separate fee for each unit that makes use of it for the enclosed garden. The invoices that we could find from the garden services for a few months, did not charge for her unit. So that may just swing things to her favour. Yet that would mean that we would have to go through each month's garden service invoice (and companies changed a few times over the last few years) for the last few years and check it.
We want to do what is right and fair without setting a precedent for other to just say "I cancelled give me my money back" etc. That is the tricky part.

 

[AchmatK]

Ya, well one should cancel in writing but anyway she didn't. I agree with you, we can actually see when last they billed her. We are scared also to set a precedent for such behaviour, so people think that trustees are responsible to check every person's billing instead of the individual himself.

I work in finance and billing mistakes do happen. Customers do not always check their invoices and statement. If an error is picked up and identified, we correct it. Haven't had errors going back more than a year though.

Setting a precedent can also be an issue. Not sure if there might be a prescription period that you can use as a limit on how far back she can claim for. Might be something to look into.

 

[James Cready]

Not sure if there might be a prescription period that you can use as a limit on how far back she can claim for. Might be something to look into.

Good point, we'll look into that as well

 

[etwylite]

First thing to establish is if the garden area is common property possibly subject to exclusive use or an actual registered allocated section?
If it forms part of the common property and a communal garden service is used you would have to investigate whether the option to opt out was registered as part of the scheme rules or agreed at an AGM or SGM, by whom and when.

Also the legal action would have to be against the BC not the trustees. Trustees could be held accountable for WILFUL negligence but I dont see that here.

 

[Ho3n3r]

Ya, well one should cancel in writing but anyway she didn't. I agree with you, we can actually see when last they billed her. We are scared also to set a precedent for such behaviour, so people think that trustees are responsible to check every person's billing instead of the individual himself.

So she was billed for a service that you didn't pay over to the service provider as they didn't bill you for it? So, what did you do with the extra money you received in this time? And your bookkeeper didn't pick up that you were getting in this extra money?

And if you can clearly see when she was last billed, that is your answer as to how far back you should refund her. This is also clearly indicative that someone in charge at the complex knew about her cancellation, and processed it.

 

[James Cready]

First thing to establish is if the garden area is common property possibly subject to exclusive use or an actual registered allocated section?
If it forms part of the common property and a communal garden service is used you would have to investigate whether the option to opt out was registered as part of the scheme rules or agreed at an AGM or SGM, by whom and when.

Also the legal action would have to be against the BC not the trustees. Trustees could be held accountable for WILFUL negligence but I dont see that here.

Well for the first part, each unit pays for it's own area at a certain fee per month, but that is each owner's responsibility. i prefer to do my own mowing for instance. Common property is charged as a lump sum divided amongst the 29 units in the complex.
Ok I see what you are saying on the negligence. Well even if that is the case, that it was willful negligence on the Trustees part it would be tricky to do that since none of them are Trustees anymore and some of them are not even in the complex anymore.

Thanks for the reply!

 

[TEXTILE GUY]

If I calculate this correctly - R6k over 60 months ... she was paying an extra R100 per month for the service?

Can you rather not offer to settle at a discounted rate of R100 pm for the next 5 years, or if you can get her to meet halfway - R50 over the next 60 months?

This wont break bank, avoids legal and personal issues and keeps everyone quiet?

On the other hand, if you feel your case is watertight, tell her to go ahead. The legal costs will be way highr than R6k, unless she goes for R3k in small claims.

 

[James Cready]

So she was billed for a service that you didn't pay over to the service provider as they didn't bill you for it? So, what did you do with the extra money you received in this time? And your bookkeeper didn't pick up that you were getting in this extra money?

Good questions with multiple angled answers. Well, firstly we don't know and we don't know. That was a different time, different people. I think the Managing Agent may then have been responsible for the accounts (I stand to be corrected). In the mean time bank accounts were changed as well (beginning of this year as access to the old account was problematic)
See, the last few years seems to have been messy on the management and trustee side here. i am trying to pick up pieces of many years of mismanagement.

And if you can clearly see when she was last billed, that is your answer as to how far back you should refund her. This is also clearly indicative that someone in charge at the complex knew about her cancellation, and processed it.

Mmm, ya if we repay that would be the way to go, if possible. The problem is that she MAY have cancelled with the garden service directly, initially I think that is what she said, it changes from time to time. I slowed the thing down now and are asking her to put her case and date of cancellation etc in writing for us so we can have some concrete stuff to work with.

 

[James Cready]

If I calculate this correctly - R6k over 60 months ... she was paying an extra R100 per month for the service?

Can you rather not offer to settle at a discounted rate of R100 pm for the next 5 years, or if you can get her to meet halfway - R50 over the next 60 months?

This wont break bank, avoids legal and personal issues and keeps everyone quiet?

On the other hand, if you feel your case is watertight, tell her to go ahead. The legal costs will be way highr than R6k, unless she goes for R3k in small claims.

ya, if we do pay back we will pay over the 5 years in form of credits on her account.
Still investigating the water tightness of the case, she has the garden service invoices on her side, which is a strong case.