A recent ruling from the Gauteng High Court has brought good news for sectional titles, estates and community schemes. <\/p>\n\n\n\n
The court ruled that a litigant cannot accept the benefits of a settlement offer while rejecting the conditions attached to it, especially when those conditions relate to cost.<\/p>\n\n\n\n
Johlene Wasserman, Director of Community Schemes and Compliance at VDM Incorporated, welcomed the court\u2019s confirmation. <\/p>\n\n\n\n
\u201cThe High Court\u2019s November judgment is an excellent one that offers important clarity for community schemes,\u201d she said. <\/p>\n\n\n\n
\u201cIt\u2019s a textbook example of why settlement mechanisms exist, and what happens when they are strategically misused.\u201d<\/p>\n\n\n\n
Court records have shown that the dispute began when a homeowner clashed with a Centurion HOA over her revised building plans.<\/p>\n\n\n\n
When the HOA initially refused to approve her plans, the homeowner launched a High Court review. When the matter was taken to court, the HOA changed course. <\/p>\n\n\n\n
\u201cIt approved the plans and delivered them to the homeowner under a formal Rule 34 settlement offer, marked \u2018without prejudice\u2019 and expressly excluding any contribution to her legal costs,” said Wasserman. <\/p>\n\n\n\n
‘Without prejudice’ is a legal term that protects confidential settlement discussions. Thus, genuine attempts to resolve a dispute cannot be used as evidence against a party in court. <\/p>\n\n\n\n
The homeowner accepted the benefit, using the approved plans to secure municipal approval and obtain her occupation certificate. <\/p>\n\n\n\n
However, she continued litigating, arguing that the HOA\u2019s approval was an independent administrative act and was not part of the settlement offer.<\/p>\n\n\n\n
\u201cThe court rejected that argument outright. It held that the approval was clearly tendered as part of a conditional settlement, and the fact that the plans were stamped before delivery did not magically detach them from the terms of the offer.” <\/p>\n\n\n\n
“In simple terms, you can\u2019t take the performance and reject the terms. Settlement doesn\u2019t work that way.\u201d<\/p>\n\n\n\n
The court criticised the homeowner for disclosing the without-prejudice offer in her affidavits. <\/p>\n\n\n\n
\u201cWhile the HOA had taken a misstep in its procedural response, the court stressed that settlement mechanisms only function when both sides respect the rules,” said Wasserman. <\/p>\n\n\n\n
By the time the matter was heard, the dispute was essentially over, as the homeowner had already obtained the relief sought. <\/p>\n\n\n\n
\u201cThe court dismissed the review as moot and made no order as to costs, noting that awarding costs in these circumstances would encourage opportunistic litigation and undermine the purpose of settlement procedures.” <\/p>\n\n\n\n
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