A fight over "unfair" penalties charged by one of Johannesburg's most expensive gated communities has ended in court.

Lawyer Logan Naidoo and businessman William Mgobo have taking the Dainfern Homeowners' Association to the High Court in Johannesburg to recover more than R700000.

Mgobo, who works in the construction industry, bought a stand in Dainfern in 1999 with plans to build his dream house.

Work on the four-bedroom home got under way, but he was slapped with hefty penalties because the association claimed he failed to complete the home within the prescribed one-year period.

A tussle has now ensued between Mgobo and the association, but neither party was willing to explain this week if and by how much Mgobo had missed the building deadline or when construction of the property was completed.

Naidoo at one stage stepped in to buy the home from Mgobo in 2007 and paid penalties of over R400000. He has since sold the house back to Mgobo, who now lives on the property. The two now want the association to pay back all penalties and interest.

Naidoo claims the estate had no right to impose the penalties and to inflate the levies on the property. Mgobo is demanding back the full amount, including 15.5% interest from August 2007.

But the estate intends fighting the application, saying Mgobo was bound by the rules he signed when he bought the property.

In court papers, the association said it had the right to recover arrear levies and interest from defaulting residents.

But Mgobo said the association had enforced unlawful penalties. In court papers, both Naidoo and Mgobo said the rule on which the association relied was "contrary to public policy and, in particular, is clearly inimical to the interests of the community".

They also argue that the association was in a ''vastly unequal bargaining position" because residents were subjected to the association's rules, leaving homeowners at the mercy of regulations that were "unduly harsh".

The association's legal representative, Alan Warrener, declined to comment.

The matter goes to trial in the High Court in Johannesburg on February 8.