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[2016] ZAGPJHC 166
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Keyrouz v Whitehorn (A5016/2015) [2016] ZAGPJHC 166 (25 May 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
CASE
NO: A5016/2015
DATE:
25 MAY 2016
In
the matter between
EDWARD
MARTIN
KEYROUZ
.....................................................................................
APPELLANT
And
ROBIN
WHITEHORN
..................................................................................................
RESPONDENT
Housing
- section 10(1)(b) of the Housing Consumer’s Protection Act 95
of 1998 - dispute between the appellant, as the home
builder, and the
respondent, as the housing consumer -
the respondent as the home consumer, notwithstanding the home
builder’s non-compliance with s 10(1), remains entitled to
claim damages from the home builder for breach of the contract.
J
U D G M E N T
VAN
OOSTEN J:
[1]
The crisp issue in this appeal concerns the
applicability of s 10(1)(b) of the Housing Consumer’s
Protection Act 95 of 1998
(the Act) to the facts of this matter. The
Constitutional Court has recently pronounced on the proper
interpretation of the section,
in
Cool
Ideas 1186 CC v Hubbart and Another
2014
(4) SA 474
(CC), and it is accordingly only necessary to briefly
summarise the facts of this matter in order to determine whether the
section
is of application.
[2]
The nub of this case concerns a building dispute between the
appellant, as the home builder, and the respondent, as the housing
consumer. A building contract was concluded between them in October
2007, which was subsequently amplified, in terms of which the
appellant undertook to construct a dwelling for and on behalf of the
respondent, at a cost of R5 000-00 per square metre. The construction
commenced but a dispute arose between the parties. The respondent
alleged that the appellant had repudiated the contract, which
he
accepted resulting in the cancellation of the contract. On 4 July
2012 the parties, by way of an agreement, referred the dispute
to
arbitration. The respondent (the claimant in the arbitration
proceedings) claimed damages from the appellant in the sum of
R3 865 375-22, together with interest thereon and costs,
arising from the appellant’s alleged repudiation of the
building contact. The arbitration hearing proceeded and an interim
award was made by the arbitrator that the respondent had duly
proven
the building contract and that the parties to the agreement were the
appellant and the respondent. On 25 April 2013 a final
award was made
against the appellant for payment of the respondent’s damages
as claimed. In August 2013 the appellant launched
an application to
this court for the review of the final award. The matter came before
Robinson AJ who, on 12 November 2014, dismissed
the application for
review. The appellant unsuccessfully sought leave to appeal before
Robinson AJ and a petition for leave to
appeal was lodged to the
Supreme Court of Appeal which, on 27 February 2015, was granted,
limited to the following issues:
‘
Whether
in the light of the arbitrator’s finding that the contract was
concluded between Mr Keyrouz, acting personally, and
Mr Whitehorn,
and the fact that Mr Keyrouz was not registered as a home builder,
(1) the effect of
s 10(1)
of the
Housing Consumers Protection
Measures Act 95 of 1998
was to preclude the arbitrator from making an
award of damages in terms of that contract and whether (2) this
amounted to a ground
for setting aside his award in terms of the
Arbitration Act 42 of 1965
.’
[3]
Against this background I now turn to the issues this court is
required to determine. Section 10(1) of the Act provides:
‘
No
person shall:
(a)
carry on the business of a home builder; or
(b)
receive any consideration in terms of any
agreement with a housing consumer in respect of the sale or
construction of a home, unless
the person is a registered home
builder.’
In
Cool Ideas
the
purpose of the Act, with reference to its name and preamble, was
confirmed to be the
protection
of housing consumers (para 29). It was further stated that the entire
legislative scheme is predicated upon a building
contract between a
registered home builder and a housing consumer being concluded.
Failure to register would result in the home
builder being ineligible
to seek consideration for work done in terms of a building agreement.
The majority of the court held that
although a distinction needs to
be drawn between the building contract and the arbitration agreement,
the underlying building contract
remains valid and extant, even
though the home builder is in law precluded from seeking
consideration for the work done due to
its failure to register as a
home builder prior to the commencement of the building works (para
45-51).
[4]
Applying the above
dicta
to the facts of the present matter leads to the conclusion that the
appellant, who was not registered as a home builder, would
not be
entitled to claim consideration for the work done. The building
contract, however, remained extant. Juxtaposed hereto, the
respondent
as the home consumer, notwithstanding the home builder’s
non-compliance with s 10(1), remains entitled to claim
damages from
the home builder for breach of the contract. The Act does not in any
way affect the rights of the home consumer to
claim from the home
builder under the agreement, in particular damages for breach of
contract. The arbitrator was accordingly not
precluded from making an
award of damages in favour of the respondent from which it follows
that there are no grounds for setting
aside the award
in
terms of the
Arbitration Act 42 of 1965
.
[5]
It follows that the appeal cannot succeed.
[6]
In the result the following order is made:
1.
The appeal is
dismissed.
2.
The appellant
is ordered to pay the costs of the appeal including the costs
consequent upon the employment of senior counsel.
FHD
VAN OOSTEN
JUDGE
OF THE HIGH COURT
I
agree.
P
BORUCHOWITZ
JUDGE
OF THE HIGH COURT
I
agree.
HJ
DE VOS
JUDGE
OF THE HIGH COURT
COUNSEL
FOR APPELLANT ADV SS COHEN
APPELLANT’S
ATTORNEYS LOUIS WEINSTEIN
COUNSEL
FOR RESPONDENT ADV HB MARAIS SC
RESPONDENT’S
ATTORNEYS MCCARTHY CRUYWAGEN
DATE
OF HEARING 25 MAY 2016
DATE
OF JUDGMENT 25 MAY 2016