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[2013] ZASCA 71
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Hubbard v Cool Ideas 1186 CC (580/12) [2013] ZASCA 71; 2013 (5) SA 112 (SCA); [2013] 3 All SA 387 (SCA) (28 May 2013)
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 580/12
In
the matter between:
HUBBARD,
ANNE CHRISTINE
...........................................................
Appellant
and
COOL
IDEAS 1186 CC
....................................................................
Respondent
Neutral
citation:
Hubbard v Cool Ideas 1186 CC
(580/12)
[2013]
ZASCA 71
(28 May 2013)
Coram: NAVSA, PONNAN and THERON JJA and WILLIS and
MBHA AJA
Heard: 10 MAY 2013
Delivered: 28 MAY 2013
Summary:
Section 10 of
Housing Consumers Protection Measures Act 95 of 1998
prohibiting unregistered home builder from receiving any
consideration for construction of home – arbitration award to
that
effect cannot be made an order of court.
___________________________________________________________________
ORDER
___________________________________________________________________
On
appeal from
:
South Gauteng High Court
(Johannesburg) (Victor J sitting as court of first instance):
The
appeal is upheld with costs.
The
order of the court below is set aside and in its stead is
substituted the
following order:
‘
The application is dismissed with costs.’
___________________________________________________________________
JUDGMENT
___________________________________________________________________
PONNAN JA (NAVSA and THERON JJA and MBHA AJA concurring):
[1] The purpose of the Housing Consumers Protection Measures Act 95
of 1998 (the Act), as its preamble proclaims, is to afford
protection
to housing consumers. It does so in various ways, including the
establishment of a National Home Builders Registration
Council (the
Council) and the requirement that home builders be registered as such
with it. Thus subsections (1) and (2) of s 10
of the Act provide:
'
10
Registration of home builders
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 that person is a
registered home builder.
(2) No home builder shall
construct a home unless that home builder is a registered home
builder.'
[2] That registration, according to subsection (3), is dependent upon
the Council being satisfied that the home builder: (a) meets
the
criteria prescribed by the Minister of Housing; (b) will meet its
obligations in terms of the Act; and (c) has appropriate
financial,
technical, construction and management capacity in order to prevent
housing consumers and the Council from being exposed
to unnecessary
risk. What consequence follows upon a home builder failing to
register as such but who nonetheless undertakes a
building project,
is the question that confronts us in this appeal. It arises for
determination against the following factual backdrop.
[3] During February 2006 and pursuant to a written building contract
the appellant, Ms Anne Christine Hubbard, appointed the respondent,
Cool Ideas 1186 CC (Cool Ideas), to undertake certain building works
for her, namely the construction of a residential dwelling
unit,
being unit number two of the Chesterfields in Bryanston for the
contract sum of R2 695 600.00. Clause 14 of the building
contract
provided:
‘
ARBITRATION
14.1 Any dispute arising between
the parties out of and during the currency of the contract or upon
termination thereof may be referred
to arbitration.
14.2 The arbitrator shall be
appointed at the request of either party by the president for the
time being of the Master Builders
Association having jurisdiction in
the area or by the president of the Building Industries Federation
(SA), whose decision will
be final and binding on both parties.'
[4] Disputes did indeed arise between the parties, which in terms of
clause 14 of the building agreement were referred to arbitration
by
Ms Hubbard. Mr Charles D Cook an architect and valuer was appointed
the arbitrator. Ms Hubbard, who complained about various
aspects of
the building works, claimed an amount of R1 231 300.50, which she
asserted was the cost of the remedial works that had
to be performed
to her residential dwelling. Cool Ideas opposed that claim. In
addition, it claimed payment of that portion of
the contract sum that
remained outstanding. The arbitration agreement concluded between the
parties recorded, inter alia, that:
'A dispute has arisen between
the parties in respect of
The work executed, and
Payment for such work.
. . . .
4. The Arbitration will be held
in terms of the
Arbitration Act, No. 42 of 1965
.
5. The Arbitrator's award shall
be final and binding. There shall be no appeal against the
Arbitrator's award.'
[5] On 15 October 2010 the arbitrator made the following award:
'32.1 The Claimant [Ms Hubbard]
is to pay the Respondent [Cool Ideas] the sum of the R550,211.00
inclusive of VAT (five hundred
and fifty thousand two hundred and
eleven rand).
32.2 Interest to be paid by the
Claimant on the sum of R1,101,333.36 (one million one hundred and one
thousand three hundred and
thirty three rand and thirty six cents)
from 7
th
November 2007 to the date of payment at the rate
of 2% greater than the minimum lending rate charged by the Claimant's
bank to
its clients, compounded monthly, the start date being 7
th
November 2007.
32.3 Costs are awarded in favour
of the Respondent.
The Claimant shall be
responsible for all of the Arbitrator's fees.
Any portion of the Arbitrator's
fees paid by the Respondent must be reimbursed by the Claimant to the
Respondent together with the
amounts due in respect of paragraphs
32.1 and 32.2 above.
The costs incurred in respect of
the preparation of the Statements of Issues and responses thereto
were not claimed by the parties
and are excluded herefrom.
32.4 All amounts due in terms of
this award shall be payable by the Claimant to the Respondent within
seven days from the date of
handing down this award.
32.5 Any amounts due and
remaining unpaid by the due date as set out in paragraph 32.4 herein
shall accrue interest as for a judgement
debt at the rate of 15.5%
per annum compounded monthly from the date due for payment.'
[6] As Ms Hubbard failed to satisfy the arbitration award, Cool Ideas
applied to the South Gauteng High Court in terms of
s 31
of the
Arbitration Act 42 of 1965
for the award of the arbitrator to be made
an order of court. That application was opposed by Ms Hubbard, who in
support of her
opposition stated:
'24. . . . [I]t was discovered .
. . that the Applicant [Cool Ideas], whom I contracted to construct
my home, was not registered
as a home builder in terms of the Housing
Consumer Protection Measures Act No. 95 of 1998.
25. The effect of the above, so
I am advised, is that that Applicant is not entitled to carry on the
business of a home builder,
or to receive any consideration in terms
of any agreement with a person, defined as a housing consumer in
terms of the Housing
Consumer Protection Measures Act No. 95 of 1998,
in respect of the sale or construction of a home.
. . . .
27. The result of the above is,
so I am advised, that the Applicant was not entitled to claim any
payment from me, let alone an
amount totalling R1 228 522.09 (one
million two hundred and twenty eight thousand five hundred and twenty
two rand and nine cents)
which consists of an amount of R1 064 746.00
(one million and sixty four thousand seven hundred and forty six
rand) for "
work
done
" and the
remainder consisting of interest charged upon such an amount.
. . . .
91. I confirm, as I have alluded
to hereinbefore, that the award of the arbitrator effectively seeks
to order the performance of
a prohibited or criminal act, in that it
purports to order me to make payment to an entity who carries on the
business of a home
builder, as defined in the Housing Consumer
Protection Measures Act NO. 95 of 1998, in relation to an agreement
in respect of the
construction/sale of a home, while such an entity
is not registered in terms of the Housing Consumer Protection
Measures Act No.
95 of 1998 as required by such an Act.
92. I am advised, advice which I
accept, that by applying to the above Honourable Court to have the
said arbitration award made
an order of court, the Applicant is
requiring of the Honourable Court to make an order contrary to an
express prohibition imposed
by the Legislator and that a Court cannot
be asked to order the performance of a prohibited or criminal act.
93. I am furthermore advised
that the arbitrator acted
ultra
vires
in making the
above order, which resulted in the award being void
ab
initio
and/or being a
nullity and therefore the award is incapable of being made an order
of this Honourable Court.'
[7] The application came before Victor J who concluded:
'1. In terms of
Section 31
of
the
Arbitration Act 42 of 1965
the award of the Arbitrator Mr C D
Cook dated 15 October 2010 is hereby made an order of court.
2. The costs of the application
should be paid by the respondent.
3. The late filing of the
replying affidavit and the costs of the condonation application
should be paid by the applicant.'
The appeal is with the leave of this court.
[8] In arriving at that conclusion the high court reasoned:
'[15] The respondent simply
relies on the direct prohibition where it is pre-emptory that not
only the project, but also that the
builder be registered in terms of
the said Housing Act. The respondent relies on Bekker v Schmidt
Bou-Ontwikkelings CC And Others
2007 (1) SA 600
(C) 607 to 608) which
holds that the registration in terms of S10 of the Act is absolute.
It is on this basis that the respondent
contends that the arbitration
award is void.
[16] One of the distinguishing
features in this case is that by the time the applicant wished to
make the arbitral award an order
of this court it had registered as a
home builder in terms so Act.
"14A Late enrolment and
non-declared late enrolment
(1) Where a home builder –
(a) in contravention of section
14 submits an application for the enrolment of a home to the Council
after construction has started;"
[17] The Act clearly envisions
the situation where late registration is permissible after the
building has commenced and therefore
peremptory provisions of section
10 are to be read with section 14A of the act. "2) No home
builder shall construct a home
unless that home builder is a
registered home builder".
[18] This amendment was
introduced in 2007. The further distinguishing feature in this case
is that the work was done by Velvori
Construction CC a registered
home builder as required in terms of the Act.
[19] To preclude the applicant
from its clam at this stage is really to give effect to form over
substance. The substance of the
applicant's claim at this stage is
that it is a registered builder and that at the time it executed the
building work it did so
in cooperation with the subcontractor Velvori
Construction CC a properly registered entity as it was entitled to
do.'
[9] In this court neither counsel sought to support the reasoning of
the high court. Nor, I daresay, could they. For, it seems
to me that
both pillars underpinning its conclusion are flawed.
In respect of
the first:
Section 14 appertains to the enrolment of the home
(the subject of the construction) with the Council. It prohibits a
home builder
from commencing the construction of that home unless the
Council has issued a certificate of enrolment in respect of it. It is
so that s 14A permits late enrolment, but that is only after certain
fairly stringent requirements as prescribed by that section
have been
met. That in any event has to occur prior to the completion of the
construction. By its very nature the protection afforded
to a housing
consumer by s 14 is in addition to that afforded by s 10. Any
relaxation afforded by s 14A for the failure of the
home builder to
comply with s 14 plainly does not find application to s 10.
Significantly, in respect of s 10 one finds no counterpart
to s 14A.
That is perhaps the clearest indicator that the legislature did not
intend a relaxation of those prohibitions. The broad
thrust of the
Act is obviously to protect home consumers, the vast majority of whom
will undoubtedly be poor and unsophisticated,
against shoddy and
unsafe houses at the hands of unskilled, unregistered and perhaps
even unscrupulous home builders.
In respect of the second:
It
matters not that the work may have been done by Velvori Construction
CC (which in any event has not been admitted by Ms Hubbard),
for in
those circumstances, s 10(7) required both it and Cool Ideas to be
registered as home builders. It thus hardly availed Cool
Ideas that
Velvori Construction CC may have been registered as a home builder.
[10] One of the earliest cases that had to
consider the consequence for the validity of an act that has taken
place in conflict
with a statutory prohibition was
Schierhout
v Minister of Justice
1926 AD 99
at 109
in which Innes CJ said:
‘
It is
a fundamental principle of our law that a thing done contrary to the
direct prohibition of the law is void and of no effect.’
But as Nugent JA pointed out in
Lupacchini
NO v Minister of Safety and Security
2010
(6) SA 457
(SCA)
para 8:
'. . . [T]hat
will not always be the case. Later cases have made it clear that
whether that is so will depend upon the proper construction
of the
particular legislation. What has emerged from those cases was
articulated by Corbett AJA in
Swart
v Smuts
[
1971
(1) SA 819
(A) at 829C-G].
"Die regsbeginsels wat van
toepassing is by beoordeling van die geldigheid of nietigheid van ‘n
transaksie wat aangegaan
is, of ‘n handeling wat verrig is, in
stryd met ‘n statutêre bepaling of met verontagsaming van
‘n statutêre
vereiste, is welbekend en is alreeds dikwels
deur hierdie Hof gekonstateer (sien
Standard
Bank v Estate Van Rhyn
1925
AD 266
;
Sutter
v Scheepers
1932
AD 165
;
Leibbrandt
v South African Railways
1941
AD 9
;
Messenger
of the Magistrate’s Court, Durban v Pillay
1952 (3) SA
678
(AD);
Pottie
v Kotze
1954
(3) SA 719
(AD),
Jefferies
v Komgha Divisional Council
1958
(1) SA 233
(AD);
Maharaj
and Others v Rampersad
1964
(4) SA 638
(AD)). Dit blyk uit hierdie en ander tersaaklike gewysdes
dat wanneer die onderhawige wetsbepaling self nie uitdruklik verklaar
dat sodanige transaksie of handeling van nul en gener waarde is nie,
die geldigheid daarvan uiteindelik van die bedoeling van die
Wetgewer
afhang. In die algemeen word ‘n handeling wat in stryd met ‘n
statutêre bepaling verrig is, as ‘n
nietigheid beskou,
maar hierdie is nie ‘n vaste of onbuigsame reël nie.
Deeglike oorweging van die bewoording van die
statuut en van sy doel
en strekking kan tot die gevolgtrekking lei dat die Wetgewer geen
nietigheidsbedoeling gehad het nie."'
[11] Sections 10(1) and (2) do not in terms invalidate the agreement
between the home builder and the housing consumer. Quite the
contrary
– I think it is clear that, consistent with the overall purpose
of the Act, the validity of that agreement is unaffected
by an act of
the home builder in breach of those sections. The prohibition in
those sections is not directed at the validity of
particular
agreements but at the person who carries on the business of a home
builder without a registration. They thus do no more
than disentitle
a home builder from receiving any consideration. That being so a home
builder who claims consideration in conflict
with those sections
might expose himself or herself to criminal sanction (s 21) and will
be prevented from enforcing his or her
claim.
[12] Counsel for Cool Ideas was constrained to accept that had it
issued a summons against Ms Hubbard for payment of the consideration
she could successfully have excepted to it (
IS & GM
Construction CC v Tunmer
2003 (5) SA 218
(W)). Here though, so it
was contended, an arbitration intervened. That, so the contention
proceeded, materially altered the situation.
I cannot see how it
does. For present purposes I shall assume, without deciding, that the
arbitration award is a valid award. The
purpose of the arbitration,
as the arbitration agreement makes plain, was to determine the work
that had been executed by Cool
Ideas and the consideration to be paid
by Ms Hubbard for such work. The arbitrator determined the
consideration to be paid by Ms
Hubbard to Cool Ideas and issued an
award to that effect. It is that award that Cool Ideas seeks to have
made an order of court.
But that a court cannot do. For, as Innes CJ
pointed out in
Hoisain v Town Clerk, Wynberg
1916 AD 236
at
240
'It is sought to compel the Town
Clerk to place the applicant's name upon the statutory list; he can
only do that upon the grant
of a certificate by the Council, which
that body has definitely refused to give. Such a certificate is not
in truth in existence.
So that the Court is asked to compel the Town
Clerk to do something which the Statute does not allow him to do; in
other words
we are asked to force him to commit an illegality. There
can be no question of estoppel as far as he is concerned. His
negligence
cannot be a substitute for the Council's approval, nor can
he by virtue of his mistake be compelled to bring about a position
which
he has no power in law to create by his own free will.'
[13]
The section makes it clear that a home
builder may not act in that capacity at all without the requisite
registration. If we were
to find that notwithstanding a home builder
having acted in conflict with the section he or she would nonetheless
be entitled to
payment of the consideration it seems to me that we
would be giving legal sanction to the very situation that the
legislature wished
to prevent (
Pottie v
Kotze
1954 (3) SA 719
(A) at 726H
).
One of the objects of the Act is to protect members of the public who
have to do business with home builders. The prohibitions
in ss 10(1)
and (2) and the penalties in s 21 are intended to make that
protection effective. It accordingly matters not that an
arbitration
intervened. For, it seems to me, that even were Ms Hubbard not to
have disputed Cool Ideas’ claim, the legislation
operated to
preclude a court from entering judgment in its favour.
[14] Although not absolutely neccessary in the
light of my approach to the matter, I nonetheless deem it prudent to
briefly touch
on some of the arguments advanced on behalf of Cool
Ideas. First, much was sought to be made of the equities in this
case. On a
proper approach to the matter the equities hardly come
into the reckoning because, simply put, the equities cannot be
invoked with
a view to in some way trumping an illegality.
In
S v Zuma & others
[1995] ZACC 1
;
1995 (2) SA 642
(CC), Kentridge AJ
stated (para 17):
'While we must always be
conscious of the values underlying the Constitution, it is
nonetheless our task to interpret a written
instrument. I am well
aware of the fallacy of supposing that general language must have a
single "objective" meaning.
Nor is it easy to avoid the
influence of one's personal intellectual and moral preconceptions.
But it cannot be too strongly stressed
that the Constitution does not
mean whatever we might wish it to mean.
He added (para18): ‘. . . [i]f the language used by the
lawgiver is ignored in favour of a general resort to "values"
the result is not interpretation but divination.'
Likewise, whilst it is always helpful to trawl
through the old authorities and analogous cases for the general
principles that they
establish, those cannot be called in aid to do
violence to the language of a statute by placing upon it a meaning of
which it is
not reasonably capable. It remains for the court
considering the legislation to give effect to the object or purpose
of the legislation
(per Innes CJ,
Dadoo
v Krugersdorp Municipal Council
1920 AD
530
at 543). In all such instances where ss 10(1) or (2) finds
application some building work would have been undertaken by the home
builder. And although on the face of it, it may appear to work an
injustice that a consumer should garner the benefit of those
labours
without having to compensate the home builder, that is the outcome
that has been decreed by the legislature. It is one
that is
applicable to all home builders who have failed to register as such,
not just those who may prove to be unscrupulous. It
is thus wholly
irrelevant that the work may have been undertaken with the necessary
skill or that, as is the case here, the housing
consumer happens to
be a fairly sophisticated individual from one of the more affluent
suburbs of Johannesburg rather than a historically
disadvantaged
resident from one of our poorer townships. I may add that whilst it
is so that at first blush the equities appear
to favour the home
builder in this case, on more careful reflection that is not case.
Cool Ideas undertook the construction of
Ms Hubbard’s home
without having been registered as a home builder. That it had not
registered as such was information that
was peculiarly within its
knowledge. After disputes arose it proceeded to arbitration, with
full knowledge that it suffered a legal
impediment. It was only after
the entire arbitration process had run its course and an award had
issued that Ms Hubbard came to
discover that Cool Ideas was not a
registered home builder. Even then there was no pause for reflection
on its part. Instead, it
persisted, that revelation notwithstanding,
in its endeavour to have the arbitration award made an order of
court. It may thus
be fairly said that Cool Ideas was very much the
author of its own misfortune. In those circumstances I baulk at
manifesting any
sympathy for Cool Ideas, for to do so may well
attract the epithet ‘maudlin’.
[15] Second, it was argued that courts are obliged to show due
deference to arbitration awards. But that is to mischaracterise
the
enquiry. It is important to recognise that we are not here dealing
with whether an arbitrator’s award can and should
be set aside.
Rather the enquiry with which we are engaged is whether such an award
can and therefore should be made an order of
court, where to do so
would admittedly fly in the face of a clear statutory prohibition.
The legion of cases that distinguish between
a court’s review
as opposed to appeal power and emphasise the fairly limited grounds
on which an arbitartion award can indeed
be set aside, serve to
obfuscate the present enquiry. That aside though, it seems to me,
that it can hardly be expected of a court
to show deference to an
arbitration award in circumstances where for it to do so would result
in it lending its imprimatur to an
illegality. In those circumstances
any such deference must necessarily yield to the deference that a
court is obliged to show to
the will of the legislature. It may well
be that the arbitration is void ab initio. But I have specifically
refrained from going
that far. It suffices for present purposes to
observe that had the point been taken before the arbitrator, I can
hardly imagine
that he could, simply in disregard of it, have
proceeded to finalise the matter on the terms that he did. For, had
he done so,
it hardly seems likely that a court would have sat idly
by were it to be called upon to review the award. I venture to
suggest
that it is the very antithesis of the rule of law for a court
to simply disregard a clear legislative prohibition that neither
party has sought to constitutionally impugn. Here the legislature has
chosen, in its wisdom, not to vest the courts with a discretion
as to
whether or not to allow claims by home builders for consideration in
circumstances where they have failed to register as
such. All such
claims, without exception, are hit by the prohibition. The language
employed by the legislature could not have been
clearer. And where
the legislature, as here, has expressed itself in clear and
unambiguous terms, a court cannot appropriate for
itself a power that
it does not have under the guise of ameliorating any perceived
harshness that may result from the enforcement
of that legislation. A
court, no matter how well intentioned, is therefore not free simply
on a whim to act in flagrant disregard
of a statutory prohibition
thereby rendering the will of the legislature nugatory. That, in my
view, our Constitution does not
countenance.
[16] It follows that the appeal must succeed and it is accordingly
upheld with costs. The order of the court below is set aside
and in
its stead is substituted the following:
‘
The application is dismissed with costs.’
_________________
V PONNAN
JUDGE OF APPEAL
WILLIS AJA (dissenting):
[17]
I have had the benefit of reading the judgment of my brother Ponnan.
I regret that we do not agree. After the appellant had
filed her
answering affidavit on 14 February 2011 in which she raised, for the
first time, the issue of the respondent’s
non-registration as a
home builder, the respondent registered as such with effect from 11
March 2011. Mr Thihangwani Mudau, the
provincial manager of the
National Home Builders Registration Council, addressed co-operative
letter to Mr Etienne Hayward of the
appellant on 1 April 2011 in
which he records that the appellant’s property had been
re-enrolled with the council under the
respondent’s name and
that this had been necessary ‘in order to align the business
model’ adopted by the respondent
and Velvori Contruction CC
with the requirements of section 10 of the Act. Mr Mudau added that:
‘
This
re-enrolment of the above stand has no impact on the protection
afforded on home owners by the Act and though the membership
of
Velvori Construction expired on 14/11/2008 this has no bearing on the
protection afforded to housing consumers
’
.
There is nothing before us to indicate that the
respondent had the requisite
mens rea
to conduct business unlawfully.
[18] Lest it seem that my disagreement with my
colleagues is unduly fractious or febrile, I should point out that
the issue of what
should be done when an act is prohibited by law has
troubled even the ancients. An example of this is to found in
Johannes Voet’s
Commentarius Ad
Pandectas
1
where he says:
‘(i)
Quorum omnium hanc
rationem puto, quod in hisce aliisque similibus ipsam gestorum
rescissionem majora sequerentur incommoda, majorque
indecentia, quam
ipsum actum contra leges gestum comitantur
.
’
2
A little later, in the same section, Voet continues:
‘(ii)
Hoc communis
praxios fundamento niti putem, quod apud Groitium legitur, ita demum
contra leges gesta ipso jure infirma esse, si
id lex nominatim
expresserit; vel ei, qui quid gessit aut fecit, gerendi facultatem &
habiltatem denegaverit; vel denique id,
quod gestum est, manifesta ac
permanente turpitudine laboret
.’
3
Sir Percival Gane
4
translated these passages as follows respectively:
‘
(i) The reason for all
these things is, I think, that in these and the like cases greater
inconveniences and greater impropriety
would follow on the actual
rescission of the things done, than attend the actual thing done
contrary to the laws.
. . .
I should think that on this
foundation of general practice rests what is found in Grotius,
namely that things done against the
law are only
ipso
jure
invalid if the
law has so expressed it in clear words; or has denied the capacity
and ability of performance to him who has done
or performed the
thing; or finally if the act performed suffers from some obvious and
ingrained disgrace
.’
[19] In
Standard Bank
v Estate Van Rhyn
,
5
Solomon JA delivering the judgment of the court, referred to these
passages to hold that care should be taken to ensure that ‘greater
inconveniences and impropriety’ do not result than ‘would
follow the act itself done contrary to the law’.
6
When Solomon JA alluded to ‘inconveniences and impropriety’
he could just as well have said ‘injustices’.
This case
has been followed in innumerable cases since then, most recently, by
this court, in
Oilwell (Pty) Ltd v
Protec International Ltd
.
7
[20] In
The Effect of
Illegality in South African Law, a Doctrinal and Comparative Study
,
8
Leon Trakman says:
‘
Few areas of law reflect
the problems inherent in the system of South African private law as
readily as do the effects of illegality
in contract. The law is
essentially institutional, finding its basis in the ancient Roman law
as interpreted by the glossators
and commentators, as adopted into
the Roman-Dutch law, and as finally reflected in the South African
law. The system reflects the
inevitable conflict between an attempt
to remain as close as possible to the institutional writings upon
which the substantive
law is founded and the need to acknowledge the
advent of changing circumstances. The court has to face situations
not anticipated
by the Roman and Roman-Dutch authorities, and advance
the system accordingly in the interests of effectiveness, necessity,
justice
and expediency.’
The Roman and Roman-Dutch authorities could not have anticipated
‘modernity’. It is a term that eludes easy definition.
Generally, it refers to the period (and the social conditions and
processes) consequent upon the Enlightenment.
9
It has been characterized by a belief that the world is capable of
transformation through human intervention.
10
The period is marked by the rise of capitalism, increasing complexity
of economic institutions, industrial production, the market
economy,
large-scale social integration, the nation state and mass
production.
11
[21] If the old authorities could not have
anticipated modernity, how much less so would they have had
‘postmodernism’
in mind?
Postmodernism
has ventured critiques of the rationalistic inheritance of the
Enlightenment and the subsequent rise of modernism.
It has been
influenced by thinkers such as Thomas Altizer, Jean Baudrillard,
Jacques Derrida, Michael Foucault, Jürgen Habermas,
Søren
Kierkegaard, Jean-François Lyotard, Robert Scharleman and Mark
Taylor. Arising in response to the tragic history
not only of the
western world but also the failures of socialism in so much of the
world over the past century, postmodernism is
characterised by
cynicism, scepticism and an attack on the ‘complacencies’
of modernism.
[22] All over the world, among the consequences of modernity,
followed upon by ‘postmodern’ terms of reference, has
been the regulation of our lives to an extent that would have been
unimaginable a generation ago. Among the consequences of
postmodernism
is that formalism in law has come under scrutiny. The
inaugural lecture of Christopher Forsyth, erstwhile professor of
public law
at the University of Cape Town and now of the University
of Cambridge, provides a helpful understanding of the issue.
12
[23] As Trakman points out in his article on the
effect of illegality in contract, the root of the reluctance to give
effect to
contracts ‘tainted by illegality’ is to be
found in the concept of certain contracts arising
ex
turpi causa
(out of a wicked/evil
purpose) and which are
contra res
publica
(contrary to public policy) or
contra bonos mores
(contrary
to good morals).
13
For thousands of years, people have been building homes for others
for ‘consideration’ without the benefit of
section
10(1) of the Housing Consumers Protection Measures Act 95 of 1998
(the Act).
Not only is there abundant
evidence across the globe that, in general, builders have, in doing
so, advanced the progress of the
human race but also that most human
beings have scant sense of ‘turpitude’ when houses are
built by someone who is
not registered as a ‘home builder’
in terms of the Act.
[24] The long title of the Act provides that its
purpose is,
inter alia
,
‘to make provision for the protection of housing consumers’.
In plain English, the purpose of the Act is to protect
from
charlatans, carpetbaggers and confidence tricksters those who pay for
homes to be built, either for themselves or for others.
This is a
purpose deserving of respect and support from the courts. To make
this particular arbitration award an order of the court
will not give
impetus to the nefarious activities of any bogus builders.
[25] In
Jajbhay v
Cassim
14
Watermeyer JA, who delivered the leading judgment
of the court, gave a careful review of the old authorities as well as
English
law and concluded that, even in Roman law there were
exceptions to the general rule that a court will not enforce an
unlawful contract
and that the need to prevent injustice was one of
these exceptions.
15
In that case Centlivres JA referred approvingly to a Scottish case in
which the sale of potatoes had been illegal because it took
place in
contravention of a statute,
16
Cuthbertson v Lowes
17
and noted that the ‘pact [was] not so
illicit that the Court could not look at it’.
[26] In
Sutter v
Scheepers
,
18
Wessels JA, who delivered the judgment of the court, held that a
court should consider the objects and scope of a statutory provision
and if its terms were strictly carried out, this would lead to
injustice, then that provision should be interpreted as being
directory
rather than peremptory.
19
This case has been refered to with approval in innumerable cases and,
in this court, most recently in
Geue v
Van der Lith
.
20
[27] Section 21 of the Act provides a criminal
sanction for non-compliance with the section in contention. The
principle of
nulla poena sine lege
(the
principle of legality), to which the Constitutional Court referred
with approval in
S v Dodo
,
21
must apply. The word
poena
in
Latin is difficult to translate into English. It means ‘punishment’
or ‘penalty’ but denotes, in general,
a criminal
sanction.
22
In
Scagell v Attorney-General, Western
Cape
,
23
The Constitutional Court affirmed that it has long been recognised by
our courts that, unless there are clear and convincing indications
to
the contrary in a statute, the prosecution will be required to prove
the necessary
mens rea
on
behalf of the accused.
24
The
principle of legality suggests that, in the absence of
mens
rea
court should be reluctant to visit
a nullity upon a contravention of the provision. Jonathan Burchell,
in both his
South African Criminal Law
and Procedure, General Principles of Criminal Law
25
and his
Principles
of Criminal Law
,
26
renders the maxim as
nullum crimen sine
lege
. Burchell refers to Pomorski’s
American Common Law and the Principle
Nullum Crimen Sine Lege
.
27
There is nothing in the record before us that shows that the
respondent or its key actor, Etienne Hayward, had the requisite
mens
rea
. This is a further factor that
should be taken into account.
[28] There are a number of cases taken from the
law reports furnishing examples which suggest that, in the particular
case before
us, the appeal should be dismissed. In
Pottie
v Kotze
28
Fagan JA, dealing with a Transvaal Ordinance which
forbade the sale of a motor vehicle without a valid roadworthy
certificate, referred
to ‘serious inequities [that] might be
caused, by the invalidation of the contract’
29
and declined to vitiate the agreement in question.
[29] In
Swart v
Smuts
,
30
Corbett JA, delivering the unanimous judgment of the court, referred
to numerous cases before concluding:
‘
Dit
blyk uit hierdie en ander tersaaklike gewysdes dat wanneer die
onderhawige wetsbepaling self nie uitdruklik verklaar dat sodanige
transaksie of handeling van nul en gener waarde is nie, die
geldigheid daarvan uiteindelik van die bedoeling van die Wetgewer
afhang.’
31
This may be translated as follows:
It appears from these and other
relevant authorities that the statutory provision in question does
not even expressly provide that
the intention of the legislature is
that the validity of such a transaction is of null and void and of no
force and effect. (My
translation).
The court confirmed that a deed of sale in
conflict with the provisions of section 23(1)(
b
)
of the Agricultural Credit Act 28 of 1966 was not invalid because it
did not have a certificate that there was a reasonable prospect
that
the Land Bank would grant him credit.
[30] In
Noragent
(Edms) Bpk v De Wet
32
a full bench of the Transvaal Provincial Division
consisting of Nestadt, O’Donovan and Van Niekerk JJ referred to
Swart v Smuts
to
hold that an agreement between an estate agent and an owner of land
was not invalid merely by reason of the fact that the estate
agent
had failed to comply with the provisions of section 26 of the Estate
Agents Act 112 of 1976.
[31] This decision was approved in
Taljaard
v TL Botha Properties
33
where the court dealt with a similar matter.
Nugent JA delivered the unanimous decision of the court in holding
that ‘[i]t
is well established that legislation is to be
construed so as to interfere as little as possible with established
rights’.
34
[32] In the
Oilwell v
Protec
case
35
this court held that the failure to obtain prior consent from the
treasury for an agreement falling under reg 10(1)(
c
)
of the Exchange Control regulations
36
promulgated under the
Currency and Exchanges Act 9 of 1933
was, by
reason of the principles set out in
Standard
Bank v Estate van Rhyn
,
37
not a nullity. Ponnan JA was a member of that court.
[33] In
Bekker v
Schmidt Bou-Ontwikkelings CC
,
38
Yekiso J held of
section 10
of the
Housing Consumers Protection
Measures Act that
:
‘
The Legislature could
never have contemplated that failure or omission by the home builder,
either deliberately or through ignorance,
to comply with the
provisions of the Act should result in the invalidity of the
agreement contemplated in s 13 of the Act and the
prejudice of the
housing consumer’
.
39
[34] One is mindful of the fact that Goldblatt J held in
IS &
GM Construction CC v Tunmer
2003 (5) SA 218
(W) that:
‘
I am satisfied that
the particulars of claim do not disclose a cause of action in that
the plaintiff, in view of the facts pleaded,
is obliged to allege
that it is a registered home builder as defined in the Act, before it
can receive any consideration.
’
40
If, by way of hypothetical example, the plaintiff had pleaded that it
was not at the relevant time a registered home builder but
had
putatively been one, bona fide believing that it had been so
registered, when it was not, owing to fraud and/or negligence
in the
registering office, would an exception still be upheld? In other
words, non-registration as a home builder would not necessarily
and
in every instance result in a plaintiff not having a claim against
its employer. The particular facts of any given case are
always of
the utmost importance.
[35] There is a further consideration that militates against
interfering with the order of the court a quo: the principle of
judicial
deference to arbitration awards. In
Telcordia
Technologies Inc v Telkom SA Ltd
41
Harms JA delivering the judgment of this court affirmed the principle
of party autonomy in arbitration proceedings and the need
to minimise
judicial intervention in arbitration proceedings.
42
[36] In
Boksburg Town Council v Joubert
,
43
which is particularly relevant , the court, in the context of an
arbitration award, referred to both
Doyle v Shenker & Co Ltd
44
and
Administrator, South West Africa v Jooste Lithium Myne
(Eiendoms) Bpk
45
to hold that a bona fide misinterpretation or an unintentional
overlooking of a provision of a statute does not constitute a gross
irregularity and affords no grounds for review.
[37] In
Lufuno Mphaphuli & Associates (Pty) Ltd v Andrews
,
46
the Constitutional Court affirmed the
Telcordia
judgment but
emphasised the need for the courts to ensure that certain standards,
including procedural fairness, had to be met
to prevent injustice.
Therein lies the control measure of application in undeserving cases
where a builder was unregistered. The
court had to consider a case
where an application to have an order made an order of court in the
High Court was granted. A counter
application to review that decision
was dismissed. This court dismissed the appeal. The majority
supported the judgment of O’Regan
J. Both she and Kroon AJ,
supported the reasoning in the
Telcordia
case and affirmed the
need for deference to arbitration awards.
[38] Ever since
Dickenson & Brown v Fisher’s Executors
47
it has been our law that a mistake of law by an arbitrator does not
permit interference by a court. This case has been affirmed
in
numerous cases: See, recently in this court:
Moch v Nedtravel
(Pty) Ltd t/a American Express Travel Service
48
and
Total Support Management (Pty) Ltd v Diversified Health
Systems (SA) (Pty) Ltd
.
49
[39] In
Total Support Management
, Smalberger ADP, delivering
the unanimous judgment of this court affirmed that ‘even a
gross mistake, unless it establishes
mala fides
or partiality,
would be insufficient to warrant interference’.
50
Smalberger ADP affirmed
51
the correctness of decision of Mpati J in
Patcor Quarries CC v
Issroff
52
to the effect that there was nothing to show the arbitrator’s
mistake was gross and, accordingly, there could be no interference.
53
[40] In this case the mistake was unusual inasmuch as the same
mistake was made not only by at least one of the parties but also
by
the arbitrator rather than concerning a rule of common law or a
statutory provision that he was specifically called upon to
decide.
Elementary set theory in mathematics makes it plain that if three
persons make the same mistake it remains as much a mistake
as if it
had been made by only one person or two. A mistake by an arbitrator
does not become a non-mistake because the parties
themselves made the
same mistake. The mistake in question could conceivably have been
made by any number of judges discharged from
active service or senior
counsel who act as arbitrators.
[41] In
Interciti Property Referrals CC v Sage Computing (Pty)
Ltd
,
54
in a case concerning the making of an arbitrator’s award an
order of Court, Zulman J referred to
RPM Konstruksie (Edms) Bpk v
Robinson
55
and
Hyperchemicals International (Pty) Ltd v Maybaker Agrichem
(Pty) Ltd
56
to hold that even if an arbitrator’s reasoning is flawed this
is no reason not to make his award and order of court.
57
[42] In
Amalgamated Clothing and Textile Workers Union of South
Africa v Veldspun (Pty) Ltd
58
Goldstone JA said that the parties ‘abandon the right to
litigate in courts of law and accept that they will be finally bound
by the decision of the arbitrator.’
59
[43] If one has regard to
Natal Joint Municipal Pension Fund v
Endumeni Municipality
,
60
recently decided in this court, it cannot be that the ‘purpose
to which [the section] is directed’ is that in every
instance
the builder would be left empty handed. That could have unfortunate
and unjust results. Not making the award an order
of the court would
be an unjust result in this particular case. The overall thrust of
both the majority and the minority judgments
in
National Credit
Operator v Opperman and Others
61
in favour of avoiding legislative sledgehammers provides me with
final encouragement.
[44] I should have dismissed the appeal with costs.
_________________
N WILLIS
ACTING JUDGE OF APPEAL
APPEARANCES:
For
Appellant: A R G Mundell SC
Instructed
by:
D J
Greyling Incorporated
Roodepoort
Honey
Attorneys
Bloemfontein
For
Respondent: H H Cowley
Instructed
by:
Chetty De
Villiers Mafokoane Attorneys
Roodepoort
E G Cooper
Majiedt Inc
Bloemfontein
1
J
Voet
Commentarius Ad Pandectas
(1723).
2
At
1.3.16.
3
Ibid
.
4
P
Gane
The Selective Voet being the Commentary on the Pandects
vol
1 (1955) at 46-47.
5
Standard
Bank v Estate Van Rhyn
1925 AD 266.
6
At
274.
7
Oilwell
(Pty) Ltd v Protec International Ltd and others
2011
(4) SA 394
(SCA) para 19.
8
L
E Trakman ‘The effect of illegality in South African law –
a doctrinal and comparative study’
(1977)
94
SALJ
327-341
and 468-482 at 327.
9
See
for example, A Giddens
Conversations
with Anthony Giddens: Making Sense of Modernity
(1998)
at 94; R Leppert ‘The Social Discipline of Listening’ in
J Drobnick (ed)
Aural Cultures
(2004)
at 19-35; C Norris ‘Modernity’ in T Honderick (ed)
The
Oxford Companion to Philosophy
(1995)
at 583.
10
Ibid
.
11
Ibid
.
12
C
Forsyth ‘
Showing the fly the way out of the
flybottle: the value of formalism and conceptual reasoning in
administrative law’
(2007) 66
Cambridge
Law Journal
325.
13
Trakman
supra
at 328-329.
See also
Colonial
Banking & Trust Co Ltd v Hill’s Trustee
1927
AD 488.
14
Jajbhay
v Cassim
1939 AD 537.
15
At
550-551.
16
At
558.
17
Cuthbertson
v Lowes
(
1870) 7 Sc.L.R.706.
18
Sutter
v Scheepers
1932 AD 165.
19
At
174.
20
Geue
v Van der Lith
[2003] ZASCA 118
;
2004 (3) SA 333
(SCA)
para 18.
21
S
v Dodo
[2001] ZACC 16
;
2001 (3) SA 382
(CC) para 13.
22
See,
for example, the
Oxford Latin
Dictionary
.
23
Scagell
v Attorney-General, Western Cape
[1996] ZACC 18
;
1997
(2) SA 368
(CC)
.
24
Para
33.
25
J
Burchell
South African Criminal Law and Procedure – General
Principles of Criminal Law
4 ed (2011) at 34.
26
J
Burchell
Principles of Criminal Law
3 ed (2005) at 94.
27
S
Pomorski
The American Common Law and the Principle of
Nullem
Crimen Sine Lege 2 ed (1975).
28
Pottie
v Kotze
1954 (3) SA 719
(A).
29
At
727B-C.
30
Swart
v Smuts
1971 (1) SA 819
(A).
31
At
829E-F.
32
Noragent
(Edms) Bpk v De Wet
1985 (1) SA 267
(T).
33
Taljaard
v TL Botha Properties
[2008] ZASCA 38
;
2008 (6) SA 207
(SCA).
34
Para
8.
35
Supra
.
36
Exchange
Control Regulations, GN R1111,
GG
Extraordinary
123, 1 December 1961.
37
Supra
.
38
Bekker
v Schmidt Bou-Ontwikkelings CC and others
2007 (1) SA 600
(C).
39
Para
27.
40
At
220H-I.
41
Telcordia
Technologies Inc v Telkom SA Ltd
[2006] ZASCA 112
;
2007 (3) SA 266
(SCA).
42
Para
4.
43
Boksburg
Town Council v Joubert and others
1964 (4) SA 73
(T).
44
Doyle
v Shenker & Co Ltd
1915 AD 233.
45
Administrator,
South West Africa v Jooste Lithium Myne (Eiendoms) Bpk
1955 (1)
SA 557
(A) at 569.
46
Lufuno
Mphaphuli & Associates (Pty) Limited v Andrews and another
2009 (4) SA 529
(CC).
47
Dickenson
& Brown v Fisher’s Executors
1915 AD 166
at 174-176.
48
Moch
v Nedtravel (Pty) Ltd t/a American Express Travel Service
1996
(3) SA 1
(SCA) at 10E.
49
Total
Support Management (Pty) Ltd and another v Diversified Health
Systems (SA) (Pty) Ltd and another
[2002] ZASCA 14
;
2002 (4) SA 661
(SCA).
50
Para
17.
51
Para
25.
52
Patcor
Quarries CC v Issroff and others
1998 (4) SA 1069
(SE).
53
Mpati
J’s judgment at 1079F-1082G.
54
Interciti
Property Referrals CC v Sage Computing (Pty) Ltd and another
1995 (3) SA 723
(W).
55
RPM
Konstruksie (Edms) Bpk v Robinson
1979 (3) SA 632
(C) at 636A-B.
56
Hyperchemicals
International (Pty) Ltd and another v Maybaker Agrichem (Pty) Ltd
and another
1992 (1) SA 89
(W).
57
At
727G-H.
58
Amalgamated
Clothing and Textile Workers Union of South Africa v Veldspun (Pty)
Ltd
[1993] ZASCA 158
;
1994 (1) SA 162
(A).
59
At
169F-G.
60
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA
593
(SCA) Para 18.
61
National
Credit Operator and Others v Opperman
2013 (2) SA 1
(CC).