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[2019] ZAGPPHC 211
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Uniqon Wonings (Pty) Ltd v National Home Builders Registration Council (2019/35086) [2019] ZAGPPHC 211 (10 June 2019)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH
AFRICA
GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE:
NO
(2)
OF
INTEREST TO OTHER JUDGES: NO
(3)
REVISED
CASE NO: 2019/35086
10/6/2019
In
the matter between:
UNIQON
WONINGS (PTY) LTD
Applicant
and
THE
NATIONAL HOME BUILDERS
REGISTRATION
COUNCIL
Respondent
JUDGMENT
MOKOSE
J
[1]
The
applicant seeks a mandamus ordering the respondent to provide it with
'correct and accurate enrolment certificates' in respect
of units
forming part of three developments.
[2]
The
salient facts are briefly that during February 2018 the applicant
launched an urgent application against the respondent seeking
delivery of certificates of proof of enrolment of certain properties
situate in Centurion, Gauteng Province. Fourie J ordered the
respondent to provide certificates within two (2) days. Despite such
order, the respondent immediately launched an application
for leave
to appeal. The applicants then launched an application in terms of
Section 18(3) of the Superior Courts' Act 1O of 2013
that the order
of Fourie J not be suspended pending the appeal. The respondent
subsequently opted to withdraw its appeal and was
ordered to pay the
costs of the appeal and the Section 18(3) application.
[3]
After
these applications and counter-applications, the respondent
continuously failed to furnish the applicant timeously with the
certificates despite applications having been made in respect
thereof. These delays in the furnishing of enrolment certificates
for
units forming part of various developments now culminate in the
application before this court today.
[4]
The
applicant was of the view that the matter was urgent and as such, its
non compliance with the rules relating to the service
of
documents and time frames should be condoned as no substantial
redress in course would be available to it as consumers would
cancel
the purchase agreements.
[5]
Although
the respondent disagreed and was of the view that there was no
justification for the applicant to have 'leaped out of the
starting
blocks as it has', I am of the view that the applicant has provided
evidence and justified the application on an urgent
basis.
Accordingly, the applicant's non-compliance with the Rules is
condoned and the application is heard in accordance with Rule
6(12)(b) of the Superior Courts Act.
[6]
The
applicant, a property developer, is a duly registered builder in
terms of Section 10 of the Housing Consumer Measures Act 95
of 1998
("the Act"). In terms of Section 14(1) of the Act a home
builder shall not commence construction of a home falling
within any
category of home that may be prescribed by the Minister for purposes
of this section unless-
(a)
he
has submitted the prescribed documents, information and fee to the
Council in the prescribed manner;
(b)
the
Council has accepted the submissions contemplated in (a) above and
had entered it into its records; and
(c)
the
Council has issued a certificate of proof of enrolment in the
prescribed form and manner to the home builder.
[7]
In
terms of the Rules of the respondent a home builder must submit a
home for enrolment fifteen (15) days prior to the commencement
of
construction together with all supporting documents. The home builder
has to determine what it believes the estimated selling
price of the
unit to be enrolled. In support thereof. It must provide proof of the
estimated price in the form of a feasibility
study. The respondent
will then issue an invoice to the home builder for the payment of
enrolment fees calculated on the estimated
selling price which fee
will be paid either in full directly to the respondent or in the case
of a sectional development, a phased
payment. The respondent would
then consider the application and if in order, will issue an
enrolment certificate.
[8]
Once
the construction of the home has been completed, the developer or
home builder will sell the house to a consumer. On conclusion
of the
sale agreement and the determination of an actual selling price by
means of a signed offer to purchase, the home builder
has a statutory
duty in terms of Rule 12(4) to declare the actual selling price to
the respondent and if it differs from the estimated
selling price,
the difference must be paid by the home builder to the respondent
upon the issue of an invoice by the respondent.
[9]
The
applicant would furnish the respondent with a spread sheet of the
properties being registered but in December 2018, the respondent
insisted on copies of the purchase agreements as proof of the actual
selling prices. However, during April 2019 the respondent
refused to
issue invoices for the difference between the estimated enrolment fee
and the enrolment fee calculated on the actual
selling price despite
the spread sheets having been furnished to it.
[10]
Section
18 of the Act states the following:
"(1)
No financial institution shall lend money to a housing consumer
against its security of
a mortgage bond registered in respect of a
home with a view to enabling the housingconsumer to purchase the home
from a home builder,
unless that institution is satisfied that the
home builder is registered in terms of the Act and that the home is
or shall be enrolled
with the Council and that the prescribed fees
have been or shall be paid.
(2)
any conveyancer attending to the registration of a mortgage bond in
favour of an institution
contemplated in sub-section (1) shall ensure
that the home builder is registered in terms of the Act, has enrolled
the home with
the Council and has paid the prescribed fees in respect
of that enrolment."
[11]
Section 21 of the Act provides as
follows:
"(1) Any
person who-
(a)
(b) Contravenes section 10(1)
or (2), 13(7), 14(1) or (2), 18(1) or (2) or 19(5),........shall be
guilty of an offence and liable
on conviction to a fine not exceeding
R25 000 or to imprisonment for a period not exceeding one year, on
each charge."
[12]
Rule 12(4) (GN R1408) states the
following:
"I
n
the case of a sectional title development or phased sectional title
development the home builder must comply with Rule B(b) and
return
the sectional title phased payment form with payment of the
outstanding amount by bank guaranteed cheque, cash, or evidence
of
cash or bank guaranteed cheque bank transfer declaring the difference
between the actual selling prices compared with the expected
selling
prices and make payment of the difference.·
[13]
Regulation 2(5) (GN1407) states the
following:
"If a deed of sale does
not exist at the time of enrolment for sectional title homes or homes
built in speculation of sale-
(a)
The enrolment fee must be
determined with reference to the expected selling price;
(b)
The home builder must submit
marketing brochures reflecting selling prices or extracts from the
feasibility studies reflecting details
relating to selling prices, in
order to enable the Council to compare proposed selling prices with
actual selling prices.”
[14]
Regulation 2(6) (GN 1407) states the
following:
"Where an
under-declaration of the selling price in respect of homes has
occurred, the home builder must, on demand of the
Council, pay the
difference in enrolment fees.·
[1
5]
The
respondent's case is that that Rule 12(4) in particular does not
apply to the matter in
casu
.
It
is of the view that this rule applies to phased development payment
mechanisms for sectional title development schemes in that
is allows
payment of twenty per cent (20%) of the total enrolment fee in cash
and eight percent (80%) by bank guarantee based on
the estimated
selling price of the homes. The applicant did not make use of this
mechanism and paid the enrolment fee upfront.
As such, this rule is
inapplicable.
[16]
Secondly, the respondent is of the view
that Rule 2(6) only applies where 'under declaration' of the
selling price has occurred.
As such, the Council is entitled, in its
discretion, to demand payment of the difference between the
under-declared price at the
time of enrolment and the actual selling
price. The respondent interprets this rule to apply where the home
builder has incorrectly
declared the actual or estimated selling
price at the time of enrolment. It is of the view that it does not
apply where for other
reasons, a false or inaccurate declaration,
declared at the time of enrolment, is not the same as the actual
price such as where
the home builder underestimates the selling price
in order to reduce the enrolment fee payable or where the estimated
selling price
has changed due to factors outside the home builder's
control such as an improvement in the housing market.
[17]
The applicant disagrees with this
interpretation and likens the matter in
casu
with that of Renico Construction
(Pty) Ltd v The National Home Builders Registration Council
[1]
where the reason the applicant brought the application was that
although the respondent had issued a certificate of proof of
enrolment
based on an expected price, since the certificate had been
issued it had concluded a sale in respect of two units at a selling
price that was higher than the price that the applicant had
anticipated. The relief sought in this matter was an amended
enrolment
certificate which the respondent contended was
ultra
vires
the Act. The notice of motion
was amended in the alternative to an amended enrolment certificate, a
letter from the respondent confirming
the applicant's compliance with
the Act, alternatively a compliance certificate.
[18]
The respondents were ordered to issue
certificates of compliance in respect of the two units where the
applicant had already paid
the difference in the enrolment fee. The
court was of the view that such matters must be approached on a
pragmatic basis and on
a basis, as regulator, of assisting those who
are regulated to achieve legitimate objects that are required in
terms of the Act.
[19]
In the matter in
casu,
the respondent accepted a duty to
assist and offered the applicant what was suggested by the court in
the Renico matter (supra)
- a certified document or some other form
of confirmation as it alleged that it was unable to furnish a new
certificate of compliance
as the under-declaration caused by market
fluctuations does not fall with the scope of the Act. Accordingly, it
is unwarranted
to suggest mala
fides
on its part.
[20]
Submissions were made by counsel for the
applicant that such confirmation or certification would not suffice
as it was not acceptable
to the Banking Association of South Africa.
Furthermore, the offer which had been made by the respondent differed
to that in the
Renico matter in that it was a tender of issuing the
certificate in respect of the lower amount and not the higher amount.
[21]
The respondent had acknowledged that it has an obligation to provide
confirmation of compliance
which is an incident of its powers and
duties under the Act. A thorough reading of the Act, the Rules and
Regulations indicates
the said obligation on the part of the
respondent to issue such certificate. It does not restrict the issue
of enrolment certificates
to under-declarations made due to factors
other than market fluctuations.
[22]
The case before this court is one in which the applicant sought an
order directing the respondent
to issue certificates of enrolment in
respect of certain units. It was resisted by the respondent on the
basis that it is not obliged
or permitted in terms of the Act,
Regulations or Rules to re-issue an enrolment certificate and levy an
additional fee where there
is a difference due to market
fluctuations. I am of the view that this is a case where the award of
attorney and client costs are
warranted due to the attitude of the
respondent despite the decision in the Renico case (supra). The court
has taken note of the
fact that the respondent is an official body
and that the use of public resources for litigation in this form is
not exemplary.
[23]
Accordingly, the following order is granted:
The order is granted as per the
draft order attached hereto.
MOKOSE J
Judge of
the
High Court
of South Africa
Gauteng Division,
Pretoria
For the Applicant:
Adv
L Van Gass instructed by
Van der Merwe & Associates
For the First Respondent:
Adv I Currie instructed by
Kunene Ramapala Inc
Date
of Hearing: 5 June 2019
Date
of judgement: 10 June 2019
IN THE HIGH COURT OF SOUTH AFRICA
[GAUTENG
DIVISION, PRETORIA]
Case No: 35086/2019
IN FRONT OF HONOURABLE JUSTICE
MADAM MOKOSE
ON 10 JUNE 2019
In
the matter between:
UNIQON
WONINGS (PTY) LTD
REGISTRATION
NO.: 1999/001441/07
APPLICANT
and
THE
NATIONAL HOME BUILDERS REGISTRATION COUNCIL
RESPONDENT
DRAFT COURT ORDER
AFTER HAVING READ THE PAPERS
FILED OF RECORD, AFTER HEARING ARGUMENT ON BEHALF OF THE PARTIES AND
AFTER CONSIDERING THE MATTER,
THE FOLLOWING ORDER IS GRANTED:
1.
THAT
the Applicant's non-compliance with
the rules of Court relating to service of documents and time frames
is condoned and that this
application is heard as an urgent
application in accordance with Rule 6(12)(b);
2.
Directing
the Respondent to issue the Applicant with correct and accurate
enrolment certificates in relation to the units listed
in Annexure
"B" to the founding affidavit relating to the developments
known as IQ Waitikiri, IQ Brooklyn, IQ Whistling
Thorn upon:
2.1)
The
Applicant declaring to the Respondent , in terms of Rule 12(4)
published under Regulations GNR 1408, the actual selling price
of
each unit supported with the offer to purchase of such unit;
2.2)
The
Respondent issuing a demand/ invoice within 2 (two) days from
declaration, in terms of Regulation 2(6) of GNR 1407, for the
difference between the enrolment fee paid and calculated in terms of
the estimates selling price and the enrolment fee based upon
the
actual selling price for such unit;
2.3)
The
Applicant paying such demand/ invoice in respect of the such unit;
3.
The
Respondent is afforded 5 (five) days from date of payment in terms of
2.3 to issue the Applicant with correct and accurate enrolment
certificates;
4.
THAT
the Respondent is ordered to pay the
costs of this application on an attorneys and client scale.
BY
ORDER - REGISTRAR
[1]
Case No. 4540/2019 dated 8 M arch 2019