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[2018] ZALMPPHC 5
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National Home Builders Registration Council v Andendorf NO and Others (1640/2015) [2018] ZALMPPHC 5 (14 February 2018)
REPUBLIC OF SOUTH
AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(LIMPOPO
DIVISION, POLOKWANE)
REPORTABLE:
YES
OF
INTEREST TO THE JUDGES: NO
CASE
N0:1640/2015
In the matter
between:
NATIONAL
HOME BUILDERS
REGISTRATION
APPLICANT
COUNCIL
AND
MICHAEL
WESSEL ANDENDORF
N.O
FIRST
RESPONDENT
CHRISTIAAN
DIEMONT
N.O
SECOND
RESPONDENT
WESSEL
ANDENDORF
N.O
THIRD
RESPONDENT
PETRUS
JACOBUS ANDENDORF
N.O
FOURTH
RESPONDENT
THE
MINISTER OF HUMAN SETTLEMENT OF
THE
REPUBLIC OF SOUTH
AFRICA
THIRD
PARTY
JUDGMENT
MULLER
J:
[1]
This is a third application wherein the question arose whether a
trust is a "person" as envisaged by the provisions
of The
Housing Consumer Protection Measures Act, Act 95 of 1998
("hereinafter the Act"). It was held, on two previous
occasions, that a trust is not a "person" for purposes of
the Act.
[1]
[2]
The respondents, in their opposing papers also took the point that
the provisions of section 10, 14, 14A, 18 and 21 of the Act
are
unconstitutional. Because of the constitutional issue which was
raised, the Minister of Human Settlement was joined, as a third
party. On the day of the hearing adv Ramawele SC and Tshivhase
appeared on behalf of the third party. Counsel for the respondents
informed the court when the application commenced that the
constitutional issue raised by them is abandoned and tendered the
costs
of the third party. It was not necessary for counsel for the
third party to make any submissions during argument on the
constitutional
issues. They were consequently given leave to be
excused from further attendance. The application then proceeded on
the disputed
issues between the applicant and the respondents. The
principle issue was whether a trust is a person, which in terms of
the Act,
has to register as home builder in terms of section 10.
[3]
The applicant is the National Home Builders Registration Council. It
is common cause that the trustees of the Mike's Trust,
acting as
such, were developing a property situated in Polokwane by erecting
dwelling sectional title units for the benefit of
the trust. The
trust registered as "a home builder" under the Act, but
failed to renew its registration. The failure
of the trust to
re-register prompted the applicant to launch the present application
in terms of section 20 of the Act.
[2]
[4]
The applicant seeks orders against the trust, alternatively the
trustees, further alternatively against the trustees in their
personal capacities. The relief claimed is wide ranging in that a
declarator
is
sought that the conduct of the trust, alternatively, the conduct of
the respondents representing the trust, further alternatively,
the
respondents in their personal capacity in constructing, alternativel
, causing the construction of homes at Portion 3 of Erf
799 Polokwane
located at 46 Devenish Street Polokwane Limpopo Province, contravenes
the Act. lnterdictory relief pending compliance
with section 10, 14
and 14A of the Act read with the rules and regulations promulgated
under the Act is also claimed.
[5]
It is argued by the respondents that the relief sought has become
academic as the building works have since been completed and
the
buildings are rented to tenants who are presently in occupation. The
argument cannot be accepted. It is correct that it is
common cause
that the buildings have been completed since the application was
launched, but the declaratory relief remains relevant.
[6]
The main contention of the respondents are that their conduct do not
fall within the scope of the Act since the Mike's Trust
is not "a
person" and is therefore not required to register as a home
builder in terms of the Act. I will commence to
answer this crucial
aspect. The Act applies to any home builder
[3]
which is defined in section 1 of the Act as:
"(a) a person
who carries on the business of a home builder;
or
(b) an owner builder
who has applied for exemption in terms of section 10A."
"Business
of a home builder" means:
"(a) to
construct or to undertake to construct a home or to cause a home to
be constructed for any person;
(b) to construct a
home for the purpose of sale, leasing renting out or otherwise
disposing of such a home;
(c) to sell or to
otherwise dispose of a home contemplated in paragraph (a) or as a
principal; or
(d) to conduct any
other activity that may be prescribed by the Minister for purposes of
this definition ."
[7]
Section 10 of the Act provides that:
"(1) No person
shall-
(a) carry on the
business of a home builder; or
(b)...
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."
[8]
The ordinary grammatical meaning must be given to the words of the
statute unless to do so will result in absurdity. The judgment
in
Natal
Joint Municipal Pension Fund v
Endumeni
Municipality
[4]
is
not in discord with the provisions of the Interpretation Act with
regard to the approach generally to be adopted when interpreting
legislation:
"Interpretation
is the process of attributing meaning to the words used in a document
, be it legislation, some other statutory
instrument, or contract,
having regard to the context provided by reading the particular
provision or provisions in the light of
the document as a whole and
the circumstances attendant upon its coming into existence. Whatever
the nature of the document, consideration
must be given to the
language used in the light of the ordinary rules of grammar and
syntax; the context in which the provision
appears; the apparent
purpose to which it is directed and the material known to those
responsible for its production. Where more
than one meaning is
possible each possibility must be weighed in the light of all these
factors. The process is objective, not
subjective. A sensible meaning
is to be preferred to one that leads to insensible or unbusinesslike
results or undermines the apparent
purpose of the document. Judges
must be alert to, and guard against, the temptation to substitute
what they regard as reasonable,
sensible or businesslike for the
words actually used. To do so in regard to a statute or statutory
instrument is to cross the divide
between interpretation and
legislation; in a contractual context it is to make a contract for
the parties other than the one they
in fact made. The "inevitable
point of departure is the language of the provision itself', read in
context and having regard
to the purpose of the provision and the
background to the preparation and production of the document."
[9]
The Constitutional Court in
Cool
Ideas 1186
CC
v
Hubbard and Another
[5]
had
occasion to interpreted section 10(1)(b) of the Act, although in a
different context.
[6]
In doing
so the court analysed the scheme of the Act. It is thus unnecessary
for me to undertake the same exercise, save to confirm
that the
purpose of the Act, as stated in the preamble, is to protect housing
consumers and to provide for the establishment of
a National Home
Builders Registration Council
[7]
in Chapter 1. The object is to regulate the building industry by
means of the NHBRC.
[8]
It does
so by requiring registration of home builders with the NHBRC.
[9]
The protection of housing consumers is enhanced by the compulsory
inclusion in contracts of sale or construction of warranties
provided
by home builders and also for enrolment of home builders with the
council before commencement of construction.
[10]
Section 20 provides for relief which the Council may claim for
non-compliance with the Act. The central question to be determined
is
if a trust is home builder which is required to register with the
NHBRC.
[10]
Unless a statute provides otherwise a trust is not a legal person. It
is a legal institution
sui
generis.
The
assets and liabilities of a trust vests in the trustees. A trustee is
the owner of the trust property for purposes of administration
of the
trust but
qua
trustee
he/she has no beneficial interest in the trust property.
[11]
However, that does not bestow upon a trustee a personal interest in
the trust property to the extent that the trust property will
devolve
on his heirs.
[12]
No rights
and obligations vested in a trust as such. A trust is not recognized
as a
persona
or
an entity.
[13]
[11]
In
Commissioner
for Inland Revenue v Emary NO
[14]
supra
the
court was called upon to decide whether a deceased estate is "a
person" for purposes of section 74 of the Income Tax
Act,
[15]
which, at the relevant time, did not contain a definition of
"person". Embarking upon that exercise the court called
in
aid the definition of "person" in the Interpretation Act.
With reference to the definition of "person" in
the
Interpretation Act, it concluded:
"The Act does
not define "person". In so far as the context allows, the
definition in sec 2(x) of the Interpretation
Act, 33 of 1957, would
accordingly apply. That definition does not purport to be exhaustive.
It includes amongst persons, apart
from the local authorities
mentioned therein, companies incorporated or registered as such under
any law, and any body of persons
corporate and unincorporated. It
does not exclude any other entity which by common law is a juristic
person. But it is not without
significance that the entities
expressly included are entities which consist of persons or which
have persons underlying their
existence.
The concept of a
legal
persona
consisting of or based upon things and without
membership of any natural persons, is not unknown in our common law
or in our statute
law....
The specific
inclusion of well-known juristic persons of more common occurrence,
such as registered companies and bodies of persons
corporate, and the
omission of any reference to the less known and more exceptional
category of such persons, rather suggests that
they do not form part
of the ordinary statutory concept of a person, and are not to be
included unless, as stated in section 2
of the Interpretation Act,
"the context otherwise requires or unless in the case of any law
it is otherwise provided".
[16]
[12]
A trust, is an accumulation of assets and liabilities, similar to a
deceased estate.
[17]
The
Interpretation Act provides a definition of "person":
"2.
Definitions.-The following words and expressions shall, unless the
context otherwise requires or unless in the case of
any law it is
otherwise provided therein, have the meanings hereby assigned to them
respectively, namely-
"person"
includes-
(a) any divisional
council, municipal council, village management board, or like
authority; (a} any company incorporated or registered
as such under
any law;
(b) any body of
persons corporate or unincorporated."
[13]
In the absence of a definition of "person" in the Act,
cognizance has be taken of the provisions of the Interpretation
Act
[18]
to attribute meaning
to the words used in the Act, insofar as the context and purpose
allows. Section 1 of the Interpretation Act
states:
"The provisions
of this Act shall apply to the interpretation of every law (as in
this Act defined) in force, at or after the
commencement of this Act,
in the Republic or in any portion thereof, and to the interpretation
of all by-laws, rules, regulations
or orders made under the authority
of any such law, unless there is something in the language or context
of the law, by-law, rule,
regulation or order repugnant to such
provisions or unless the contrary intention appears therein."
[14]
It may be taken that the legislator is acquainted with the actual
state of the law and also with the interpretation by the
courts in
relation trusts in a similar context.
[19]
[15]
The Act contains no definition of a "person." The inclusion
of a trust in the definition of "person" cannot
simply be
inferred, unless a trust is included in the scope of the Act as a
juristic person. To achieve that purpose trusts are
specifically
defined in other Acts to include trusts as juristic persons for
purposes of those Acts.
[20]
The impression gained, from the inclusion of definitions which define
trusts as juristic persons in those Acts, is that the legislature
is
fully aware that trusts are not legal
persona,
but
that it is necessary to specifically include trusts in statutory
provisions as juristic persons, if that purpose is to be achieved.
[16]
Counsel for the applicant drew attention to section 9(1) and 9(2)(a)
of the Act
[21]
and argued that
the section clearly requires the NHBRC to maintain and provide an
information database of home builders which include
trusts
registered, suspended and deregistered in terms of the Act. And that
requirement, so the argument goes, indicates that trusts
are home
builders and are required to register as such.
[17]
The argument cannot be upheld. The definition of a home builder makes
no reference to a trust. All that is required by the
provisions of
section 9(1) is that the NHBRC must keep a database of all home
builders registered, suspended or deregistered. The
provision by
itself cannot be interpreted to mean that a trust is regarded as a
home builder together with other entities that
are obliged to
register as home builders. That could easily have been achieved by
providing a definition of "person"
and the inclusion of a
description of a trust in that definition. Nor can it be inferred
from other words used in the Act. All
it says is that all the
entities,
[22]
names and
identity numbers of the directors, members, trustees, or partners of
such companies, close corporations, trusts, partnerships
or sole
traders, if registered, suspended , or deregistered in terms of the
Act, be included in the database. A trustee of a trust
may register
as a home builder, if he/she is so inclined. But if it has done so,
the NHBRC is obliged to keep the information on
its database.
[18]
Counsel also referred to the penal provisions of section 21 of the
Act
[23]
and argued that the
reference to a trustee in subsection 21(1)(b), is a very clear
indication that trusts are included in the Act.
Section 21, as far as
its provisions relate to section 10(1) or (2), envisages a statutory
offence if a person failed to register
as a home builder before
construction commences. It is stated emphatically in
Cool
ldeas
[24]
that
the section 10 requires·registration of
persons
or entities
[25]
that
carry on the business of home builder , and those that have entered
into an agreement with a housing consumer in respect of
the sale of a
house or construction of a house. As with the interpretation of
section 10, it is not permissible to extract one
word from section 21
and then to rely on it to support the interpretation which the
applicant contends for. A trust is therefore
excluded from the ambit
of section 10 as a trust is not "persons or entities" which
are required to register. A trust,
by its very nature, is not an
entity having a real or distinct existence.
[26]
[19]
Section 13(7) provides that a home builder may not demand or receive
from a housing consumer any deposit for the construction
or sale of a
house unless an agreement in terms of section 13(1) and (2) has been
concluded . Nor may a home builder receive any
consideration unless
the provisions of section 14(1) or (2) have been complied with.
Section 14(1) provides that a home builder
may not commence the
construction of a home, if the home falls within a certain category
of homes unless the home builder has been
enrolled with the NHBRC.
Section 14(2) states that a home builder shall not commence
construction of a home the acquisition of
which will be financed
solely from the proceeds of a state housing subsidy unless the home
builder has been enrolled with the NHBRC.
[20]
Section 21 uses the words "any person".
[27]
The word "any" is an indefinite term of wide and
unqualified generality, unless restricted by the context in which it
is used.
[28]
In my judgment
the words "any person" in section 21(1)(a) refer only to
natural persons. It is evident from the use of
the words "he or
she". A trust, not being a person, is incapable of furnishing or
withholding information. Natural persons
are capable of knowingly
withholding information and are able to furnish information knowing
to be false.
[29]
Juristic
persons act through their directors or members.
[21]
Section 21(1)(b), however, is not restricted to natural persons only,
but include juristic persons also. A distinction is to
be drawn
between "any person" referred to in section 21(1)(a) (which
is restricted to natural persons) and "any
person" referred
to in section 21(1)(b). A home builder referred to in section
21(1)(b) need not be a natural person. Insofar
as the offence may be
committed by a home builder which is a juristic person, every
director, trustee, managing member or officer
of that particular home
builder who knowingly permitted a contravention is also guilty of
that statutory offence. For section 10,
13(7) and 14 to be
contravened a home builder need to be a person or an entity. The
reference to "trustee" in section
21(1)(b) does not refer
to a trust which is not a home builder.
[30]
[22]
The provisions of section 18(1) provide that financial institutions,
as money lenders to housing consumers, have to satisfy
themselves
that the home builder is registered in terms of the Act. Section
18(2) provides, in addition, that any conveyancer attending
to
registration of the property shall ensure that the home builder is
registered with the NHBRC. The failure to comply with section
18(1)
and (2) constitutes a criminal offence in each case. Neither of these
two offences have any relevance to a trust being a
home builder.
[23]
Section 19(5), finally, makes it a criminal offence for a person to
hinder, obstruct, interfere or withhold information from
an
inspector. Similarly, a trust, as such, is not capable of doing what
is prohibited by section 19(5).
[24]
The present application was launched in 2015 and is premised on the
proposition that both judgments of Southwood J and Vorster
AJ
supra
[31]
were
wrongly decided. I am not convinced that they are wrong. It is very
disquieting that the correctness of those judgments are
attacked,
despite the acquiescence of applicant since 2006, without demur.
[32]
It is in the public interest that orders of court be certain and
final so that members of the public may arrange and conduct their
affairs accordingly.
[33]
In
the result, the following order is made.
ORDER:
1.
The
application is dismissed with costs.
2.
The
respondents are ordered to pay the costs of the third party inclusive
of the costs of two counsel.
____________________
G C MULLER
JUDGE OF THE HIGH
COURT LIMPOPO
DIVISION: POLOKWANE
APPEARANCES
For
Applicant: Adv AG Sawma SC.
For
Respondents: Adv M Naude.
For
Third Party: Adv RPA Ramawele SC.
:
Adv TT Tshivashe.
DATE
HEARD: 12 December 2017.
DATE
DELIVERED: 14 February 2018.
[1]
National Home Builders Registration Council (NHBRC) v Botes
(18094/2006)
[2008] ZAGPHC 170
(20 August 2006); National Home
Builders Registration Council (NHBRC) Van Rooyen and Others
(11273/2006)
[2006] ZAGPHC 17
(20 April 2006).
[2]
s 20 also makes provision for interdictory relief to stop
construction of a home or to direct a home builder to comply with
the provisions of the Act.
[3]
s 1A. The Act does not apply to a person who uses his or her own
labour to build a home for his or her occupation if the home
is part
of an approved PHP Project. The reference in section 1A to a person
as male or female cannot be overlooked when interpreting
its
provisions.
[4]
2012 (4) SA 593
(SCA) 13 and 18.
[5]
2014 (4) SA 474
(CC) para 29-37.
[6]
The Constitutional Court was not required to give meaning to the
word "person" in the definition but dealt with the
registration of a home builder with reference to the wording of s
10(1) and (2) of the Act.
[7]
Hereinafter the "NHBRC".
[8]
s 3.
[9]
Chapter III s 10-13.
[10]
Chapter IV.
[11]
Kohlberg v Burnett NO and Others
1986 (3) SA 12
(AD) 25G-I.
[12]
Brown v Blann and Botha NNO and Another 1984 (2) SA 850 (AD) 859
E-H.
[13]
Commissioner for Inland Revenue v Friedman and Others NNO
[1992] ZASCA 190
;
1993 (1)
SA 353
(AD) 369J-3701.
[14]
623G-625D.
[15]
Act 31 of 1941.
[16]
623G-624C; In Commissioner for Inland Revenue v MacNeilie's Estate
1961 (3) SA 833
(AD) 840E-G it was held that a trust is excluded
from the ambit of s 2 of the Interpretation Act.
[17]
Theron NNO v Loubser NO
2014 (3) SA 323
(SCA) para 5. Land and
Agricultural Bank of South Africa v Parker and Others
2005 (2) SA 77
(SCA) para 10; Commissioner for Inland Revenue v Emary NO
1961 (2)
SA 621
(AD) 624C; Commissioner for Inland Revenue v MacNeilie's
Estate supra 840G-H.
[18]
Act 33 of 1957.
[19]
De Wet NO v Jurgens
1970 (3) SA 38
AD 51E.
[20]
The
Consumer Protection Act 68 of 2008
defines a juristic person to
include "a trust as defined in the Trust Property (Control)
Act, 1988 (Act 57 of 1988)";
The
National Credit Act 34 of 2005
defines a juristic person to include "a partnership,
association or other body of persons, corporate or unincorporated,
or a trust if- (a) there are three or more individual trustees; or
(b) the trustee is itself a juristic person". See also
s 1
Financial Institutions (Protection of Funds) Act 28 of 2001
.
According to the heads of argument presented by the third party
steps had been taken to include trusts in the Act.
[21]
9(1) The Council shall keep up and provide access to an information
database on the home builders registered, suspended and deregistered
in terms of this Act.
The database
contemplated in section 9(1) shall include-
(a) the names and identity numbers of the directors, members,
trustees or partners of such companies, close corporations ,trusts,
partnerships or sole traders;
[22]
Commissioner for Inland Revenue v Friedman and Others NNO supra n 14
at 369J-3701.
[23]
21 (1) Any person who-
(a) knowingly withholds information required in terms of this Act or
furnishes information that he or she knows to be false or
misleading; or
(b) contravenes section 10(1) or (2), 13(7), 14(1) or (2), 18(1) or
(2) or 19(5), and every director, trustee, managing member
or
officer of a home builder who knowingly permits such contravention,
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.
(2) Notwithstanding
anything to the contrary in any other Act, a magistrate's court
shall have jurisdiction to impose any penalty
prescribed by this
Act.
[24]
Para 34.
[25]
My emphasis.
[26]
Para 34. The Collins Concise Dictionary (1982) described an entity
as: "something having real or distinct existence."
Hutchinson Concise Encyclopedic Dictionary (1992): "something
with a distinct existence; a thing's existence in itself."
[27]
s 18(2) refers to "any conveyancer ..." The word "any"
is therefore restricted by the context to only conveyancers.
[28]
Commissioner for Inland Revenue v Ocean Manufacturing Ltd
[1990] ZASCA 66
;
1990 (3)
SA 610
(AD) 618G-I.
[29]
It is not without significance that the words "any person"
in s 21(1)(a) is restricted by the use of the words "he
or she"
which is a reference to natural persons.
[30]
Fn 22.
[31]
Fn 1.
[32]
Counsel appearing on behalf of the applicant informed the court from
the bar that the applicant did not apply for leave to appeal
in
either of the two previous applications.
[33]
Naidoo v Cavendish Transport Co (Pfy) Ltd
1956 (3) SA 244
(N) 248A;
Van Wyk v Unitas Hospital
[2007] ZACC 24
;
2008 (2) SA 472
(CC) para 31.