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
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):

(1) The appeal is upheld with costs.

(2) 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
(1)
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
7th 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 7th 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 Justice1926 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 (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 Pandectas1 where he says:

1 J Voet Commentarius Ad Pandectas (1723).

‘(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 Gane4 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)
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

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.

[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

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.

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.

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.

[25]  In Jajbhay v Cassim14 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 Lowes17 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

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 2004 (3) SA 333 (SCA) para 18.
21 S v Dodo 2001 (3) SA 382 (CC) para 13.
22 See, for example, the Oxford Latin Dictionary.
23 Scagell v Attorney-General, Western Cape 1997 (2) SA 368 (CC).

the accused. 24The 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 Law25 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 Kotze28 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).

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.

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 Wet32  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 Properties33   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 case35 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 regulations36 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

32 Noragent (Edms) Bpk v De Wet 1985 (1) SA 267 (T).
33 Taljaard v TL Botha Properties  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).

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 Ltd41 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 Ltd44 and
Administrator, South West Africa v Jooste Lithium Myne (Eiendoms) Bpk45 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.

39 Para 27.
40 At 220H-I.
41 Telcordia Technologies Inc v Telkom SA Ltd 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.

[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 Executors47 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 Service48 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
affirmed51 the correctness of decision of Mpati J in Patcor Quarries CC v Issroff52 to the
effect that there was nothing to show the arbitrator’s mistake was gross and,
accordingly, there could be no interference.53

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 (4) SA 661 (SCA).
50 Para 17.
51 Para 25.
52Patcor Quarries CC v Issroff and others 1998 (4) SA 1069 (SE).
53 Mpati J’s judgment at 1079F-1082G.

[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 Robinson55 and Hyperchemicals International (Pty) Ltd
v Maybaker Agrichem (Pty) Ltd56 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) Ltd58 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

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 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.

majority and the minority judgments in National Credit Operator v Opperman and
Others61 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

61 National Credit Operator and Others v Opperman 2013 (2) SA 1 (CC).

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
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

28 May 2013

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form part of
the judgment.

Hubbard v Cool Ideas 1186 CC
(580/12) [2012] ZASCA 71 (28 May 2013)

Media Statement
The Supreme Court of Appeal (SCA) handed down judgment today in an appeal from the South
Gauteng High Court, Johannesburg. The matter involved a dispute between a housing consumer and
a home builder that the former had contracted to undertake certain building works. In particular, the
issue before the court was whether a court could make an arbitration award handed down in favour of
the home-builder, which compelled the housing consumer to pay the home builder for the work that it
had rendered, an order of court.
As per the building contract between the parties, any dispute between the parties was to be referred
to arbitration. The housing consumer, Ms Hubbard, complained about various aspects of the building
work and claimed, what she asserted were the costs of the remedial work required to repair her
house. Cool Ideas, the home builder, opposed that claim, and claimed payment of that portion of the
contract sum that remained outstanding. The arbitrator found in favour of Cool Ideas and issued an
award in its favour. Ms Hubbard failed to satisfy the arbitration award and as a consequence 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. The basis of her opposition was that Cool Ideas was not a registered home builder as it
ought to have been in terms of the Housing Consumer Protection Measures Act 95 of 1998 (the Act),
and was thus precluded by s 10 of that Act from, inter alia, receiving any consideration for such work
from a housing consumer.

In the High Court, Victor J granted Cool Ideas’ application and made the arbitration award an order of
court. Leave to appeal that order was then obtained from the SCA by Ms Hubbard. The majority of the
SCA (four judges) noted that sections 10(1) and (2) of the Act clearly disentitles an unregistered home
builder from receiving any consideration for work done. The majority reasoned that to allow Cool
Ideas’ claim would be in conflict with a clear statutory prohibition. Accordingly, so the judges held, to
make the arbitrator’s award an order of court would mean that the court was placing its stamp of
approval on an illegality, this is so regardless of where the equities may lie in that particular case. Put
simply, according to the majority, where the legislature has ordained that certain conduct constitutes
an illegality, a court is not empowered to simply disregard that. They accordingly upheld the appeal.
--- ends ---