Case Summary: Cool Ideas 1186 CC v Hubbard and Another (2014 (4) SA 474 (CC))
Court:
Constitutional Court of South Africa
Judges:
Majority judgment by Majiedt AJ (Moseneke ACJ, Skweyiya ADCJ, Dambuza AJ, Jafta J, Mhlantla
AJ and Zondo J concurring).
Dissent by Froneman J (Cameron J and Van der Westhuizen J concurring).
Date:
17 April 2014
Facts:
Cool Ideas 1186 CC (“Cool Ideas”) was a property developer that contracted with Hubbard
(“the homeowner”) to build a home.
The construction was completed by a registered home builder, but Cool Ideas itself was not
registered as required under section 10(1)(b) of the Housing Consumers Protection
Measures Act 95 of 1998 (“the Act”).
A dispute arose, and an arbitrator awarded Cool Ideas payment for the work done.
Hubbard opposed enforcement of the award, arguing that the contract was unenforceable
because Cool Ideas had contravened the Act by being unregistered.
Legal Issue:
Can an unregistered home builder (in terms of section 10 of the Housing Consumers Protection
Measures Act) enforce a building contract or an arbitration award arising from it?
Held (Majority Judgment):
The Constitutional Court dismissed the appeal and held that Cool Ideas could not enforce the
award, because doing so would contravene the Act.
“A court cannot enforce a contract that the law declares to be prohibited or unenforceable.”
The court held that even though another registered builder had carried out the actual construction,
Cool Ideas — being the contracting party — was still bound by the statutory requirement to be
registered.
Reasoning:
1. Purpose of the Act:
The Act protects housing consumers from unqualified or unscrupulous builders and
ensures building standards are maintained.
“The main objective of the Act is the protection of housing consumers.”
2. Statutory Prohibition:
Section 10(1)(b) explicitly provides that no unregistered person may carry on the business
Court:
Constitutional Court of South Africa
Judges:
Majority judgment by Majiedt AJ (Moseneke ACJ, Skweyiya ADCJ, Dambuza AJ, Jafta J, Mhlantla
AJ and Zondo J concurring).
Dissent by Froneman J (Cameron J and Van der Westhuizen J concurring).
Date:
17 April 2014
Facts:
Cool Ideas 1186 CC (“Cool Ideas”) was a property developer that contracted with Hubbard
(“the homeowner”) to build a home.
The construction was completed by a registered home builder, but Cool Ideas itself was not
registered as required under section 10(1)(b) of the Housing Consumers Protection
Measures Act 95 of 1998 (“the Act”).
A dispute arose, and an arbitrator awarded Cool Ideas payment for the work done.
Hubbard opposed enforcement of the award, arguing that the contract was unenforceable
because Cool Ideas had contravened the Act by being unregistered.
Legal Issue:
Can an unregistered home builder (in terms of section 10 of the Housing Consumers Protection
Measures Act) enforce a building contract or an arbitration award arising from it?
Held (Majority Judgment):
The Constitutional Court dismissed the appeal and held that Cool Ideas could not enforce the
award, because doing so would contravene the Act.
“A court cannot enforce a contract that the law declares to be prohibited or unenforceable.”
The court held that even though another registered builder had carried out the actual construction,
Cool Ideas — being the contracting party — was still bound by the statutory requirement to be
registered.
Reasoning:
1. Purpose of the Act:
The Act protects housing consumers from unqualified or unscrupulous builders and
ensures building standards are maintained.
“The main objective of the Act is the protection of housing consumers.”
2. Statutory Prohibition:
Section 10(1)(b) explicitly provides that no unregistered person may carry on the business
