Hubbard v Cool Ideas 1186 CC

Ms Anne Christine Hubbard concluded a written building contract with Cool Ideas 1186 CC in February 2006 for the construction of a residential dwelling in Bryanston at a contract price of R2 695 600. Disputes arose regarding the quality of the work and payment, which were referred to arbitration in terms of the contract. The arbitrator awarded Cool Ideas payment of outstanding amounts, interest and costs. Cool Ideas then applied to the South Gauteng High Court under section 31 of the Arbitration Act 42 of 1965 to have the arbitration award made an order of court. Ms Hubbard opposed the application after discovering that Cool Ideas was not registered as a home builder as required by section 10 of the Housing Consumers Protection Measures Act 95 of 1998, contending that Cool Ideas was legally prohibited from receiving any consideration for the construction of the home. The High Court nonetheless made the award an order of court, and Ms Hubbard appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the South Gauteng High Court making the arbitration award an order of court was set aside and substituted with an order dismissing the application with costs.

This decision authoritatively confirms the strict and peremptory nature of section 10 of the Housing Consumers Protection Measures Act. It establishes that unregistered home builders are absolutely barred from enforcing claims for payment, even through arbitration, and that courts may not make arbitration awards orders of court where this would contravene a statutory prohibition. The case underscores legislative supremacy, reinforces consumer protection in the housing context, and clarifies the limits of arbitration in the face of illegality.