oa Litnet Akademies : 'n Joernaal vir die Geesteswetenskappe, Natuurwetenskappe, Regte en Godsdienswetenskappe - Vonnisbespreking : grondwetlike aspekte van die registrasie van huisbouers en die billikheid van private arbitrasiebeslissings : regte
Constitutional aspects of the registration of home builders and the fairness of arbitration awards
In Cool Ideas 1186 CC v Hubbard 2014 8 BCLR 869 (CC) the constitutional court considered the constitutionality of section 10(1)(b) of the Housing Consumers Protection Measures Act 95 of 1998 which provides that no person shall 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. The court interpreted this provision to mean that no consideration is due if a home builder does not register before the building contract is concluded and the commencement of the building operations. According to section 21 of the act it constitutes a crime not to register. The court held that although this provision factually amounts to a deprival of property for the purposes of the right to property in section 25 of the Constitution, the deprival is not arbitrary - the limitation serves an important public purpose, namely the protection of housing consumers. This was also the second judgment of the constitutional court, in which the court expressed itself on constitutional aspects of private arbitration. The first was Lufuno Mphaphuli and Associates (Pty) Ltd v Andrews 2009 6 BCLR 527 (CC), 2009 4 SA 529 (CC). In the latter case the court held that the right to access to the courts and to fair and public trials by independent courts and tribunals applies indirectly to private arbitration. However, the court did not express itself on the implications of this indirect application (because the matter was not argued before it), except to say that clauses in arbitration contracts that provide for unfair procedure would probably be contra bonos mores. The court generally held that constitutional values preclude a court from interfering unnecessarily with private arbitration awards. Although the court did not articulate clearly which constitutional values were involved, the opinions expressed in the Cool Ideas case state that these values concern the personal autonomy and freedom of choice of the parties to a private arbitration agreement. The Cool Ideas case did not concern procedural matters in arbitration proceedings, but the question whether a court is obliged to make an arbitration award an order of the court when the arbiter in making that order has ignored the provisions of section 10(1)(b) of the Housing Consumers Protection Act. The court held that an arbitrator may not for the purposes of what she or he considers to be a fair outcome, disregard statutory rules which provide for criminal sanctions when certain provisions are not complied with. It also held that in this regard the principle of legality as an aspect of the rule of law, which is a foundational principle of the Republic in terms of section 1 of the Constitution, is accorded greater weight than the personal autonomy protected by right to contractual freedom of the parties to a private arbitration agreement. This must now be added to the list of considerations which courts must take into account in respect of an application to make an arbitral award an order of the court in terms of section 31 of the Arbitration Act 42 of 1965. Although arbitration has become a popular method for alternative dispute resolution in cases where specialist non-legal knowledge, and in certain cases specialist legal knowledge, is required to consider an issue, arbitration is not limited to these circumstances. It is often also used to circumvent litigation in the state courts in systems with serious curial systemic problems. The need for trials to be fair also exists in respect of alternative dispute resolution schemes and the guarantees in section 34 of the Constitution provide for this need. To the extent that private arbitration could be considered as a solution to solve systemic problems in court systems it is important to note that the consensual nature of private arbitration should not be allowed to dilute the constitutional protection provided by section 34.
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