The Constitutionalisation of the Test for Statutory Illegality in South African Contract Law: Cool Ideas v Hubbard 2014 4 SA 474 (CC)

  • Odwa Golela
Keywords: Contract law, Statutory illegality, Constitutionalisation, Cool Ideas v Hubbard

Abstract

This paper investigates the constitutionalisation of the test for statutory illegality (the test) in South African contract law, firstly through a careful evaluation of the manner in which the Constitutional Court (CC) applied the test in Cool Ideas v Hubbard, secondly through the manner in which the CC purports to constitutionalise the test in the said case, and thirdly through asking if such a method is desirable in the constitutional dispensation. It can be conceded that the approach taken by the main judgment to the application of the test in this case is more compelling than that taken by Froneman J. However, the fundamental differences in these approaches, particularly in the determination of the impact of the Constitution and its underlying values, highlight the need for an investigation into the test and the way it should operate in the constitutional dispensation. The paper begins by setting out the test and shows that it is capable of reflecting the values that underlie the Constitution (while maintaining a workable level of legal certainty) and that the test can operate in a manner that enhances the vision and goals of the Constitution. It also proposes a framework within which the various factors of the test should be weighed up, with a view to determining whether the contract under investigation is valid or invalid. Then the paper evaluates the CC's application of the test. It criticises the main judgment for its incomplete undertaking of the enquiry envisaged in sections 8(1) and (2) of the Constitution, as it took into account neither the "spirit, purport and objects" underpinning section 25(1), nor the fundamental values of the Constitution. It also criticises Froneman J's judgment for not connecting the value of fairness with the "spirit, purport and objects" underpinning section 25(1) or the broader fundamental values of the Constitution. Thereafter, it considers the manner in which the CC purports to constitutionalise the test. It points out that equity considerations apply in all matters, whether a substantive right is implicated or not, as they ensure that the "application" and "interpretation" of a statute enhance and are in line with the "objective normative value system" that is the Bill of Rights. Lastly, it considers the desirability of the CC's approach to the application of the test and its constitutionalisation. It points out that the main judgment goes to the extremes of objectivity in interpreting the relevant provisions of the Housing Consumers Protection Measures Act, 1998 (within the application of the test), while Froneman J goes to the extremes of subjectivity. In this regard, it suggests that courts can use the "balance of convenience" test to adjust their decisions to accommodate the circumstances of each case. Therefore, it concludes that the approach to constitutionalising the test lies somewhere between that of the main judgment and that of Froneman J

Author Biography

Odwa Golela
Legal Graduate, Legal Services Department, MultiChoice in Johannesburg

References

6 Bibliography
6.1 Literature
Bhana, Deeksha “The development of a basic approach for the constitutionalisation of our common law of contract” 2015 Stell LR 3-28
Bhana, Deeksha “The horizontal application of the Bill of Rights: A reconciliation of sections 8 and 39 of the Constitution” 2013 SAJHR 351-375
Bhana, Deeksha and Meerkotter, Anmari “The impact of the constitution on the common law of contract: Botha v Rich NO (CC)” 2015 SALJ 494-509
Bhana Deeksha, Nortje Minette and Bonthuys Elsje Student’s Guide to the Law of Contract 4th ed (Juta 2015)
Bhana, Deeksha and Pieterse, Marius “Towards the constitutionalisation of contract law and constitutional values: Brisley and Afrox revisited” 2005 SALJ 865-895
Botha Christo Statutory interpretation: An introduction for students 5th ed (Juta 2012)
Brand, DJ Fritz “The role of good faith, equity and fairness in the South African law of contract: A further instalment” 2016 Stell LR 238-253
Brand, FDJ “The role of good faith, equity and fairness in the South African law of contract: The influence of the common law and the Constitution” 2009 SALJ 71-90
Cachalia, Raisa “Government contracts in South Africa: Constructing the framework” 2016 Stell LR 88-111
Cibane, Siboniso “Application of the constitutional value of ubuntu in private relations: The private law of contract as a test case” available at http://thelawthinker.com/up-content/uploads/2014/07/BradCibane-Ubuntu.pdf, accessed on 30 June 2016 1-23
Christie RH and Bradfield GB Christie’s The law of contract in South Africa 6th ed (LexisNexis 2011)
Currie and de Waal The Bill of Rights Handbook 6th ed (Juta 2013)
Dafel, Michael “Curbing the constitutional development of contract law: A critical response to Maphango v Aengus Lifestyle Properties (Pty) Ltd” 2014 SALJ 271-287
Davis, Dennis “Transformation: the constitutional promise and reality” 2010 SAJHR 85-101
Davis, DM “Developing the common law of contract in the light of poverty and illiteracy: The challenge of the constitution” 2011 Stell LR 845-864
Hawthorne, Luanda “Justice Albie Sachs’ contribution to the law of contract: Recognition of the relational contract theory” 2008 SAPL 80-93
Hawthorne, Luanda “The end of bona fides” 2003 SA Merc LJ 271-277
Hutchison Dale and Pretorious Chris-James (eds) The Law of Contract in South Africa 2nd ed (Oxford University Press Southern Africa 2012)
Kerr AJ The Principles of the Law of Contract 6th ed (Butterworths 2002)
Lewis, Jonathan “Fairness in South African contract law” 2003 SALJ 330-351
Lubbe GF and Murray CM Farlam and Hathaway Contract Cases, Materials and Commentary 3rd ed (Juta 1988)
Mupangavanhu, Yeukai “fairness a slippery concept: The common law of contract and the Consumer Protection Act 68 of 2008” 2008 De Jure 116-135
Rautenbach, IM “Constitution and contract – exploring ‘the possibility that certain rights may apply directly to contractual terms or the common law that underlies them’” 2009 TSAR 613-637
Van der Merwe, Van Huyssteen, Reinecke and Lubbe Contract General Principles 4th ed (Juta 2012)
van Staden, Marius “A comparative analysis of common-law presumptions of statutory interpretation” 2015 Stell LR 550-582
Wallis, Malcom “The common law’s cool ideas for dealing with Ms Hubbard” 2015 SALJ 940-970
6.2 Case law
ABSA Insurance Brokers (Pty) Ltd v Luttig 1997 (4) SA 229 (SCA)
Bezuidenhout v AA Mutual Insurance Association Ltd 1978 (1) SA 703 (A)
Botha v Rich NO 2014 (4) SA 124 (CC)
Bredenkamp v Standard Bank of South Africa 2010 (4) SA 468 (SCA)
Brisley v Drotsky 2002 (4) SA 1 (SCA)
Carmichele v Minister of Safety and Security 2001 (4) SA 938 (CC)
Cool Ideas 1186 CC v Hubbard 2014 (4) SA 474 (CC)
Eastern Cape Provincial Government v Contractprops 25 (Pty) Ltd 2001 (4) SA 142 (SCA)
Eerste Nationale Bank van Suidelike Afrika Bpk v Saayman 1997 (4) SA 302 (SCA)
Govender v Minister of Safety and Security 2001 (4) SA 273 (SCA)
Henry v Branfield 1996 (1) SA 244 (C)
Investigating Directorate: Serious Economic Offences v Hyundai Motor Distributors (Pty) Ltd: In re Hyundai Motor Distributors v Smit NO 2001 (1) SA 545 (CC)
Lende v Goldberg 1983 (2) SA 284 (C)
Metro Western Cape (Pty) Ltd v Ross 1986 (3) SA 181 (A)
Motorvoertuigassuransiefunds v Gcwabe 1979 (4) SA 786 (A)
Municipal Manager: Qaukeni Local Municpality v FV General Trading CC 2010 (1) SA 356 (SCA)
National Credit Regulator v Opperman 2013 (2) SA 1 (CC)
Pharmaceutical Manufacturers Association of South Africa: In re ex parte President of the Republic of South Africa 2000 (2) 674 (CC)
Pottie v Kotze 1954 (3) SA 719 (A)
Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A)
St John Shipping Corporation v Joseph Rank Ltd 1957 1 QB 267
Unlawful Occupiers, School Site v City of Johannesburg 2005 (4) SA 199 (SCA)
Weeven Transitional Council v Van Dyk 2002 (4) SA 653 (SCA)
6.3 Legislation
Constitution of the Republic of South Africa, 1996
Arbitration Act 42 of 1965
Blacks (Urban Areas) Consolidation Act 25 of 1945
Housing Consumers Protection Measures Act 95 of 1998
Insurance Act 27 of 1943
Transvaal Motor Vehicle Ordinance 17 of 1931
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Published
2018-08-27
Section
Case Notes