African Dynamics (Eastern Cape) (Pty) Ltd v MEC for Education, Eastern Cape Province and Others (352/2007, 583/2007, 768/2007) [2010] ZAECBHC 12 (13 September 2010)

African Dynamics (Eastern Cape) (Pty) Ltd v MEC for Education, Eastern Cape Province and Others (352/2007, 583/2007, 768/2007) [2010] ZAECBHC 12 (13 September 2010)

The court found that the 'Limitation of Cession' clause in the service level agreements did not constitute an absolute prohibition against cession, but rather imposed conditions. The cessions entered into by the applicant and suppliers did not contravene the terms of the SLA. Even if the clause were interpreted as an absolute prohibition, the Department would be liable on the basis of estoppel, having represented to the applicant that it would honour the payment arrangements. The Department's application to amend the common law was rejected; inefficiency and incompetence of a public body do not justify a departure from established principles. The Department was not liable for debts owed...

Citation
[2010] ZAECBHC 12
Parties
Applicant: African Dynamics (Eastern Cape) (Pty) Ltd; Respondent: Member of the Executive Council of the Provincial Government of the Eastern Cape Responsible for Education; Respondent: Breeze Trading 48 CC and 32 Others
Court
Eastern Cape High Court, Bhisho
Jurisdiction
South Africa
Judgment Date
13 September 2010
Case Number
352/2007, 583/2007, 768/2007
Procedural Posture
Civil Application / Final Judgment After Oral Evidence
Outcome
The applicant succeeded in its claims against the Department for debts owed under the cession agreements, except for claims relating to the Department of Health. The Department's application to amend the common law was dismissed. Costs were apportioned as specified.
Judges
L D Kemp
Legal Topics
Cession of Claims, Pactum De Non Cedendo, School Feeding Scheme, Estoppel, Contractual Interpretation
Commercial and Corporate Civil Procedure Cession of Claims Pactum De Non Cedendo School Feeding Scheme Estoppel Contractual Interpretation

Case Brief

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Parties

African Dynamics (Eastern Cape) (Pty) Ltd

Applicant

Member of the Executive Council of the Provincial Government of the Eastern Cape Responsible for Education

Respondent

Breeze Trading 48 CC and 32 Others

Respondent

Procedural Posture

Civil Application / Final Judgment After Oral Evidence

Legal Issues

  1. 1 Whether the cession agreements between the applicant and suppliers contravened a pactum de non cedendo in the service level agreements with the Department.
  2. 2 Whether the Department was liable to pay the applicant for debts paid directly to suppliers in breach of the cessions.
  3. 3 Whether the Department's application to amend the common law regarding payment to cessionaries by state organs should be granted.

Ratio Decidendi

The court found that the 'Limitation of Cession' clause in the service level agreements did not constitute an absolute prohibition against cession, but rather imposed conditions. The cessions entered into by the applicant and suppliers did not contravene the terms of the SLA. Even if the clause were interpreted as an absolute prohibition, the Department would be liable on the basis of estoppel, having represented to the applicant that it would honour the payment arrangements. The Department's application to amend the common law was rejected; inefficiency and incompetence of a public body do not justify a departure from established principles. The Department was not liable for debts owed...

Court Disposition

The applicant succeeded in its claims against the Department for debts owed under the cession agreements, except for claims relating to the Department of Health. The Department's application to amend the common law was dismissed. Costs were apportioned as specified.

Orders

  • In case no. 768/2007, the first and twenty fourth respondents are ordered to pay the applicant R231,015.00, with interest at the legal rate from 6 August 2007 to date of payment, jointly and severally.
  • In case no. 768/2007, the first and twenty seventh respondents are ordered to pay the applicant R29,758.00, with interest at the legal rate from 6 August 2007 to date of payment, jointly and severally.