South African Securitisation Programme (RF) Ltd v TC Esterhuysen Primary School and Others (2024/076235) [2025] ZAGPJHC 1244 (4 December 2025)

Case Note

Case Name: South African Securitisation Programme (RF) Ltd v T. C. Esterhuysen Primary School and Others
Citation: Gauteng Division, Johannesburg, Case No: 2024-076235
Date: 4 December 2025

Reportability

This case is reportable because it addresses significant legal issues surrounding the enforceability of contractual obligations in the context of public school financing. The court's consideration of the liability of state organs under section 60(1)(a) of the South African Schools Act 84 of 1996 is particularly noteworthy, as it clarifies the extent to which the State can be held liable for the wrongful acts or omissions of public schools. Furthermore, the ruling reaffirms critical legal principles regarding misrepresentation, agency relationships, and the enforceability of acceleration clauses in rental agreements.

The implications of this judgment are substantial, particularly for creditors working with public entities and for schools engaging in contractual arrangements. The court reinforced that adherence to written agreements is essential, thereby providing clarity on the standards for agency and misrepresentation defenses against contractual obligations.

Cases Cited

Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A)
National Sorghum Breweries Ltd v Corpcapital Bank Ltd 2006 (6) SA 208 (SCA)
Johnson v Incorporated General Insurance Ltd 1983 (1) SA 318 (A)
Botha v Fick 1995 (2) SA 750 (A)
Slip Knot Investments 777 (Pty) Ltd v Du Toit 2011 (4) SA 72 (SCA)
Claude Neon Lights (SA) Ltd v Schlemmer 1974 (1) SA 143 (N)
Parekh v Shah Jehan Cinemas and Others 1982 (3) SA 618 (D)
Western Bank Ltd v Meyer 1973 (4) SA 697 (T)
MEC, Department of Education, Eastern Cape v Komani School & Office Suppliers CC 2022 (3) SA 361 (SCA)
Page Automation (Pty) Ltd v Profusa Properties CC t/a Homenet or Tambo and Others 2013 (4) SA 37 (GSJ)

Legislation Cited

South African Schools Act 84 of 1996
Conventional Penalties Act 15 of 1962

Rules of Court Cited

None explicitly cited in the judgment

HEADNOTE

Summary

In this case, the plaintiff, South African Securitisation Programme (RF) Ltd, sought summary judgment against T.C. Esterhuysen Primary School and related state defendants for breach of two rental agreements. The plaintiff claimed arrear rentals, interest, and the return of equipment supplied under those agreements. The defendants contested their liability based on alleged misrepresentations regarding the terms of the agreements and the conduct of the sales agent. The court upheld the enforceability of the agreements and the State's liability under the Schools Act, confirming that contractual terms as written must be adhered to, despite the defendants' claims of misunderstanding.

Key Issues

The key legal issues addressed included:

1. The validity and enforceability of the rental agreements under South African law.
2. The extent of liability of state actors as joint and several with a public school.
3. The legitimacy of defenses brought by the defendants regarding misrepresentation and agency.
4. The enforceability of the acceleration clauses in the rental agreements and allegations of over-compensation.

Held

The court held that the plaintiff was entitled to summary judgment against all defendants. The agreements were found to be enforceable as written, and the defendants failed to present a valid legal defense. The defendants' perceived misunderstandings regarding non-existent agency relationships and rental terms were not sufficient to invalidate the agreements.

THE FACTS

The plaintiff, South African Securitisation Programme (RF) Ltd, entered into two master rental agreements with T.C. Esterhuysen Primary School for equipment rental, which included printing equipment and telecommunications infrastructure. The rental payments were to be made via debit orders. However, the school stopped these payments, which led to claims of arrears under the agreements.

The defendants admitted that the school had received the equipment but contested the terms outlined in the agreements. They argued that the governing body believed the agreements to be for a shorter term than reflected and alleged misrepresentation by an agent, Mr. Olifant, regarding these terms.

The plaintiff established a chain of cessions of rights from the initial finance houses to itself, asserting its standing to enforce the agreements. The defendants challenged the plaintiff's claims, citing confusion over rental amounts and misrepresentations related to what they believed to be a three-year rental term.

THE ISSUES

The court was tasked with resolving several key questions:

1. Did the defendants demonstrate a bona fide defense against the enforcement of the rental agreements?
2. Is the State liable for damages arising from the breach of the rental agreements under section 60(1)(a) of the Schools Act?
3. Are the contractual terms, including the acceleration clause and interest rates, enforceable as written?
4. Did the defendants have any valid claims of misrepresentation or agency that might negate their obligations under the agreements?

ANALYSIS

The court engaged in a thorough analysis of the facts and legal arguments presented. It emphasized that the written agreements were clear and unambiguous, observing that the defendants were bound by the terms, notwithstanding subjective misunderstandings or allegations about pre-contract negotiations. The court cited the doctrine of quasi-mutual assent, stating that a unilaterally perceived misunderstanding does not equate to grounds for invalidating a contract.

The court also examined the implications of the alleged agency, ultimately finding that the agreements clearly delineated the roles of the parties, negating any claim that Olifant could have acted for both the vendor and the finance houses. The enforcement of the obligation to pay the stipulated rentals, including the validity of the acceleration clauses for breach of contract, was confirmed.

With respect to the defendants' claims of over-compensation, the court concluded that all claims for arrears and future rentals were consistent with the terms originally agreed upon, and that the provisions regarding the interest rate were lawful and disclosed. The absence of evidence from the defendants to corroborate claims of disproportionate charges further underpinned the court's decision.

REMEDY

The court granted summary judgment in favor of the plaintiff, allowing the following remedies:

1. Confirmation of the termination of both master rental agreements.
2. Return of specified equipment.
3. Payment of R265,670.28 in arrears under the first agreement and R406,937.84 under the second, with interest at the rate of prime plus 6% from a specified date.
4. Full costs of the application on an attorney-client scale.

LEGAL PRINCIPLES

This judgment reinforces several important legal principles, including:

• Quasi-Mutual Assent: Parties are bound by the written terms they sign, even if one party has a different understanding of those terms.
• Agency in Contracts: An agency relationship must be explicitly established; mere representations by agents are not sufficient to impose liability on a principal unless documented in the agreement.
• Acceleration Clauses: These can be legitimate and enforceable mechanisms within contracts, allowing for the immediate demand of future payments upon default.
• State Liability: Under the Schools Act, state departments can be held jointly and severally liable for breaches of contract arising from actions taken by public schools.