Seartec Trading (Pty) Limited v Agni Steels SA (Pty) Limited

Seartec Trading (Pty) Limited concluded a rental agreement with Agni Steels SA (Pty) Limited to finance and rent hardware and software installed by Limtech Biometric Solutions. In November 2017 Seartec ceded its rights under the rental agreement to the trustees of the Rental Company Trust (RCT). Before issuing summons for unpaid rentals in October 2018, Seartec alleged that it had repurchased the rental agreement from the RCT in April 2018 and that the rights were re‑ceded to it. Agni Steels raised a special plea contending that Seartec lacked locus standi because it had divested itself of its rights through the initial cession. The regional magistrate upheld the special plea, finding that Seartec failed to prove a valid re‑cession. Seartec appealed.

The appeal was upheld with costs. The order of the regional court upholding the special plea was set aside and replaced with an order dismissing the defendant’s special plea with costs, including the costs of counsel. Certain unnecessary record costs were excluded from the appeal costs.

The case clarifies South African law on cession and re‑cession, particularly the distinction between the obligatory agreement and the transfer agreement, and confirms that a re‑cession may be effected tacitly and proved by conduct without formalities. It also underscores the correct approach to evaluating evidence and probabilities in determining locus standi.