University of Johannesburg v Auckland Park Theological Seminary and Another

The University of Johannesburg (UJ) owned land in Auckland Park and, following ministerial approval, concluded a 30-year registered long-term lease in 1996 with Auckland Park Theological Seminary (ATS). The lease arose from a close cooperative relationship focused on higher education and envisaged the use of the land for educational and religious purposes connected to that relationship. ATS paid a once-off rental of R700 000. ATS never developed a theological college on the land and, in 2011, without UJ’s consent or ministerial approval, ceded its rights under the lease to Wamjay Holdings Investments (Pty) Ltd for R6.5 million. Wamjay intended to build a faith-based primary and high school. UJ contended that the lease rights were personal (delectus personae), incapable of cession, that the cession amounted to repudiation, and that it was entitled to cancel the lease and evict ATS and Wamjay.

Leave to appeal was granted; the appeal was upheld; the order of the Supreme Court of Appeal was set aside and replaced with an order dismissing the respondents’ appeal with costs. The respondents were ordered jointly and severally to pay UJ’s costs, including the costs of two counsel.

This case is a leading Constitutional Court authority on contractual interpretation, clarifying the relationship between contextual evidence and the parol evidence rule. It confirms that rights under a long-term lease may be personal and incapable of cession, and that courts must consider context to determine delectus personae. The judgment reinforces the Endumeni approach and corrects an overly restrictive application of the parol evidence rule by the Supreme Court of Appeal.