Member of the Executive Council, Department of Education, Eastern Cape v Komani School & Office Suppliers CC, t/a Komani Stationers

Komani Stationers supplied school stationery worth R151,954.81 to Mpendulo Public Primary School in January 2013 at the instance of the School Governing Body (SGB) and Principal. When the school failed to pay, Komani Stationers obtained default judgment against the SGB and school in the magistrate's court. When Komani Stationers attempted to execute on the judgment by attaching school assets, the MEC instituted interpleader proceedings, arguing that school assets were immune from attachment under s 58A(4) of the South African Schools Act. After the goods were released from attachment, Komani Stationers gave notice to the MEC under the Institution of Legal Proceedings against Certain Organs of State Act and then instituted proceedings in the high court against the MEC seeking payment under s 60(1) of the Schools Act. The high court found in favour of Komani Stationers, and the MEC appealed.

• Whether s 60(1) of the South African Schools Act 84 of 1996, as amended by the Basic Education Laws Amendment Act 15 of 2011, encompasses claims for specific performance (payment of money owed) or is limited to claims for delictual or contractual damage or loss
• Whether a creditor must institute a claim directly against the Member of the Executive Council (MEC) from the outset under s 60(3), or can first obtain judgment against the school and then turn to the MEC
• Whether the claim against the MEC had prescribed
• Whether s 58A(4) read with s 60 of the Schools Act infringed the creditor's constitutional rights to equality (s 9) and access to courts (s 34)

The appeal was upheld with costs, including costs of two counsel. The order of the high court was set aside and replaced with an order dismissing the application with costs, including costs of two counsel where so employed. The majority judgment effectively means that Komani Stationers cannot claim the purchase price (specific performance) from the MEC under s 60(1) of the Schools Act. The judgment debt against the school remained extant but could not be executed against due to s 58A(4).

Section 60(1) of the South African Schools Act 84 of 1996, as amended by s 14 of the Basic Education Laws Amendment Act 15 of 2011, creates State liability only for delictual or contractual damage or loss arising from acts or omissions in connection with school activities. It does not extend to claims for specific performance of contractual obligations. The clear and unequivocal language referring to "delictual or contractual damage or loss" must be given its ordinary grammatical meaning. A claim for specific performance seeks performance of a contractual obligation (payment of money owed), not compensation for damage or loss, and therefore falls outside the scope of s 60(1). Where s 60 does apply, s 60(3) requires that claims be instituted against the Member of the Executive Council from the outset, not first against the public school. The prohibition on attachment of school assets in s 58A(4) does not transform a specific performance claim into a damages claim covered by s 60(1). To extend s 60(1) beyond its clear terms would constitute impermissible judicial legislation.

The majority noted (without deciding) that it might have been open to Komani Stationers to cancel the contract with the school on account of breach and then sue the MEC for contractual damages under s 60(1) and (3), but this did not arise on the facts. The court observed that such a question would have to wait for another case where it is pertinently raised and addressed. The court emphasized that courts are enjoined to decide only issues placed before them by litigants and may not introduce new issues or change the factual foundation of a case. The majority expressed concern about the dissent's approach of adjudicating based on facts not relied upon by the parties in their affidavits, stating this violated the principle that appellate courts are confined to the appeal record. The court noted that the default judgment obtained by Komani Stationers against the school remained extant and unaffected by the proceedings. The majority observed that Komani Stationers had "misconceived the nature of its remedy" under s 60 and was thus "the author of its own misfortune." The dissent made extensive obiter observations about: (1) the public policy implications of denying relief to small business enterprises dealing with schools; (2) the need for the State to ensure SGBs are properly trained and capacitated to handle s 21 functions; (3) the availability (or lack thereof) of alternative remedies such as mandamus; (4) the potential for developing a remedy of "constitutional damages" in such circumstances; and (5) the interpretation of the word "loss" in s 60(1) as potentially encompassing loss from non-payment of specific performance claims.

This case provides important guidance on the interpretation of s 60 of the South African Schools Act post-amendment. It establishes that: (1) s 60(1) creates State liability only for delictual or contractual damage or loss, not for specific performance of contractual obligations; (2) claims under s 60 must be instituted directly against the MEC from the outset under s 60(3), not first against the school; (3) while s 58A(4) protects school assets from attachment, this does not transform a specific performance claim into a damages claim against the State; (4) the legislative purpose of s 60, as clarified by the 2011 amendment, is to regulate State liability for "certain damages" not to provide a general warranty for school contracts. The case has significant implications for creditors dealing with public schools, particularly in impoverished areas, and highlights a potential gap in legal remedies where schools cannot pay their debts and their assets cannot be attached. The strong dissent reveals ongoing tension between protecting educational resources and protecting creditors' rights. The case reaffirms principles of statutory interpretation requiring courts to give effect to clear legislative language while promoting constitutional values, and confirms the limits of s 39(2) of the Constitution in allowing courts to extend statutory provisions beyond their clear meaning.