Red Coral Investments (Pty) Ltd v Cape Peninsula University of Technology

Red Coral Investments (Pty) Ltd instituted an action in the Western Cape Division of the High Court claiming payment of R758 630.12, allegedly due under an oral agreement concluded with Cape Peninsula University of Technology (CPUT), acting as agent for the National Student Financial Aid Scheme (NSFAS). Red Coral alleged that it provided private student accommodation to NSFAS-funded students pursuant to this oral agreement, under which NSFAS funds allocated for accommodation would be paid to Red Coral via CPUT. NSFAS paid the funds to CPUT, but the amount was not paid over to Red Coral. The claim against NSFAS was based on contract, and alternatively against CPUT on delict (condictio furtiva) or unjustified enrichment (condictio sine causa). CPUT excepted to the particulars of claim on the basis that NSFAS was statutorily precluded from entering into such an oral agreement, rendering the pleaded cause of action unsustainable. The High Court upheld the exception. Red Coral sought to appeal but was out of time and applied for condonation and reinstatement of the appeal.

The application for condonation and for the reinstatement of the appeal was dismissed with costs.

The case affirms the principle that statutory bodies like NSFAS may only act within the powers expressly or necessarily implied by their enabling legislation. It clarifies the statutory payment and contracting framework under the National Student Financial Aid Scheme Act and underscores that public funds administered under the Act may not be paid to or contracted with third-party service providers outside the strict statutory scheme. The judgment reinforces the doctrines of ultra vires and legality in the context of public finance and statutory contracts.