Automated Office Technology (Pty) Ltd t/a AOT Finance v International Colleges Group (Pty) Ltd

Katlego Solutions (Pty) Ltd concluded a master rental agreement in November 2005 with International Colleges Group (Pty) Ltd for the hire of office equipment, with specific items to be hired under separate written rental addenda. Nine such rental addenda were concluded. In April 2006 Katlego entered into a written cession agreement with Automated Office Technology (Pty) Ltd t/a AOT Finance, purporting to cede its rights, title and interest in the master rental agreement and addenda. The respondent ceased paying rentals in 2008. It was common cause that the first three rental agreements were validly ceded, but the respondent disputed that the remaining six agreements, concluded after the written cession, had been validly ceded. The appellant sued for arrear and future rentals. The magistrates’ court and the High Court held that the six later agreements were not ceded. The appellant appealed to the Supreme Court of Appeal.

The appeal succeeded with attorney-and-client costs. The orders of the High Court and the trial court were set aside. Judgment was granted in favour of the appellant for arrear rentals of R479 257.35 and future rentals of R54 510.78 in respect of all nine rental agreements, together with interest at the prescribed rate. The respondent was ordered to pay costs on the attorney-and-client scale, subject to an order for certain wasted costs.

The case is significant for South African contract and commercial law as it clarifies that a cession of a master agreement may, on proper interpretation, include future agreements concluded under it. It reinforces the Endumeni approach to contractual interpretation, emphasising context, commercial sense, and avoidance of unbusinesslike outcomes. The judgment also underscores that courts, not witnesses, determine the meaning of written contracts.