WHEN ARE PERSONAL RIGHTS TOO PERSONAL TO BE CEDED? University of Johannesburg v Auckland Park Theological Seminary 2021 JDR 1151 (CC)

Abstract

Context in law is everything, or so says the aphorism. That said, to what extent should courts consider the surrounding context of a contract when interpreting and construing it and its provisions? Does the parol evidence rule preclude a court from taking into account contextual evidence or circumstances in interpreting contractual provisions? Or is the court restricted to the contractual provisions and nothing beyond the four corners of the contract? These are some of the central issues that were considered in University of Johannesburg v Auckland Park Theological Seminary (2021 JDR 1151 (CC)) (UJ CC). The Supreme Court of Appeal (Auckland Park Theological Seminary v University of Johannesburg 2020 JDR 0494 (SCA) (UJ SCA)) and the Constitutional Court had divergent views on the matter. This case note provides a critical analysis of both judgments, ultimately preferring the decision of the Constitutional Court.
In the law of contract, it is trite that, generally, all personal rights may be freely transferred or ceded to a third party without requiring the consent or knowledge of the other contracting party, who has a correlative duty. This is known as cession. An example is necessary. Consider A’s deposit of R10 000 into B Bank where B Bank is contractually obliged to return the deposit on A’s demand. A then transfers his right to claim (or demand) his deposit to C. There is no requirement that A procures B Bank’s consent to cede his right to claim. For the sake of completeness, cession is a bilateral juristic act aimed at transferring a personal right from a cedent/creditor to another legal person (cessionary). The cessionary then wears the shoes of a creditor in the cedent’s place. Cession can be differentiated from delegation (which concerns the substitution of a debtor, as opposed to a creditor) and assignment (which refers to a combination of cession and delegation).
However, the general rule of cession is subject to limitations. There are two crucial limitations in this regard. First, a right cannot be ceded where it is the subject of a pactum de non cedendo, which can generally be defined as an agreement to not cede. Accordingly, a contract may contain a provision that prevents a creditor from ceding a right without the debtor’s consent. An example of a pactum de non cedendo is where a tenant, in a lease agreement, is not permitted to cede her rights of occupation and possession unless there is prior written consent by the landlord. Secondly, there may be certain rights that are so personal in nature that they cannot be ceded. Such rights cannot be ceded because the identity of the creditor is paramount to the debtor and there is an expectation that the party initially contracted with will fulfil the obligations. Claims for pain and suffering in delict, and claims for maintenance, are traditional examples of such rights. These rights are classified as delectus personae.
In light of that general background, the author turns to consider the case of University of Johannesburg v Auckland Park Theological Seminary (supra) with a particular focus on the judgments of the Supreme Court of Appeal and the Constitutional Court. To this end, this case note is structured as follows. First, the pertinent facts of the case are canvassed; secondly, the decision of the Supreme Court of Appeal is examined; thirdly, the findings of the Constitutional Court are analysed; and lastly, the author provides a critical evaluation of the judgments, and endorses the reasoning furnished by the Constitutional Court.