The Supreme Court of Appeal rejected what it called a highly technical defence that the cession of all right, title and interest in a master equipment rental agreement only carried with it a cession of the hired equipment addenda at the time of the cession and not future addenda.
At the time of the cession there were three addenda and six came into being after the cession of the master agreement which referred to ‘the addenda signed hereto between’ the parties. The master agreement described the hiring contract as being for ‘the equipment which will be described in signed addendums’ and the rental would be payable ‘as agreed in the rental addendums’. Each addendum adopted the terms and conditions of the master agreement ‘as though specifically set forth herein’.
The rights and obligations for the hire of particular equipment could only be determined by reading the master rental agreement together with each rental agreement. The rental agreements could not stand alone.
If the written cession only applied to existing rental agreements it would ‘lead to impractical, unbusinesslike and oppressive consequences and would stultify the broader operation of the master rental agreement’. The later rental agreements would be incomplete and unenforceable because rights were no longer possessed under the master rental agreement.
The court rejected as ‘without foundation’ the argument that the master rental agreement was incorporated by reference into the addenda so that the master agreement was unnecessary. Judgment was given for the arrears on all nine rental agreements with interest from November 2013 and attorney and clients costs as provided for in the agreement.
[The case is Automated Office Technology (Pty) Ltd t/a AOT Finance v International Colleges Group (Pty) Ltd]