The Numbers on How the COVID19 Lockdown Recession Affected Schools in South Africa

Schools and the Recession

While the COVID19 Lockdown Recession has affected the global economy, it has hit South Africa particularly hard as we were in recession even before the Lockdown. One of the greatest challenges facing South Africa is unemployment where pre-lockdown unemployment was already at over 30%  in the first quarter of this year. With the implementation of the Lockdown in the second quarter, this rate is expected to increase much further.

As a result of this, quality schooling, another one of South Africa’s great challenges is also under threat with closures and recession-affected parents being unable to pay school fees. The report in The Mercury on 16 July 2020 investigating the plight of two Durban schools, shows that the effect of these threats are being felt by both private and fee-paying public schools alike.

A report in the Daily Maverick on 22 July 2020 points to a public school in Cape Town where some staff have had to take salary cuts. This illustrates that while the rest of the public sector employees have been insulated against the unemployment ravaging South Africa, fee-paying public schools with a portion of their staff financed directly by school fees are still exposed.

During SchoolAdvisor’s webinar on 22 July 2020, Bentley Credit Control ran an anonymous survey of the attending schools by asking some crucial questions to gain better insight into the extent of the financial hardships currently being experienced by schools. Of the roughly 300 attendees, 37 schools kindly took the time to complete the survey, the results of which appear below. 75% of the respondents were public schools, while the other 25% were private.

How Many Parents are Unemployed?

The first question posed was what percentage of parents at your school have disclosed to you that they are unemployed?

From these answers, it would appear that even in the second quarter, that the attendee schools unemployment rates are lower than the 30% average South African first-quarter (pre-Lockdown) unemployment rate.  One has to bear in mind that the schools surveyed either came from Quintile 5 Publc Schools, roughly the top 20% of economic areas in South Africa, or were private schools.

What percentage of parents have advised you that they have had their remuneration reduced?

By what percentage has your school fee collection for 2020 dropped?

Curro Holding, a JSE listed company and private school provider, reported a 20% decrease in fee collection for the period between March and April 2020.

These figures fit in with the feedback Bentley Credit Control has received from its school clients which indicated that their fee collection rates were, on average, down by between 20% to 40%  this year.

Has your School retrenched any staff or reduced salaries in 2020?

The concerning statistic here is that at least one-third of schools were considering retrenchments and salary cuts.

Conclusion

The statistics paint a perturbing picture of the financial effect of the Lockdown recession on both public and private schools. Schools for their part need to act proactively to meet these challenges.To do this, steps that may be taken include:

  • An improved internal collection process, with the best tools, optimum staff and support
  • Looking to outsource the internal collections where the above can not be achieved
  • Balancing the ring-fencing of “COVID19 effected debtors”, providing them with  payment terms to aid their recovery while taking a much more assertive approach in handing over the balance of those debtors unaffected by the lockdown
  • Fully understanding your legal position in terms of the right to collect school fees

Can A Learner Who Has Attained Majority Be Held Liable For Their Public School Fees?

The above is a question that we have received from several public schools.

The age of majority is the age in which a minor (child) becomes major (adult) and amongst other things gains contractual capacity and can be held fully legally liable in various ways.

There was a reduction of the age of majority from 21 to 18 years under Section 17 of the Children’s Act 38 of 2005, which came into effect from 1 July 2007.

So when a learner in a public school becomes a major, do they become liable for their school fees?

The South African Schools Act[1] (“the Act”) states that, “A parent is liable to pay the school fees determined in terms of Section 39 unless or to the extent that he or she has been exempted from payment in terms of this Act.[2]

The definition given in Section 1 of the Act[3], states that:

Parent means –

(a) the biological or adoptive parent or legal guardian of a learner;

(b) the person legally entitled to custody of a learner; or

(c) the person who undertakes to fulfil the obligations of a person referred to in paragraphs (a) and (b) towards the learner’s education at school.[4]

Accordingly, the only people that can be held liable for the school fees are the parents or guardians; the legal custodian or the person who undertakes to fulfil the obligation towards the learner’s education at the school. Liability of school fees is limited to only the categories of people listed in the Schools Act.

Therefore when a learner is admitted to a school:

  • the relationship between the learner and the school is educational.
  • while the relationship between the parent and the school is, amongst other things, financial.

This position is reinforced by Section 41(1) of the Act[5] , which states that :

A public school may by process of law enforce the payment of school fees by parents who are liable to pay in terms of Section 40.”

This section specifically states that the enforcement of the payment of the fees is limited to parents. Once again no provision is made for enforcement against any other party including a learner, even if the learner has attained the age of majority. 

Exemptions are only made available to parents of the learners and the calculated based on the parent’s income. Nowhere in this whole process is the learner actively involved.

Therefore no learner regardless of their age can be held liable for the payment of public school fees.

Why Public School Fees are still Payable notwithstanding the Absence of Schooling during the Lockdown

Introduction

The effects of COVID-19 and the lockdown have not spared public schools, and in some respects public schools have been more severely impacted with the reopening of schools being a controversial topic.

Consequently, a few parents are enquiring why they should be liable for school fees when the school services to their children were interrupted.

Some schools were able to implement online learning programmes. However, others due to financial constraints and the financial circumstances of the learners were not so fortunate. However, most schools are also implementing catch-up programmes to ensure learners catch-up with lost time in the school year.

Department of Education’s Position

The Department of Basic Education, strongly emphasises that parents must continue paying school fees or make suitable arrangements with schools to pay off the fees.

Below is a tweet from the Department’s spokesperson Elijah Mahlangu quoting Basic Education Minister Angie Motshekga in her address to the nation on the 30 April 2020:

Minister Motshekga dealt with the issue of fees when addressing the recovery plan for the reopening of schools and advised that “fees are payable, where the children attend fee-paying schools”. The Minister further advised that reports were received from some schools that parents did not adhere to paying school fees which in turn has affected the salaries of teachers appointed by the governing body.

Most fee-paying schools and the Department of Education empathise with parents situation and particularly those parents financially affected by the Lockdown. This article is not dealing with the inability to pay, but rather the argument that the schools have not fully performed their obligation in terms of providing schooling.

In this regard, parents need to take into account both the legal and moral reasons that they need to pay school fees.

Legal Reason for Paying School Fees

The legal principle of force majeure and its implication in various scenarios arising from COVID-19 and the resultant Lockdown has been the subject of discussion and even debate.

The South African law on impossibility of performance departed from English law more than a century ago, when the court in Peters, Flamman & Co v Kokstad Municipality 1919 AD 427 held that “if a person is prevented from performing his contract by vis major or casus fortuitus…he is discharged from liability”.’ Vis major is the Latin term for the French phrase force majeure and part of South Africa’s Roman-Dutch common law.

However, when one looks at public schools in South Africa where a few parents have tried to argue that they do not have to pay school fees as the school has not performed, this is not legally correct as:

  1. Most schools have or are performing their duty to educate between online programmes and/or catch-up programmes, and in addition, the Government has extended the school terms and shortened the holidays to ensure that learners are making up for schooling lost during the Lockdown; and
  2. Public school fees are a statutory obligation in terms of the SA Schools Act and not the result of a contractual agreement. Therefore, the principles applicable to contractual law, such as force majeure, do not apply to the obligation to pay school fees.

Section 40 as read with Section 39 of the SA School Act creates a duty on person/s who fall within the Section 1 definition of parent, whose child/ren are admitted to a public school to pay school fees. Such a parent’s liability to pay school fees is not dependant on their having entered into an agreement or even having been a party to the admission of the child to the school ( See Fish Hoek Primary School v G W (642/2008) [2009] ZASCA 144 and Head of Department Western Cape Education Department and Others v S (1209/2016) [2017] ZASCA 187).

Therefore any attempts by parents to use a force majeure argument to refuse to pay public school fees must fail.

Moral Reason to Pay School Fees

As the Minister of Basic Education alluded to, in fee-paying schools the fees collected are not for the profit of the schools, as public schools are non-profit. Rather, school fees serve to pay the teachers, other SGB paid staff and maintain the school and the standard of education, which those very parents that are disputing liability demand for their children.

Without school fees being paid for 2020, not only will jobs be lost but the standard of education in the fee-paying schools will drop, probably never to get back to the previous standard. This will be as a result of parents, who have the means to pay school fees, looking at private education as an alternative to the deteriorating standard of education provided if fees are not paid at public schools. This will lead to a vicious cycle of decreasing income for fee-paying schools as more and more fee-paying parents move to private education and further decreases in the quality of education at these schools with the ultimate victims being the children at these schools.

Consequently, parents are encouraged to pay school fees for the 2020 year as in previous years with the best interests of their children’s schooling future in mind. Parents should be mindful that should they fail to pay school fees timeously the quality of their children’s education is likely to be affected, not to mention potentially being hand-over for debt collection.

Therefore, if parents at fee-paying schools can pay schools they should, it is the right thing to do both legally and morally.

Who is liable – the State or a Public School?

In terms of the South African Schools Act (SASSA) public schools and their SGBs have a degree of autonomy and independence but fortunately for schools Section 60 does provide for state liability for the acts and omissions of schools in certain circumstances.  When the state is liable has recently been considered by the courts in two important decisions, that of Parktown High School For Girls v Hishaam and Another (93/2018)[2019]ZASCA 10 and Kenmont School and Another v Moodley and Others (11611/2016)[2018] ZAKZDHC 67.

Section 60(1)(a) states that:

“ the state liable for any damage or loss caused as a result of any act or omission in connection with any school activity conducted by a public school and for which such public school would have been liable for. “

The facts in these two cases differ significantly but both deal with this important issue of when the state is liable and when the school is liable.

The Parktown High School case dealt with a claim by a member of the public who attended a fashion show at the school and was injured. This event was organised by the Representative Council of Learners as a fund raiser.

The essence of this case was:

  1. Whether the school should be held liable for the injury in terms of Section 60(4) of SASAA which exempts the State from liability if the negligent conduct occurs “in connection with any enterprise of business operated under the authority of a public school for purposes of supplementing the resources of the school as contemplated in section 36…”; or
  2. Whether it fell outside Section 60(4) and therefore the State was liable in terms of Section 60(1).

Fortunately for the school in this case the court held on the central issue of whether the fashion show was an ‘enterprise or business’, that it was not and therefore the state was liable.

The second case that dealt with state liability was the Kenmont case.  This case dealt with the attaching of a public schools’ assets due to a cost order granted against the school and the SGB. Without going into the details of the original High Court case, the school and the SGB had a cost order against them.

Section 58A(4) of SASSA states that the assets of a public school may not be attached as a result of any legal action taken against the school and the school was of the view that the Department of Education should be responsible for the costs in terms of Section 60(1)(a) of SASSA. The court however held that the provisions of Section 60(1) are not applicable as it was not a delictual claim nor was it a contractual damage or loss.

The court went further and, in what we submit was an unfortunate decision, Section 58(4) was held to be unconstitutional as it infringed on the Constitutional right that everyone is equal before the law and has a right to equal protection and benefit of the law. Section 58(4) was held to be unconstitutional as it deprived the respondent in the Kenmont case from recovery of his costs.

The reason that we respectfully feel that the decision in this case was wrong will be addressed thoroughly in an article written by the authors of this article in a legal journal – shortly. In addition, as the case found an aspect of SASSA unconstitutional it has to be referred to the Constitutional Court and is set down for hearing on the 14th May 2019. We are hoping for the Constitutional Court to not allow Section 58(4) to be declared unconstitutional.

Kimeshree Pillay and Brett Bentley

Bentley Attorneys

Are Registered Emails for Section 41(5) Letter Legal?

Several private companies are offering public schools the facility to send “electronic registered mail” to comply with the notice required in term of Section 41(5) of the SA School Act. This article will look at whether this is a legally acceptable method of delivery.

The relevant provisions read:

41.   Enforcement of payment of school fees.

(1)A public school may by process of law enforce the payment of school fees by parents who are liable to pay in terms of section 40.

…..

 (5)  Despite subsection (4), a public school may act in terms of subsection (1) if—

(a)that school can provide proof of a written notification to the parent delivered by hand or registered post that the parent has failed to apply for exemption contemplated in section 39; and (b) despite the notice contemplated in paragraph (a), the parent fails to pay the school fees after a period of three months from the date of notification.” Therefore the sending of a Section 41(5) is generally a prerequisite to instituting legal action against a parent who has not handed school fees or applied for an exemption. The prescribed method of delivery is either hand delivery or registered post.

The section of South African law in which our courts, including our Apex court – the Constitutional Court – have dealt extensively with the requirement of sending a notice by registered post is Section 129(1)(a) of the National Credit Act and this article draws on the content I wrote on Notices in terms of Section 129(1)(a) of the National Credit Act, which appeared in the April 2019 edition of De Rebus, the official SA attorneys magazine.

The problem with using conventional registered post is that not only is it costly but it has a poor collection rate. In the case of ABSA Bank Ltd v Mkhize and Another and Two Similar Cases 2012 (5) SA 574 (KZD) the judge remarked:

‘I have also been provided with an affidavit by an attorney who attends to ABSA’s home loan and asset and vehicle finance matters in Pretoria. He too has not kept detailed statistics but estimates that 70% of the registered s 129 letters his office sends out are returned unclaimed.’

However, a potential solution to this challenge is found in s 19(4) of the Electronic Communications and Transactions Act 25 of 2002 (ECTA), which states:

‘Where any law requires or permits a person to send a document or information by registered or certified post or similar service, that requirement is met if an electronic copy of the document or information is sent to the South African Post Office Limited, is registered by the said Post Office and sent by that Post Office to the electronic address provided by the sender.’

If this provision were in operation, it would allow e-mails or even electronic text messages such as SMSes, to serve as valid s 41(5)(a) notices.

Therefore many were excited by the South African Post Office’s (SAPO) announcement in May 2016 that it was launching ‘eRegistered Mail’ (www.fin24.com, accessed 22-2-2019). Unfortunately, based on various meetings with sales representatives of SAPO and other players in the communications industry over two years, it is, my opinion, that SAPO itself is not confident in the service as it is practically cumbersome and based on ‘pull’ as opposed to ‘push technology’. It is, therefore, no surprise that the general public has not embraced nor made much use of it since inception.

There are, as previously mentioned, several private companies currently claiming to offer viable ‘push technology’ solutions. Based on the use of such products, I believe at least one may be a potential answer to ensuring electronic service of legal notices while maintaining a sound evidentiary trail. The challenge lies with s 19(4) of ECTA. While many service providers claim SAPO’s endorsement, the communications –

  • do not appear to be sent by the sender to SAPO as required; and
  • do not appear to be sent by SAPO to the electronic address provided by the sender.

Additionally, there is some uncertainty as to whether SAPO registers these electronic communications.

Therefore, a gap exists, which could be resolved by SAPO either partnering with an efficient service provider or providing a service of comparable quality, to achieve the goal of ensuring compliance with the ECTA. This would be of benefit not only with NCA compliance but serve a similar purpose with other legislation referring to registered mail.

Also, there are many challenges unique to public schools:

  1. Not many schools have incorporated email addresses/cell phone numbers as chosen domicilium in their admission documents for parents, which is prerequisite to be able to send documents via electronic mail;
  2. as public school fees are a statutory obligation and not a contractual one, a non-custodian parent may not have signed any form of admission document and therefore not have chosen a domicilium of any form;
  3. The SA Schools Act does not have the same safety net as the National Credit Act. In the NCA where a creditor provider uses electronic communication for S129(1)(a) Notices, it may, if a court does not accept the electronic communication as not complying with Section 19(4) of the ECT, ask the court for an order in terms of Section 130(4)(b) of the NCA. The order would be one in which they can adjourn the court matter while they redo the S129(1)(a) Notice in the manner ordered by the court and until the necessary day notice has expired.

The SA School Act does not have any similar provision to Section 130(4)(b). This means in a similar situation of a court rejecting the electronic sending of Section 41(5) notice, it would result in a fatal defective notice and they would have to withdraw the action, potentially paying the other side’s costs and having to redo the Section 41(5) Notice and lose at least 3 months plus  in the process.

Therefore, while I strongly believe that electronic registered mail is the future of registered post in South Africa but that currently, it is too risky for public schools to use these services without either:

  • the full co-operation and endorsement of the SA Post Office; or
  • a High Court judgment supporting the use of electronic mail visa one of these service providers as complying with Section 19(4) of the ECT.

Brett Bentley

Bentley Attorneys

Prescription and Public Schools

Simply put, prescription is the law surrounding the life of a debt, how long one can legally collect on such debt and is subject to a number of rules.

The Constitutional Court in Road Accident and Another v Mdeyide 2011 (2) SA 26 (CC)described the reason for prescription, “ In the interests of social certainty and the quality of adjudication, it is important, though, that legal disputes be finalised timeously. The realities of time and human fallibility require that disputes be brought before a court as soon as reasonably possible. Claims thus lapse, or prescribe, after a certain period of time. If a claim is not instituted within a fixed time, a litigant may be barred from having a dispute decided by a court. This has been recognised in our legal system – and others – for centuries.”

The primary law governing prescription in South Africa is the Prescription Act No. 68 of 1969.

Some of the important principles of prescription include:

  • A debt is extinguished by prescription after the lapse of the prescriptive period applicable to that specific type of debt
  • Once prescribed the debt cannot be revived, not even by an acknowledgement of liability, unless the
    acknowledgement amounts to a new undertaking. (Trinity Asset Management (Pty) Ltd v Grindstone Investments 132
    (Pty) Ltd (1040/2015) [2016] ZASCA 135 (29 September 2016))
  • Prescription can be interrupted by various events, which means that the prescription period begins to restart from the
    time of these various events
  • Acknowledgement of a debt, whether by part payment or even any informal means of acknowledging the debt (for
    example an email) will interrupt prescription (Section 14)
  • Service of a summons interrupts the running of prescription (Section 15(1))
  • The defence of prescription has to be raised by the debtor and a court on its own cannot raise it (Section 17(1))
  • Payment of a prescribed debt is valid payment and can not be reclaimed

One of the areas of confusion is how long public school fee debts take to prescribe?

Section 11 of the Prescription Act states:
“The periods of prescription of debts shall be the following:
(a) thirty years in respect of—
(i) any debt secured by mortgage bond;
(ii) any judgment debt;
(iii) any debt in respect of any taxation imposed or levied by or under any law;
iv) any debt owed to the State in respect of any share of the profits, royalties or any similar consideration payable in respect of the right to mine minerals or other substances;
(b) fifteen years in respect of any debt owed to the State and arising out of an advance or loan of money or a sale or lease of land by the State to the debtor, unless a longer period applies in respect of the debt in question in terms of paragraph (a);
c) six years in respect of a debt arising from a bill of exchange or other negotiable instrument or from a notarial contract, unless a longer period applies in respect of the debt in question in terms of paragraph a) or (b);
(d) save where an Act of Parliament provides otherwise, three years in respect of any other debt.”

So the next important question is can public school fees be fitted into Section 11(a)(iii), thereby extending it’s life from the usual 3 years to 30 years, like judgment debts?

Unfortunately we believe not, as although public school fees are a statutory obligation for the parents in terms of the SA Schools Act, it is not a tax. The courts in South Africa have defined tax very narrowly, so narrowly that in Eskom v Bonjanala Platinum District Municipality and Another (560/2003) [2004]

So the usual period for most debts is 3 years, which can be extended by taking legal action and obtaining judgment, which extends the life of a debt to 30 years.

So the next important question is can public school fees be fitted into Section 11(a)(iii), thereby extending it’s life from the usual 3 years to 30 years, like judgment debts?

Unfortunately we believe not, as although public school fees are a statutory obligation for the parents in terms of the SA Schools Act, it is not a tax. The courts in South Africa have defined tax very narrowly, so narrowly that in Eskom v Bonjanala Platinum District Municipality and Another (560/2003) [2004]

ZASCA 118; [2005] 3 All SA 108 (SCA) (30 November 2004) the Supreme Court of Appeal held that municipal service levies were not a tax as defined in terms of Section 11(a)(iii). We are not alone in this interpretation and others that have interpreted the prescription period for public school fees to be 3 years include Prof. Carnelley in her 2011 paper, Liability for the payment of public school fees.

Unfortunately the Department of Trade and Industry attempted to regulate prescription by introducing amendments to the National Credit Act in 2015, instead of requesting the Department of Justice and Constitutional Development to amend the Prescription Act.

The intention of this amendment was to prohibit the sale of prescribed debts, as well as making the continuing collection of prescribed debts illegal. But by inserting the amendments in the National Credit Act and not the Prescription Act it firstly can only govern credit agreements and public-school fees are not credit agreements and secondly there are many conflicts between this NCA amendment and the current Prescription Act.

As a result of the issues caused by the NCA amendment and other motivations, a new Prescription Bill was published in early 2018 for comment and the SA Law Reform Commission is consulting widely on the proposed amendments and for input.

  • Without going into the legal niceties of hard and soft prescription and other finer details not relevant to public school fee collections, the intention of the proposed new piece of legislation will include to potentially:
  • Extend the life of standard prescription from 3 years to 4 years
  • Prohibit the sale and recovery of all prescribed debts and not only credit agreements
  • Giving courts the ability to consider prescription, without the current requirement that the defendant raise it before they can consider it
  • Making the only form of acknowledgement of debt to interrupt prescription, a formal written acknowledgement

The law relating to prescription is fast developing at the moment and it is something that public schools should be alive to in respect of their internal school fee debt recovery and their external debt collector recoveries.

Public School Fee Collections Tips

The collection of school fees owing to a public school is a delicate, involved and controversial activity that is fundamental to the successful operation of any fee paying public school. Without these fees the standard of education in the fee paying schools would drop and irreparable harm would be done to our country and our future.

1. The Right Staff
The most important part of the school fee collections process is the appointment of a suitable person who has sufficient time and with the correct personality for the task. A number of schools rely on someone involved in administration who has a number of other tasks and Admin activities, which don’t allow them to focus on the collections and management of the collection process.

Another potential mistake is the appointment of someone who is not assertive, alternatively overly aggressive or emotional. The task requires someone with a high Emotional Intelligence to deal with potentially very emotional and aggressive parents.

Some schools are reluctant to employ the services of an internal fee collector but the employment of a suitable person will more than pay for their additional expense to the school in increased income, reduced bad debt hand-overs to third party collectors and write offs.

2. Develop a Sound Collections Policy
You need to establish a sound and practical collections policy, which operates within the parameters laid down by the SA Schools Act. This should be a document which lays down the time frames and steps that you take internally in the collections process and at which stage the matter should be handed over for third party collections and the procedures for monitoring their progress.

3. Educate Parents about the financial Needs of the School
A large number of parents do not understand the financial situations of fee paying public schools and how dependant schools are on these fees for their successful operation. Another misconception is that if they qualify for exemptions or partial exemptions that the state pays for this, which is not the case.

A positive step is for schools to educate parents and even high school pupils (learners) on the school budget and just how vital school fees are. This does not mean “preaching to the converted” at AGMs but rather communicating with the broader community of parents through emails and other forums and means of communication.

This is a positive tool in increasing the awareness of the importance of paying schools and thereby encouraging the payment of school fees.

4. Ensure Proper Staff Training
Ensure that this training is preferably with a trainer that is properly legally qualified and who knows collections and collections tools. The trainer should also know the SA Schools Act and the legal developments in all areas of law impacting on collections. Regular training is necessary as the law in South Africa is developing fast and any internal School fee collector needs to be kept abreast of the latest developments in the law and of the newest and best collection methods.

5. Choose the Right Third Party Collector
Invariably someone in the school or the Governing Body knows some attorney or debt collector and recommends them to attend to the fee collections. But the important question is whether that third party collector is a specialist in the field of collections and more specifically the area of public school fee collections which is governed by an Act, that not all attorneys, never mind debtor collectors are very familiar with, the SA Schools Act.

Third party collectors that do not know their way through the mine field of requirements for school fee collections can be a liability to the school. Look for a third party collector with public school references and a proven track record in the collection of school fees.

Should you require any assistance or advice on any of the above issues please don’t hesitate to contact us, Brett Bentley on +27 87 654 3399 or bentley@law.co.za .

SCA Saffer Judgment on Public School Fee Liability and Exemptions Handed Down

The judgment from a school perspective, it is a bit of a mixed bag.

Mostly importantly the court has held that parents are jointly and severally liable for their child’s school fee, as opposed to jointly liable, which is what the court below had held. If parties are joint liability, then they cannot be sued separately for the full obligation, which they can in the case of jointly and severally liable.

The negative part of the judgment is that in the situation of exemption applications by separated parents, the court ordered that:

“(a) The governing body of a public school shall grant a conditional exemption from payment of school fees, referred to in Regulation 1 of the Regulations, to a parent who:

(i) in his or her application for exemption:

(aa) gives particulars for his or her total annual gross income; and

(bb) does not give particulars of the total annual gross income of the other parent of the learner concerned because the other parent has refused or failed to provide such particulars to the parent applying for the exemption; and

(ii) having regard solely to his or her total annual gross income, would qualify for a total or partial exemption in terms of the Regulations if he or she were the only parent of the learner concerned.

(b) A conditional exemption shall be the total exemption or the partial exemption to which the applicant would have been entitled if he or she were the only parent of the learner concerned.

(c) When granting such a conditional exemption the governing body shall impose conditions to the effect that the applicant for the exemption:

(i) must report to the school forthwith any increase in his or her gross annual income during the school year in question which, had it been his or her income at the time of making the application for exemption, would have disentitled him or her from receiving the total exemption granted to him or her or from receiving any partial exemption granted to him or her;

(ii) must, on demand from the governing body, pay on reasonable terms to be determined by the governing body after giving him or her the opportunity to make representations, the school fees or the portion of the school fees for which he or she would have been liable in terms of the Regulations based on his or her increased gross annual income;

(iii) shall not be liable to make any such payment unless, during the school year in question, his or her gross annual income increases to such an extent that, had it been his or her income at the time of making the application for exemption, he or she would have been disentitled from receiving the total exemption granted to him or her or from receiving any partial exemption or he or she would have been entitled only to a lesser partial exemption than the one granted to him or her.”

This aspect of the judgment was redeemed to a certain extent by the court holding:

“It is declared that the granting of such a conditional exemption shall not preclude the public school from taking legal steps to enforce payment, by the other parent of the learner concerned, of the school fees or the balance of the school fees, as the case may be, in terms of section 41(1) of the Act.”

The judgment is not ideal for public schools and does not take into account a number of practical situations like the situation where the co-operative parent is granted a conditional exemption on the grounds set out above and then the non-cooperative parent is sued only to reveal that the combined income exceeds the exemption limit. Does that then give the school the right to withdraw the conditional exemption granted to the other parent?

However on the whole the judgment is a vast improvement on the judgment given by the court below and gives the schools certainty on how to deal with the majority of situations involving a co-operative and non-co-operative parent in an exemption application.

Bentley Submission on the Draft Basic Education Laws Bill

The Department of Basic Education released the Draft Basic Education Laws Amendment Bill on the 13th October 2017 , calling for comments by the 10 November 2017.

The Bill covered many aspects covering the administration of public schools but as a firm that deals with large numbers of public school fee collections we decided to focus on the proposed amendment of Amendment of section 41 of Act 84 of 1996, as amended by section 5 of Act 24 of 2005 Section 41 of the South African Schools Act, 1996, dealing with the documentation required in support of an application for an exemption and the challenges of parent liability to pay school fees.

We believed in following a position of compromise, fairness and understanding of the position of parents applying for exemptions balanced with the needs of the school and the general body of learners and the details of our submission appear below.

 1. Introduction

I am an attorney who acts for over 120 fee paying public schools and I assist these schools with compliance of the SA School Act and school fee collections. In addition, for the past 14 years I have been giving annual seminars to public schools around the country on the topic of compliance with the SA Schools Act, specifically relating to school fees and exemption applications.

The sole focus of this submission is to deal with the proposed amendment of Amendment of section 41 of Act 84 of 1996, as amended by section 5 of Act 24 of 2005 Section 41 of the South African Schools Act, 1996, dealing with the documentation required in support of an application for an exemption and the challenges of parent liability to pay school fees.

These submissions are based on facts and actual situations dealt with by not only our clients but other public schools in the country that were canvassed by the writer on this specific proposed amendment. However, the content of the submissions are those of the writer alone.

It is not an easy area to create fairness, as will appear from this submission, as there are competing rights and particularly where parents are separated finding a workable and practical legal framework is challenging.

2. Rights of Parents vs the School and General Body of Learners

Admittedly the approach of some fee paying schools in dealing with exemption applications has been stringent and requires detailed private financial information but there are valid reasons in many cases and the legislature has to be careful that in trying to protect the parents that they don’t tread on the rights of the general body of learners at the school. In addition, one has to understand the motivation of the public school in being reluctant to grant exemptions without a proper investigation of the true financial affairs of the parents.

While Supreme Court of Appeal case of Fish Hoek Primary School v G W (642/2008) [2009] ZASCA 144; 2010 (2) SA 141 (SCA) ; 2010 (4) BCLR 331 (SCA) ; [2010] 2 All SA 124 (SCA) (26 November 2009)dealt with the question of non-custodian parent liability, Ponnan JA’s statement at 14 sheds light on the consequences of non-payment of public school fees, be that as a result of enforcement issues or the relaxing in the requirements for the granting of exemptions:

“Were the school not to have the right to recover school fees from the non-custodian parent in those circumstances, it will either have to shoulder that loss or mulct other parents with additional charges. In either event it would be acting to the detriment of other learners. By including a further category of persons to those ordinarily contemplated by the word parent, it is plain that the legislature cast the net as widely as it could to afford the school and in turn the learner the maximum possible protection.”

While the Department of Basic Education offers a small compensation to fee paying schools for exemptions granted, in most cases this amount is not even remotely commensurate with the fees lost on the granting of exemptions.

Therefore, the more parents that qualify for exemptions, the less income the school has, which results in the school having to look at increasing school fees which in turn results in more exemptions being granted, as the formula for exemptions is a direct relationship between what the parents earn and the amount of the school fees. This vicious spiral can result in the inability of schools to meet its financial requirements and may result in the reduction of school standards and facilities which obviously then effects all learners in that school.

In the unreported case of Centre for Applied Legal Studies and Others v Hunt Road Secondary School and Others (DCLD) (case 10091/2006) the Applicant secured a court order preventing the school from enforcing various judgments for the payment of outstanding school fees as the school had failed to properly comply with the relevant law before handing the matters over for legal debt collection. The writer was personally advised by the then principal of this previously disadvantaged school that the result of this court order and the reduction in school fee income was that the school was no longer able to employ 3 Governing Body employed educators and lost a subject. Patently this was to detriment of the general body of learners.

From the above I trust that it is clear that we are dealing with competing rights of parents applying for exemptions versus the rights of the other parents in the school and more importantly the rights of the general body of learners and their Section 29 Constitutional right to basic education.

Moreover, the effect of the new proposed 41(2A) will be to effectively let off a large number of non-custodian parents from their legal liability to support their child/ren in paying for their fees notwithstanding that they may well be capable of doing so.

3. Divorce Orders and Settlement Agreements

It is submitted that reference to Divorce agreements and orders, gives an incorrect perception that these are binding on schools, which they are not.

While the school may wish to have proof of a divorce decree, the specific reference to documents beyond this have no bearing on the calculation of an exemption as such a court order is binding inter partes and not on third parties. There is a long line of legal authority confirming this general position while the unreported Free State case of Meeding v Hoer Tegniese Skool Sasolburg case no: A134/2011 which deals specifically with public school fees and in which the court held at page 46-47:

“Al wat hierde bevel doen is dat dit ‘n verhaalsreg van persoonlike aard aan die appellante verleen en geen saaklike reg nie. Hierde bevel is bloot ‘n persoonlike vorderingsreg wat nie teenoor die res van die wêreld geld en spesifiek nie ten opsigte van enigiemand wat nie ‘n party tot die egskeidingsgeding was nie.

Wat meer is dit voorsien uitdruklik dat uitgawes wat aangegaan is ook betaal moet word deur die tweede verweeder of dan die appellante se vorige eggenoot. Dit voorsien met ander woorde by noodwendige implikasie dat sy reeds uitgawes aangegaan het en moontlik uitgawes kan aangaan wat sy van hom kan verhaal. Daar is geen ruimte vir ‘n bevinding dat hierdie bevel die bepalings van die Skolewet wysig of inperk in enige opsig nie. Daar is geen manier waarop so ‘n bevel die wet kan wysig of ‘n inperking op die regte van die respondent kan daarstel wat nie ‘n party daartoe was nie.
Dit is eintlik die einde van die saak in die sin dat uit hoofde van die bepalings van die Skolewet die landdros tereg geregtig was om ‘n bevinding te maak soos hy gedoen het, naamlik dat beide die ouers, synde die appellante en die tweede verweerder, gesamentlik en afsonderlik aanspreeklik is vir betaling van die skoolfooie.”

Translated into English:

“All that this order does is that it gives the appelant a right of recourse of a personal nature and no real right. This order is purely a personal right of action which is not effective against the rest of the world and specifically not in relation to anyone who is not a party to the divorce suit.

What is more, it explicitly states that expenses incurred must also be paid by the second defendant or the appellant’s previous spouse. It provides, in other words, with the necessary implication that she has already incurred expenses and may incur expenses she can recover from him. There is no room for a finding that this order changes or limits the provisions of the Schools Act in any way. There is no way in which such an order could amend the law or create a restriction on the rights of the respondent who was not a party to it.

It is actually the end of the case in the sense that under the provisions of the Schools Act the magistrate was entitled to make a finding as he did, namely that both the parents, being the appellants and the second defendant, jointly and severally liable for payment of school fees.“

4. Separated Parents

The effect of the proposed amendment will be to cut of the school’s right to look at the non-cooperative parents who are generally the non-custodian parent and limit the application solely to the income of the applicant parent, notwithstanding that the non-custodian may well be the proverbial millionaire. This is completely unfair to the school.

Case such as the Meeding case referred to above and the case of M S v Head of Department, Western Cape Education Department and Others (18775/2013) [2016] ZAWCHC 119; [2016] 4 All SA 578 (WCC); 2017 (4) SA 465 (WCC) (15 September 2016), which is currently on appeal to the Supreme Court of Appeal, highlight the challenges when dealing with the liability of separated parents to pay school fees and how to deal with them in cases of exemption applications. In numerous instances these parents are in conflict with one another and this soured relationship spews over into the area of who is liable for school fees and exemption applications and many schools report being unwillingly drawn into this arena of conflict, something they wish to avoid.

So in M S v Head of Department, Western Cape Education we had a case trying to deal with the challenges of an application for an exemption of a divorced mother in which the father was not co-operative in providing his financial information so that the school could apply the exemption formula in terms of the exemption regulations which apply to “combined annual income of parents”. The writer respectfully submits that the court in this matter erred in its judgment and hopes that a Supreme Court of Appeal corrects this error. The court in this case rather than creating fairness for the mother through an interpretation of the exemption regulations chose rather to look to the SA Schools Act and hold that parents are jointly liable for public schools, and stating that :

“Joint liability in this context means that each parent would only be liable for their proportionate share of the fees; joint and several liability means that each parent is liable to the school for the full amount of the fees and if one parent pays the full amount, she or he will have a right of recovery against the other parent.”

This is problematic in many aspects.

Firstly, what is a proportionate amount? In the Supreme Court of Appeal case, Fish Hoek Primary School referred to previously, it was held:

“At common law both parents of a dependent child are under a duty to support such child in accordance with their respective means. That duty must undoubtedly embrace the educational needs of the child as well, particularly as the Act creates a system of compulsory schooling. The narrow construction placed on the word ‘parent’ by the high court offends against the principle of statutory interpretation which requires a statute to be interpreted in conformity with the common law rather than against it.”

So while in the M S v Head of Department, Western Cape Education case the parents were conveniently liable for 50% each, a large number of divorce and maintenance orders do not specify in percentages but rather who pays what. Moreover, to enforce that would draw schools into being bound by divorce and maintenance orders, which is not only untenable for schools of becoming the interpreters of such orders but moreover this conflicts with the legal position of such orders not being binding on third parties as reflected in numerous cases and specifically the Meeding case, which also conflicted with the M S case in holding that parents were jointly and severally liable in terms of the SA Schools Act.

Secondly the decision creates an interpretation issue, as if parents are jointly liable, this conflict with the exemption regulations in which the “combined annual income of parents” is measured in a formula against the total years school fees and the judgment renders the regulations impossible to apply in accordance with direct wording of the regulations.

To allow any form of liability of parents other than joint and several would result in schools having to try and interpret court orders, which are legally not binding on them, and being drawn into post-marital/relationship conflicts.

Admittedly joint and several liability might result in one parent paying more than their legal duty to support their child in accordance with their means but they would then have the right to refer the matter to the maintenance court, the correct institution to determine and redress the liability between the parents.

5. Use of Affidavits as Binding Evidence

One of the strongest criticism the writer received from schools providing feedback on this proposed amendment was the reliance on affidavits as final proof in a number of cases.

A large number of schools have reported numerous instances of false affidavits being submitted and while this is a criminal offence of perjury, which will be future defined as a specific criminal offence in terms of the proposed provision of Section 59(3) in which it is proposed to add the following:

“A parent of a learner or any person who, in an application for
admission to a public school or for the exemption of the payment of school fees, submits or provides information which he or she knows to be false or misleading, or submits a forged document or one which, purports to be but is not a true copy of the
original is guilty of an offence and upon conviction liable to a fine or to imprisonment for a period of six months.”

But the reality is that in a country in which serious crime is rife, the chances of successfully having criminal charges under either criminal provision prosecuted are slim and therefore the criminal sanctions do not serve as a disincentive for false statements relating to income or employment.

Moreover, the limitation of information that schools can request from parents in terms of these draft amendments will severally limit the about of false information that is detected therefore rendering the possible implementation of the proposed Section 59(3) impossible in a majority of cases.

6. Self-Employed Parents

Another challenging area for schools is trying to determine the income of self-employed parents and the reliance purely on unaudited statements on self-employed parents and those with investment interests leaves the schools open to extensive false statements in this area.

7. Unemployed Parents

Once again the reliance on simple affidavits is not sufficient and lead to abuses and false statements. A simple letter by the Department of Labour that the parent is unemployed while not perfect, would be far more effective.

8. Act being Amended to deal with Regulation Issues

One must also question why the Act is becoming amended to deal with an issue that comes from the exemption regulations. With respect, a number of the issues come directly for the poor drafting of these regulations and it would be far better to overhaul the entire exemption regulations.

In addition, the formula applied needs to be rethought as it’s resulting in persons who are upper middle-class earners qualifying for exemptions and the vicious spiral discussed at the beginning of this submission needs to be avoided.

9. Bank Statements

In numerous instances schools have advised us that bank statements were vital in properly assessing the income of parents as without it:
– additional income beyond salaries would go undetected
– a number of fraudulent salary slips would not be detected
– various other frauds would not have been picked up

It is submitted that the requirement of 3 months bank statements is a fairly regular requirement in financial transactions and is something that parents should be familiar with.

10. Our Proposal on the Amendment

Our suggestions on the proposed amendment dealing with school fees and exemptions under Section 41 is as follows:

1. Amending Section 40(1) to:
“[Parents are jointly and severally liable] to pay the school fees determined in terms of section 39 unless or to the extent that [they have been ] exempted from payment in terms of this Act.”

2. Re-looking at the entire exemption process and then amending the regulations (as opposed to the Act) to:

2.1 Consider a new exemption formula that is fairer and does not result in exemptions placing the financial burden of such exemptions almost solely on the school; and
2.2 Limiting the documents that a school can request from parents to –

(a) A salary advice of all parents, where applicable;
(b)Three (3) months personal bank statements of each parent and in the event that they are self-employed those of the business;
(c) divorce orders, if applicable, to determine the legal status of the parents;
(d)audited statements of profits received from investments or other forms of business, alternatively each parent’s last annual tax return;
(e) where the parent is unemployed, a letter from the Department of Labour confirming this; and
(f) proof of all children registered at a public school.

2.3 Amending the proposed S41(2A) and placing it in the regulations as:

“A parent may submit to the governing body documentary evidence in the form of an affidavit supported by a confirmatory affidavit from a social worker or another competent authority, or a court order, which constitutes prima facie proof that the other parent of the learner-
(a) is untraceable;
(b) is unwilling to provide the first- mentioned parent with particulars of his or her total annual gross income,
(c) has failed to provide the first- mentioned parent with particulars of his or her total annual gross income despite the lapse of a reasonable time after a request by or on behalf of the first -mentioned parent that he or she do so; or
(d) has provided the first -mentioned parent with incomplete or inaccurate particulars about his or her total annual gross income and has refused to rectify the deficiency or has failed to do so despite the lapse of a reasonable time after a request by or on behalf of the first-mentioned parent that he or she do so.”

2.4 Add a new subsection dealing the school’s right to trace and sue the uncooperative parent for outstanding school fees subject to their right to apply with the other parent for an exemption : –
2.4.1.”Notwithstanding a parent submitting the requisite documents in terms of (2A) above, this shall not preclude the school from attempting to trace the other parent and obtain details of their income in order to comply with the regulation allowing it to use “the combined annual income of the parents”. If the school does not trace the other parent, then the exemption shall be calculated without such parent.”
2.4.2 “In the event of any one of the parents not providing the financial information required to process the exemption application, the school shall have the right to sue such parent for the full outstanding school fees subject to that parent’s right to apply for an exemption with the other parent.”

Divorce Orders & Public School Fees

One of the issues we have raised by divorced parents at public schools is the issue of the effect of a divorce order, where there is a court order ordering the one parent to be responsible for school fees. So when the school asks the parent who is not the party responsible for the fees in terms of the order to make payment, they say no the court has ordered the other parent to be responsible and that is binding on the school.

We have even seen a situation where a legal adviser of the one of the provincial Education Departments has tried to argue that – a divorce order amounts to an automatic exemption in terms of Regulation 4(3)(c) of the Regulations Relating To Exemption Of Parents From Payment Of School Fees In Schools No. R1052 of 2006.

Our opinion is that that the divorce order is not binding on third parties but only between the divorcing parties, unless such third party have been cited in the legal proceedings. The legal authority upon which we rely is the Supreme Court of Appeal decision of OLD MUTUAL LIFE ASSURANCE CO (SA) LTD AND ANOTHER v SWEMMER 2004 (5) SA 373 (SCA), which at 24 the court held that , As the appellants were not parties to the proceedings in which this order was made, the order was a nullity as far as they were concerned and they could legitimately disregard it without having it set aside.

Moreover the South African Schools Act wide definition of parent in terms of Section 1 is designed to ensure that public schools do not become embroiled in disputes between feuding parents and that both jointly and severally liable for the schools fees. In this regard we refer to the Supreme Court of Appeal authority of FISH HOEK PRIMARY SCHOOL v GW 2010 (2) SA 141 (SCA) in which the court held at 14:

Moreover, an interpretation that burdens both parents with responsibility for school fees is consistent with the injunction in s 28(2) of the Constitution that ‘a child’s best interests are of paramount importance in every matter concerning the child’. It unquestionably is in the best interests of a child that a non-custodian parent, who is unwilling, yet has the means, to pay his child’s school fees, should be made to do so, if necessary by the injunction of an order of a competent court.

Were that not to be so, the custodian parent would solely be saddled with that responsibility. And whilst a custodian parent, if she has paid more than her pro rata share towards the child’s support, may in law be entitled to recover the excess from the non-custodian parent, the reality is that her right to recover may for all practical purposes prove to be illusory.

Further, the sad truth is that many custodian parents are simply unable to pay or have been exempt from paying due to poverty. Were the school not to have the right to recover school fees from the non-custodian parent in those circumstances, it will either have to shoulder that loss or mulct other parents with additional charges. In either event it would be acting to the detriment of other learners.

By including a further category of persons to those ordinarily contemplated by the word ‘parent’, it is – plain that the legislature cast the net as widely as it could to afford the school and in turn the learner the maximum possible protection. To interpret the word restrictively as the High Court did can hardly be reconciled with the paramountcy that must be afforded to the best interests of the child principle.

As to the Education Departments who has tried to argue that a divorce order amounts to an automatic exemption in terms of Regulation 4(3)(c) of the Exemption Regulations. The divorce order is not an court order exempting any party from payment of school fees or showing evidence of qualification for exemption but an order that inter alia arranges financial responsibility between the parties.

The court in no ways assess the ability of the party or parties to pay school fees and in many cases divorce orders are merely the product of settlement agreements between the parents. If this submission were true then parents could effectively exempt one party by way of a divorce settlement agreement, which is patently legally untenable and not in accordance with the reasoning of the Fishhoek case.