Plumbago Financial Services (Pty) Ltd t/a Toshiba Rentals v Joseph t/a Project Finance (2879/2005) [2007] ZAWCHC 35; 2008 (3) SA 47 (C); (15 June 2007)

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[2007] ZAWCHC 35
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Plumbago Financial Services (Pty) Ltd t/a Toshiba Rentals v Joseph t/a Project Finance (2879/2005) [2007] ZAWCHC 35; 2008 (3) SA 47 (C); (15 June 2007)

REPORTABLE
THE REPUBLIC OF
SOUTH AFRICA
IN THE HIGH COURT OF SOUTH
AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE
NO: 2879 / 2005
In the matter between:
PLUMBAGO
FINANCIAL SERVICES (PTY) LTD
t/a TOSHIBA RENTALS
Plaintiff
and
JANAP JOSEPH
t/a PROJECT FINANCE
Defendant
JUDGMENT : 15 JUNE 2007
BOZALEK J:
[1] This matter concerns a claim for
arrear and future rentals and certain ancillary claims by the lessor
of equipment arising out
of the breach of the lease contract by the
lessee. More particularly, it involves the interpretation of a
particular disputed clause
in the agreement and the question of
whether, in terms of the provisions of the Conventional Penalties
Act, 15 of 1962, certain of
the amounts claimed by the lessor fall to
be reduced by the court.
BACKGROUND
[2] In 2005 the plaintiff, a company
carrying on the business of leasing out photocopier machines,
obtained default judgment against
the defendant, an adult business
woman trading under the name of
Project
Finance
in the amount R232
651, 35 for arrear and accelerated future rentals together with
interest and costs. The defendant then launched
a successful
application for rescission of the default judgement and was granted
15 days within which to file a plea. In due course
a plea was filed,
the general purport of which was to put plaintiff to the proof of its
case in which it had alleged breach of the
contract through
non-payment and a consequent entitlement to the various sums claimed.
In addition, the defendant disputed the existence
of a term in the
contract relied upon by the plaintiff as entitling it, upon
defendant’s breach, to claim not only arrear rentals
but immediate
payment of all future rentals.
[3] The
matter proceeded to trial but no further pleadings or notices were
filed by the defendant. On trial day there was no appearance
either
by the defendant or on her behalf. Upon enquiry it transpired that
the defendant’s legal representatives had withdrawn as
attorneys of
record some ten days prior to trial and served a copy of such notice
on the defendant’s accountant at her place of
business and on the
defendant’s son-in-law. Their attempt to serve the notice on the
defendant’s last known place of residence
was unsuccessful. The
defendant’s erstwhile attorney advised the plaintiff’s attorney
that he was satisfied that the defendant
had been made aware of the
trial proceedings commencing on 12 April 2007 and of the fact that
she would be unrepresented in court.
[4] The
plaintiff had earlier obtained a substantial costs order against the
defendant arising out of the rescission application and
there were
indications that the defendant was seeking to avoid the service of
process in the matter. I was satisfied that the defendant
was made
aware of the trial proceedings and given every opportunity to contest
the action. In the circumstances therefore, the action
proceeded in
her absence.
[5] The plaintiff’s claim against
the defendant is based upon rental agreements relating to two
photocopiers, which I shall also
refer to as “the equipment”,
concluded in February and September 2004 respectively. In terms of
the first agreement the defendant
leased an
E-Studio
25
photocopier at an
initial monthly rental of R995, 22 for a period of five years. In
terms of the second agreement the defendant leased
a
E-Studio
350
digital photocopier for
a similar period at an initial monthly rental of R2120, 40.
[6] The terms and conditions of the
two agreements were virtually identical and had the following salient
provisions:
the rental was payable monthly in
advance;
the monthly rentals increased
annually on a cumulative basis at the rate of 15% per annum;
Defendant agreed that if she failed
to effect any payment in terms of the agreement on the due date
thereof, such overdue amounts
would bear interest at a rate equal to
6% per annum above the prevailing publicly quoted base rate of
interest per annum at which
any one of the plaintiff’s bankers
would lend on overdraft;
Defendant further agreed that in the
event of her breaching the agreement all costs and disbursements,
including legal costs on
the attorney and own client scale incurred
by the plaintiff in recovering possession of the leased goods and in
collecting or endeavouring
to collect any amounts payable by the
defendant to the plaintiff, would be for the account of the
defendant.
[7] The terms of the breach clause are
of particular importance . It reads, insofar as it is material, as
follows:
“
8. If User
defaults in the punctual payment of any monies as it falls due in
terms of this agreement or any other agreement that
it has with Hirer
or any of its associates, holding or subsidiary or fellow-subsidiary
company; or fails to comply with any of the
terms and condition of,
or its obligations under any such agreement; ….. then and upon the
occurrence of any of these events Hirer
may elect without prejudice
to any of its rights to:
8.1
Without
terminating this agreement to treat as immediately due and payable
all rentals which would otherwise have become due and payable
in
terms hereof over the then expired (sic) of the agreement and to
claim and recover from the User forthwith the aggregate amount
of
such rentals as well as all rentals and other sums then in arrear in
terms of this agreement.
The
Hirer shall, pending payment of these amounts, be entitled to be
possessed of the goods and to retain possession thereof on condition
that against full payment, the Hirer shall return the goods to the
User who shall not be entitled to any rebate of abatement of rentals
or other amounts by reason of the User’s loss of possession and
enjoyment of the goods while the same will have been in the Hirer’s
possession; OR
8.2 immediately
terminate this agreement without notice, taking possession of the
goods, retain all amounts already paid by User and
claim all
outstanding rentals, all legal costs on the attorney and own client
scale and, as a agreed, pre-estimated liquidated damages,
the
aggregate value of the rentals which would have been payable had this
agreement continued until expiry of the Rental period stated
in the
equipment schedule.”
[8] The plaintiff’s case is that
when the defendant breached the agreements through non-payment of the
monthly instalments, it made
an election in terms of clause 8.1 to
adhere to the contract but to take possession of the goods pending
payment by the defendant
of the arrear rentals and the accelerated
future rentals.
[9] In
opposing affidavits in the rescission application the defendant
contended that the plaintiff could not rely on clause 8.1 in
the
light of the incoherence of the first sentence thereof (highlighted
above). The same point was taken in the defendant’s plea.
It is
necessary then, in the first place, to ascertain the meaning, if this
is possible, of the sub-clause.
[10] Mr.
Gess, who appeared on behalf of the plaintiff, argued that, applying
the rules of contractual interpretation, the proper
meaning of the
first sentence of clause 8.1 was expressed when the word “expired”
was replaced with the phrase “unexpired portion”
so that the
sentence as a whole reads:
“
Without
terminating this agreement to treat as immediately due and payable
all rentals which would otherwise have become due and payable
in
terms hereof over the then unexpired portion of the agreement and to
claim and recover from the user forthwith the aggregate amount
of
such rentals as well as all rentals and other sums then in arrear in
terms of this agreement”
.
Mr. Gess relied on the “golden rule”
of interpretation as summarised by Joubert, JA in
Coopers
and Lybrand v Bryant
[1995] ZASCA 64
;
1995
(3) SA 761
(A) at 767E – 768E contending that if the clause were
given its ordinary grammatical meaning this would result in an
absurdity
inconsistent with the rest of the agreement. He submitted
further that, looking at the context in which the phrase was used in
its
inter-relation to the contract, including the nature and purpose
of the contract and the background circumstances, it was clear that
the amended phrase expressed the intention of the parties when they
concluded the agreement.
[11] It is so that when the phrase is
re-written in the manner contended for the clause, both in itself and
within the structure of
the agreement as a whole, makes complete
sense. Clause 8.1 clearly seeks to distinguish between arrear rental
as it is commonly understood
and future rentals which have become due
and payable by reason of the acceleration provisions coupled with the
lessee’s default
in making regular payment or by reason of a breach
of its obligations in some other respect. “Expired” must mean
“unexpired”
since the clause already makes it clear that the
lessee would be liable for arrear rentals. Similarly the phrase is
meaningless without
the addition of the word “portion” thereto.
[12] No
other meaning of the clause was contended for by the defendant and
its apparent lack of meaning seems to have been caused
simply by the
careless omission of the words which require to be read in. I find
that clause 8.1 must be read in the manner contended
for by the
plaintiff, namely, as providing for the acceleration of future rental
payments by the defaulting lessee.
THE RELIEF CLAIMED
[13] Following its election to pursue
its rights in terms of clause 8.1 of the agreement after the
defendant’s default in payments,
the plaintiff retook possession of
both photocopier machines in March 2005. One of them was restored
briefly to the defendant but
removed again after further defaults in
payments. Since then the defendant has not enjoyed the possession or
use of the equipment.
[14] The plaintiff’s total claim is
for:
1.1 the sum of R228 391,05 which is
made up of both arrear rentals and future rentals in respect of both
machines in the amounts of
R67 434,51 (the
E-Studio
25
-photocopier) and R160
956,54 (in respect of the
E-Studio
350
-photocopier). When
summons was issued in April 2005 all but some R13 000,00 of this
total sum related to future rentals.
1.2 interest on the aforesaid sum at
a rate equal to 6% above the base overdraft rate quoted by the
plaintiff’s banker and calculated
from 2 February 2005 to date of
payment;
1.3
Costs of suit on a scale as between attorney and own client,
including collection commission and;
1.4 an
order directing the plaintiff to return the leased goods to the
defendant for any remaining period of each agreement upon payment
by
the defendant to the plaintiff of all amounts claimed in respect of
such machine.
[15] During
the course of the trial counsel for plaintiff amended the relief
sought as interest, details of which I shall give later.
THE APPLICABILITY
OF THE CONVENTIONAL PENALTIES ACT, 15 OF 1962
[16] At the commencement of the
hearing I raised with plaintiff’s counsel the potential
applicability of the Conventional Penalties
Act, 15 of 1962, in the
light of the claim for accelerated future rentals and the claim for
interest at the prime rate plus 6% on
all rentals, both arrears and
future.
[17] There is some debate as to
whether a court has the power to act of its own accord in opposed
proceedings in raising the question
of whether an excessive penalty
has been claimed.
1
Generally speaking the debtor has the
onus
to prove that the penalty is disproportionate relative to the
prejudice suffered by the creditor.
2
In
Smit
v Bester
the learned judge expressed the view that a court has the power to
order a reduction of the penalty in appropriate circumstances
of its
own accord when it appears
prima
facie
from
the pleadings that the penalty is disproportionately severe.
[18] In the present matter the issue
was not raised on the pleadings. To my mind this is no bar to it
being raised by the Court in
the circumstances of the present case.
Although it was suggested in
Bank
of Lisbon International Ltd
that
the Court should not consider a reduction of a penalty in an opposed
matter unless it has been alleged and approved, a more flexible
approach was advocated in
Courtis
Rutherford and Sons CC and others v Sasfin (Pty) Ltd
,
a full bench decision of this division. Van Zyl J observed that it
is, and remains, the court’s primary function to ensure that
justice is done on the basis of what is just fair and reasonable
under all circumstances. By implication, he expressed approval of
a
court dealing with the question of an excessive penalty even where
that was not formally pleaded, subject to it being fully canvassed
in
evidence and argument.
[19] In
my view, the circumstances of the present matter require such an
approach. Although formally opposed, the lack of any appearance
by
either the defendant in person or on her behalf renders the matter in
effect unopposed. I propose therefore, to fully consider
the
question. In this I have been considerably aided both by the argument
and authorities quoted by Mr. Gess and by the evidence
which he led
on behalf the plaintiff from its managing director and shareholder
Mr. Chris Du Toit (“Du Toit”).
[20] The
following emerged from Du Toit’s evidence. Both machines leased to
the defendant were, at the latter’s insistence, new.
The
plaintiff’s customers were generally required to sign a maintenance
agreement in respect of any such photocopier, as was the
defendant.
In return for the equipment being maintained, the customer paid a fee
calculated on the number of photocopies made. No
claim was being
brought against defendant in respect of the maintenance agreements
since the plaintiff had incurred no expenses in
that regard. The
plaintiff purchased the equipment from the distributor either using
its own monies or on finance it raised. The
equipment would, in the
ordinary course, remain on the plaintiff’s balance sheet and be
depreciated over 60 months. Where the plaintiff
used finance to
purchase the equipment a substantial period of the 60 months income
was devoted to repaying the finance house.
[21] The
rate of technological change in the photocopier industry is high and
the value of five year old equipment is virtually nil.
The profit
margin is really only made in the last third of a five year contract.
When exercising what Du Toit described as the “softer
option” in
clause 8.1, the equipment which the plaintiff repossesses is not
specifically set aside against the possibility of the
defaulting
customer paying the sums owing in terms of the contract. Instead the
equipment is, where possible, re-leased or sold.
In that event,
should the defaulting customer make payment of the monies owing,
equipment of the same make and model and in similar
condition is
restored to the customer. There was, however, a limit to the further
income possibilities of repossessed equipment because
most businesses
wanted state of the art technology.
[22] As far as the equipment in
question was concerned the defendant had rapidly fallen into default
in respect of the
E-Studio
25
photocopier, the
plaintiff having only received approximately one year’s worth of
rental in respect thereof. The position in respect
of the
E-Studio
350
photocopier was similar
with only some eight months of rental having been received. Du Toit
was able, after consulting his records,
to state exactly what had
transpired with the repossessed machines. The
E-Studio
25
photocopier had been
leased out for sixteen months from July 2005 at a monthly rental of
R1035,00, excluding VAT. Thereafter it had
earned no further income
but had simply been used as a replacement when another machine was
being repaired. The
E-Studio
350
machine had been sold
outright in March 2005 for R99 825,00, excluding VAT. Details of the
income earned from maintenance agreements
in respect of the
repossessed equipment were not available. However, since such income
is offset, at least to some extent, by expenses
it is reasonable to
conclude that the two machines produced an income of not less than
R116 085,00 after being re-possessed from
the defendant.
THE CONVENTIONAL PENALTIES ACT
[23] Section 1(2) of the Conventional
Penalties Act defines a “penalty” as “any sum of money for the
payment of which or anything
for the delivery or performance of which
a person may ……become liable”. A “penalty stipulation” is a
stipulation “whereby
it is provided that any person shall, in
respect of an act or omission in conflict with the contractual
obligation be liable to pay
a sum of money or to deliver or perform
anything for the benefit of any other person… either by way of a
penalty or as liquidated
damages”. Such a penalty stipulation is
capable of being enforced in any competent court but a creditor is
not entitled to recover
both a penalty and damages. Furthermore s
3(1) of the Act prohibits the recovery of a penalty which is out of
proportion to the prejudice
suffered by the creditor. In that
instance the court may, if the penalty is excessive, reduce it to
such extent as may be equitable
in the circumstances.
[24] It has been held that the correct
approach to these matters is firstly to enquire as to whether what is
being complained is a
“penalty”. If not, the enquiry goes no
further.
3
For a provision to constitute a penalty it must be one which derives
from a breach of contract. If the penalty is out of proportion
to the
prejudice suffered by reason of the defendant’s breach of contract
the question arises as to whether it would be equitable
for the court
to reduce the penalty. If so the remaining question is to what extent
must such penalty be reduced? See
Murica
Land CC v Erinvale Country Estate Home Owners Association
2004 (4) All SA 656
(C) especially at 659 C – D. Section 1(2) of
the Act leaves the term “penalty” undefined and thus it must be
taken in its common
law sense as a provision intended to operate
in
terrorem
of
the offending party. See
Cape
Municipality v F Robb and Company Ltd
1996
(4) SA 329
(A) at 336 C – D.
DOES THE CLAIM CONSTITUTE A
PENALTY AND IS A REDUCTION THEREOF JUSTIFIED?
[25] The plaintiff’s claim against
the defendant is based solely on the contract and arises from the
defendant’s breach thereof.
The requirement that a penalty must
derive from a breach of contract is thus satisfied in the present
matter. However, the plaintiff’s
claim is made up of various
components and the first question which much be addressed is whether
the various components amount to
a penalty or not. The plaintiff’s
claim is comprised of arrear rentals and accelerated future rentals
and interest on both arrear
rentals and future rentals. The claim for
arrear rentals,
stricto
sensu
, is clearly not a
penalty, as the debtor is obliged to pay what he owes and nothing is
added to his obligations by reason of his
breach.
4
[26] In
the presentation of its case the plaintiff referred to those rentals
which would ordinarily have fallen due between the date
of breach and
the court hearing as “arrear rental”. This is a misnomer since
they fell due pursuant to the acceleration clause
with effect from
the plaintiff’s decision to exercise its rights in terms of clause
8.1 i.e. March 2005. Thus, notwithstanding
the passing of some two
years since the issue of summons, the bulk of the claim comprises
future accelerated rentals.
[27] The provision in the contract
which stipulates that upon default in respect of any one payment the
defendant became liable for
all future “rentals” (and forfeits,
temporarily at least, the equipment), is clearly one which operates
in terrorem
of
the offending party. Such a party obtains no additional benefit in
return for having to make a lump sum payment of monies for which
it
would, in the ordinary course, only be liable to pay on a
month-to-month basis,
pro
rata
.
[28] Such
a conclusion was reached in regard to similar provisions in
Claude
Neon Lights (SA) Ltd v Schlemmer
.
5
In
Parekh
v Shah Jehan Cinemas and Others
6
,
however, Leon J held that an acceleration clause in a contract does
not per se amount to a penalty stipulation. In the course of
a
comprehensive analysis of the Act and the authorities the learned
judge dealt with the case of
Claude
Neon Lights
.
He distinguished it, however, on the basis that contrary to the facts
in Parekh’s case where payment of an existing debt was accelerated,
Claude
Neon Lights
concerned the acceleration of several debts owing by the lessee.
Referring to the facts in
Claude
Neon
he
stated as follows:
“
What was there accelerated were
several debts which had never previously been owing by the lessee to
the lessor and which were reciprocal
to the performance by the lessor
of its obligations in terms of the lease. Any acceleration of
payments not yet due gives an advantage
to the lessor over and above
what would be his normal remedy for the breach, namely cancellation
and ejectment, or, in the case of
a lease of movables, repossession.
A right given to a lessor to require the lessee to pay, in
accelerated form, the rent up to the
terminal date of the lease being
something additional to, and over and above, the normal remedy of a
lessor might well be regarded
as being
in
terrorem
the
lessee.
7
”
I too consider that the two cases are
distinguishable and draw support from the above remarks for my view
that the acceleration provisions
in clause 8.1 in the present matter
constitutes a penalty within the meaning of the Act.
[29] The provision whereby the
defendant becomes liable for interest on arrear and future rentals at
a rate equal to 6% per annum
above the prevailing prime overdraft is
obviously designed to operate against the defaulting party
in
terrorem
. This is a
substantial premium over an already high base rate and clearly seeks
to penalize a party who defaults in the payment of
any instalment.
[30] I
find then that in the present matter the claim for future rentals and
the interest provisions in the contracts are penalty
stipulations.
IS
THE PENALTY DISPROPORTIONATE TO THE DEFENDANT’S PREJUDICE AND, IF
SO, TO WHAT EXTENT SHOULD IT BE REDUCED?
[31] The next leg of the enquiry
requires a determination of whether the penalty was out of proportion
to the prejudice suffered by
the defendant. The best method of
determining this is to compare what the plaintiff’s position would
have been had the defendant
not defaulted in the contract as opposed
to what the plaintiff’s position would be should it obtain judgment
in the full sum sought.
Had there been no defaults on the part of the
defendant the plaintiff would have received the monthly instalments
in respects of
the equipment month by month over a period of five
years. At the end of that period the equipment would, to all intents
and purposes,
have been worthless to the plaintiff. In terms of the
order now sought the plaintiff will receive in total the same rentals
but according
to figures prepared by the plaintiff, as at 1 May 2007,
of the total sum claimed an amount of R136 050,56 would be received
prematurely.
This sum would otherwise only become due on an accruing
monthly basis between 1 May 2007 and 28 February 2009 in respect of
the
E-Studio 25
photocopier and 31 October 2009 in respect of the
E-Studio
-350
photocopier. In addition the plaintiff initially sought interest on
virtually the entire aforesaid sum at prime plus 6% from
the date of
first default February 2005 to payment.
[32] In argument, however, Mr. Gess
conceded that seeking interest at the rate of prime plus 6% on future
rentals was a disproportionate
and unfair penalty and he therefore
limited the plaintiff’s claim for interest on future rentals to
interest at the prescribed
rate i.e. 15,5% from date of judgment to
date of payment. Such an interest rate is the same as may be claimed
by any judgment debtor
and clearly cannot be seen as a penalty.
However, I understood Mr. Gess to make this concession only in
respect of rentals which
would ordinarily have fallen due after the
date of hearing i.e. on the basis of the plaintiff’s extended (and
incorrect) definition
of arrear rentals. Nevertheless, not only do I
consider the concession on interest claimed at the higher rate to be
well made by
Mr. Gess, but I have difficulty seeing why interest at
that rate should be payable for any period. To require the defendant
to pay
interest at the punitive rate of 6% above prime on accelerated
rentals for even a limited period is, in all the circumstances,
disproportionate
to the plaintiff’s prejudice. In my view the
plaintiff’s prejudice is adequately met by awarding interest at the
prescribed rate
a tempore
morae
.
[33] In
determining whether payment of future, or more accurately,
accelerated rentals, amounts to a penalty disproportionate to the
plaintiff’s prejudice, clearly what also has to be brought into
account is the income earned by the plaintiff from the sale of
one of
the machines and its leasing out the other i.e. a total of R116
385,00. Assuming, as I consider one must, that the plaintiff
successfully executes on the judgment which it obtains, the aforesaid
sum represents a windfall gain for the plaintiff since such
income
would never have been earned by it had the contracts in question run
uneventfully to term. Mr. Gess urged that no “discount”
be given
in respect of future rentals in lieu of the additional income earned
contending that the Court must also take into account
the plaintiff’s
poor prospects of ever recovering any judgment in full or at all from
the defendant as well as the legal costs
which the plaintiff had
incurred.
[34] Although I am aware that judicial
opinion differs in regard to the question of whether weight should be
given to the prospects
of recovering on any judgment given
8
,
it appears to me to be invidious and illogical to do so. Such an
exercise is essentially speculative. Furthermore, any judgment
must
be, and is, given on the basis that it is at least potentially
recoverable from the party against whom it is ordered. In these
circumstances if no abatement is made the possibility exists of an
unfair judgment being granted against a defendant simply because
that
party’s ability to meet the judgment is underestimated. If,
however, account is taken of such windfall earnings and the claim
is
abated, either partly or wholly thereby, the plaintiff becomes
entitled to no more than is due to it in equity. If the judgment
debt
is irrecoverable in total or in large part the question of what
abatement is made in arriving at the judgment sum is largely
academic. Similar provisions apply to the question of costs
particularly where the costs orders, as in this case, are, in terms
of
the contracts, made on the attorney and client scale.
[35] The
provisions of clause 8.1 are highly favourable to the plaintiff as
lessor. They enable it to claim a sum no less than what
it would be
able to prove at common law as damages for breach of the contract
plus interest at a rate well above the prevailing prime
overdraft
rate. At the same time, the lessee is deprived of the use of the
equipment until it makes payment of all sums owing including
accelerated rentals. In the present case the defendant enjoyed the
use of the equipment for a very limited period in relation to
the
full term of the contracts. In these circumstances to award the
plaintiff arrear and future rentals and disregard the additional
income it earned would result in the defendant being visited with a
penalty out of all proportion to the prejudice suffered by the
plaintiff.
[36]
In my view this would be the case even if the repossessed equipment
earned no additional income. However, since the defendant
earned
substantial income from the sale of the one machine and the lease of
the other, I consider that to give the benefit of this
income to the
defendant in the form of an abatement of the accelerated rentals
would, together with interest thereon but at a reduced
rate,
constitute an equitable reduction of the penalty stipulations as a
whole.
[37] In
arriving at this conclusion I have taken into account the plaintiff’s
rightful interests including the prejudice it suffered
in not
receiving the rentals it contracted for and its interest in enforcing
the terms of the contracts it concludes with its customers.
I have
also had regard to the fact that the plaintiff was and remains liable
to restore the equipment at any time during the term
of the contracts
upon payment of all arrear and future rentals. Contrary to Mr. Gess’s
submission, if one has regard to the sums
owing and the remaining
terms of the leases, I see no danger in the present matter of the
defendant “snatching at a bargain”
at the expense of the
defendant if she were to pay all arrear and future rentals abated by
the additional income earned and interest,
albeit reduced to the
extent discussed above. Instances of such a bargain may well arise in
similar contractual situations where
the defaulting party can obtain
repossession and use of equipment for a much reduced sum because the
original equipment was profitably
sold or leased by the lessor in
mitigation of its losses. In such an event that factor may be taken
into account by the court in
determining the extent of reduction, if
any, in the penalty provisions.
[38] As far as costs are concerned,
the contracts provide for costs orders on an attorney and client
scale and in circumstances of
this matter I can see no reason not to
grant such an order. Having regard as a whole to the relief which I
propose to grant, however,
I consider that awarding the plaintiff
collection commission would tilt the balance reached as regards the
fairness of the penalty
provisions and I therefore decline to make
any such award.
9
[39] In
the result judgment is granted in favour of the plaintiff against the
defendant in the following terms:
(a) Payment in the sum of R112 006,05
(R228 391,05 less R116 085,00);
(b) Interest
on the aforesaid sum at the rate of 15,5% per annum from 2 February
2005 to date of payment;
(c) The
plaintiff is directed, upon payment in full by the defendant of all
amounts awarded to the plaintiff in terms of prayers (a),
(b) and
(d), to return the goods leased by the defendant from the plaintiff
in terms of the first and second rental agreements or,
failing that,
equipment of the same make and in similar condition to such equipment
when it was repossessed, for the remaining period
of the lease
agreements.
(d) Costs
of suit on the attorney and client scale.
_________________
LJ
BOZALEK, J
1
See
Bank
of Lisbon International Ltd v Venter and Another
1990 (4) SA 263
( A).
2
Smit
v Bester
1977 (4) SA 937
(A) at 942 D - G.
3
Sun
Packaging (Pty) Ltd v Vreulink
[1996] ZASCA 73
;
1996 (4) SA 176
(A) at 182 I to 183 D.
4
Western
Bank v Meyer
1973 (4) SA 697
(T) at 704A – B
5
1974
(1) SA 143
at 147C – E
6
1982
(3) SA (D+CLD) 618
7
At
628C - E
8
See
Premier Finance Corporation (Pty) Ltd v Rotainers (Pty) Ltd and
Another
1975 (1) SA 79
(TPD) at 83H;
But
cf
Western Bank Ltd
v Lester and Mc Lean and Others
1976 (3) SA 457
at 464F – H.
9
See
in this regard Claude Neon Light (SA) Ltd supra at 152A - H