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[2013] ZAWCHC 146
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Rawson and Another v Yacht Transport (Pty) Ltd t/a Target Cranes (AC 49/04) [2013] ZAWCHC 146 (17 September 2013)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT, CAPE
TOWN)
Exercising its
Admiralty Jurisdiction
Case
No
AC49
/04
In the matter between:
WILLIAM ELLIS
RAWSON
.....................................
First
Applicant / Plaintiff
JOSEPHINE RAWSON
.........................................
Second
Applicant / Plaintiff
and
YACHT
TRANSPORT (PTY)
LIMITED
T/A
TARGET
CRANES
................................
Respondent
/ Defendant
(Now
named Babcock Target Plant Services (Pty) Limited)
Court:
GRIESEL J
Heard:
10 September 2013
Delivered:
17 September
2013
____________________________________________________________________
JUDGMENT
____________________________________________________________________
Griesel J:
This
application forms the final chapter (barring any possible appeal) in
an action
in personam
instituted by the present applicants,
as plaintiffs, against the respondent (as defendant) for damages as
long ago as 2004. Their
maritime claim arose from an incident that
occurred at the Elliott Basin, Table Bay Harbour on 23 December
2002, when a sailing
yacht belonging to the plaintiffs,
Helsal II
(‘the yacht’), was damaged after it fell into the
water while it was being lifted from the quay side by a crane
operated
by the defendant. (For convenience I refer to the parties
as they were in the trial before the court of first instance.)
Brief chronology
The
matter has a long and tortuous history, but the only outstanding
issue calling for a decision at this stage is the plaintiffs’
claim for interest on the capital amount of the claim. For a proper
understanding of this issue, it is necessary briefly
to review
the chronology of the matter.
The
plaintiffs, Mr and Mrs Rawson, are Australian citizens who had
planned to participate in the Cape to Rio yacht race which
commenced on 11 January 2003. After the incident referred to
above, the damage to the yacht had to be repaired urgently
by
various contractors in Cape Town before commencement of the
race and most of the repairs (R429 280) had been paid
for on
behalf of the plaintiffs by their Australian insurer by 14 January
2003. The overall claim of R483 726,50 equated
to
AUS$104 298,41 at the applicable exchange rate at the time.
On
29 March 2004, the first plaintiff issued a writ of summons,
claiming damages from the defendant in the aforesaid amount of
R483 726,50. In addition, he claimed interest (at an
unspecified rate) from the date of the loss on 23 December 2002 to
date of payment; alternatively such interest as the court may
award pursuant to the provisions of s 5(2)(f) of the
Admiralty
Jurisdiction Regulation Act, 105 of 1983 (‘the Admiralty
Act’).
1
More detailed particulars of claim were delivered on behalf of the
first plaintiff on 22 April 2004.
After
exchange of pleadings and joinder of the second plaintiff as well as
a third party (the Royal Cape Yacht Club), the matter
eventually
came to trial before Blignault J during March 2007 in relation
to the merits of the claim, with the quantum standing
over for later
determination, if necessary. For various reasons, completion of
the trial was delayed and the evidence was
only finalised on 7
February 2011.
On
18 March 2011, Blignault J delivered judgment, dismissing the
plaintiffs’ claim. However, on appeal to a Full Bench
of this
Division, on 27 August 2012, the judgment of the trial court was
overturned and the defendant was held liable in
delict to the
plaintiffs in respect of the damage occasioned to the yacht.
An
application by the defendant for special leave to appeal to the
Supreme Court of Appeal against the latter judgment was dismissed
with costs on 22 November 2012, thereby bringing finality to the
plaintiffs’ claim as far as the merits were concerned.
On
23 January 2013, the quantum of the plaintiffs’ claim was
agreed between the parties in the amount as set out in the
summons.
However, payment of such agreed amount was not forthcoming, nor
could agreement be reached on the question of interest.
This
prompted the plaintiffs, on 26 March 2013, to launch the present
application, claiming payment of the agreed capital
of the
claim, together with interest at the rate of 15.5% per annum
calculated ‘from 20 March 2004’, which should
actually
be 30 March, being the date after issue of summons (as was made
clear in the founding affidavit).
After
filing a notice of opposition the defendant, on 11 April 2013,
eventually paid the agreed capital amount of the claim to
the
plaintiffs. However, the issue relating to interest remained in
dispute. In its answering affidavit, the defendant agreed
with the
plaintiffs that interest on the claim should be calculated from the
date indicated in the notice of motion, i.e. the
date of summons.
The defendant accordingly only took issue with the applicable
rate claimed. In their replying affidavit,
as in counsel’s
argument before me, however, the plaintiffs reverted to their
original stance, claiming interest from the
date of the loss, i.e.
from 23 December 2002. In the result, the issues falling for
decision herein are accordingly the date
from which and the rate at
which interest is to be calculated on the plaintiffs’ claim.
This being a
maritime claim, these issues are to be considered against the
background of the provisions of s 5(2)(f) of the
Admiralty Act
which read as follows:
‘
(2)
A court may in the exercise of its admiralty jurisdiction –
. . .
(f) make such order
as to interest, the rate of interest in respect of any sum awarded by
it and the date from which interest is
to accrue, whether before or
after the date of the commencement of the action, as to it appears
just.’
As pointed out in the case of
the
MT Argun,
2
the section confers ‘a wide and unfettered discretion’
upon the court. As to the exercise of such discretion, Howie JA
said the following in the case of
Adel Builders (Pty) Limited v
Thompson
3
in the context of the similarly worded
s 2A(5)
of the
Prescribed Rate of Interest Act, 55 of 1975
:
4
‘
Acting
in terms of ss (5), it was open to the Court, in fixing the date
from which interest was to run, to give effect to its
own view of
what was just in all the circumstances . . . Plainly,
if parties wish certain facts and circumstances
to be weighed in the
exercise of such a discretion they must establish them. But there are
no
facta
probanda
.
No enquiry arises as to whether a necessary fact has been
successfully proved. Similarly, absence of proof does not result in
failure on any issue. Indeed, there are no evidential issues to
attract any onus.’
Date
from which interest is to run
As
far as the relevant date is concerned, as mentioned earlier, the
plaintiffs initially claimed interest from the date of the
loss on
23 December 2002. In their notice of motion in this application,
however, they modified this prayer by claiming interest
from the
date of summons.
I
have serious doubts whether it is open to the plaintiffs, in the
absence of a formal amendment of their notice of motion, to
‘resurrect’ a claim that had been modified in favour of
the defendant, irrespective of whether or not this amounted
to a
waiver. Be that as it may, I do not find it necessary to make a
definite finding in this regard, as I am of the view, in
the
exercise of my discretion, that the date of summons is in any event
the appropriate date from which interest on the plaintiffs’
claim ought to be calculated in this instance.
In
this regard, the trite principle in our law, prior to the enactment
of
s 2A
of the
Prescribed Rate of Interest Act in
1997, was
that no interest was recoverable on unliquidated claims for damages.
The rationale for this principle is that it is
not just or equitable
to hold a defendant liable to pay interest on a claim whose
quantum
he or she could not reasonably be expected to assess.
5
These considerations were recognised by the legislature in enacting
s 2A(2)(a)
of the
Prescribed Rate of Interest Act, which
provides that interest on an unliquidated debt shall ordinarily
run ‘from the date on which payment of the debt is
claimed by
the service on the debtor of a demand or summons, whichever
date is the earlier’. A ‘
demand’
, in turn,
is defined as ‘a written demand setting out the creditor’s
claim in such a manner as to enable the debtor
reasonably to assess
the quantum thereof’.
6
In the
Seajoy, supra,
it was held by Thring J that by
‘summons’ the legislature must have had in mind a
combined summons as contemplated
by Uniform
Rule 17(2)(a)
, because
an ordinary summons (or writ of summons, as in this case), would
ordinarily contain only ‘the bare bones of the
quantum
of
the plaintiff’s claim’.
7
Having
regard to the rationale for these provisions, namely that interest
should not start to run until such time as the debtor
is in a
position reasonably to assess the quantum of damages, I respectfully
agree with Thring J’s approach. Adopting the
same approach,
the date from which interest should be calculated in the present
case is accordingly 22 April 2004, being the
date on which the
plaintiffs’ original particulars of claim were delivered.
Rate of interest
Turning
now to the rate of interest to be used, the plaintiffs asked that
interest be awarded at the prescribed rate, as promulgated
by the
Minister in terms of the
Prescribed Rate of Interest Act, namely
15,5% per annum.
8
By way of motivation for this rate, it was pointed out on
behalf of the plaintiffs,
inter alia
, that they (or rather
their insurers) had to pay for the repairs to the yacht in 2003,
amounting to some AUS$104 000, while
the capital amount they
received ten years later, in April this year, was less than half of
that amount due to depreciation of
the South African currency
against the Australian dollar in the meantime.
It
is of course true, as pointed by Grosskopf JA, that ‘currency
nominalism, for whatever reason, is firmly entrenched in
our law’.
9
This means that –
‘
. . . a
debt sounding in money has to be paid in terms of its nominal value
irrespective of any fluctuations in the
purchasing power of currency.
This places the risk of a depreciation of the currency on the
creditor and saddles the debtor with
the risk of an appreciation.’
10
The
plaintiffs, as creditors, thus bore the risk of depreciation of the
currency in which they had paid the accounts and in which
they
framed their claim against the defendant herein. Nonetheless, as
pointed out in
Hartley,
‘[i]f a plaintiff through no
fault of his own has to wait a substantial period of time to
establish his claim it seems unfair
that he should be paid in
depreciated currency’.
11
Those remarks were made at a time before unliquidated debts
attracted interest and were more than likely partly responsible for
the later introduction of
s 2A
into Act 55 of 1975.
On
behalf of the defendant, it was submitted in its answering affidavit
herein that ‘due consideration ought to be taken
of aspects
relevant to the protraction of the litigation’. However,
as the defendant readily conceded, the delay in
the resolution of
the proceedings cannot be blamed in any way on the plaintiff.
The
defendant also argued that awarding the prescribed interest rate
would be unjust having regard to the notorious fact that
interest
rates prevailing in the market place at the present time are far
lower than that rate. It was accordingly suggested
on behalf of the
defendant that the money market call rate paid by the large
commercial banks from time to time would be the
appropriate rate.
However, the defendant made no effort to place any evidence on
record as to what that rate is or how it fluctuated
over the past
ten years. And, as Howie JA made clear in
Adel Builders
,
supra
,
12
‘if parties wish certain facts and circumstances to be
weighed in the exercise of such a discretion they must establish
them.’
From
the plaintiffs’ replying affidavit it appears that the money
market call rate currently paid by Standard Bank is around
4,35% per
annum. Awarding interest to the plaintiffs at these kinds of rates
would not, in my view, be ‘just’. The
defendant retained
the use of its money for the full period of ten years, which it
could have utilised in its business or have
invested elsewhere at
more attractive rates. The plaintiffs, by contrast, are being
paid in ‘depreciated currency’
and have already seen
their capital being halved over the same period.
As
rightly submitted on behalf of the plaintiffs, in awarding interest
the court will have regard to the principle in Admiralty
Law that
that a plaintiff should, as far as possible, obtain full restitution
for its loss.
13
Thus, as suggested by Hofmeyr,
14
s 5(2)(f) of the Admiralty Act empowers the court to have
regard to the equities and to encompass the more generous basis
upon
which interest is awarded in admiralty.
In
the circumstances, I am of the view that the prescribed rate of
15,5% would be the appropriate rate to apply in the present
circumstances.
15
Order
For
the reasons set out above, the following order is issued:
The
defendant is ordered to pay
(a)
interest on the sum of R483 726,50, calculated at the rate of
15,5% as from 22 April 2004 to 11 April 2013;
(b)
further interest on the amount of interest calculated as above at the
rate of 15,5% as from 12 April 2013 to date of payment;
(c)
the costs of the present application, including the costs previously
reserved.
B M Griesel
Judge of
the High Court
1
See
para below for the text of the relevant section.
2
MT
Argun
v Master and Crew of the MT
Argun
& others
2004 (1) SA 1
(SCA) para 38.
3
2000
(4) SA 1027
(SCA) para 15.
4
Section
2A(5) provides:
‘
Notwithstanding
the provisions of this Act but subject to any other law or an
agreement between the parties, a court of law, . . .
may make such order as appears just in respect of the payment of
interest on an unliquidated debt, the rate at which interest
shall
accrue and the date from which interest shall run.’
5
MV
Seajoy
1998 (1) SA 487
(C) at 507H I.
6
Section
4(ii) of the Act.
7
MV
Sea Joy, supra, loc cit.
8
Government
Notice No R1814 (GG 15143 of 1 October 1993).
9
SA
Eagle Insurance Co Ltd v Hartley
[1990] ZASCA 106
;
1990 (4) SA 833
(A) at 840F G.
10
Hartley
at 839G H.
11
At
841G.
12
Para
above.
13
See
Hofmeyr
Admiralty Jurisdiction Law and Practice in South Africa
,
2 ed at p 239 and the authorities cited in n 138.
14
Hofmeyr
op cit
at pp 239–240.
15
See
also
MV Seajoy, supra,
at 508G 509B; and
MT Argun
2003 (3) SA 149
(C) at 164G I.