Sarah damaged her car when she drove into a pillar in the parking lot of a shopping mall. XYZ

Panel Beaters quoted her R10 000 to repair the car. She accepted the quotation and paid a R5000
deposit. The car was repaired and returned to Sarah, and she, despite demand for payment from
attorneys for XYZ Panel Beaters, remains in default for payment of the outstanding amount. Since
the outstanding amount is a liquidated amount, interest has started to accrue from the date of
the letter of demand. Sarah’s failure to pay the outstanding amount has led to the attorneys
instituting a claim and obtaining a default judgment against her in the district court of the
Magistrate’s Court. According to the attorney’s last letter to Sarah, she now owes R11 500, which
includes the judgment debt, interest on the amount as well as costs. Sarah consults with you
regarding this latest letter she has received. She wants to know whether it is possible for them
to claim this amount of money from her when the initial debt was only R5000.
Instruction: Advise Sarah with reference to the common law rule and legislative guidelines that
regulate mora interest. refer to Visser&potgieter

1 answer

In terms of the common law rule, mora interest can only be claimed on a liquidated amount that is due and payable. In this case, the initial debt of R10 000 quoted by XYZ Panel Beaters was a liquidated amount agreed upon by Sarah when she accepted the quotation and paid a deposit of R5000. Therefore, interest can be claimed on the outstanding amount since it is a liquidated debt.

Legislatively, the National Credit Act 34 of 2005 regulates mora interest and states that interest can be charged on overdue amounts as long as it does not exceed the maximum prescribed interest rate. In this case, XYZ Panel Beaters have claimed an additional R1500 in interest, which is within the limits set by the Act.

Since Sarah has failed to pay the outstanding amount and a default judgment has been obtained against her in court, she is liable to pay the full amount of R11 500, which includes the judgment debt, interest, and costs. It is important for Sarah to settle this debt as soon as possible to avoid further legal action by the attorneys.