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.

Question

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.

GPT 3.5 · Answer

According to the common law rule and legislative guidelines that regulate mora interest in South Africa, creditors are entitled to claim interest on outstanding debts from the date of demand until the debt is paid in full. In this case, XYZ Panel Beaters sent a letter of demand to Sarah, requesting payment of the outstanding amount. Since Sarah failed to pay the amount, interest started to accrue from the date of the demand letter.

The attorneys for XYZ Panel Beaters have now obtained a default judgment against Sarah in the Magistrate's Court, which includes the judgment debt, interest on the amount, and costs. This means that Sarah is now legally obligated to pay the total amount of R11 500, which includes the initial debt of R5000, interest on the amount, and the legal costs incurred by XYZ Panel Beaters.

Therefore, Sarah is liable to pay the total amount claimed by the attorneys. It is important for her to act promptly to settle the debt to avoid any further legal action.