Haw & Inglis Civil Engineering (Pty) Ltd v MEC: Free State Provincial Government: Department Of Police, Roads And Transport (4646/2014) [2014] ZAFSHC 59 (8 April 2014)

Haw & Inglis Civil Engineering (Pty) Ltd v MEC: Free State Provincial Government: Department Of Police, Roads And Transport (4646/2014) [2014] ZAFSHC 59 (8 April 2014)

The court found that the applicant was entitled to payment of contract interest as certified in the five outstanding interest certificates, amounting to R1 070 447.12. The contract expressly provided for interest at the prime overdraft rate certified by the applicant's bankers on all overdue payments, which included interest amounts. The applicant failed to provide the requisite banker’s certificate for the rate, and thus could not claim statutory mora interest at 15.5% per annum on the contract interest. The respondent’s argument that interest on interest was impermissible was rejected, as appellate authority confirms that unpaid interest attracts further interest unless contractually...

Citation
[2014] ZAFSHC 59
Parties
Applicant: Haw & Inglis Civil Engineering (Pty) Ltd; Respondent: MEC: Free State Provincial Government: Department Of Police, Roads And Transport
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
8 April 2014
Case Number
4646/2014
Procedural Posture
Civil Application / Final Judgment
Outcome
Application granted in part; respondent ordered to pay certified contract interest and costs.
Judges
M H Rampai
Legal Topics
Construction Contracts, Interest on Overdue Payments, Certification of Payment, Mora Interest, Contractual Dispute
Commercial and Corporate Civil Procedure Construction Contracts Interest on Overdue Payments Certification of Payment Mora Interest Contractual Dispute

Case Brief

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Parties

Haw & Inglis Civil Engineering (Pty) Ltd

Applicant

MEC: Free State Provincial Government: Department Of Police, Roads And Transport

Respondent

Procedural Posture

Civil Application / Final Judgment

Legal Issues

  1. 1 Is the applicant entitled to payment of certified contract interest for overdue amounts under the construction contract?
  2. 2 Is the applicant entitled to statutory mora interest on the contract interest component?
  3. 3 Did the respondent fully discharge its payment obligations under the contract prior to the institution of proceedings?

Ratio Decidendi

The court found that the applicant was entitled to payment of contract interest as certified in the five outstanding interest certificates, amounting to R1 070 447.12. The contract expressly provided for interest at the prime overdraft rate certified by the applicant's bankers on all overdue payments, which included interest amounts. The applicant failed to provide the requisite banker’s certificate for the rate, and thus could not claim statutory mora interest at 15.5% per annum on the contract interest. The respondent’s argument that interest on interest was impermissible was rejected, as appellate authority confirms that unpaid interest attracts further interest unless contractually...

Court Disposition

Application granted in part; respondent ordered to pay certified contract interest and costs.

Orders

  • The respondent is ordered to pay the sum of R1 070 447.12 to the applicant.
  • The respondent is ordered to pay the costs of the application.