Optic Powerlines (Pty) Ltd v J P Hattingh trading as Hat Kontruksie (3645/2015) [2016] ZAFSHC 152 (8 September 2016)

Optic Powerlines (Pty) Ltd v J P Hattingh trading as Hat Kontruksie (3645/2015) [2016] ZAFSHC 152 (8 September 2016)

The court found that clause 4 of the settlement agreement did not constitute a penalty clause under the Conventional Penalties Act. The agreement provided for two amounts: a lesser sum payable if the defendant performed timeously, and a larger sum if the defendant defaulted. The court accepted that both amounts were acknowledged as due and payable by the defendant at the time of settlement, and that the larger amount did not exceed what was already owed. There was no evidence that the plaintiff obtained more than what was due, nor was there any quantification or proof of disproportionality or prejudice by the defendant. The application for rescission or variation under Rule 42 failed, as...

Citation
[2016] ZAFSHC 152
Parties
Applicant: Optic Powerlines (Pty) Ltd; Respondent: J P Hattingh trading as Hat Kontruksie
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
8 September 2016
Case Number
3645/2015
Procedural Posture
Rescission Application / Judgment on Application for Rescission of Consent Judgment
Outcome
Application dismissed with costs.
Judges
P.U. Fischer
Legal Topics
Rescission of Judgment, Penalty Clause, Settlement Agreement, Conventional Penalties Act, Rule 42 Uniform Rules
Civil Procedure Commercial and Corporate Rescission of Judgment Penalty Clause Settlement Agreement Conventional Penalties Act Rule 42 Uniform Rules

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Parties

Optic Powerlines (Pty) Ltd

Applicant

J P Hattingh trading as Hat Kontruksie

Respondent

Procedural Posture

Rescission Application / Judgment on Application for Rescission of Consent Judgment

Legal Issues

  1. 1 Whether clause 4 of the settlement agreement incorporated into the court order constitutes an unenforceable penalty clause under the Conventional Penalties Act.
  2. 2 Whether the consent judgment should be rescinded or varied under Rule 42 of the Uniform Rules of Court due to alleged error or unfairness.
  3. 3 Whether the defendant discharged the onus to show disproportionality or prejudice justifying reduction or deletion of the clause.

Ratio Decidendi

The court found that clause 4 of the settlement agreement did not constitute a penalty clause under the Conventional Penalties Act. The agreement provided for two amounts: a lesser sum payable if the defendant performed timeously, and a larger sum if the defendant defaulted. The court accepted that both amounts were acknowledged as due and payable by the defendant at the time of settlement, and that the larger amount did not exceed what was already owed. There was no evidence that the plaintiff obtained more than what was due, nor was there any quantification or proof of disproportionality or prejudice by the defendant. The application for rescission or variation under Rule 42 failed, as...

Court Disposition

Application dismissed with costs.

Orders

  • The application for rescission or variation of the consent judgment is dismissed with costs.