Micro Plan Financial Services (Pvt) Ltd v Chesets Trading (Pvt) Ltd & Ors (HC 3182 of 2015) [2015] ZWHHC 513 (9 June 2015)

Micro Plan Financial Services (Pvt) Ltd v Chesets Trading (Pvt) Ltd & Ors (HC 3182 of 2015) [2015] ZWHHC 513 (9 June 2015)

The court found the penalty interest rate of 10% per month (120% per annum), compounded, to be usurious and contrary to the in duplum rule and public policy. The court exercised its discretion under the Contractual Penalties Act to limit the recoverable interest to the maximum allowed by the in duplum rule and disallowed collection commission due to lack of post-summons agreement.

Citation
[2015] ZWHHC 513
Parties
Plaintiff: MICRO PLAN FINANCIAL SERVICES (PVT) LTD; Defendant: CHESETS TRADING (PVT) LTD; Defendant: CHARITY MADYARA; Defendant: JOHN MAXWELL CHISHAKWE; Defendant: PORTIA NYAMUTSAMBA
Court
Harare High Court
Jurisdiction
Zimbabwe
Judgment Date
9 June 2015
Case Number
HC 3182 of 2015
Procedural Posture
Chamber Application for Default Judgment / Judgment on Application for Default Judgment
Outcome
Default judgment granted in part; penalty interest and collection commission limited/disallowed.
Legal Topics
Contractual Penalties, Interest Rates, Default Judgment, In Duplum Rule, Collection Commission
Source Language
English
Contract Law Banking and Finance Contractual Penalties Interest Rates Default Judgment In Duplum Rule Collection Commission

Case Brief

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Parties

MICRO PLAN FINANCIAL SERVICES (PVT) LTD

Plaintiff

CHESETS TRADING (PVT) LTD

Defendant

CHARITY MADYARA

Defendant

JOHN MAXWELL CHISHAKWE

Defendant

PORTIA NYAMUTSAMBA

Defendant

Procedural Posture

Chamber Application for Default Judgment / Judgment on Application for Default Judgment

Legal Issues

  1. 1 Whether the penalty interest and charges claimed are enforceable or unconscionable under the Contractual Penalties Act and the in duplum rule
  2. 2 Whether collection commission is claimable in addition to costs

Ratio Decidendi

The court found the penalty interest rate of 10% per month (120% per annum), compounded, to be usurious and contrary to the in duplum rule and public policy. The court exercised its discretion under the Contractual Penalties Act to limit the recoverable interest to the maximum allowed by the in duplum rule and disallowed collection commission due to lack of post-summons agreement.

Court Disposition

Default judgment granted in part; penalty interest and collection commission limited/disallowed.

Orders

  • Defendants to pay plaintiff US$16,696.78 being loan capital and cumulative interest, subject to the in duplum rule.
  • Third defendant's immovable property declared specially executable as described in the deed of hypothecation.