This blog was co-authored by Shay Roper, Candidate Attorney.

The case of Merchant Commercial Finance 1 (Pty) Ltd t/a Merchant Factors v Valoworx 33 CC and Others highlights the importance of a creditor, seeking a monetary judgment, to determine and reflect the capital sum and interest payable, in the affidavit and certificate of balance in support of the application.

The applicant and first respondent entered into a term loan agreement. The first respondent defaulted under the agreement which resulted in the applicant and the respondents concluding a settlement agreement and deeds of suretyship.

The applicant sought a monetary judgment against the respondents for payment of an amount to be reflected on the applicant’s updated certificate of balance, together with interest at the statutory rate from the date of order to date of final judgment. No updated certificate of balance was filed or formed part of the application and affidavits. In absence of an updated certificate, the applicant relied on the settlement agreement, and argued that the outstanding capital balance, multiplied by two (in line with the in duplum rule), represented the amount outstanding and payable by the respondents.

The court did not to accede to the applicant’s request to calculate the amount claimed by merely doubling the outstanding capital amount, assuming that the agreed interest would be double that amount over the period. The court held that it was for the applicant to prove the interest portion of the monetary claim which was not liquidated nor easily ascertainable. No particulars were provided of when the last payment was received or from which date interest accumulated. The agreements were silent on whether the applicant was entitled to simple or compounded interest.

In the absence of the required proof, the court concluded that simple interest was payable on the capital amount, per the settlement agreement, calculated from the date of last payment.

It is important to bear in mind the court’s confirmation that in motion proceedings, the affidavits constitute the evidence and the pleadings. The parties must allege the required facts, and provide admissible evidence in support, in their affidavits.

The full judgment can be accessed here: Merchant Commercial Finance 1 (Pty) Ltd t/a Merchant Factors v Valoworx 33 CC and Others (16399/2023) [2024] ZAWCHC 377 (19 November 2024)