RB RANCHERS (PVT) LTD v ESTATE LATE MCLEAN & ANOR 1985 (2) ZLR 24 (H) *

Flynote

Contract — implied term of — that interest due on capital amount owing — circumstances when a court will imply a term in a contract.

Statutes — Bills of Exchange Act [Chapter 277] — ss 46(1)(a) and 56 — bill dishonoured by non-payment when duly presented for payment and payment refused and cannot be obtained — recovery of interest from party liable on the bill — withholding of interest if justice required that interest should be withheld — words to be given their plain meaning. E

Headnote

The court should be very slow to imply a term in a contract. The circumstances when a court will do so were considered by CENTLIVRES CJ in Mullin (Pty) Ltd v Benade Ltd 1952 (1) SA 211 (A). Section 46(1)(a) of the Bills of Exchange Act [Chapter 277] provides that a bill is dishonoured by non-payment when it is duly presented for payment and payment is refused or cannot be obtained. Section 56 of the Act provides for the measure of damages, which shall be liquidated damages, where a bill is dishonoured. In terms of para (a) thereof the holder may recover from any party liable on the bill the amount of the bill and interest thereon in accordance with any stipulation in the bill or from the time of presentment for payment if the bill is payable on demand, and the expenses of noting and of any protest. Paragraph (c) thereof provides, however, that interest recoverable in terms of the said para (a) may, if justice requires it, be withheld wholly or in part. A better approach in considering the withholding of interest if justice required that interest should be withheld would be to give the words used their plain meaning so as to include any method by which the bill was dishonoured, whether the failure to pay was excusable or inexcusable, and then to withhold interest only where justice so required. Section 56 of the Bills of Exchange Act [Chapter 277] deals only with the ordinary normal case where dishonour inevitably involves an inexcusable failure to pay at the proper time. If, however, s 56 should be given a wider meaning so as to apply to all cases where a cheque is dishonoured justice would require that interest be withheld in cases such as the present one, where the law prohibited the banker from meeting the cheque and thereafter the debt was paid in accordance with the provisions of the Administration of Estates Act [Chapter 301].