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WCLawyer
WCLawyer, Attorney
Category: South Africa Law
Satisfied Customers: 14940
Experience:  L.LB (UOVS)
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Hi. I received a letter of demand from the attorneys of a company

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Hi. I received a letter of demand from the attorneys of a company that I bought some computer equipment from. I did not deny that I owed the money - I just had difficulty paying. The letter claimed the capital amount that I owed them, but said nothing about interest or costs. I begged and borrowed and came up with the money and paid the attorneys. But now they are coming after me saying that their client insists that I pay their legal costs, although they are prepared to waive the interest so that the matter may be settled. There was no agreement between me and the seller, written or otherwise, about costs and interest. They gave me the goods, and I was to pay them, which I did not do, but have now done.

If I refuse to pay their costs, can they now come and sue me for the interest and costs, even though I have paid the capital and complied with the letter of demand in full?
Submitted: 11 months ago.
Category: South Africa Law
Expert:  WCLawyer replied 11 months ago.
Good day and thank you for your question. My name is XXXXX XXXXX I will try and assist you today.

In terms of the Prescribed Rate of Interest Act, they can, in the absence of an express agreement on interest, claim 15,5% interest per annum from the date that the debt became due. In other words, from the date that the invoice says payment needs to be made before. So, if the invoice for instance says that this invoice is payable within 30 days, interest will start to run within 30 days of you receiving the invoice. If it does not say when it is payable, then it is immediately payable and interest will start to run from the date that you received the invoice.

The the absence of an agreement that you are liable to pay their attorney and own client or attorney and client costs, you would be liable for collection commission if you did not pay the full amount (inclusive of interest) in one go. Collection commission is 10% of the value of each separate payment, up to a maximum of R 300, excluding VAT. They would also be able to charge you for the letter of demand and the costs of sending that letter of demand registered mail. That is something like R 19.00 excluding VAT and excluding the expense, depending on the value of the claim.

If you have paid them the interest and those amounts mentioned, they would not be able to claim the balance of their legal costs, like I said, unless you signed something where you said that you will pay their attorney and client or attorney and own client costs.

I hope this helps you a little bit, but if you have follow up questions before you rate, feel free to ask them at no extra cost. If you are satisfied with the service, kindly rate it positively
Customer: replied 11 months ago.

Hi John


 


Thanks - that does help clear it up a bit. I think it's safe to say that I was supposed to pay them when I took delivery of the goods a couple of years ago - there was no invoice, but I immediately ran into trouble and couldn't pay.


 


BUT, when I received the letter of demand, I borrowed the full amount claimed in the letter of demand and paid it in one shot. The letter did not even mention the words "Interest" or "costs" - it demanded payment of the capital only, and I paid the capital in one shot, believing that that would be the end of the matter.


 


Now, after the fact, they have come back demanding I pay their costs, with an implied threat that they will claim the interest from me if I don't pay their costs. But neither of these were in the letter of demand, so is it not the case that if I satisfy the written demand in full that it's the end of the matter? Or am I still liable for amounts that they chose not to claim them but now want to?


 


Is it possible to sue someone for interest alone, even if the capital amount has been paid? I haven't taken advice from an attorney properly yet, but an attorney friend told me that there is no precedent for suing for interest once capital has been paid in full in response to a formal demand. But that was an informal discussion - hence me looking for a more informed opinion with you :-)


 


I hope that clarifies my question and concern a little.

Expert:  WCLawyer replied 11 months ago.
How many years ago did you receive the goods?
Customer: replied 11 months ago.

A little over 3 years ago - however the debt did not prescribe because I never disputed my indebtedness and there was some correspondence between us over that time. It was just something that was on the back burner for both me and the seller, and now just recently came to a head.

Expert:  WCLawyer replied 11 months ago.
What is the amount of the interest and legal fees? If you can give it to me separately, please?
Customer: replied 11 months ago.

They are claiming R1000 in legal fees.


 


Where interest is concerned, they mentioned a figure of about R8000, but I worked out that the interest would be more, in the region of about R12,500


 


To be fair, I paid what they demanded. And while I don't want to be unreasonable, I also don't want to be held over a barrel and forced to pay legal fees under threat of being sued for just the interest, when neither was demanded in the first place.

Expert:  WCLawyer replied 11 months ago.
What was the capital amount? Because, in terms of the in duplum rule, the interest can never be more than double the capital. Meaning, if you owe them R 8 000 in capital, the capital plus interest amount can never be more than R 16 000.

Be that as it may, I understand that this kind of left a sour taste in your mouth, but the problem is that they are allowed to charge what I mentioned above by statute, whether they include it in their letter of demand or not.

An argument can be made that they abandoned the interest and legal costs through their letter of demand, but I am not sure how far you are going to get with such an argument.

On the flip side, I don't know whether they are going to go through all the trouble and legal expense to claim an amount of R 8 000. It is going to cost them more, in the end, in legal fees than what they potentially stand to gain. Since they are a business, they cannot approach the Small Claims Court and this may very well just be a bluff.
Customer: replied 11 months ago.

Hi again


 


Thanks very much - I think your last message really sums it up quite nicely and makes good sense.


 


My belief is also that if they wanted interest in the first place, they should have either claimed it or reserved their right to claim it, which they didn't.


 


I appreciate the help and the effort explaining things so thoroughly!

Expert:  WCLawyer replied 11 months ago.
My pleasure. Please do not forget to rate the service.
WCLawyer, Attorney
Category: South Africa Law
Satisfied Customers: 14940
Experience: L.LB (UOVS)
WCLawyer and 2 other South Africa Law Specialists are ready to help you

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