Supreme Court
Action No. 57 of 1978
31st October, 1980
Barrington-Jones, J.

Mr. D. Lindo for the Plaintiff
Mr. D. Courtenay for the Defendant

Interest on unpaid credit balance - whether interest payable at common law on ordinary debts in the absence of some contract.

J U D G M E N T

At the hearing on the 24th September, 1980 I gave judgment for the Plaintiff in the sum of U.S. $52,927.91 and reversed the question of a claim for interest for further consideration.

It is only right to say here that Mr. Courtenay for the Defendant strenuously opposed the claim made by the Plaintiff for interest on the judgment debt. For his part Mr. Lindo relied on the footnote which he said appears on the originals of the Plaintiff's invoices, reading:

"In the event that this invoice is unpaid for more than our credit terms, the customer authorizes Reliance Industries Inc., to charge interest on the unpaid balance at the highest legal rate available on the date of the invoice. If this invoice has to be placed in the hands of an attorney for collection, the customer agrees to pay to said attorney a reasonable attorney fee, together with any and all cost of collecting this invoice."

Mr. Lindo said that the originals of all invoices had been sent to the Defendant Company, and when he produced the original of No. 09567 dated the 31st December, 1977 Mr. Courtenay asked how this could be if all such originals invoices had been sent to the Defendants. Perhaps the answer to this question lies in the fact that No. 09567 of the 31st December, 1977 is not in fact an invoice but a statement of the Defendant Company's account.

The history of the claim for interest can perhaps be gleaned from the copy invoices which were exhibited in Court; and it is clear that no interest was charged in respect of the invoices rendered by the Plaintiff to the Defendant, from the 20th February, 1972 until the 10th June, 1974 when by Invoice No. 5543 interest was charged at 1% in respect of May, 1974. But more importantly there is a reference in this particular invoice to the Plaintiff's letter of the 29th April, 1974 which presumably set out the terms under which interest was to be charged.

Thereafter interest continued to be charged to the Defendant's account, but the percentage arose in June, 1974 from 1% to 13 ½% and thence to 14% for July, 1974 and continued at this rate until June, 1975, finally amounting to U.S. $9,566.15. It is to be noted that no other claims for interest were apparently invoiced to the Defendant Company after June, 1975; and indeed the claim for interest for the period 31st July, 1975 to 31st December, 1977 first appears in the statement referred to earlier viz: No. 09567; the original being handed into Court. Whilst there is nothing to show that this particular document was ever sent to the Defendant Company, this claim for interest is at 10% per annum from the 31st July, 1975 to the 31st December, 1977 and is said to amount to U.S. $ 15,102,74.

There is no doubt that there is a discretion to award interest vide S. 182 of Chapter 5, but I find that I am not satisfied that in this case that interest should be awarded on the terms asked for by the Plaintiff.

From my position I do not know what was contained in the Plaintiff's letter of the 29th April, 1974 to the Defendant Company; nor do I know why interest was not charged from the 20th February, 1972 until it was first introduced in June, 1974. Nor am I aware of the "Credit Terms" the Defendant Company enjoyed, as envisaged in the invoice footnotes.

There is nothing to suggest that the Defendant Company did not receive the invoices in respect of interest applied between the 10th June, 1974 and the 30th June, 1975; nor was anything led before me to show that these invoices were the subject of any dispute between the Plaintiff and the Defendant Company.

It is noted that at paragraph (4) of the Defence it is recited:

"The Defendant denies that the amount of interest contained in the particulars mentioned at paragraph 3 of the Statement of Claim are recoverable and says that there was no agreement between the parties whereby such interest was to be paid."

It is good law that interest is not payable or recoverable at common law on ordinary debts in the absence of some contract, express or implied. On the evidence before me I find that the footnotes to the invoices are in the terms mentioned earlier, and clearly the communication addressed to the Defendant Company on the 29th April, 1974 intimated that interest was being charged on the unpaid balance as at that time. So that I think it proper to find that there was an implied contract that the Defendant Company pay interest. The case of In Re Henry, Marquis of Anglesey. Willmot v Gardner (1901) Chancery 548 whilst not on all fours with the present case is certainly authority for saying that a contract to pay interest on an amount due for goods sold and delivered will be inferred where the debtor has from time to time received sums on account generally. And whilst it is true that the Defendant has not paid sums on account there have certainly been credit made by the Plaintiff at various times in its account with the Defendant Company.

It is also true that the Statement of Claim on the Writ does not state whether the claim for interest is based on contract or statute. Indeed interest in the sum of US. $9,566.15 is "lumped together" in a global figure of US. $62,494.06, whilst the claim for interest for the period 31st July, 1975 to 31st December, 1977 in the sum of $15,102.74 does not appear in the statement of claim at all.

I have come to the conclusion that the failure to state whether the claim for interest is based on contract or statute is not fatal to the claim and for the reasons I have given and in exercising my discretion under S. 182 of the Supreme Court Ordinance interest will be allowed in the sum of US. $9,566.15, but the claim for the period 31st July, 1975 to 31st December, 1977 in the sum of US. $15,102.74 will be disallowed.

That is to say judgment in the sum of US. $52,927.91 and interest in the sum of US. $9,566.15 totaling U.S. $62,494.06 in all.

The Plaintiff to have the costs of the Action.

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