Euro Blitz 21 (Pty) Ltd and Another v Secena Aircraft Investments CC

The respondent leased aircraft-related property to the appellants under a written lease agreement. After the appellants fell into arrears, the respondent sued in the Germiston Magistrate’s Court for payment of R353 126.40 plus interest at prime plus 5% ‘calculated daily’ from 24 March 2006 to date of payment. Judgment was granted in those terms. Years later, a dispute arose about whether the magistrate’s order meant that interest was simple interest calculated daily, or compound interest compounded daily. The respondent sought a declaratory order in the South Gauteng High Court that the interest was compounded daily. That court agreed with the respondent. The appellants then appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the South Gauteng High Court was set aside and replaced with a declaratory order confirming that interest was not compounded daily and regulating the application of the in duplum rule over specified periods.

The case clarifies the interpretation of interest clauses and court orders in South African law, confirming that the mere use of the words ‘calculated daily’ does not imply compound interest. It reinforces the principle that compound interest is exceptional and must be expressly agreed upon or otherwise legally justified. The judgment provides important guidance for drafting pleadings, contracts, and court orders involving interest.