Scoin Trading (Pty) Ltd v Bernstein [2010] ZASCA 160; 2011 (2) SA 118 (SCA); [2011] 2 All SA 608 (SCA) (1 December 2010)

The case of Scoin Trading (Pty) Limited v Bernstein, Gillies Martin NO concerned a dispute over the purchase of a rare gold coin. The respondent, an avid coin collector, negotiated with the appellant, a company dealing in gold coins, to purchase a ZAR Een Pond Overstamp gold coin for R1, 950m. The respondent paid a deposit of R200,000 and agreed to pay the remaining balance by the end of the year. However, the respondent passed away before the full payment was made. The appellant sought payment of the remaining balance, plus interest, from the respondent's estate. The court had to determine whether the estate was liable for the interest on the late payment.

The court examined the concept of "mora," which refers to delay or default in contractual obligations. In this case, the respondent was in "mora ex re," as the contract fixed the time for performance and no demand was necessary to place the debtor in mora. The court found that the respondent had agreed to pay the balance by the end of December and failed to do so, triggering the consequences of mora.

The respondent argued that their failure to pay was not due to any fault of their own, as the debtor had passed away before the debt became payable. They also argued that the death of the debtor made performance impossible. However, the court rejected these arguments, stating that contractual damages do not depend on fault. The court clarified that mora interest is intended to compensate the creditor for the loss or damage suffered due to not receiving the money on time.

Additionally, the court addressed the concept of "casus fortuitus" and supervening impossibility of performance. It was determined that personal incapability to perform, such as death, does not constitute impossibility. The court concluded that the respondent's estate was liable for the interest on the late payment, as the executor of the estate was obliged to pay the debt, which included the interest.

The ratio decidendi, or core legal principle, underlying the decision in the case of Scoin Trading (Pty) Limited v Bernstein, Gillies Martin No is that the death of a debtor does not affect their liability for interest on a delayed payment. The court's decision centered around the concept of "mora," which refers to delay or default in contractual obligations. In this case, the respondent was in "mora ex re," as the contract fixed the time for performance, and no demand was necessary to place the debtor in mora. The respondent had agreed to pay the balance of the purchase by the end of December but failed to do so, triggering the consequences of mora.

The respondent argued that their failure to pay was not due to any fault of their own, as the debtor had passed away before the debt became payable. They also argued that the death of the debtor made performance impossible. However, the court rejected these arguments, stating that contractual damages do not depend on fault. The court clarified that mora interest aims to compensate the creditor for the loss or damage suffered due to the delayed payment.

Additionally, the court addressed the concept of "casus fortuitus" and supervening impossibility of performance. It was determined that personal incapability to perform, such as death, does not constitute impossibility. The court concluded that the respondent's estate was liable for the interest on the late payment, as the executor of the estate was obliged to pay the debt, including the interest.

The ratio decidendi of this case establishes that the death of a debtor does not absolve their estate from liability for interest on delayed payments. The consequences of mora apply regardless of the circumstances surrounding the delay, and the purpose of mora interest is to compensate the creditor for their loss.

The case law referenced in the court's reasoning for the Scoin Trading (Pty) Limited v Bernstein case is provided below, along with a brief summary and neutral citation for each:
1. Victoria Falls and Transvaal Power Co Ltd v Consolidated Langlaagte Mines Ltd 1915 AD 1: This case addressed the concept of mora interest and its applicability to unliquidated damages. The court held that a debtor can only be in mora if they know the specific debt they owe, and without such knowledge, their failure to pay cannot be considered 'wrongful'.
2. RB Ranchers (Pvt) Limited v McLean's Estate & another 1986 (4) SA 271 (ZS): The court in this case considered a similar scenario where a purchaser of cattle died shortly after posting a cheque for payment. The court's decision focused on three issues: the implication of a term regarding interest in the agreement, liability for damages for breach of contract, and the interpretation of the Bills of Exchange Act. The court rejected the claim for interest but based its decision on different grounds than those in the Scoin Trading case.
3. Trotman v Edwick 1951 (1) SA 443 (A) at 449B-C: This case distinguished between contractual and delictual damages. It emphasized that contractual damages aim to put the innocent party in the position they would have been in if the contract had been properly performed, rather than recompensing them for their loss.
4. Legogote Development Co (Pty) Ltd v Delta Trust & Finance Co 1970 (1) SA 584 (T) at 587F: The court affirmed that contractual damages do not depend on fault. To establish mora, the creditor only needs to prove that the debtor failed to perform on time, regardless of any fault on their part.
5. Bellairs v Hodnett 1978 (1) SA 1109 (A) at 1145D-G: This case clarified the purpose of mora interest, stating that it seeks to compensate the creditor for the loss or damage they suffer due to not receiving their money on time. The court explained that interest is the "lifeblood of finance," and a debtor's delay in payment often causes the creditor to lose out on the productive use of their money.
6. Meyerowitz, Administration of Estates and Estate Duty 2007: This source was cited for the principle that a creditor is generally not entitled to interest between the date of death and payment of the claim, unless the claim carries interest or the executor is put in mora.
7. WA Ramsden, Supervening Impossibility of Performance in the South African Law of Contract, 1985: This source discusses the concept of supervening impossibility, arguing that mere personal incapability to perform does not constitute impossibility.
8. Christie, The Law of Contract in South Africa 5ed, 2006: Christie's text elaborates on the transmission of contractual rights and duties upon death. He explains that unless the contract expressly provides otherwise, the general principle is that the rights and duties are enforceable by or against the executor of the estate.