Assuming the Supreme Court would defer to Bingham LJ's analysis, what factor makes that clause a disguised penalty? Presumably, it is the fact that the contract imposed the obligation to perform within 14 days. If the contract had merely stated:
'A holding fee of £5 plus VAT per day will be paid for each transparency which is retained by you longer than ... 14 days ...',
the obligation to pay the specified sum would have amounted to a conditional primary obligation and ought not, on the reappraised test, have fallen within the doctrine. Seems a tad artificial, doesn't it?
As to (2), the Supreme Court did not restrict the nature of the detriment imposed to payments of money. It was more expansive in its view. Lords N and S saw no reason why an obligation to transfer assets (either for nothing or at an undervalue) should not be capable of constituting a penalty. Similarly, the fact that a sum is paid over by one party to the other party as a deposit, in the sense of some sort of surety for the first party's contractual performance, would not prevent the sum being a penalty if the second party in due course forfeited the deposit in accordance with the contractual terms, following the first party's breach of contract. Lord Mance accepted that the doctrine extended to where the detriment imposed was a transfer of money's worth rather than just of money.
What of (3), the new test of the measure of the detriment?
The clause must impose a disproportionate disadvantage on the party in breach if it is to be classified as penal. That is nothing new. That there is an element of deterrence in the detriment imposed is no longer enough. Moreover, the measure of the detriment will no longer always be tied to a pure damages comparison. The judgments recognise that the party imposing the disadvantage may have a legitimate commercial interest in the performance of the primary obligation extending beyond a financial substitute for performance. Lord Mance put it this way:
'What is necessary in each case is to consider, first, whether any (and, if so, what) legitimate business interest is served and protected by the clause and, second, whether (assuming such an interest to exist) the provision made for the interest is nevertheless in the circumstances extravagant, exorbitant or unconscionable.'
So, in Cavendish Square, the court could look beyond the particular loss arising from the breach of the restrictive covenant to the innocent party's legitimate commercial interest in the protection of its goodwill. In Parking Eye, the court could look at the overall cost of providing and maintaining a car parking enforcement scheme rather than the particular loss caused by the individual's extended stay.
This approach undoubtedly provides a greater ambit of justification to the innocent party and restricts the circumstances in which a clause is determined to be penal in its effects.