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[2015] ZAGPPHC 360
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Saunders N.O v MEC of the Department of Health: Limpopo Province (A899/2013) [2015] ZAGPPHC 360 (1 June 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION,
PRETORIA)
Case number: A899/2013
Date: 01 JUNE 2015
In the matter between:
JAN SAUNDERS
N.O
.......................................................................................................
APPELLANT
And
THE MEC OF THE DEPARTMENT OF HEALTH:
LIMPOPO
PROVINCE
.................................................................................................
RESPONDENT
JUDGMENT
PRETORIUS J.
[1] The present appeal is against the
whole of the judgment delivered on 3 May 2013 in this court where the
following order was
granted:
“1.1 That the writ of the
execution issued out of this Court on 22 March 2013 be set aside.
1.2 That it be declared that the
settlement amount embodied in the Court Order granted on 19 November
2012 does not bear interest;
1.3 That the Third Respondent be
ordered to pay the cost of this application. ”
[2] On 19 July 2013 an application for
leave to appeal was dismissed. Leave to appeal against the judgment
was granted to the Full
Bench of this court by the Supreme Court of
Appeal on 18 October 2013, hence this hearing.
[3] It is common cause that an action
for damages for personal injuries was instituted on behalf of a minor
child, Jaun Hendrik
Smith, for damages he had suffered at his birth
as a result of the negligent conduct of employees of the respondent.
The question
of liability was settled between the parties. The
quantum portion of the claim had to be heard on 19 November 2012 in
this court.
[4] The parties reached an agreement
regarding the quantum of the claim. A settlement agreement was made
an order of court by agreement
between the parties. The order inter
alia, reads as follows:
“By agreement between the parties
the following order is made:
1.The Defendant is ordered to pay an
amount of R6 500 000.00 in full and final settlement of the Third
Plaintiff’s claim into
the trust account of Hendrik van Lill
Attorneys, the details being as follows...”.
[5] The full amount in the sum of
R6.5million as agreed, was paid by the respondent on 18 February
2013. There was no mention of
a date of payment in the draft order or
any separate provisions of interest to be paid.
[6] Thereafter the appellant claimed
interest on the amount of R6.5million, from the date of judgment to
the date of payment of
the full amount. On 19 February 2013 the
appellant demanded an additional amount of R248 424.66 as interest on
the amount of R6.5million
which had been paid on 18 February 2013.
[7] According to the appellant the
amount of interest to be paid if the provisions of the
Prescribed
Rate of Interest Act 55 of 1975
were to apply, would be R248 424.66
calculated at 15.5% per annum.
[8] After the respondent refused to pay
any interest, the appellant caused a writ of execution to be issued
on 22 March 2013 for
payment of the amount as set out above. This
resulted in the respondent applying to court to set aside the writ of
execution as,
according to the respondent, there was no basis in
respect of which a writ could have been issued, as the appellant was
not entitled
to any interest in these circumstances. The respondent’s
contention was that the settlement agreement, where the parties
settled the quantum at R6.5million “in full and final
settlement of the third respondents claim” included all
outstanding
amounts.
[9] The appellant opposed the
application for setting aside the writ and launched a counter
application for a declaratory order
in the following
“(1) That the amount of R6 500
000.00 payable in terms of the Court order dated 19 November 2012 is
a judgment debt as defined
in section 2(3) of the Prescribed Rates of
Interest Act, 55 of 75;
(2) That the said amount bore interest
at the rate of 15.5% per annum calculated from 17 November 2012 until
18 February 2013;
(3) That the Applicant is ordered to
pay the amount of R248 424.66 to the Third Respondent;
(4) Cost of suit.”
[10] The application for setting aside
the writ was granted and the counter application dismissed, resulting
in the present appeal.
[11] The appellant relies on
section
2(1)
of the
Prescribed Rate of Interest Act, 1975
, in respect of
morae interest to be paid by the respondent. The appellant argued
that the execution in respect of the interest
could have been levied
on the same judgment as it involved a simple calculation to ascertain
the amount of interest for the relevant
period.
[12] The appellant’s further
argument is that the judgment debt is recoverable by levying
execution and therefor any interest
payable in terms of the judgment
debt will be recoverable by way of levying execution. This will only
be applicable if the court
should decide that interest was payable as
alleged by the appellant.
[13] The provisions of
section 2(2)
of
the
Prescribed Rate of Interest Act provides
:
“Any interest payabie in terms of
Subsection (1) may be recovered as if it formed part of the judgment
debt on which it is
due/’
[14] Section 3(1) of the State
Liability Act, 20 of 1957 ("Act”) provides:
“(1) Subject to subsections (4)
to (8), no execution, attachment or like process for the satisfaction
of a final court order
sounding in money may be issued against the
defendant or respondent in any action or iegal proceedings against
the State or against
any property of the State, but the amount, if
any, which may be required to satisfy any final court order given or
made against
the nominal defendant or respondent in any such action
or proceedings must be paid as contemplated in this section. ”
[15] Section 4 of the Act sets out what
a judgment creditor may do to ensure payment. Section 6 makes
provision and sets out under
which circumstances the registrar or
clerk of the court would issue a warrant of execution against movable
property. Section 7
provides that the sheriff may attach movable
property but may not remove it. Section 8 provides that the sheriff
may after the
expiration of thirty (30) days remove and sell the
attached property in execution of the debt. Unfortunately for the
respondent
this defence was never a part of the defence, not in the
court a quo, during the application for leave to appeal, nor during
the
petition. It seems like an after-thought as it was mentioned for
the first time in the respondent’s present heads of argument
and during argument in court.
[17] Uniform Rule 45(1) provides:
“(1) The party in whose favour
any judgment of the court has been pronounced may, at his own risk,
sue out of the office of
the registrar one or more writs for
execution thereof as near as may be in accordance with Form 18 of the
First Schedule: Provided
that, except where immovable property has
been specially declared executable by the court or, in the case of a
judgment granted
in terms of rule 31 (5), by the registrar, no such
process shall issue against the immovable property of any person
until a return
shall have been made of any process which may have
been issued against his movable property, and the registrar perceives
therefrom
that the said person has not sufficient movable property to
satisfy the writ ”
[18] In McNutt v Mostert 1949(3) SA 253
T at 255, Clayton J found:
“...the judgment upon which
execution is issued must be a judgment from which there can be
gathered what money or thing the
judgment debtor must deliver... ”
[19] In De Crespigny v De Crespigny
1959(1) SA 149 NPD, Milne J held at p152 A:
“In the result I think that it
can be stated authoritatively that a writ of execution which has been
issued will be held to
be incompetent if the amount payable under the
judgment can only be ascertained after deciding a further legal
problem (I need
not decide what degree of factual uncertainty in a
judgment renders execution incompetent)”
[20] In the present instance the court
has to decide whether the settlement
agreement, which was made an order of
court, disposed of and included interest as well.
[21] In Karson v Minister of Public
Works 1996(1) SA 887 ECD at p893, Leach J found at F-H:
“It is well settled that the
agreement of compromise, also known as transactio, is an agreement
between the parties to an
obligation, the terms of which are in
dispute, or between the parties to a lawsuit, the issue of which is
uncertain, settling the
matter in dispute, each party receding from
his previous position and conceding something, either by diminishing
his claim or by
increasing his liability... ”
[22] In the present instance the
particulars of claim in the main action the plaintiff on behalf of
the minor claimed damages in
the amount of R15 451 937.13. Prayer 4
of the particulars of claim set out:
“4) Betaling van rente op
voormelde bedrae bereken teen die voorgeskrewe rentekors, a tempore
morae vanaf ‘n datum soos
deur die Hof bepaal word”
[23] It is clear from the wording of
this prayer in the particulars of claim that the interest would be
dependent on the amount
awarded in damages and that interest would be
payable as from a date to be determined by the court.
[24] In Gollach & Gomperts v
Universal Mills and Produce Co 1978(1) SA 914 (AD), Miller JA held at
p922 that:
“A transaction, whether
extra-judicial or embodied in an order of Court, has the effect of
res judicata
[25] At p921 C Milner JA set out:
“The purpose of a transaction is
not only to put an end to existing litigation but also to prevent or
avoid litigation”
[26] The respondent argues that the
appellant’s claim for damages became res judicata. In Custom
Credit Corporation (Pty)
Ltd v Shembe 1972(3) SA 462 (AD), Van Winsen
JA found at p472 in relation to res judicata:
uThe law requires a party with a single
cause of action to claim in one and the same action whatever remedies
the law accords him
upon such cause. This is the ratio underlying the
rule that, if a cause of action has previously been finally litigated
between
parties, then a subsequent attempt by the one to proceed
against the other on the same cause for the same relief can be met by
an exceptio rei judicatae vel litis finitae. The reason for this rule
is given by Voet, 44.2.1, (Gane's translation, vol 6, p. 553)
as
being 'to prevent inextricable difficulties arising from discordant
or perhaps mutually contradictory decisions due to the same
suit
being aired more than once in different judicial proceedings'. ”
[27] In Andy’s Electrical v
Laurie Sykes (Pty) Ltd 1979(3) SA 341 (NPD), Didcott J found at p345
D-E that:
“And a "settlement" is
sometimes an appropriate label, in common parlance at any rate, for
an outright payment,
as distinct from a compromise. A payment "in
full settlement of your claim", on the other hand, has a very
different
ring. Once again, the context may illuminate something else
behind the terminology (cf Moosa v Essa
1931 NPD 365
at 367, 369).
Unless it does, however; the ’’claim” as a whole
has now become the target of the "settlement",
and the
"settlement" itself assumes the unmistakable hue of a
compromise...”
[28] The appellant is correct when
arguing that a judgment debt becomes payable on the date of judgment,
unless the order provides
for a later date. It is also correct that
the interest thereon follows ex lege in terms of
section 2(1)
of the
Prescribed Rate of Interest Act and
must be calculated from the date
of the order.
[29] That will be the position when the
issue of interest was not included in the court order. The appellant
conceded in the heads
of argument that the court order had “finally
disposed of the issues between the parties as contained in the
pleadings”.
The rider to this statement is that it was never
intended to include interest from the date of judgment. It is clear
that the whole
claim for damages was settled, but it could never
include the interest which came into force once there was a judgment
as that
would give the defendant carte blanche to delay payments as
long as it likes.
[30] In Steyn No v Ronal Bobroff &
Partners 2013(2) SA 311 (SCA) at para 34 Brand JA held:
“In the circumstances
contemplated in Bellairs, where the claimant is entitled to mora
interest at the rate prescribed in
the Act, our courts accept that
interest constitutes a form of damages. But they do not require a
claimant to prove that damages
were actually sustained. They act on
the assumption that, had the payment been made, the capital sum would
have been productively
employed by the claimant during the period of
mora and that the mora interest consequently represents the damages
flowing naturally
from the default...’’ (Court’s
emphasis)
[31] Interest a tempore morae is an
ancillary obligation that automatically attaches to and is payable
together with the damages
in the present case.
[32] The court has to agree that if all
the facts, arguments and principles as set out in the authorities,
the respondent is liable
for the payment of interest from the date of
the settlement agreement had been made an order of court, until the
date of payment.
It is logical that it must be so as the respondent
could take its time to pay and leave a party without any interest.
The interest
contained in the settlement agreement could never be the
interest that becomes payable through a judgment.
[33] This court, however, finds that it
is logical that interest that run from the date of judgment until
payment cannot, in these
circumstances, be included in the settlement
agreement.
[34]
Section 2
of the
Prescribed Rate
of Interest Act, 55 of 1975
provides that mora interest is payable on
a judgment debt from the date of judgment. Section 2A of the Act has
the effect that
“...Once judgment is granted such interest
‘shail run from the date on which payment of the debt is
claimed by the
service on the debtor of a demand or summons,
whichever is the earlier”’.
[36] In this instance the interest
claimed is for an unliquidated debt and therefor section 2A of the
Act applies, where section
2A(2)(a) provides
that a claim a tempore morae run from
the date of the summons or demand, whichever date is earlier, until
date of payment. Subsection
5 of the Act contains a rider and grants
the court a discretion “to make such order as appears just in
respect of payment
of interest on an unliquidated debt, the rate at
which interest shall accrue and the date from which interest shall
run”
[37] The present claim is for a
post-judgment claim for interest on a judgment debt. The judgment
making the settlement agreement
an order of court created a judgment
debt on which interest started to run on the date of judgment.
[38] The court has to agree, under
these circumstances, that the appellant is entitled to bring a
further claim for interest as
this amount did not form part of the
compromise which had been paid by the respondent. The interest ran
from the date of the judgment
until payment on 18 February 2013.
[39] Therefor I propose the following
order:
1. That the appeal is upheld.
2. That the amount of R6.5 million
payable in terms of the Court order dated 19 November 2012 is a
judgment debt defined in
section 2(3)
of the
Prescribed Rate of
Interest Act, 55 of 1975
.
3. That the said amount bore interest
at a rate of 15.5% per annum calculated from 17 November 2012 until
18 February 2013.
4. That the applicant is ordered to pay
the amount of R248 424.66 to the Third Respondent.
4. The respondents to pay the costs of
the appeal, including the costs of two counsel.
Judge C Pretorius I agree.
Judge E Jordaan I agree.
Judge DS Molefe
Case number : A899/2013
Appeal heard on : 20 May 2015
For the Appellant : Adv. BC van den
Heever SC
Instructed by : BOTES ATTORNEYS
For the Respondent : Adv. R Bedhesi
SC/Adv. A Lapan
Instructed by : STATE ATTORNEY
Date of Judgment 01 JUNE 2015