About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2015
>>
[2015] ZAGPPHC 371
|
|
Jan v MEC of the Department of Health: Limpopo Province (A899/2013) [2015] ZAGPPHC 371 (1 June 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
number: A899/2013
Date:
1/6/2015
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
respondent’s 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 terms:
“
(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 payable 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 legal
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
:
“
The 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 ‘shall 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 &
Adv D J Venter
Instructed
by
: HENK VAN LILL ATTORNEYS
For
the Respondent
: Adv. R Bedhesi SC/Adv. A Lapan
Instructed
by
: STATE ATTORNEY
Date
of Judgment
: 1 JUNE 2015