1
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case Number: 13654/2013
In the matter between:
PASSENGER RAIL AGENCY OF SOUTH AFRICA Applicant
and
ADV. C BISSCHOFF N.O. obo D J REYNERS First Respondent
THE SHERIFF OF CAPE TOWN WEST Second Respondent
Date of hearing: 7 August 2024
Date of judgment: 16 August 2024
______________________________________________________________________
JUDGMENT
PANGARKER AJ
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Introduction
1. The dispute between the parties revolves around a narrow issue: the calculation
of interest, the application of the in duplum rule, the date on which post-judgment interest
starts running on the judgment debt, and the rate of post -judgment interest. As counsel
for the parties submitted, the dispute is a legal issue.
2. The only participating parties in this matter are PRASA, the defendant in the
finalized damages action and applicant in respect of its Part B application, and Advocate
Christo Bisschoff NO, in his capacity as the Court appointed curator ad litem for Denzil
John Reyners. As there are two applications before me, to simplify matters, the parties
are simply referred to herein as PRASA and the plaintiff. The Sheriff of Cape Town West,
the second respondent, abides the decision of the Court.
3. In Part B of the application as contained in its Notice of Motion, PRASA seeks the
following relief:
PART B:
8. Declaring that the Applicant has satisfied the judgment debt handed
down by the Honourable Justice Goliath on 03 June 2020, in the
amount of R 3 326 484.00 together with the interest thereon, when
it paid the amount of R3 589 397.32 on 16 April 2024;
9. Setting aside the warrant of execution dated 05 February 2024;
10. Costs of the application;
11. Further and/or alternative relief.
4. The second application is the plaintiff’s counter application for a declarator in the
following terms:
1. It is declared that as at 7 August 2024 (and after taking into account
all payments made by the applicant to the first respondent until
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such date pursuant to the judgment delivered by the trial court
on 3 June 2020 under the above case number), the applicant is
presently obliged to pay the first respondent a balance of R3 912
304,30 (alternatively, a balance of R3 636 907, 58, which amount is
presently due, owing and payable.
2. The applicant shall pay the first respondent’s costs of the
counter-application including the costs of two counsel, on Scale C.
3. Further and/or alternative relief.
5. Part A of PRASA’s application was an urgent application on 19 April 2024 seeking
the following relief: suspension of the execution of the June 2020 order granted by the
trial Court (“the Goliath order”) pending the determination of Part B; an interdict preventing
the sale in execution of its attached movable assets which were advertised to take place
on 23 April 2024; the return of these movable assets pending the determination of the
relief in Part B, and postponing Part B while reserving PRASA’s right to supplement its
papers, and costs.
6. On 19 April 2024, Lekhuleni J granted an order by agreement between the parties
which has the effect that the sale in execution was suspended on condition that PRASA
provides security to the curator to the satisfaction of the second respondent. The further
orders are not referred to herein. The matter was consequently postponed for hearing of
Part B to 7 August instant and all issues of costs were to stand over for later
determination.
Common cause and undisputed facts
7. On 20 February 2001, Denzil John Reyners fell out of a moving train while
travelling to work. The incident occurred between Ysterplaat and Mutual Stations in Cape
Town. As a result of the incident, Mr Reyners sustained various bodily injuries which
included a right compound depressed temporal skull fracture and severe traumatic brain
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injury1. Subsequently, a curator was appointed who issued Summons in August 2013
based on a delictual claim against PRASA.
8. Several years passed until the trial proceeded before Goliath DJP (as she then
was). At paragraph [36] of the judgment, the trial Court found that the parties had settled
the merits of the matter on the basis that PRASA was liable for 80% of the plaintif f’s
proven damages, in the event that PRASA’s special plea on prescription was to be
dismissed. The Court indeed dismissed the special plea of prescription and found in
favour of the plaintiff.
9. On 3 June 2020, the trial Court made the following order2:
1. The defendant is ordered to make payment to plaintiff in the amount of R3
246 484.00, together with interest thereon from the date of service of
summons to date of payment, be awarded as damages in respect of:
1.1 R1 371 705. 00 for past loss of earnings.
1.2 R1 786 400.00 for future loss of earnings.
1.3 R500 000 for future medical and other expenses.
1.4 R500 000 for general damages.
(My emphasis)
10. The Supreme Court of Appeal (SCA) later granted PRASA leave to appeal to the
Full Court of the Western Cape High Court in respect of the dismissal of its special plea.
On 12 May 2022, the Full Court upheld the appeal, set aside the trial Court’s order, and
substituted it with an order that PRASA’s special plea succeeds with costs3.
1 PRASA 2, p42
2 PRASA 2, par [52] 1., p65 – “the Goliath order” as referred to during the hearing (note, the further orders at page
24 of the trial Court’s judgment are not repeated herein)
3 PRASA 3, p67-115 – Mantame and Nuku JJ concurring (though for different reasons), Le Grange J dissenting
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11. Unhappy with the outcome of the appeal, Advocate Bisschoff NO on behalf of Mr
Reyners further appealed the decision of the Full Court to the SCA, and on 28 November
2023, the SCA handed down judgment in Bisschoff NO obo Reyners v Passenger Rail
Agency of South Afric a4. In its unanimous decision, the SCA upheld the curator’s
appeal and set aside the decision of the Full Court, which had the effect that the order of
the trial Court as per Goliath DJP dated 3 June 2020, was reinstated.
12. On 5 February 2024, the plaintiff obtained a writ of execution from the Registrar of
the High Court which states as follows:
TO THE SHERIFF: Cape Town West
You are hereby directed to attach and take into execution the movable
goods of the PASSANGER (sic) RAIL AGENCY OF SOUTH AFRICA, the
above-mentioned Defendant of Cape Metrorail, 1 Adderley Street, Cape
Town, and of the same to cause to be realised by public auction the sum of
R10 143 617.02 (TEN MILLION ONE HUNDRED FORTY -THREE
THOUSAND AND SIX HUNDRED AND SEVENTEEN RAND AND TWO
CENTS ONLY) being the Judgement Debt in the sum of R3 246 484.00
(THREE MILLION TWO HUNDRED AND FORTY-SIX THOUSAND FOUR
HUNDRED AND EIGHTY-FOUR RANDS ONLY) and interest thereon at
15.5 percent from date of service of summons on 23 August 2013 to date
of judgement as per the In Duplum Rule in the sum of R3 246 484.00
(THREE MILLION TWO HUNDRED AND FORTY-SIX THOUSAND FOUR
HUNDRED AND EIGHTY-FOUR RANDS ONLY) plus further interest from
date of judgement to date of Writ in the sum of R3 650 649.02 (THREE
MILLION SIX HUNDRED AND FIFTY THOUSAND AND SIX HUNDRED
AND FORTY-NINE RAND AND TWO CENTS), totalling the sum of R10 143
617.02 (TEN MILLION ONE HUNDRED FORTY-THREE THOUSAND AND
SIX HUNDRED AND SEVENTEEN RAND AND TWO CENTS ONLY),
4 [2023] ZASCA 160 – see PRASA 4, p116-127
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which the Plaintiff recovered by Judgement delivered on 3 June 2020, and
also all other costs and charges of the Plaintiff for the issuing and service
of this Writ, besides all your costs thereby incurred.
Further pay to the said Plaintiff’s attorney the sum of R10 143 617.02 (TEN
MILLION ONE HUNDRED FORTY -THREE THOUSAND AND SIX
HUNDRED AND SEVENTEEN RAND AND TWO CENTS ONLY) and for
your doing so this shall be your Writ.
And return this Writ with what you have done thereupon.
13. Consequent upon the issuing of the Writ, the Sheriff attached and removed 23
vehicles belonging to PRASA as set out in the Sheriff’s notice of attachment in execution5.
14. PRASA made the following payments which it states, is in satisfaction of the
principal debt:
14.1 R3 326 484 on 15 March 20246;
14.2 R3 589 397, 32 on 16 April 20247, in total R6 835 881,32.
15. The parties agree that interest on the capital sum as awarded by the trial Court, of
R3 246 484 commenced to run from the date of service of Summons being 23 August
2013, at the rate of 15, 5% per annum.
5 PRASA 6, p132-133
6 PRASA 7, p134
7 JC15.1, p218
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The issues between the parties
16. There is a dispute between PRASA and the curator as to the calculation of interest.
According to PRASA, it satisfied the judgment debt with interest once it made its last
payment on 16 April 2024. The plaintiff calculates the judgment debt plus interest as being
a total sum of R10 143 617,02 , but PRASA’s view is that the plaintiff’s calculation of
interest is incorrect as he has not suspended the running of interest after it reached the
in duplum amount of R3 246 484 until the SCA’s judgment date of 28 Nove mber 2023.
The parties have provided their own calculations indicating how, in their view, the interest
is and should be calculated. I set out these calculations below.
17. The major dispute revolves around the application of the in duplum rule and the
date when post-judgment interest on the judgment debt commences. A secondary issue
is whether the judgment debt comprises the capital sum awarded by the trial Court plus
pre-judgment interest. In view of these disputes, and because the plaintiff has approached
the matter distinguishing between pre -and post -judgment interest, the judgment thus
hopes to address the issues in a similar fashion.
PRASA’s calculation of interest
18. From paragraph 27 of the founding affidavit, it is apparent that PRASA uses the
incorrect capital amount upon which it bases its calculation. In the trial Court’s order, the
capital amount awarded is R3 246 484 , and not R3 326 484 8 which PRASA uses
throughout its calculation. Counsel for the plaintiff points this out in his heads of argument,
but notwithstanding, the main arguments in the matter do not revolve around this issue
and it does not form part of the principal disagreement on the interest calculation issue.
19. PRASA’s calculation of interest and its indebtedness, as reflected in its affidavit
supporting relief in Part B and its heads of argument, is set out below:
8 Par 27.2, p13
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15,5% interest on R3 326 484 from August 20139 to November 2023
R3 326 484 x 15,5% x 120 ÷ 12
Total interest = R5 156 050, 20
End balance R3 326 484 + R5 156 050, 20 = R8 482 534, 20
Interest became capped in terms of the in duplum rule at R3 326 484 until the
date of the SCA’s judgment (28 November 2023)
11,75% interest on R6 652 968 (= R3 326 484 x 2) from 28 November 2023 to 14
March 202410 calculated as follows:
Interest from 28 November 2023 to 31 December 2023
11,75% x R 652 968 = R781 723, 74
R781 723, 74 ÷ 365 x 100 = R2 141, 70(88)11
R2 141, 70(88) x 33 days = R70 676, 39(2)
Interest from 1 January 2024 to 15 March 2024
11,75% x R6 652 968 = R781 723, 74
R781 723, 74 ÷ 366 = R2 135, 85(7)
R2 135, 85(7) x 75 days = R160 189, 27(5)
Total post -judgment interest from 28 November 2023 to 15 March 2024
= R230 865, 66(7) (R70 676, 392 + R160 189, 275)
Total end balances as at 14 March 2024 on R6 652 968 + R230 865, 66(7)
= R6 883 833, 66(7) - R3 326 484 (amount paid on 15 March 2024)
= R3 557 349, 66(7)
9 Service of the Summons
10 Note, 14 March 2024 is the day before PRASA made its first payment to the plaintiff in respect of its indebtedness
as per the Goliath AJP order
11 Brackets are inserted in PRASA’s calculation as reflected in the judgment merely to round off – no other changes
have been made to its calculations
9
11,75% interest applied on R3 557 349, 67 between 15 March and 16 April 2024
(date of second PRASA payment)
11,75% interest from 16 to 31 March 2024 on R3 557 349, 66(7)12
Interest accumulated from 15 to 31 March 2024 = R18 272, 72(5)
Total interest from 1 to 30 April 202413 = R34 437, 34(6)14
End balance as at 31 March 2024 = R3 557 349, 67 + R18 272, 72(5)
= R3 575 622, 392
Interest accumulates on R3 575 622, 392 at R1 147, 91(1) per day
20. In light of its calculations as set out above, PRASA concludes and submits that
when it made its second payment on 16 April 2024, it had then satisfied the judgment
debt and the in duplum interest together with the post -judgment interest and does not
have an outstanding balance in respect of the judgment debt. Having regard to the above
calculation, the following pertinent aspects in PRASA’s calculations must be highlighted
and were indeed emphasized by the plaintiff’s counsel:
20.1 The capital sum in the Goliath order is not R3 326 484, the figure upon
which PRASA bases its calculations, but R3 246 484;
20.2 PRASA applies the in duplum rule to the calculation of pre-judgment interest
with the result that it caps and suspends the pre-judgment interest;
20.3 Insofar as post -judgment interest on the amount of the judgment debt is
concerned, PRASA commences the running of such interest from 28
12 See para 28 – 29, PRASA’s heads of argument
13 See calculation at par 29, PRASA’s heads of argument
14 Interest accumulates at R1 147, 911 per day from 1 to 30 April 2024 as per PRASA’s calculation
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November 2023, being the date on which the SCA delivered its appeal
judgment and order in the plaintiff’s successful appeal;
20.4 PRASA applies a prescribed interest rate of 11,75% per annum to post -
judgment interest, which the parties agree was the prescribed rate of
interest on 28 November 2023.
The plaintiff’s calculation of interest
21. The plaintiff’s affidavit in support of its counter -application delivered on 4 June
2020 constitutes simultaneously an answering affidavit to the Part B application. In
support of the plaintiff’s contention that PRASA’s calculation is incorrect, the plaintiff
attaches two calculations to the affidavit but has requested that I nonetheless consider
the additional calculations which are attached as annexures to the heads of argument15.
22. For the sake of not overburdening this judgment, only the main calculation as set
out in annexure JC1A, is set out below as it is the calculation which the plaintiff seeks to
convince the Court is correct , and should be accepted . In total, four calculations are
presented and relied upon and the following must be noted from these annexures or
schedules16:
22.1 JC1A, which is a duplicate of JC1 – an interest rate of 15,5% per annum is
applied throughout, in respect of pre-and post-judgment interest, and the in
duplum rule is not applied;
22.2 JC1B – an interest rate of 9,75% per annum is applied to the post-judgment
interest calculation and the in duplum rule is not applied;
15 Including alternative calculations in the event that it is found that the in duplum rule applies
16 JC1 and JC1A are the same; JC2 and JC2A are the same; JC1B and JC2B are not attached to the founding papers in
the counter -application but are presented as calculations to consider depending on findings regarding the
application of the in duplum rule and the rate of prescribed interest
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22.3 JC2A – JC2A is presented only in the event that it is found that the in
duplum rule does apply as needed to the calculation of pre -judgment
interest and the rate of interest applied is 15,5% throughout;
22.4 JC2B – similar to JC2A, except that the post-judgment interest is calculated
at 9,75% per annum.
23. The plaintiff’s case is that the in duplum rule finds no application to pre-judgment
interest and while the rule applies to post -judgment interest, it is not applicable in these
circumstances set out later in the judgment. There is thus a request that a declaration be
made that the calculation in JC1A be determined as the correct interest and outstanding
balance, alternatively, JC1B, which applies the rate of interest of 9,75% being the
prescribed rate as at 3 June 2020, when the trial Court granted its order. Whether JC1A
or JC1B, the plaintiff’s contention is that the debt has not been satisfied and that there is
a balance owing by PRASA. The reference to “current date” on JC1A below, and on all
the annexures, is a reference to the hearing date of 7 August 2024.
24. The plaintiff’s calculation of the net amount still due as at the current date (7 August
2024) as per JC1A17 is as follows:
Date of service of Summons 23 Aug 2013
A = Judgment amount 3 246 484,00
Judgment date 3 June 2020
No. of days from service of Summons to Judgment date 2 476
Applicable Interest Rate 15,50%
No. of leap years between service of Summons and Judgment date
B = Pre-judgment interest on the capital sum from date of service of Summons to
2,00
Judgment date
C = (A + B) = The capital sum + adjusted pre-judgment interest thereon (as at the
3 410 764,98
17 Certain parts of the heading to JC1A have been deleted, and dates abbreviated
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Judgment date) 6 657 248,98
First Payment date 15 Mar 24
Amount paid 3 326 484
No. of days from the Judgment date until the First Payment date 1 381
No. of leap years between the Judgment date and the First Payment date 1,00
D = Interest accrued on amount C until the First Payment date 3 901 330,30
E = (C + D) = Total amount due on the First Payment date 10 558 79,28
Less: Amount of the first payment 3 326 484
F = Net amount still due on First Payment date, after First Payment made 7 232 095
Second Payment Date 16-Apr-24
Amount Paid by PRASA 3 589 397,32
No. of days from the First Payment date to the Second Payment date 32,00
G = Interest accrued on amount F until the Second Payment date 90 465,63
H = (F + G) = Total amount due on the Second Payment date 7 322 560,91
Less: Amount of the second payment 3 589 397,32
I = Net amount still due on the Second Payment date, after Second Payment
made 3 733 163,59
Current Date 7 August 2024
J = Interest accrued on amount I until current date 179 140,71
No. of days since Second Payment 113
No. of leap years in between 0,00
K = (I + J) = Net amount still due on Current date (NO in duplum rule applied ) 3 912 304,30
Interest on an unliquidated debt
25. It is common cause that the plaintiff’s action which was instituted in 2013 was
based in delict and that the curator on behalf of Mr Reyners sued PRASA for delictual
damages. PRASA had admitted liability for 80% of the plaintiff’s damages and at the
conclusion of its judgment, the trial Court awarded the plaintiff damages in the amounts
as set out in paragraph 1 of its order.
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26. The plaintiff submits that a distinction must be drawn between a liquidated and an
unliquidated debt, and submissions were made regarding the moment when an
unliquidated debt becomes liquidated. The argument is that prior to the trial Court’s
judgment and fixing of the quantum of damages to be awarded to the plaintiff, PRASA
owed an obligation to the plaintiff as the quantum of such obligation had not been reduced
to a definite sum of money, hence, it was an unliquidated debt. The significance of the
distinction if the plaintiff’s argument is followed, relates to pre -judgment interest, which I
proceed to consider, commencing with the common law approach.
27. In Victoria Falls & Transvaal Power Co. Ltd v Consolidated Langlaagte Mines
Ltd18, Innes CJ stated the following with regard to the characteristic attaching to a claim
for unliquidated damages:
“But it is not necessary to pursue that line of enquiry, because the question with
which we are concerned is whether in a claim for unliquidated damages only
ascertainable as to amount, after a long and intricate investigation, the defendant
can properly be held liable for interest, prior to judgment upon the sum finally
assessed.”
(My emphasis)
28. Several years later, the Appellate Division in Union Government v Jackson and
Others19 described an unliquidated debt as “an obligation which has not yet been reduced
to a definite sum of money”. Furthermore, in an appeal against a final sequestration order,
the Court in Kleynhans v Van der Westhuizen NO20, considered the difference between
a liquidated and unliquidated claim, and with reference to various earlier authorities 21,
concluded that in respect of a claim for damages, it is usually unliquidated as the amount
thereof is “uncertain and has to be determined by the Court” 22. Thus, I accept the
18 1915 AD 1 at 31-32
19 1956 (2) AD 412 E-F
20 1970 (1) SA (O) at 567A-568B
21 See authorities referred to on pages 567 to 568, for example, SA Fire & Accident Insurance Co. Ltd v Hickman 1955
(2) SA 131 (C), Toucher v Stinnes (SA) Ltd 1934 CPD 184 at 189
22 Kleynhans supra at 568A
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submission that an unliquidated debt owed by a debtor becomes liquidated upon the trial
Court’s fixing of the quantum of such damages.
29. The common law approach to interest on an unliquidated debt then envisages a
consideration of what is meant by mora, a term often used when discussing the liability
of a debtor for the payment of interest. Returning to the Victoria Falls judgment, one
sees that a distinction is drawn between mora ex re , wrongful default arising out of a
transaction and mora ex persona, default arising out of a debtor’s conduct23. In the more
recent judgment of Griffiths v Janse van Rensburg and Another24, the concept of mora
is described as relating to “the time at which an obligation is due”25 and that Court stated
further that “…the debtor is not in mora until the payment is due”.
30. This approach and findings support similar findings in the Victoria Falls and Union
Government judgments because it follows that if a debtor did not know and could not
ascertain the amount of his indebtedness to another, it must be that he would not be in
mora until the payment is due by him. Put another way, in respect of an unliquidated
damages claim under the common law, mora interest or pre-judgment interest could not
be awarded as the amount had not been determined or fixed by a Court . This common
law principle was again recognized by t he SCA in Adel Builders (Pty) Ltd v
Thompson26.
31. This brings me to the Prescribed Rate of Interest Act 55 of 1975 (the Act) which
provides for the calculation of interest in certain circumstances, at a prescribed rate on
certain judgment debts. Section 2A was introduced into the aforementioned Act by the
Prescribed Rate of Interest Amendment Act 7 of 1997, and it provides Courts with the
authority to award pre-judgment interest on unliquidated debts. The following sections of
the Act are highlighted:
23 Victoria Falls supra, p31
24 2016 (3) SA 389 (SCA) par 35
25 Par 35 of the judgment
26 2000 (4) SA 1027 (SCA) at par 11
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1. Rate at which interest on debt is calculated in certain circumstances
(1) If a debt bears interest and the rate at which the interest is to be
calculated is not governed by any other law or by an agreement or a trade
custom or in any other manner, such interest shall be calculated at the
rate contemplated in subsection (2)(a) as at the time when such interest
begins to run, unless a court of law, on the ground of special
circumstances relating to that debt, orders otherwise.
(2) (a)…
(b)…
(c )…
2. Interest on a judgment debt
(1) Every judgment debt which, but for the provisions of this subsection,
would not bear any interest after the date of the judgment or order by
virtue of which it is due, shall bear interest from the day on which such
judgment debt is payable, unless that judgment or order provides
otherwise.
(2) 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.
(3) In this section “judgment debt” means a sum of money due in terms of a
judgment or an order, including an order as to costs, of a court of law, and
includes any part of such a sum of money, but does not include any
interest not forming part of the principal sum of a judgment debt.
2A. Interest on unliquidated debts
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(1) Subject to the provisions of this section the amount of every unliquidated
debt as determined by a court of law, or an arbitrator or an arbitration tribunal or by
agreement between the creditor and the debtor, shall bear interest as
contemplated in section 1.
(2)
(a) Subject to any other agreement between the parties and the provisions of the
National Credit Act, 2005 the interest contemplated in subsection (1) 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 date is the earlier.
[S 2A(2)(a) am by s 172(2) (Sch 2) of Act 34 of 2005.]
(b) In the case of arbitration proceedings and subject to any other agreement
between the parties, interest shall run from the date on which the creditor
takes steps to commence arbitration proceedings, or any of the dates
contemplated in paragraph (a), whichever date is the earlier.
(3) The interest on that part of a debt which consists of the present value of a
loss which will occur in the future shall not commence to run until the date upon
which the quantum of that part is determined by judgment, arbitration or
agreement and any such part determined by arbitration or agreement shall for the
purposes of this Act be deemed to be a judgment debt.
(4) Where a debtor offers to settle a debt by making a payment into court or a
tender and the creditor accepts the payment or tender, or a court of law awards an
amount not exceeding such payment or tender, the running of interest shall be
interrupted from the date of the payment into court or the tender until the date of
the said acceptance or award.
(5) Notwithstanding the provisions of this Act but subject to any other law or
an agreement between the parties, a court of law, or an arbitrator or an arbitration
tribunal may make such order as appears just in respect of the payment of interest
17
on an unliquidated debt, the rate at which interest shall accrue and the date from
which interest shall run.
(6) The provisions of section 2(2) shall apply mutatis mutandis to interest
recoverable under this section.
[S 2A ins by s 1 of Act 7 of 1997.]
(My emphasis)
32. Following on from the authorities referred to above and the Act, the plaintiff argues
that the award of pre-judgment interest on unliquidated damages in terms of section 2A(1)
is interest that was not due until the date of the Court’s judgment, which is when the
capital amount was determined and upon which capital sum, pre -judgment interest is
awarded. The further submission is that such interest cannot be called arrear interes t as
it was not in arrears until the judgment date when the capital was fixed by the trial Court.
33. The plaintiff thus holds the view that because an unliquidated debt is not due until
the Court’s judgment fixes or grants it, thus the in duplum rule does not apply to pre -
judgment interest on unliquidated debts but only applies to arrear interest and post -
judgment interest. PRASA’s argument on this point is that in terms of the common law,
the debt bears mora interest and thus section 1(1) of the Act applies, and furthermore,
that the in duplum rule applies ex lege.
Pre-judgment interest and the in duplum rule in this matter
34. With reference to the Act, it is important to note that section 2A(1) refers to “ the
amount of every unliquidated debt as determined by a court of law … shall bear interest
as contemplated in section 1”. In my view, section 2A must be read with section 2 which
deals with interest on a judgment debt generally.
18
35. Pre-judgment interest would refer to the period from service of the Summons on
23 August 2013 to judgment on 3 June 2020, and I shall accept that the pre -judgment
interest award was made in terms of section 2A of the Act on an unliquidated debt, which
then became liquid when the Court fixed the quantum of damages owed by PRASA.
36. The in duplum rule, simply put, is that interest stops running once unpaid interest
equals the capital sum 27, or as the plaintiff’s counsel submitted, once “the double” has
been reached. Insofar as the application of the in duplum rule is concerned, Sanlam Life
Insurance Ltd v South African Breweries28 is authority for the view that the rule applies
to arrear interest only. Arrear interest would be interest which accrued because it already
became due and payable at the time of it being claimed, in other words, prior to the Court’s
judgment29.
37. In this matter, given that the plaintiff’s claim was for unliquidated damages, which
then became fixed when the trial Court assessed and then awarded damages as set out
in its order, plus interest payable thereon from the date of service of the Summons, it
cannot be said nor held that such pre-judgment interest is or was arrear interest. Prior to
the fixing of the quantum, at best for the plaintiff, PRASA had an obligation to the plaintiff
on behalf of Mr Reyners in respect of the unliquidated damages . I emphasise that
PRASA’s obligation was not due until the payment was due hence it cannot be said that
PRASA was in mora30 until the payment was due. Put differently, and having regard to
the discussion and reference to the authorities earlier in the judgment, PRASA’s payment
was not due until such time that the trial Court pronounced upon and fixed the quantum
of damages.
38. Turning to the Act, and having regard to the wording of the trial Court’s order, I
share the view held by counsel for the plaintiff, that the trial Court awarded pre-judgment
27 LTA Construction BPK v Administrator, Transvaal 1992 (1) SA 473 (A 482A -B; Sanlam Life Insurance Ltd v South
African Breweries Ltd 2000 (2) SA647 WLD 655 D-E
28 Supra footnote 28 at 655D-E
29 Sanlam Life supra at 654F-I
30 Griffiths v Janse van Rensburg supra par 35
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interest in terms of section 2A(2) of the Act as it awarded interest on the capital sum as
from date of service of the Summons on PRASA.
39. The plaintiff relies on Drake Flemmer & Orsmond Inc and Another v Gajjar 31,
a judgment of the SCA, while PRASA has tellingly not addressed this judgment in its
submissions. I point out that most, if not all, the recent authorities which PRASA rely upon,
relate to interest and the in duplum rule on liquid claims as opposed to an unliquidated
debt such as the plaintiff’s damages claim. In Drake Flemmer, Rogers AJA (as he then
was) writing for the Court, considered the application of the in duplum rule to pre-judgment
interest on an unliquidated debt.
40. At paragraph [83] of Drake Flemmer, the SCA stated that interest is not ordinarily
awarded from a date earlier than demand or service of Summons. Furthermore, having
regard to Da Cruz v Barnardo 32 and Watson and Another v Renasa Insurance
Company Limited33, it is evident that the in duplum rule applies to pre-judgment interest
which is arrear interest and that not all debts that attract interest are hit by the in duplum
rule. The important point is that these factors are not considered nor addressed in
PRASA’s argument which advances the view that the in duplum rule applies in this matter
because it operates ex lege.
41. In my view, PRASA’s reliance on the Constitutional Court judgment of Paulsen v
Slip Knot Investment 777 34 for its contention that the in duplum rule applies to pre-
judgment interest attaching to all judgment debts loses sight of the fact that here we are
dealing with an unliquidated debt , where there was no arrear interest, and in Paulsen,
the Court considered a loan agreement between the parties in terms of which the
Paulsens had bound themselves as sureties. Furthermore, while the general principles
regarding the in duplum rule were addressed in Paulsen35, the Constitutional Court did
31 2018 (3) SA 353 (SCA)
32 [2022] 1 All SA 414 (GJ) para 41-43
33 [2019] ZAWCHC 7 par 71
34 2015 (3) SA 479 (CC)
35 From par [43] of the judgment
20
not address the application of the rule to pre -judgment interest, in relation to an
unliquidated debt.
42. Thus, the argument that the in duplum rule does apply to pre-judgment interest in
this matter, without addressing authorities such as Drake Flemmer , is unconvincing.
Having regard to the above discussion and findings, I hold a similar view as counsel for
the plaintiff, that there was no arrear interest in that interest had not accrued and was not
due prior to the trial Court’s judgment.
43. It is not necessary, in my view, to determine whether the pre -judgment interest
awarded by the trial Court in its order was also awarded having exercised a discretion in
terms of section 2A(5) of the Act, because as stated above, my finding is that the t rial
Court did so in terms of section 2A(2), read with section 2A(1) and (6). To conclude this
point, I find that the in duplum rule is not applicable to the award of pre-judgment interest
in this matter.
Post-judgment interest
44. The parties are agreed that the in duplum rule does apply to post-judgment
interest, however, they differ on the date from which to calculate that interest and also the
prescribed rate at which interest is to be calculated. In this regard, I refer to the parties’
respective calculations earlier in the judgment. The plaintiff is of the view that post -
judgment interest is calculated and runs from the date of the trial Court’s judgment on 3
June 2020, while PRASA submits that it runs from the date of the SCA judgment which
upheld the plaintiff’s appeal, being 28 November 2023.
45. In order to solve this dispute, the question is whether post -judgment interest is
calculated on the capital sum only or on the judgment debt. Turning to Paulsen36 yet
again, the Constitutional Court, when determining whether post-judgment interest ran on
36 2015 (3) SA 479 (CC) at para 99-100
21
the whole judgment debt or only the capital amount, did not disagree with the SCA’s
findings in the earlier appeal to the effect that post-judgment interest ran on the whole of
the judgment debt including accrued interest. This is echoed in various authori ties such
as Drake Flemmer, which makes it clear that the interest runs on the capital plus pre -
judgment interest awarded thereon37. Thus, the capital sum plus pre -judgment interest
constitute the judgment debt.
46. Secondly, in respect of the date of commencement of the running of post-judgment
interest, Mdlanga J in Paulsen writing for the majority, stated the following38:
“Post-judgment interest
[96] It is settled law that the in duplum rule permits interest to run anew from the
date that the judgment debt is due and payable. 39 The usual practice for
appellate courts, including this Court, is to retain the date on which the court of
first instance handed down judgment as the date on which judgment debts are
due and payable .40 In oral argument, counsel for both the Paulsens and Slip
Knot accepted that in the order, for the purposes of calculating post -judgment
interest, the date on which the High Court entered judgment should be replaced
with the date on which this Court hands down judgment.
37 Supra par 87
38 I have retained the citations and references as they appear in the footnotes to paragraphs [96] to [98] of the
Paulsen judgment
39 See Oneanate above n 15 at 834H; Stroebel above n 74 at 139D-E; Commercial Bank of Zimbabwe above n 64 at
300B-C; and Absa Bank Ltd v Erasmus [2006] ZAWHCC 25; 2007 (2) SA 545 (C) (Erasmus) at paras 29-30.
40 See Occupiers of Saratoga Avenue v City of Johannesburg Metropolitan Municipality and Another [2012] ZACC 9;
2012 (9) BCLR 951 (CC) at paras 7-8 which quoted, with approval, General Accident Versekeringsmaatskappy Suid-
Afrika Bpk v Bailey NO 1988 (4) SA 353 (A) at 358H-I.
22
[97] Were the High Court’s date of judgment to be used as the date from which
the judgment debt is due and payable, this would have the effect of suspending
the in duplum rule for the pendency of the appellate litigation, thus allowing
interest to accrue during this period. The same reasons that led me to conclude
that the rule applies pendente lite, lead to the conclusion that the date this Court
hands down judgment should be the date from which the running of interest
recommences. I am, therefore, of the view that we should oblige the request of
the parties.
[98] However, I emphasise that this logic applies because the Paulsens’ appeal
was meritorious, and indeed the order I propose differs materially from that of
the High Court and Supreme Court of Appeal. I am here not concerned with
totally unmeritorious, unsuccessful appeals brought as a dilatory tactic. In such
instances, different considerations must apply, for the reasons explained by
Labe J in Certain Underwriters.41”
47. From the above paragraphs in Paulsen, it is evident that the Constitutional Court
recognised that judgment debts are due and payable from the date on which the trial
Court or Court of first instance gave judgment. Moreover, the Paulsens’ circumstances
were very specific and peculiar in that as debtors, the capital in respect of a loan
agreement was R12 million but due to accrued interest, it had ballooned to R72 million
by the time the matter came before the Constitutional Court. They were the successful
41 In a dissent in Certain Underwriters at Lloyds v South African Special Risks Association [2000] ZAGPHC 2; 2001 (1)
SA 744 at para 15, Labe J explained that it is “common sense” that interest should run from the date of judgment in
the court of first instance and not from the date of the judgment in the court of appeal because “it is unthinkable
that a [losing] party . . . should be entitled to lodge a frivolous appeal against an award, and thereby delay the period
from which i nterest should run on the award”. This reasoning plainly does not apply to meritorious, successful
appeals.
23
debtors to a large extent and it is apparent from the quoted paragraphs, that before the
Constitutional Court, the parties had either agreed or accepted, that for purposes of
calculating post-judgment interest, the High Court (Court a quo) judgment date would be
replaced with the date of the Constitutional Court ’s judgment. Thus, in doing so, the
Constitutional Court departed from the “usual practice” that post -judgment interest was
calculated from the date of the trial Court’s judgment, that is, the date when the judgment
debt becomes due and payable.
48. PRASA’s submission is that the date of the SCA’s appeal judgment should be used
to commence the running of post-judgment interest because, it argues, Paulsen says
that it is the date of the appeal judgment which should be the commencement date of the
interest calculation. I disagree with this view because the point must be made that the
Constitutional Court’s decision to use its judgment date to calculate post -judgment
interest was based on the parties’ agreement /acknowledgement to do so, the Paulsen’s
massive judgment debt which was largely made up of accrued interest and that the
Paulsens were the successful debtors in that Court . Furthermore, the circumstances
which led the Constitutional Court to use its own judgment date instead of the High Court
judgment date was the exception to the general rule and practice regarding the
commencement date of post-judgment interest, as seen from the above discussion of the
judgment.
49. Significantly, Paulsen, in my view, did not do away with the rule or practice, as
referred to in General Accident Versekeringsmaatskappy SA BK v Bailey NO 42, that
the date on which the trial Court handed down judgment, is the date upon which the debt
is due, and it follows, th at it is that date (when the debt is due) which constitutes the
commencement date for the running of post-judgment interest, in this instance, 3 June
2020. Lastly, section 2(1) of the Act makes it clear that every judgment debt “shall bear
interest from the day on which such judgment debt is payable”. There can thus be no
doubt that the day on which the judgment debt becomes due and payable is the day on
which the trial Court’s judgment is handed down.
42 1988 (4) SA 353 (A) 358-359
24
50. Insofar as the rate of interest applicable, the 11,75% used by PRASA is
unsustainable as it relates to the prescribed rate of interest as at the SCA appeal
judgment date, which I have already found is not the commencement date for the
calculation of post-judgment interest. I have considered the plaintiff’s submissions that he
has continued to apply 15,5% interest per annum from the trial Court’s judgment date to
date of payment. In doing so, he relies on Davehill (Pty) Ltd v Community Development
Board43 which states that:
“The rate prescribed under subsection (2) at the time when interest begins
to run governs the calculation of interest. The rate is fixed at that time and
remains constant. Subsection (1) does not provide for the rate to vary from
time to time in accordance with adjustments made to the prescribed rate.by
the Minister of Justice in terms of subsection (2). The fact that the Minister
may from time to time prescribe different rates of interest therefore has no
effect on the rate applicable to interest which has already begun to run.”
51. By all accounts the reliance on Davehill seems to suggest that the 15,5% interest
rate awarded in the trial Court’s order in respect of pre -judgment interest should be
constant and applicable to the calculation of post -judgment interest as well . Thus,
Davehill is authority that the rate of interest which applied at the commencement of the
matter, should apply throughout. However, the recent SCA judgment of Member of
Executive Council Police, Roads and Transport, Free State Provincial Government
v Bovicon Consulting Engineer CC and Others 44, which does not refer to Davehill,
holds at paragraph [11] that:
“Accordingly, the appropriate rate of interest would be that prevailing at the time
when judgment was granted in the high court”45.
(my emphasis)
43 1988 (1) SA 290 AD 301A-B
44 2023 JDR 2090 (SCA) para 11, 18
45 The judgment emanated from the High Court
25
52. In Bovicon, the SCA replaced the High Court’s order of 15,5% with the prescribed
interest rate applicable at the time when the High Court judgment was granted. Having
regard to the above authorities and the provisions of section 1(1) read with sub -section
1(2) of the Act, I am more inclined to align myself with the Bovicon judgment that the
applicable rate to apply to post -judgment interest is the rate of interest applicable at the
time that the trial Court delivered its judgment, on 3 June 2020, as opposed to the 15,5%
per annum applicable when the matter commenced. Accordingly, th e rate of interest
applicable on the 3 June 2020 was 9,75% which I find applicable to post -judgment
interest46.
Conclusion and costs
53. The submission by PRASA in reply that regard must be had to the definition of
“debt” and the Prescription Act 68 of 1969 in that a delictual claim will give rise to a debt,
does not advance PRASA’s case in this matter. In view of my findings above, the
calculation submitted by PRASA in its Part B application is thus incorrect for a number of
reasons apparent from my discussion and findings in this judgment . Furthermore, my
finding is that the in duplum rule is not applicable to the pre -judgment interest and that
the post-judgment interest rate of 9,75% is applicable as from 3 June 2020. I have had
regard to the plaintiff’s calculations as set out in its annexures referred to in the judgment
and given the finding on the interest rate, I agree that the calculation of the amount still
due to the plaintiff is as set out in schedule/annexure JC1B (copy attached hereto).
54. Furthermore, the in duplum rule finds no application because the post -judgment
interest has not yet reached the double of the judgment debt which is R6 657 248,9847.
To clarify, the post-judgment interest which has accrued on the judgment debt as at 7
August 2024 is R2 454 062, 61 + R56 905, 80 + R67 986,61 = R2 578 955, 02 48, hence
46 GNR 397 of 27 March 2020 (GG No. 43146)
47 C on annexure JC1B
48 D+G+J on annexure JC1B
26
the running of such interest has not yet become capped and suspended by the in duplum
rule. On the calculation as per JC1B, I find that PRASA’s net amount still due to the
plaintiff is R2 320 322, 68.
55. On the issue of costs, I have considered the submissions of the parties and see
no reason why the merits related to Part A should be considered in light of the fact that
the parties reached agreement on 19 April 2024 as to the conduct of the matter. Given
the disparity in calculations and disputes on material issues such as the applicability of
the in duplum rule, the commencement date of the running of post-judgment interest, and
the rate of interest, I disagree with PRASA’s view that the Plaintiff’s decalarator
application was not necessary. As costs are in the discretion of the Court, and the plaintiff
is successful, the costs awarded shall include costs related to Part A which stood over on
19 April 2024.
Order
56. In the result, the following order is granted:
56.1 The application for relief claimed in Part B of the application is dismissed
with costs (see paragraph 56.3 below).
56.2 The counter-application is granted in the following terms:
It is declared that as at 7 August 2024, and after taking into account
payments made by the applicant (PRASA) pursuant to the judgment
of the trial Court dated 3 June 2020 under the above case number, the
applicant is presently obliged to pay the first respondent (plaintiff) a balance
of R2 320 322, 68, which amount is presently due, owing and
payable, together with interest thereon at the rate of 9,75% per annum from
such date to date of payment.
27
56.3 The applicant is ordered to pay the first respondent’s costs of Part A and
Part B of the application which shall include costs of 19 April 2024 and costs
related to steps taken in execution of the trial Court’s judgment, as well as
costs of the counter application. Costs include the costs of two counsel
where so employed on scale C.
___________________________
M PANGARKER
ACTING JUDGE OF THE HIGH COURT
For Applicant F Nalane SC
E Muller
Instructed by: AMMM Attorneys Inc.
Mr E Malapane
For Respondents: M Crowe SC
P McKenzie
Instructed by: Jonathan Cohen & Associates Attorneys
Mr J Cohen
28
JC 1B
WCHC Case No. 13654/13: calculation of net amount still due as at current date, being 7 August 2024
( 15.5% until Judgment,9,75% thereafter on the capital sum + pre-judgment interest )
Date of service of Summons 23 August
2013
A = The capital sum of the trial court's judgment 3 246 484,00
Judgment date 03 June 2020
No. of days from service of Summons to Judgment date 2 476
Applicable Interest Rate 15,50%
No. of leap years between service of Summons and Judgment date
B = Pre-judgment interest on the capital sum from the date of service of the summons to
2,00
the judgment date 3 410 764,98
C = (A + B) = The capital sum + pre-judgment interest thereon (as at the judgment date 6 657 248,98
First Payment date 15-Mar-24
First amount paid by PRASA 3 326 484
Applicable Interest Rate 9,75%
No. of days from Judgment date until First Payment date 1 381
No. of leap years between Judgment date and First Payment date 1,00
D = Interest accrued on amount C until First Payment date 2 454 062,61
E = (C + D) = Total amount due on First Payment date 9 111 311,59
Less: Amount of first payment 3 326 484
F = Net amount still due on First Payment date, after First Payment made 5 784 828
Second Payment Date 16-Apr-24
Second amount paid by PRASA 3 589 397,32
Applicable Interest Rate 9,75%
No. of days from First Payment date to Second Payment date 32,00
G = Interest accrued on amount F until Second Payment date 56 905,80
H = (F + G) = Total amount due on Second Payment date 5 841 733,39
Less: Amount of the second payment 3 589 397,32
29
I = Net amount still due on Second Payment date, after Second Payment made 2 252 336,07
Current date 07 August
2024
J = Interest accrued on amount I until current date 67 986,61
No. of days since Second Payment 113
No. of leap years in between 0,00
K = (I + J) = Net amount still due on Current date (in duplum rule NOT applied) 2 320 322,68