The Supreme Court of Appeal considered two consolidated appeals arising from claims against the Road Accident Fund (RAF), addressing a single critical question: is the RAF liable to pay post-judgment interest on awarded damages where the court order is silent on the matter and can that interest be enforced through execution?
In both matters, the respondents obtained judgments against the RAF for substantial damages following motor vehicle accidents. The RAF delayed payment by approximately six to seven months after judgment. Although it ultimately paid the damages awarded, it refused to pay interest on the late payment, arguing that where a court order is silent on interest, no liability arises.
The court rejected the RAF's position. Applying the interpretive principles from Natal Joint Municipal Pension Fund v Endumeni Municipality, it held that section 2(1) of the Prescribed Interest Rate Act 55 of 1975 (PRIA) must be interpreted contextually and purposively. Section 2(1) provides that every judgment debt bears interest from the date it becomes payable, unless the order provides otherwise. Accordingly, interest arises automatically by operation of law; it is not contingent upon an express court order. The court confirmed this position through reliance on General Accident Versekeringsmaatskappy Suid-Afrika Beperk v Bailey NO and subsequent authority, which abolished any common-law requirement that post-judgment interest must be expressly claimed.
Once a court quantifies and awards compensation, the claim crystallises into a judgment debt irrespective of whether the original claim was liquidated or unliquidated. The court also confirmed that cost orders fall within the definition of a "judgment debt" under section 2(3) of PRIA.
The general operation of section 2(1) is modified, in the RAF's case, by section 17(3)(a) of the Road Accident Fund Act 56 of 1996, which provides that no interest is payable unless 14 days have elapsed from the date of the court order. This introduces a grace period but does not extinguish the right to interest altogether.
The RAF argued that fluctuating prescribed interest rates created sufficient uncertainty to justify non-payment. The court rejected this, confirming that the prescribed rate is objectively ascertainable by reference to the South African Reserve Bank's determination, which takes effect on the first day of the second month after publication, irrespective of any delays in ministerial publication.
The RAF further attempted to impede execution by demanding additional affidavits and interest calculations before permitting sheriffs to issue and execute writs. The court firmly rejected this approach, emphasising that the clarity of the statutory framework leaves no room for procedural obstruction.
The judgment confirms that the RAF cannot exploit procedural ambiguity to avoid its obligations. Post-judgment interest accrues ex lege, is enforceable and, where necessary, executable without requiring creditors to initiate further litigation.
