- The RAF's effort to cancel writs for interest was dismissed, and the entity was ordered to pay costs.
- The court confirmed that interest ex mora is automatic under the PRIA and the RAF Act, even if not mentioned in judgments.
- Claimants do not need new court orders before executing writs for interest. The court stated that even without a mention of interest in a court order, claimants still have a legal right to it. Thus, they can enforce writs for interest without needing a new order.
The Mpumalanga High Court has dismissed the Road Accident Fund’s (RAF) effort to avoid paying interest on 13 settled claims. The court ruled that even if a court order does not mention interest, claimants are still entitled to it by law. As a result, claimants can enforce writs for interest without needing a new court order.
Deputy Judge President TV Ratshibvumo, who delivered the ruling, dismissed the RAF’s request to invalidate writs for interest issued on 13 settled claims. The RAF had argued that because the original court orders were silent on interest, claimants were not entitled to receive it. The court disagreed.
“The First to Thirteenth Respondents claimed compensation from the Applicant, and their claims were all settled,” Judge Ratshibvumo stated. “Each settlement agreement was made an order of the court. While these agreements did not specify interest on the capital amounts, the Respondents later applied to the Registrar and were granted warrants of execution for interest.”
The RAF’s application was divided into two parts: Part A, heard urgently, sought to prohibit the Sheriff from seizing RAF assets; Part B, the primary request, aimed to set aside the writs because the original judgments did not mention interest.
Statutory entitlement and precedent
While the respondents acknowledged the RAF’s factual claims, they insisted they were entitled to interest under Section 2 of the Prescribed Rate of Interest Act (PRIA) and Section 17(3)(a) of the Road Accident Fund Act. The court concurred.
Judge Ratshibvumo cited section 2(1) of the PRIA: “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.”
He further cited section 17(3)(a) of the RAF Act: “No interest calculated on the amount of any compensation which a court awards to any third party shall be payable unless 14 days have elapsed from the date of the court’s relevant order.”
In this case, the RAF failed to make payment within the statutory 14-day period and, in two instances, missed an additional 180-day window that had been expressly agreed to.
Silence does not mean exclusion
The judgment referenced several precedents to reinforce that interest ex mora does not depend on express contractual provisions. In ABSA Bank v Du Toit, the court rejected the idea that interest must be specified in a debt instrument. Judge Ratshibvumo wrote: “It was considered outrageous to suggest that, in the absence of a debt deed, even default interest cannot be charged.”
He also cited Linton v Corser, where Judge C Centlivres stated: “Interest tempore morae could still be claimed even when the sale agreement made no provision for it. Interest is the ‘lifeblood of finance’ in modern times.”
This principle was echoed in Nedbank v Houtbosplaas, where Judge DP Petse observed: “A party who has been deprived of the use of his or her capital for a period of time has suffered a loss and does not need to prove special damages.”
Misreading Stoffels
The RAF relied on Stoffels v RAF, alleging that claimants must seek a separate court order to recover interest. Judge Ratshibvumo rejected this reading: “I believe the Applicant’s interpretation of the Stoffels judgment in this respect is flawed and not supported by the reasoning within it.”
He clarified that Stoffels did not require fresh judicial intervention and instead aligned with RAF v Sheriff Pretoria East, which upheld the validity of writs issued for interest, even where original judgments were silent.
“Section 2 of the PRIA was established for contracts or debt instruments that do not specify interest; any other interpretation would render its provisions unnecessary, which would be absurd.”
Final order and implications
The court dismissed the RAF’s application (Part B) with costs on a party-and-party scale. The writs of execution for interest remain valid, and the Sheriff is no longer barred from acting on them. “The application (Part B) is dismissed with costs calculated on party-and-party scale B.”
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