BY Aslam Moosajee AND Vishana Makan
How far is too far for judgment creditors when causing a writ to be issued?
In the recent Supreme Court of Appeal (“SCA”) judgment of Rand West City Local Municipality v Quill Associates (Pty) Ltd and Another, the SCA set aside a writ of execution issued at the instance of the first respondent, Quill Associates (Pty) Ltd (“Quill”), purportedly in accordance with an order of the Gauteng High Court. The writ was issued against the appellant, the Rand West Local Municipality (“the Municipality”).
In 2015, Quill obtained a monetary judgment in its favour against the Municipality together with “interest on the said amounts at a rate of 15.5% per annum ad tempore more” and “VAT if VAT is payable on the amounts so ordered”. The Municipality made payments towards the judgment debt and Quill instructed the Registrar of the High Court to issue a writ of execution for payment of the outstanding balance.
In the affidavit in support of the writ, Quill submitted that interest had to be calculated from the date of service of the summons to the date of payment “capitalized monthly” and that interest on the balance after payment had to be “compounded monthly”. Quill further claimed that VAT was payable. These claims were subsequently included by the Registrar in the writ.
The Deputy Sheriff subsequently executed the writ by attaching approximately ZAR7.9-million in the Municipality’s bank account. The Municipality instituted an application for an order reviewing and setting aside the writ on the basis that the writ was not in accordance with the Gauteng High Court order. In particular, the Municipality argued that the court order did not provide for interest to run from the date of summons, or for compound interest and VAT. The court a quo dismissed the review application with costs.
The SCA stated that it is trite that a writ will be set aside where it does not accord with the order on which it was purportedly issued, where the facts show that the debt has been satisfied or the underlying order has itself been set aside. The SCA found that a registrar does not engage in administrative action when issuing a writ and therefore the decision cannot be reviewed under the Promotion of Administrative Justice Act, 2000 (“PAJA”). Instead, such a decision ought to be challenged under the principle of legality.
In determining the issue of whether compound interest ought to have been included in the writ, the SCA held that Quill did not pray for compound interest when seeking the original monetary judgment and that compound interest is claimable only in certain defined instances, which were not asserted, considered or applicable in the present case. Regarding the issue of VAT, the SCA held that the original order was impermissibly vague and unenforceable and found in favour of the Municipality.
In its closing remarks, the SCA stated that “Quill sought more than its pound of flesh” in that the writ was not in accordance with the order. The writ was accordingly set aside.
Litigators ought to be careful when causing a writ to be issued to ensure strict compliance with both the Uniform Rules of Court and the wording of the underlying order.
Executive | Dispute Resolution
+27 82 461 5917
Associate | Dispute Resolution
+27 66 493 2372