‘No interest calculated on the amount of any compensation which a court awards to any third party by virtue of the provisions of subsection (1) shall be payable unless 14 days have elapsed from the date of the court’s relevant order’ (s 17(3)(a) of the Road Accident Fund Act 56 of 1996 as amended).
It is no secret, that in recent years, for many reasons, the Road Accident Fund (RAF) has faced many challenges, one being its inability to make payment of awards to road accident victims timeously in terms of court orders handed down in these matters or in terms of settlement agreements it has concluded with road accident victims or their attorneys. In this article, I refrain from examining or debating the reasons for this unfortunate state of affairs, save for stating that over the past few years, the RAF has approached our courts and have obtained orders extending the dates for payment to 180 days from the date of the orders or settlements as a temporary measure to assist it in navigating and resolving the financial challenges it faces.
This article examines the question of the payment of interest accruing on the arrear payments of compensation.
This very issue was considered in the matter of Jacobs NO v Road Accident Fund (GJ) (unreported case no 2022/22121, 5-1-2024) (Nkutha-Nkontwana J).
The RAF argued that it has become standard practice for any award of damages to road accident victims to become due and payable after 180 days, from the date of the court order or settlement agreement and fortified its submission by relying on the judgments of Road Accident Fund v Legal Practice Council and Others 2021 (6) SA 230 (GP) and Motaung and Others v Road Accident Fund (GP) (unreported case no 26222/15, 7-3-2023) (Khumalo J). On this basis, the RAF was afforded an extension of 180 days from the date of the court order or settlement in all matters within which to make payment and interest cannot begin to accrue until the expiry of the extended period. On behalf of the plaintiff, it was contended that s 17(3)(a) of the Road Accident Fund Act 56 of 1996 (the Act), as amended, is unambiguous in that interest on arrears payment begins to start running 14 days from the date of the court order, despite the grant of the extension.
In finding that the submissions of the RAF were untenable in the matter before it, the court had regard to the matter of Kujawa NO obo MN v Road Accident Fund (WCC) (unreported case no 18198/2018, 19-6-2023) (Baartman J), which held that there is no authority for the proposition that a court has the power to disallow interest on default (being mora interest) once a debtor’s obligation to make payment has already arisen.
In this matter the court had regard to the provisions of ss 2 and 2A of the Prescribed Rate of Interest Act 55 of 1975 (PRIA), which provides every judgment debt which includes a judgment of an unliquidated claim (which is what a judgment for compensation to a road accident victim amounts to) shall bear interest from the date on which payment in terms of the court order or settlement falls due subject of course to s 17(3)(a) of the Act.
The court also held that a judgment debt also includes an order for costs. Thus, interest on the capital amount awarded commences to run on the 15-calendar day, following the date of judgment or settlement and on the costs on the 15-calendar day, following the date of the affixing of the taxing Master’s allocatur to the bill, or the date on which agreement is reached between the parties of the quantum of the bill.
The Western Cape Division of the High Court also considered this issue in the matter of Stoffels and Another v Road Accident Fund (WCC) (unreported case no 20656/2023, 25-6-2024) (Gassner AJ).
In both claims (heard together) payments were made late and, the RAF initially argued that it was not liable to pay interest on the late payment because its Treasury Department declined to do so, because the court orders did not provide for it. The RAF had issued an internal directive that court orders needed to contain a clause specifying the obligation to pay interest on the capital sum and on costs.
The court in this matter also had regard to s 17(3)(a) of the Act and ss 2 and 2A of PRIA and found that PRIA applies to all judgment debts including the provisions of s 17(3)(a) of the Act.
As there was uncertainty as to the existence of the RAF internal directive the court did not make any finding in respect of its validity or otherwise. This arose due to conflicting averments made by the RAF in their papers and in their argument before the court.
The court thus handed down orders confirming the plaintiffs’ entitlement to interest on the capital sum, running from 14 days from the date of judgment, and on the costs, from 14 days from the date of the allocatur of the taxing master or from the date of the agreement on costs.
I conclude this article by making a reference to the decision of Antwerpen obo Scholtz and Another v Road Accident Fund and Another (GP) (unreported case no 41371/2021, 29-7-2024) (Fisher J) in which the plaintiff brought an application to hold the Chief Executive Officer of the RAF to –
The court declined to grant this application primarily on the grounds that there was a misjoinder in that the applicant failed to join the Minister of Transport as a party to the action. The court was faced with an application for leave to appeal which was declined and there is a pending possibility of leave to appeal being sought from the Supreme Court of Appeal. The court was not requested to make any finding as to the date on which interest on the arrears would commence to run and did not do so. For obvious reasons, this issue will not be dealt with in this article. However, news has just come to hand to the effect that leave to appeal this judgment has been granted.
Leslie Kobrin Dip Jur (Wits) Dip Bus Man (Damelin) is a consultant legal practitioner at Bove Attorneys Inc in Johannesburg.
This article was first published in De Rebus in 2025 (March) DR 10.
