Rand West City Local Municipality v Quill Associates (Pty) Ltd and Another

During 1998, a predecessor of the appellant Municipality concluded an agreement with Quill Associates (Pty) Ltd (Quill) to purchase a software program (the BIQ program) with annual support and maintenance. In 2004, a new agreement was entered into after a name change. In July 2011, the Municipality's predecessor gave notice to terminate the agreement but continued using the BIQ program on a month-to-month basis without paying licence fees. Quill instituted action in the High Court for copyright infringement under section 24(1) of the Copyright Act 98 of 1978. On 31 July 2015, the trial court (Potterill J) found copyright infringement and granted interdictory relief plus a monetary judgment for reasonable royalty with 'interest on the said amounts at a rate of 15.5% per annum ad tempore morae; VAT if VAT is payable on the amounts so ordered.' The appellant made certain payments. Quill then caused a writ of execution to be issued by the Registrar for the balance outstanding, claiming interest from date of service of summons calculated and compounded monthly, and including VAT. The Deputy Sheriff executed the writ on 10 July 2018, attaching R7,965,470.56 from the Municipality's bank account. The Municipality applied to set aside the writ on the basis that it was not in accordance with the trial court order, particularly regarding the date from which interest ran, compound interest, and VAT.

• Whether a decision to issue a writ of execution is susceptible to review under the Promotion of Administrative Justice Act 3 of 2000 (PAJA)
• Whether a writ of execution must be in accordance with the court order on which it is premised
• Whether interest a tempore morae runs from the date the liability arose or from the date of service of summons
• Whether compound interest was properly included in the writ of execution
• Whether VAT was properly included in the writ of execution
• The proper basis for setting aside a writ of execution

The appeal was upheld with costs of two counsel, where so employed. The order of the court a quo was set aside and replaced with an order setting aside the writ of execution under case numbers 36264/2013 and 36265/2013, and ordering the first respondent (Quill) to pay the costs of the application.

The binding legal principles established are: (1) A Registrar issuing a writ of execution does not engage in administrative action and such issuance is not subject to review under PAJA, but is reviewable on the principle of legality. (2) A writ of execution will be set aside where it does not accord with the court order on which it was purportedly issued, or where the facts show that the debt has been satisfied, or the order on which it was premised is itself set aside. (3) A writ of execution cannot include compound interest unless compound interest was specifically claimed in the pleadings and awarded by the court. (4) Interest runs from the date determined by the court order, and in the context of an award of damages for copyright infringement consisting of reasonable royalty and licence fees, interest runs from the date the court determined those amounts, not from an earlier date such as service of summons. (5) Execution creditors cannot use the writ execution process to obtain relief beyond what was granted by the court order.

The court made several non-binding observations: (1) The trial court's order regarding VAT ('VAT if VAT is payable on the amounts so ordered') was vague and unenforceable, though the Supreme Court of Appeal did not need to determine whether VAT was in fact payable as that was a question for the trial court. (2) The court distinguished its earlier decisions in Drake Flemmer & Orsmond Inc and Another v Gajjar NO (concerning professional negligence claims and accounting for inflation and trial delay) and Davehill (Pty) v Community Development Bank (concerning statutory interest under the Expropriation Act), noting that those cases involved very different pleadings, legal frameworks, and factual circumstances and were therefore unhelpful to the present case. (3) The court noted that the high court had identified 'novel issues' but observed that the high court's duty was simply to look to see if the writ was in accordance with the order, not to embark on answering novel questions. The court was critical of the high court for not adhering to this basic principle.

This case is significant for establishing important principles regarding the validity and enforcement of writs of execution in South African law. It clarifies that: (1) The issuance of a writ of execution by a Registrar is not administrative action subject to PAJA review, but should be challenged on the principle of legality; (2) A writ of execution must strictly accord with the terms of the court order on which it is based and cannot include relief not granted by the court; (3) Compound interest cannot be included in a writ unless specifically awarded by the court or claimed in the pleadings; (4) The timing from which interest runs must be determined by the court order itself and cannot be unilaterally varied by the execution creditor; (5) Courts reviewing writs of execution should focus on whether the writ accords with the underlying order, not on whether the underlying order was correct. The case serves as an important reminder that execution creditors cannot use the writ execution process to obtain more than what was awarded by the court.