Adampol (Pty) Ltd v Administrator, Transvaal

• Jurisdiction: South Africa
• Judge: Joubert JA, Hoexter JA, Botha JA, Vivier JA, Eksteen JA
• Judgment Date: 22 May 1989
• Citation: 1989 (3) SA 800 (A)
• Hearing Date: 21 February 1989
• Court: Appellate Division

Joubert JA:

This is an appeal against a judgment of Van der Merwe J in the Transvaal Provincial Division on a special case in which he decided a point of law in favour of the respondent ('the Administrator'), D viz that the appellant ('Adampol') was not entitled to payment of interest in terms of s 95A of the Roads Ordinance 22 of 1957 (T) ('the ordinance') prior to 25 September 1985. The appeal is brought with leave of the Court a quo.

The undisputed facts material to the present appeal are briefly as follows. Adampol was at all relevant times the registered owner of a certain immovable property situate in Randburg. Acting in pursuance E of the powers conferred on him by s 5(1)(b) of the ordinance the Administrator on 31 December 1980 duly promulgated in the Provincial Gazette two notices (Nos 2068 and 2069) in which he declared two public roads, one being a throughway and the other being a district road, to F exist over a portion of Adampol's property. For the sake of convenience I shall hereinafter refer to these promulgated notices as the notices of expropriation. I shall likewise refer to 31 December 1980 as the date of expropriation. By virtue of the provisions of s 92 of the ordinance the Administrator became obliged to pay Adampol compensation in respect of the land encroached upon by the establishment of the two public roads. On 28 May 1982 Adampol submitted its claim for compensation to G the Administrator. They were unable to agree mutually on the amount of compensation. During February 1983 Adampol instituted in the Transvaal Provincial Division an action against the Administrator in which it claimed the determination by the Court of the compensation in an amount H of not less than R350 000 with interest at the rate of 11 % and costs. On 29 April 1986 the parties partially settled the action. In accordance with their settlement the Administrator on 10 June 1986 paid Adampol the sum of R200 000 as compensation in terms of s 92 of the ordinance, such sum representing the market value of the land encroached upon. The only matter in dispute between the parties was whether or not Adampol was entitled to interest in terms of s 95A of the ordinance on I the compensation paid by the Administrator, from a date prior to 25 September 1985. To appreciate the nature of the dispute it is necessary to point out that prior to 25 September 1985 the ordinance made no provision for the payment by the Administrator of interest on the outstanding balance of any compensation payable in terms of s 92 of the J ordinance. An important innovation was, however, brought about when s 95A was inserted as a new

Joubert JA

A section in the ordinance by s 11 of the amending Ordinance 20 of 1985 with effect from 25 September 1985. The material portion of s 95A reads as follows:

'95A Interest on compensation payable in terms of s 92

(1)

Interest at the standard interest rate determined in terms of s 26(1) of the Exchequer and Audit Act 66 of 1975, shall be paid B on any outstanding amount of the compensation payable in terms of s 92 with effect from a date 60 days from the promulgation of the notice contemplated in ss (1) of the latter section.

(2)

Where the owner of land referred to in s 92(1) occupies or utilises the land concerned, no interest shall, in respect of the period during which he occupies or utilises such land, be paid in terms of ss (1) on the outstanding amount contemplated in the subsection....'

C The provisions of s 95A(2) are not relevant for purposes of the case since it is common cause that Adampol never occupied or utilised the land encroached upon as comtemplated in that section.

Adampol's contention is, as set out in the stated case,

'that, on a proper construction of s 95A of the ordinance, it is D entitled to interest on the amount of R200 000 paid to it at the rate laid down in that section, calculated from a date 60 days from the date after the promulgation of the notice in terms of s 92(1) of the ordinance up until the date of payment of the compensation, that is from 1 March 1981 to 10 June 1986'.

According to the stated case the Administrator's contention is

E 'that the plaintiff (ie Adampol) is entitled to interest to be calculated as set out in the said s 95A on the said sum of R200 000 from 25 September 1985, but not prior to that date'.

During the course of his argument in this Court Mr Grobler, on behalf of the Administrator, advanced a more restrictive construction of s F 95A(1), viz that Adampol was not entitled to the payment of any interest on the said sum of R200 000. The basis of his contention was that s 95A(1) was intended to operate only prospectively (ex nunc) from its date of coming into operation (ie 25 September 1985) in regard to future transactions or matters. 31 December 1980 was the date of the promulgation of the Administrator's notices of expropriation while 1 G March 1981 was the date reckoned 60 days from the promulgation of the said notices. Both of these dates were prior to 25 September 1985 when there was no obligation on the Administrator to pay interest on the outstanding balance of compensation. What was contended for on behalf of Adampol, according to Mr Grobler, was to place retrospectively a new obligation on the Administrator to pay interest on the outstanding H balance of compensation despite the fact that no obligation to pay interest existed prior to 25 September 1985. The only relevant matter that occurred after 25 September 1985 was the determination of the amount of the compensation by the parties in their partial settlement of the action. The other relevant matters occurred prior to 25 September 1985.

I The soundness or otherwise of these opposing contentions depends upon the proper construction of s 95A(1).

'The purpose of all rules or maxims as to the construction or interpretation of statutes is to discover the true intention of the law, and the rules or canons of construction are merely aids for ascertaining legislative intent. The rules of construction are neither J ironclad nor inflexible, and must yield to manifestations of a

Joubert JA

A contrary intent. Such rules are useful only in cases of doubt; they are never to be used to create doubt, but only to remove it.'

(Corpus Juris Secundum vol 8 (1953) s 311.)

The plain meaning of the language in a statute is the safest guide to B follow in construing the statute. According to the golden or general rule of construction the words of a statute must be given their ordinary, literal and grammatical meaning and if by so doing it is ascertained that the words are clear and unambiguous, then effect should be given to their ordinary meaning unless it is apparent that such a literal construction falls within one of those exceptional cases in which it would be permissible for a court of law to depart from such C a literal construction, eg where it leads to a manifest absurdity, inconsistency, hardship or a result contrary to the legislative intent. See Venter v Rex 1907 TS 910 at 913 - 14, Johannesburg Municipality v Cohen's Trustees 1909 TS 811 at 813 - 14, Shenker v The Master and Another 1936 AD 136 at 142; Ebrahim v Minister of the Interior 1977 (1) SA 665 (A) at 678A - G.

D It becomes necessary to construe the wording of s 95A(1) in its ordinary meaning and to have regard to its words in the light of their context. According to the Oxford English Dictionary vol 7 sv 'outstanding' the following meanings are attributed to the word 'outstanding' as an adjective, viz:

'1.

That stands out or projects; projecting, prominent, detached.

2.

E fig. Standing out from the rest; prominent, conspicuous, eminent; striking.

3.

That stands out in resistance or opposition.

4.

That stands over or continues in existence; that remains undetermined, unsettled, or unpaid.

5.

That sets a course outwards.'

F From the context of s 95A(1) it is apparent that the expression 'outstanding amount of the compensation' according to its ordinary grammatical meaning denotes 'unpaid or undetermined amount of the compensation' which is 'payable in terms of s 92'. Section 92(1) enjoins the Administrator to 'pay to the owner, in respect of the land encroached upon by such establishment... such compensation as may G be mutually agreed upon or, failing such agreement, as may be determined in accordance with s 14 of the Expropriation Act, 1975...'. In terms of s 92(1) the amount of compensation may be determined or quantified: (1) by agreement between the Administrator and the owner of the land, or (2) by a Court (s 14(1) of the Expropriation Act 63 of 1975), or (3) H by arbitration (s 14(7) of the Expropriation Act 63 of 1975). I may interpose here to observe that according to our law an unliquidated debt cannot carry interest. See Victoria Falls and Transvaal Power Co Ltd v Consolidated Langlaagte Mines Ltd 1915 AD 1 at 31 - 2, Union Government v Jackson and Others 1956 (2) SA 398 (A) at 412E. It is therefore essential for the payment of interest in terms of s 95A(1) that I the amount of compensation should be determined in accordance with one of the three methods mentioned supra. In the present case the parties in their settlement on 29 April 1986 determined the amount of compensation in the sum of R200 000. Moreover, s 95A(1) renders it obligatory that the payment of the interest shall be 'with effect from a date 60 days from the promulgation of the notice contemplated in ss (1) of the J latter section' (ie s 92). That is to say, the interest is to be

Joubert JA

A calculated from a date 60 days subsequent to the date of promulgation of the notice of expropriation. Section 95A(1) also prescribes how the rate of interest is to be ascertained. In my judgment the wording of s 95A(1) is clear and unambiguous. Nor does the ordinary meaning of its words lead to a manifest absurdity, inconsistency...