Davehill (Pty) Ltd and Others v Community Development Board

• Jurisdiction: South Africa
• Judge: Rabie ACJ, Botha JA, Grosskopf JA, Smalberger JA and Boshoff AJA
• Judgment Date: 30 September 1987
• Hearing Date: 03 September 1987
• Court: Appellate Division

Smalberger JA:

The appellants were previously the owners of certain erven situtated in West Germiston Township. These properties were expropriated by the respondent under the provisions of the Expropriation Act 63 of 1975 ('the Act') on 24 October 1980. On 3 December 1980 the respondent took possession of the properties concerned. Initially the parties were unable to reach agreement on the amount of compensation F payable under the Act for the properties expropriated. This led to the respondent making an interim payment of compensation of R634 600 to the appellants on 22 May 1983 ('the interim payment'). This was done in terms of the provisions of s 11(1) of the Act. During November 1984 the respondent made a final offer of settlement to the appellants. The offer G was accepted on 19 December 1984. Consequent thereon the respondent paid a further amount of R453 550 to the appellants on 11 January 1985 ('the final payment'). This brought the total agreed compensation paid to the appellants (exclusive of interest) to R1 088 150. In terms of s 12(3) of the Act the respondent was obliged to pay interest to the appellants from the date of taking possession of the properties on any outstanding H portion of the compensation payable in respect thereof. It will be convenient to refer to such interest as 'statutory interest'. On 1 April 1986 the respondent paid statutory interest in an amount of R162 850,33 to the appellants. This was followed by a further payment of statutory interest of R224 403,40 on 5 January 1987. It is common cause that the statutory interest paid by the respondent, totalling R387 253,73, I represents the full amount of interest payable to the appellants in terms of s 12(3).

In February 1986, prior to the first payment of statutory interest by the respondent, the appellants commenced motion proceedings against the respondent in the Transvaal Provincial Division for the recovery of J statutory interest due to them. The appellants proceeded with their

Smalberger JA

A application, despite the payment of statutory interest on 1 April 1986, because they considered the amount paid to be less than that to which they were entitled. Two days prior to the hearing of the application the appellants gave notice of their intention to amend their notice of motion to include a claim for mora interest on the amount of statutory B interest outstanding from the date of the final payment of compensation.

The matter came before O'Donovan J on 23 May 1986. The amendment was sought and granted. The Judge a quo's ex tempore judgment, however, was confined to the appellants' claim for statutory interest, and omitted to deal with the claim for mora interest. He held, in effect, that the amount of statutory interest paid to the appellants on 1 April 1986 C represented the full extent of the respondent's liability for such interest in terms of s 12(3). In the result he dismissed the appellants' application, but granted them leave to appeal to this Court.

On 18 September 1986 judgment was delivered in this Court in the matter of Community Development Board v Mahomed and Others NNO (reported D at 1987 (2) SA 899). From the terms of this judgment it became apparent that the amount of statutory interest paid by the respondent was insufficient, and that the judgment of the Court a quo to the contrary was wrong. This gave rise to the further payment of statutory interest on 5 January 1987. This left, as the only outstanding issue between the parties, the question whether the respondent was liable to pay mora E interest to the appellants in respect of statutory interest due and payable over the period 12 January 1985 - 5 January 1987.

The matter, however, does not end there. When they filed their heads of argument the appellants gave notice of their intention to apply at F the hearing of the appeal to further amend their notice of motion in terms of an amended notice attached to their heads of argument. The amendment foreshadowed in the amended notice of motion sought to introduce an additional claim for mora interest on outstanding statutory interest from the date of the interim payment of compensation to the G date of the final payment thereof. The application was moved at the hearing of the appeal, but not before a further amended notice of motion was handed in to replace that annexed to the heads of argument. The latter notice did not introduce anything new in principle. It merely sought to clarify the amounts of mora interest claimed by each appellant individually. Judgment was reserved on the application.

Before dealing with the various issues that fall to be decided it is H necessary to set out the relevant provisions of ss 11(1) and (3) and 12(3) of the Act as the determination of certain of the issues depends upon their proper construction. They provide as follows:

'11(1) If the Minister deems it expedient, he may, prior to the determination of the amount of compensation payable in terms of this Act I for property or for the use of property and on or at any time after the date of expropriation, but subject to the provisions of ss (3), pay the amount offered the owner concerned as such compensation, or a portion of such amount, to the owner concerned, or the person contemplated in s 19, or deposit it with the Master or utilise it in settlement of the tax or other moneys contemplated in s 20 under the same circumstances under which he should or could have so paid, deposited or utilised such J compensation had it been determined on that date.

Smalberger JA

...

A (3) The payment, deposit or utilisation of any amount under ss (1) shall not preclude the determination by agreement or by a Court contemplated in s 14(1), of a different amount as compensation, but if the amount so determined as compensation is less than the amount paid, deposited or utilised, the owner to whom or on whose behalf the last-mentioned amount was paid, or the Master with whom it was B deposited, or the local authority concerned, as the case may be, shall refund the difference to the State together with, in the case of such owner or local authority, interest at the rate contemplated in s 12(3) from the date on which the amount was so paid or utilised, and, in the case of the Master, the interest accrued thereon in terms of ss (2).'

C '12(3) Interest at the standard interest rate determined in terms of s 26(1) of the Exchequer and Audit Act 66 of 1975, shall... be payable from the date on which the State takes possession of the property in question in terms of s 8(3) or (5) on any outstanding portion of the amount of compensation payable in accordance with ss (1)(a) (i): Provided that -

...

(b)

D from the date on which the Minister in terms of s 11(1) pays or makes available an amount to the owner or any person referred to in s 21(4),

the amount which is so payable shall for the purposes of the payment of interest not be deemed to be an outstanding amount.'

I shall commence with the appellants' claim for mora...