Community Development Board v Mahomed and Others (318/1985) [1986] ZASCA 95; [1987] 1 All SA 228 (A) (18 September 1986)

Community Development Board v Mahomed and Others (318/1985) [1986] ZASCA 95; [1987] 1 All SA 228 (A) (18 September 1986)

The Supreme Court of Appeal held that the appellant was liable to pay interest on the agreed compensation amount of R100,000 from the date the State took possession of the property (1 December 1980) until payment (1 March 1985). The proviso to section 12(3) of the Expropriation Act does not suspend the accrual of interest where the amount offered by the expropriating authority is less than the amount ultimately determined or agreed. The applicable interest rate for the period prior to the statutory amendment (1 December 1980 to 12 March 1982) is the rate in force on the date of expropriation, as determined under section 26(1) of the Exchequer and Audit Act, 1975. For the period after the...

Citation
[1986] ZASCA 95
Parties
Appellant: Community Development Board; Respondent: Rabia Essa Valli Mahomed N O; Respondent: Mahomed Sayed Mahomed N O; Respondent: Shabir Ahmed Mahomed N O; Respondent: Shiraz Essa Valli Mahomed N O
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
18 September 1986
Case Number
318/1985
Procedural Posture
Civil Appeal / Appeal From the Transvaal Provincial Division After Settlement and Judgment on Interest and Costs
Outcome
Appeal succeeds in part and fails in part. The appellant is liable for interest on the compensation amount, but the rate is amended for the first period.
Judges
Botha JA, Trengove JA, Hoexter JA, Grosskopf JA, Smalberger JA
Legal Topics
Expropriation Act 1975, Interest on Compensation, Statutory Interpretation, Mortgage Encumbrance, Settlement Agreement
Land and Property Civil Procedure Expropriation Act 1975 Interest on Compensation Statutory Interpretation Mortgage Encumbrance Settlement Agreement

Case Brief

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Parties

Community Development Board

Appellant

Rabia Essa Valli Mahomed N O

Respondent

Mahomed Sayed Mahomed N O

Respondent

Shabir Ahmed Mahomed N O

Respondent

Shiraz Essa Valli Mahomed N O

Respondent

Procedural Posture

Civil Appeal / Appeal From the Transvaal Provincial Division After Settlement and Judgment on Interest and Costs

Legal Issues

  1. 1 Is the expropriating authority liable to pay interest on the capital amount of compensation for expropriated property, and if so, for what period and at what rate.
  2. 2 Does the proviso to section 12(3) of the Expropriation Act limit the liability for interest where the compensation offered is less than the amount ultimately determined.
  3. 3 How should the applicable interest rate be calculated in light of statutory amendments and repeals.

Ratio Decidendi

The Supreme Court of Appeal held that the appellant was liable to pay interest on the agreed compensation amount of R100,000 from the date the State took possession of the property (1 December 1980) until payment (1 March 1985). The proviso to section 12(3) of the Expropriation Act does not suspend the accrual of interest where the amount offered by the expropriating authority is less than the amount ultimately determined or agreed. The applicable interest rate for the period prior to the statutory amendment (1 December 1980 to 12 March 1982) is the rate in force on the date of expropriation, as determined under section 26(1) of the Exchequer and Audit Act, 1975. For the period after the...

Court Disposition

Appeal succeeds in part and fails in part. The appellant is liable for interest on the compensation amount, but the rate is amended for the first period.

Orders

  • The defendant is ordered to pay interest to the plaintiff on the amount of R100,000 for the period from 1 December 1980 to 1 March 1985, calculated as follows: (a) from 1 December 1980 to 12 March 1982, at a constant rate in force on 28 November 1979 under section 26(1) of Act 66 of 1975; (b) from 13 March 1982 to 1...
  • The appellant is ordered to pay one-half of the respondents' costs of the appeal, subject to possible variation upon written argument.