L T A Construction Bpk v Administrateur van Transvaal (112/90) [1991] ZASCA 147; 1992 (1) SA 473 (AD); [1992] 3 All SA 1007 (AD) (14 November 1991)

L T A Construction Bpk v Administrateur van Transvaal (112/90) [1991] ZASCA 147; 1992 (1) SA 473 (AD); [1992] 3 All SA 1007 (AD) (14 November 1991)

The Supreme Court of Appeal held that the duplum rule, which prohibits the recovery of arrear interest exceeding the principal sum, remains part of South African law and has not been abrogated. The rule is not limited to money lending contracts but applies to all contracts where a principal sum is subject to interest. The court rejected the appellant's argument that the rule is anachronistic and contrary to public policy, stating that it serves an important economic function by protecting debtors from excessive interest accumulation. The court further held that any change to the duplum rule must be effected by the legislature, not by judicial decision. Accordingly, the appellant's...

Citation
[1991] ZASCA 147
Parties
Appellant: L T A Construction Bpk; Respondent: Administrateur van Transvaal
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
14 November 1991
Case Number
112/90
Procedural Posture
Civil Appeal / Appeal From Dismissal of Counter Application
Outcome
Appeal dismissed with costs, including the costs of two counsel.
Judges
C P Joubert, E M Grosskopf, Vivier, F H Grosskopf, Van Coller
Legal Topics
Duplum Rule, Interest on Debt, Contractual Interest, Common Law Principles
Commercial and Corporate Duplum Rule Interest on Debt Contractual Interest Common Law Principles

Case Brief

Summary, issues, holding and outcome

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Parties

L T A Construction Bpk

Appellant

Administrateur van Transvaal

Respondent

Procedural Posture

Civil Appeal / Appeal From Dismissal of Counter Application

Legal Issues

  1. 1 Whether the duplum rule applies to contractual interest claims exceeding the principal debt.
  2. 2 Whether the duplum rule has been abrogated in South African law.
  3. 3 Whether the duplum rule is limited to money lending contracts or applies to all contracts involving a principal sum and interest.

Ratio Decidendi

The Supreme Court of Appeal held that the duplum rule, which prohibits the recovery of arrear interest exceeding the principal sum, remains part of South African law and has not been abrogated. The rule is not limited to money lending contracts but applies to all contracts where a principal sum is subject to interest. The court rejected the appellant's argument that the rule is anachronistic and contrary to public policy, stating that it serves an important economic function by protecting debtors from excessive interest accumulation. The court further held that any change to the duplum rule must be effected by the legislature, not by judicial decision. Accordingly, the appellant's...

Court Disposition

Appeal dismissed with costs, including the costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs of two advocates.