Mora interest: Compensation for loss or damage


National Tertiary Retirement Fund v Mokadi (419/2015) [2016] ZASCA 92 (1 June 2016)


Kathree-Setiloane AJA [Ponnan, Theron, Petse and Zondi JJA concurring]


The SCA confirmed that the purpose of mora interest is to place creditors in the position they would have been if the debtor had performed in terms of the undertaking.

Quotations from judgment

[27] . . . . .  Interest, as envisaged in s 30N of the PFA, on the other hand, is clearly distinguishable. Its purpose may be comparable to a tempore mora interest, which was described by this court in Scoin Trading (Pty) Ltd v Bernstein NO [2010] ZASCA 160; 2011 (2) SA 118 (as follows:

‘If a debtor’s obligation is to pay a sum of money on a stipulated date and he is in mora in that he failed to perform on or before the time agreed upon, the damages that flow naturally from such failure will be interest a tempore morae or mora interest. The purpose of mora interest is to place the creditor in the position he would have been if the debtor had performed in terms of the undertaking. This notion was more fully explained in Bellairs v Hodnett & another [1978] (1) SA 1109 (A) at 1145D-G: 

“It may be accepted that the award of interest to a creditor, where his debtor is in mora in regard to the payment of a monetary obligation under a contract, is, in the absence of a contractual obligation to pay interest, based upon the principle that the creditor is entitled to be compensated for the loss or damage that he has suffered as a result of not receiving his money on due date. . . . This loss is assessed on the basis of allowing interest on the capital sum owing over the period of mora . . .

Admittedly, it is pointed out by Steyn, Mora Debitoris [at] 86, that there were differences of opinion among the writers on Roman-Dutch law on the question as to whether mora interest was lucrative, punitive or compensatory; and that, since interest is payable without the creditor having to prove that he has suffered loss and even where the debtor can show that the creditor would not have used the capital sum owing, this question has not lost its significance.

Nevertheless, as emphasised by Centlivres, CJ, in Linton v Corser, 1952 (3) SA 685 (AD) at 695, interest is today the “lifeblood of finance” and under modern conditions a debtor who is tardy in the due payment of a monetary obligation will almost invariably deprive his creditor of the productive use of the money and thereby cause him loss. It is for this loss that the award of mora interest seeks to compensate the creditor.’

More recently in Crookes v Regional Land Claims Commission [2012] ZASCA 128; 2013 (2) SA 259 (SCA) para 16 this court made plain that:

‘. . . a party who has been deprived of the use of his or her capital for a period of time has suffered a loss (Thoroughbred Breeders’ Association v Price Waterhouse [2001] ZASCA 82; 2001 (4) SA 551 (SCA) ([2001] 4 All SA 161) para 85). And that, in the normal course of events, such a party will be compensated for his loss by an award of mora interest.’


Discussion by GilesFiles

See also:

SJ Cornelius Mora Debitoris and the Principle of Strict LiabilityScoin Trading (Pty) Ltd v Bernstein NO 2011 (2) SA 118 (SCA) [2012] PER 63