Khedama on interest, and the credit- jurisdiction cases
Two sentences a civil magistrate can use in reasons this month.
The measure of a civil order: the amount, the date, and the instrument.
“Interest follows the reason. Jurisdiction follows the statute.” On Khedama
In Minister of Police v Khedama [2026] ZACC 27, decided on 29 June 2026, the question was the date from which interest runs on general damages for unlawful arrest and detention. Mathopo J, for a unanimous Court, held that section 2A(5) of the Prescribed Rate of Interest Act 55 of 1975 confers a discretion to depart from the general rule that interest on an unliquidated debt runs from demand or from service of summons. Where general damages are assessed at their value at judgment, and could not reasonably have been known before that assessment, fairness ordinarily requires that interest run from judgment to payment.
In Dreyer NO v Standard Bank and Nedbank v Abrahams [2026] ZASCA 74, delivered on 22 May 2026, the Supreme Court of Appeal held that section 127(8) of the National Credit Act 34 of 2005 gives the magistrates’ court jurisdiction. It does not oust the High Court. The word “may” was not to be read as “must”. Exclusive jurisdiction is conferred in stated places, including the debt-review provisions. Section 127(8) is not one of them.
A prayer for interest from demand, on general damages, should not be granted by default. A plea that the High Court lacks jurisdiction solely because of section 127(8) should fail. A plea that the magistrates’ court lacks jurisdiction, where the amount and the linking facts are within the Act and the Magistrates’ Courts Act, should equally fail. Clerks and practitioners who have treated section 127(8) as a compulsory magistrates’ court pathway should adjust their advice.
A note from Neelan Karikan. On the authority of Khedama, interest on those general damages ordinarily runs from judgment. Section 127(8) confers jurisdiction on the magistrates’ court. It does not exclude the High Court.