The parties were involved in long-standing litigation concerning compensation payable to Hume Housing, a property developer, for properties acquired by the Hibiscus Coast Municipality after unlawful occupiers invaded the land. A settlement was made an order of court directing that the municipality acquire the properties and that compensation be determined in accordance with sections 12(1)–(3) of the Expropriation Act 63 of 1975. Action proceedings were instituted to determine compensation. The parties’ attorneys later agreed to appoint Mills Fitchet as expert valuers and to be bound by their valuation. Mills Fitchet valued the compensation at R6 045 000 including land, improvements and solatium. The municipality failed to pay. Hume brought an application to have the valuation made an order of court, which was dismissed by Koen J on the basis that there was no consensus between the parties on what was to be valued. Hume then pursued action proceedings. The municipality raised a special plea of res judicata, which was upheld by Steyn J but overturned by the full court. The municipality appealed to the Supreme Court of Appeal.