A letter of demand or notice is always necessary where legislation requires that notice be given, and if demand or notice is a prerequisite to complete a cause of action.

Legislation such as the National Credit Act 34 of 2005, the Customs and Excise Act 91 of 1964 and the Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002 are examples of legislation requiring such notice to be given.

Many clients approach ProBono.Org’s offices with reasonable or good prospects of success in suing an organ of state. However, these clients often approach us for assistance long after their respective claims have prescribed and are rather disgruntled when they are advised of the prescription and its consequences.

For the purposes of this article, we will highlight the rules around notice in terms of section 3 of the Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002 (the Act) and stress the importance of prescription when intending to institute legal proceedings against an organ of state.

Prior to the promulgation of the Act in 2002, different statutes were applicable to different organs of state and each statute had its own unique prescription periods and its own specific requirements to commence litigation.

Owing to these various prerequisites, it became clear that there was a breach of section 34 of the Constitution which provides that:

Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.

Subsequently, the Act was passed with the purpose of regulating and harmonising the prescription periods of claims against organs of state.

Consequently, civil action brought against any national, provincial or local governmental department, amongst others, must comply with the provisions of the Act.

Furthermore, the Act stipulates that no legal proceedings may be instituted against an organ of state unless the claimant has provided written notice of its intended litigation. The only instance where this written notice is not a prerequisite is when the applicable organ of state has given consent in writing to the institution of impending litigation.

Such notice, generally termed as a section 3 notice, should contain the particulars of the claims, such as parties involved, date the debt became due and amounts to be claimed. In other words, the notice should include sufficient details as to the facts giving rise to the debt.

Perhaps the greatest harmonisation created by the Act is that a creditor has six (6) months from the date the debt became due to serve a section 3 notice on the relevant organ of state. It is further important for creditors to note that litigation may not commence against an organ of state before the expiry of 30 days after the section 3 notice was served.

The question then arises – what recourse, if any, is available to a creditor should s/he fail to comply with the above requirements?

Section 3(4) of the Act states that a creditor may apply for condonation of the late filing of the notice and the court may grant such condonation if; (1) the debt has not been extinguished by prescription, (2) good cause exists for the failure by the creditor to comply with the notice requirements, and (3) the organ of state was not unreasonably prejudiced by that failure. Moreover, when applying for condonation, the creditor must provide a full explanation for the late filing and non-compliance.

The court is only required to grant condonation if it is satisfied that all requirements have been met. Unfortunately, many clients come in and mention condonation as if it is an ordinary part of litigation.

Although the purpose of condonation is to forgive noncompliance provided the above prerequisites in terms of s 3(4) are met, one has to take cognisance of the fact that condonation is not a right and therefore cannot be guaranteed.

In conclusion, if the court is not satisfied that a creditor has met the requirements for condonation, the claim will not stand, and a valid and real defence of prescription will be raised by the relevant organ of state. When a cause of action arises or a debt becomes due against an organ of state, it is advisable to consult a legal practitioner as soon as possible in order to ensure compliance.

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