We were representing a private company (Our client*) suing a state organization for outstanding monies in terms of a contract of services. The state attorney on behalf of the state organ filed a special plea.
The special plea held that our client was required to deliver a notice in terms of Section 3 (1) (a) of the Institution of Legal Proceedings Against Certain Organs of State Act 40 of 2002 (Hereinafter referred to as the “Act”) before instituting the claim.
In terms of Section 3 (1) (a) of the Act, before a creditor issues a summons against a state organ for the recovery of a debt, the creditor must issue a notice in writing of its intention to institute legal proceedings.
In terms of Section 3 (2), the said notice in writing must be issued by the creditor intending to institute legal proceedings within six months of the debt becoming due.
Where a creditor fails to issue the notice in writing, the Act provides that the creditor can bring an application for condonation. If the requirements for condonation are met, the court can condone the late issuance of the notice.
A good reason must exist for the creditors’ failure to issue the state organ with the notice for the intended legal proceedings and that the state organ should not be put in an unfair position.
On behalf of the private company, a creditor in terms of the Act, we intended to provide the court with a formal application for condonation of late filing of Section 3 (1) (a) notice in terms of the Act.
Also, we were hoping that the parties separate the issues, and the special plea filed on behalf of the state organ be dealt with by the court, in believe that the special plea will not be successful after we deal with the merits of the case.
The state attorney in most instances raises a special plea to delay legal proceedings, the so-called dilatory special plea. The state organ had no defense to the merits of the case.
However, after reading the case of Nicor IT Consulting v NW Housing Corporation and Director v Kovacs Investments 2010 (3) SA 90, we realized that the private company didn’t need to deliver a notice in terms of Section 3 (1) (a) of the Act before instituting the claim as the claim is for monies owed in terms of the contract of service, not for damages arising from the breach of the contract.
The private company had fulfilled its obligations in terms of the contract and was entitled to its monies in terms of a contract.
Furthermore, the claim is for specific performance i.e. for the payment of an invoice, and therefore does not constitute a debt as contemplated in Section 1 of the Act.
The claim is not for damages like your normal unlawful arrest or personal injury claim, as the requirement to provide notice in terms of Section 3 (1) is not necessary.
Mokhabela and Mposula Attorneys will assist you to claim against state organs in terms of a contract , contact Lungani Mposula on 072 761 1278 or email lunganim@mmplaw.co.za.