TAKING ON THE “BIG CHEESE” IS NO SIMPLE AFFAIR

Fictitious scenario:

Mr. Small, a contractor, enters into a contract with the Department of Education. In terms of the contract, Mr. Small is to pave a parking lot for the Department. The contract also states that as soon as the work is completed, Mr. B will be paid. Thus, Mr. Small incurs all the necessary costs involved with completing the parking lot. Mr. Small expects payment from the Department but 5 months later no payment is received. Mr. Small now intends to institute legal proceedings against the Department for breach of contract.


Before legal action can be instituted against an organ of state, certain requirements must be complied with. The aforementioned requirements are contained in the Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002 (hereafter referred to as “the Act”).

Firstly, it is necessary to look at the definitions contained in the Act. A creditor as defined in the Act is a person who intends to institute legal proceedings against an organ of state for the recovery of a debt (S1(1)). An organ of state as described in the Act is any national or provincial department (S1(1)).

Secondly, notice of intended legal proceedings must be given to the organ of state (S3). The creditor must give the organ of state notice in writing of his intention to institute legal proceedings (S3(1)(a)). A notice must be served on the organ of state within 6 (six) months from the date on which the debt becomes due (S3(2)(a)). The notice must briefly set out the facts giving rise to the debt and any particulars of the debt within the creditor’s knowledge (S3(2)(b)).

Thirdly, the notice must be served on an organ of state by sending it by certified mail, or delivery by hand, or sending it by electronic mail, or by transmitting it by facsimile (S4(1)). In the case of a notice being sent by electronic mail or transmitted by facsimile, the creditor must take reasonable steps to ensure that the notice has been received by the person to whom it was sent (S4(2)(a)). The creditor must also within 7 (seven) days after the date upon which that notice was sent or transmitted, deliver the same notice by hand or send the notice by certified mail, and must contain an affidavit by the creditor or the person who sent or transmitted the notice.





Lastly, the abovementioned affidavit must contain the following information (S4(2)(b)(i)-(iv)) :

• The date and time at which the notice was sent or transmitted by electronic mail or facsimile,
• The electronic mail address or facsimile number to which the notice was sent or transmitted,
• Setting out the steps that were taken to ensure the notice was received,
• Indicate whether confirmation of the receipt of the notice has been obtained, and
• If applicable, the name of the person who gave confirmation of receipt of the notice.


Thus, do not be caught off guard when taking on an organ of state. And remember the wise words of W Edwards Deming: “Lack of knowledge…that is the problem”.