Legal Aid Board and Others v Singh (14939/05) [2008] ZAKZHC 66; 2009 (1) SA 184 (N) (25 August 2008)

IN THE HIGH COURT OF SOUTH AFRICA

NATAL PROVINCIAL DIVISION

CASE NO: 14939/05

APPEAL NO: AR 99/07

In the matter between:

LEGAL AID BOARD

First Appellant

BAREND GROEN Second Appellant

MINISTER OF JUSTICE AND

CONSTITUTIONAL DEVELOPMENT Third Appellant

and

VIREN SINGH

Respondent

JUDGMENT Date of Hearing: 4 February 2008

Date of Judgment: 25 August 2008

THERON J

[1] This appeal raises the question whether a court has the power, in terms of s 3(4) of the Institution of Legal Proceedings against certain Organs of State Act 40 of 2002 (‘the Act’), to condone the institution of legal proceedings where the provisions of s 3(1)(a) of the Act have not been complied with.

[2] The respondent is an attorney of this court. On 28 October 2002, the respondent was charged with 617 counts of fraud, it being alleged that he had defrauded the first appellant. At the time the second appellant had been a senior public prosecutor in the employ of the third appellant. Some of the charges against the respondent were terminated upon the grant of a permanent stay of prosecution on 30 August 2003 and the remainder of the charges were withdrawn on 30 August 2004.

[3] In October 2005, the respondent instituted an action against the appellants in which he claimed damages for malicious prosecution and defamation. The second appellant filed a special plea in which he alleged that the respondent had failed to comply with the provisions of s 3(1) of the Act.[1] It was common cause that the first appellant was an organ of state; that the respondent’s claim was a debt within the meaning of s 3 of the Act; that the respondent had failed to give notice within six months from the date when the debt became due; that the respondent had instituted proceedings against the first appellant without having given the required notice and that the first appellant had not consented to the institution of such proceedings.

[4] In response to the special plea, the respondent instituted proceedings in the court a quo during March 2006 in which he sought, inter alia, an order in the following terms:

‘That the plaintiff’s [respondent’s] failure to comply with s 3 of the Institution of Legal Proceedings Against Certain Organs of State Act 40 of 2002 be and is hereby condoned.

That the plaintiff’s issue and service of summons and all subsequent process filed under this case number by the respective parties be and is hereby condoned.’

The matter was heard by Baqwa AJ and on 8 September 2006, the judge made an order to the effect that ‘condonation is hereby granted’. On appeal it was accepted by all the parties that the judge in the court a quo had granted condonation as prayed for by the respondent and set out above. No appeal was directed at the costs order which had been made by the trial court.

[5] The respondent had, in his affidavit filed in support of the condonation application, alleged that the court was entitled, in terms of s 3(4) of the Act,[2] to condone his failure to comply with s 3(1) of the Act, as the debt had not been extinguished by prescription and good cause existed for such failure. The respondent further alleged that his claim for malicious prosecution arose, at the earliest, on the date on which he had been charged, namely, 28 October 2002, although it was arguable that prescription should only start running from the date that the prosecution ended in his favour which would be 30 August 2004, when the charges against him were withdrawn. He further alleged that his claim for defamation arose on 28 or 29 October 2002 when the criminal summons had been served on him and continued until the termination of proceedings in his favour. Summons was served on the first appellant on 21 October 2005, on the second appellant on 24 October 2005 and the third appellant on 24 October 2005. It was alleged by the respondent that service was effected a few days before prescription could, at the earliest, have been deemed to have occurred, namely, 28 October 2005. The respondent had also stated that summons had been issued and served without the requisite notice being served in order to avoid a defence of prescription being raised.

[6] In his affidavit, the respondent alleged that he had only become aware of the relevant provisions of the Act during July 2005, and after he had sought the advice of counsel in respect of another matter wherein the first appellant was a defendant and the cause of action related to a claim for professional services rendered at the first appellant’s special instance and request. The respondent further stated that in September 2005 he had sought counsel’s advice on the prospects of success of his claim for malicious prosecution and that counsel had advised him, during October 2005, that he had reasonable prospects of success. Hence summons was served on the parties towards the end of October 2005. The respondent stated that as his claim, or part thereof, was due to prescribe on or about 28 October 2005, it was imperative that he institute the necessary action urgently. He was of the view that since a period of considerably longer than six months had elapsed since the cause of action had arose, and that prescription was imminent, to serve a notice as required by s 3 of the Act would serve little or no purpose.

[7] The appellants opposed the condonation application primarily on the ground that s 3(1) of the Act imposed an absolute prohibition of the institution of legal proceedings against certain organs of state without the requisite notice having being given. In my judgment there is no merit in the submission advanced on behalf of the respondent that the prohibition contended for by the appellants would not give effect to the intention of the legislature to make the courts more accessible. In Mohlomi v Minister of Defence, [3] Didcott J stated that notices (similar to the kind required by s 3(1)) have been part of our ‘statutory terrain’ for a long time and the reason for

‘demanding prior notification of any intention to sue such an organ of government is that, with its extensive activities and large staff which tends to shift, it needs the opportunity to investigate claims laid against it, to consider them responsibly and to decide, before getting embroiled in litigation at public expense, whether it ought to accept, reject or endeavour to settle them.’[4]

[8] In terms of the provisions of s 3(1) of the Act, no legal proceedings for the recovery of a debt may be instituted against an organ of state unless the creditor has given the organ of state written notice of the impending proceedings, or the organ of state has consented to the institution of the legal proceedings without such notice. The provisions of s 3(1) are, in my view, peremptory.

[9] Section 3(4)(a) confers upon the creditor the right to apply for condonation of the failure to comply with the provisions of s 3(1). Section 3(4)(b) sets out the jurisdictional facts which must exist before condonation may be granted by the court. A court may grant condonation if it is satisfied that (a) the debt has not been extinguished by prescription; (b) good cause exists for the failure by the creditor to comply with the provisions of s 3(1) and (c) the organ of state would not be prejudiced by such failure. It was common cause that the respondent’s claim could have been deemed to have prescribed on or about 28 October 2005. The application for condonation for the failure to comply with the provisions of s 3(1) ought to have been made before the claim prescribed. In the circumstances, one of the jurisdictional facts which must be satisfied before condonation can be granted has not been met.

[10] Section 3(4)(c) defines the court’s powers and details the relief which a court may grant. In terms of this section, the court may condone the failure to give the requisite notice and grant the creditor leave to institute the legal proceedings. The court does not have the power to condone the institution of legal proceedings in circumstances where the provisions of s 3(1) have not been complied with. In the circumstances, the issue of the summons by the respondent, without first complying with the provisions of s 3(1) or applying for condonation in respect of such non-compliance, was a nullity.

[11] The following order is made:

11.1 The order of the court a quo is set aside and replaced with the following:

‘The application is refused.’

11.2 The respondent is directed to pay the costs of appeal.

I agree: Kruger J

I agree: Radebe AJ

First appellant’s counsel:

Mr F R Memani

First appellant’s attorneys:

Nozuko Nxusani Incorporated

c/o Hlatshwayo & Associates

Second and third appellants’ counsel: Mr T Mukadam

Second and third appellants’ attorneys: The State Attorney, Durban

c/o Cajee Setsubi Chetty Incorporated

Respondent’s counsel:

Mr A Collingwood

Respondent’s attorneys: Viren Singh & Company

1 Section 3(1) of the Institution of Legal Proceedings against certain Organs of State Act reads: ‘No legal proceedings for the recovery of a debt may be instituted against an organ of state unless- (a) the creditor has given the organ of state in question notice in

writing of his or her or its intention to institute the legal proceedings in question; or (b) the organ of state in question has consented in writing to the institution of that legal proceedings- (i) without such notice; or (ii) upon receipt of a notice which does not comply with all the requirements set out in subsection (2).’

1 Section 3(1) of the Institution of Legal Proceedings against certain Organs of State Act reads:

‘No legal proceedings for the recovery of a debt may be instituted against an organ of state unless-

(a) the creditor has given the organ of state in question notice in

writing of his or her or its intention to institute the legal proceedings in question; or

(b) the organ of state in question has consented in writing to the institution of that legal proceedings-

(i) without such notice; or

(ii) upon receipt of a notice which does not comply with all the requirements set out in subsection (2).’

[2] Section 3(4) of the Institution of Legal Proceedings against certain Organs of State Act reads: ‘(a) If an organ of state relies on a creditor's failure to serve a notice in terms of subsection (2)(a), the creditor may apply to a court having jurisdiction for condonation of such failure. (b) The court may grant an application referred to in paragraph (a) if it is satisfied that- (i) the debt has not been extinguished by prescription; (ii) good cause exists for the failure by the creditor; and (iii) the organ of state was not unreasonably prejudiced by the failure. (c) If an application is granted in terms of paragraph (b), the court may grant leave to institute the legal proceedings in question, on such conditions regarding notice to the organ of state as the court may deem appropriate.’

[2] Section 3(4) of the Institution of Legal Proceedings against certain Organs of State Act reads:

‘(a) If an organ of state relies on a creditor's failure to serve a notice in terms of subsection (2)(a), the creditor may apply to a court having jurisdiction for condonation of such failure.

(b) The court may grant an application referred to in paragraph (a) if it is satisfied that-

(i) the debt has not been extinguished by prescription;

(ii) good cause exists for the failure by the creditor; and

(iii) the organ of state was not unreasonably prejudiced by the failure.

(c) If an application is granted in terms of paragraph (b), the court may grant leave to institute the legal proceedings in question, on such conditions regarding notice to the organ of state as the court may deem appropriate.’

[3] 1997 (1) SA 124 (CC) at para [9].

[4] There was no attack on the constitutionality of s (3)1 of the Act and whether it limits the right of access to a court under s 34 of the Constitution. Section 34 provides as follows: ‘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.’

[4] There was no attack on the constitutionality of s (3)1 of the Act and whether it limits the right of access to a court under s 34 of the Constitution. Section 34 provides as follows:

‘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.’