Legal proceedings against organs of state and condonation application

Donald Dinnie, Norton Rose Fulbright

From time to time insurers are required to defend proceedings against their insureds who are organs of state or to institute subrogated recovery actions against such bodies.

he Institution of Legal Proceedings Against Certain Organs of State Act 2002 requires the claimant who wishes to proceed against an organ of state to give notice to that entity within six months from the date on which the debt became due, setting out the facts giving rise to the debt and any particulars of the debt that are within the knowledge of the claimant.

If they do not do so the court may grant an application for condonation if it is satisfied that:

• the debt has not been extinguished by prescription;
• good cause exists for the failure by the creditor to comply with the notice requirements; and
• the organ of state was not unreasonably prejudiced by that failure, for instance, the event was not previously reported to it and any witnesses are no longer available.

All three of the requirements for condonation must be established by the party requesting the condonation.

Often the application for condonation is treated as a matter of a right. That is not correct. Condonation is not to be had for the mere asking.

The parties seeking the condonation must make out a case entitling them to the court’s indulgence and show sufficient cause. That requires a full explanation for the non-compliance. The party seeking condonation must prove good cause and not merely allege it.

The requirement of having to notify state organs within six months of any proposed claim for damages was introduced specifically to prevent a situation where an organ of state is called upon to meet a claim which it might have defended successfully if it had been given an early opportunity to investigate the circumstances leading to the claim.

Recently the Bloemfontein High Court dealt with such a condonation application. The judgment, T M v Member of the Executive Council Department of Health Free State Province contains a very useful review of all the relevant case law and an analysis of the condonation requirements and the practical application on the facts.

First published by: Financial Institutions Legal Snapshot