Instituting Legal Proceedings Against Certain Organs of State

3 Feb, 2016

The Institution of Legal Proceedings Against Certain Organs of State Act, No. 40 of 2002 (“the Act”), makes provision for specific notice requirements when instituting legal proceedings against certain organs of state in respect of the recovery of a debt.

In terms of the Act, a creditor must give the organ of state in question notice in writing of his or her or its intention to institute legal proceedings within 6 months from the date on which the debt became due, failing which, no legal proceedings for the recovery of a debt may be instituted against the organ of state. If a creditor fails to give the required notice within the stipulated time frame, a creditor may apply to court for condonation if good cause exists for the failure by the creditor and the organ of state was not unreasonably prejudiced by the failure. It is therefore imperative that creditors who are owed debts by municipalities or provisional or national departments, are aware of and comply with the above provisions of the Act.