Minister of Public Works v Roux Property Fund (Pty) Ltd

On 20 July 2010, Roux Property Fund (the respondent) as lessor entered into a written lease agreement with the National Department of Public Works (DPW) as lessee for premises to be used by the South African Police Service for a period from 1 April 2011 to 28 February 2021. The DPW never took occupation of the premises nor paid any rent, and denied the validity of the lease on grounds of lack of authority of officials who concluded it and non-compliance with statutory procurement requirements. On 11 April 2011, the respondent defaulted on its mortgage bond repayments to Nedbank, which instituted foreclosure proceedings on 21 April 2011. On 13 September 2011, the Minister instituted proceedings to declare the lease void ab initio. Nedbank obtained judgment on 7 November 2011 for R248,589,308.49 and the property was sold in execution on 14 August 2013. On 28 August 2014, the respondent issued summons claiming R340 million in damages arising from the alleged breach and repudiation of the lease, and gave notice under the Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002 on the same day. In October 2014, the Minister filed a special plea based on non-compliance with section 3 of the Act. The respondent only brought a condonation application on 24 April 2017, which was granted by the high court. The Minister appealed.

• Whether section 3(4) of the Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002 permits condonation for non-compliance with both sections 3(1) and 3(2)(b) of the Act
• Whether the respondent's non-compliance with section 3(1) ought to be condoned in terms of section 3(4)
• Whether the court a quo misdirected itself in relation to the requirements of section 3(4)(b)
• Whether the respondent satisfied the three conjunctive requirements for condonation: (i) that the debt has not prescribed; (ii) good cause exists for the failure; and (iii) the organ of state was not unreasonably prejudiced
• When the cause of action arose and whether prescription had extinguished the claim

The appeal was upheld with costs including those attendant on the employment of two counsel. The order of the high court was set aside and replaced with an order dismissing both the condonation application and the plaintiff's claim, each with costs including the costs of two counsel where two counsel were employed.

1. Section 3(4) of the Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002 permits condonation for non-compliance with both section 3(1) (failure to give notice) and section 3(2) (failure to give timeous notice or proper notice). 2. The three requirements in section 3(4)(b) are conjunctive: the court must be 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. All three must be met before the court can exercise its discretion to grant condonation. 3. A debt becomes due and prescription commences to run when the creditor acquires a complete cause of action, which is when the creditor knows the identity of the debtor and the facts giving rise to the debt. 4. An applicant seeking condonation must provide a full and reasonable explanation for non-compliance that enables the court to understand how the default came about and to assess the applicant's conduct and motives. 5. Prospects of success are a relevant consideration in assessing whether good cause exists for the delay. 6. Unreasonable prejudice to an organ of state can arise from long delays where key witnesses are no longer available and memories may fade.

The court noted that it is difficult to understand what purpose the respondent had in defending the Minister's application to declare the lease invalid ab initio other than to establish the lease's validity in order to pursue a damages claim. The court also observed that long delays in litigation are not in the interest of justice as memories of witnesses may fade, documents may get lost, and changes in administration may result in high turnover of senior staff. The court commented that while the question whether the statement in De Witt regarding condonation under section 3(1) was obiter might be debatable, it was a fully considered view of the court not lightly to be departed from, and none of the grounds for departing from an earlier decision were present or advanced.

This case provides important guidance on the interpretation and application of section 3(4) of the Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002. It confirms that condonation may be granted for complete failure to give notice under section 3(1), not only for failure to give timeous notice under section 3(2)(a). The judgment clarifies the conjunctive nature of the three requirements in section 3(4)(b) and emphasizes that all three must be satisfied before a court can exercise discretion to condone. The case also illustrates the strict approach courts take to applications for condonation, requiring full and reasonable explanations for delay, and demonstrates how prospects of success relate to the assessment of good cause. It reinforces the principle that prescription is determined by when a complete cause of action arises, not when damages crystallize or become quantifiable. The judgment serves as a warning that inordinate delays in bringing condonation applications will not be tolerated, particularly where key witnesses may no longer be available.