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IN THE HIGH COURT OF SOUTH AFRICA
(TRANSVAAL PROVINCIAL DIVISION)

CASE NO: 21072/2005
DATE: 03/08/2007
UNREPORTABLE
In the matter between:
OSCON DOMEMESTIC INSTALLATIONS CC			PLAINTIFF
VS
POLOKWANE LOCAL MUNICIPALITY				DEFENDANT

JUDGMENT
											
BOSIELO J
INTRODUCTION
1.
What happened in this matter can be aptly summed up by
reference to the old adage "Procrastination is the thief of
time." The plaintiff is a close corporation duly registered in
terms of the Close Corporation Act. The defendant is a local
authority properly established in terms of section 11 of the
Local Government: Municipal Structures Act, 117 of the 1998
(the Structures Act").

1.2
2.
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During or about August 2001, the defendant put up public
tenders for the installation of electrical reticulation networks
in the township of Seshego under tender no 8/2/1/1
E 19/2001. Pursuant to this tender, the plaintiff submitted his
tender. It is common cause that there were 20 other tenders
submitted for consideration. It is not in dispute that, after
considering all the tenders, the defendant awarded the
tender to another tenderer and not the plaintiff. Furthermore
it is common cause that the tender has been fully executed
by the successful tenderer.
LEGAL ISSUES
2.1 The plaintiff avers that this tender was governed by the
2.2
Preferential Procurement Policy Framework Act, 5 of 2000
(Procurement Act) read with Part 2 of the Preferential
Procurement Regulation of 2001.
Furthermore the plaintiff avers that it scored the highest
points as contemplated by section 2 (f) of the Procument Act.
Based on this, the plaintiff asserts that it should have been
declared as the successful tender and a fortiori the tender

2.3
2.4
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should have been awarded to the applicant. In fact, the
plaintiff asserts that in the circumstances, the defendant was
under a duty to award the tender to the plaintiff. As a further
bow to it's string, the plaintiff relies on the provisions of
section 33 of the Constitution of the Republic of South Africa,
Act 108 of 1996 (the Constitution) which entitles everyone to
administrative action which is lawful, reasonable and
procedurally fair.
Flowing from the above exposition, the plaintiff avers that by
awarding the tender to another tenderer, the defendant
acted unlawfully and in breach of its constitutional duty to
ensure
lawful,
reasonable
and
procedurally
fair
administrative action. As a result, the plaintiff sued the
defendant for R509 644. 46 which represents the damage
allegedly suffered by the plaintiff.
The defendant is defending this action vigorously. In
addition to its main defence, defendant raised two points in
limine. The first point in limine is premised on prescription
whilst the second one is premised on the failure by plaintiff
to comply with the provisions of section 3 of the Institution of

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Legal Proceedings Against Certain Organs of State Act 40
of 1992.
3.
STATUTORY FRAMEORK
3.1 Section 11 of the Prescription Act 68 of 1969 (Prescription
Act) is central and pivotal to the first point in limine. Section
11 (d) provides as follows:
"Periods of prescription of debts- The periods of prescription
of debts shall be the following:
(d) save where an Act of Parliament provides
otherwise, three years in respect of any other debt.
(3)A debt shall not be deem to be due until the
creditor has knowledge of the identity of the debtor
and of facts from which the debts arise: Provided
that a creditor shall be deemed to have such
knowledge if he could have acquired it by
exercising reasonable care."
3.2
It is clear from section 11 (d) of the Prescription Act, that
plaintiff is obliged to institute his claim within a period of three
(3) years of debt becoming due. This is so because there is
no Act for Parliament which provides otherwise. The crisp

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question to be answered is when does a debt became due.
Mr Diamond for the plaintiff submitted that the debt herein for
the plaintiff only became due after the last payment was
made to the successful tender by defendant. He submitted
that this is so, because this is the only time at which plaintiff
will be in a position to know with certainty what his precise
damages are. Understandably, Mr Motsiri for the defendant
held the opposite view. He argued that plaintiff's alleged
claim became due on the date of the award of the tender to a
third party or at worst, on the date on which the plaintiff
became aware that the tender was awarded to a third party.
Mr Motsiri submitted that, based on his tender documents
which he had submitted, the plaintiff would have been able to
determine with ease and exactitude whatever damages he
may have suffered. He submitted that for the plaintiff to
submit that it could not compute its damages until such time
that the last payment was made to the successful tenderer is
seriously flawed and far-fetched. According to Mr Motsiri the
tender was awarded to the successful party on 18 October
2001. The summons were served on defendant on 23 June
2005, some three (3) years and eight (8) months after the
alleged debt became due.

3.3
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I find it necessary to state that plaintiff formally applied for
condonation for having failed to
notice
serve the
contemplated by section 3 (1) of the Institution of Legal
Proceedings Against Certain Organs of State Act, 40 of
2002. This application was based on section 3 (4) (a) of the
Act. Section 3 (1) of the Act provides that+
"Notice of intended legal proceedings to be given to
organ of state.
(1)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).

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(2) A notice must
(a)
within six months from the date on
which the debt became due, served on
the organ of state in accordance with
section 4 (1); and
(b) (i)
briefly set out
the facts giving rise to the debt; and
(ii)
such particulars of such debt as are
within the knowledge of the creditor.
(3) for purposes of subsection (2) (a)
(a) a debt may not be regarded as being 
due until the creditor has knowledge of the
identity of the organ of state of the facts
giving rise to the debt, but a creditor must be
regarded as having acquired such knowledge
as soon as he or she or it could have
acquired it by exercising reasonable care,
unless the organ of state wilfully prevented
him or her or it from acquiring such
knowledge; and

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(b) a debt referred to in section 2(2) (a), must
be regarded as having become due on the
fixed date.
(4) (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 unreasonable
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, 0
such conditions regarding notice to the organ
of state as the court may deem appropriate.

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3.4 It should be clear from section 3 (4) of the Act that there are
certain clear jurisdictional facts which must be satisfied
before a court can condone any non-compliance with the
clear and peremptory provisions of section 3 (1) and (2) of
the Act. I will deal with these pre-requisites later in the
course of my judgement.
4.
LEGAL SUBMISSIONS
4.1 Mr Diamond, appearing for the plaintiff submitted that the
debt herein has not prescribed. He based his submissions on
the allegation that according to plaintiff, the debt did not
become due on 18 October 2001 (the date on which the
tender was awarded to the third party) but on the date on
which defendant effected final payment to the successful
tenderer. As I have alluded to above, Mr Motsiri was of a
different view. He submitted that the debt became due on 18
October 2001 when the tender was awarded to the
successful tenderer. He proceeded to submit that as
summons were only served three (3) years and eight (8)

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months after the debt became due, plaintiff's claim had
prescribed.
4.2
It is common cause that the tender was awarded to a third
party during 18 October 2001. Furthermore it is not in dispute
that summons was only issued on 22 June 2005 and served
on the defendant some considerable period after the
statutory three year period as set out in section 11 (d) of the
Act. The only question which was needs to be resolved is:
when did plaintiff's debt become due. The direct and clear
answer to this question lies in section 12 (3) of the
Prescription Act which provides:
"12 (3) A debt shall not be deemed to be due until
the creditor has knowledge of the identity of the
debtor and of the facts from which the debt crises:
Provided that a creditor shall be deemed to have
such knowledge if he could have acquired it by
exercising reasonable care."
4.3 In my view, the plaintiff's debt or claim became due at the
time when he became aware that the tender was not awarded
to him. This date is 18 October 2001. It is a well-known fact

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that a tenderer is expected to set clearly in his documents all
relevant information which impacts on the tender, including his
pricing. I fail to understand why an unsuccessful tenderer
should wait until the successful tenderer is paid his final
payment before he can compute his damages. Common
sense and logic informs me that the claim of an unsuccessful
tenderer is not dependent on the successful tenderer's pricing.
In my view, the plaintiff's argument on this aspect is patently
absurd and far-fetched. It is clear that, for reasons best known
to plaintiff, plaintiff delayed in instituting action against the
defendant. Section 11 (d) of the Act is very clear. It is
abundantly clear that plaintiff's claim has prescribed.
4.4 It should be clear that section 3 (3) (a) of the Institution of
Legal Proceedings Act Against Certain Organs of State Act is
couched in similar to the above-quoted section. It should be
clear from my finding above that the fact that plaintiff's claim
has prescribed has a direct relation to the second point in
limine based on non-compliance with section 3 of the
Institution of Legal Proceedings Against Certain Organs of
State Act. I have already alluded to the fact that it is common
cause that plaintiff failed to comply with section 3 (1) of the

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Act. However plaintiff applied formally for condonation of his
non-compliance with the section. According to section 3 (4) (b)
a court may grant such condonation 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) organ of state was not unreasonably prejudiced by
the failure.
4.5
Based on section 3 (4) (b) (i), it follows logically that as I
have already found that the debt herein has prescribed, the
application for condonation should fail Regrettably, this
effectively disposes of the application for condonation as I
cannot revive a claim which has prescribed. However, in
order to complete the picture, I deem it prudent to deal with
the question whether the plaintiff has shown good cause for
his non-compliance with section 3 (1) of the Act. It is
common cause that after the tender was awarded to a third
party, plaintiff brought a review application in this court to
have the defendant's decision to award the tender to a third
party reviewed and set aside. it is furthermore common
cause that the application was struck off the roll due to lack
of urgency. It is clear from the papers that
after the

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application was struck off plaintiff sat idly until sometime in
April 2005 when it suddenly instructed new attorneys to
pursue this matter. Plaintiff's explanation for this patent
ineptitude is manifold. Firstly, plaintiff avers that after his
attorney, Mr Steyther died, his matter lost momentum.
Regrettably, plaintiff fails to offer any explanation as to why it
did nothing to ensure that this claim is properly and diligently
attended to. Plaintiff avers that it only became aware during
July 2005 when it consulted a new attorney that this claim
was never prosecuted. This cannot be the truth. It is
important to note that plaintiff does not state that before it
consulted with its new attorneys, it had no knowledge of its
claim. Moreover plaintiff stated unequivocally at paragraph
7.9 his affidavit, that "it became apparent that my claim
against Respondent was never taken any further." It should
reasonably clear from this statement that plaintiff had
instructed its previous attorney to lodge its claim. However
due to the intervening death of Mr Steytler his claim was
unfortunately allowed to die. Plaintiff fails to explain why Mr
Steytler did not issue the required notice in terms of section 3
(1) whilst he was still alive. Furthermore, plaintiff failed to
explain to the court exactly when did Mr Steytler die. It is not

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clear whether his matter was assigned to another attorney in
the firm where Mr Steytler was a partner. If this matter was
taken over by another attorney where Mr Steyler was a
partner, then an explanation must be given as to why that
attorney neglected this matter and did not take plaintiff's
claim any further. Regrettably there is no such explanation. It
should be clear that the application for condonation suffers
from a serious paucity of relevant information to explain the
non-compliance by plaintiff with the Act. In the result, I am
unable to find that there is good cause to condone the
plaintiff's failure to comply with section 3 (1) of the Act.
In the result and for aforegoing reasons, I find that the
plaintiff's claim has prescribed. Furthermore, I find that
plaintiff failed to comply with section 3 (1) of the Act and
further that plaintiff has failed to show good cause for
condonation of his non-compliance with section 3(1).
Consequently, I hereby make the following order:
1. The two special pleas raised by the defendant are
upheld.

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2. Plaintiff's claim is dismissed with costs, which costs
shall include the costs of two counsel.
					
L.O BOSIELO
JUDGE OF THE HIGH COURT
Heard on the
: 1 June 2007
For the Plaintiff: G J Diamond
Instructed by : K.P Seabi & Associates
For the Defendant: S D Motsiri
Judgement Delivered: 03 August 2007