You’ve been served

Served on security guard at complex

In the matter Sibeko v Shackleton Credit Management (Pty) Ltd and Another (3664/2015) [2022] ZAGPJHC 1036, the applicant (Sibeko) sought a rescission of a default judgment taken against him on 20 November 2015 by Shackleton in terms of a vehicle financing agreement he concluded with WesBank, which WesBank then ceded to Shackleton. In addition, he sought a declarator that the purported service of the summons was invalid. In terms of the vehicle financing agreement, Sibeko chose his residential address, a complex, as his domicilium citandi et executandi (the address for service of legal documents) for service on him of legal documents (“the domicilium”). A copy of a combined summons was served by the sheriff on a security guard at the domicilium, which, Sibeko argued, should be declared invalid and any subsequent legal processes based on that judgment should be set aside. He claimed that he did not personally receive the summons, and, thus, the judgment does not accord with any of the competent methods of service provided for in the court rules.

Good service

The court relied on Amcoal Collieries Ltd v Truter 1990 (1) SA 1 (A) and Absa Bank Ltd v Mare and Others 2021 (2) SA 151 (GP), which held that service on an address chosen by a debtor in an agreement as the domicilium constitutes good service even if the debtor is known not to be residing at the domicilium address, is overseas, or has abandoned the premises. Furthermore, the court referred to the Loryan (Pty) Ltd v Solarsh Tea and Coffee (Pty) Ltd 1984 3(3) SA 834 (W) case, which held that effective service at the domicilium must, in the ordinary course, come to the attention of and be received by the intended recipient.

Obligation on debtor to update or amend domicilium address

The court held that it is the obligation of a debtor, Sibeko, to update or amend its chosen domicilium address with the credit provider, Shackleton, in the event of a change to the domicilium address. Sibeko informed the court that he telephonically advised Shackleton that he was no longer living at the domicilium. However, it is important to note that a change in residential address does not serve to change the domicilium, and Sibeko’s averment did not amount to an amendment of his domicilium address.

Telephone conversation was not valid amendment

The court held that Shackleton was in its right entitled and contractually obliged to rely on the domicilium address for the purposes of service of the combined summons on Sibeko, as the telephonic conversation relied upon by Sibeko was only in respect of his change of residential address and was not a valid amendment to the domicilium address in terms of the agreement.

The court held that the obligation rested upon Sibeko to update the domicilium address in accordance with the requirements of a valid amendment to the agreement. The telephonic conversation did not do so.

In giving its order, the court held that without a valid amendment of the domicilium address and given the difficulties of a sheriff or his deputy accessing a security complex in the absence of the occupant for the purposes of service in terms of rule 4 of the Uniform Rules of Court, service by way of handing summons to the security guard at the complex, who is a responsible employee older than 16 years, is valid and is regarded as effective service on the debtor (Sibeko).

Sibeko also relied on an alleged cancellation of the agreement on 14 October 2011. He pleaded that Shackleton’s claim was prescribed on 14 October 2014, three years after the cancellation of the agreement. However, Shackleton repossessed the vehicle that was the subject of the agreement, on 31 October 2012, a date after Sibeko signed a voluntary termination notice (“VTN”) in terms of Section 127 of the National Credit Act (”the Act’). Through this notice, Sibeko acknowledged liability for any shortfall on the motor vehicle after the sale of the vehicle.

No triable defence

The court accepted Shackleton’s argument that the aforementioned cancellation date of 14 October 2011 was a typographical error and should have been 14 October 2012. Shackleton argued that the vehicle in question was repossessed on 31 October 2012, after Sibeko signed the VTN. Additionally, the vehicle was sold at an auction towards the end of 2012, and the proceeds of R36,480.00 from the sale were received on 7 December 2012. Through the signing of the VTN, Sibeko acknowledged his indebtedness in respect of the shortfall.

The court held that Sibeko did not deny his indebtedness to Shackleton in the amount claimed. Moreover, he did not suggest that, if the summons had come to his attention, he would have been financially able to pay the outstanding amount claimed by Shackleton. Sibeko’s prescription argument was, therefore, not entertained.

In the circumstances, the court held that Sibeko failed to set out a triable defence and failed to meet the requirements for rescission of the judgment. Accordingly, the application for rescission was dismissed with costs.

Conclusion

In conclusion, it is essential to carefully review the specific agreement in question to determine the exact procedures or methods that need to be followed when changing the nominated domicilium. For example, the agreement may specify that any changes to the nominated domicilium must be made in writing and delivered via registered mail to the other party. In such a case, the party seeking to change the domicilium would need to follow the stipulated process by preparing a written notice and sending it via registered mail to the other party.

Should a domicilium address listed in any agreement change, clients are advised to always ensure that they notify the bank in writing and request that the bond and/or vehicle agreement’s domicilium clause be amended to reflect the new home address. This is crucial because, absent to such amendment, service on the old address will be regarded as effective; doing it over the phone will not be enough. Furthermore, in the event that a party encounters financial difficulties and falls behind on payments, the bank has the right to initiate legal action. They will serve the party with legal documents, including notices in accordance with Section 129 of the Act and summons. It is essential to be aware that these documents will be sent to the old address listed as the domicilium address in the argument with the bank. Even if the party has relocated or updated their address, the bank will continue to use the domicilium address specified in the agreement until it is formally updated. Therefore, it is crucial to ensure that the bank has the correct and current domicilium address to avoid any potential issues or missed notifications.