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The longest yard – court hits back

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The longest yard – court hits back

The longest yard – court hits back

23rd October 2020

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The High Court in Absa Bank Limited v Mare and Others was recently tasked with, inter alia, considering the proper service of a summons, and whether affixing the summons to the grass on a property, constituted proper service in accordance with the Uniform Rules of Court (the Rules of Court).

In terms of this decision, Absa Bank Limited (Absa) entered into a written loan agreement in relation to a mortgage bond with the Anet Mare (Mare), who in turn, fell into arrears with the repayments of the loan agreement. A section 129(1) Notice in terms of the National Credit Act 24 of 2005 (Section 129(1) Notice), was served on Mare by the respective sheriff, who attached it to the gate of Mare's premises. As no response was provided, Absa issued a summons for the recovery of the outstanding amount of the loan agreement, whereby the sheriff affixed it to the grass on Mare's premises. As Mare had not provided a notice of intention to defend the matter, Absa applied for, and was granted default judgment in the matter. A writ of attachment of Mare's premises was granted by the Court, and a sale in execution of Mare's premises took place.

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Mare applied for the rescission of this default judgment, and in turn for the setting aside of the sale of her property, on the basis that she was never served with either the Section 129(1) Notice or the summons. The court a quo rescinded the default judgment on the basis that it had been granted erroneously. The Court held that merely leaving the summons on the grass, or the notice on the gate, without taking other proper precautions to ensure it was correctly delivered, did not constitute effective service in terms of the Rules of Court, and ordered that Mare's ownership of the property be reinstated. This decision was then appealed.

On appeal, the Court cited the decision in Knox NO v Mofokeng and Others 2013, holding that, on the restoration of a judgment, the debtor's entitlement to claim restoration of the property, once the judgment in terms of which the property had been sold in execution had been rescinded, depended on the factual circumstances at the time of rescission. Of particular importance, the Court noted that where the sale had been perfected by delivery in the case of movables, or -  in the case of immovables  - registration of transfer to a bona fide purchaser who had no knowledge of the rescission proceedings, or where the transfer had been effected before institution of the rescission proceedings, the owner was not entitled to recover possession of the property, unless it could be shown that the judgment and/or sale in execution constituted a nullity.

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In determining whether the default judgment constituted a nullity, the Court relied on the decision of Nkutha and Another  v Standard Bank of South Africa and Others, which noted that a default judgment would be void where " there was no power to have granted it in the first place, such as where service of the process did not occur in accordance with the rules of the court.". Absa argued that the Section 129(1) Notice and the summons were served in accordance with the Rules of Court, however, Mare argued that service of both the Section 129(1) Notice and the summons were not properly served in accordance with the Rules of Court, citing the following reasons:

  • there was no perimeter fence or gate on the property;
  • she was present at the property when the sheriff left the Notice and summons in the property; and
  • she denied any discussion with the sheriff indicating that she would collect the summons in his office.

In dealing with the service of the Section 129(1) Notice, the Court accepted the above as correct, and held that that service of the Notice by affixing it to a gate at the address would not have been plausible. In turning to the service of the summons, the Court reiterated the well-known principle that the purpose of serving the summons or notice of motion is to involve a defendant or respondent in a lawsuit, and that such party is only implicated or involved in the lawsuit once service of the summons or notice of motion had been effected.

The Court sought to narrow the issue surrounding service of the summons, by questioning the manner of service prescribed in Rule 4(1)(a)(iv) of the Rules of Court, which provides for service at the address. The manner of process here is not prescribed and depends on the circumstances, nor does the loan agreement prescribe such. The Court held that the duty upon a sheriff is to serve a notice or process of court at the address by delivering or leaving the notice or process in a manner by which, in the ordinary course, the notice or process would come to the attention and be received by the intended recipient, and to report to the court how the process was served and why it was served in that manner.

The Court held that the leaving of the summons on the grass where it can be blown way, taken away or be invisible, was not an appropriate place for delivery in these circumstances. In circumstances where delivery is to be done in terms of Rule(4)(1)(a)(iv), it would not be enough to drop the process over a perimeter fence or to put it into a hedge. The obvious method of delivery that would have allowed the summons to come to the attention and be received by Mare, and which the sheriff was required to comply with in terms of Rule 4(1)(a)(iv) of the Rules of Court,  was to hand a copy to Mare or a responsible employee, if there was someone present, by slipping it under or affixing it to the front of her home, or even by placing it in a post box, if there was one.

The Court held that there was no proper service of the summons and that the default judgment was void. The sale in execution was therefore invalid and the sheriff had no authority to conduct the sale and to transfer the property to the purchaser. The Court therefore held that the property could, in principle, be vindicated from a bona fide purchaser who had taken transfer of the property. The Court ordered the reinstatement of the first respondent's registered ownership of the property.

Although the above principles elucidated by the Court in this decision are consistent with the well-known principles surrounding service, parties should be mindful of the manner in which service has taken place and ensure that their lawyers scrutinize returns to ensure that they accord with the Rules of Court, in order to prevent any obstacles in obtaining the necessary relief.

Written By Darryl Bernstein, Partner and Head of Dispute Resolution, Rui Lopes, Associate, Dispute Resolution, and Nothando Mthimkhulu, Candidate Attorney at Baker McKenzie in Johannesburg

 

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