WENDY KNOWLER | To avoid a default judgment, make sure your creditors know your official address

Do you know which address your bank has on record as your chosen one — the address to which legal documents must be sent?

It’s an important issue because, as banking services ombud Reana Steyn pointed out in a recent media release, while a court can’t give judgment against you if the bank bringing the case can’t prove it sent you a section 129 notice (a formal letter of demand), the bank’s only obligation is to send this letter to your chosen address by registered post. They do not have to prove that you received it, Steyn warned.

And that’s why so many default judgments are granted against alleged debtors — that is, without their knowledge or participation. Only when they apply for credit or check their credit profiles do they discover they have a judgment against them.

This issue was central to a case involving Lezel du Toit of Johannesburg. After she became overindebted, she underwent debt review with DebtBusters in 2022, with her Absa car loan — taken out on a Renault Sandero in mid-2019 — included in the refinancing agreement. 

But owing to a couple of missed (and later caught-up) payments — a saga I won’t go into here — Absa took legal action to repossess the car.

In February 2023, the Johannesburg high court granted default judgment in favour of Absa, meaning she was required to hand over her car to a representative of the bank. The crux of her case against Absa — heard last week in the same court, where she sought to get that judgment rescinded and her car returned to her — was the address the bank used to serve that section 129 summons on her.

In my view ... had the person who granted the default judgment been aware of the change of address, judgment would not have been granted.

—  Justice Wilson

The service of that summons was irregular, she said, because the bank had used an old address, “affixing the summons to its main entrance”. That, as well as having been a model debt counselling candidate, entitled her to get her car back, she argued.

Yes, the outdated address was the address that the bank officially had on record for her, she said, but in early January 2022, 11 months before the bank served summons on her, her debt counsellor (DebtBusters) had sent a National Credit Regulator Form 17.1 to all credit providers, including Absa, with a different address for her: one in North End, Johannesburg. So that’s the address the bank should have used to serve the summons in respect of her car — and if it had, she would have received it and been in a position to defend the action.

Justice Wilson, the judge in the matter, disagreed with Absa’s claim that the debt counselling notice of January 2022 did not amount to a change of address. “Form 17.1 is an important document,” the judge said. “Debt review has consequences for debtor and creditor. [Du Toit] makes a fair point when she points out that, after judgment was obtained, the bank managed to find her and her car at a different address, but at the time of service of the summons the bank relied on a domicilium address.”

“In my view,” the judge said, “had the person who granted the default judgment been aware of the change of address, judgment would not have been granted.” So it followed that Du Toit should get her car back, Wilson said.

Absa had undertaken to store the Sandero safely until the outcome of the case, and so it was that Du Toit was reunited with it on Tuesday this week, a year after it was taken from her.

I asked Steyn how significant the judgment was, given the banks’ frequent reliance on the domicilium address, even when they had access to a client’s current address. Each such case was considered on its own merits, she said, “so it’s difficult to take a position without the details of a specific case”.

In terms of the Domicile Act, Steyn said, “domicile” is your permanent home, while “residence” is your temporary home, and as such there was a distinction between the two. In terms of the Absa vehicle asset finance agreement, clients do not choose a domicile address, but merely a “physical [street] address”.

The terms of the contract provide that a notice pursuant to it must be delivered to the address stated in the agreement, or “the address most recently provided by the recipient by hand, registered mail or email”.

“It can therefore be argued that Form 17.1, as delivered to the bank by the debt counsellor, provided the current residential address of the client to the bank,” Steyn said. “The purpose of Form 17.1 is not to change a debtor’s address for service of legal documents, but rather to inform credit providers that a consumer has applied for debt review,” she said.

But in this case, she said, “as the Absa contract in question only made provision for the updating of a residential address and not specifically a domicile address, it can be argued that the Form 17.1 constituted a change of address for legal notices”.

But generally in South Africa a debt review application itself may not be sufficient to change your chosen domicilium address formally, Steyn said. Changing that address on contracts or court orders usually requires the explicit consent and agreement of all parties, she said.

In short, a debt review application may involve providing information about your current address and contact details, but it does not automatically change your domicilium address. To do that, you must notify the credit provider in writing to update the relevant legal documents with your new address details.

• Contact Knowler for advice with your consumer issues via email consumer@knowler.co.za or on X (Twitter) @wendyknowler