Durban - The Supreme Court of Appeal has been approached to chart the way forward for banks dealing with defaulting homeowners after conflicting judgments caused confusion in legal circles.
In June, the Constitutional Court ruled that defaulting debtors must receive section 129 notices – notifying consumers they were in default – via registered mail before creditors took action against them.
However, two courts, in KwaZulu-Natal and the Western Cape, interpreted the judgment differently.
Durban High Court Acting Judge Peter Olsen handed down a judgment in July – in three cases brought by Absa bank against homeowners – which put up more barriers for banks to overcome.
In the three cases, the section 129 notices had been sent via registered mail to the respective post offices, but had been returned to sender.
The bank had track-and-trace reports to confirm the letters had been sent to the correct post offices and had applied for default judgment. Because of the conflicting judgments, Absa confirmed it had been granted leave to appeal to the appeal court.
Judge Olsen said the practice of sending notices by registered mail was not enough.
He said ordinary post could also be used, with multiple letters being sent to the owner’s home address, work address and any other provided.
Judge Olsen adjourned the applications indefinitely and ordered the notices be sent again by registered mail and by fax, e-mail or in person. He also ordered that in similar cases, where summons had been issued, the banks must bring applications so the court could give a directive setting out the steps that needed to be followed to conform to the National Credit Act requirements. However, in a similar case Cape Town High Court Judge Bennie Griesel found differently.
Judge Griesel said the Constitutional Court had ruled that merely dispatching the notice was insufficient and that there must be proof that the letter reached the post office.
Absa argued that the two decisions would cause problems.
“Inter-divisional confusion would arise by the conflicting judgments. It is thus desirable that the SCA [the appeal court] pronounces finally on this issue so that the legal community enjoys certainty,” it said.
The bank said Judge Olsen’s judgment was flawed and that providing proof that the notice had been received by the post office was sufficient. - The Mercury