Thumeka Cetwayo v ABSA Bank Limited

The applicant (Cetwayo) entered into a credit agreement with ABSA Bank on 23 December 2021 for a Toyota Hilux motor vehicle. The agreement was regulated by the National Credit Act 34 of 2005. The applicant defaulted on monthly instalments of R10,662.10, accumulating arrears of R139,492.95. ABSA issued a section 129 notice via email on 12 July 2023 to the applicant's nominated email address ([email protected]), which she had requested be used for all correspondence on 2 June 2023. The applicant did not respond. ABSA instituted action by summons on 31 August 2023, claiming cancellation of the agreement and return of the vehicle. Service of summons was effected on 10 October 2023 at 37 Tshabangu Street (accepted by Mzukisi Cetwayo, identified as the applicant's brother), though the agreement specified 37A Tshabangu Street. Default judgment was granted on 7 November 2023 by Govindjee J. The vehicle was repossessed on 31 May 2024. The applicant then sought rescission under rule 42(1)(a), arguing improper service and claiming defences of reckless lending and entitlement to return of the vehicle.

• Whether the default judgment was erroneously granted in the absence of the applicant under uniform rule 42(1)(a)
• Whether service of the summons was properly effected at the applicant's domicilium citandi et executandi despite the discrepancy between 37A and 37 Tshabangu Street
• Whether the section 129 notice under the National Credit Act was properly delivered via email to the applicant's nominated electronic address
• Whether the applicant established good cause for rescission, including whether she had a bona fide defence with prospects of success
• Whether the applicant had a valid defence based on reckless lending
• Whether the applicant was entitled to return of the vehicle after cancellation of the credit agreement

1. The application is dismissed. 2. The applicant shall pay the costs of the application on the high court scale as between party and party.

1. Under rule 42(1)(a), a judgment is not erroneously granted where the court granting it was aware of all relevant facts (including procedural irregularities) and was procedurally entitled to grant the order. 2. Service at a domicilium citandi et executandi under rule 4(1)(a)(iv) does not require strict compliance with the nominated address where delivery is effected in a manner whereby the process would ordinarily come to the attention of the intended recipient. Minor typographical discrepancies in addresses do not render service invalid. 3. A sheriff's return of service constitutes prima facie evidence under section 43(2) of the Superior Courts Act, and a party seeking to impeach it bears the onus of rebuttal on a balance of probabilities. 4. Under the National Credit Act, where a consumer nominates an electronic address for legal communications in terms of a credit agreement, delivery of a section 129 notice to that email address constitutes proper notice. 5. Once a credit agreement is validly cancelled under the National Credit Act following proper section 129 notice and non-remediation of default, the agreement cannot be revived or reinstated, and the consumer has no legal entitlement to continued possession of goods owned by the credit provider.

The court observed that credit agreements regulated by the National Credit Act are increasingly free of legalistic jargon, making them more accessible to consumers. The court also noted that even if the application failed under rule 42(1)(a), it could be considered under rule 31(2)(b) or common law rescission principles, provided those requirements are met. Rugunanan J indicated that the applicant's denial that Mzukisi Cetwayo was her brother was ineffective, as it was unlikely the sheriff would have conceived of such name and relationship by design. The court emphasized that while rule 42(1)(a) does not require good cause, a court still retains discretion whether to grant rescission even where the requirements are met, as the rule uses permissive ('may') rather than mandatory ('must') language.

This case clarifies the requirements for rescission under uniform rule 42(1)(a) in the context of credit agreements regulated by the National Credit Act. It establishes important principles regarding: (1) the flexibility of service at a domicilium citandi et executandi, confirming that minor address discrepancies do not invalidate service if effected in a manner likely to bring the process to the recipient's attention; (2) the validity of electronic delivery of section 129 notices where the consumer has nominated an email address for legal communications; (3) the evidentiary weight of a sheriff's return of service as prima facie evidence and the burden on parties seeking to impeach it; (4) the interpretation of rule 42(1)(a) requiring demonstration that the court was unaware of facts that would have prevented it from granting the order; and (5) the irreversibility of credit agreement cancellation under the National Credit Act once properly effected, precluding revival or return of financed goods.