The borrower defaulted and the lender took possession. The borrower was trying to restrain the lender from selling the property and argued that the Default Notice had not been properly served and therefore the lender’s right to exercise their power of sale had not arisen.
The borrower had notified the lender of a change of address. The lender had sent all correspondence to the new address (which was a PO Box). However the Default Notice had not been served at the PO Box address or at the registered address of the borrower, but rather had been left under the front door of the security property, which was leased as a restaurant.
The borrower argued that because it had notified the lender of the change of address, the lender could not effect valid service by leaving the Notice at the premises, as they knew that they were leased. The borrower also sought to rely on the doctrine of fair notice. However this was raised after both parties had already made all their arguments and so the Judge did not allow the borrower to rely on that argument.
The Judge interpreted that the object and purpose of the relevant condition in the mortgage was to facilitate the service of notices and demands by the lender on the borrower, and it bore the usual one-sided character of a provision designed to give the lender several means of giving notices and making demands. The Judge determined that the condition provided for service in any number of ways and satisfaction of any of the avenues would constitute good service. Further, the Judge found that the meaning that the borrowers were arguing for was not consistent with the meaning of the clause.
Therefore, the Judge found that service of the Default Notice being left at the address as shown in the mortgage was valid, and further the Transfer of Land Act also enables service of the Default Notice in that way. Therefore the lender was entitled to exercise their power of sale.