Upon the conclusion of an agreement parties as a standard practice insert a domicilium clause in the agreement to make provision for the contracting parties to elect their address of choice to which they wish to receive service of legal notices and processes in relation to the agreement. This entails inserting a street and/or postal and/or email address upon which notices of breach, letters of demand or court processes can be served. But is it as simple as that? Should more attention be given to the domicilium clause during the drafting stage?
On appeal, the Gauteng Local Division, Johannesburg in the matter of Shepard v Emmerich (A5066/2013)  ZAGPJHC 120 considered the validity of the service of a summons at a contractually chosen domicilium citandi et executandi.
In the matter, the domicilium clause was contained in an addendum to a sale of business agreement, concluded between the appellant, as the purchaser, and the respondent as the seller (Agreement). In terms of the Agreement the seller elected the second floor of its attorneys of record and named a person for such service.
The purchaser issued summons against the seller for payment of a sum of money based on the Agreement. The summons was served by the deputy sheriff, which, according to the return of service, was effected on the seller’s legal representatives being the chosen domicilium citandi et executandi by “affixing a copy of the combined summons to the principal door” of the domicilium address.
Strictly speaking, the service, not being effected at the second floor of the domicilium address and not marked for the attention of the named person did not comply with the provisions of the domicilium clause in the Agreement between the parties.
It was further accepted by the court a quo (court of first instance) that it was common cause that prior to the service of the summons, the law firm had moved offices from the domicilium address and further that the named person had resigned from the firm. As a consequence, the summons never came to the attention of the seller and judgment by default was subsequently sought and granted. Pursuant thereto the seller launched an application for rescission of the default judgment. The application was opposed and the court a quo found that the service was defective. The purchaser appealed the judgment.
On appeal, the court (full bench) found that the double provision in the domicilium clause provided for service on the second floor, which was not complied with. The second requirement was a reference to the named person which likewise was not complied with.
Of importance to note from the judgment was that the court stated that although the firm had moved and that the named person had resigned, this was immaterial as it did not and could not change the requirements for a proper service. Had the service been effected in accordance with the domicilium clause, even though the summons did not come to the attention of the seller due to the changed circumstances, it would have constituted proper service.
As a result, the appeal was dismissed as the purchaser did not adhere to the provisions of service as stipulated in the domicilium clause.
It is therefore imperative at a drafting stage to not merely regard the domicilium clause as a standard clause but to pay more attention thereto. On interpretation of the domicilium clause it will come down to the wording used. Parties as well as their attorneys must apply their minds to the domicilium clause as well as familiarise themselves with the service process of legal notices and summonses.