If the provisions in the mortgage conditions relating to service are complied with then service will be deemed to have taken place.

This was confirmed by the High Court in Redstone Mortgages Ltd v Wiemer. The borrower had defaulted on his mortgage. The claimant sent him a letter of demand which the borrower denied having received. The claimant successfully applied for summary judgment against the borrower for the loan principal, accrued interest and indemnity costs.

The borrower appealed on the basis that the demand had not been served properly. He alleged he had notified the claimant of a new address, to which it had sent several statements of account, and at which the demand should have been served.

The court held there was no basis on which to doubt that the claimant had sent the letter of demand. Under the mortgage conditions, a notice by way of letter of demand could be sent either by post or delivered by hand. If sent by post, it was deemed to have been given on the second working day after being posted, even if the letter did not reach its destination or was returned. Such a demand was valid unless the lender had been properly notified of another address. The borrower had conceded that the address to which the notice had been posted was his latest residential address.

The borrower ought to have given evidence at the first hearing about his alleged notification of his new address to the claimant and not ask the court to draw an inference from the fact some statements of account had been sent there. It would be unfair to allow the borrower to serve a witness statement at this late stage which would require the claimant to produce records and give evidence in answer. The court dismissed the appeal.

Things to consider

Where an agreement provides for how, and when, something is to be served, in order to take the benefit of those deemed service provisions, the party serving the document should follow the provisions to the letter. Service will then be deemed to be effective and the recipient will have an uphill struggle to persuade the court that effective service has not occurred.