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Critical overview

25 November 2010

The 2009 Conference of Registrars has yielded, in my humble opinion, very few resolutions that may be referred to as controversial.

It is regrettable that Registrars Conference Resolutions RCR 40 of 2008 was not repealed. With respect, it made no sense at all. A general power of attorney (GPA) is obviously granted for use in general not only in the deeds office. Registration in the deeds office of a General Power of Attorney is a requirement of the Deeds Registries Act 47 of 1937 (DRA) to facilitate the use of the power in the deeds office. Yes, in the old days the original was not returned, but then banks, etc. used to accept copies of the power. Nowadays, thanks to technology, the original is returned to client, and banks, etc. do not accept a copy. The original must be produced. Furthermore, section 2(c) of Deeds Registries Act does not state that the filmed copy becomes the original document that is the case only for deeds office purposes.

RCRs 35 of 2005, 2 of 2006 and 12 of 2008 and their confirmation by RCR 6 of 2009, beg an explanation. It is clear from the Court's arguments in the Hunkydory case that mortgage cannot be construed as alienation, and it can only be said that it may have an alienation as a result, referring to exactly the cases quoted in RCR 2 of 2006.

RCR 19 of 2008 resolved, in the opinion of probably most conveyancers, a matter which was for long a matter of controversy. The last sentence of RCR 10 of 2009 now effectively places the situation right back where we were prior to RCR 19 of 2008. If one needs to get the owner's consent to the rectification in terms of section 4(1)(b), one might as well again get the owner to apply. This in the case where the Act actually places the discretion on the Registrar to rectify the error, admittedly with the consent of parties that appear to have an interest in the rectification with no provision for an application at all.

RCR 12 of 2009 cannot be correct. This resolution is putting the cart in front of the horses. There is nothing in section 14, or anywhere else in the Deeds Registries Act, that will prevent, in the scenario created in the question put before conference, the sale of the property from the joint estate, (i.e. the estate of the first dying as it is called in the resolution), and transferring the property to the purchaser. The estate of the last dying spouse will only be entitled to the proceeds of the sale. Section 14 of Deeds Registries Act dictates in which order transfers must be registered, i.e. in the order in which transactions were concluded or took place. It does not dictate the order in which transactions must take place. Thus, if the property was sold from the joint estate, the transfer will be passed from that estate with the executor/representative signing the power of attorney in compliance with section 21 of the Deeds Registries Act. A section 42(2) of the Administration of Estates Act 66 of 1965 (ADE) endorsement in the joint estate will be required, and not the estate of the last dying, as the property will never be an asset in that estate. If the property was only sold from the estate of the last dying, then his executor/representative alone will pass transfer as the property will then form an asset in that estate. (Amended by CRC 21/2010 http://www.ghostdigest.co.za/PDF/ConferenceResolutions2010.pdf - Editor).

CRC 22 of 2009 is in my humble opinion not correct. By the term "trite law" we mean that it has been tried and tested, has been accepted as a legal principle and is consistently applied by all courts. To state that it is trite law that an amount must be disclosed seems to fly in the face of the common law as it still applies. I do not think that the necessity for some procedure to be satisfied, i.e. the determination of the deeds office's fee, is of any consequence. The fee structure should be amended to allow for this circumstance. Admittedly, by far the majority of bonds registered in South Africa are to secure the payment of a monetary debt, but that does not rule out bonds registered to secure obligations other than monetary debts.

In Thienhaus, N.O. v Meje & Ziegler Limited and Another 1965 (3) AD at p. 32 the Court states as follows: "It is clear that a mortgage bond as a deed of hypothecation must relate to some obligation. As it was expressed by Wessels A.C.J. in Kilburn v Estate Kilburn 1931 AD at p. 506, a mortgage:
"can secure any obligation whether it be present or future, whether it be actually claimable or contingent. The security may be suspended until the obligation arises, but there must always be some obligation, even if it be only a natural one, to which the security obligation is accessory".

WiIle's Mortgage and Pledge (Scott and Scott) defines mortgage under the Heading "Essentials of Mortgage" as follows: "Mortgage is a right, over the property of another, constituted with the object of securing an obligation, and effectively attaining such object". Under the heading "The Principal Obligation", sub-heading "Nature of Obligation" it is stated: "The principal obligation may be of any kind of nature." It follows obviously that the obligation must not be invalid or illegal. Looking at the quoted work in CRC 22 of 2009, Silberberg's The Law of Property on page 319, I fail to find anything to contradict what I said above. In fact the same works and cases are also referred to there. Footnote 10 on page 319 states for example "…and the bond ought to stipulate a maximum amount". Just a convenience therefore in the context in which it was said. Mentioning an amount is also not essential of mortgage. Thus, by way of example, securing a party's obligation to transfer a portion of a property back to the seller by means of a bond, with no amount reflected in the bond, should be perfectly registerable. The monetary value of the obligation can be easily ascertained or determined later, e.g. in case of foreclosure.

RCR 34 of 2009 in my opinion seems to me to be open for attack. Let us assume three persons own a property and wish to register a general plan on such property. There will be no objection to such a registration yet each owner also has no locus standi to apply for the registration in respect of the share not owned by him or her. Then why distinguish between the two cases? To cite section 22 of the Deeds Registries Act as a stumbling block hardly seems relevant. Each of what will amount to separate township owners will simply be able to transfer such erven as are situated on his/her parent erf to purchasers. The other owners need not be involved in such a transfer. To take it to the level of the transfer of the remainder of the township, should the remainder of the township be acquired by one person, each of the township owners will simply have to pass a separate transfer to such new owner of his/her parent property, as section 22 will effectively not allow one transfer. Surely there cannot be an objection to this? It all fits neatly into section 47 of the Deeds Registries Act.

An example in Cape Town where such a registration will find practical application is District 6, where different bodies own and are redeveloping different parts of the area, but general plans covering more than one body's area have been approved. There does not even seem to be a provision in the Deeds Registries Act that prohibits partial registration of a general plan, but that's another argument.

RCR 40 of 2009 needs reconsideration. Without going into the detail of similar provisions in different countries, the situation in England, for example, may be a case in point. Civil unions between same sex partners in England are governed by The Civil Partnership Act 2004. Such a civil union or partnership is not recognised as a marriage. This can be verified on the website http://www.legislation.gov.uk/ukpga/2004/33/contents. It cannot possibly be correct then to describe partners in such a union as "married". It would seem that each case will have to be treated on its own merit, taking into consideration in the first place whether the union is recognised as a marriage in the foreign country where the union was entered into. (Confirmed by CRC 24/2010 http://www.ghostdigest.co.za/PDF/ConferenceResolutions2010.pdf - Editor).

Dudley Lee
Republished with permission SA Deeds Journal


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