Power of executor – reply to a reply

8 February 2007

Thabo Nqhome's reply (Power of executor - a reply) to Allen West's article raises certain issues. Starting with the statement in paragraph 7 that the Registrar of Deeds does not have the power to declare a transaction null and void: most certainly the Registrar may, given the current law as it is and as the Registrar understands it, decide that a sale/transaction is ab initio void, and should the parties to the contract disagree with the Registrar, it is up to them to refer the matter to the Court for a ruling.

MrNqhome refers to section 3(1)(b) of the Deeds Registries Act no 47/1937 (DRA), highlighting three reasons why a Registrar of Deeds may reject deeds. I submit that it is entirely within the power of a Registrar of Deeds to reject a transfer which is clearly void ab initio based on the information before him. No Registrar of Deeds will register a transfer where a person acted as trustee before being authorised by the Master to do so, notwithstanding the decision in the Kriel case. It is a valid rejection based on legal fact.

It is all very well to refer to the decision in Kriel v Terblanche NO 2002 (6) SA 132 (NC) pointing out that the title is not invalid, but that is the situation after registration, whereas Mr West was referring to a matter lodged for examination and registration, if correct. That is what the case was about - one party requesting the Court to declare a title invalid after registration on the basis that the initial agreement of sale being invalid ab initio , based on various decisions, such as Simplex (Pty) Ltd v Van der Merwe and others NND 1996 (1) SA 111. However, Mr West was not referring to an already registered deed, but to a matter lodged for examination with the Registrar of Deeds and it comes to light that a person acted as executor prior to his appointment as such by the Master. The decision in Kriel v Terblanche is therefore, in my opinion, not relevant here.

What is important is what was decided in a case such as the Simplex case. First question that arose was whether it was within the capability of the parties to ratify an agreement, where a trustee acted in such capacity prior to being authorised to act by the Master of the High Court. This was in conflict with section 6 of the Trust Property Control Act, no. 57/1998 (TPCA). The court referred to the well established principle, quoting from Neugarten and Others v Standard Bank of South Africa Ltd 1989 (1) SA 797: "that there can be no ratification of an agreement which a statutory prohibition has rendered ab initio void in the sense that it is to be regarded as never having been concluded" and continues later with reference to York Estates Ltd v Wareham 1950 (1) SA 125 (SR) at 126:" As a general rule a contract or agreement which is expressly prohibited by statute is illegal and null and void even when, as here, no declaration of nullity has been added by the statute". Note the last part of the quote with reference to Mr Nqhome's statement in paragraph 6 of his reply to Mr West's article.

In Schierhout v Minister of Justice 1926 AD 99 at 109 the judge states:"… it is not only of no effect, but must be regarded as never having been done" and in Cape Dairy and General Livestock Auctioneers v Sim 1924 AD 167: "there cannot be ratification of a bargain which is prohibited by statute" and on appeal Innes CJ states:" Ratification relates back to the original transaction, and there can be no ratification of a contract which is prohibited and made illegal by statute" In Re Townsend, Ex Parte Parsons (1886) 16 QBD 532 (CA) at 546 the court states also:" If the Act of 1882 makes the instrument void, the rest follows easily enough. It follows that the parties cannot ratify or confirm a void agreement".

Next question was whether the Court could 'validate retrospectively acts performed as a trustee by one not duly so appointed". The Court concludes at 114: "In my opinion, the Court cannot validate acts which are expressly prohibited by statute. To do so would be to arrogate to this Court the power to override valid legislative acts"

If we look at the provisions of section 13 (1) of the Administration of Estates Act 66/1965 (AEA) it is, in my opinion, as peremptory as the provisions of Section 6 of the TPCA, and it must therefore follow that an act performed by any person as executor without having been appointed as such by the Master, like in the case of a trustee acting without having been authorised to act as such by the Master, is void ab initio, cannot be ratified by the parties and nor can it be validated by the Court. The section clearly states: "No person shall liquidate or distribute the estate of a deceased person except under letters of executorship ….". If such a transaction is lodged with a Registrar of Deeds for examination and registration, I cannot imagine the Registrar of Deeds doing anything but reject the transaction. And the contract being void ab initio must be a valid reason for rejection of such a transaction.

It is interesting to note that neither the DRA nor the regulations to the DRA contain a provision that either prevents the Registrar of Deeds from calling for a copy of the deed of sale to be lodged or makes it unnecessary to lodge a copy thereof with the transaction to be registered. Given the provisions of section 4(1) of the DRA, it would be perfectly within the powers of the Registrar to call for a copy of the deed of sale to be lodged as proof of the facts. I also do not think that the Court would force a Registrar of Deeds to register a transfer in pursuance of a void deed of sale. The statement by Mr Nqhome "Therefore, since a (sale) transaction is not a deed or document submitted for execution or registration, it is incapable of rejection" is not, in my opinion, entirely correct. In my view, Mr West came to the right conclusion.

Dudley Lee
1 February 2007

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