You realize that your property has been sold and transferred without your knowledge. On investigation it appears that the property has been transferred fraudulently to someone who subsequently sold it to a bona fide third person. You are still in possession of your original deed of transfer and did not give any estate agent a mandate to sell your property. Would a court declare you as the rightful owner of the property and restore your sole possession and occupation thereof?

The Applicant in this case (“Stirling”) returned from holiday and found that her property had been broken into by intruders who not only stole her movables, but also vandalized it.  The property was in such a state of disrepair that it was not habitable.  This caused Stirling and her husband to vacate the property and live elsewhere.

On one of his visits to the property, Stirling’s husband found that their gate padlock had been replaced.  He learned from his neighbour that the property was on sale.  Stirling’s legal representative investigated the matter and established that the property had been “sold” to the Third Respondent (“Alvares”), who in turn sold it to the First Respondent (“Fairgrove”).

The court established that Stirling’s signature had been forged on a deed of sale, special power of attorney to pass transfer and other relevant documents required for the registration of ownership of the property.  The power of attorney further contained errors and it reflected that it was prepared by a conveyancer named Choene Kekana, who was not registered as such with the relevant Law Society.  The person authorized by the power of attorney to appear before the Registrar of Deeds to attend to the transfer of the property, was also neither an attorney nor a conveyancer.

 

The subsequent transfer from Alves to Fairgrove was procedurally effected correctly and Fairgrove paid the full purchase price and transfer costs prior to the transfer of the property into his name.

RELIEF SOUGHT:

The main application in this matter was for a declaratory order that Stirling was still the rightful owner of the property and for the expungement of two deeds of transfer in terms of which the property was transferred.  Fairgrove also brought a counter-application for damages caused by the payments made for the purchase of the property and Alvares instituted action against the alleged estate agent.

JUDGEMENT:

The issue before the court was whether the transfer from Stirling was tainted with fraud and whether the Registrar of Deeds as the custodian of security of title to property breached her statutory duty to reject the deed.  The court also had to decide whether Alvares made a case against the estate agent or whether he was a party to the fraudulent transaction.

The requirements for a valid transfer of ownership of immovable property are as follows:

1.    Registration of transfer in the Deeds Office; and
2.    The existence of a real agreement, the elements of which are intention on the part of the seller to transfer the property and intention on the part of the purchaser to acquire ownership of the property.

If this real agreement was concluded fraudulently, ownership will not pass despite registration in the Deeds Office.

One of the duties imposed on the Registrar by the Deeds Registries Act 47 of 1937 is to thoroughly examine all deeds and to verify the identity of conveyancers who appear at the Deeds Office to execute deeds.  The deficiencies in the transfer of the property to Alvares were significant and the deed should have been rejected.  The court held that the Registrar failed to discharge the statutory duty in a reasonable manner.

The applications of Stirling and Fairgrove succeeded and that of Alvares was dismissed.  Ownership of the property was restored to Stirling.