Deeds Examination

Section 33 of the Constitution of the Republic of South Africa, Act 108 of 1996, reads as follows:
(1) Everyone has the right to administrative action that is lawful, reasonable and procedurally fair.
(2) Everyone whose rights have been adversely affected by administrative action has the right to be given reasons.
(3) National legislation must be enacted to give effect to these rights and must -
(a) provide for the review of administrative action by a court or, where appropriate, an independent and impartial tribunal;
(b) impose a duty on the state to give effect to the rights in sub-sections(1) and (2); and
(c) promote an efficient administration.

How did the legislature give effect to this right?
The Promotion of Administrative Justice Act 3 of 2000 (hereafter referred to as "AJA") came into operation on 30 November 2000 as a measure to give effect to the fundamental principles of Administrative Justice as envisaged in section 33 of the Constitution: that is the right to administrative action that is lawful, reasonable, and procedurally fair. Everyone has the right to written reasons for the administrative action that adversely affects their rights.

The AJA applies to all Organs of State as defined in section 239 of the Constitution 108 of 1996. In brief, the stipulations of the Act require two letters to be written as soon as an administrative action is anticipated that has the potential of adversely affecting a person's rights. This is based on the audi alteram partem rule which gives the applicant the opportunity to be heard, and is a way of making sure that such action is procedurally fair (Director, Mineral Development, Gauteng Region v Save the Vaal Environment 1992 (2) SA 709 SCA).

What is the procedure when the action is considered to fall within the ambit of the AJA?
The procedure for the first letter/notice is set out in section 3(2)(b)(a) and (b) of the AJA:
In order to give effect to the right to procedurally fair administrative action, an administrator, subject to sub-section (4), must give a person
(a) adequate notice of the nature and purpose of the proposed administrative action;
(b) a reasonable opportunity to make representations;

This letter is structured in such a way that it contains all the compulsory information as to who, what, when, where, why and how the action will be taken, and when, how, to whom and where representations should be made.

The second letter informs the person of the action that was taken after considering all the relevant information and his/her right to written reasons. Adequate notice of the right to internal appeal and right to review are also given.

Sub-section 4(1) contains the very important escape or safety measure that refers to the fact that if it is reasonable and justifiable under the circumstances, an administrator may depart from any requirements referred to in sub-section 2. This measure may, however, only be used under exceptional circumstances. (This implies that you first have to give reasons why you are not going to give reasons for the decision made!).

The effect of the AJA on the Deeds Registry
The Deeds Registry, as administrator, falls within the definition of Organ of State, as mentioned previously, which effectively means that the AJA comes into effect whenever an examiner makes the decision to reject a deed in accordance with Regulation 45(7) of the Deeds Registries Act 47 of 1937.

Not every decision made by an administrator needs to follow this procedure. It is only necessary if the decision (or failure to take a decision when one is required) amounts to an administrative action. It is therefore necessary to know what the requirements for an administrative action are.

Section 1 of the AJA gives a complicated definition of "Administrative Action", but it can be summarised as followed:

  • a decision;
  • of an administrative nature;
  • made by an organ of the state;
  • in terms of an empowering provision that is not specifically excluded by the AJA;
  • that adversely affects rights; and
  • that has a direct external effect.
These requirements are cumulative and all six of them have to be satisfied before an action can be considered to be an administrative action. In President of the Republic of South Africa v Sarfu 2000 (1) SA 1 (CC) it was held that any decision relating to the implementation of legislation is an administrative action.

Due to the nature and core function of the Deeds Registry, the 2nd, 3rd and 4th requirements are obviously complied with, and it will only be necessary to determine whether the rejection of a deed fulfils the 1st, 5th and 6th requirement.

Three questions arise from the above, to establish whether such a rejection is in fact
(i) a decision that
(ii) adversely affects people's rights.

If the answer is in the affirmative, whose right? Will it be that of the conveyancer or that of his/her client? It stands to reason that if a right has not been adversely affected, the AJA does not apply.

The third question is whether the rejection of a deed is in fact an administrative action taken in the process of deeds registration? Thus, does the rejection comply with all six requirements for an administrative action?

The AJA provides a definition for "Decision" in section 1, the appropriate part for examination purposes being:

(iii) imposing a condition or restriction; and
(iv) doing or refusing to do any other act or thing of an administrative nature.

Most decisions by examiners to reject a deed are derived from empowering provisions, which give authority to act, and most are found in an enabling statute. This could either be a section in the Deeds Registry Act, or any other legislation stipulating:
"The Registrar shall or must …"

These are considered to be mandatory provisions and examiners do not have discretion in this instance.

Where a provision is discretionary, e.g., The Registrar "may" or "in the opinion of the Registrar, the AJA proposes that the administrator should ask himself/herself questions in order to determine whether the decision he or she has made is not biased. Furthermore he/she has to consider whether or not all relevant facts have been taken into account (or whether or not the irrelevant ones have been ignored). He/she also has to ask him/herself whether or not the decision was taken in bad faith, etc. These are questions asked when the courts review a decision as provided for in section 6 of the AJA.

From the above, one can conclude that the rejection of a deed does in fact fall within the ambit of a "decision" as provided for in section 1 of the AJA. A validly rejected deed, however, does not fulfil the sixth requirement of an administrative action: that is that it must have a direct external effect. One can argue that the external effect of a validly rejected deeds is of a conveyancer's own doing as an examiner's empowering provisions to reject a deed are the provisions of regulation 45(7) of the Deeds Registries Act, 47 of 1937.

Is a right adversely affected
The next aspect to determine is, whether by rejecting a deed, a right is adversely affected, and whether it is the conveyor's right or that of his/her client. As only a conveyancing firm or an approved department as prescribed in regulation 45(1) of the Deeds Registries Act may lodge deeds, and as the examination section deals only with conveyancers on a daily basis, the examiner's client is the conveyancer, and not the client whom he represents. As to whether a right is adversely affected, the courts recognized "the doctrine of legitimate expectations" in Administrator, Transvaal v Traub 1989 4 SA 731 A. The impact of this decision is that conveyancers have a legitimate (reasonable) expectation not to have their deeds rejected upon lodgement, which has now become a right and they could use the AJA to protect themselves. But then again, conveyancing requires specialization and a high degree of professionalism.

Could the conveyancer then, notwithstanding Regulation 45(7), enforce the right not to have his/her deeds rejected, and insist on justice, as provided for in the AJA? An affirmative answer to this question boils down to absurdity: The examiner would have to inform the conveyancer by letter that he/she is about to reject his deed unless he/she complies with a proviso. The deed would have to be held up for a mandatory time period of up to 3 months allowing the conveyancer time to reply. The examiner would have to allow the deed to be amended in his/her office. If the deed cannot be amended and is still rejected, the examiner would have to supply written reasons and inform the conveyancer of internal remedies to appeal against the validity of the rejected deed. During this process a further period of 3 months could have lapsed.

The conclusion is that the conveyancer only has a right not to have his/her deeds erroneously or unreasonably rejected. Once it is determined that the latter is the case, the rejection of a deed does have the effect of adversely affecting his/her right and only then does the administrative action have a direct, external effect on his/her client, thus satisfying the requirements for an administrative action as provided for in section 3 and 4 of the Provision for Administrative Justice Act, 2000.

Republished with permission from SA Deeds Journal.

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