Neutral citation: Standard Bank of South Africa Ltd and Another v Margalit (25966/06)  ZAGPJHC 58
Coram: Mbha,J, Levenberg AJ
Delivered: 21 May 2011
Summary: Bond cancellation - contract, delict - liability of bank and conveyancers for non cancellation and subsequent loss due to delays.
In this case the respondent appointed a conveyancer to take care of a transfer, while the Standard Bank appointed a firm to cancel the bonds.
Significant delays followed as a result of the City of Johannesburg to issue a rates clearance certificate and the transfer documents being rejected by the Registrar of Deeds three times (Levenberg is critical of the process and different deeds office practices). The case centers on the rejection resulting from the fact that the parties (including the respondent) were unaware that there were two bonds which needed to be cancelled and which required two lost document affidavits.
The appeal was upheld for the following reasons:
- Standard bank was under no contractual obligation to cancel the bond until a valid and current guarantee was in force.
- Failure of the respondent to demonstrate that the bank acted negligently - since the respondent himself was not aware that he had taken out two bonds, it is difficult to charge the bank with negligence in the absence of evidence that it should have known better.
- Failure to provide evidence in support of the contention that the bank's bond cancellation attorney owed a duty of care. Because there was no contractual relationship between the respondent and the bond cancellation attorney the claim was delictual. However since no evidence was led to prove that a legal duty was owed to the respondent by the attorney in cancelling the bonds (i.e. acted unlawfully), this claim also failed.
In concluding it was emphasised that:
[Although] ..."there is no evidence to support the extension of a delictual remedy against the bond cancellation attorneys in this matter, I am not making a general finding that the mortgagee's conveyancer never has a duty to the seller in a conveyancing transaction not to be negligent. I am simply finding that, in this instance, there is no evidence to support the recognition of such a duty."