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Mistaken transfer - II

19 June 2014

Randald Vise's comments below, to the article Mistaken transfer:  

I had to deal with a similar situation recently and simply did a rectification transfer back to the seller of the portion that should not have been transferred together with the release of that portion from the bond. Was there some reason that the same procedure could not have been followed here? Am I missing something? This would then have kept to the correct history and sequence of transfers in the registry. It would have worked out at a fraction of the cost - or did the parties have to approach to court because of a dispute?

Raised the following response from Johan Gijsbers: 

Agreed Ranald, a rectification transfer by agreement with the full co-operation of all concerned would be the preferable and cost effective way to go. In this instance the parties were locked in dispute as summarised in the Appeal Court Judgement. Here, the original developer that benefited from the mistaken transfer was subsequently liquidated. The litigation that ensued was between the original Seller asking for an order to have the Remainder of the property (that should never have been transferred in terms of the original Deed of Sale in the first place) transferred back to it. This application was opposed by the appointed Liquidators of the developer as well as by the bank as the subsequent bondholder. Clearly, there was never going to be the co-operation required to enable a rectification transfer by agreement.

The Court mentioned in passing that the directors of the company had (prior to its liquidation) "opportunistically exploited the mistaken transfer" as this property had been presented to the bank together with other properties to obtain bond finance. In a sense this is still a rectification transfer, with the transfer taking place in terms of a court order rectifying the initial mistaken transfer of land, as opposed to a rectification transfer by agreement.

The Court Order confirmed actual ownership and it directed the Registrar of Deeds to give effect to such order of ownership. Although there is no reference to the Deeds Registries Act in the Court Order, the resulting Title Deed was drafted to expressly record that the transfer is registered in terms of Section 33 of the Deeds Registries Act. Nkuba will be pleased to note that the “dead” T98193/1993 title was not revived as the holding title of the remainder in favour of Schmidt Bou in terms of the Court Order; but that the Holding Title is now a 2013 Title Deed with full reference to the Court Order and to the 2005 Deed of Transfer.

I submit that on viewing the actual Deeds of Transfer together with the Court Order directing this transfer in this case, the sequence of events and the history of the transfers can still be clearly ascertained and researched. Obviously it remains the function of the responsible conveyancers and the Deeds Office to ensure that this is true for all “rectification transfers” by Court Order.

Johan Gijsbers
Gijsbers Attorneys
Durbanville

Bester and Others vs Schmidt Bou

 

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