Pocock v D'Oliviera 2006 JOL 18407: Notarial tie agreements, demands for transfer, mistaken belief, and the need to study the conditions clause.
- D'Oliviera ("D") owned two erven Erf 5554 and Erf 5555 Kensington (Johannesburg), each 495 square metres in extent.
- The erven were held by separate title deeds, but both deeds contained a title condition (with reference in the title deed to a 1938 notarial agreement) to the effect that the two erven comprised a 'block' and that only one residence could be built on them; the two erven were de facto treated as one stand; erf 5555 is landlocked, with no separate access to the street.
- A creditor of D'Oliviera attached one of the two erven, Erf 5554, and caused it to be sold by public auction to one Du Plessis. (The creditor was the City Council, in respect of D'Oliviera's arrear rates). Pocock purchased the erf from Du Plessis (presumably a tripartite agreement was concluded) and it was transferred to her by the Sheriff in December 2001.
- She was perhaps not aware at the time that the land comprised two erven and that she really only acquired ownership of one of the two stands.
- A few years later D'Oliviera applied to court stating that he is the owner of Erf 5555 and asking for an order that he be granted a servitude of right over Pocock's erf in order to gain street access. This application is still to be decided upon.
- In response Pocock brought this application to the WLD division of the High Court, for a declaratory order to the effect that the erven are notarially tied and for an order that D'Oliviera transfer the erf to her.
- D'Oliviera opposed the application. He was firstly of the view that Pocock's claim, if any, prescribed (Erf 5554 was transferred to her in December 2001; this application was brought February 2006). He further defended the claim on the basis that Pocock's interpretation of the notarial agreement was incorrect. He also stated that the applicant has no factual or legal basis on which to claim transfer.
The issues before the court were therefore, to decide whether the properties were in fact notarially tied and whether Pocock was entitled to transfer of Erf 5554 into her name. The Judge said no to both questions and dismissed the application.
Discussion and comments
Is there a notarial tie agreement? The court says no, I think there is
Jahbay J did not find it necessary to deal with the question of whether the claim prescribed. I am not sure whether this was the correct approach.
Instead, he proceeded to rule that the present situation did not constitute a typical notarial tie situation where the two erven are to be dealt with as one. The reason for his finding (after considering evidence of what a notarial tie agreement in this context really is) was phrased as follows:
"In the present matter such notarial tie agreements have not been concluded. The properties have not been consolidated into a single erf. A notarial tie agreement, by its very definition, requires the agreement to be in writing, between the owners of the respective erven and the local authority. (My underlining)".
With respect, I beg to differ from the above finding by the learned judge. Firstly: the typical notarial tie agreement as it is often used in the Johannesburg/Gauteng region is concluded precisely because consolidation of the property has been deemed undesirable or unnecessary in the circumstances. Notarial ties are popular in cases of small erven where building line restrictions are relaxed, and a single residence is built over the boundaries of one of the erven. As a condition for allowing this, the local authority will insist on consolidation or at least a notarial tie agreement. The ruling by the Court in this matter - that because the properties have not been consolidated (I use the word in the conveyancing-technical sense), a notarial tie agreement has not been concluded - is not a sound one.
[The use of the term 'notarial tie' in this context is not to be confused with the use of the word as it is sometimes used in sectional title matters, especially in Cape Town, where an exclusive use area (or a section) is 'notarially tied' to a specific section so that the two cannot be sold separately from one another.]
Secondly, the judge's finding that no such agreement has been concluded, as far as I can see from the facts, is incorrect. The 1938 notarial agreement concluded between the previous owner of both erven, Venter, the then-township owner and the Council, is that agreement. It has the effect of notarially binding the destinies of the two erven together. They were meant to be used as a block and not to be separated, if not in ownership then certainly in nature of use. This, to my mind, is precisely what the classical notarial tie agreement does. (Granted, the word "tie" appears not to be used in the agreement - maybe the word was not in use in 1938?). That agreement has been brought forward as a title condition and is binding on successors in title, in the present case Pocock and D'Oliviera.
Whether or not the right words were used, there is no doubt in my mind that the intention in 1938 was and still is that the two erven are to be used as one entity of land. Pocock has presumably used it as such since she bought 'the property'. Surely every other owner right back to 1938 and perhaps even beyond used it in this way? Until this interesting 'split' in ownership of the two erven, they have always belonged to the same owner. No residence can, in terms of the title conditions, be built on D'Oliviera's stand. To grant access to that stand from the road (for what - to be used as a vegetable garden?) by means of an imposed right of way over an already very small stand seems to me unreasonable and contrary to the intention of the township owner, the local authority and the owner, Pocock.
Acquisition of ownership by prescription, and accession
Pocock's counsel argued on her behalf that she is entitled to transfer as a result of acquisitive prescription (the 30 years uninterrupted possession requirement). Jahbay J correctly found, I submit, that the requirements for acquisition by prescription were not met in the present case. I further agree with the judge's finding that the argument of accession has no merit in these circumstances.
Pocock's mistaken belief that she purchased both properties: who is to blame?
Who is to blame for the present difficulties, and how could this have been avoided?
The judge has the following to say: "The applicant's mistaken impression can be attributed to her not diligently investigating the property, the warrant of execution, the conditions of sale, the sale agreement between her and Du Plessis (the person who bought at the auction and sold it to her) and finally the title deed of the property".
This is true, of course. An experienced buyer would also have seen, on the date of signing, that the property description mentions an erf of 495 square metres whereas the property she took occupation of is clearly larger that that. But Pocock, presumably a novice in matters of conveyancing and legal relevance, would have relied on the transfer attorneys to ensure all legal requirements had been met and to notify her of potential prejudicial factors. Should one not perhaps ask if the transfer attorney had a responsibility to read the conditions clause and to have made enquiries as to why the other erf was not also transferred to Pocock?
Maybe it would be too harsh to impose such an obligation on the average, reasonable conveyancer. On the other hand, the conveyancer acting for the Council/Sheriff in effecting the transfer ought to have known the history of the property and ought, perhaps, to have been more diligent in considering the effect of the notarial agreement. A simple deeds search on the name of D'Oliviera would have shown that he owned both erven (erven 5554 and 5555) and a reading of the conditions clause would have provided cause for wondering why only one of the two notarially linked properties was being transferred. It can be argued that the reasonable conveyancer, aware of the existence of the 1938 notarial agreement, would have realised such a transfer would lead to a breach of the title conditions and would have foreseen the present difficulties in the case of separation of ownership of the erven.
Clearly a comedy of errors contributed to Pocock's unfortunate dilemma. I submit, however, that a simple deeds office print-out coupled with a careful reading of the title deed conditions could have prevented the problem. One could argue that the Council's litigation attorneys also erred in not attaching both properties. It is not clear from the stated facts, though, that this is indeed the case- perhaps both erven were attached.
Although the issue was not addressed in the judgement, there is the theoretical possibility that Pocock can seek recourse against her seller, Du Plessis (misrepresentation, mistake?) but there are insufficient facts available to consider the merit of such action here.
Is there any basis on which Pocock could demand transfer of D'Oliviera's erf? The Judge says 'no' and I agree
Assuming Pocock initially knew nothing about the problem, I cannot help but feel sympathy towards her. She faces an unenviable dilemma. Firstly, half of what she thought she owned, she doesn't own, and she cannot be too pleased about handing over her garden to D'Oliviera. Secondly, she will now potentially also have to endure a servitude of right of way over her small stand in D's favour. (Unless the court hearing that application considers more favourably the effect of the nature and purpose of the notarial agreement).
However, the judge is right when he says: "The applicant is effectively requesting the Court to order that the first respondent transfer to her erf 5555 simply because, on her interpretation of the restrictive title conditions, the one erf could not be sold without the other. In doing so, the applicant tries to elevate a restrictive title condition contained in the notarial agreement and subsequent title deeds being limited real rights, to real rights granting her ownership of the property. This construction ignores the fundamental difference between the two types of rights. In that [sic] it is only the first respondent that can pass legal title in the circumstances of the present case to the applicant."
Even assuming, then, that there exists a valid notarial tie agreement which imposes a restriction on separating ownership (or use) of the two erven, that fact does not in itself grant to Pocock any legal entitlement to demand transfer of D'Oliviera's property. What needs to be done to remedy the breach of the notarial tie agreement and title conditions is not certain. The Council and/or township owner (or its successor, if any) will probably need to consider the issue and decide on a course of action.
Conclusion: lessons for conveyancers
In the meantime, all conveyancers and conveyancing paralegals can learn from this. In all transfers (and also bonds):
- obtain and carefully study the necessary deeds office print-outs (for property, seller and also for purchaser if the purchaser is reflected in the deeds office records);
- always read, with concentration and an awareness of general unknown risks, the conditions clause (and endorsements) in the title deed;
- in Cape Town there is the added dimension of the need to know about conditions in deeds registered before the 'pivot deed', although in practice this rarely presents problems.
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