FILTERS:

Interdicts and forced transfers

12 February 2015

The registration of a transaction contrary to a prohibitory interdict which has been served on the deeds registry can result in serious financial loss for the state. It is therefore imperative that the greatest care be taken by all officials who receive, record, examine or withdraw interdicts. Examiners must ensure that no transactions are registered in Contravention of an interdict. Attention must also be given to section 99 of the Deeds Registries Act, 47 of 1937, which provides inter alia as follows:

"... an officer can be held personally liable for any damage sustained as a result of such officer failing to exercise reasonable care and diligence in the exercise of his/her duties.”

The registration of deeds is not something new. Our system is similar to one referred to in the Bible (see Jeremiah 32:-16):

“... Jeremiah replied, ‘The word of the Lord came to me: Watch! Hanamel, the Son of your Uncle Shallum, is coming to you to say: Buy my field at Anototh for yourself for you own the right of redemption to buy it. Then my cousin Hanamel came to the guards courtyard as the Lord has and urged me, please buy my field in Anathon in the land of Benjamin, for you own the right of inheritance and redemption, Buy it for you. Then I knew that this was the land of the Lord. So I bought the field in Anathon from my cousin Hanamel, and I weighed out to him the money, recorded it on a Scroll, sealed it, called witnesses, and weighed out the money on the scale. I took the purchase agreement — the sealed copy with its terms and conditions and the open copy and gave the purchase agreement to the Baruch son of Neriah, Son of Mahseiah. l did this in the sight of my cousin Hanamel, the witnesses who were signing the agreement, and all the Judeans sitting in the guards courtyard. I instructed Baruch in their sight, this is what the Lord of Hosts, of God of Israel, says: Take these scrolls - this purchase agreement with the sealed copy and this opened copy – and put them in an earthen storage jar so they will last long time. For this is what the Lord of Hons, the God of Israel, says: Houses, fields, and Vineyards will again be bought in this land. ..after I had given the purchase agreement to Baruch, son of Neriah, I prayed to the Lord.....'.”

An examiner has a very onerous task when it comes to attachments and sequestrations. Examiners rely solely on the computer printouts for interdicts. It is thus the duty of examiners to consult the interdict itself to ascertain whether it is applicable to a particular transaction. Should a junior examiner find that an interdict is not applicable to a certain transaction he / she must note the reason for his / her findings on the computer printout, to enable the senior examiner to confirm his / her finding. The word “not applicable or N/A” is not allowed.

Senior examiners must also investigate the applicability of the interdict, and this will depend on the circumstances, or, the nature of the transaction or the relevant reason given by the junior examiner why the interdict is not applicable.

Where examiners are not absolutely certain about the effect of an interdict they must consult their supervisors. For example, in one instance, the Court authorized the sheriff to sign the powers of attorney to pass transfer where the owner refused to do so, and an attachment against the property was erroneously ignored. The position would have been different had the Order of the Court provided for the transfer free from the bonds and other encumbrances, inclusive of the attachment.

It is crucial that on re-lodgment of rejected deeds, all interdicts be checked thoroughly anew. This is because there have been instances where interdicts received since the prior lodgment have been missed because this had not been done. As far as our relationship with the conveyancer is concerned, when an examiner has reason to believe that there should be an interdict, but there is no interdict noted, for example, a sequestration order, it is his / her duty to obtain such documents, and have it lodged at the interdict section prior to re-lodgement.

Separate notes must be made with regard to rehabilitation orders applicable to a person. Rehabilitation orders often do not disclose the date of the sequestration orders and there are in fact instances in some offices where rehabilitation orders are linked to the sequestration orders and there is no link to substantiate the linking.

Furthermore, particular care must be taken not to remove insolvency notes or to disregard sequestration orders where property is sold or otherwise dealt with. The provisions of section 58 of Deeds Registries Act 47 of 1937 must be borne in my mind in all such cases, subject, however, to the provisions of section 127A of the Insolvency Act, 24 of 1936.

Where a declaration has been made to the effect that the deponent is not and never has been insolvent, such affidavit must be accepted if lodged with a deed as proof of the solvency of the party, unless a sequestration order in respect of person with a similar name was issued on the same day or a day subsequent to the one when the declaration was made, or it is prima facie a false declaration.

An important function of an examiner is to ensure that the necessary instructions are given to the interdict section to purge interdicts which have been complied with. Obsolete interdicts which remain in the interdict records cause endless headaches for both examiners and conveyancers, alike.

Like all other acts of registration, an application for the amendment or change of name of a party to a deed must be black booked. What is important is that there may be interdicts which do not prohibit the registration of the amendment of a change of name, but are nevertheless applicable to that party or the property reflected in the deeds. In such instances examiners must make an Office note for the interdict clerk to also index the interdict against the name as amended or changed.

Except where transfer is given by the sheriff, in pursuance of a sale in execution or by a trustee pursuant to a sale in insolvency, all attachments must be withdrawn before the deed can be registered. Where a transfer is passed pursuant to a sale in execution examiners must give the necessary written instruction to the interdict clerk to purge or withdraw the relevant attachment interdicts.

Attention is drawn to section 20 (1) (c) of the insolvency Act No 24 of 1936 which provides that a sequestration will stay the execution by sheriff of the court. Examiners must, therefore, raise the usual insolvency queries where a transfer is passed by a sheriff in pursuance of a Court Judgment.

Section 20(2)(a) of the lnsolvency Act 24 of 1936 also provides that all property of the insolvent at the date of sequestration, including property or the proceeds thereof which are in the hands of the sheriff, shall vest in the Master and subsequently in the trustee of such insolvent estate, see also the case of Simpson v Klein NO 937 (1) SA 405 (W). In casu, it was held, inter alia, that immovable property sold in execution, but not yet transferred at the date of sequestration, vests in the Master and in the trustee on his or her appointment.

However, in exceptional circumstances, the Court has the authority to order the sheriff to proceed with the sale and transfer of the immovable transfer, see Unie Spoorweg Onderlinge Begrafnisgenootskap v Druker NO 1961 (1) SA 266 (W). Remember, in terms of the common law, immovable property sold by the insolvent “including the sheriff" but not as yet transferred at the date of sequestration vests in to the trustee of such insolvent. Such contract of sale is not automatically terminated by sequestration, but the trustee cannot be adjoined by the other party to perform in terms of the contract. If the trustee decides to enforce the contract, he or she must fulfill all the insolvent's outstanding obligations in terms thereof and “the trustee not the sheriff" must pass the transfer of the immovable property.

Madila Mathews Nakeng
Deeds Examiner
Deeds Registry Pietermaritzburg

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