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Rejection guidelines - II

12 September 2013

The matter of rejecting of deeds is, in my view, much more complex than is generally accepted. The rejection process in itself is an administrative process which must comply with the Promotion of Administrative Justice Act 3/2000(PAJA), which it does not.  Let me put the horse before the cart and state that I do not quite understand the last paragraph in the article (Rejection Guidelines) which goes “....the list is by no means exhaustive and the Registrar, and not the examiner, will always have a discretion in this regard.” If this means that the examiner has no discretion whatsoever, then how can he be expected to perform the duty delegated to him? The examiner cannot be given the hand but no fingers. Conversely, if the registrar has an overriding discretion, that would make sense, but the situation needs better consideration.

In South African law the general rule of the delegation of powers is that the body or person to whom was granted such powers, has to exercise those powers himself (see Thomson, Trading as Maharaj & Sons v Chief Constable, Durban 1965 (4) SA 662 (D); Marion L Dixon ‘Delegation of Powers in South African Administrative Law’ 1984 TSAR 250; 1985 TSAR 62 178, 310) unless authorised to do so expressly or by necessary implication of the authorising statute (Arenstein v Durban Corporation 1952 (1) SA 279 (A), Spier Properties (Pty) Ltd and Another v Chairman, Wine and Spirit Board and Others [1999] 2 All SA 446 (C)). In terms of section 2(1) of the Deeds Registries Act 47/1937 (DRA) the Minister shall appoint:
"b)...in respect of each registry, a registrar of deeds, who shall be in charge of the registry in respect of which he has been appointed;
c) for a deeds registry, if necessary, one or more deputy registrars or one or more assistant registrars of deeds or one or more deputy registrars of deeds and one or more assistant registrars of deeds, who shall have the power, subject to the regulations, to perform any act which may lawfully be done under this act by a registrar.”

Section 2(4) of DRA continues as follows: “Every registrar appointed under or referred to in this section is hereinafter referred to as the registrar”. Regulation 5 of DRA provides for delegation of power by a registrar to deputy or assistant registrars and action in case of the absence of the registrar from the registrar. Statutes often provide for the subdelegation of powers. There is no other provision in the DRA for the delegation of the power of the registrar to any other official or person except for what is provided for in regulation 5, but that is delegation to another registrar.

Power to delegate is restrictively interpreted (Citimakers (Pty) Ltd v Sandton Town Council (1) 1977 (4) SA 959 (W); SA Airways Pilots Association and Others v Minister of Transport Affairs and Another 1988 (1) SA 362 (W)). Therefor in the absence of specific power for a registrar to delegate it appears that a registrar does not have the power to do so. Maybe the Court should establish whether implied power for a registrar to delegate his powers exists.

For many years what we have known for many years as “senior examiners” or currently “level 2 examiners”, are the ones who have passed or rejected deeds, but on the face of things I see no authority for a registrar to delegate his powers of passing or rejecting deeds to the level 2 examiners implied in the DRA. That would mean that every duty set out in section 3 of DRA must be performed by a registrar, but has not been performed by a registrar for a great many years. During that time, and to this day, the person who decides whether to pass or reject a deed is the level 2 examiner. Admittedly we have the so-called “monitoring” of deeds examined by the level 2 examiners, by the assistant registrars, but in most cases this is nothing more than a cursory scan of most of the deeds handed over to assistant registrars by the level 2 examiners. The assistant registrars simply do not have the time to monitor all, or even most of, the deeds handed over to them by the level 2 examiners. It appears then that the wrong person is passing or rejecting deeds.

There can be no refuting that a registrar is an organ of State as defined in the Constitution of the Republic of South Africa. Nor can it be refuted that the rejection of a deed or a batch of deeds, in fact the raising of every note by an examiner, is an administrative action as defined in PAJA. Thus, at the moment it is probably the wrong person passing or rejecting deeds, the very process of rejecting deeds is not in keeping with the provisions of PAJA and nor is the raising of most notes. A registrar of deeds is not exempt from the provisions of PAJA and, by his very nature as an organ of State, must comply with PAJA, but is not. This situation needs urgent attention.

But let us look at the rest of the article and its subject matter. While it may seem to be the intention to grant impetus to the matter in general by referring to the 1961 Chief Registrars Circular, let’s face it that a lot has happened since that 1961 Chief Registrars Circular was issued: South Africa became a republic; man landed on the moon; personal computers abound; cell phones and the electronic media made great strides to the point where retyped pages can be transmitted in minutes from a conveyancer’s office to his cell phone or tab and reprinted by the conveyancer already at the deeds office.  Already in 1984 the deeds office itself moved away from double copies of deeds with the advent of microfilming. The necessity of having to compare two copies of each deed, each typed separately on a typewriter as carbon copies were not accepted, not only by 3 levels of examiners but also by the conveyancer and his personnel are long gone. Most examiners today have no idea of those old processes. Deeds office information is now captured on computer, and so it continues.

In short, the whole world has changed. Why hark back to antiquity, so to speak? Let’s face it, the excuse that pages need to be examined by all 3 levels of examiners again does not hold water. It did when pages were typed on manual typewriters, but that is hardly necessary today. It does not take an examiner more than a minute or two to examine a new page. To state differently is exaggeration, with respect. Whilst it is certainly true that certain errors in deeds or failure to lodge certain documents justify rejection of the deeds, too much is made of the full initialling issue. The last sentence of regulation 20(4) of DRA (the regulation requiring full initialling) states “If, however, an interlineation is is attested by a person other than the original attestor, such person shall attach his signature”. Surely a conveyancer before whom a document was signed may attest an amendment? Why reject the deed for this? Why is the discretion contained in regulation 20(8) of DRA seemingly always conveniently ignored? There appears to be a reluctance to exercise discretion in favour of the public, as a civil servant should do, whenever possible. Given the provision of the discretion it can hardly be argued that regulation 20(4) of DRA is peremptory simply because the word “shall” is used by the legislator. The test for a provision to be peremptory in Sutter v Scheepers 1932 AD 165, and especially where the significance of use of the word “shall” in legislation is concerned, is clearly against such a point of view.

The paragraph dealing with certificates makes much more sense. However, the second bullet from the end of the article is controversial and needs more consideration. It is an attack on the practice to get the transferor/grantor and witnesses to initial in advance next to relevant clauses and says that the practice “...must be frowned upon...”.  It also states that examiners should circle such initials that were “...affected prior to the request for further initialling of a later material error”.

There are some factors that need to be taken into account regarding this practice:

  1. A grantor of a power of attorney authorises the agent to attend to certain actions on his behalf. By initialling in advance opposite information where problems may occur is nothing more than reiterating the powers granted to the agent. Such initialling avoids possible later cost incurring delays. Grantors know exactly why such initialling is requested of them. On what grounds would the deeds office imagine that they can dictate this sort of action? It is neither unlawful nor contra bones mores to initial in advance and is in fact an accepted and age old practice;

  2. To circle the initials will amount to defacing a document that is not the property of the deeds office, and will never become the property of the deeds office. It therefor seems out of place for the deeds office to arrogate to itself the authority to deface documents belonging to another person for no lawful reason. Prior to microfilming of deeds and documents, registered deeds and documents as well as supporting documents became the property of the deeds office upon registration and were retained and filed as the official deeds office records. Once the lodging of deeds in single copies started, because the deeds office started to microfilm deeds, the microfilmed documents were deemed to be the original as provided for in section 3(4) of DRA;

  3. This practice is very helpful if one considers that very often documents are drafted using deeds office printouts to obtain the information. Too often, unfortunately, the printouts reflect incorrect information. The one method of combatting such bona fide errors the article will now attempts to remove.

There is nothing in law I could find which finds such initialling in advance repulsive or unlawful. In fact, the validity of signed blank documents is well established in South African law (see for example Fourlamel (Pty) Ltd v Penguin Heating and Air Conditioning (Pty) Ltd and others 1975 (4) SA 501; Sutter v Scheepers 1932 AD 165). Why would initialling to avoid later possible problems, such as is the practice, be invalid or have to be “....frowned upon....”?; Why should deeds not leave the deeds office while on prep? It is so simple – scan the deeds into prep, during which time the deeds are the conveyancers’ responsibility. Once handed in for registration the deeds become the deeds registry’s responsibility again. If the documents are not handed back into prep once the prep days have passed, let the system reject the deeds automatically. This is an archaic attitude that seems out of place today. Fraud can be committed without the documents ever leaving the deeds registry, if that is the concern.

Whilst Mr. West may have good intentions with this article, with respect, one cannot agree with a lot of the contents. Furthermore, at a time when Cape Town deeds registry takes almost four weeks for deeds to be registered, the article will encourage examiners to reject deeds unnecessarily and frivolously, which is the last thing the conveyancing fraternity, as well as buyers and sellers of property in Cape Town, can afford at the moment. It may cause a lot of damage and harm. In our economy today stimulation of the economy is essential – finding new ways to obstruct the operation of such an important part of the economy should not be the purpose of civil servants, least of all a component of the civil service that deals with matters affecting virtually the entire economy in one way or another, with vast amounts of money involved.

Dudley Lee
Cape Town

Reader Comments: 4
Elize Samson 13/09/2013:

Yes I fully agree it was much better to get the documents back from the deeds office on prep to rectify any errors that may appear on the deeds or Power of Attorneys and getting the Sellers to come and sign the amended documents.

sello motla 13/09/2013:

While I agree with most of what the writer has said there is one point that I differ with.  While it might appear that the registrar has no power to delegate rejection of the deeds, the fact that an examiner rejects a deed is not a fait accompli because if you are not satisfied with that decision you can elevate the problem to the senior of that examiner. It is when the registrar herself rejects the deed that you may invoke the provision of PAJA. If you do that before then I am afraid that the court will throw your case out for failure to exhaust all the internal processes to solve your objection.

Dudley Lee 13/09/2013:

Mr Motla, by the time I know that the deed is rejected it is too late to salvage! It is in fact a fait accompli! The damage is done. One must then ex post facto argue the case which is wrong. Even if restoration is agreed to a lot of time has by then been wasted, at the expense of all the parties involved. The conveyancer should be given the opportunity to argue the notes BEFORE the deed is rejected and scanned as such.

Once the deed is scanned as rejected, it is out of the deeds office's system. By that time it has been to an assistant Registrar who may or may not have applied his mind. That is exactly what places the current process out of parameters of PAJA. The fact is also that it is the registrar, i.e. an assistant registrar, deputy registrar or the registrar of the office who should make the decision to reject or pass the deed - not the 2nd level examiner.

Allen West 19/09/2013:

Elize, there are certain amendments that cannot be rectified on prep and that being the reason for the guidelines provided. You surely cannot bring your client to the deeds office to initial a power of attorney etc.

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