Abstract

In EMD v Fourie (2493/2019) 2023 ZAECQBHC 46 (17 August 2023) the erstwhile couple Daniels were married in 1987. During the subsistence of their marriage, they jointly acquired an immovable property as their matrimonial home, and this was duly registered and held in joint ownership. For the acquisition of the property a loan secured with a mortgage bond by the bank was registered against the property’s title deed. Even after their divorce no amendment regarding the registration of the property held in joint ownership took place. The erstwhile wife with the couple’s children remained in occupation of the house after the husband moved out with his new wife. In time the erstwhile wife also remarried and stayed in the house with her new husband, Jacobs.

When the joint debtors encountered cash-flow problems and were unable to meet the bond payments, the house was rented to tenants. The bank eventually foreclosed on the mortgage bond and acquired an execution order from the court. Shortly before the date for the auction a knowledgeable employee of the bank materialised as the proverbial good Samaritan and suggested that with the help of “befriended attorneys” and an estate agent a “special arrangement” may be reached to safeguard the asset – akin to “pawn your car and drive it”. Eventually the wife and her new husband, masquerading as the erstwhile husband and co-owner, signed documents that in reality encompassed an agreement to sell the property for R70 000. After the transfer was duly registered the new registered owner served eviction orders on all tenants and occupiers.

The court upheld the application of the original registered co-owners and ordered a rectification of the deeds register to once more reflect the true legal position of their joint ownership. Because the erstwhile husband was not even aware of the intended scheme of his ex-wife and her new husband, the alleged real agreement did not exist. A joint owner can dispose of his/her undivided share of the interest held in co-ownership but has no entitlement to dispose of the complete undivided real right without the agreement of the other joint owners involved. Mr Daniels never had the animus transferendi dominii and the masquerading signatory Jacobs was not entitled to represent him as his agent nor to forge his signature. The purchaser never considered buying merely an undivided co-ownership share in the property and consequently there was neither an obligatory nor a real agreement.

The successful application for the rei vindicatio is founded, however, not in the nullity of the obligatory agreement nor on errors regarding the formal requirements of Act 68 of 1981 but in the fact that legally no change in the ownership occurred in the absence of a valid real agreement and consequently the true owners could rely on the rei vindicatio.

The primary defence of estoppel was correctly disposed of by Eksteen J because Mr Daniels made no representations at all to the purchaser, the registrar or the conveyancer involved and the first requirement for estoppel is always that the estoppel asserter acted on the representation made by the applicant as estoppel denier and not on representations by an imposter. The court correctly held: “He did not sign the deed of sale, nor did he sign the power of attorney to pass transfer and he was, at all times, entirely unaware of the process. As I have said Mr Jacobs forged his signature” (par 11).

It is submitted that although the outcome of the judgment is correct in so far as the “domicile” of the real right of ownership to the immovable property is concerned, it leaves some unease that the erstwhile debt secured by the mortgage bond was wiped out by the payment of that debt to the bank by the purchaser before the alleged registration of the transfer of the property in the name of the purchaser could take place. With the rectification of the unjustified registration, the property is once more registered in the names of the two original joint owners, but now it is no longer burdened by the mortgage debt. This translates to a significant unjustified enrichment of the joint owners at the cost of the duped purchaser, who was bona fide uninformed about the fraudulent chicanery of the attorneys, estate agent and Mrs Daniels and Mr Jacobs. In addition to her loss, she was burdened with the cost order.

It is also troublesome that the judgment does not mention whether the court referred the conduct of the attorneys and the estate agent involved in the fraudulent activity to the applicable governing bodies: “Ms Daniels alleged that Mr Postumous [an attorney], Mr Bekker, an estate agent, and Ms Cradock, an attorney in the employ of the fifth respondent, knew of his [ie Mr Jacobs’] true identity and that they had advised him to sign, as if he were Mr Daniels, because of the urgency of the matter” (par 6 and 9).

It ought to be considered whether the perpetrators of such fraudulent conduct should not be barred as unworthy of the professions as attorneys or as a registered estate agent.