South African Deeds Journal

South African Deeds Journal 

March 2008 • Issue No. 14 

CROSS-BORDER INSOLVENCIES 

land affairs 

Department: 

Land Affairs 

REPUBLIC OF SOUTH AFRICA 

Department of Land Affairs 

CHIEF REGISTRAR OF DEEDS 

COUCHING OF A WAIVER 

OF PREFERENCE IN A 

SECTIONAL BOND 

WAIVER OF 

LEGAL EXCEPTIONS 

REGISTRARS' CONFERENCE 

RESOLUTIONS OF 2007 

THE RECOGNITION OF 

CUSTOMARY MARRIAGES 

ACT, 120 OF 1998

GUIDELINES FOR ARTICLES 

IN THE SADJ 

SADJ welcomes contributions, in any of the 11 official languages, 

especially from deeds office staff and practitioners. The following 

guidelines should be complied with: 

1. Contributions should as far as possible be original and not published elsewhere. 

2. Contributions should be useful or of interest to the conveyancing practice and land 

issues. The decision of the editorial committee is final. 

3. Authors are required to provide their involvement or interest in any matter discussed 

in their contributions. 

4. Footnotes should be avoided. Case reference, for instance, should be incorporated into 

the text. 

5. When referring to publications, the publisher, city and date of publication should be 

provided. When citing reported or unreported cases and legislation, full reference details 

should be included. 

6. Articles should be in a format compatible with Micro-soft Word and should either be 

submitted by e-mail or, together with a printout, on a stiffy or compact disk. Letters to the 

editor, however, may be submitted in any format. 

7. The editorial committee and the editor reserve the right to edit contributions as to style 

and language and for clarity and space. 

8. Acceptance of material for publication is not a guarantee that it will be included in a 

particular issue, since this must depend on the space available. 

9. Articles should be submitted to Allen West at e-mail: ASWest@dla.gov.za or Private Bag 

X659, Pretoria 0001. 

land affairs 

Department: 

Land Affairs 

REPUBLIC OF SOUTH AFRICA 

i

land affairs 

Department: 

Land Affairs 

REPUBLIC OF SOUTH AFRICA

C 

ontents 

E 

ditorial 

News 

Discussion on section 35A of the Income Tax Act 25 

Cross-Border Insolvency Law 30 

Property Law Update 

Couching of Waiver of Preference in a Sectional Bond 3 

Massing and Adiation vis à vis Massing and Election 5 

Registrars' Conference Resolutions of 2007 8 

The Recognition of Customary Marriages Act, 120 of 1998 9 

Beneficiary's Disposal in a Trust and Transfer Duty Implications 17 

Sales from Estates: Section 18(3) Act 66 of 1965 19 

Chief Masters Directive 3 of 2006: Appointment of Executors 

and/or Master's Representatives in Deceased Estates by the Master 20 

Waiver of Legal Exceptions 25 

Change of Names of Building Societies and Banks 

of Immovable Property in South Africa 

Does Agricultural Land Still Exist given the Stalwo v Wary case? 

27 

32 

Case Law 

Books 

Conveyancing Through the Cases 34 

Articles Published in Legal Journals 34 

Letters to the Editor 

Testamentary Conditions and Redistribution Agreements – Reply 1 35 

Section 4(1)(b) – A rethink 35 

Lapsing of Real Rights of Extension 36 

SADJ – October 2006 – Transfer Duty : Acquisition of Immovable 36 

Property by a Company, Close Corporation or Trust: 

Article by PS Franck 

Other features 

The Deeds Registry as a Necessary Economic Infrastructure 2 

Long Distance Runner 7 

Reflecting the Past 40 Years 14 

Deeds Training Spreads its Wings 16 

DISCLAIMER 

The views expressed in the articles published in this journal do not bind the 

Department of Land Affairs and the Chief Registrar of Deeds. The Chief 

Registrar of Deeds does not necessarily agree with the views of the 

contributors. 

HOW TO SUBSCRIBE 

Anybody who would like to be placed on the mailing list for the SADJ, must 

submit their postal address to SCMohlake@dla.gov.za 

PRINTER 

Lesedi Litho Printers 

88 Visagie Street, PRETORIA 

Editorial Committee 

Allen West (Editor) - Deeds Training 

Joanne Dusterhoft - King William's Town 

Tebogo Monnanyana - Bloemfontein 

Ali van der Ross - Vryburg 

Hennie Geldenhuys - Office of the Chief Registrar of Deeds 

Lood Vosloo (Sub-Editor) - Cape Town 

Zandré Lombaard (Scribe) - Deeds Training (Scribe) 

Dorethea Samaai - Directorate: Communication Services 

Marie Grovè 

- Deeds Training 

Elizabeth Govender - Pietermaritzburg 

Alan Stephen 

- Johannesburg 

Levina Smit 

- Kimberley 

George Tsotetsi 

- Office of the Chief Registrar of Deeds 

Gustav Radloff 

- Conveyancer, MacRobert Inc. 

André Schoeman - Office of the Surveyor General, Pretoria 

The new year has literally commenced 

with a bang, albeit with or without load 

shedding. This issue is once again 

bumper-packed with interesting 

articles and news. 

Photos are provided on courses and conferences for readers to try 

and identify previous Registrars and Deeds Office officials. 

The 2007 resolutions taken by the Registrars are included. Please 

note that they have become operative with effect from 2 January 

2008. 

The article chosen as the best article in the previous issue was the 

one by the former Registrar of Deeds Kimberley, Mr Willie 

Swanepoel on Fideicommissums. Accolades were received from 

far and wide for the article on Robben Island together with the 

superb photography. Thanks once again Loodt on a wellresearched 

article. 

Abelated blessed new year to all. 

ALLEN WEST - EDITOR 

Contributions may be sent to the Editor: 

Via e-mail or post 

ASWest@dla.gov.za 

AS West 

Private Bag X659 

PRETORIA 

0001 

This journal is also published on the Department of Land Affairs' 

website: 

www.dla.pwv.gov.za 

CONTRIBUTORS: 

A S West • A Boraine • L J Vosloo • R Rossouw • A van Wyk • M M 

Meyer • L Kilbourne • I Broodryk • M Grovè • T Maree 

COVER PHOTO 

Allen West - Editor 

Our Front Cover picture this month shows a colourful row of 

historic houses on the slopes of Signal Hill in the Cape Town city 

bowl, which is known as the “Malay Quarter”, so named after the 

inhabitants who have lived there since they were freed from 

slavery in the early 1800s. The area is a major tourist attraction, 

hence the colourful outside paint schemes of some of the houses. 

It is hardly imaginable that in the 1930s, due to the deterioration of 

many of these historic buildings, it was considered demolishing 

the houses to make way for development. A very informative 

paper, written by Cape Town professor Fabio Todescini and 

published on the website http://www.international.icomos. 

org.victoriafalls2003/papers/A2-6%20-%20 Todescini.pdf gives 

an authoritative insight in the background of the Malay Quarter, or 

Bo Kaap and its inhabitants, who have shaped this unique 

heritage site. 

1

The Deeds Registry as a Necessary 

Economic Infrastructure 

By: Professor Andreas van Wyk 

University of Stellenbosch 

Astrike of Deeds Registry officials during 2006 hardly received 

attention in the highest quarters of Government. The reaction 

might well have been that it is a strike by just another relatively 

obscure group of aggrieved civil servants, within the 

Department of LandAffairs. 

In reality, the offices of the registrars of deeds, which are 

mostly situated in areas where there are also Divisions of the 

High Court, form a vital piece of economic infrastructure. 

Without it our modern free market system would hardly 

function or function with great difficulty, as has been shown in 

countries aligned to the former Soviet Union. Likewise, in 

many Third World Countries, the lack of a proper land register 

stifles economic development. 

As an everlasting asset, land forms the most obvious security 

one has to offer for the repayment of a loan. However, this 

presupposes that the particular piece of land may be clearly 

identifiable. Only then will individual or institutionalized money 

lenders be prepared to provide credit on the strength of a real 

right against the debtor's land this which we nowadays call a 

mortgage bond. 

This is the basis upon which the whole modern banking 

system is built. If all land in a country belongs to the State, then 

banks are largely restricted to providing loans to the different 

organs of State or merely providing short term loans, even if 

individual property rights on land are acknowledged without a 

credible system which proves X or Y's legal right. So for 

example, in Indonesia, or in other parts of the developing world 

no bank will provide significant credit to say a Javanese 

subsistence farmer. 

It is exactly in this area where South Africa inherited one of its 

most significant strategic advantages from the Roman Dutch 

law. Fundamental to a credible cadastre (property register) is 

the survey performed by many generations of surveyors, 

which enables almost each piece of land to be identified. This 

provides not only the creation of a register of who owns a piece 

of land or has rights thereto, but may also provide this 

information for public knowledge. 

This all may sound obvious, but it is not really so? 

In some of the most highly developed Western countries, such 

as Britain there is not really an equivalent to South Africa's 

reliable deeds registers (property registers). 

During the late Roman times the transfer of land took place by 

physically handing over a document in which the transferor 

(i.e. the seller of a house) confirmed that he transfers the land 

to the transferee (the buyer). This event was not accompanied 

by public notification. This in essence is still the situation in 

England today with their “conveyance by deed” and 

complicated matters to outsiders who wish to know who the 

owner of a specific piece of land is. 

However, in other parts of North Western Europe things 

developed differently during the Middle ages. The transfer of 

land had to take place in public, usually in the presence of 

family or neighbours. This developed into a practice where this 

function was performed in the presence of the local judicial 

official who had to keep a copy of the transfer deed in his office. 

This finally gave rise to legislation enacted between 1529 and 

1580 by the then Austrian-Spanish rulers who also ruled the 

Lower Lands of Holland. Accordingly, all transfers of land and 

rights thereto (such as a mortgage or servitude) had to be 

registered in the local court. 

This is precisely what happened in the Cape. Simultaneously 

with the establishment of a separate Council of Justice (“Raad 

van Justisie”) in 1680, all land transfers were registered there 

th 

until the early 19 century when the British administration in 

the Cape established a separate registration office for land 

titles. The Roman-Dutch principles upon which this office then 

functioned remained, and indeed still does so to this day. 

South African Deeds Registries are therefore government 

offices where information relating to land and certain other 

related judicial information (such as antenuptial contracts) are 

readily provided for public access. Information kept there 

enable potential land purchasers or credit providers to decide 

whether they wish to proceed with such transactions or not. 

Land registers may function in one or the other way. In certain 

Western European countries a so-called positive registration 

system is employed, which means that information recorded 

may be fully relied upon. By implication this means that the 

relevant State will guarantee the accuracy of the information 

contained in its land registers. 

In South Africa, and elsewhere, the system however is 

negative. This means that the information contained in deeds 

registers create a strong presumption, but total reliability 

cannot be guaranteed. 

Nevertheless, great care is taken to ensure the accuracy of our 

registers. In its present form, the Deeds Registries Act, 47 of 

1937 places a great deal of responsibility on conveyancers 

(the specialized attorneys who deal with land transfers and the 

rights thereto) to take responsibility for this. 

On the other hand, our system also relies to a great extent on 

2

the professionalism of deeds examiners employed by the 

State to ensure the integrity of the registers. 

Of course our land registration system and all that it is built 

upon only forms part of the total judicial infrastructure on which 

our economy is based. If anarchy in a given area escalates to 

such an extent that a bank can no longer retrieve its 

outstanding debt on a property by way of public auction, then 

the best land registration system becomes meaningless. 

However, one must not underestimate the value to the 

economy of a reliable land register. 

The above article originally appeared in the SAKE24 supplement of DIE 

BURGER and is reproduced here with kind permission from Media24, and the 

author. See also the monetary value of bond and bond registrations published in the 

October 2007-issue of the SADJ on pages 15 to 20 which is ancillary to the 

essence of this article. It was translated from the original Afrikaans by L J Vosloo. - 

Editor 

Couching of Waiver waiver of preference Preference 

in a Sectional sectional bond Bond 

By: Marie Grové 

Deeds Training, PRETORIA 

The Sectional Titles Act, 95 of 1986 does not provide for the waiver of a personal servitude in a sectional bond. The matter was 

recently discussed at the Registrars' Conference, and the Registrars resolved that the bond must be made subject to the usufruct and 

the waiver must be contained in the bond, and not the annexure: 

“52/2007 Couching of waiver of preference of usufruct 

Uncertainty at present prevails as to how the waiver or preference of a real right, such as a usufruct, must be couched in 

a sectional bond. 

Resolution: 

The usufructuary must either personally or in terms of an agent appear before the conveyancer. The bond must be 

made subject to the usufruct and the waiver must be contained in the bond and not the annexure.” 

Unfortunately the conference did not state whether the Power of Attorney (PA) must be lodged when the usufructuary (or holder of the 

personal servitude) appoints an agent by means of a PA. It can be reasoned both ways whether the PAmust be lodged or not. 

In the first instance, the PA falls within the ambit of the documents described in Annexure 6B, as referred to in regulation 40 of the 

Sectional Title regulations, in which case the PAshould not be lodged. 

It can also be reasoned that the personal right is waived in terms of the Deeds Registries Act, 47 of 1937, and not in terms of the 

Sectional TitlesAct, 95 of 1986. Therefore the PAmust be lodged. 

It is suggested that the waiver of preference in the bond, as directed by the Conference should be set in the example below, namely: 

“ Mortgagor hereby binds as a FIRST MORTGAGE, subject to the conditions set out in the annexure to this bond: 

A unit consisting of: 

(a) Section No 2 as shown and more fully described on Sectional Plan No SS 91/1996 in the scheme known as BATCAVES in 

respect of the land and building or buildings situated at ERF 957 ELDORAIGNE TOWNSHIP, in the local authority of City 

of Tshwane Metropolitan Municipality of which section the floor area, according to the said sectional plan is 90 

(NINETY) square metres in extent; and 

(b) 

an undivided share in the common property in the scheme apportioned to the said section in accordance with the 

participation quota as endorsed on the said sectional plan. 

Held by virtue of Deed of Transfer ST 

SUBJECT TO ALL THE TERMS AND CONDITIONS CONTAINED THEREIN AND A LIFELONG USUFRUCT IN FAVOUR OF 

23

EMMA GEEL, IDENTITY NUMBER 520101 0032 00 2, UNMARRIED, WHICH RIGHT IS BEING WAIVED IN FAVOUR OF 

THIS BOND, AS WILLAPPEAR LATER ON IN THE BOND 

*I, the undersigned, ALEXANDER HONEY, duly authorized by virtue of a power of attorney, signed at Pretoria on 7 January 

2004, by EMMA GEEL, IDENTITY NUMBER 520101 0032 002, UNMARRIED, the holder of the usufruct over the within 

mentioned property, do hereby waive the usufruct on behalf of the usufructuary, in favour of the mortgagee. 

Signed at Pretoria on 20 July 2004 

____________________________________ 

Alexander Honey 

Duly authorized by Usufructuary 

SIGNED at PRETORIA on 26 July 2004 

____________________________________ 

Mortgagor / Duly authorized agent of 

Mortgagor 

Before me 

Elaine Buckeroo 

Suite 16, Wildberry Park 

777 Wildberry Avenue 

MUCKLENEUK 

__________________________ 

CONVEYANCER 

Registered at PRETORIA on 

__________________________ 

REGISTRAR OF DEEDS 

*The exact wording of the waiver is the prerogative of the preparer. 

See page 5 for other resolutions taken by Conference. - Editor 

4

Massing and Adiation 

Massing and Election 

vis à vis 

By: Allen West 


This article is not intended to provide legal treatise on massed 

estates, but merely to provide a simple distinction between 

massing and adiation, and massing and election. 

The question begging an answer is whether a will must provide 

a limited interest in the massed property in favour of the 

surviving spouse. According to Wille's Mortgage and Pledge 

(Third Edition) on page 299 it is a prerequisite that the 

surviving spouse receives a limited interest in the massed 

property. The authority for this is probably based on the 

provisions of section 37 of theAdministration of EstatesAct, 66 

of 1965. Furthermore the case of Secretary, South African 

Association v Mostert; 1873 Buch 31 provides that “ the 

supervisor has accepted some benefit under the will”. Adiation 

is thus dependent on the surviving spouse obtaining a limited 

interest in the massed estate. 

However, when election occurs in a massed estate entirely, 

there is no necessity for a limited interest and the quid pro quo 

may lie distinct from the inheritance. 

Thus to summarize, where there is a massed estate, and the 

surviving spouse has abided by the terms of the joint will, 

adiation will be necessary where a limited interest is received, 

and election necessary where no limited interest is obtained. 

From a conveyancing perspective the provisions of section 21 

and regulation 50(2)(b) of the Deeds Registries Act 47 of 1937 

requires closer perusal. 

In the case of massing and adiation, where a joint estate is 

involved, the surviving spouse does not have to join the 

executor in the passing of transfer of the massed property, 

provided proof is submitted that the surviving spouse has 

adiated. 

However, where massing and election has occurred, and the 

property forms an asset in the joint estate, the surviving 

spouse must join the executor in the passing of the transfer of 

the massed property and documentary evidence in the form of 

an affidavit from the surviving spouse must be lodged to prove 

the election of the surviving spouse. 

Although the latter proof 

is not a specific requirement in terms of the Act, section 4(1)(a) 

sanctions the request for same. 

In both instances; where the property forms an asset in a joint 

estate, the joint estate must be divested (see regulation 

50(2)(c)). 

Resolutions taken at the Conference 

of Registrars 2007 



The Registrars held their annual conference during November 

2007 and 52 resolutions were taken. These resolutions have 

become operative from 2 January 2008 and are applicable to 

all Deeds Registries. 

What follows is merely those conference resolutions deemed 

necessary to draw examiners and practitioners attention to 

and which has an effect on the day to day practice of 

conveyancing. 

RCR 3/2007 - Proof of Intestacy 

Given the fact that a death notice cannot be accepted as proof 

of children born out of wedlock, it should also not be accepted 

as proof that a person died leaving no valid will. Does 

conference concur and if so, what proof should be required? 

Resolution: 

A death notice cannot serve as evidence of intestacy. Proof, in 

the form of an affidavit from the executor/representative, must 

be insisted upon. However, in the case of a transfer by 

endorsement in terms of section 45 of Act No. 47 of 1937, a 

regulation 49(1)(g) certificate from the Master will be 

acceptable. 

RCR 4/2007 - Sectional Title Mortgage Bonds 

Where a sectional title unit is subject to conditions, imposed in 

favour of the Home Owners Association, restricting transfer, 

etc. must the bond registered over such unit be made specially 

subject to such conditions, in the light of RCR 5 of 1987, read 

with RCR 22 of 2005? 

Resolution: 

Yes, sectional bonds must be made subject to restrictive 

home-owners association conditions. RCR 13/2002 is hereby 

confirmed. 

RCR 6/2007 - Registration of Usufruct over right to extend 

Can a usufruct be registered over a right to extend as provided 

for in terms of section 25(9) ofAct No. 95 of 1986?According to 

RCR 41/2003 and RCR 37/1996, and Act No. 95 of 1986 it is 

possible to register a usufruct over an exclusive use area (this 

amplifies the registration of a “right over a right” which the law 

does not allow).Also, see RCR 44/2003. 

Resolution: 

No, Act No. 95 of 1986 does not provide for a usufruct to be 

registered over a right of extension. 

5

RCR 7/2007 - Regulation 68(11) 

An authorized person/agent cannot make an oath on behalf of 

his/her principal (see RCR 6.12/1999). What is the position 

with an affidavit in terms of regulation 68(11) Act No. 47 of 

1937, where the agent (conveyancer) acts in terms of a 

general power of attorney on behalf of the Mortgagee (The 

Bank)? 

Resolution: 

RCR 6.12/1999 must also be applied to applications and 

affidavits in terms of regulation 68(11) of Act No. 47 of 1937. A 

general power of attorney mandating an agent to make an 

affidavit on behalf of his/her principal is contra bonis mores 

and should not be allowed. 

RCR 12/2007 - Conditions in Antenuptial Agreements 

RCR 34/2006 states: the following clause is inserted in an 

Antenuptial Contract: “The accrual system is to apply without 

modification to their intended marriage, provided that should 

either party be an unrehabilitated insolvent at the time of the 

dissolution of the intended marriage then the said accrual 

system shall not apply”. 

Is the proviso legal and enforceable? 

Resolution: 

Such a proviso is not legal and to the disadvantage of future 

creditors. The Matrimonial PropertyAct only allows that certain 

assets can be excluded from the accrual system. See Vorster 

v Steyn 1981 (2) SA831 (O). 

In view of the comments made by the judge in ex parte 

Wismer 1950 (2) 195 CPD the above resolution should be 

revisited. 

Resolution: 

Registrars of Deeds must register the contract. Should any 

dispute arise as to the contents thereof, the parties concerned 

may refer the matter to court for clarification. See ex parte 

Wismer 1950 2 195 CPD on pages 198 and 199. (RCR 

34/2006 is hereby withdrawn). 

RCR 15/2007 - Application of Section 68(1) 

Where a personal servitude has lapsed and the land 

encumbered thereby is transferred, is it peremptory to request 

an application in terms of section 68(1), or will the 

documentary proof lodged as a supporting document suffice? 

Resolution: 

Section 68(1) must be complied with in all instances where a 

personal servitude lapses for any reason. 

RCR 20/2007 - VA copy already lodged 

Where application and affidavit is made for the issue of a 

certified copy of a title deed, bond, etc. for which a VA copy has 

already been issued, must the application be made in terms of 

regulation 68(7), or will an application in terms of regulation 

68(1) be acceptable? 

Resolution: 

The application must be made in terms of regulation 68(1) and 

not 68(7). RCR 26.1/1996 is hereby confirmed in respect of the 

disclosure of the full facts. 

RCR 34/2007 - CROSS-BORDER INSOLVENCY 

A Foreign Court has issued a judgment to liquidate a company 

that owns property in South Africa. A foreign trustee now 

requests the registrar of deeds to note a liquidation order 

against the company. Does the registrar of deeds have the 

power to note such an order to enable a foreign trustee to deal 

with company's assets? 

Resolution: 

The registrar of deeds must decline to note such an order, 

unless it has been recognized by a South African Court. See 

Deutsche Bank AG v Moser and Another 1999 (4) SA 216 

(C). 

RCR 42/2007 - Lapsing of Right of Extension 

Is it the duty of the registrar of deeds to check the right of 

extension on transfer of a unit to determine if same has lapsed, 

and if so, how must the 15B(3)-certificate be couched or must 

section 68(1) be complied with, where same has lapsed? 

Resolution: 

No, it is not the duty of the registrar of deeds to check the right 

of extension on transfer of a unit. It is the duty of the 

conveyancer to determine whether or not the right of extension 

has lapsed. If it has been determined that such right has 

lapsed, then a section 68(1) application by the body corporate 

must be lodged. The 15B(3) certificate must reflect that a right 

of extension has been registered, but that such right has 

lapsed. 

RCR 43/2007 - Non-disclosure of Period of Extension 

What procedure must be followed where it is ascertained 

subsequent to registration that the reservation of a right of 

extension does not disclose a period of time in which the right 

must be exercised? 

Resolution: 

A Notarial variation agreement entered into between the body 

corporate and the developer, with the written consent of all 

members of the body corporate as well as with the written 

consent of the mortgagee of each unit in the scheme, failing 

the agreement or the obtaining of all consents, an order of 

court must be obtained. 

Should a body corporate not be in existence, a section 4(1)(b) 

application may be lodged where a right has been reserved, 

from time to time, but no specific period has been stipulated in 

the condition. 

RCR 48/2007 - Subdivision of Agricultural Land Act 70 of 

1970 

Where a sectional title register is opened on land 

encompassing the word “farm” in the property description 

must CRC 6 of 2002 be applied in that the consent of the 

Minister must be obtained, alternatively proof that such land is 

not deemed to be agricultural land? 

6

Resolution: 

Yes, CRC 6 of 2002 is applicable. 

RCR 49/2007 - Opening of Sectional Title register and Act 

21 of 1940 

Where a sectional title register is opened on land within 95 

metres from a main or building restriction road, must the 

provisions of section 11(4) of Act No. 21 of 1940 be applied as 

per the uniform practice applicable to conventional transfers of 

land to two or more persons? 

Resolution: 

Yes, section 11(4) ofAct No. 21 of 1940 must be adhered to. 

Uncertainty at present prevails as to how the waiver of 

preference of a real right, such as a usufruct, must be couched 

in a sectional bond. 

Resolution: 

The usufructuary must either personally or in terms of an agent 

appear before the conveyancer. The bond must be made 

subject to the usufruct and the waiver must be contained in the 

bond and not the annexure. 

Readers are advised to obtain a full set of the resolutions from 

their law society or from the Deeds Registry. 

*See also the article by Marie Grovè on page 3 of this issue - Editor 

*RCR 52/2007 - Couching of Waiver of Preference in 

Sectional 

Long 

Mortgage Bond 

Distance 

Runner 

Susan Hurter is an Assistant Registrar of Deeds at the Pretoria Deeds Registry. She is a regular participant in long distance 

running events. In 2007 she participated in five 100-miler ultra marathons. She won all her 100-miler marathons and in the 

Washie 100 miler she came 9th overall. 

Those of us who wonder why Susan does this - It is because she can! 

7

CONFERENCE OF REGISTRARS 2007 

Back Row: K. Pillay, J . Badenhorst, Alla n Stephen, S. Mbatha, G. Tsotsetsi, I. Singo, P. M e sefo, A . van der Ross 

Front Row: L. du Pont, H. Geldenhuys, L. Smit, A. West, N. Matanga, Z. Rahmann, C. Knoessen, A. Lombaard, 

A. Reynolds, A. Sepp 

8

The Recognition of Customary 

Marriages Act, 120 of 1998 

By: Margaret Meyer 

Masters’ Training PRETORIA 

INTRODUCTION 

The Recognition of Customary Marriages Act, 120 of 1998, 

came into operation on 15 November 2000, and gives full legal 

recognition to customary marriages for the first time in the 

history of SouthAfrica. 

Prior to the commencement of the Act, customary marriages, 

(better known as customary unions) did not enjoy the same 

status as civil marriages concluded in terms of the Marriage 

Act, 25 of 1961. Customary unions received partial recognition 

for purposes of certain legislation and common law, if they 

were registered under the Black Administration Act 38 of 1927. 

Partners in customary unions were treated as spouses for the 

1 2 

purpose of workmen's compension, income tax, and 

3 

maintenance. 

Customary unions, as codified in the Black Administration Act, 

were also institutions in which women suffered unequal status 

and rights, to men. The Black Administration Act treated all 

women, regardless of age, capacity and marital status as 

4 

minors. Women were not allowed to own property, sue or be 

sued in court, or exercise the power of contract. Women could 

not negotiate or terminate their marriages, nor could they have 

legal custody of their children. 

The unequal status of customary marriages reflected the 

general approach of the pre-democratic governments to 

customary law in South Africa. It was viewed as a system of 

law that was 'inferior' to common law and legislation. Its 

acceptance as 'law' was based on a concept of 'repugnancy' 

defined by Western, Colonial and Christian values. For 

example, customary unions were not fully recognized 

because, 'potentially polygamous', they were 'against good 

5 

morals' 

THE LEGAL RECOGNITION OF CUSTOMARY 

MARRIAGES 

Which marriages are recognized? 

According to section 1 of the Act 'customary marriage' is 

defined as a marriage concluded in accordance with 

customary law, while 'customary law' is defined as the 

customs and usages traditionally observed among the 

indigenous African peoples of South Africa and which form 

part of the culture of those peoples. 

From the above definitions it is clear that customary marriages 

concluded in terms of Hindu and Muslim rites are not affected 

by the Act, and remain invalid unless they were solemnized in 

terms of the MarriageAct, 25 of 1961 or the Civil UnionsAct, 17 

of 2006. 

Customary marriages entered into before 15 November 

2000 

Section 2(1) of the Act recognizes customary marriages 

entered into before the commencement of the Act (15 

November 2000), provided that such marriages were validly 

concluded in terms of customary law and existed at the 

commencement of theAct. 

According to section 2(3) if a person was a spouse in more 

than one validly concluded customary marriage as at date of 

the commencement of the Act, all the marriages are 

recognized as marriages. Polygamous marriages are thus 

given legal recognition. 

Customary marriages entered into after 15 November 

2000 

Section 2(2) recognizes customary marriages entered into 

after the commencement of the Act (15 November 2000), 

provided the marriage complies with the requirements of the 

Act. This also includes polygamous marriages entered in 

terms of theAct [section 2(4)]. 

The general requirements for a valid customary marriage 

entered into after the commencement of the Act are as 

6 

follows: 

• The prospective spouses must both be above the age of 

18 years; 

• They must both consent to be married to each other 

under customary law. 

• The marriage must be negotiated and entered into or 

celebrated in accordance with customary law. 

• If either of the prospective spouses is a minor, both his or 

her parents, or if he or she has no parents, his or her legal 

guardian, must consent to the marriage. If there is no 

7 

legal guardian, theAct provides for substitute consent. 

• The parties must not be prohibited from marriage 

because of relationship by blood or affinity as determined 

by customary law. 

• In addition to the above requirements, a husband in a 

customary marriage who wishes to enter into a further 

customary marriage with another woman after the 

commencement of the Act, must comply with a further 

requirement set out in section 7(6) of the Act, namely an 

application to the Court to approve a written contract 

which will regulate the future matrimonial property system 

of his marriages. 

Subsequent civil marriages 

A man and a woman between whom a customary marriage 

subsists may marry each other in terms of the Marriage Act, 25 

9

of 1961, if neither of them is a spouse in a subsisting customary 

8 

marriage with any other person. 

A spouse in a customary marriage may, however, not marry 

another person in terms of civil law during the subsistence of 

9 

such customary marriage. 

REGISTRATION OF CUSTOMARY MARRIAGES 

Duty to register 

Registration provides certainty, and consequently section 4 of 

the Act provides that all customary marriages must be 

registered. 

Customary marriages entered into before the commencement 

of the Act, which are not already registered in terms of any 

other law, had to be registered within a period of 12 months 

after the commencement of the Act, or within such a period as 

the Minister may from time to time prescribe by notice in the 

10 

Gazette. 

Marriages entered into after the commencement of the Act 

must be registered within a period of three months after the 

conclusion of the marriage or within such period as the Minister 

may from time to time prescribe by notice in the Gazette. 

Although registration of a customary marriage is peremptory in 

terms of the Act, section 4(9) provides that failure to register a 

customary marriage, does not affect the validity of that 

marriage. 

Proof of existence of a customary marriage that has not been 

registered can pose a problem to the Master when an estate is 

reported and it is suggested that the Master is justified in 

insisting on proof of registration of the marriage for estate 

purposes. 

Section 4(8) provides that “a certificate of registration of a 

customary marriage issued under this section or any other law 

providing for the registration of customary marriages 

constitutes prima facie proof of the existence of the customary 

marriage and of the particulars contained in the certificate.” 

Who may apply to register a marriage? 

Section 4(2) specifically allows 'either spouse' to register a 

marriage on behalf of both spouses. This provision read with 

section 4(5)(b) makes it possible for a surviving spouse in a 

customary marriage, whose marriage is not registered at the 

time of death of the other spouse, to register the marriage after 

the death of the other spouse in order to satisfy the Master's 

requirement of proof of registration. 

During the process of developing the law, the women's rights 

lobby argued strongly for a provision that would allow wives to 

register marriages without their husbands. The purpose was to 

ensure that spouses who are reluctant to register their 

marriage do not frustrate the other spouse or the purpose of 

the Act. Because a customary marriage is a process that 

occurs over time and may involve more than a ceremony, it is 

easy to challenge its existence. Women, in particular, have the 

most to lose if the customary marriage is not registered. Men 

have been able to challenge customary marriages in order to 

avoid maintaining former spouses or the wives dependent on 

the estates they have inherited as male heirs. 

Essentially, the Act accepts that it is not always in the interests 

11 

of both spouses to register their marriage. 

The Act also allows 'interested parties to apply to register a 

12 

customary marriage on behalf of the spouses. 

An interested party may be a friend, a relative, a traditional 

leader or one of the people who participated in the marriage 

negotiations between the two families. He or she could also be 

one of the husband's other wives or the children of the 

marriage or of the husband from another marriage. Also 

relevant may be persons with an interest in communal land 

under the control of the husband, business partners and fellow 

trustees. It appears to be left within the discretion of the 

registering officer as to who constitutes an interested party. As 

long as the party seeking to register the marriage satisfies the 

registering office that he or she has 'a sufficient interest in the 

13 

matter', they may apply. 

Requirements to register a customary marriage 

Section 4(2) of the Act provides that the applicants must 

furnish the registering officer with the prescribed information 

and any additional information which the registering officer 

may require in order to satisfy himself or herself as to the 

existence of the marriage. 

The Minister of Justice, in consultation with the Minister of 

Home Affairs, is responsible for creating the registration form 

and for identifying the necessary information the spouse or 

couple must provide to the registering officer. 

According to information obtained from the Pretoria Regional 

Office of the Department of Home Affairs the following 

information is required to register a customary marriage after 

one of the spouses is deceased: 

• The family lobolo agreement, which contains the date of 

the marriage, the lobolo amount and any of the agreed 

information, duly signed by all the parties concerned. 

• If the agreement and the marriage was concluded in the 

rural area, the written confirmation from the Tribal Chief 

or King from that area to the effect that the marriage took 

place in that area. 

• The death certificate, or a certified copy thereof, in 

respect of the deceased spouse whose spouse is 

reported. 

• One representative each of the bride and the groom's 

family must accompany the surviving spouse to the 

nearest office of the Department of Home Affairs. All the 

parties must produce their identity documents during the 

registration process. 

10

• A fee of R10,00 is payable in respect of the application for 

registration of the customary marriage. 

STATUS AND CAPACITY OF SPOUSES 

In terms of section 6 of the Act, a wife in a customary marriage 

is placed on an equal footing with that of her husband as far as 

her status and capacity is concerned, subject, however, to the 

matrimonial property system governing the marriage. This 

means that she may now acquire assets and dispose of them, 

enter into contracts and litigate, on a basis of equality with her 

husband, in addition to any rights and powers that she might 

have at customary law. 

PROPRIETARY CONSEQUENCES OF CUSTOMARY 

MARRIAGES 

The consequences of a customary marriage differ according to 

whether the marriage was entered into before or after the 

commencement of the Act. For marriages entered into before 

the commencement of the Act, the proprietary consequences 

continue to be governed by customary law, unless an 

application is made to change the property regime in terms of 

section 10 of theAct. 

For marriages entered into after the commencement of the Act 

the proprietary consequences will depend on whether the 

marriage is monogamous or polygamous. 

Customary marriages in existence before the 

commencement of the Act 

Section 7(1) provides that the proprietary consequences of a 

customary marriage entered into before the commencement 

of the Act will continue to be governed by customary law. The 

question, however, is which customary law? 

The concepts of “in community or out of community of 

property” are unknown in customary law. 

For purposes of the administration of estates, the Master will 

regard customary marriages entered into before the 

commencement of the Act as being out of community of 

property. 

The Act allows spouses married under customary law prior to 

the Act to apply to a court to change their marital property 

regime. Section 7(4) requires the application for change to be 

made by both the husband and the wife. The court will grant the 

application if: 

(a) there are 'sound' reasons for the change; 

(b) written notice is given to all creditors owed amounts of over 

R500,00; 

(c) no one will be prejudiced by the change. 

If the husband has other spouses in a polygamous marriage, 

then they must be joined in the proceedings to ensure that their 

14 

rights are protected. Other parties who have interests in the 

marital property must also be joined, including the dependants 

of the husband and anyone else who will be affected by the 

change. 

Customary marriages entered into after the 

commencement of the Act 

Monogamous customary marriages 

In terms of section 7(2) of the Act the marriage property 

arrangement of a monogamous customary marriage is that of 

a marriage in community of property and of profit and loss. 

Monogamous customary marriages concluded after the 

commencement of the Act thus have the same consequences 

as a civil marriage. 

The spouses to a monogamous customary marriage can 

marry out of community of property, provided they enter into an 

antenuptial contract. 

Where the marriage is in community of property, it must be 

noted that the provisions of Chapter III and sections 18, 19, 20 

and 24 of Chapter IV of the Matrimonial Property Act, 88 of 

1984, apply to the customary marriage. 

Polygamous customary marriages 

A husband in a customary marriage who wishes to enter into a 

further customary marriage with another woman after the 

commencement of the Act, must comply with the requirement 

of section 7(6) of the Act, in addition to the general 

requirements set out in section 3 of the Act. He must make an 

application to court to approve a written contract which will 

regulate the future matrimonial property system of his existing 

marriage and the prospective one. 

In view of the fact that the Act now provides for polygamous 

marriages in respect of indigenous African people of South 

Africa, the Master should take cognizance of this fact and 

ensure that the rights of all the spouses (where there is more 

than one marriage) is protected in the course of the 

administration of the estate. 

The Master will call for the written contract which regulates the 

deceased's marriages, duly approved by the court, if the death 

notice indicates the following: 

• the deceased was married under customary law; 

• the marriage is polygamous; 

• the second or subsequent marriage was concluded after 

the commencement of theAct (15 November 2000). 

DISSOLUTION OF CUSTOMARY MARRIAGES 

In terms of section 8(1) of the Act a customary marriage may 

only be dissolved by a court by a decree of divorce, on the 

ground of the irretrievable breakdown of the marriage. 

As with all other estates administered by the Master, a copy of 

the divorce order and any settlement between the parties, 

which has been made an order of court, must be called for in 

appropriate circumstances, e.g. to establish whether the 

deceased estate is liable for future maintenance. 

11

THE RELATIONSHIP BETWEEN CIVIL AND CUSTOMARY 

MARRIAGES AND THEIR IMPACT ON ESTATES 

The practice of combining customary with civil ceremonies is 

common in South Africa, and many variations are possible. 

The spouses may celebrate a customary marriage and, on the 

same day, or a short while later, have it solemnized again in a 

civil registry office. The rites may also be reversed, when a civil 

marriage is followed by a traditional wedding. Dual marriages 

by the same spouses entered into prior to the Recognition of 

Customary Marriages Act, 120 of 1998 created few legal 

problems, because the customary union was not recognized 

15 

and the civil marriage was simply allowed to prevail. 

Where, however, a spouse (normally the husband) purported 

to marry a third person by different rights, the situation is more 

complicated. A migrant worker, for instance, might marry one 

wife in the country according to customary law, and another in 

the city according to civil rites. The husband, thinking in terms 

of his customary right to take many wives, might have been 

unaware of the legal implications of his actions, or a more 

calculating man, however might have deliberately kept his 

wives in the dark. 

Because the Recognition of Customary Marriages Act is not 

retrospective in effect, marriages contracted prior to the Act 

are still governed by rules that applied before it came into force 

on 15 November 2000. These rules can be divided into four (4) 

categories. 

Subsequent civil marriage by the spouse of a subsisting 

customary union to a third person: Situation before 2 

December 198 - Areas outside the Transkei 

Only civil marriages were deemed proper marriages, and 

consequently where a husband in a subsisting customary 

union were to marry a third person or one of his existing 

polygamous wives by civil rites, the civil marriage 

automatically superseded and extinguished the prior 

customary union(s). These consequences caused great 

16 

hardship for the 'discarded' customary wife and children. 

Section 22(7) of the Black Administration Act, 38 of 1927, 

however, provided some measure of protection to the 

discarded family when the husband died. For purposes of 

succession, the status of the widow and children of the civil 

marriage were deemed to be equivalent of their customary-law 

counterparts. By implication, the preferential status given the 

civil-law wife and children was lost and they ranked equally 

with the prior discarded wife (or wives) and their children. 

If the Master's Office or Service Point is confronted with a 

17 

situation as set out above after the Bhe decision , it should be 

noted that both the discarded wife and the civil-law wife will be 

deemed spouses of the deceased for purposes of intestate 

succession. 

Subsequent civil marriage by the spouse of a subsisting 

customary union to a third person: Situation after 2 

December 1988 until 15 November 2000 

Areas outside the Transkei 

In 1988 the Marriage and Matrimonial Property Law 

Amendment Act 3 of 1988, which came into operation on 2 

December 1988 provided that, although partners to a 

customary union could marry one another again by civil rites, 

a spouse could not validly marry a third person by civil rites 

during the subsistence of the customary union. Should a 

spouse in a customary union purport to enter into a civil 

marriage without first dissolving the customary union, the civil 

marriage will be invalid. This was confirmed in Thembisile 

18 

and Another v Thembisile and Another. 

When confronted with a situation as set out above, the Master 

or Service Point would have to determine which of the 

marriages (customary or civil) was invalid at the date of death 

of the deceased. If the deceased entered into a customary 

union (first Marriage) with wife A and then into a civil marriage 

with wife B, without first dissolving the customary union, then 

the civil marriage is invalid and the customary union is the only 

valid marriage. If the customary marriage was dissolved 

before the civil marriage, then the civil marriage will be the 

only valid marriage. 

Dual marriages in Transkei 

The 1978 Transkei Marriage Act, 21 of 1978 allowed the 

husband of a subsisting civil marriage to contract additional 

customary marriages, provided that the civil marriage was out 

of community of property. Likewise, a husband in a customary 

union, could also during the subsistence of such customary 

union validly contract a civil marriage with a third person, 

provided the civil marriage was out of community of property. 

Thus, when the Master or Service Point is confronted with 

dual marriages concluded in terms of the Transkei Marriage 

Act, both the civil and customary law spouses would be 

19 

deemed spouses for purposes of intestate succession. 

The position after 15 November 2000 

The Recognition of Customary Marriages Act, 120 of 1998 

came into operation on 15 November 2000 and revoked 

section 22(1) to (5) of the Black Administration Act, and the 

provision in the Transkei Marriage Act that permitted dual 

marriages. 

Section 2(1) of the Recognition of Customary Marriages Act 

determines that a marriage which is a valid marriage at 

customary law and existing at the commencement of the Act, 

is for all purposes recognized as a valid marriage. 

Section 10(1) provides that a man and a woman between 

whom a customary marriage subsists are competent to 

contract a civil marriage with each other if neither of them is a 

spouse in a subsisting customary marriage with any other 

person. 

Section 10(4) provides that despite subsection (1), no spouse 

of a civil marriage is, during the subsistence of such marriage, 

12

competent to enter into any other marriage, albeit civil or 

customary. 

The Act thus confirms that spouses married by customary 

union may not enter into a civil marriage if either of them is a 

spouse in a subsisting customary marriage with any other 

person. The same holds for spouses married under civil rites. 

They may not enter into a customary union. 

Editor's Note: 

The Department of Home Affairs who is responsible for the 

registration of customary marriages has ceased to register 

marriages subsequent to the dates referred to in section 4 and 

thus the matter has to be referred to court for verification of the 

marriage should the marriage not have been registered 

timeously. This is causing undue hardship for the parties who 

have entered into customary marriages. 

Foot Notes: 

1 

Compensation for Occupational Injuries and DiseasesAct 

130 of 1993, s 1. 

7 

8 

9 

10 

11 

12 

13 

14 

15 

Refer to sections 3(b), 4(a) & 4(c). 

Section 10(1). 

Section 3(2). 

The Minister of Home Affairs extended the period to 

November 2002, but despite the expiry period, Home 

Affairs has permitted registration to continue. 

Justice College, Customary Marriages Bench Book, 

February 2004, par. 4.5. 

Section 5(a). 



Section 7(4)(b). 

Benett Customary Law in South Africa (2004) 236. 

2 

The Income TaxAct 58 of 1962, s 1. 

16 

Nkambula v Linda 1951 (1) SA377 (A). 

3 

4 

MaintenanceAct 23 of 1962, s 1. 

The BlackAdministrationAct, 38 of 1927, s 11(3)(b). 

17 

Bhe and Others v Magistrate Khayelitsha and Others, 

2005 (1) SA580 (CC) handed down on 15 October 2004. 

5 

6 



Section 3. 

18 

19 

2002 (2) SA209 (T). 

In Khambule v The Master and Others 2007 (3) SA 403 

(E) it was held that the failure of parties to register the 

customary marriage in terms of the Transkei Marriage 

Act does not affect the validity thereof. 

Exemption Of Transfer Duty: Section 9(1)(i) 

Of The Transfer Duty Act 40 Of 1949 

By Marie Grové 

Deeds Training Pretoria 

Section 9(1)(i) of Act 40 of 1949 reads as follows: 

Section 9(1): “No duty shall be payable in respect of the 

acquisition of property by - ……. (i) the surviving or divorced 

spouse who acquires the sole ownership in the whole or any 

portion of property registered in the name of his or her 

deceased or divorced spouse where that property or portion is 

transferred to that surviving or divorced spouse as a result of 

the death of his or her spouse or dissolution of their marriage or 

union” (my underlining). 

The Act specifically requires that the surviving or divorced 

spouse should acquire “sole ownership” in the “whole” or “any 

portion” of a property, registered in the name of his or her 

spouse. The word “any portion” is used and not “any share”, 

which indicates that when reference is made to “portion” it will 

be a “defined” portion and not a “share” in the property. 

By way of an example, should a deceased/divorced spouse 

be the registered owner of an undivided share in the property, 

i.e. co-owner together with a third party (not his/her spouse), 

and the surviving/divorced spouse, who is entitled to the 

property, receives transfer of the share of the other spouse, 

the transaction will not be exempt from transfer duty in terms 

of section 9(1)(i). The spouse does not receive transfer of the 

“whole” or a ”portion” of the property and does not acquire 

“sole ownership”, but merely an undivided share. Strictly 

interpreted transfer duty should be payable in respect of such 

transactions. 

Is this an oversight by the legislator? 

your views please! - Editor 

13

Reflecting the Past 40 Years 

DEEDS REGISTRATION COURSE LEVEL VI 2001 

From Left to Right: 

st 

1 Row: MP Moya, CCE Knoesen (Lecturer), 

AS West (Lecturer), JF Scheepers 

(Director: Training), JE Grobler (Lecturer), 

HF Gerryts (Lecturer), A Lombaard 

(Lecturer). 

nd 

2 Row: HR Nkambule, VM Tango, D Hoko, 

MM Mokale, RT Mamabolo 

rd 

3 Row: NS Lefafa, I de Jongh, NV Makete, 

WL Motlhabane, PJH Gwangwa, GA 

Botha 

th 

4 Row: Avan Rooyen, H Nauschutz, 

L Coetzer, S Mallick, M van Niekerk 

TRANSVAAL TOWNSHIPS BOARD - 1983 


Front: Messrs. LW Pentz (Vice-chairperson); JI Le Roux Van Niekerk (Chairperson); PF Bekker (Secretary) 

Behind: Messrs. H J de Beer (Registrar of Mining Titles); NC O'Shaughnessy (Representative of Surveyor General) 

CW Erasmus (Representative of Roads); GE Verster (Representative of Community Development); 

MPAuret (Representative of Local Government); WG James (Representative of Roads); 

JJGB Knoetze (Member); DJL Kamfer (Member); WF Olivier (Registrar of Rand Townships); 

DG Raath (Assistant Head of Planning) and EP de Beer (Representative of the Prime Minister's Office 

Section Physical Planning) Insert: Mr. DP Wilcocks (Member); Mr.APL Kotze (Member) (Pretoria). 

14

COURSE FOR SECTIONAL TITLES ACT - 1973 


st 

1 Row: SA Walters; DJA Visser; Mrs. E Grobler; JLE Smit (Chief Registrar of Deeds); Miss. M van Ronge; 

MS Kruger (Course Leader); HR Gibbs 

nd 

2 Row: L Kriel; CJ Wolfaardt; CA Pienaar; BD Davidson; RN Weaving; JH Chamberlain; WFHC Swanepoel 

rd 

3 Row: DLW Westpfahl; NT Duvenage; C Streak; CH Myburgh; W Obbes (Assistant Registrar Windhoek); AN Wilson 

th 

4 Row: PJ van Rensburg; P Lategan; CL Wabeke; RR Kretzmann; L Heunis 

TRANSVAAL TOWNSHIPS BOARD - 1966 


Front: Mr. H Preiss, member; Mr. ATW de Klerk, member; Mr. CP Joubert (Registrar of Mining Titles), member; Mr. LJ Vosloo 

(Registrar of Deeds); member; Mr. RBJ Gouws (Representative of the Department of Local Management), member; 

Mr. JI Le Roux Van Niekerk, (Chairperson); Mr. H Matthee, secretary; Mr. LW Pentz (Surveyor General), member; Mr. 

JSM Guldenpfennig, member. 

Behind: Mr. SG Cronje (Representative of the Department of Roads), member; Mr. DG Raath, Plannner of the Townships 

Board; Mr. DG Cruse, member; Mr. PPC van der Hoven, Planner of the Townships Board 

15

Deeds Training Spreads its Wings 

By: L J Vosloo 

Deeds Registry, CAPE TOWN 

The Sub-Directorate: Deeds Training periodically conducts topic courses for Deeds Office officials to keep their 

knowledge of the myriad of legislation, procedures and practices ship shape. 

Often these courses are presented at the various locations of the Deeds Offices by the lecturers from Deeds Training. 

The photographs were taken at one such course and show Deeds Training lecturer Wiseman Bhuqa explaining the 

intricacies of Customary Marriages to Deeds Office examiners from the Cape Town deeds registry. 

Class attendants 

Wiseman Bhuqua presenting lectures. 

16

Beneficiary's Disposal in a Trust and 

Transfer Duty Implications 

By: Roelie Rossouw 

Conveyancer Rossouws Attorneys, BLOEMFONTEIN 

RELEVANT PROVISIONS OF THE TRANSFER DUTYACT 

The following provisions of the Transfer Duty Act 40 of 1949 

(“Transfer DutyAct”) are relevant: 

The following definitions contained in section 1 of the Transfer 

DutyAct: 

'property' means land in the Republic and any fixtures 

thereon, and includes - 

(a) any real right in land but excluding any right under a 

mortgage bond or a lease or property other than a lease 

referred to in paragraph (b) or (c); 

(b) …….. 

(c) …….. 

(d) a share or member's interest in a residential property 

company; or 

(e) a share or member's interest in a company which is a 

holding company (as defined in the Companies Act, 

1973 (Act 61 of 1973) or as defined in the Close 

Corporations Act, 1984 (Act 69 of 1984), as the case 

may be), if that company and all of its subsidiary 

companies (as defined in the Companies Act, 1973, or 

Close Corporations Act, 1984), would be a residential 

property company if all such companies were regarded 

as a single entity; 

(f) a contingent right to any residential property or share or 

member's interest, contemplated in paragraph (d) or (e), 

held by a discretionary trust (other than a special trust 

as defined in section 1 of the Income Tax Act, 1962 (Act 

58 of 1962)), the acquisition of which is - 

(i) a consequence of or attendant upon the conclusion of any 

agreement for consideration with regard to property held 

by that trust; 

(ii) accompanied by the substitution or variation of that trust's 

loan creditors, or by the substitution or addition of any 

mortgage bond or mortgaged bond creditor; or 

(iii) accompanied by the change of any trustee of that trust; 

'residential property' means any dwelling house, holiday 

home, apartment or similar abode, improved or 

unimproved land zoned for residential use in the republic 

(including any real right thereto), other than - 

(a) an apartment complex, hotel, guesthouse or similar 

structure consisting of five or more units held by a person 

which has been used for renting to five or more persons, 

who are not connected persons, as defined in the Income 

Tax Act, 1962 (Act 58 of 1962), in relation to that person; or 

(b) any 'fixed property' of a 'vendor' forming part of an 

'enterprise” all as defined in section 1 of the Value-Added 

Tax Act, 1991 (Act 89 of 1991); 

(a) 

(b) 

(c) 

'transaction' means - 

….. 

….. 

in relation to a discretionary trust, the substitution or 

addition of one or more beneficiaries with a contingent 

right to any property of that trust, which constitutes 

residential property or shares or member's interest 

contemplated in paragraph (d) or (e) of the definition of 

property' or a contingent right contemplated in paragraph 

(f) of that definition; 

‘ trust' means any trust consisting of cash or other assets which 

are administered and controlled by a person acting in a 

fiduciary capacity, where such person is appointed under 

a deed of trust or by agreement or under the will of a 

deceased person. 

Section 2 which deals with the imposition of transfer duty in 

the following manner: 

(1) Subject to the provisions of section 9, there shall be levied 

for the benefit of the National Revenue Fund a transfer 

duty (hereinafter referred to as the duty on the value of 

any property …. acquired by any person on or after the 

date of commencement of this Act by way of a transaction 

or in any other manner… 

RELEVANT PROVISIONS OF THE TRUST PROPERTY 

CONTROL ACT 57 OF 1988 

The following definitions contained in section 1 of the Trust 

Property ControlAct are relevant: 

'trust' means the arrangement through which the ownership in 

property of one person is by virtue of a trust instrument made 

over or bequeathed - 

(a) 

(b) 

to another person, the trustee, in whole or in part, to be 

administered or disposed of according to the provisions 

of the trustee instrument for the benefit of the person or 

class of persons designated in the trust instrument or for 

the achievement of the object stated in the trust 

instrument; or 

to the beneficiaries designated in the trust instrument, 

which property is placed under the control of another 

person, the trustee, to be administered or disposed of 

according to the provisions of the trust instrument for the 

benefit of the person or class of persons designated in the 

trust instrument or for the achievement of the object 

stated in the trust instrument, but does not include the 

case where the property of another is to be administered 

by any person as executor, tutor or curator in terms of the 

provisions of the Administration of Estates Act, 1965 (Act 

66 of 1965); 

CATEGORIES OF TRUSTS 

It is clear from the definitions of 'property' and 'transaction' 

contained in the Transfer Duty Act that (for the purpose of 

determining whether the disposal of a beneficiary's interest in 

a trust will attract transfer duty) it is imperative that one should 

be able to differentiate between a “discretionary trust” and a 

trust which is not a discretionary trust for purposes of the act. 

The Transfer Duty Act uses the term “discretionary trust” 

without defining it. (For the purpose of this memorandum I will 

accept that the “discretionary trust” to which the act refers is 

the one defined by PA Olivier 'Trustreg en Praktyk' on p 114 as 

one where the trustees have a discretion as to which of the 

beneficiaries will eventually receive the income and/or capital 

of the trust. The rights of the beneficiaries are therefore 

contingent and not vested). 

17

The Trust Property Control Act also does not differentiate 

between a “discretionary trust” and a trust which is not a 

discretionary trust. (It does, however, differentiate in its 

definition of “trust” between: 

a trust where ownership of the trust assets vest in the trustees 

in paragraph - (a) of the definition and; 

a trust where ownership of the trust assets vest in the 

beneficiary/ies - in paragraph (b) of the definition. 

Cameron, de Waal and Wunsh Honoré's SouthAfrican Law of 

Trusts' (Fifth Edition) p 9 refers to 3.3.1 as a 

'ownership trust' and to 3.3.2 as a 'bewind trust'. 

P A Olivier 'Trustreg en Praktyk' p 111 refers to 3.3.1 as a 

“privaat trust” and says the following of that category of trust: 

“Dié soort trust is eintlik die werklike uitvloeisel van die trust in 

regstegniese sin met die trustee as eienaar van die trustgoed 

en met bepaalde of bepaalbare begunstigdes.” 

On p 114 

Olivier defines a 'discretionary trust as follows: “'n 

Diskressionêre trust is 'n privaat trust met die besondere 

kenmerk dat die begunstigdes wat uiteindelik deur die 

inkomste en/of kapitaal van die trust bevoordeel gaan word 

volgens die diskresie van òf die trustees òf 'n begunstigde 

bepaal moet word. Dis … 'n besondere verskynsel van die 

privaat trust.” It would thus appear as if Olivier acknowledges 

that one does find another form of the “privaat trust” where 

ownership of the trust assets still vest in the trustees even if 

they do not have a discretion as to which of the beneficiaries 

will eventually receive the income and/or capital. 

P A Olivier 'Trustreg en Praktyk' p 114 says the following 

regarding the practical use of a 'bewind trust': “Omdat die 

bewindtrust wel erkenning geniet, is dit bruikbaar in die vorm 

van 'n beleggingstrust wat ook 'n vorm van 'n besigheidstrust 

is. 'n Voorbeeld hiervan kan gevind word waar die lede van 

byvoorbeeld 'n prokureursfirma hulle eie gebou oprig. Dit 

geskied in die naam van die Omega Trust. Die vennote of hulle 

familietrusts is die begunstigdes en die kapitaal en inkomste 

en verliese van d i e O m e g a Tr u s t v e s t i g i n d i e 

begunstigdes.” I am of the opinion that Oliver's “Omega 

Trust” would only be a 'bewind trust' if the office building is 

registered in the name of the beneficiaries. If, as is much more 

common, the office building is registered in the name of the 

trustees the trust is an 'ownership trust' notwithstanding the 

fact that the beneficiaries have a vested right as regards the 

income and capital of the trust when either income and capital 

is distributed by the trustees. I base my opinion on the fact that 

the trustees, before they decided to distribute the capital of the 

trust, may (if they are entitled to do so in terms of the provisions 

of the trust deed) decide to sell the office building and buy 

another in the place thereof. The beneficiaries clearly never 

had a real right in either of the office buildings whilst the 

buildings are registered in the name of the trustees. Only when 

the trustees decide to transfer the office building to the 

beneficiaries do they acquire a real right. This may never 

happen as the trustees may decide to sell and convert the 

office building into cash and then to distribute the cash to the 

beneficiaries. 

I also find support for my opinion in: 

(a) Coetzee v Peet Smith Trust en andere 2003 (5) SA 674 

(T) where it was said that “Die trustgoed word normaalweg 

aan trustees in eiendomsreg oorgedra ('n uitsondering 

is die geval van 'n bewind-trust).” 

(b) Commissioner, South African Revenue Service v Dyefin 

Textiles (Pty) Ltd 2002 (4) SA 606 (N) where it was 

decided that the trust in question although it only had one 

beneficiary was “a trust property so called, where the 

assets of the trust vested in the trustees, as opposed by a 

'bewind' trust, where the founder made a gift or bequest 

directly to a beneficiary but vested the control of the 

assets in a trustee or administrator. The trust was a valid 

and binding one” (my underlining). 

(c) Bafokeng Tribe v Impala Platinum Ltd and others 1999 (3) 

SA 517 (BH) where it was held as regards a trust deed 

with only one beneficiary that “there were no 'inherent 

ambiguities' in the affected deeds of transfer. No facts 

had been placed before the Court relating to a bewind 

trust, except the legal principles relating thereto. It 

appeared from the affected deeds of transfer that the 

dominium of the Bafokeng land vested in the various 

government officials whose names appeared thereon in 

trust for the tribe. What was involved was an ordinary trust 

in terms whereof the trustee and not the beneficiary had 

the dominium of the land” (my underlining )”. 

As regards the 'ownership trust' I am thus of the opinion that 

the trust may be: 

a discretionary trust where the trustees have a discretion as to 

which of the beneficiaries to benefit when income or capital is 

distributed (I will refer to this category of trust as a 

'discretionary ownership trust') or; 

One where the founder has given the beneficiaries fixed (or 

vested) rights. In the trust income and capital but where the 

trustees remain owners of the trust assets until they decide to 

distribute it to the beneficiaries (I will refer to this category of 

trust as a 'non-discretionary ownership trust'). 

Although the said learned writers refer to and discuss many 

categories of trust (e.g., inter vivos as opposed to 

testamentary trusts, trust in the strict sense as opposed to 

trusts in the wide sense, family trust as opposed to business 

trusts, etc.), I am of the opinion that, for the purpose of 

determining the transfer duty implications when a 

beneficiary's 'interest' in a trust is disposed of, one may accept 

that all trusts will fall into one of the following categories: 

the 'bewind trust'; 

the 'discretionary ownership trust' and 

the 'non-discretionary ownership trust'. 

(Kindly note that this memorandum does not deal with a 

'special trusts' as defined in section 1 of the Income Tax Act, 

1962 (Act 58 of 1962)). 

Bewind Trusts: 

If the trust in question is a bewind trust the transfer duty 

implications when a beneficiary's 'interest' in a trust is 

disposed of are easy to determine. The beneficiary thus 

disposing is owner (or co-owner) of the immovable property 

and therefore has 'a real right in land' which, in terms of the 

definition contained in section 1 of the Transfer Duty Act, is 

'property' and which, when disposed of, will attract transfer 

duty regardless of whether it is 'residential property' as 

defined or not. 

Discretionary ownership trusts: 

The position as regards the disposal of a contingent right in a 

'discretionary ownership trust' is provided for in the Transfer 

Duty act. 'Transaction' in relation to a discretionary trust, is in 

section 1 of the Transfer Duty Act, defined as “the substitution 

or addition of one or more beneficiaries with a contingent right 

to any property of that trust, which constitutes residential 

property ……..”. In terms of the definitions of 'residential 

property' and 'transaction' contained in the Transfer Duty Act 

transfer duty (read with section 2 of the Act), transfer duty will 

18

thus be payable if the trust in question is a 'discretionary 

ownership trust' where the trustees of the trust (in their 

capacities as trustees) are the owners of 'residential property' 

as defined and where beneficiaries are substituted or added in 

such a manner that the new beneficiaries acquire a contingent 

right to any residential property, the acquisition of which isa 

consequence of or attendant upon the conclusion of any 

agreement for consideration with regard to property held by 

that trust; accompanied by the substitution or variation of that 

trust's loan creditors, or by the substitution or addition of any 

mortgage bond or mortgage bond creditor; or accompanied 

by the change of any trustee of that trust; 'Non-discretionary 

ownership trusts’ The position as regards the disposal by a 

beneficiary of its interests in a 'non-discretionary ownership 

trust' is not so clear. My opinion as regards this category of 

trust is as follows: The beneficiary is not the owner of the trust 

assets but has a vested right (as opposed to a contingent 

right) regarding any income or capital which the trustees may 

decide to distribute. If a beneficiary of such a trust disposes of 

its rights as beneficiary the interest disposed of is neither a 

“real right in land” (see paragraph 4 of this memorandum) nor 

is it a “contingent right in a discretionary trust” and therefore 

does not constitute “property” as defined in section 1 of the 

Transfer DutyAct. 

It would thus appear (incongruent as it may seem) as if the 

disposal of a beneficiary's interest in a 'non-discretionary 

ownership trust' will not attract transfer duty. 

REAL RIGHTS IN LAND 

The “vested right” of the beneficiary of a 'non-discretionary 

ownership trust' is a personal right and not a real right in land 

because: 

it is not enforceable against bona fide third parties. Should the 

trustees, for instance, pass a mortgage bond over the trust's 

property to secure the repayment of money borrowed by the 

trustees, the mortgage would acquire a real right and the 

beneficiaries would not be able to enforce their “vested right” 

against the mortgagee. 

It is not registrable in a Deeds Registry (In Dlamini and 

another v Joosten and others 2006 (3) SA 342 (SCA) the 

following was held as regards a real right in land: “Such a right 

is in principle registrable in a Deeds Registry because it 

constitutes a 'burden on the land' by reducing the owner's right 

of ownership of the land and binds successors in title” and in 

Erlax Properties (Pty) Ltd v Registrar of Deeds and others 

1992 (1) SA 879 (A) it was held that “the right to extend” was a 

real right in land which therefore was, in principle, capable of 

registration.) 

CONCLUSION 

It is clear that the use of the word “discretionary trust” in the 

definitions of 'property' and 'transaction' in section 1 of the 

Transfer Duty Act was an unfortunate one and creates 

confusion. I would appreciate the viewpoint of other 

practitioners. 

Republished with permission from Ghost Digest - Editor 

Sales from Estates: Section 18(3) Act 66 of 1965 

By: L J Vosloo 

Deeds Registry, CAPE TOWN 

There has been an ongoing debate as to whether the Master of 

the High Court needs to consent to sales of immovable 

property from a “section 18(3)-estate”, and what proof the 

Deeds Office requires to ensure that the estate does not 

exceed the present limit of R125 000,00, notwithstanding RCR 

3 of 2003. 

A letter from the retired Cape Town Master confirmed that 

should a sale from the estate exceed the limit of R125 000,00 

then it must be referred back to him for the appointment of an 

executor. It has, however, been confirmed that this only applies 

to sales directly from the estate, and not to a follow-on sale. In 

other words where there is a so-called “same day” transfer and 

the heirs in an “section 18(3) estate” transfer the property for a 

higher value, then no further deeds office examination queries 

need be made, questioning the section 18(3) procedure. 

However, the question now begging an answer is how does the 

Deeds Registry know that the sale of the immovable property 

is within the R125 000,00 limit?After all it can quite conceivably 

happen that a property is valued at just below R125 000,00, yet 

the other assets such as cars, etc. might cause the estate to 

exceed the limit, having the result that the more formal 

procedure of appointing an executor must be followed. 

According to the said Master, his office now issues 

appointment certificates which list all the assets, and from 

such document it can then be ascertained what the value of the 

estate is. Since it is not a requirement to lodge these 

appointment certificates for the section 18(3) - transfers, this 

information is not available to the deeds examiner. 

Two schools of thought exist in this regard. Firstly, in the case 

of a sale of immovable property from an estate administered in 

terms of section 18(3), the Deeds Office examiner should call 

for the appointment certificate by the Master's representative 

to ascertain whether the sale falls within the ambit of section 

18(3). If it appears from such a certificate that the combined 

value of the immovable property and any other assets in that 

estate will have the result that may the maximum amount 

allowed for a section 18(3) is exceeded, the matter has to be 

referred back to the Master for the appointment of an 

executor. This has in fact been suggested by the Master. 

Secondly, the Deeds Office should not concern itself with this 

issue as regulation 44A(c) covers the deeds office in that the 

conveyancer, who has signed the preparation clause, has 

accepted responsibility that “such person has in fact been 

appointed in that capacity (Master's Representative) and is 

acting therein in accordance with the powers (that is not to act 

if the estate exceeds the maximum value permitted by his 

appointment) granted to him” (my parenthesis) 

This is a contentious issue and readers are urged to 

provide their views hereon. - Editor 

19

Chief Masters Directive 3 of 2006: Appointment of 

Executors and/or Master's Representatives in 

Deceased Estates by the Master 

PREAMBLE 

The primary function of the Master is to regulate the 

administration of estates. It is the duty of the Master to ensure 

that the legal and financial interests of those affected in the 

administration of an estate are taken care of in a 

compassionate manner. 

The conduct of a Master must at all times assure the public that 

the manner in which estates are administered is - 

• in compliance with the law; and 

• that the financial and legal interests of all those who may 

be vulnerable will be protected. 

The Chief Master recognizes that - 

the procedures and forms used in the appointment of 

administrators of estates needs to be standardized - 

• to ensure uniformity in all offices; 

• to eliminate all forms of corruption; and 

• to bring about transparency and consistency in the way 

appointments are done. 

PURPOSE 

The purpose of this Directive is to direct all Masters in the 

performance of their functions. This Directive is issued in terms 

of - 

Section 14(a) of the Judicial Matters Amendment Act, 2003 

which entitles the Chief Master as the executive officer of the 

Master's offices to “exercise such supervision over all the 

Masters in order to bring about uniformity in the practice and 

procedure” ; 

Section 3 of the Judicial Matters Amendment Act, 2005 which 

requires the Chief Master to “exercise control, direction and 

supervision over all the Masters”. 

Section 2(1) of theAdministration of EstatesAct. 

This Directive replaces all previously issued directives in 

respect of appointments in deceased estates. 

SCOPE 

This Directive addresses the appointment of executors, and 

Master's Representatives in terms of the 

Administration of EstatesAct, 1965 (Act No. 66 of 1965); 

OBJECTIVES 

This Directive seeks to achieve the following objectives:- 

Compliance with the Promotion of Administration of Justice Act 

3 of 2000. 

To ensure greater transparency and openness in the functions 

of the Master. 

Establish uniform, fair and transparent appointment 

procedures to be used by Masters of the High Court in 

appointing executors and Master's Representatives; 

To direct the Masters of the High Court with regard to making 

appointments of executors and Master's representatives; 

Eliminate corruption. 

DEFINITIONS (FOR THE PURPOSE OF THIS DIRECTIVE) 

“Chief Master” means the person appointed as the Chief 

Master of the High Courts in terms of sections 1 and 2(1) of the 

Administration of EstatesAct, 1965. 

“Deceased estate” means (unless otherwise indicated) an 

estate of a deceased person in terms of the Administration of 

EstatesAct, 1965. 

“Executor” means the executor as defined in section 1 of the 


“Master” means the Master as defined in section 2 of the 


“Master's Representative” means the person appointed in 

terms of section 18(3) of the Administration of Estates Act, 

1965. 

“Administrator” means the person appointed / to be 

appointed as either executor or Master's Representative in 

the estate. 

IMPLEMENTATION 

This Directive will be effective as from date of signature of the 

Chief Master. 

REPORTING DOCUMENTS 

Death Notice (J294) 

Every Master is bound by the area of jurisdiction for 

1 

whichhe/she is appointed . 

• Jurisdiction is determined in terms of section 4(1) of the 

Act. The ordinary place of residence of the deceased 

prior to his death, irrespective of the duration of his 

residence there determines which Master has 

2 

jurisdiction. 

Ensure that the deceased's residence falls within your area of 

jurisdiction. 

• If the place of residence falls outside the area of 

3 

jurisdiction and there is no appliation on record in terms 

20

of section 4(1) for the Master to assume jurisdiction, the 

Master transfer the estate to the appropriate Master's 

Office with jurisdiction. 

• The Master can only assume jurisdiction with the consent 

of the Master who has jurisdiction. 

• Once the Master has exercised jurisdiction, for instance 

by registering and accepting the will, he shall continue to 

have jurisdiction. In such a case, jurisdiction cannot be 

transferred to or assumed by another Master. 

Where the deceased left a will/codicil. 

• If the will/codicil has not been lodged yet, it must be called 

for. 

• If only a copy has been lodged, the original must be called 

for. 

• The Registry Personnel must also check that there is no 

4 

“live will” filed in Registry, and indicate as such on the 

death notice. 

• If a will/codicil was registered but has not yet been 

accepted by the Assistant Master, a JM47 must be 

placed on the inside of the soft cover (J257). This Jm47 

must be removed as soon as the will has been 

accepted / rejected by theAssistant Master. 

• Once the will/codicil has been accepted by the 

Assistant Master, the original will must be filed in the vaults 

and a copy must be placed on the file by Registry. 

• Any endorsements made on the will/codicil by the 

Assistant Master, must be noted and taken into 

account. A will's advice (JM27) must be issued by 

Registry, which indicates whether a will/codicil has been 

rejected or endorsed in any way. 

• The Master may release a will delivered to him to a person 

lawfully requiring it to liquidate and distribute the estate of 

the deceased person outside the RSA, if he is satisfied 

that the deceased testator/testatrix has not left any 

property in the Republic. 

If it is indicated on the death notice that there is a predeceased 

spouse, it has to be ascertained from the predeceased 

spouse's estate that the will in that estate would have any 

effect on the administration of the estate in question. 

This document must be properly signed. 

A Death Certificate, or certified copy thereof, must be lodged in 

all estates, accept in matters where the person signing the 

Death notice was present or identified the body of the 

deceased. Even though not required by law in the latter 

6 

instance, it would be prudent to call for the Death Certificate. 

Marriage Certificate 

7 

An original or certified copy of the Marriage certificate or Proof 

8 

of Registration, issued by HomeAffairs, may be accepted. 

AMarriage Certificate must be lodged where the deceased 

• died intestate leaving one/more surviving spouse(s) or 

• died testate and the spouse claims to be an 

interested party due to his/her half share of the estate in 

5 

terms of an alleged marriage in community of 

property, unless such spouse is named the sole heir in the 

will. 

Original Will 

The original Will, if any, must be lodged or a duplicate original 

10 

Will. (Refer to section 8(4B)). 

Only copies of registered and accepted wills and 

codicils must be on file. 

Copies of invalid / rejected wills or codicils are not kept on file, 

only a note containing the date of the will and the reason why it 

is invalid / rejected is filed in the file. 

Next-of-KinAffidavit (J192) 

• The Next-of-Kin Affidavit should be called for where 

the deceased 

• left no Surviving Souse or 

• left a surviving spouse, but he/she will not be the sole 

heir and/or 

• left no valid will, indicating the heirs or 

• left a will nominating heirs in a class, without specific 

11 

mention of the name of the heirs. 

The Next-of-Kin affidavit must be completed by 

someone who knew the deceased and his/her family well. 

A Commissioner of Oaths, and the person making the 

affidavit, must sign the Next-of-Kin affidavit, as well a s 

any annexure attached thereto. Any alterations or 

amendments must also be signed accordingly. 

Inventory (J243) 

A provisional inventory must be lodged in terms of 

section 9 within 14 days after date of death of the 

deceased. 

If the deceased was married in community of property, the 

assets of the joint estates of the deceased and the surviving 

spouse must be reflected in the inventory. 

The value of assets must be included as this will indicate what 

12 

type of appointment must be issued. 

In the case of the death of one or more of the persons who 

have massed their estates in terms of section 37, the massed 

13 

estate must be reflected. 

Where an estate is to be administered in terms of Section 

18(3), a municipal valuation must be lodged as proof of the 

value of the mentioned assets. 

The inventory must be signed and dated. 

List of creditors (MBU 4) 

9 

In all estates, which are administered in terms of section 

18(3), a full list of creditors must be provided on the form J155. 

Where this part of the J155 has not been completed, 

Written confirmation must be provided that there are no 

creditors or a separate list must be provided. 

Declaration: Reporting (MBU 5) 

In all estates, where the assets are valued at R50 000, or less, 

21

a declaration must be provided by the applicant, that the matter 

has not been reported to any Service Point, in the form of MBU 

5. 

• This form must be dated and duly signed. 

Declaration of subsisting marriages and or co-habitation 

relationship 

In all estates, a declaration must be provided by the 

applicant, indicating if the deceased was a partner in of any of 

the following: 

14 

• One/more subsisting Customary marriages or 

15 

• One/more subsisting Religious marriages or 

16 

• Asame sex co-habitation relationship or 

17 

• ACivil marriage 

If any of the above is applicable, full details must be provided 

consisting of: 

• Full names of all partners 

• ID number of each partner (if available) 

• Contact particulars of each partner (if available) 

Nominations 

Where the deceased 

• died intestate or 

• no administrator has been nominated in a valid will or 

• the nominated administrator is untraceable, incapacitated 

18 

or refuses to act or 

• the nominated administrator in the will is deceased and no 

provision is made in the will to substitute or 

• the nominated administrator in the will, when called 

upon by the Master, by notice in writing to take out letter of 

appointment within the period specified by the Master, 

fails to respond to the Master's request, 

all interested parties must nominate, in writing, a person to be 

appointed as executor / Master's Representative. The Master 

must in every of the above-mentioned consider the calling of a 

meetingin terms of section 18 for the purposes of electing an 

executor. 

Nominations should only be obtained from major heirs and/or 

legal guardians of minor heirs. 

In intestate estates the heirs, in this regard, must be 

determined by examining the Next-of-KinAffidavit. 

If there is competition for the office of administrator, the Master 

19 

shall give preference to 

• the surviving spouse or is/her nominee, 

• an heir or his/or nominee, 

• a creditor or his/her nominee, 

• a tutor/curator so nominated of any heir/creditor who is a 

minor/person under curatorship 

• where there is more than one surviving spouse, all 

spouses must be consulted before making an 

appointment 

• it is advisable to follow the process of a formal 

meeting in terms of section 18 where there is 

competition for the office of executor in an estate 

If a corporation is nominated as an administrator, 

• the appointment letter shall be granted to a person who is 

an officer / director of the nominated corporation and 

• has been duly authorized by the said corporationto act on 

their behalf and for whose acts and omissions as 

executor the corporation accept liability; 

• the Corporation nominated in the will as executor, must 

qualify to liquidate and distribute the estate of a deceased 

person in terms of R910, otherwise section 16 cannot be 

implemented. 

Acceptance of Trust as Executor (J190) / Undertaking and 

Acceptance of Master's Directions (J155/MB.48) 

Where the gross value of the assets of the estate is more than 

R125 000 the applicant(s) must complete the J190 in 

duplicate 

• Every person applying must complete the J190 in full; 

• The form must be signed the properly witnessed 

• Acertified copy of the applicant's ID must be lodged 

• If the applicant is a lay person, he/she must be 

required to be assisted by a person who, to the 

satisfaction of the Master, has the necessary 

capabilities and trustworthiness to assist him/her. The 

agent must confirm so in writing to the Master. 

• A legally incapacitated person, such as a minor, may 

not act as an administrator of a deceased person 

• Any Board of Executors, trust company, public 

accountant and person licensed under Act 44 of 1962, 

20 

may act as an administrator. 

• The will must be checked for any endorsement by the 

Assistant Master, to the effect that the nominated 

executor is disqualified in terms of section 4A(3) and 

4A(1) of the WillsAct 7 of 1953. 

• A copy of the Acceptance of Trust as Executor must be 

forwarded to SARS. Make sure that the estate 

reference number is inserted on the J190 before 

dispatch. 

Where the gross value of the estate is R125 000 or less the 

estate may be administered in terms of Section 18(3), unless 

otherwise directed by the Master. Applicant(s) must complete 

form MB. 48, in duplicate. 

• Every person applying must complete the J155 in full; 

• The form must be signed and properly witnessed; 

• Acertified copy of the applicant's ID must be lodged; 

• A legally incapacitated person, such as a minor, may 

not act as an administrator of a deceased person; 

• Instances where the Master may request an 

executor to be appointed for such an estate: 

• Minors or mental patients being heirs / creditors 

21 

of the estate 

• Insolvent deceased estates 

22 

• Will determines property to be sold 

• Dispute/complaints by creditors and/or heirs 

Security in terms of section 

than R125 000) 

23 

(in estates with a value of more 

Every person who has not been nominated by will, as an 

executor, must lodge security in terms of section 23; 

• In an amount determined by the Master for the 

proper performance of his functions. 

• The amount is determined by the value reflected in 

the section 9 inventory (provisional inventory). 

The following persons are exempted from furnishing security, 

unless the Master directs him/her to furnish security (e.g. if he 

22

is insolvent, has committed an act of insolvency or resides or is 

about to reside outside the Republic): 

• The parent, child or surviving spouse of the testator o r 

a person who has, in terms of the Will, been 

assumed as executor by such person. 

• A person nominated by a will executed before 1 

October 1913 or assumed by such a person and has 

not been directed by the Will to find security. 

• A person nominated by a will executed after 1 

October 1913 and the Master has been directed to 

dispense with security. 

• A person who has been exempted from furnishing 

security by the Court. 

The Master may by notice in writing require any executor 

(dative of testamentary) to lodge security if: 

• His/Her estate has been sequestrated. 

• He/She has committed an act of insolvency. 

• He/She is about to go or has gone to reside outside the 

Republic. 

• There is good reason for it. Refer to section 23(2), 

23 

proviso. 

Sequence of documents in an Estate file: 

The reporting documents must be filed in the following order, 

in the front section of the file: 

• Death Notice (J294) 

• Death Certificate 

• Marriage certificate (if any) 

• Copy of the accepted will (if any) 

• Next-of-kinAffidavit (J192) 

• Inventory (J234) 

• List of creditors of the deceased (MBU 4 - see 8.8 

hereunder) 

• Declaration confirming that the estate has not been 

reported to any other Master's Office or service point 

(MBU 5) 

• Declaration of subsisting marriages 

• Written Nominations for the appointment of an 

administrator 

• Undertaking and Acceptance (J155) OR Acceptance of 

Trust as Executor (J190) 

• Originally signed copy of Letter of Appointment once 

issued. 

Letters ofAppointment 

Letters of Executorship 

Where the gross value of the assets of the estate is more than 

R125 000, the Master must, if satisfied that the above 

requirements have been met, issue the Letters of 

Executorship which must contain the following: 

• Estate number 

• Full names and ID number of the Executor 

• If the nominated executor is a corporation, letters of 

executorship, shall be granted to a person 

who is an officer or director of the nominated 

corporation, indicating that he/she is acting on 

behalf of said corporation 

• Full names and ID number of the deceased,including the 

maiden name of a woman, or previous surnames where 

the deceased was previously married 

24 

• Where spouses were married in community of 

property, both the name and ID number of the 

deceased and his/her surviving spouse should be 

reflected and that fact recorded on the Letters of 

Executorship 

• Date of death 

• Signed by the Assistant Master / Deputy Master / 

Master 

• Contains a date stamp 

• It should be prepared and signed in duplicate as 

one copy must be given to the appointee, and the 

other must be filed on record 

The following documentation must be sent with the Letter of 

appointment: 

• Estate Duty Return Form (Rev 267) 

• Notice to Creditors of the Deceased (J193) 

• If security was lodged, an inventory in terms of section 27 

26 

must be sent with the letters of appointment. 

Letters of Appointment of Master's Representative (Section 

18(3) 

Where the gross value of the estate does not exceed R125 

000, the estate may be administered in terms of section 18(3), 

unless otherwise directed by the Master. The Master must, if 

satisfied that all requirements have been met, issue a Letter of 

Appointment as Master's Representative which must contain 

the following: 

• Estate number 

• Full names and ID number of the appointee 

• If the nominated appointee is a corporation, letters of 

appointment shall be granted to a person who is an officer 

or director of the nominated corporation, indicating that 

he/she is acting on behalf of said corporation 

• Full names and ID number of the deceased, including the 

maiden name of a woman, or previous surnames where 

the deceased as previously married 

• Where spouses where married in community of property, 

both the name and ID number of the deceased and 

his/her surviving spouse should be reflected 

• Date of death 

• All assets, and the value thereof, as indicated in the 

Inventory on record 

• Signed by the Assistant Master / Deputy Master / 

Master 

• Contains a date stamp 

• It should be completed in duplicate as one copy 

must be given to the appointee, and the other 

must be filed on record. 

23

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

Foot Notes 

The Service Point, at the Magistrate's Office where the 

person was so resident, can make an appointment in the 

following instances 

(i) The deceased did not leave a valid will and; 

(ii) The value of the estate is not more than R50 000 and; 

(iii) The estate is solvent; and 

(iv) All the beneficiaries are majors or any one or more of 

the beneficiaries is a minor and is assisted by his/her 

legal guardian and the cash assets in the estate are 

worth R20 000 or less. 

All estates, where there is a valid will and/or codicil must be 

dealt with directly by the Master's Office, irrespective of the 

value of the assets. 

Note that the advertisements in terms of section 29 and 

35, refer to the place the deceased was ordinarily resident 

12 months prior to his death. A person is “ordinary 

resident” at the place to which the deceased, or other 

person concerned, would return from wandering, his real 

home 

A fully motivated application for transfer of jurisdiction 

should be made by an interested partynot the Master 

A “live will” is a will which was lodged under the repealed 

Administration of Estates Act 24 of 1913, whilst the 

testator/testatrix was still alive 

If the document is signed by the making of an “X”, the mark 

of the signatory must be witnessed by a commissioner of 

oaths 

When the deceased died of unnatural causes, a death 

certificate is not issued immediately. The interim proof of 

death document is then sufficient. 

The marriage certificate serves as proof of the existence 

of the marriage and determines the preference in terms of 

section 19 of theAct 

In this regard also see Daniels v Campbell and Others 

2004 (5) SA 331 (CC) and Khan v Khan 2005 (2) SA 272 

TPD 

Any reference to a will includes a reference to a codicil 

where applicable. 

Once the above documents have been lodged, the 

examiner must request Registry to refer the original Will to 

theAssistant Master for acceptance. 

E.G. “my children”, “my sons”, etc. 

Although an executor is not usually appointed in an estate 

where the asset value is R125 000 or less, there may be 

cases where the Assistant Master would decide to appoint 

an executor rather than to make an appointment in terms 

of section 18(3). Also see Amended Master's Instruction 

no 6 dated 04 June 1992. 

Section 9(1)(iii) 

Recognition of Customary MarriagesAct 120 of 1998 

Daniels v Campbell 2004 (5) SA 331 CC; Khan v Khan 

2005 (2) SA 272 T; Amod v Multi Lateral Motor Vehicle 

Accident Fund (Commission for Gender Equality 

intervening) 1999 (4) SA 1319 SCA; Ryland v Edras 1997 

(2) SA690 (C) 

Mark Gory v Daniel Gerhardus Kolver NO and Other 

(Erilda Start & others intervening) Case no. CCT 28/06 

Volks v Robinson 2005 (5) BLLR 446 CC 

Section 18(1) 

See the provisions of Section 19(i) and (ii) 

20 

21 

22 

23 

24 

25 

26 

R.910 prohibits the liquidation or distribution of the 

estates of deceased persons by any person other than 

an attorney, notary, conveyancer or law agent. 

However, any board of executors, trust company, 

public accountant and person licensed under Act 44 of 

1962 are permanently exempted from these 

prohibitions. Natural persons nominated as executor 

by Will are also exempted from the prohibitions to the 

extent as specified in R.910. (R.910 can be found in the 

handbook by Meyerowitz on the 

Administration of 

Estates, sixth edition, pp A-63 to A-65 or in the latest 

2004 edition on pp A-64 to A-66.) A legally 

incapacitated person, such as a minor, may also not 

act as executor of the estate of a deceased person 

section 18(6) refers. 

Where minors or mental patients were involved, an 

attorney, bank, trust company or accountant should be 

appointed in section 18(3) estates. An undertaking 

should be obtained from this person to deposit the cash 

due to the minor into the Guardians Fund within two 

months (60 days) from date of appointment. A note to 

this effect should also be affected on the Letters of 

Authority issued in terms of section 18(3). The file 

should be diarized accordingly. 

Where immovable property is reflected at municipal 

valuation, it may appear that the estate is worth R125 

000 or less, but the sale of immovable property may 

result I this amount being exceeded. 

Where the nominated executor has been convicted of 

fraud or theft, this may be a “good reason” why he may 

be required by the Master to find security. Where an 

executor was ordered by the Master or who in terms or 

section 23 was required to find security, must within 

thirty days from date of appointment lodge a section 27 

inventory (final inventory), which reflects all the 

property in the estate. The file must be diarized 

accordingly. When the inventory. When the inventory is 

lodged, you should check whether the section 23 

security filed, is sufficient to cover all the assets of the 

estate. If not, additional security should be called for. 

A full list of documents can be found in the Code 

Examiners, and the sequence as set out there in, must 

be followed. 

After sending off the Letter of Appointments the file 

should be diarized accordingly for the estate account to 

be lodged or funds to be deposited as mentioned in 

Footnote 17 above. 

This must be signed by the executor personally within 

30 days after appointment. 

Although this directive is not directly 

related to the examination of a deed, 

it makes for interesting reading 

from a conveyancing perspective! - Editor 

24

Waiver Of Legal Exceptions 

By: Ingrid Broodryk 

Conveyancer - Cliffe Dekker Incorporated 

Allen West asked the following: “Could you please assist as to 

where in the NCA it addresses the waiver of legal exceptions in 

bonds. As I understand it, the Latin maxims are not permitted, 

but the defences may still be waived. Am I correct?” 

The answer is found in section 90(2)(c)) of the National Credit 

Act, which provides that a provision of a credit agreement is 

unlawful if it purports to waive any common law rights that may 

be applicable to the credit agreement and have been 

prescribed in terms of subsection (5). In terms of subsection 

(5), the Minister may prescribe particular common law rights 

that may not be waived in a credit agreement. 

Regulation 32 of the NCAreads as follows: 

“The following common law rights or remedies that are 

available to a consumer may not be waived in a credit 

agreement: 

(a) 

Exceptio errore calculi; 

(b) 

(c) 

Exceptio non numeratae pecuniae; 

Exception non causa debiti. 

The unlawful provision is void, not the whole agreement. The 

provision must be severed from the agreement. However, a 

court can declare the entire agreement unlawful. 

It is has nothing to do with the fact that the provisions are in 

Latin. It is the provision itself that is unlawful, even if expressed 

in English. 

However, it is advisable to express the other common law 

remedies that may still be used in language that the consumer 

will understand. You can still use the Latin but should provide 

an explanatory note.” 

The exception; de duobus vel pluribus reis debendi may thus still 

be waived, but must be in an understandable language - Editor 

Discussion On Section 35A 

Of The Income Tax Act 

By: Lizelle Kilbourne 

Conveyancer - Igqwetha Training Academy (Pty) Ltd 

The section was implemented on 1 September 2007. 

Section 35A in a nutshell: 

• Apurchaser of immovable property must withhold 

(i.e. not pay to the seller) a certain percentage of 

the purchase price where 

• the seller is a non-resident; and 

• the amount due by the purchaser to the seller is 

more than R2 million. 

• If the non-resident seller is a natural person, 5% of 

the amount due to him/her must be withheld, if the 

seller is a company then 7,5%, and if the seller is a 

trust, then 10% must be withheld. 

• The amount withheld must be paid to SARS within 14 

days after 'the date on which the amount was so 

withheld' (usually date of registration, one 

presumes), but where the purchaser is 

himself/herself a non-resident, then within 28 days. 

• Payment to SARS must be accompanied by a 

prescribed declaration (I have not seen the form yet). 

• If the purchaser knew or ought to have known that 

the seller is a non-resident, and fails to so withhold 

the amount, that purchaser is himself/herself/itself 

liable to pay the amount to SARS, with interest if late 

payment is made, and penalties. 

• Where the seller in a property transaction is indeed a 

non-resident, the estate agent, if any, and the 

conveyancer who administers the transaction (the 

section phrases it as who “...is entitled to payment of 

any remuneration or payment in respect of services 

rendered ..') must notify the purchaser in writing that 

this section may be applicable. 

25

• If the estate agent and/or conveyancer knew or ought 

to have known that the seller is a non-resident, and 

then fails to so warn the purchaser in writing, then that 

estate agent and/or conveyancer will be jointly and 

severally be liable for the amount, but (thank 

goodness for small mercies) limited to the amount of 

the remuneration he/she/they/it would have 

received. 

The date of implementation - who says it is really effective 

from 1 September 2007? 

As most attorneys, agents and property investors know bynow, 

the Income Tax Act 58 of 1962 was amended in 2004 by the 

addition of section 35A, a section that obliges a purchaser of 

property to withhold, in cases where the seller is a non 

resident, a percentage of the purchase price. This requirement 

to withhold proceeds became known as the 'property 

withholding tax on foreigners'. The purpose of section 35A is to 

make sure SARS succeeds in collecting any taxes due by nonresident 

sellers; it may be difficult to convince some nonresidents 

to pay tax on the South African authorities once 

these investors (and their assets) have left the country for 

good. 

It is also common knowledge that the relevant part of the new 

section 35A was not implemented with immediate effect. In this 

regard section 35A(2) states: 

Subsection 1 (the subsection creating the withholding tax) 

shall come into operation on a date to be determined by the 

President by proclamation in the Gazette. 

Most role-players in the conveyancing and property industries 

have waited with anticipation these last three years, and a few 

predictions as to when the sections were going to be 

implemented were made, but the dates always arrived and 

went without any notice in the Government Gazette, and 

without communication from SARS. 

What a search to find the government notice 

implementing section 35A! 

effect on 1 September 2007. There was nothing on the SARS 

website indicating the authority for this, and no one I spoke to 

could initially tell me in which Government notice this date was 

proclaimed, so I tried my hand at some electronic and manual 

library detective work, to no avail. Eventually, Jade Van Wyk 

from SARS pointed me in the right direction. 

While I admittedly overlooked what would have been obvious 

to tax experts going through tax legislation with fine 

toothcombs, I do think that the way the 'announcement' was 

made was unduly obscure. One would think such an important 

tax date would merit at least a SARS media release to provide 

timeous forewarning and clarity to the conveyancing 

profession, the international community and the South African 

public. 

Be that as it may, here is what happened in regard to 

'announcing' the date: Instead of a simple announcement in a 

Government notice stating “in terms of section 35A(2) of the 

Income Tax Act, I hereby declare 1 September 2007 as the 

effective date …” (or something to this effect), the legislator 

chose to amend the section in the 2004 Amendment Act that 

amended the Income Tax Act, by means of a further 

amendment Act. This 2007 amendment section states that 

section 30 of the 2004 Amendment Act is amended by 

inserting the date 1 September. The word “section 35A of the 

Income TaxAct” is not mentioned anywhere in this 2007Act. 

Here are the references: 

• Taxation Laws Amendment Act 8 of 2007 was 

promulgated on 7 February 2007 in GG 29604. Page 92 

of this Act contains section 87, which states the 

amendment to section 30(2) of the Revenue Laws 

Amendment Act, 2004, to the effect that the 

relevant date will no longer be a date to be determined by 

Proclamation in the Government Gazette, it will now 

be 1 September 2007. 

• Revenue Laws Amendment Act 32 of 2004 was 

promulgated on 24 January 2005 in GG 27188. Page 52 

of this Act contains section 30, which has as its heading 

“Insertion of Section 35AinAct 58 of 1962'. 

Republished with permission from Ghost Digest. 

I recently learned through media reports that the property 

withholding tax on non-resident property owners would take 

Please 

note: 

This journal is also 

available 

in braille on request 

26

History and Change of Names 

Of Building Societies 

And Banks 

By: M Grove 

Deeds Training Pretoria 

BANKOVS 

Volkskas Industrial Bank Ltd 

Santam Bank Ltd 

Na me changed on 19/7/1990 

CRC 8/1990 

Volkskas Ltd 

Assets transferred on 

1/3/1986CR C 6/1986 

Merca Bank Ltd 

04/2001/06 

Volkskas Spaarbank Ltd 

80/04826 

Volkskas Motorbank Ltd 

53/01649/06 

Name changed on 12/4 /1989 

CRC 4/1989 

Assets & liabilit ies 

transferred on 

1/8/1987 

CRC 2/1988 

Unibank Ltd 

89/06531/06 

1 2 

(2) then changed name 

. on 1/9/1995 

CRC 20/1995 

Name cha nged on 21/6/1991 

CRC 7/1991 

Assets & liabilities 

transferred on 31/3/1990 

CRC 1/`990 

Name changed on 

1/8/1987 

CRC 2/1988 

Volkskas Bank Ltd 

78/03306/06 

Sentrale Aksepbank Ltd 

Santam Bank Ltd 

04/2001/06 

Unibank Investment 

Holdings Ltd 

89/06531/06 

Allied Building Society 

Trust Building Society 

& 

& 

Converted to public 

companyon3/631987 

CRC 8/1987 

ABSA Motorbank Ltd 

53/01649/06 

& 

Volkskas Aksepbank Ltd 

68/00880/06 

Assets & liabilities taken 

over on 1/6 /1990 

CRC 5/1990 

(1) Assets and liabilities transferred on 20/12/1994 



CRC 1 /1989 

Allied Building Society Ltd 

81/02375/06 

& 

& 

Trust Bank of Africa Ltd 

Merque Financial Services (Pty)(Ltd) 

81/02743/06 

& 

Lantern Financial Services (Pty)(Ltd) 

1998/012178/07 

& 

Unibank Savings & Loans Ltd 

1998/010163/06 

Allied Bank Ltd 

81/02743/06 

& 

Name changed 

on 1/10/1991 

CRC 9/1991 

Name chang ed 

on 1/6/1990 

CRC 4/1990 

Assets & liabilities taken 

over on 30/9/1991 

CRC 8/1991 

Prima Bank Ltd 

89/06531/06 

ABSA Aksep Bank Ltd 

68/00880/06 

Bankorp Ltd 

54/01539/06 

All assets &liabilities 


CRC 19/2003 

& 

& 

United Bank Ltd 

86/04794/06 

Unibank Ltd 

1988/001474/06 

(formerly Prima Bank Ltd) 

Changed na me on 1/9/1995 

CR C20/1995 

Name changed on 30/9/199 1 

CRC 8/1991 


transfe rred on 1//8/19 92 

CRC 7/19992 

Certain assets & liabilities, i.e all 

mortgage bonds, notarial bonds, & 

immovable properties,transferred 

w.e.ḟ 1/ 4/2001 

CRC 19/2003 

C ertain assets & liabilities, i.e all mortgage bonds, 

notarial bonds, &immovable properties, transferred 

w.e.f. 31/3/2004 

CR C 8/2004 

MLS Bank Ltd 

1963/006472/06 

ABSA BANK LTD 

86/0047/06 

27

First National Bank of SA Ltd 

Natal Building Society 

NBS Boland Bank Ltd 

51/00847/06 

NBS Bank Ltd 

87/01384/06 

Boland Bank PKS 

51/00847/06 

BOE Bank Ltd 

51/000847/06 

Natal Building Society Ltd 

87/01384/06 

Converted to publiccompany 

w.e.f 22/4/1991 . 

. CRC 4/1991 

Firstcorp Merchant Bank Ltd 

58/02411/06 

Assets and liabilities transferre d 

w.e.f. 1/10/1997 

Na me changed w.e.f 22 /4/19 91 

CR C 4/1991 


58/02411/06 


05/01225/06 

Firstrand Bank Ltd 

05/01225/06 

Rand Merchant Bank Ltd 

68/13988/06 

Continue 

Next page 

Bolandse Eksekuteurskamer (Malmesbury) Ltd 

BOE Investment Bank Ltd 

93/05904/06 

51/00847/06 

Distriksbank Ltd 

C30 


taken over 

CRC 4/1988 

Most assets&liab ilities transferred 

CRC 9/1989 

Name chang ed w.e.f. 

4/9 /1989 CRC 

9/1989 

First National Bank Beherend Ltd 

71/09695/06 

First National Industrial Bank Ltd 

Boland Bank Ltd 

04/00312/06 

CRC 11 /1997 


transferred 

C RC 7/1995 

Na me changed w.e.f . 4/9/1989 

CRC 9/1989 

BOE Private Bank & 

Trust Company Ltd 

83/06636/06 

Name changed w.e.f 1/10/1997 

Assets & liabilitiesregistered before 30/6/1999 

transferred w.e.f. 30/6/1999 

CRC 9/1999 

Name changed w.e.f .1/7/1999 

CRC 9/1999 

Changed name w.e.f. 2/6/1995 

CRC 7/1995 

CRC 11/1997 

All assets&liabilities registered before 30/6/1999 

tra nsfer red w.e.f. 30/6/1999 

. CRC 9/1999 

First National Western Bank Ltd 

58/02411/06 

Cashbank Ltd 

Assest & liabilities transferred w. e.f. 20/10/1998 . 

. CRC 31/19 98 

Assest & liabilitie stransferred w.e.f. 20/10/1998 . 

. CRC31/1998 

Assets & liabilities transferred on 1/10/1991 

C RC 8/1993 

Name chang ed 

CRC 26/1998 

1999/028269/06 

PA RT o f assest &liabilities tr ansferred 

w.e.f. 25/10 /2001 

. CR C 12/2001 

Certain assets (div.NBS homeloans) 

transferred w. e.f. 15/3/2002 

CRC 11 /2002 

Na me changed w.e.f. 1/7/1999 

CRC 9 /1999 

28

BoputhatswanaBuilding Society 

Future Bank Ltd 

91/05161/06 



CRC 2/1998 

Assets &liabilitiestra nsferred w.e.f 1/7/1 996 

CR C2/1998 

South African Permanent 

Building Society 

Citizen Bank Ltd 

93/002510/06 

Name changed on 27/3/1997 

CRC 2/1998 

Future Bank Corporation Ltd 

Assets & lia bilities transferred 

w.e.f. 1/44/1 989 

CRC 3/1989 

93/92510/06 

Assets & liabilities transferred w.e.f. 1/4/1998 

CRC 24/1998 

Nedperm Bank Ltd 

51/00009/06 

Fidelity Bank Ltd 

Name changed on 2/9/19 98 

CRC 24/1998 

94/00929/06 

Cape of Good Hope Bank Ltd 

BOE Bank Ltd 

51/000847/06 

See page 1 

Syfrets Finance Ltd 

Assets & liabilities transferre d 

w.e.f. 1/10/1997 

CR C 21/1998 & CRC 13/2001 

1958/000018/06 

Peoples Bank Ltd 

1994/000929/06 

NedbankLtd 

1951/000009/06 

Nedfin Bank Ltd 

05/22898/06 

NedcorBank Ltd 

1951/000009/06 

Peoples Mortgage Ltd 

1994/000929/06 

Nefic Ltd 

Assets & liabilit ies transferred 

w.e.f. 1/10/1997 

CRC 21/1998 

Syfrets Ltd 

04/01741/06 

04/01741/06 

After 1/10/1997 changed name w.e.f. 7/2/2001 

CRC 13/2001 

UAL Merchant Bank Ltd 

55/03181/06 

Assets &liabilities 

taken over 

CRC 12/1988 

Name changed on 

17/3/1998 

CRC 21/1998 

Part of assets an d liabilities 

transfe rred w.e.f 1/6/2002 

CRC 12/2002 

Nedcor Inv. Bank Ltd 

1955/003181/06 

Syfrets Bank Ltd 

71/05007/06 

Nedbank Ltd 

Name changed w.e .f. 31/3/1989 

CRC 2/1989 

Assets & liabilities transferre d w.e.f. 1/10/1991 

CR C 2/1992 

Part of assets & liabilities 


CRC 7/2 002 

All assets transf erred w.e.f. 1/1/2003 

CRC 4/2003 

Allassets transferred w.e.f. 1/1/2003 

CR C 3/2003 

Change of name 

w.e.f. 21/11/2002 

Na me changed w.e.f. 31/3/1992 

CRC 2/1992 

Part ofassets & liabilitiestransferred w.e.f. 1 /8/2000 

CRC9/2002 

CRC 15/2002 

Part of rem. assets transferred 

w.e.f. 1/1/2003 

CRC 1/2003 

FBC Fidelity Bank Ltd 

Part of re m. assets transferred w.e.f.1/1/2003 . 

. C RC 2/2003 

94/00929/06 

Pa rtofassets transferred 

w.e.f. 1/1/2003 

CRC 6/20 03 

Part of assets transferred 

w.e.f. 1/1/2003 

CRC 5/2003 

Name changed w.e. f. 26/3/2002 

CRC9/2002 

Name change d w.e.f. 1/2/200 5 

CRC 3/20 05 

29

Cross-Border Insolvency Law 

By: Prof. André Boraine 

University of Pretoria 

INTRODUCTION 

South Africa has a mixed legal system because its commonlaw 

the Roman-Dutch law has been significantly influenced by 

English law in certain areas. Mercantile law, in particular 

insolvency and company law, thus has a strong English law 

character. 

The Insolvency Act 24 of 1936 remains the principal source of 

insolvency law in this jurisdiction, but some provisions relating 

to corporate insolvency are found in the Companies Act 61 of 

1973 and the Close Corporations Act 69 of 1984. Insolvency 

provisions of the Insolvency Act and the general law (i.e. 

common law) will nevertheless apply to corporate insolvency 

in the absence of a particular provision in the relevant 

legislation. 

The estates of natural persons are sequestrated and 

companies are wound up or liquidated in terms of the 

applicable legislation. (For purposes of this discussion the 

term “sequestration” will be used in both instances, unless 

indicated otherwise.) 

With regard to the recognition of foreign appointments, the 

Foreign Trustees and Foreign Liquidators Recognition Act of 

1907, being the first statutory enactment that applied in the 

former Cape Colony, provided that the then Supreme Court 

could recognize the appointment of a foreign representative. 

Although this Act no longer forms part of South African law, 

some of its principles survived through precedent. [Ex parte 

Steyn 1979 2 SA309 (O).] 

At present there is no legislation in force that deals with crossborder 

insolvency in SouthAfrica and therefore the general law 

and precedent must be applied in this regard. Based on comity, 

convenience and equity a South African High Court is thus still 

entitled to recognize the appointment of a foreign 

representative. [Ex parte BZ Stegmann 1902 TS 40; Ex parte 

Steyn, supra;Ward v Smit & Others: In re Gurr v Zambia 

Airways Corporation Ltd 1998 3 SA 175 (SCA).] The 

principles of international private law (conflict of laws) will be 

applied in such an instance with regard to the treatment of 

property situated in this jurisdiction. 

South Africa adopted the UNCITRAL Model Law on crossborder 

insolvency as the Cross-Border Insolvency Act 42 of 

2000 on 8 December 2000. However, it must be noted that 

although being adopted as an Act of Parliament, this Act will 

thus only apply to designated countries but no countries have 

been designated as yet. 

In view of the introduction of the principle of reciprocity, this 

jurisdiction will in future follow a dual approach to the 

recognition of foreign bankruptcy orders in that 

representatives from designated countries will follow the 

procedure of the Cross- Border Insolvency Act whilst those 

from non-designated countries will still have to follow the 

general law route. 

PROPERTY AND CROSS-BORDER RULES IN TERMS OF 

THE SOUTH AFRICAN GENERAL LAW 

The definition of “property” in the Insolvency Act includes all 

types of property, both movable and immovable, situated in 

South Africa. With regard to property situated in a foreign 

jurisdiction, the principles of private international law apply. 

These rules apply in the case of property situated outside the 

borders of South Africa (outward bound situation) as well as in 

the case of a request by a foreign representative to be 

recognized in SouthAfrica (inward bound situation). 

Apart from property in the Republic, movable property of the 

insolvent in a foreign country will vest in the insolvent estate if 

the estate is sequestrated by the court where the insolvent is 

domiciled [ Viljoen v Venter NO 1981 2 SA 152 (W)]. In 

principle this means that the foreign representative will be 

able to lay claim to any such property outside his or her 

jurisdiction without first obtaining such recognition. 

In case of immovable property the lex forum rei sitae 

principle applies and recognition must be obtained from the 

foreign jurisdiction. If the representative fails to obtain this 

recognition, the immovable property remains vested in the 

insolvent [ Mavromati v Union Exploration Import (Pty) Ltd 

1947 4 SA 192 (A); Hymore Agencies Durban (Pty) Ltd v 

Gin Nih Weaving Factory 1959 1 SA180 (D)]. 

Contrary to the situation with movable property where such 

recognition is deemed to be a mere formality, the recognition 

in case of immovable property is a necessity and the courts 

have an absolute discretion to reject or approve such an 

application [ Ex parte Palmer NO: In re Hahn 1993 3 SA 359 

(C)]. In Ward v Smit: In re Gurr v Zambia Airways Corp Ltd 

supra, the court held that it is imperative for the foreign 

representative of a juristic person to apply for recognition 

where the trustee has to deal with either immovable property 

or movable property in SouthAfrica. 

After recognition has been obtained the foreign 

representative may deal with local assets. A South African 

court may impose conditions on the foreign representative in 

order to safeguard the rights and interests of local creditors. If 

recognition is refused by a South African court, or not applied 

for, a foreign creditor may apply for the sequestration of the 

estate in this jurisdiction. 

PROCEDURALAND RELATED MATTERS 

Inward bound request 

Application for recognition by a foreign representative 

In order to be recognized as such in South Africa, the foreign 

representative must apply to a local High Court for recognition 

and assistance. When the rights of a third party (i.e. a local 

creditor) may be effected by the application, such person must 

be notified of the application [see Clegg v Priestley 1985 3 

SA950 (W)]. 

The discretion to recognize foreign orders and 

appointments 

Granting recognition to a foreign administrator to deal with an 

insolvent's immovable property in South Africa is within the 

local court's discretion. This discretion is absolute but 

recognition is usually granted in the interests of comity and 

convenience. In Ex parte BZ Stegmann supra, 

Innes JP, 

while accepting the above rule, went on to state: 

“But on the other hand, the same court, acting from motives of 

30

comity or convenience, is equally justified in allowing the order 

of the judge of the domicile to operate within its jurisdiction, and 

in assisting the execution or enforcement of such order. The 

matter is entirely one for its own discretion. [See also Ex parte 

Palmer NO: In re Hahn, supra.] 

The effect of recognition 

The effect of recognition is that the local assets will be treated 

as if the foreign debtor is an insolvent in terms of South African 

law, although he or she will not be an insolvent in terms of this 

jurisdiction. [ Ex parte Steyn, supra.] However, our courts will 

not adjudicate foreign offences or tax claims. [See Priestly v 

Clegg 1985 3 SA955 (T).] 

The contents of the order 

The court will describe the mode of notice of the order to 

interested parties. The order should deal with the following: 

(a) Recognising the appointment of the foreign 

representative; 

(b) Duration of the order; 

(c) General powers of the foreign representative; 

(d) Security to be afforded by the foreign representative to the 

satisfaction of the Master of the Supreme Court; 

(e) The service of the order to relevant parties; 

(f) Supervision by the Master and practical 

arrangements regarding the administration of the 

order and submittal of estate accounts; and 

(g) Special conditions regarding meetings of creditors; 

proof, admission and rejection of claims; plans of 

distribution and the rights and powers of the foreign 

representative. These procedures will be gleaned 

from the Insolvency and the Companies Act. [See 

Moolman v Builders & Developers (Pty) Ltd 1990 10 

SA954 (AD); Ex parte Steyn, supra.] 

South African courts will protect the interests of local creditors 

and orders will sometimes state that “[p]roperty can only be 

transferred once administration costs and local debts have 

been paid before assets may be transferred” [ Ex parte Steyn, 

supra]. However, a foreign creditor should receive preferential 

treatment if he or she holds a security acknowledged by the 

local forum. 

Outward bound request 

In case of a South African sequestration order, the local 

representative will seek to recover all assets situated in a 

foreign jurisdiction. In this respect the laws and procedures of 

the foreign jurisdiction must be complied with. [South Africa is 

not a party to any international treaty in this regard but it is a 

relevant country for the purposes of recognition in terms of 

section426 of the InsolvencyAct 1986 (England).] 

Although not compulsory, local representatives sometimes 

apply for a letter of request at a local court before approaching 

the foreign court. In Ex parte Wessels & Venter NNO: In Re 

Pyke-Nott's Insolvent Estate 1996 2 SA 677 (O) the court 

denied such a request by considering the merits of the 

representative's request to pursue assets situated in England. 

The court disapproved of this approach in Gardener and 

Another v Walters NNO 2002 2 SA796 (C) and stated that the 

court is not asked to approve or sanction the actions of the 

representative in the foreign jurisdiction. 

Application for a local proceeding 

The courts have expressed a preference for a single forum of 

administration where the main proceeding is directed by the 

forum domicilii. [See Re Estate Morris 1907 TS 657; Ex parte 

Palmer NO: In re Hahn, supra.] Nevertheless, if an 

application for recognition fails, foreign creditors may always 

apply for the opening of a local procedure in terms of local law. 

Where the local statutory requirements can be met, the local 

estate of a foreign natural person debtor may for instance be 

sequestrated in South Africa. However, it is important to take 

note of section 149 of the Insolvency Act in terms of which the 

South African court has a discretion to refuse such an order in 

case of sequestration based on the principle of convenience 

where the debtor comes from a non-designated country. The 

local court has no such discretion in case of a foreign debtor 

from a designated country. When exercising the discretion, 

the local court will rather be lead by what will happen after the 

granting of the order than the convenience of the local courts 

as such [ Morley v Pederson 1933 TPD 304; Goode, Durrant 

& Murray (SA) Ltd and Another v Lawrence 1961 4 SA 329 

(W); Deutsche Bank AG V Moser and Another 1999 4 SA 

216 (C).] 

THE CROSS-BORDER INSOLVENCYACT 42 OF 2000 

This Act applies to states designated by the Minister of Justice 

by notice in the Government Gazette. The minister may only 

designate a state if he or she is satisfied that the recognition 

accorded by the law of such a state justifies the application of 

the Act to foreign proceedings in such state. This requirement 

has introduced the principle of reciprocity. [See sections 2(a) 

and (b) of theAct.] 

ThisAct applies: 

(a) Where a foreign court or representative seeks South 

African assistance in a foreign proceeding; or, 

conversely, 

(b) where such assistance is requested in a foreign 

court in a proceeding under the laws of the Republic 

relating to insolvency (a “local proceeding”); 

(c) where a foreign and a local insolvency proceeding 

run concurrently in respect of the same debtor; or ( d ) 

where creditors or other interested (foreigner) 

persons apply to commence or to participate in a 

local insolvency proceeding [s 2(1)]. 

The Act will afford certain advantages to representatives and 

creditors from foreign jurisdiction of designated countries. 

These advantages include: 

• The Act will provide direct and speedy access and 

recognition to foreign representatives or creditors. 

• The Act also provides clarity with regard to the 

ranking of foreign creditors by stating that their 

ranking will not be lower than non-preferent claims of 

local creditors. 

• Foreign creditors are entitled to similar notifications 

as (local) creditors. 

• Local courts will not have a discretion based on 

convenience to refuse a local sequestration order [ s e e 

discussion supra]. 

As far as the application for recognition is concerned, the Act 

clearly states that a foreign representative may apply to the 

High Court for recognition of the foreign proceeding in which 

he or she has been appointed. Such application must be 

accompanied by the relevant documentary evidence, 

including a statement of all foreign proceedings that he/she 

31

knows relate to the debtor [section 15]. After recognition has 

been granted, the foreign representative may take part in a 

local proceeding [ss 11 and 12] and may intervene in any 

proceeding to which the debtor is a party [ss 11, 12 and 24]. 

Upon registration of a foreign proceeding, the foreign 

representative acquires locus standi to initiate legal action to 

set aside any disposition that is available to a South African 

trustee or liquidator [ss 23]. 

The latter is indeed so see RCR 34 of 2007 - Editor 

Does Agricultural Land Still Exist given 

the Stalwo v Wary case? 


Deeds Training - PRETORIA 

Before commencing with a discussion of Stalwo (Pty) Ltd v 

Wary Holdings (Pty) Ltd [2007] SCA133 (RSA), a case which 

has placed the cat among the pigeons, it is apt to first provide a 

brief background to the Agricultural Land Act 70 of 1970 (the 

Act), from inception to date. 

The Act was assented to on 28 September 1970 and came into 

operation on 2 January 1971. The purpose of the Act is to 

control the subdivision and use of agricultural land. Since its 

inception, the Act underwent numerous amendments. The 

most significant of these was the amendment of the definition 

of agricultural land, by virtue of Proclamation R100 dated 31 

October 1995, which included the following proviso to the said 

definition: 

“Provided that land situated in the area of jurisdiction of a 

transitional council as defined in section 1 of the Local 

Government Transition Act, 1993 (Act 209 of 1993) which 

immediately prior to the first election of the members of 

such transitional council was classified as agricultural 

land, shall remain classified as such.” 

The whole Act was subsequently repealed by section 1 of the 

Subdivision of Agricultural Land Act Repeal 64 of 1998, which 

repeal will come into operation on a date to be proclaimed by 

the President by proclamation in the Gazette (which to date 

has not yet occurred). 

Subsequent to the amendment of the Act by Proclamation 

R100 of 1995, uncertainty prevailed as to which land should be 

classified as agricultural land. In view of this uncertainty and 

the concerns of the Department of Agriculture, the State Law 

Advisors in two opinions, 553/2000 and 408/2001, dated 21 

December 2000 and 25 October 2001, respectively, held that 

all “farm property” must, in future, until proof to the contrary has 

been furnished, be regarded as agricultural land for purposes 

of applying the provisions of the Act. The latter opinion inter 

alia reads as follows: 

“The Department of Land Affairs, hereinafter referred to as “the 

Department” has requested our opinion on the question 

whether consent for subdivision in terms of the provisions of 

the Subdivision of Agricultural Land Act, 1970 (Act No. 70 of 

1970) hereinafter referred to as “the 1970 Act”, “in areas which 

previously included 'agricultural land' but now falls in the new 

municipal jurisdictions, is still required.” 

In terms of section 3 of the 1970 Act, the Minister of Agriculture 

must give his or her consent before the subdivision of any 

agricultural land can be effected. “Agricultural land” is defined 

in section 1 of the 1970 Act and includes any land with the 

exception of “land situated in the area of jurisdiction …” of 

certain local authorities. Therefore, any land falling outside 

the “area of jurisdiction” of the said local authorities was 

“agricultural land”. 

The Department refers us to the Local Government Transition 

Act, 1993 (Act No. 209 of 1993) hereinafter referred to as “the 

1993 Act”, which changed the situation with regard to the area 

of jurisdiction of the local authorities existing at that time by 

extending their areas of jurisdiction. The result is that 

“agricultural land” which prior to the commencement of the 

1993 Act fell outside the area of jurisdiction of the local 

authorities referred to in section 1 of the 1970 Act, now falls 

within the area of jurisdiction of the “extended” local 

authorities. 

We are further referred to Proclamation No. R.100 of 1995 

promulgated in Government Gazette No. 16785 of 31 October 

1995, hereinafter referred to as “the Proclamation”. In terms of 

the Proclamation, section 1 of the 1970 Act is amended by the 

addition of a proviso to the definition of “agricultural land” to 

declare land situated in the extended area of jurisdiction (in 

terms of the 1993 Act) of the said local authorities as 

agricultural land. 

According to the submission the validity of the Proclamation is 

questioned. The Department is of the view that section 235(9) 

of the Constitution of the Republic of South Africa, 1993 (Act 

No. 200 of 1993), hereinafter referred to as the “Interim 

Constitution”, under which the Proclamation was issued 

provided only for the assignment of the administration of a law 

to an administrator or other authority and did not confer any 

powers on the President to amend an Act of Parliament. The 

Department submits that the Proclamation is ultra vires and 

did not change the situation with regard to the definition of 

“agricultural land”. “Agricultural land”, according to the 

Department which fell outside the area of jurisdiction of the 

local authorities referred to in section 1 of the 1970 Act and 

now falls within the larger area of jurisdiction of transitional 

councils established in terms of the 1993 Act, is no longer 

“agricultural land” for the purposes of the 1970 Act. Therefore 

the Minister's consent in terms of section 3 of the 1970 Act is 

no longer required with regard to an application for the 

subdivision of such agricultural land. 

32

Under section 235(9)(a), the President assigned the 

administration of all laws with regard to agriculture to the 

Minister of Agriculture, including the 1970 Act, in 

Proclamation No. 102 of 3 June 1994. 

In terms of section 235(9)(b) of the Interim Constitution 

subsection (8)(b) thereof shall mutatis mutandis apply in 

respect of an assignment by the President of the 

administration to an administrator or other authority done 

under paragraph (a) of section 239(9). Subsection (8)(b)(i), 

inter alia, clearly provides that when the President assign 

the administration of a law, or at any time thereafter, he or 

she may amend such law to regulate its application or 

interpretation. 

We are therefore of the opinion that the Proclamation, which 

effected the amendment of the definition of “agricultural 

land” in terms of section 1 of the 1970 Act, is legally sound. 

The fact that the amendment has not been done with the 

initial assignment in Proclamation No. R. 102 of 1994 does 

not nullify the subsequent Proclamation whatsoever, for the 

reason that section 235(8)(b) provides that an amendment 

may (also) be done any time after the initial assignment. 

Therefore, in our view, the consent in terms of section 3 of 

the 1970 Act by the Minister of Agriculture for the subdivision 

of agricultural land is still required. However, in view of the 

pending repeal of the 1970 Act (see the Subdivision of 

Agricultural Land Act Repeal Act, 1998), it is not clear 

whether the question posed to us is not at this stage of purely 

academical value.” 

Following on this legal opinion, the Chief Registrar of Deeds, 

in terms of Chief Registrars' Circular 6 of 2002, laid down a 

uniform practice. The uniform practice is that the registration 

of all subdivisions of agricultural land and the increase of 

shareholders in agricultural land requires the consent from 

the Minister of Agriculture or a letter from the Department of 

Agriculture to the effect that the land in question is not 

agricultural land as defined in the Act. For the sake of 

uniformity, the Registrars of Deeds applied the above 

instruction to all land, irrespective of its extent, which 

contained the word “farm” in its property description. 

In Kotze v Minister van Landbou 2003 (1) SA 445 T it was 

held that agricultural land still exists for the purposes of the 

Act, and it consists of all land except land situated within the 

jurisdiction of the structures named in section 1 of the Act at 

the last moment when those structures actually existed. It 

was further held that until the Act is repealed, the written 

consent of the Minister is still required for the subdivision of 

agricultural land. This decision was in line with the practice 

of the Department of Land Affairs and in accordance with the 

practice laid down by the Chief Registrar of Deeds, referred 

to supra. 

Now to return to the case that placed the cat among the 

pigeons. The facts of the case are briefly as follows: 

On 6 December 2004 proposed subdivisions of agricultural 

land were sold.At the time of the sale the land was still zoned 

as “agricultural land”. The purchaser brought an application 

to court to presumably compel the seller to give transfer, 

which application was duly opposed by the seller on the 

following grounds: 

• The agreement did not comply with section 2(1) of 

the Alienation of Land Act 68 of 1981, in that the 

written agreement did not contain a suspensive 

condition; and 

• The agreement was in contravention of section 

3(a) of Act 70 of 1970, in that no consent of the 

Minister was obtained. 

The court a quo found that the contract did not fall foul of 

the provisions of the Alienation of Land Act, but, due to the 

fact that no ministerial consent was obtained for the 

subdivision, the contract was void. 

Suffice to say, the Supreme Court of Appeal agreed with 

the court a quo on theAlienation of Land dispute. However, 

the court held that the land in question was not agricultural 

land and therefore the agreement was valid and binding on 

the parties. 

The court based its argument on the following grounds: 

• The Act is a piece of “old order legislation” 

envisaged by the Constitution and section 93(8) 

of the Municipal Structures Act 118 of 2000, and 

thus the definition of agricultural land must 

include all municipal structures. This is not 

contained in the decision. Furthermore, how can 

a definition of land include a municipal structure? 

The below is what is contained in the decision. 

“[17] To my mind, there is no question that the 

Agricultural Land Act is a piece of the 'old order 

legislation' envisaged by the Constitution and 

section 93(8) of the Municipal Structures Act. 

That being so, the words 'municipal council, city 

council, town council' in the definition of 

'agricultural land' in the Agricultural Land Act 

must be construed to include a category A 

municipality such as the NMMM. 

• The status of agricultural land is fluid rather than 

static and changes with the expansion of local 

authorities and new ones. 

• The Minister retains, in terms of the definition of 

agricultural land, as set out in section 1 of the Act, 

the power to declare land agricultural land for the 

purposes of theAct. 

The author agrees that as there is no longer any land 

situated outside the jurisdiction of a local authority, there is 

thus, strictly according to the definition of agricultural land, 

no more agricultural land. 

However, the Department of Land Affairs is of the opinion 

that the Minister will have the say as to which land is to be 

deemed agricultural land. 

At a management meeting with Registrars held on 29 

October 2007, the Registrars of Deeds held that they will 

continue to apply Chief Registrars Circular 6 of 2002, albeit 

ex abudantei cautela, 

until such time the matter is 

resolved by the Constitutional Court. The Constitutional 

Court will be deciding on this matter in due course. 

33

Articles Published in Legal Journals 

Herewith a list of articles published in Legal Journals, which should be 

of interest to the land practitioner: 

2007 TSAR 560 - Extension of schemes in terms of section 25 of the Sectional Titles 

Act 95 of 1986 by D J Lots and C J Nagel. 

2007 DJ 166 - Commentary on the Civil Union Act 17 of 2006 by L N van Schalkwyk 

Conveyancing Through the Cases 

By: 

Deeds Training - PRETORIA 

Allen West 

The following summaries of cases are of note, however, 

readers are advised to read the cases in toto: 

CASE NO. 1 

Exercising Options to Purchase 

Mostert/Van der Westhuizen and Another (CPD) 

Judgement 28 March 2007; Per; Griessel, J 

Date of 

In the Cape High Court, Justice Griessel delivered a 

judgement on 28 March 2007 regarding the validity of an 

alleged agreement that had been concluded to purchase 

immovable property, in terms of an option that had been 

granted to the alleged buyer in a lease agreement. 

Simply put, an option is an unconditional and irreversible right 

that is given to a person to buy a certain property within a 

certain time, at a predetermined price. The option is then 

exercised in writing by the purchaser, by simply advising the 

seller that he is now exercising the option, and in doing so, the 

sale is concluded. The seller may not refuse to then conclude 

the agreement. 

In the present matter, Mr. Mostert had leased certain land to a 

company, in terms of which lease the company was granted an 

option to buy the property during the duration of the lease, at an 

agreed sum, subject to an annual escalation. On a certain day, 

during the existence of the lease, the company's attorney then 

sent a letter to Mr. Mostert indicating that his client had decided 

to exercise the option, and attached a draft Deed of Sale. The 

covering letter invited Mr. Mostert to make such changes to the 

Deed of Sale as he thought might be necessary, and if he were 

happy with it in its present form, to please sign it and return it to 

the attorney for his client's signature. Several months went by 

and the company heard nothing. After the lease expired, Mr. 

Mostert wanted his property back. The company, however, 

refused to vacate the property on the grounds that it had 

exercised its option in terms of the lease. Mr. Mostert then 

sued the company for eviction. The company defended the 

claim on the basis that it was entitled to the property on the 

basis of having exercised the option. 

Mr. Mostert then raised a point in law which he referred to the 

Court to be determined as a separate issue, namely that the 

option had in fact not been properly exercised, in that the 

proposed Deed of Sale that was sent to him contained a 

clause stating that the agreement would be subject to the 

company being able to obtain a bond from a financial 

institution first, within a certain time. In other words, the option 

was not properly exercised because the proposed Deed of 

Sale contained a suspensive condition. 

The company argued that the condition that was attached was 

merely one of several terms and conditions that needed to be 

negotiated, and that this condition did not affect the question 

of price but only the manner of payment. The company also 

argued that Mr. Mostert should have simply replied and stated 

that he was not prepared to make it subject to bond approval, 

and this clause could have been removed as Mr. Mostert had 

been invited to do in the attorney's letter. 

Mr. Mostert however argued, and the Court agreed, that firstly 

there was no duty on him to supplement any shortcomings in 

the draft Deed of Sale, and secondly, that when one exercises 

an option, it must be completely in line with the option that was 

granted above all, it must not introduce terms or conditions 

that were not part of the original option. In this case the option 

was simply worded I the lease, namely that the company 

would be entitled to buy the property at a certain price, within a 

certain period of time. No other terms or conditions were 

attached. As such, irrespective of the company's best 

intentions, by law, the option was not exercised. As such the 

company's defence was ruled out. 

34

CASE NO. 2 

Suspensive Conditions 

Maharaj & Another v Govindsamy & Another [2007] JOL 19052 

(D) Case 17125/05 - 12/01/2007 

Summary: 

The applicants purchased immovable property from the two 

respondents. Their agreement of sale was subject to the 

applicant obtaining a loan within 21 days of the date of 

signature. Furthermore, this suspensive condition was for the 

benefit of the purchaser who could unilaterally waive 

compliance with it. After the applicant failed to fulfill this 

suspensive condition, the respondents wrote a letter to the 

applicant to inform him that the contract had lapsed. In 

response the applicants lodged this application to claim 

transfer. In his founding affidavit the first applicant asserted 

that the respondents were aware that they had, inter alia, 

already obtained a “pre-approved bond” at the time when they 

signed the agreement. The obligation had been fulfilled; 

alternatively, they had elected to waive compliance with the 

condition. In addition, the respondents had not notified them in 

writing before purporting to cancel the agreement as was 

required by a clause in the agreement. 

Held that in terms of section 19(1) of the Alienation of Land Act 

68 of 1981 a seller of immovable property who decides to take 

action as a result of a breach is required to give the buyer 

written notice to rectify the breach before the seller can 

terminate the contract. Cancellation constitutes a drastic step 

that cannot be taken willy-nilly without following the necessary 

procedure. The agreement was declared to be valid and the 

respondent was directed to take steps to effect transfer of the 

property into the name of the applicants. 

LETTER NO. 1 

TESTAMENTARY CONDITIONS AND REDISTRIBUTION 

AGREEMENTS - REPLY 1 

“In response to the above article I wish to submit the following: 

If a transfer of property is done subsequent to a will and 

redistribution agreement, the causa refers to the will and the 

redistribution agreement entered into between the heirs (in 

terms of the will):- What would have been 2 subsequent 

causae, have become one causa as the Deeds Registries Act 

allows it by virtue of section 14(1)(b)(iii). The redistribution 

should therefore no longer be seen as another 'transaction'. 

I disagree with the conclusion reached in the said article and 

hold the opinion that any asset transferred in terms of a will and 

redistribution agreement shall either be fully subject to a 

testamentary condition or fully exempt therefrom (unless a 

contrary intention of course appears from the will!). 

Fortunately the usual 'exclusion' condition in a will refers to all 

benefits received by all beneficiaries in terms of the will. If not 

so, the next step will be to determine whether a particular 

bequest/legacy is subject to or exempt from a testamentary 

condition. 

I believe the intention of the testator should be the determining 

factor as to whether any testamentary condition was intended 

to apply to the legatee/heir or to the asset(s) so bequeathed. 

If the condition was intended to apply to the asset(s) , the 

change of beneficiary by reason of a redistribution agreement 

should not affect the condition applying to the asset. The rule 

applies that one cannot transfer more rights than one holds 

(Nemo Potest rule). Each heir contributes that which he would 

otherwise have inherited to the 'pool of assets for distribution'. 

When an asset which is subject to a condition is contributed, 

the condition continues to limit the rights to the asset even after 

it has been re-distributed to a different beneficiary. 

If the condition was intended to apply to the beneficiary, the 

assets allocated to him/her in terms of the redistribution 

agreement will all be subject to the condition. 

In the example under discussion A dies and leaves his farm to 

his 3 sons subject to the condition that the inheritance shall be 

excluded from marital community of property. In terms of the 

re-distribution agreement the farm is allocated to one of the 3 

sons. 

(i) If they also inherit other assets in respect of which no 

condition applies, it shall be presumed that the asset as 

such should not form part of any joint estate irrespective 

of which son receives it; 

(ii) If they also inherit other assets in respect of which the 

same condition applies, it shall be presumed that all 

assets of all heirs are excluded; 

(iii) Athird possibility which does not apply to this example is if 

they also inherit other assets and the testator has placed 

a condition only on the assets accruing to a particular 

beneficiary it shall be presumed that all assets 

eventually received in terms of a redistribution agreement 

by such heir shall be excluded from his joint estate with 

his/her spouse whilst no condition applies to the assets 

redistributed to the other beneficiaries. 

Adrie van der Merwe 

Fisher, Quarmby & Pfeifer 

LETTER NO. 2 

SECTION 4(1)(b): A RETHINK 

The practice regarding affidavits required for the registration 

of the rectification of an error in terms of section 4(1)(b) of the 

Deeds Registries Act 47 of 1937 (DRA) and the application for 

a certified copy in terms of regulation 68(1) of DRA needs a 

rethink. 

The article by A S West in issue No. 10 of the SADJ on the 

application of section 4(1)(b) of the Deeds Registries Act 

states that “although the aforementioned section does not 

require an application or affidavit, this is established practice”. 

This is true, and so much so that examiners believe that there 

has to be an affidavit. Deeds are rejected, even by senior staff, 

on that basis. With respect, simple proof of the error in 

registration should, given the wording of the section, be all that 

is required for such a rectification to be made. Admittedly, an 

application makes for better conveyancing practice. However, 

established practice cannot usurp the provisions of the Act 

and the insistence on an affidavit should be relaxed, if not 

abandoned altogether. 

35

The article also correctly points out that section 4(1)(b) does not 

stipulate who may request the rectification of a deed, yet it is also 

established practice that deeds are rejected if someone other 

than the owner applies for their rectification. It is a simple fact that, 

with few exceptions, owner of land, owners of land, mortgages, 

etc., do not have, except for the spelling of their names and dates 

of birth (and sometimes even that!), any idea what requirements 

are involved in the registration of deeds. 

The last paragraph of that article begs comment as well. 

Remember, if you make no mistakes, you make nothing. 

However, if firm A registered the title and firm B is now instructed 

to pass a bond over the property and realizes that some error 

exists in the title, what is there to do? Does firm B sue firm A? Try 

to force firm A to attend to the rectification? Blame it on the deeds 

office and its employees for not seeing the error? Must firm B now 

tend to the rectification for free? Time is money … and maybe it is 

the mad rush to give rectification for free? Time is money … and 

maybe it is the mad rush to give good service that can sometimes 

be blamed for the errors! Batho Pele shooting itself in the foot? 

As regards applications for the issue of certified copies under 

Regulation 68(1) of the Deeds Registries Act, it is submitted that 

conveyancers are responsible for their own misery in this 

instance. The regulation clearly states that the registered owner 

or his agent may make the application. It continues to specify an 

affidavit supporting the application, without specifying who should 

make that affidavit. Deeds registries insist that the owner must 

make the supporting affidavit, and conveyancers blindly comply 

with that view, but that practice does not make sense. 

It is common knowledge that by far the majority of title deeds 

never pass through the hands of the owner, but are retained by 

the mortgagee. How can an owner in such a case be required to 

issue an affidavit as to the whereabouts of the title? He cannot 

know where it is! 

He believes it to be safe in the custody of the bank. Big mistake! 

Titles are lost by banks, conveyancers, post offices, couriers, 

other postal services, but relatively rarely by the owner himself, 

because he never sees it or has it in his possession. Surely, it 

would be far better practice to require the mortgagee or 

conveyancer, or whoever actually could have handled or 

possessed the title at some time, to issue the supporting affidavit. 

By: D Lee 

CAPE TOWN 

What is the opinion of readers? -Editor 

LETTER NO. 3 

LAPSING OF REAL RIGHTS OF EXTENSION 

In terms of RCR 39 of 2003 the following question was asked: 

“A real right to extend the scheme is reserved in terms of section 

25 of the Sectional Titles Act 95 of 1986, but the right, however, 

lapsed. Is it permissible for an owner of a unit in the scheme or the 

body corporate to apply in terms of section 68(1) of Act 47 of 1937 

to note the lapsing of the right to extend or must the developer 

apply?” 

The resolution given was: 

“The body corporate on behalf of the owners may apply in terms of 

the provisions of Section 68(1) of Act 47 of 1937 to note the 

lapsing of the right to extend.” 

In RCR 1/1991, the following question was asked: 

“Must the building(s) to be erected be completed within the period 

reserved in terms of the section 25 of the Sectional Titles Act 95 of 

1986 reservation or must the registration of the sectional plan of 

extension also be completed within this reserved period?” 

The resolution given: 

“The intention is that only the building(s) must be erected and 

completed within the stipulated time.” 

The problem which now arises is that even though the right 

may have lapsed by effluxion of time, RCR 1 of 1991 provides 

that only the building(s) need to be completed within this 

period, the developer can bring his/her application for the 

registration of the extension of the scheme at any time, even 

years after the reserved period has lapsed. The developer will, 

however, have to prove that the building(s) were completed 

within the reserved period. 

It may further appear from the perusal of the estimated 

participation quotas filed with the section 25-reservation that 

the developer has exhausted his/her right by the registration 

of all the units reflected in such estimated participation quotas. 

Section 25(13) of the Sectional Titles Act 95 of 1986 provides, 

“with due regard to changed circumstances the developer 

does not need to strictly follow the section 25(2) plans” (my 

paraphrase); see also Knoetze v Saddlewood CC 2001 I All 

SA42 S.E. in this regard. 

The developer may therefore still have further registrations 

pending under such section 25 reservation and it will not be 

possible for anyone besides the developer to know whether 

the right has lapsed or not. 

It is therefore imperative that RCR 39 of 2003 be withdrawn in 

that only the developer may apply, in terms of the provisions of 

section 68(1) of Act 47 of 1937, to note the lapsing of the right 

to extend. The danger is that the body corporate could 

extinguish a title in terms of which the developer still has 

pending registrations. 

Warren Hamer 

Buchanan Boyes 

LETTER NO. 4 

SADJ OCTOBER 2006 TRANSFER DUTY : ACQUISITION 

OF IMMOVABLE PROPERTY BY A COMPANY, CLOSE 

CORPORATION OR TRUST: ARTICLE BY PS FRANCK 

In the SADJ of October 2006 on page 11 the calculation of the 

transfer duty payable by each shareholder seems to be in 

contradiction with the way of determining the transfer duty 

payable as provided for in section 2(5) of the Transfer Duty Act 

(Act 40 of 1949). 

Am I missing something? 

Congratulations and also thank you for a very good 

publication. 

Steinman de Bruyn 

SARS responded as follows to the above concern: 

One should note what kind of shares is talked about. 

Undivided shares in a property is not deemed to be the same 

as shares held in a company. As I had the same query 

regarding “shares in a company” and “undivided shares in a 

property”, I queried this with SARS Law Writers and National 

Treasury when “shares” was brought into of the Transfer Duty 

Act, 1940 (“the Act”) as part of the definition of “property” and 

was assured that the meaning of the amendment was as is set 

out below. 

Section 2(5) the Act refer to “undivided shares in a property” 

which means person A has a share (i.e. 50% undivided share 

in the property) and person B has the other 50% undivided 

share in the property. 

However when shares in accompany is sold, i.e. 50% shares 

in company ABC the examples as set out in Mr. Franck's 

article will be used. 

36

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