Abstract:
Contrary to the common intention of a transferor (Schmidt) and transferee (Innova), an entire erf, instead of a subdivided portion of it, was transferred to Innova. This mistake was later discovered in the course of the liquidation process of Innova. During Schmidt's application to rectify the mistake, and in seeking clarification on the ownership of the remaining extent of said erf, it was unsuccessfully contended that Schmidt was not entitled to any legal assistance in this respect, as his claim has prescribed; alternatively, he was estopped from any relief. The Supreme Court of Appeal again, indubitably, confirmed that the abstract theory applies to the passing of ownership. Consequently it was held that since neither Schmidt nor Innova, respectively, had the intention to transfer and obtain ownership of the remaining extent of the erf, Innova had never become the owner of it. The Supreme Court of Appeal further held that there is no difference between the rectification of a contract on the one hand and the rectification of a deed of transfer on the other. It follows that the rectification of both a contract and deed of transfer does not constitute a "debt" as contemplated by section 10 of the Prescription Act 68 of 1969 which could be extinguished by prescription. An additional technical question concerning the procedure to be applied to rectify the incorrect deed of transfer was also introduced. Even though the Supreme Court of Appeal approved an amendment in terms of section 4(1)(b) of the Deeds Registries Act 47 of 1937 (the act) in order to correct the mistake, the deeds community, especially through the Deeds Office intranet and grapevine, was notably sceptical about this ruling. For this purpose a detailed analysis is prepared to facilitate the various methods that may be applied to correct a defective deed of transfer. The possibilities investigated relate to an amendment in terms of section 4(1)(b) of the act, cancellation of a deed of transfer according to section 6, a section 3(1)(v) endorsement and a rectification transfer.
