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NO DEEDS REJECTIONS WITHOUT NOTICE

Interesting • 1st Sep, 15

 

William du Toit

Attorney, BBP Law Attorneys


  • The Promotion of Administrative Justice Act, 3 of 2000, (“PAJA”) commenced on 30 November 2000 and was enacted to give effect to the rights provided in terms of s33 (1) & (2) of the Constitution.  PAJA provides that administrative action which materially and adversely affects the rights or legitimate expectations of any person must be procedurally fair.  An administrative action is fully defined in PAJA, but when it is applied to the Deeds Registries rejection process it can be said to be any decision taken by an Assistant-, or Deputy-, or Registrar of Deeds to reject a deed which adversely affects the rights of any person and has a direct, external effect.  In such an instance, the administrator is obliged, before he performs the administrative action, to advise the person affected by such action of his intention to perform the administrative action and to grant such an affected person the opportunity to make written representations in respect thereof.  From the perspective of the rejection process it is important to note that all these actions must precede the rejection.
  • The Cape Town Attorneys Association (“the CTAA”) considered the current rejection procedure, practiced by the Deeds Registry at Cape Town, as failing to comply with the provisions of PAJA and resolved to obtain senior counsel’s opinion supporting such a supposition.  They instructed Adv. A G Binns-Ward SC to furnish an opinion on the matter and in particular to assess whether the alternative system they proposed would comply with the provisions of PAJA.  Their proposal required the relevant Deeds Controller to record his note of rejection as is the current practice but to preface his note with the words Notice of intention to reject.  The deed would then remain in the system and the conveyancer would on preparation for registration be able to make representations why the deed should not be rejected.
  • On 25 June 2007 Adv. Binns-Ward SC furnished his opinion, finding that -
  • the decision to reject a deed submitted for registration falls within the definition of “administrative action” in terms of PAJA.
  • the alternative system proposed by the CTAA achieves the requirement of procedural fairness demonstrably more effectively than the system currently in operation.
  • giving effect to the proposed alternative system would not adversely affect the current operation of the Deeds Registry because it would not, in the context of s3(1)(b) of the Deeds Registries Act (“DRA”), require any additional examination of the deed.
  • the Deeds Office would not be able to justify their current system on the basis of any of the grounds of exception expressly described in s3(4) of PAJA.
  • the current system would probably not withstand scrutiny on judicial review in terms of s6 of PAJA.  It would be competent to bring an application in terms of s6 of PAJA on a class basis to obtain appropriate declaratory and directory relief in such application as provided for in terms of s8(1)(a)(ii) and s8(1)(d) of PAJA.
  • The CTAA then requested a meeting with the Registrar of the Deeds Registry at Cape Town (“the Registrar”) to advise him of Adv. Binns-Wards’ opinion and to discuss the possible implementation of their proposal.  A memorandum was prepared by the CTAA encapsulating the salient points of the opinion and proposing a joint practice committee where conveyancers and Deeds Controllers could interact to standardize grounds of rejection and assist with the implementation of PAJA.  The Registrar responded by letter on 8 August 2007 blaming rejections on mistakes made by conveyancers.  The Registrar did not address the failure of the process to comply with the provisions of PAJA.  At the meeting on the 8 August 2007 the Registrar was adamant that PAJA was not applicable to the rejection process, but nevertheless agreed to refer the CTAA’s memorandum to the Chief Registrar of Deeds.
  • At this time the CTAA decided that this matter was of such vital importance to their clients and the property industry as a whole that the matter needed to be considered at as many levels as possible.  Through the intercession of a conveyancing member of the The Deeds Registries Regulations Board, of which the Chief Registrar is the chairman, the matter was placed on the agenda for its meeting on 17 October 2007.  Again a memorandum was prepared to support a proposal that the Chief Registrar of Deeds be authorized to obtain a legal opinion from a senior advocate on whether PAJA applies to all registration procedures performed in all the Deeds Registries.  The memorandum also dealt with the informal objections that have been raised by some Deeds Controllers to the implementation of the provisions of PAJA.  These objections were that –
  • the implementation of PAJA would place an untenable administrative burden on the registration process and thereby prejudice the integrity of the process.  There are essentially two responses to this allegation, namely:
  • The clear effect of implementing PAJA (aside from the fact that it is now the law) is to preclude the rejections of deeds on the wrong grounds.  Currently, all rejected deeds have to be relodged and therefore re-examined.  The implementation of PAJA will reduce the number of rejected deeds which will require relodgement by that number of deeds which currently are being wrongly rejected. The argument was that should 350 deeds be rejected on any given day,  Deeds Controllers would be overrun, after implementation of PAJA, by conveyancers attempting to prevent 350 deeds from being rejected.  Clearly, conveyancers who have received notification of intended rejection on grounds which the conveyancer knows are incontestable, generally would not attempt to persuade the Deeds Controller to reverse the note.  The few, who attempt to do so, do so currently anyway and therefore if it is currently absorbed by the system without overloading it, nothing would change after implementation of PAJA.
  • PAJA is a law of general application promulgated later than the Deeds Registries Act, 47 of 1937, (“the DRA”), which is a law of specific application in terms of which the process of deeds registration is conducted in the Deeds Registries.  In such a situation, it was contended, the law of specific application continues to regulate the process to which it applies to the exclusion of the law of general application.
  • This objection was refuted by Adv. Preiss SC in his opinion which is dealt with later.
  • Secondly, PAJA itself contains a significant indication that the legislature did not intend that any administrative action should escape its provisions without notice to any person whose rights may be adversely affected by such administrative action.  Section 2 of PAJA provides that the Minister of Justice may exempt an administrative action or group or class of administrative actions from the provisions of PAJA.  However, the Minister may only do so if it is reasonable and justifiable in the circumstances.  Alternatively, the Minister may, in order to promote an efficient administration and if it is reasonable and justifiable in the circumstances, permit an administrator to vary any of the requirements referred to in sections 3(2), 4(1)(a) – (e), (2) and (3) or 5(2) in a manner specified in the notice.  So it is clear that no administrator has the luxury, after commencement of PAJA, to go quietly about his business in terms of an act of specific application as if nothing had changed.  The only way for him to be sure would be to apply for the exemption.  This contention was later supported by Adv Preiss SC.
  • On 17 October 2007 the Deeds Registries Regulations Board resolved to authorize the Chief Registrar of Deeds to obtain an opinion from a senior advocate on whether PAJA applies to the DRA’s rejection procedure.  Again the CTAA assisted by offering their instructions to and the opinion of Adv. Binns-Ward SC as part of the brief to their counsel. 
  • On 3 March 2008 Adv. D.A. Preiss SC delivered his opinion in which he made the following findings:
  • That the contention that the DRA, being a law of specific application, continues to regulate the process to which it applies to the exclusion of PAJA, as a law of general application, does not apply.  This is so because the Legislature intended regulating the exercise of public powers and therefore there is no conflict between the two statutes and no ambiguity that would require that specific provisions of an earlier statute (the DRA) should prevail over the provisions of a general statute (PAJA).
  • That section 2 of PAJA contains a clear indication that the Legislature intended all administrative actions to be subject to the provisions of PAJA, unless exempted therefrom by the Minister of Justice and that actions in the Deeds Registries have not been so exempted.
  • That all actions in the Deeds Registries, which involve the exercise of a public power and which materially affect the rights of any person, fall within the definition of “administrative action” in section 1 of PAJA and are subject to the other provisions of PAJA, most notably the power of review enacted in section 6.
  • On 8 April 2008 the CTAA wrote to the Chief Registrar of Deeds enclosing the two opinions requiring a response from the Chief Registrar as to the steps taken by him to implement the provisions of PAJA in Deeds Registries’ processes in the light of the favourable opinions by the two advocates.
  • On 30 July 2008 the Chief Registrar responded to the letter of 8 April 2008 by inviting representatives of the CTAA to a meeting in Pretoria on 5 August 2008.  Two representatives of the CTAA attended the meeting.  At the meeting (which was not attended by the Chief Registrar) a number of his staff as well as the Registrars of Deeds from Pretoria and Cape Town were present.  Although a number of points were argued by the Deeds Registries’ representatives at the meeting, they returned again and again to the position that although the provisions of PAJA may apply to the Deeds Registries processes, the administrative burden anticipated was intolerable and would threaten the integrity of the process.  In the end the Deeds Registries’ representatives at the meeting, however, agreed to include the proposal by the CTAA to the Registrars’ Conference, scheduled to take place at the end of October 2008, where the Chief Registrar would also be present.
  • This was yet another delay but in the end the CTAA decided to await their decision at the end of October 2008.  A last attempt was made to tip the scales in favour of the conveyancers by suggesting to the Chief Registrar’s staff that they obtain an opinion from the Chief State Law Adviser on the applicability of PAJA.  This was done because a favourable opinion in another matter was previously obtained from those quarters.  An opinion duly arrived but it absolved the Deeds Registries from any obligation to apply the provisions of PAJA to the Deeds Registries’ processes.  The findings in the opinion were that –
  • the proposed change in the process (to provide for notice to reject) would not necessarily be fairer than the current process of rejection.  Comment: This bald statement is made without any attempt to weigh up the one process against the other.  In contrast Adv. Binns-Ward dealt comprehensively with the question of procedural fairness.  He pointed out that the basic point of departure in assessing procedural fairness was compliance with the requirements of section 3(2)(b) of PAJA.  Included in those requirements were notice of the proposed action and an opportunity by the affected person to make representations.  Of course, an administrator may in terms of section 3(4) follow a process which is different from that prescribed in section 3(2)(b), if it measures up against the requirements set out in section 3(4)(b).  It is then astounding that this statement could be made when the current process does not contain a notice requirement or an opportunity to make representations;
  • it is a question of fact in terms of section 3(4)(a) of PAJA whether it is reasonable and justifiable to depart from the requirements of the provisions of section 3(1), (2) and (3).  Comment:  Another bald statement with no explanation to justify it.  An examination of the facts concerned is clearly only the beginning of establishing whether it is reasonable and justifiable for an administrator to depart from the requirements of section 3(2).  The next step is then to determine whether the departure is reasonable and justifiable with reference to the factors included in section 3(4)(b).  Section 3(4) of PAJA has clearly been inserted to allow administrators to suspend administrative fairness for the individual in those cases where doing so would cause greater harm for society as a whole.  Yet, when doing so the Legislature still requires the administrators to measure their proposed administrative action against a strict framework of factors set out in section 3(4)(b) of PAJA.  The first factor in making that assessment is the object of the empowering provision.  When, in terms of this factor, it would nullify the effect of the empowering provision to give notice and make representations, it would be reasonable and justifiable not to comply with those requirements.  The empowering provision in the rejection process is section 3(1)(b) of the DRA.  It allows rejection of deeds if they cannot be registered or executed in terms of the DRA or any other law. Clearly the object then is to prevent invalid registrations.  So, the question has to be asked, how will the notice and representations requirements lead to invalid registrations?  If the proposed rejection is to be undertaken on valid legal grounds the administrator, after giving notice and allowing representations, can still go ahead and reject the deed.  Therefore the empowering provision will not be frustrated.  If the proposed rejection is to be undertaken on the wrong grounds then the administrator is acting outside the empowering provision and then the notice and representations requirements may prevent the adverse effects of such an invalid rejection.    The second factor is the nature, purpose and need to take the administrative action.  This second factor ensures that the deed is expelled from the system.  Once that is achieved the likelihood of an invalid registration is minimized as the deed is physically removed from the process.  In the proposed change to the process the deed will not be physically removed from the process but will remain in the system until the proposed rejection is confirmed.  If an argument is raised that the defective deed is not expelled from the system as before and it might now slip through and be registered, then the answer is that the Deeds Controller, who made the note of intention to reject, remains firmly in control of the deed because the note can only be removed from the deed by Deeds Controllers.  If the rejection is confirmed despite the representations made, then the deed can still be expelled from the process.  The third factor is the likely effect of the administrative action.  The likely effect is to be judged from the administrator’s point of view.  If the administrative action is taken without the notice and representations requirements would the action so taken still have the effect which is contemplated by the empowering provision?  In the case of the rejection process the effect of the administrative action (if taken on valid grounds) remains the same whether notice was given or not.  The defective deed can still be rejected.  The fourth factor is the urgency of taking the administrative action or the urgency of the matter.  Again this assessment has to be made by the administrator.  No urgency for rejection of deeds can be argued.  Whether it is rejected today (without notice) or tomorrow (with notice) from the administrator’s point of view the object of the empowering provision would be served.  The last factor is to promote an efficient administration and good governance.  If an efficient administration and good governance can be promoted only by dispensing with notice to a person whose rights would be adversely affected by a proposed administrative action, then such a situation would arise only where the society entitled to such an efficient administration and good governance should be protected from some threat from such an individual.  Dispensing with notice in the absence of some threat to maintaining an efficient administration and good governance cannot be said to be reasonable and justifiable and therefore would not warrant any departure.
  • On 5 November 2008 the CTAA was furnished with the decision taken by the Registrar’s Conference.  It stated that PAJA is applicable to the rejection of deeds but that a fair procedure is in place with regard to the examination and rejection of deeds.  Therefore the status quo will remain.
  • The lack of accountability on the part of the Deeds Registry is clearly demonstrated in the outline above.  Conveyancers and other stakeholders in the property industry now have the ammunition in the form of PAJA to compel such accountability.

 

This article first appeared in De Rebus in April 2007.  It is republished on this website with permission of the editor of De Rebus.



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