The importance of the choice of a transferring attorney was emphasized in the recent High Court case of Agu v Krige and Others (20763/2017) [2019] ZAWCHC 46. The case involved the theft of R720 000 of trust money by a deceitful conveyancer.

In the court, Agu, who was the Purchaser of a property, was asking for an order in terms of which Krige, the Seller, would be forced to transfer the property to her. This was despite the fact that the conveyancer, who had received the purchase price, had stolen the money.

The sale agreement stipulated that payment of the purchase price by the Purchaser was to be made in full to the Seller’s conveyancer before transfer. The purchase price was then to be held in an interest-bearing trust account (with interest accruing to the Purchaser) until transfer was registered. The purchase price was then to be paid to the Seller.

The Purchaser had paid the full purchase price to the conveyancing attorneys (who had been nominated by the Seller). The Purchaser contended that they had therefore discharged their obligation to make payment. The Seller obviously denied this, and alleged that the Purchaser’s obligation to pay would only be discharged once he had received payment.

The Court therefore had to determine whether the conveyancer was the Seller’s agent in receiving the funds for the property. If the conveyancer was the Seller’s agent, then the Purchaser could be said to have paid the purchase price and would be entitled to the transfer of the property. If the conveyancer was not the Seller’s agent to receive the purchase price, then the Purchaser could not be said to have paid, and would not be entitled to transfer unless she paid again.

The Court found in favour of the Purchaser and held that the conveyancer had acted as an agent for the Seller when collecting the purchase price. Thus, the Purchaser had “complied with her obligation in terms of the deed of sale by making payment of the purchase price to the [conveyancer].” The Court therefore ordered the Seller to transfer the property to the Purchaser.

Our feeling is that this is another one of those cases that could have gone either way, and it is a judgment that might be overturned on appeal.

But what should we learn from this case? It emphasises the importance of making use of an honest and reputable conveyancer when purchasing or selling property. It is also a reminder to look at your own deed of sale, and, if you had wanted the case to turn out differently, you should make appropriate changes to ensure that this question is not open to interpretation.

If you need assistance in making changes to your deed of sale, do not hesitate to contact one of our attorneys.

Storm Barry and Deon Welz
July 2019