Homeowner wins back property after title fraud case

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The matter concerned an attorney who was struck from the roll of legal practitioners and the involvement of a trust with the attorney’s husband as the sole trustee thereof. The case illustrates familial fraud in everyday processes as well as the justice system’s strong reaction thereto.

Property transaction cancelled

Veronica Goeieman lawfully acquired ownership of the property in dispute in 2011 and has occupied the property with her elderly mother since.

On 5 March 2020, Goeieman concluded a deed of sale with the YDT Trust (YDT), represented by Yabela Dlali (Mr Dlali) in his capacity as the sole trustee of the trust. An attorney, Nozipho Dlali (Mrs Dlali), was appointed as conveyancer to register the transfer, despite the fact that she was not a qualified conveyancer.

The sale was subject to a fairly standard suspensive condition, being the approval of a loan by a financial institution for not less than the purchase price on/or before 6 June. However, the suspensive condition was never complied with.

There was no evidence presented of a loan being approved to the purchaser, YDT, at any stage. Goeieman’s title deed was handed over to Mrs Dlali, the attorney, when the transaction was concluded. She, without being a qualified and registered conveyancer, was to effect registration of transfer as agreed in the deed of sale.

A few days later, Goeieman decided against proceeding with the sale and informed the trustee, Mr Dlali, accordingly. There was no further correspondence from Mr Dlali and Goeieman accepted that the sale agreement had been cancelled.

Around July 2020, she became aware of enquiries by YDT regarding her municipal account. Goeieman’s mother attempted to collect the title deed from Mr Dlali, which was unsuccessful.

The local municipality made enquiries during November 2021, which prompted Goeieman to again request her mother to communicate with Mr Dlali. He then insisted that he would not hand over the title deed and that she would have to sell her house to repay the money she allegedly owed him.

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Property has been unlawfully transferred

In January 2022, Goeieman approached Legal Aid for assistance, and it surfaced that Mrs Dlali had been suspended from practice (and was eventually struck from the roll of legal practitioners).

In March 2022, Goeieman established at the Deeds Registry that her property had been transferred to YDT, which must have been incredibly concerning as she was under the impression that she had not signed any transfer documents in this regard.

Goeieman’s attorneys then launched an application at the High Court to declare the deed of sale between Goeieman and YDT null and void, and to declare that the transfer of the property to YDT is invalid and set aside.

On 26 September 2023, Goeieman was served with an eviction application issued by Moalusi and Kehilwe Phokoje (Mr and Mrs Phokoje). Apparently, the property had been transferred into their names.

It was discovered that Mr Phokoje signed an offer to purchase the property from YDT on 16 March 2020 – only nine days after Goeieman had concluded the deed of sale in terms of which she sold the property to the YDT Trust.

It further became clear that the property was transferred from Goeieman to YDT and from YDT to the Phokojes on the same day in February 2022.

The Phokojes never inspected the property, either before signing the deed of sale, or before registration thereof into their names. No prospective purchaser or estate agent contacted Goeieman to inspect the property at any point in time.

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High Court proceedings

Goeieman argued that since the property was fraudulently transferred to the YDT Trust, the subsequent transfer to the Phokojes must also be declared invalid.

The Phokojes, in Mr Phokoje’s affidavit, misrepresented the date that the deed of sale between Goeieman and YDT was entered into, as well as the date that the Phokojes’ home loan was approved.

YDT’s office was contacted to provide the Phokojes with the keys of the house after the property was registered in their names, but the keys could not be provided to them. They were informed by Mrs Dlali that the previous owners were still residing at the property.

The Phokojes then went to view the property, but Goeieman disputed hearsay evidence that she agreed to vacate the premises in due course after the viewing. Further hearsay allegations were made that Goeieman was prepared to rent the property or was even willing to buy back the property; however she denied ever making such statements.

The Phokojes issued eviction proceedings out of the Magistrate’s Court, but it has been kept on hold pending finalisation of the High Court applications. Meanwhile, the Phokojes continued paying their bond instalments despite the fact that they are unable to occupy the property registered in their names.

Of further significance is the fact that on 24 February 2022, the Deeds Registry examiner raised queries which stipulated what needed to be done before registration took place.

Amongst others, the Deeds Registry examiner requested that the registration number of YDT on the Power of Attorney of Goeieman be amended with full initialling next to such amendment.

Goeieman denies that she initialled the document in accordance with the examiner’s notes. She did sign the Power of Attorney in 2020 already, but was never involved with the transfer or any amendments of the transfer documents.

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Agreement automatically lapses

The court confirmed that where a suspensive condition in an agreement is not timeously fulfilled, the agreement lapses automatically. The court also confirmed that the nemo plus iuris principle is also still part of our law, which means that one cannot transfer more rights than one has.

If the transferor of property was not the true owner, the transfer is void.

It was highlighted that the requirements for the passing of ownership in terms of the abstract theory are two-fold - registration of transfer in the Deeds Registry in the case of immovable property, accompanied by a real agreement.

A real agreement requires the intention on the part of the transferor to transfer ownership and the intention of the transferee to become the owner of the property. Ownership does not pass if there is a defect in the real agreement.

Furthermore, if the underlying transaction is tainted by fraud, ownership also does not pass. Fraud unravels property transactions, regardless of the involvement of innocent third parties.

The court reiterated that a formal registration process is futile where registration is effected following fraud or a forged document.

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Cancellation was accepted

Neither Mr Dlali as trustee, nor Mrs Dlali who acted as the attorney presented any evidence that the original deed of sale was legal, that the suspensive condition was fulfilled or that the transfers to YDT and the Phokojes were legal.

Although the oral cancellation of the sale by Goeieman was invalid, it is evident that the Mr and Mrs Dlali accepted the cancellation as they delivered a statement for wasted costs by ND Attorneys to Goeieman on 16 October 2020.

However, they still secretly arranged registration of transfer two years after the deed of sale was concluded.

Furthermore, the deed of sale between YDT and the Phokojes was flawed on many fronts. Some flaws included missing pages, missing signatures and no provision was made for inspection of the property by the purchasers.

The agreement also included a suspensive condition for a loan from a financial institution that must have been granted within a specific time, which never occurred. This means that the purported deed of sale lapsed automatically upon the non-fulfilment of the suspensive condition.

This agreement further confirmed that no person was occupying the property and that the Phokojes would receive undisturbed possession and occupation. These were fraudulent misrepresentations, as it was clear that Goeieman and her mother were occupying the property.

Adding insult to injury, Goeieman never received a single cent of the purchase price despite the fact that the property was registered in YDT’s name in February 2022.

The only reasonable inference the court could make was that the Dlalis, one as trustee and the other a former attorney, received the nett proceeds of the sale to the Phokojes after the required deductions.

The court held that there can be no doubt that the Dlalis acted together to defraud Goeieman and the Phokojes.

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Fraud did in fact unravel all

The court found that this case was indeed one of fraus omnia vitiate, where the Dlalis’ fraud unravelled all.

The real agreement was defective, as Goeieman did not have the intention to transfer the property to YDT.

The court declared that the deed of sale between Goeieman and YDT was null and void, that registration of the subsequent transfer to the YDT was invalid and set aside, and that the registration of the transfer of the property to the Phokojes was invalid and set aside.

The Phokojes were ordered to pay the costs of the applications, including counsel’s fees.

It is deeply concerning to witness instances of fraud within the conveyancing process. However, it is equally encouraging to observe the judiciary’s firm response which reassures that fraud does not have the final say.