Margalit v Standard Bank of South Africa Ltd and Another

The appellant sold immovable property for R3 million. At the time, two mortgage bonds in favour of Standard Bank were registered over the property and had to be cancelled before transfer. Standard Bank appointed the second respondent, a firm of conveyancing attorneys, to attend to the bond cancellations. Transfer was significantly delayed after a rates clearance certificate was issued because the second respondent negligently failed to apply for cancellation of both bonds and prepared defective documentation under reg 68 of the Deeds Registries Act. As a result, deeds office lodgements were repeatedly rejected, delaying transfer from when it should have occurred on 29 May 2008 until 16 July 2008. The appellant claimed damages for interest lost due to the delay.

The appeal was upheld with costs. The order of the high court was set aside and replaced with an order dismissing the respondents’ appeal, thereby restoring the magistrates’ court judgment awarding damages to the appellant.

The case affirms the high standard of care required of conveyancers in South African law and confirms that negligent preparation or checking of deeds office documentation can ground delictual and contractual liability. It also clarifies that the exceptio non adimpleti contractus must be pleaded and cannot be raised opportunistically where performance was in fact attempted.