Meir Margalit v Standard Bank of South Africa Ltd

The appellant sold his property for R3 million in May 2007. Standard Bank held two mortgage bonds over the property that required cancellation before transfer. The bank appointed the second respondent (a firm of attorneys) to handle the bond cancellations. Transfer was delayed by over a year until July 2008. The delay was partly caused by the City of Johannesburg's failure to issue a rates clearance certificate until April 2008. However, after the certificate was obtained, further delays occurred due to the second respondent's conduct. The second respondent failed to identify both bonds registered over the property (only arranging cancellation of one initially) and also lodged defective reg 68 affidavits that did not comply with deeds office requirements. Transfer eventually occurred on 16 July 2008. The appellant claimed damages for lost interest on the purchase price amounting to R42,713.42 against both respondents.

• Whether the second respondent (conveyancing attorney) was negligent in handling the bond cancellation process
• Whether the standard of care required of a conveyancer was met
• Whether the second respondent's mistakes constituted actionable negligence in delict
• Whether Standard Bank could rely on the exceptio non adimpleti contractus based on the lapse of the original guarantee
• Whether the delays in transfer were attributable to the second respondent's negligence
• The liability of a conveyancing attorney for delays causing financial loss to parties in a property transaction

1. The appeal is upheld with costs. 2. The order of the high court is set aside and is replaced with the following: 'The appeal is dismissed, with costs.'

A conveyancing attorney must exercise the degree of skill and care that would be exercised by a reasonable conveyancer in the same position. Given that mistakes or negligence in conveyancing can lead to delays causing financial loss to clients, conveyancers must be fastidious in their work and take great care in preparing documents. This obligation flows from both common law principles of professional negligence and the statutory obligations imposed by section 15A of the Deeds Registries Act 47 of 1937 and regulation 44, which require conveyancers to accept responsibility for the correctness of facts stated in documents they prepare for lodgment at the deeds office. Where a conveyancer fails to identify bonds shown on title deeds in their possession or fails to ensure that affidavits comply with current deeds office requirements when lodging documents, and such failures cause delays in registration resulting in financial loss, the conveyancer is liable in delict for damages flowing from such negligence. The gravity and likelihood of potential harm determines the steps a reasonable person should take to prevent such harm - the more likely the harm, the greater the obligation to take preventative steps.

The Court observed that banks losing title deeds and mortgage bonds held as security is "an almost everyday occurrence" and noted that regulations 68(1) and (6) of the Deeds Registries Act provide a remedy in such situations. The Court also commented that while expert evidence on professional practice is often helpful in determining whether a professional acted negligently, it is not always necessary - the nature of the conduct may be such that a court can determine it falls below the reasonable standard without expert opinion. Regarding costs, the Court noted that an order for costs of two counsel is not justified where the amount in issue is fairly meagre, the law is not unsettled, and the facts are straightforward. The Court also remarked on the "highly undesirable state of affairs" created when the conveyancer and conveyancing secretary who handled the matter did not testify, which "may well have resulted in crucial information not being placed before court."

This case establishes important principles regarding the standard of care required of conveyancing attorneys in South Africa. It clarifies that conveyancers must exercise meticulous care in preparing documents and ensuring compliance with deeds office requirements, as negligent delays can cause financial harm to clients. The judgment emphasizes that professional obligations arise from both common law negligence principles and the statutory duties imposed by the Deeds Registries Act and regulations requiring conveyancers to accept responsibility for the correctness of their documents. It also confirms that not every professional mistake constitutes negligence - the test is whether the professional exercised the degree of skill and care of a reasonable practitioner in the same position. The case provides guidance on when expert evidence is necessary to establish professional negligence, noting that in some cases the nature of the conduct may be sufficiently clear that a court can make a determination without expert testimony.