Bester and Others NNO v Schmidt Bou Ontwikkelings CC

Schmidt Bou Ontwikkelings CC sold only a subdivided portion of its immovable property in Sedgefield to Innova Holdings (Pty) Ltd. Due to a mistake by the transferring attorney, the entire parent erf, including the remainder that was never sold, was transferred and registered in Innova’s name. Innova later registered a mortgage bond over the remainder in favour of Absa Bank Limited. Schmidt Bou, unaware of the erroneous transfer and bond, applied for a declaratory order that it remained the owner of the remainder, rectification of the deed of transfer, and cancellation of Absa’s bond. The liquidators of Innova raised prescription as a defence, while Absa relied on estoppel.

Both appeals were dismissed. The liquidators of Innova and Absa Bank were ordered, jointly and severally, to pay the respondent’s costs of appeal. The orders declaring Schmidt Bou the owner, rectifying the deed of transfer, and cancelling Absa’s bond stood.

The case confirms that rectification of a deed of transfer is not subject to extinctive prescription because it does not involve a ‘debt’. It reinforces the abstract theory of transfer in South African property law and clarifies the limits of estoppel where reliance and causation are not established, particularly in mortgage lending contexts.