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Everyone, from your parents when you are a child to your prospective in-laws when you reach adulthood, sings the same song: get some “property” behind you; along with an education, it is supposed to be something that “cannot be taken away.” But are they correct, at least about the property part?

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Like most countries, South Africa has legislation enabling property to be expropriated for public use or benefit, and the country’s political parties are considering whether to extend the circumstances under which land may be expropriated. But there is another way you can lose property – when it was not yours in the first place and you only acquired it by fraudulent means!

That is exactly what happened in the case of Botha v Leboko-Radebe, recently decided by high court judge Leicester Adams. He was considering an application brought by Cornelius Botha, the executor of a deceased estate. The estate belonged to Jeremiah Jerry Radebe, who died in April 2004. At the time of his death, he owned certain property in Gauteng that he had acquired during 2002. As to his family life, he had been married to Nthibi Leboko-Radebe until their divorce in 1997.

Extraordinarily bold fraud

After his death, his former wife carried out an extraordinarily bold fraud. During 2005, she misrepresented to the Master of the High Court, Johannesburg, that she was the surviving spouse of the deceased, Jerry Radebe. On this basis, she obtained Letters of Authority from the Master, giving her the right to control the assets in the deceased estate.

Typically, Letters of Authority give the person nominated the right and duty to administer an estate. It is not, however, an automatic process. To protect the estate from theft and fraud, there are a number of documents, including the death certificate and the original or a certified copy of a marriage certificate, that the Master needs to receive and consider before Letters of Authority will be issued.

Having jumped through all these administrative hoops and convinced the Master that she was genuinely the surviving spouse, Leboko-Radebe then went on to have the property transferred into her name.

Fraudulently obtained a mortgage bond over the property

Between the time that Leboko-Radebe had the property transferred into her name and Botha brought a high court case to take it away from her, several official legal steps took place, all of them the natural consequence of a property transfer. For example, the Deed of Transfer relating to the property was endorsed by the Registrar of Deeds, so that Leboko-Radebe became the registered owner of the property.

As Judge Adams put it, however, her “fraud did not end there.” During 2006, she obtained a loan from Absa Bank, and a mortgage bond was registered over the property, which she had fraudulently obtained from her former husband’s estate.

Eventually, however, the Master of the High Court discovered what had happened. The Master then revoked the Letters of Authority issued to Leboko-Radebe and appointed Cornelius Botha as executor in her place.

No court in this land will allow a person to keep an advantage which he obtained by fraud

What should happen now? True, there had been a fraud perpetrated, but the property had been transferred and registered in Leboko-Radebe’s name, and the Absa loan had been approved and granted. Could this all be undone?

The legal team for Botha, the executor, said that the transfer of the property from the deceased estate to Leboko-Radebe was “tainted by fraud,” and this meant that the registration of her ownership of the property had to be set aside. For the same reason, the Absa bond would have to be set aside.

Judge Adams agreed and he quoted these words from a much earlier court decision: “No court in this land will allow a person to keep an advantage which he has obtained by fraud. No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved it vitiates judgments, contracts and all transactions whatsoever …”.

“Fraud unravels everything,” he repeated, “that is our law.”

Unravelling the fraud

As the judge had already found, Leboko-Radebe had committed fraud because she “misrepresented” to the office of the Master that she was Radebe’s surviving spouse, ‘when in fact and in truth they had divorced many years before his death.’

This misrepresentation had resulted in two transactions that would now need to be “unraveled” because they were based on fraud. There was no getting away from it, the two transactions would have to be set aside, the judge found.

Apart from this basis for undoing the two transactions, there was something else. In law, the essential requirement for a “real agreement” is an intention by the person transferring the property to transfer it, and an intention by the person to whom the property was transferred to acquire ownership of it.

Defect in the real agreement

If there was any defect in this “real agreement”, such as a lack of intention on the part of the party transferring the property or the party to whom it was being transferred, to transfer and acquire the property, then “ownership will not pass despite registration.”

Should the agreement be tainted by fraud or obtained in some way that destroyed the validity of the consent between the parties, then “ownership of the property will not pass despite registration in the deeds registry.”

The judge’s inevitable conclusion was that Botha, as executor, was entitled to retrieve the property for the estate.

Judge granted a formal order cancelling the transaction

As the court explained, the Deed Registries Act states that a registered deed (like the one that incorrectly stated that Leboko-Radebe was the owner of the Radebe property) may not be cancelled “except upon an order of court”. This meant that the judge had to grant a formal order cancelling the transaction and ordering the Registrar of Deeds to cancel the endorsement on the Title Deed.

The judge also ordered the Registrar to cancel the mortgage bond over the property.

What about the legal costs? The judge pointed out that Leboko-Radebe had appeared in court in person and had told the court that she had used the loan proceeds received from Absa Bank to pay some of the expenses relating to the property, such as the municipal accounts.

No occupation by the ex-wife

What is more, Leboko-Radebe had never actually occupied the property because family members had prevented her from doing so. Given these circumstances, said the judge, he would not order her to pay all the legal costs of the case. Instead, he granted an order that each party should bear their own costs.

Just what made Leboko-Radebe think she could get away with passing herself off as Radebe’s widow, we will never know. One thing we can be sure about though – fraud does not pay. Not even the weight of an officially registered property transfer or an officially approved bank loan can stop the court ordering that a property, fraudulently obtained, be returned to its original owner.