The Registration of Special Notarial Bonds under the Security by Means of Movable Property Act and the Publicity Principle: Lessons from Developments in Belgium

  • Lefa Sebolaisi Ntsoane University of South Africa
Keywords: delivery, electronic pledge register, movable property, pledge, real security right, publicity principle, registration, special notarial bond

Abstract

Many people do not own immovable property to offer as security but do have movable property which can be offered as security for the repayment of a debt. In today’s world where the costs of a motor car can exceed that of a house, the increasing value of movable things makes it a popular and appropriate security object. Under the common law pledge, delivery of the movable property from the pledgor (debtor) to the pledgee (creditor) has to take place in order for the pledgee to acquire a real security right in the property. Delivery of the property is aimed at ensuring compliance with the publicity principle. The principle of publicity entails that the existence of a real security must be known to the public. With the aim to promote commerce, certain countries have taken the initiative in reforming their laws on pledge to allow the debtor to retain possession of the movable property that serves as security. Furthermore, technology has advanced to a level where national registration systems which can be accessed easily and at minimal costs can be established. The South African legislature enacted the Security by Means of Movable Property Act 57 of 1993 which makes provision for a pledge without possession. This Act deemed a duly registered notarial bond over specified movable property to have been delivered as if delivery has in fact taken place thereby substituted the common law delivery requirement with registration in the Deeds Office. On 30 May 2013, the Belgian House of Representatives adopted a Belgian Pledge Act which allows for a non-possessory pledge on movable property subject to registration in a newly created public register called the Electronic Pledge Register. This article therefore examines the efficacy of the registration system of special notarial bonds in South African law and whether this form of registration complies with the publicity principle looking at the developments of a computerised registration system taking place in Belgium.

Author Biography

Lefa Sebolaisi Ntsoane, University of South Africa
Lecturer, Private Law department, UNISA

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LIST OF ABBREVIATIONS
CILSA Comparative and International Law Journal of Southern Africa
EPLJ Environmental and Planning Law Journal
EPR Electronic Pledge Register
Intel Insol Rev International Insolvency Review
LAWSA Law of South Africa
PELJ Potchefstroom Electronic Law Journal
SA Merc L South African Mercantile Law Journal
SALJ South African Law Journal
SMPA Security by Means of Movable Property Act
THRHR Tydskrif vir Hedendaagse Romeins-Hollandse Reg
TSAR Tydskrif vir die Suid-Afrikaanse Reg
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Published
2018-01-19
Section
Articles