Bester N.O and Others v Mirror Trading International (Pty) Ltd (In Liquidation) t/a MTI - Leave to Appeal (15426/2021) [2023] ZAWCHC 217 (18 August 2023)

Bester N.O and Others v Mirror Trading International (Pty) Ltd (In Liquidation) t/a MTI - Leave to Appeal (15426/2021) [2023] ZAWCHC 217 (18 August 2023)

The court found that the second respondent failed to establish any real, genuine disputes of fact that would justify referral to oral evidence or trial. The evidence overwhelmingly indicated that the business model of MTI was fraudulent and constituted a pyramid scheme, regardless of the currency traded or its regulatory status at the relevant time. The court held that cryptocurrencies are now regulated in South Africa and can be considered movable property for the purposes of the Insolvency Act. The court further found that it had jurisdiction to make findings regarding the illegality and voidness of the contracts between MTI and its investors. The alleged non-disclosures in the ex parte...

Citation
[2023] ZAWCHC 217
Parties
Applicant: Herman Bester NO; Applicant: Adriaan Willem van Rooyen NO; Applicant: Christopher James Roos NO; Applicant: Jacolien Frieda Barnard NO; Applicant: Deidre Basson NO; Applicant: Chavonnes Badenhorst St Clair Cooper NO; Respondent: Mirror Trading International (Pty) Ltd (in liquidation) t/a MTI; Respondent: Clynton Hugh Marks; Respondent: Henri Robert Honiball; Respondent: Cecil John Jacob Rowe; Respondent: All Members/Investors of Mirror Trading International (Pty) Ltd (in liquidation); Respondent: Financial Sector Conduct Authority (FSCA)
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
18 August 2023
Case Number
15426/2021
Procedural Posture
Leave to Appeal / Application for Leave to Appeal Against Judgment Orders to the Supreme Court of Appeal
Outcome
Leave to appeal is dismissed with costs, including costs of two counsel where so employed.
Judges
A De Wet
Legal Topics
Cryptocurrency Regulation, Leave to Appeal Standard, Declaratory Relief, Insolvency Act Interpretation, Jurisdiction, Pyramid Scheme Prohibition
Civil Procedure Banking and Finance Commercial and Corporate Cryptocurrency Regulation Leave to Appeal Standard Declaratory Relief Insolvency Act Interpretation Jurisdiction +1 more

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Parties

Herman Bester NO

Applicant

Adriaan Willem van Rooyen NO

Applicant

Christopher James Roos NO

Applicant

Jacolien Frieda Barnard NO

Applicant

Deidre Basson NO

Applicant

Chavonnes Badenhorst St Clair Cooper NO

Applicant

Mirror Trading International (Pty) Ltd (in liquidation) t/a MTI

Respondent

Clynton Hugh Marks

Respondent

Henri Robert Honiball

Respondent

Cecil John Jacob Rowe

Respondent

All Members/Investors of Mirror Trading International (Pty) Ltd (in liquidation)

Respondent

Financial Sector Conduct Authority (FSCA)

Respondent

Procedural Posture

Leave to Appeal / Application for Leave to Appeal Against Judgment Orders to the Supreme Court of Appeal

Legal Issues

  1. 1 Whether there are material disputes of fact justifying referral to oral evidence or trial.
  2. 2 Whether the court erred in granting declaratory relief regarding the illegality of MTI's business model and contracts.
  3. 3 Whether the court had jurisdiction to make findings on cryptocurrency-related agreements.

Ratio Decidendi

The court found that the second respondent failed to establish any real, genuine disputes of fact that would justify referral to oral evidence or trial. The evidence overwhelmingly indicated that the business model of MTI was fraudulent and constituted a pyramid scheme, regardless of the currency traded or its regulatory status at the relevant time. The court held that cryptocurrencies are now regulated in South Africa and can be considered movable property for the purposes of the Insolvency Act. The court further found that it had jurisdiction to make findings regarding the illegality and voidness of the contracts between MTI and its investors. The alleged non-disclosures in the ex parte...

Court Disposition

Leave to appeal is dismissed with costs, including costs of two counsel where so employed.

Orders

  • The application for leave to appeal is dismissed with costs, such costs to include the costs of two counsel where so employed.