Blue Cell (Pty) Ltd v Blue Financial Services Limited and Others (3489/07 , 8456/07) [2014] ZAGPPHC 14 (14 February 2014)

Blue Cell (Pty) Ltd v Blue Financial Services Limited and Others (3489/07 , 8456/07) [2014] ZAGPPHC 14 (14 February 2014)

The court found that the respondents had deliberately misrepresented the financial position of the applicant, resulting in the liquidation and adverse costs orders. The evidence established that the court was misled by fraudulent affidavits, and the respondents unlawfully diverted income due to the applicant. The court held that it would be manifestly inequitable and contrary to the interests of justice for the respondents to benefit from costs orders obtained through fraud. The court exercised its inherent jurisdiction to rescind the costs orders and substituted them with punitive costs orders against the respondents, thereby partially remedying the injustice perpetrated against the...

Citation
[2014] ZAGPPHC 14
Parties
Applicant: Blue Cell (Pty) Ltd (in liquidation); Applicant: Wayne Anton Mostert; Respondent: Blue Financial Services Limited; Respondent: Blue Employee Benefits (Pty) Ltd; Respondent: Van Niekerk, Dave; Respondent: Smit, Wessel; Respondent: Van der Westhuizen, Renier; Respondent: Mostert, Wayne Anton; Respondent: JSE Limited
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
14 February 2014
Case Number
3489/07 , 8456/07
Procedural Posture
Review Application / Application for Rescission of Costs Orders and Amendment of Prior Judgment Orders.
Outcome
Application for rescission of costs orders granted. Costs orders set aside and substituted with punitive costs orders against the respondents.
Judges
K E Matojane
Legal Topics
Rescission of Judgment, Fraud on the Court, Costs Orders, Specific Performance, Liquidation Proceedings
Civil Procedure Commercial and Corporate Rescission of Judgment Fraud on the Court Costs Orders Specific Performance Liquidation Proceedings

Case Brief

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Parties

Blue Cell (Pty) Ltd (in liquidation)

Applicant

Wayne Anton Mostert

Applicant

Blue Financial Services Limited

Respondent

Blue Employee Benefits (Pty) Ltd

Respondent

Van Niekerk, Dave

Respondent

Smit, Wessel

Respondent

Van der Westhuizen, Renier

Respondent

Mostert, Wayne Anton

Respondent

JSE Limited

Respondent

Procedural Posture

Review Application / Application for Rescission of Costs Orders and Amendment of Prior Judgment Orders.

Legal Issues

  1. 1 Whether the costs orders granted in favour of the respondents should be rescinded due to fraudulent misrepresentation.
  2. 2 Whether the court has inherent jurisdiction to set aside orders obtained by fraud.
  3. 3 Whether the applicant is entitled to substitution of the costs orders on a punitive scale.

Ratio Decidendi

The court found that the respondents had deliberately misrepresented the financial position of the applicant, resulting in the liquidation and adverse costs orders. The evidence established that the court was misled by fraudulent affidavits, and the respondents unlawfully diverted income due to the applicant. The court held that it would be manifestly inequitable and contrary to the interests of justice for the respondents to benefit from costs orders obtained through fraud. The court exercised its inherent jurisdiction to rescind the costs orders and substituted them with punitive costs orders against the respondents, thereby partially remedying the injustice perpetrated against the...

Court Disposition

Application for rescission of costs orders granted. Costs orders set aside and substituted with punitive costs orders against the respondents.

Orders

  • The cost order made on 8 May 2007 under case number 3489/07 is set aside and substituted with an order that the First to Fourth Respondent jointly and severally pay the costs of the application for specific performance on a scale as between attorney and own client.
  • The cost order made on 8 May 2007 in the liquidation application under case number 8456/07 is set aside and substituted with an order directing the first respondent, jointly and severally with the second to fourth respondents, to pay the costs of the liquidation inclusive of applicant's full costs of opposition...