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[2014] ZAGPPHC 267
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Blue Cell (Pty) v Blue Financial Services Limited and Others (3489/07 , 8456/07) [2014] ZAGPPHC 267 (16 May 2014)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
NORTH
GAUTENG HIGH COURT, PRETORIA
CASE NO: 3489/07
and
CASE NO: 8456/07
DATE: 16 MAY 2014
NOT REPORTABLE
NOT OF INTEREST
TO OTHER JUDGES
In the matter
between:
BLUE CELL (PTY)
LTD (IN
LIQUIDATION)
.....................................................................
APPLICANT
and
BLUE FINANCIAL
SERVICES
LIMITED
................................................................
1
st
RESPONDENT
BLUE EMPLOYEE
BENEFITS (PTY)
LTD
..............................................................
2
nd
RESPONDENT
VAN NIEKERK,
DAVE
................................................................................................
3
rd
RESPONDENT
SMIT,
WESSEL
............................................................................................................
4th
RESPONDENT
VAN DER
WESTHUIZEN, RENIER
….....................................................................
5th
RESPONDENT
MOSTERT, WAYNE
ANTON
.....................................................................................
6th
RESPONDENT
MATOJANE, J
[1] The first and
second respondents (“the respondents”) apply for leave to
appeal against the judgment and order granted
against them on the 13
February 2004, in terms of which judgment and order: The costs order
made on 8 May 2007 under case number
3489/07 and case number 8456/07
was set aside, and substituted with an order directing the first
respondent, jointly and severally,
with the second to fifth
respondents, to pay the costs of the application for specific
performance and the liquidation on a scale
as between attorney and
client.
[2] This court in
the earlier application liquidated applicant at the instance of the
respondents and refused applicant’s
application seeking a
statement of account and payment of its revenue from the respondents.
Applicant was mulcted in costs. It
is common cause that the court was
misled and defrauded into liquidating the applicant and refusing the
order for specific performance.
The costs order is the only portion
still alive. Unless the costs order is reconsidered, It would be
manifestly inequitable and
not in the interest of justice to
implement the costs order given against the applicant as a result of
fraud and dishonesty.
[3]
The respondents contends that while a judgment can be rescinded under
common law, the requirements necessary to be fulfilled
in this regard
are those set out in
Childerley
Estate Stores v Standard Bank of SA Ltd
1924
OPD 163.
They submit that this court has no inherent jurisdiction to
rescind its orders outside of this authority.
[4]
The common law power of this court to rescind its own final judgments
was discussed in
De
Wet and Others v Western Bank Ltd
1979(2)
SA. Trengove AJA as he then was stated at 1040 D that the court’s
power to rescind its own judgments and orders, in
cases where the
merits of the dispute between the parties have not been gone into, is
not confined to cases of fraud or the exceptional
cases of Justus
error which are referred to in the Childerley case, but may be
exercised on wider grounds than those, at 1041 C-E
he said :
“
The
Courts of Holland, as I have mentioned, appear to have had a
relatively wide discretion in regard to the rescission of default
judgments, and a distinction seems to have been drawn between the
rescission of default judgments, which had been granted without
going
into the merits of the dispute between the parties, and the
rescission of final and definitive judgments, whether by default
or
not, after evidence had been adduced on the merits of the dispute.
(Cf Athanassiou v Schultz 1956(4) SA 357 (W) at 360G and
Verkouteren
v Savage
1918 AD 143
at 144). In the former instance the Court
enjoyed relatively wide powers of rescission, whereas in the latter
event the Court
was,
generally
speaking, regarded as being functus officio, and judgments could only
be set aside on the limited grounds mentioned in
the Childerley case.
(Cf Voet 2.11.9 and Loenius Decisien en Observatien cas 109).”
[5]
In
Firestone South
Africa (Pty) Ltd v Genticuro AG
1977(4)
SA 298 (A) at 306H - 308A four exceptions to the rule that once a
court has duly pronounced a final judgment or order, it
has itself no
authority to correct, alter or supplement it is set out. The
exceptions are clearly set out in the headnote and I
quote them for
convenience:
“
Once
a court has duly pronounced a final judgment or order, it has itself
no authority to correct, alter, or supplement it. The
reason is that
it thereupon becomes functus officio: its jurisdiction in the case
having been fully and finally exercised, its
authority over the
subject-matter has ceased. There are,
however, a few
exceptions to that rule. Thus, provided the court is approached
within a reasonable time of its pronouncing the judgment
or order, it
may correct, alter or supplement it in one or more of the following
cases: (1) The principal judgment or order may
be supplemented in
respect of accessory or consequential matters, for example, costs or
interest on the judgment debt, that the
court overlooked or
inadvertently omitted to grant.
(2) The court may
clarify its judgment or order, if, on a proper interpretation, the
meaning thereof remains obscure, ambiguous
or otherwise uncertain, so
as to give effect to its true intention, provided it does not thereby
alter ‘the sense and substance’
of the judgment or order.
(3) The court may correct a clerical, arithmetical, or other error in
its judgment or order so as to
give effect to its true intention.
This exception is confined to the mere correction of an error in
expressing the judgment or
order; it does not extend to altering its
intended sense or substance. (4) Where counsel has argued the merits
and not the costs
of a case (which nowadays often happens since the
question of costs may depend upon the ultimate decision on the
merits), but the
court, in granting judgment, also makes an order
concerning the costs, it may thereafter correct, alter or supplement
that order.
The
above list is not exhaustive: the question whether the court has an
inherent general discretionary power to correct any other
error in
its own judgment or order in appropriate circumstances, especially as
to costs, raised but not decided. On the assumption
that the court
has
a
discretionary
power this should be sparingly exercised, for public policy demands
that the principle of finality in litigation should
generally be
preserved rather than eroded - interest reipublicae ut sit finis
litium.
”
[6]
The court held that the list of exceptions to the
functus
officio
rule
was not exhaustive. Given the circumstances in that case the court
was prepared to assume in the applicant’s favour that
the court
does retain a general discretion to correct, or supplement, its
judgment or order in appropriate cases other than those
listed in the
judgment, but warned that “
the
assumed discretionary power is obviously one that should be very
sparingly exercised, for public policy demands that the principle
of
finality in litigation should generally be preserved rather than
eroded
-
interest
reipublicae ut sit finis litium”.
[7]
The
constitutional court in
Zondi
v MEC, Traditional and Local Government Affairs and others
2006(3)
SA 1 CC at par 34 after a reference to
West
Rand Estates Ltd v New Zealand Insurance Co. Ltd
1926
AD 173
at 178 held that the common law general rule that an order
once made is unalterable was departed from when it was in the
interest
of justice to do so and where there was a need to adapt the
common law to changing circumstances and to meet modern exigencies.
The court reaffirmed the inherent power of a court to regulate its
own process and the principle that when justice required it
a court
had the power to amend its own order.
[8] In the instant
case, justice and necessity requires that the earlier court order be
amended or substituted as the court was
misled and defrauded in
granting it. As it was correctly argued by counsel for the applicant
in his heads of argument and in court,
costs is an ancillary issue
and does not warrant a rehearing of substantive issues under the
circumstances where subsequent events
relating thereto exposes an
injustice. Consequently, in my judgment, the application for leave to
appeal must fail as there is
no reasonable prospect that another
court will come to a different conclusion than this court.
[9] After entering
judgment against the defendants on the 13 February 2004 it was
brought to my attention that the attorney and
own client costs orders
I awarded in favour of the applicant in respect of the two
applications (“the 2007 applications”)
and the variation
application itself were erroneously granted jointly and severally
against first to fifth respondent. The cost
orders ought to have been
granted jointly and severally against first to fourth respondent as
the application against the fifth
respondent was settled and
withdrawn by notice of withdrawal. The orders also inadvertently
omitted to expressly include the applicant’s
costs consequent
upon employment of two counsel and also past reserved costs orders as
was specifically dealt with and ordered
by Bertelsmann J in his party
and party costs orders in the 2007 applications.
[10] A letter by
applicant’s attorneys was addressed to the respondent’s
attorney requesting them to confirm and agree
that the attorney and
own client costs orders in favour of the applicant would include the
costs consequent upon the employment
of two counsel and the past
reserved cost orders granted in the 2007 applications. The
respondent’s attorneys refused to
agree to the request and
insisted that the punitive costs orders in favour of the applicant
stand as they are. A formal application
was brought and for
convenience, the application was heard together with the application
for leave to appeal.
[11] I should point
out that it is apparent from my order of the 13 February 2004 that I
inadvertently omitted to expressly make
provision for the costs
consequent upon employment of two counsels as ordered by Bertelsmann
J in the 2007 applications, as well
as the reserved costs in the
past.
[12]
The then Appellate Division in
West
Rand Estate
case,
supra, was called upon to consider whether it had the power to amend
its order. The court in giving judgment for an amount
due under an
insurance policy overlooked the fact that
mora
interest
had been claimed and made no order in that regard. In an application
made to the court that such interest be granted, the
court in
amending its order stated that it was doing justice between the same
parties as this is a plain matter of necessity and
justice.
[13] I agree that it
was open for the applicant who is aggrieved by the order to be heard
on an appropriate order as to costs and
that the court has the
inherent power to supplement its costs order so as to provide for
past reserved costs orders not expressly
dealt with therein.
[14] In the result
a. The application
for leave to appeal is dismissed with costs, including the costs of
two counsel.
b. The order for
costs I made on the 13 February 2014 is accordingly clarified and
altered to read as follows:
1. The two cost
orders made in the two 2007 applications are set aside and
substituted with an order that the first to fourth respondents
jointly and severally pay the costs in respect of the two
applications on a scale as between attorney and his own client, which
costs are to include, the costs consequent upon the employment of two
counsel. The defendants are also ordered to pay those costs
that were
reserved.
2. The costs of the
setting aside / variation application are to be paid by the first to
the fourth respondents jointly and severally
on a scale as between
attorney and his own client, which costs are to include, the costs
consequent upon the employment of two
counsel.
K
E MATOJANE
JUDGE OF THE HIGH
COURT