Cause of Action for Fraud

The words are apt in Civil Appeal 3441/01 Anonymous v. Anonymous, Nech (3) 1 (published in Nevo, 19.01.2004):

"Fraud as a cause of action can overcome the principle of finality of proceedings. A fundamental principle of our legal system is that no person shall benefit from his wrongdoing (see CA 3798/94 Anonymous v. Anonymous [7]). From this fundamental principle derives the well-established rule in many legal systems that fraus omnia corrumpit – fraud corrupts everything. As Justice M. Cheshin noted: ‘All acts of governance and administration tainted by fraud – including judicial acts – are like fruit infected by rot; they decay and disintegrate from within and resemble a tree whose roots have rotted and whose crown has withered. An act tainted by fraud is defective and void from its inception and hangs upon nothing… Such is the law in judicial acts, such is the law in all acts of governance and administration, and indeed in every legal act. The rule is born of a primordial command: that a wrongdoer shall not profit from his wrongdoing. He who sows falsehood shall reap emptiness. This is the moral-social command, and in its path we shall walk’ (HCJ 706/94 Ronen v. Minister of Education and Culture [8], pp. 415-416)."

"This rule applies also to judgments obtained by fraud, and it has the power to overcome, at times, the existence of res judicata between the parties (CA 4958/99 Ein Gev – Workers’ Cooperative Settlement Ltd. v. Mekorot Water Company Ltd. [9], p. 22). Accordingly, it has been held that courts may entertain claims that final judgments are not binding due to the fraud involved in their issuance. This principle should be regarded as reflecting first principles. As Justice Zusman noted some forty-five years ago: ‘The power of a court of equity to prevent a litigant from enjoying the fruits of a judgment obtained by fraud is ancient and beyond doubt’ (CA 254/58 Ingster v. Langfus [10], p. 454)."

"What is the source of the courts’ authority to entertain claims of fraud even when judgments have become final? Justice Zusman noted that this ability does not derive from statutory law, and that the court retains discretion as to the extent of its use (Ingster case [10], pp. 455–456). Justice M. Cheshin likewise held that the authority to annul a decision obtained by fraud is inherent, in the absence of a specific statutory provision negating such authority (CrimA 7569/00 Yegudayev v. State of Israel [15], p. 575)."

"Restore our judges as at the first, and our counselors as at the beginning. Remove from us sorrow and sighing. And reign over us swiftly, You alone, O Lord, with kindness and mercy."