AppChat founder John Holdsworth has been denied leave to appeal against a judgment in his high-profile legal battle with Reunert, the JSE-listed company that bought ECN Telecommunications, a company he founded and led until 2011.
The decision to deny Holdsworth leave to appeal places a further question mark over whether he will be able to launch start-up AppChat successfully in the time frame he had hoped. Holdsworth, who wants to launch AppChat commercially next year — offering low-cost telephony to consumers — says Monday’s ruling by high court judge Selby Baqwa will not stop him from proceeding with his plans.
Baqwa ruled last month that Holdsworth — despite his assertions to the contrary — was aware of Nashua ECN’s plans to enter the mobile voice market and that a restraint of trade he signed with the company was relevant to the case.
Baqwa did not provide reasons for his decision to deny Holdsworth leave to appeal.
“I have considered my position overnight and, after having consulted with my lawyers we’ve decided we’re going to petition the supreme court of appeal in Bloemfontein,” Holdsworth tells TechCentral. “I’m prepared to go out on a limb and say there is absolutely no doubt in my mind, given the evidence, that this will be granted.”
Holdsworth says he is aware of the “non-time-bound relief” the court granted Reunert and that neither he nor AppChat has any intention of “falling foul of that and being in contempt of court”. That relief includes not poaching employees from his former employer.
Holdsworth sold ECN to Reunert in 2011 for R172m. The company was renamed Nashua ECN and has since been merged with another Reunert subsidiary, Nashua Communications.
Holdsworth says he will continue to prepare AppChat for commercial launch. “We’re carrying on,” he says, and hints the battle with Reunert is far from over. “A document has arrived in our possession by way of protected disclosure that I have no doubt, when it is presented to a court, will completely exonerate both me and AppChat of all the charges and accusations.”
He declines to comment further on the document or its content.
Nashua Communications MD Andy Openshaw says Reunert went to court on Monday intending to file an application under rule 49 (11) of the uniform rules of court.
In terms of the law of procedure, once a party notes the appeal of a high court judgment, the order is suspended pending the outcome of that appeal. Rule 49 (11) provides an exception where the potential harm to one of the parties requires that the order be executed, even pending an appeal against the original decision.
Reunert’s application would have been submitted had Holdsworth’s request for leave to appeal been successful in order to ensure the original ruling would remain in place until the appeals process had been concluded. However, because the appeal request was denied, Reunert no longer needed to file its application, Openshaw says.
“The judge turned down the appeal yesterday afternoon and awards costs again,” he says. The denial of Holdsworth’s request for leave to appeal is a “pleasing result” that “reinforces our view of the matter and the outcome of the original case”, he adds.
Earlier this year, Reunert accused Holdsworth of breaching a restraint-of-trade agreement, of soliciting Nashua ECN staff unlawfully and of using his knowledge of the company’s product development plans to benefit AppChat.
In its founding affidavit, Reunert argued it wanted to protect the intellectual property it paid for when it bought ECN. A large part of the R172m purchase value was made up of goodwill, paid over and above the company’s net asset value at the time of the acquisition. — (c) 2012 NewsCentral Media
