Former Nashua ECN CEO John Holdsworth said on Monday that he would appeal against a judgment in the high court in Pretoria that found he had breached his restraint of trade and actively solicited employees and customers of his former employer in launching his new company, AppChat.
On Friday, high court judge Selby Baqwa ruled that Holdsworth was aware of Nashua ECN’s intention of entering the mobile voice market — the same market AppChat intended to target — and that the restraint of trade he had signed with the company was relevant to the case.
But Holdsworth said there were a number of factual errors in Friday’s judgment. “I am clearly disappointed with the judgment and will most certainly be appealing it,” he said in a written response to a query from TechCentral.
Nashua ECN parent Reunert, which bought the-then ECN Telecommunications (later renamed Nashua ECN) in 2010 in a deal worth R172m, brought the case against Holdsworth in March, accusing of him, among other things, of actively soliciting ECN staff and customers for AppChat.
AppChat, which Holdsworth hopes to launch commercially early next year, will provide mobile communications using, among other things, a voice-over-Internet protocol (VoIP) service.
Reunert said Holdsworth had prior knowledge of ECN’s plans to launch a mobile VoIP product of its own and said he was using his knowledge of the company’s product development plans to benefit AppChat unlawfully. Reunert said it brought the case to protect the intellectual property it paid for when it bought ECN, arguing it paid a significant premium over and above the company’s net asset value in the form of R107m in goodwill.
However, contrary to the court’s findings, Holdsworth said he had “no idea that Nashua ECN was developing a VoIP application for mobile phones”.
“Curiously, affidavits submitted by Jane Ashburner, a former ECN shareholder and board member, and Andy Baker, former Nashua Group CEO and board member – that they also did not know that ECN was developing a VoIP application for mobile phones – did not seem to sway the judge,” he said.
“The findings in relation to employee and customer solicitation appear to be based upon probabilities and inferences to be drawn,” Holdsworth added. “Regrettably, the reasoning is not clear and easy to follow. Nor has the learned judge clarified what is regarded as ‘confidential information and customer connections’. To be accused of soliciting ECN’s customers when I have not even met or spoken a word to an ECN customer since my employment contract was terminated in November 2011 (almost 10 months ago) is surreal if not somewhat disturbing.”
He said the effect of the judgment was that both he and AppChat were required to adhere to the contractual restraint on him, which is due to expire this Thursday, 30 August, but there would be no reason for him not to continue with plans to launch AppChat. — (c) 2012 NewsCentral Media