The High Court in Pretoria has on Friday (24 August) ruled in favour of listed ICT company Reunert over matters of unlawful competition by former employee, John Holdsworth.
In late March, Reunert instituted proceedings against Holdsworth, seeking to prevent him from soliciting or employing staff at subsidiary firm, ECN Telecommunications (now Nashua ECN), where Holdsworth had previously served as CEO.
Holdsworth had looked to set up a rival business to ECN Nashua, called AppChat, following Reunert’s acquisition of ECN Telecommunications business for R172 million (R107 million was allocated to goodwill).
Reunert also sought to prevent him from engaging in the dilution of goodwill of ECN and using confidential information and proprietary interest of Nashua ECN.
The companies were due to battle it out in court on 29 May, however the case was postponed to August due to the unavailability of judges.
The court ruled that through Holdsworth’s actions, Reunert “could run the Nashua ECN Business to the ground if allowed to continue unchecked with solicitations of customers and clients of applicant.”
The judge ruled that Holdsworth solicited employees and customers from the very business that he sold. “Had the first respondent (Holdsworth) proceeded to prepare to open business with the intention of sourcing his own employees and establishing his own customers, the applicant (Reunert) would have no cause of action against him even if the new company would be competing with applicant,” the court ruling read.
Holdsworth was ordered to pay the “wasted costs”, including the costs of two counsel.
[More to follow]