Holdsworth to appeal AppChat ruling
AppChat CEO, John Holdsworth says he will be appealing a High Court ruling against his company, citing a number of factual errors in the 22-page judgement handed down in Pretoria on Friday (24 August).
Judge Selby Baqwa ruled in favour of listed ICT company, Reunert, over matters of unlawful competition by former employee, 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.
“I am clearly disappointed with the judgment and will most certainly be appealing it,” Holdsworth said.
Having had the opportunity to study the document over the weekend, he said he was “appalled at the number of factual errors” in the ruling.
Holdsworth noted that in section 14,under Breach of Restraints, the learned judge said: “I was the chairman of the Board of Nashua ECN and as a consequence, was aware of the developments and intention of Nashua ECN to launch a VoIP application for mobile phones.”
“This is untrue; when Reunert acquired the business of ECN I was not appointed as a director or fiduciary of Nashua ECN. I have never been invited or attended a Nashua ECN board meeting in any capacity whatsoever – least of all as ‘chairman of the Board of Nashua ECN’,” Holdsworth said.
“In June 2011 I was instructed by Reunert to take up a role as a consultant and work from home. Indeed, from that point forward, until my employment was terminated in November 2011, I was never contacted by anyone from Nashua ECN in respect of any work-related matter or instructed to perform any work on behalf of Nashua ECN,” he continued.
Holdsworth also claimed that he had no idea that Nashua ECN was developing a VoIP application for mobile phones.
“Curiously, the 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 AppChat head also argued that the findings in relation to employee and customer solicitation appeared to be based upon probabilities and inferences to be drawn.
He opined that the reasoning was not clear and easy to follow, with Baqwa not clarifying 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,” Holdsworth said.
He claimed that the only example of customer solicitation in almost one thousand pages of evidence was a lunch and meeting he had with iConnect in October 2011. “Bearing in mind that I was still employed by ECN and my restraint had not even commenced, it is difficult to see how I could have possibly breached my restraint.”
Holdsworth maintained that the first he had heard of the alleged customer solicitation was in March 2012 in Reunert’s Notice of Motion. “I had not spoken to iConnect for six months since the October lunch and meeting.”
The CEO pointed out that the effect of the judgment is that both he, and AppChat are required to adhere to the contractual restraint until 30 August 2012 (Thursday). “We have not been barred from competing with Nashua ECN in the future,” he said.
Paragraph 18 of the judgment stated the following: “had the first respondent proceeded to prepare to open a business with the intention of sourcing his own employees and establishing his own customers, the applicant would have no cause of action against him even if the ‘new’ company would be competing with applicant.”
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