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Georgiou granted leave to appeal

SCA judgment will have far-reaching consequences for future class action suits.

Property magnate Nic Georgiou was granted leave to appeal against a judgment, which saw Georgiou settle the claims of several applicants in the Highveld Syndication (HS) class action suit. These applicants subsequently withdrew their application for certification of the class action, and if allowed by the courts, will effectively bring an end to the class action process.

Judge John Murphy of the High Court in Pretoria ruled last week that there are compelling reasons to grant leave to appeal. “Firstly, the matter gives rise to important questions of law which are res nova; and secondly the judgment will have far-reaching consequences impacting on all future class actions.”

Res nova refers to a case or legal issue that has never before been decided by a court.

“Given that there is no clear and definitive rule regarding the duties of applicants in a certification application, there is, in my view, a reasonable prospect that another court could rule that without certification an applicant for certification is not a representative required to act in the best interests of the contemplated class,” he wrote in his judgment.

Murphy’s original judgment was scathing of Georgiou’s conduct, which saw him settle the claims of the applicants who represented around 7 000 Highveld Syndication Action Group (HSAG) members in an application for certification of the class action.

As part of the settlement agreements, the applicants had to appoint new attorneys and withdraw their original application for a class action certification. This would bring an end to the class action application.

All of this was done without notifying the legal team of the HSAG who brought the original application for certification of the class action.

Judge Murphy also acknowledged that he is mindful that the matter must be resolved expeditiously and the prejudice in delaying the class action and suggested that the registrar of the Supreme Court of Appeal be approached for an expedited appeal.

In response Jacques Theron, legal representative of the HSAG in a communication to HSAG members welcomed the referral directly to the SCA as it “would give certainty to the future process of also the HSAG Class Action (e.g. if Georgiou/Orthotouch attempt to settle new Applicants)”.

He also stated that Judge Murphy emphasised the “seriousness of the matter, and the HSAG is confident that the SCA will protect the interests of the thousands of HS investors in the failed HS Companies”.

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