The South Gauteng High Court labelled property magnate Nic Georgiou’s latest attempt to scuttle the looming class action suit and the application for the revocation of the Orthotouch scheme of arrangement, an “act to sabotage the claims of investors”.
This judgement by Judge Mohamed Ismail follows an almost bizarre turn of events which saw Georgiou settle the claims of the six applicants, who represented around 7 000 other members of the Highveld Syndication Action Group (HSAG) late last year. After these claims were settled, the six applicants secretly appointed new attorneys and applied to the court to withdraw their original application against Georgiou and Orthotouch. This was done without notifying the HSAG legal team.
If this application had succeeded, it would have ended the HSAG class action suit.
When HSAG attorney Jacques Theron became aware of these developments, he opposed it stating that it was a clear attempt by Georgiou to “buy off” the six applicants and to “hijack” the class action suit.
He said the six applicants were mere representatives of the 7 000 HSAG members and could not withdraw the application in their personal capacity.
Judge Mohamed Ismail agreed and had some harsh words in his judgement:
“The court was requested to intervene in light of the alleged abuse by Mr Georgiou who it was submitted devised the scheme by using Mr Donnenberg (the new lawyer of the six applicants) to withdraw the main application thereby setting back the current application and delaying and prolonging the class action. It was submitted that the court cannot sit back by indifferently and nonchalantly permitting this type of abuse and egregious conduct by a litigant against others rights.
“This is exacerbated by attorney Donnenberg’s withdrawal of the main application without informing Mr Theron or the HSAG thereof timeously. This ‘scheme or stratagem’ it was submitted smacked of collusive behaviour on the part of Mr Georgiou and Mr Donnenberg to rid themselves of the HSAG investors claims.
“The withdrawal by the nominal applicants of the action was nothing other than an act to sabotage the claim of the other investors, in the form of the HSAG. I am of the view that this court cannot idly sit by and observe or countenance such conduct designed to deprive the investors of their rights to proceed with any intended action they may have.”
In response to the judgement, Theron said it “is another major victory for the HSAG as well as the administration of justice”.
He added that the path has been cleared for the HSAG members to pursue their claims against Georgiou and Orthotouch.
Theron said the next step is to execute Judge Brian Spilg’s order by compelling business rescue practitioner, Hans Klopper, to provide the names of the Highveld Syndication investors to the HSAG.
Klopper applied for leave to appeal in the Supreme Court of Appeal but later withdrew it.
HSAG management committee
Georgiou has not only targeted the applicants in the case, but also key individuals within the HSAG management committee. He allegedly settled their claims, or offered them employment. These include Elna Visagie, Herman Lombaard and Helgard Hancke.
Theron confirmed that a new committee member has been appointed to the HSAG, although he did not name the individual.
The HSAG was represented by Adv Watt Pringle SC, assisted by Adv CHJ Maree. Georgiou was represented by Adv N Redman SC, assisted by Adv Mostert.
Georgiou did not respond to emailed questions.
Read the judgement here.