Orthotouch slams appeal process

Property group criticises Supreme Court of Appeal.

Legal counsel for investors in property group rejects claims made as startling. Moneyweb

Property group Orthotouch has criticised Supreme Court of Appeal (SCA) developments, which saw the group withdraw its appeals and tendering punitive legal costs to the Highveld Syndication Action Group (HSAG).

It claims its legal counsel wasn’t given the opportunity to argue its case in full and that the appeals were withdrawn to avoid references of impropriety that may have been made in a judgment.

The appeals were against two scathing high court judgments involving the group and its owner Nic Georgiou. The courts found Georgiou acted unethically and abused the legal system when he secretly settled the claims of the six applicants who represented about 7 000 HSAG members in the applications to have the Section 155 Scheme of Arrangement set aside and for the certification of the class action.

After claims were settled, the six withdrew their applications and changed lawyers without informing the HSAG’s lawyers.

Press statement

Orthotouch states it “… believes that had the Orthotouch counsel been given the opportunity to argue the appeals, the court would have been in a position to give clarity on the rights and obligations of the representative plaintiffs in applications to certify class actions”.

The statement added that the appeals were withdrawn by Orthotouch and Georgiou’s “legal teams to avoid any inference of impropriety being drawn and costs were tendered. There was furthermore no concession that Georgiou acted unethically and abused the legal system”.

SCA response

Moneyweb put Orthotouch’s claims to SCA chief registrar, C van der Merwe. She responded: “… Proceedings took place in open court. During the course of argument by counsel on behalf of the appellants, they were afforded an opportunity to take instructions. After a fairly lengthy adjournment the court was informed that the appellants were withdrawing the appeals and tendered costs.

“The respondents were unwilling to accept costs other than on a punitive scale. Consequently, the court reserved judgment in relation to costs. Minutes thereafter, counsel on behalf of the appellants informed the court in chambers that they were now offering costs on a punitive scale.” HSAG legal counsel Jacques Theron of Theron and Associates rejected Orthotouch’s version of events. “It’s startling to even suggest that five SCA judges disallowed a party to present its arguments to the court. If this was the case, it should be a national scandal of historic proportions.”

He said Orthotouch and Georgiou’s counsel set out their arguments in their heads of argument. “The five judges simply made it clear that they were unimpressed with any of those arguments.”

Late payment of interest

Regarding the late payment to investors, Derek Cohen, receiver of the scheme said: “… my attorneys have been instructed to address a letter of demand to Orthotouch and Zephan placing them on terms and inter alia demanding that should future monthly interest payments not be paid by the 7th of each month I will be compelled to approach the courts.”