GraceKenndy Remittance Services Limited (GKRS) has requested another postponment of trial in the lawsuit filed by Paymaster Jamaica Limited, and is seeking permission to appeal a decision by the Jamaican appeal court not to strike out a portion of the claim by Audrey Marks, the bill payment company's founder and chief executive officer.
The application filed last week is expected to be heard in the penultimate week of September, and if successful would postpone the October 12-23 trial set in the Supreme Court.
The Court of Appeal in a unanimous decision July 9 threw out an appeal by GKRS that was based on the argument the $652.6 million detailed in a 'supplemental witness statement' of April 2008 amounted to a new claim for special damages and "should have been specifically particularised and pleaded".
GraceKennedy on Tuesday said it would not comment on a case that was before the court, but the company had disclosed in stock market filings last week that the case represented a $1.7 billion exposure.
In a signal it expected to eventually triumph over Paymaster, the conglomerate said it had made no provision for the damages sought.
Paymaster has claimed the $652.6 million as 'opportunity cost', saying it related to business denied her company because of the actions of her better-capitalised competitor.
GK has denied any wrongdoing.
Arguments citied
Justice Cooke in his decision cited arguments by Paymaster outling the alleged economic injury.
"The fact that GKRS was prepared to, and in reality gained a fast-track market entry, and significantly underpriced the service in a manner that was unsustainable and was, therefore, intended solely to drive the cash-weak competitor from the market is manifested in two subsequent developments," Marks claimed in her suit.
"First, within four years of that pricing model, GKRS was forced to introduce a J$35 front-end fee to paying customers, to make up the shortfall ..."
Marks, in court filings, had projected that Paymaster's sales would have grown from $66.7 million in 2000 to $266.6 million in 2005, and that the company would have grown transaction volumes in the same period from 2.2 million to 5.3 million. Instead, she said, fee revenue realised was $2.25 million in 2000, growing to just under $100 million in 2005.
Marks is also seeking compensation of US$12 million, or 10 per cent of what Paymaster estimates as GKRS's US$120 million of value - claiming the company was "enriched" by Paymaster's intellectual property.
Paymaster based its estimate on the US$29.5 million that GraceKennedy earned in the sale of a 25 per cent stake in GKRS to Western Union.
The lawsuit filed by Paymaster also contends breach of copyright over software that Marks said she had commissioned, but which she alleges that software developer Paul Lowe wrongly shared with GKRS. An injunction granted in August 2000 bars GKRS from utilising the software.
Lowe is a co-defendant in the lawsuit.
When the case eventually gets to trial, the allegations against GKRS and Lowe and whether they are liable will be heard first and, if Paymaster triumphs, a second hearing will consider the matter of damages.
lavern.clarke@gleanerjm.com