Powerbeat DVI case dismissed

By PETER GRIFFIN, IT writer

A High Court judge has thrown out Hamilton inventor Peter Witehira's claims that Stephen Tindall and a senior Government official conspired to edge Witehira's company Powerbeat out of a shareholding in technology start-up Deep Video Imaging.

In a judgment delivered on Thursday, Justice Salmon dismissed the claim and granted applications for summary judgment to the defendants - Tindall, Richard Christie, the former chair of a Technology New Zealand sub-committee, IT Capital, its former managing director Keith Philips and the IT Capital vehicle DVI Investment Company.

The decision is a second blow for Witehira, who failed in July to get legal action off the ground accusing management of 3D screen developer DVI of "oppressive behaviour" towards Powerbeat, preventing it from increasing its stake in DVI.

Witehira said he would appeal against Justice Salmon's finding, complaining that his legal team had not been given enough time to examine the paper-trail of documents relevant to the case.

"Before we can take this to trial we need to get access to all the documents, we didn't have that access."

Powerbeat is seeking to overturn a sale of 370,000 DVI shares to IT Capital in May 2000. It claims it was led to believe the issue of a $506,000 grant from Technology New Zealand was dependent on it exiting the majority of its stake in DVI.

Justice Salmon said it was obvious that Powerbeat's tainted business record was perceived to be a barrier to DVI winning the public money.

"There is certainly evidence that supports the allegation of the representation that the DVI company would not obtain a grant while [Powerbeat] remained a shareholder." But he was unconvinced that any dealings between Tindall and Christie had resulted in Powerbeat being forced to sell.

"Whatever [Christie] and his alleged co-conspirators might or might not have done, it was not causative of the decision to sell the shares."

But what proved "fatal" to Powerbeat's case, said Justice Salmon, was evidence that Powerbeat knew the way had been cleared for the grant to be issued before it sold the shares to IT Capital. Financial assurances from Tindall had convinced Technology New Zealand that DVI was a viable recipient of the grant.

Australian entrepreneur and Powerbeat investor Ross Palmer said it was "outrageous" that a proper hearing had been denied Powerbeat and hinted that he would financially back the company in its appeal.

"For this reason I fully intend to ensure that Mr Witehira and his staff are provided with sufficient support to ensure their efforts and inventions receive protection," he said.