“Please Call Me” inventor Nkosana Makate will have to wait even longer for compensation from Vodacom.
The Constitutional Court overturned a 2024 Supreme Court of Appeal (SCA) ruling that ordered the company to pay him between 5% and 7.5% of revenue generated from the service over 18 years.
The SCA ruling had followed Makate’s rejection of Vodacom’s R47 million settlement offer.
The Please Call Me dispute dates back to 2000, when Makate, then a Vodacom employee, proposed a free messaging service to allow users without airtime to request a call back.
Vodacom launched the service soon afterwards but did not compensate him. After a lengthy legal battle, the Constitutional Court ruled in 2016 that Makate was entitled to “reasonable compensation”.
The case then shifted to determining what constituted a fair amount. In 2024, the SCA sided with Makate, ruling that he should receive a percentage of the revenue generated by the service – an outcome Vodacom challenged in its latest appeal.
In handing down his judgement, justice Mbuyiseli Madlanga was critical of the SCA’s approach, finding it had failed in its legal duties. He ordered the matter be sent back to the SCA to be reheard by a different panel.
“This court is agonised by Vodacom’s submission about a court’s disregard of facts, giving rise to a total failure of justice. How flawed must an assessment be for it to cross the line and for it to constitute a failure of justice?” the judge said.
Fundamental fail
He noted that some assessment errors by the SCA go beyond ordinary human fallibility.
“Those are errors that are so far-reaching as to result in a total failure of justice in the sense that a court ends up failing fundamentally to decide a case before it,” Madlanga said.
He highlighted that the key question now is whether there is merit in Vodacom’s claim, adding: “Before going there, let me caution that unsatisfactory or incorrect reasoning and defects in a judgement do not necessarily mean a failure by a court to discharge its duty of proper consideration.”
According to Madlanga, the SCA judgement was, at times, marked by “confusing reasoning” and, in other instances, by “statements that evince a disregard or lack of awareness of the facts and issues”.
He cited several examples to show the SCA breached its duty of proper consideration.
“A ready example is the question whether the R47 million awarded by the [Vodacom] CEO [Shameel Joosub] was inequitable was central to the Supreme Court of Appeal’s determination against Vodacom.
“This question concerned whether the award of R47 million was unjust or patently inequitable. If the Supreme Court of Appeal found that the CEO’s determination was inequitable, then Vodacom’s appeal had to fail.”
Yet, he noted, the SCA merely outlined the parties' arguments without engaging meaningfully with them. It also failed to decide whether Vodacom’s R47 million offer was in fact inequitable.
“A shortcoming of this nature in such a crucial issue constitutes a breach of the duty of proper consideration."
Madlanga also referenced how Vodacom’s CEO had conducted detailed analysis of Please Call Me revenue within the context of voice revenue, even scrutinising Makate’s models.
“Moving on, in his determination, the CEO extensively dealt with evidence on Please Call Me revenue in the context of Vodacom’s voice revenue. As part of this, he referred to calculations of voice revenue in one of Mr Makate’s models and said those calculations or estimates need to be carefully examined; and, indeed, he examined them carefully.”
Despite this, Madlanga noted that the SCA criticised the CEO’s conclusions as being reached “without saying why”.
“This is evidence that the Supreme Court of Appeal should have been aware of and assessed,” he added.
“Another example is the apparent readiness of the Supreme Court of Appeal to accept whatever Mr Makate said with regard to the calculations. This is evidenced by the manner in which the court adopted Mr Makate’s computation models for compensation.
“The Supreme Court of Appeal said ‘absent any evidence that Mr Makate’s computation is wrong, I can find no reason why Mr Makate’s computation should not accepted as correct’. This is surprising given that Vodacom submits that the entire debate in the Supreme Court of Appeal turned on the question whether the models presented by Mr Makate or those of the CEO should be preferred. Everything about Vodacom was demonstrating that Mr Makate’s computation was wrong.
“So, that was evidence to demonstrate that Mr Makate’s computation was wrong. Whether or not Vodacom succeeded in this regard is something else and of which we do not have to make a pronouncement.”
According to Madlanga, the issue lies in the SCA not considering this evidence at all.
“Here is the final example: the Supreme Court of Appeal also appears to not have considered the substantive content of the substituted order that it granted in favour of Mr Makate. The Supreme Court of Appeal simply copied paragraph two of Mr Makate’s High Court notice of motion verbatim, thus incorporating the revenue-sharing range of 5% to 7.5% and two alternative rates of interest.
“The alternatives in the order translate to huge differences in the amounts payable across revenue-sharing range and the interest calculated on the alternative basis.”
He added that the SCA failed to exercise the necessary judicial discretion when it came to relief.
“If the SCA had properly considered relief, it would have realised that although a litigant can claim relief across a range or in the alternative, a court has to fix the relief with precision.”
Failure to discharge duty
“The purpose of giving these few examples is to illustrate that the Supreme Court of Appeal failed to provide adequate reasons for its judgement, failed to assess evidence…and readily accepted whatever Mr Makate proffered without explaining why it did so.
“I, therefore, conclude that the Supreme Court of Appeal failed to discharge the duty of proper consideration. This failure violates the rule of law and fair hearing.”
As a result, he ruled the matter must be referred back to the SCA to be reconsidered by a different bench.
“The court makes the following order: (1) leave to appeal is granted, (2) the appeal is upheld, (3) the order of the Supreme Court of Appeal is set aside, (4) the matter is remitted to the Supreme Court of Appeal to be reheard by a different panel of judges, (5) each party must pay their own costs, (6) the first respondent must pay the applicant costs in this court,” he concluded.
Responding to the judgement, Vodacom spokesperson Byron Kennedy said: “Vodacom is pleased that the Constitutional Court has upheld its appeal, with the case referred to a new panel of the Supreme Court of Appeal. Vodacom will now review the judgement in full and take appropriate next steps.”
Makate had not responded to ITWeb’s request for comment by the time of publication.
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