Vodacom scores major win as ConCourt sends ‘Please Call Me’ case back to SCA
Key topics:
ConCourt overturns SCA ruling: South Africa’s Constitutional Court has ruled that the Supreme Court of Appeal failed in its “duty of proper consideration” in the long-running Please Call Me dispute, sending the case back for rehearing before a different panel of judges YouTube+11MyBroadband+11TechCentral+11.
Makate ordered to pay Vodacom’s legal costs: In a unanimous judgment led by Deputy Chief Justice Madlanga, Makate must cover Vodacom’s constitutional court costs, including fees for three senior counsel Wikipedia+5TechCentral+5Wikipedia+5.
Case drags on after 17–18 years: This landmark dispute over compensation for the empowering “Please Call Me” service—purported to have earned Vodacom billions—is returning to the SCA and remains unresolved nearly two decades later
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In a scathing judgment, the Constitutional Court has ruled that the Supreme Court of Appeal must rehear the case between Kenneth Nkosana Makate and Vodacom with a differently constituted panel of judges.
South Africa’s apex court ruled that the Supreme Court had failed in its “duty of proper consideration” by failing to consider critical evidence and accepting Makate’s calculations without question.
The judgment was handed down by Acting Deputy Chief Justice Mbuyiseli Madlanga, who retires today and for whom there was a special sitting of the Constitutional Court.
Madlanga said he and his fellow judges agonised over the issues presented, as considering the possibility of such total failure by a superior court was new ground within South Africa’s jurisprudence.
This is the second time this case has appeared before South Africa’s apex court. In April 2016, the Constitutional Court ruled that a verbal agreement existed between Vodacom and Makate.
It ordered that Vodacom and Makate must negotiate in good faith regarding appropriate compensation for his idea, designating the Vodacom CEO as the deadlock breaker.
Makate presented his idea for a “buzzing option” in a memo to his boss on 21 November 2000 while a trainee accountant at Vodacom.
His original idea was to send a missed call to someone’s phone without airtime. Evidence submitted in court documents shows that Vodacom acknowledged this as the impetus for Please Call Me.
However, despite the Constitutional Court ruling nine years ago, and Vodacom CEO Shameel Joosub calculating a compensation offer of R47 million, the parties could not reach an agreement.
Makate rejected the offer, labelling it “shocking” and “an insult”. He returned to court to argue for compensation of up to R126 billion, obtaining favourable rulings in the High Court and Supreme Court of Appeal (SCA).
Second round through the courts
Vodacom applied to the Constitutional Court for permission to appeal the Supreme Court ruling that was handed down on 6 February 2024.
The court had ordered Vodacom to pay Makate between 5% and 7.5% of the total voice revenue its Please Call Me product generated over 18 years, plus interest.
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It also ordered Vodacom to use Makate’s models to calculate the revenue and consequent compensation, rather than its own.
Based on Makate’s previous court papers, his models show that the capital amount alone was R9.7 billion when calculated using 5% revenue share, growing to almost R29 billion when adding interest.
When calculating the compensation based on a 7.5% revenue share, the amount balloons to R63 billion with interest. Vodacom argued that this ambiguity makes the Supreme Court order unenforceable.
However, Makate said in his responding papers to the Constitutional Court that when the SCA’s order is interpreted correctly, the payment due from Vodacom amounted to R9.4 billion.
Vodacom argued that Makate was effectively trying to make the Supreme Court’s order enforceable by vacating certain claims it potentially entitled him to.
Essentially, Makate attempted to ensure the order is read as 5% Please Call Me revenue share plus mora interest. However, Vodacom said he couldn’t do that.
“Mr Makate does not abandon the SCA’s orders in their entirety nor any particular one of its orders,” it stated.
“What he attempts to do instead is to rewrite the SCA majority’s order by ‘abandoning’ select words within an order in the hope that it reads more sensibly,” said Vodacom.
Vodacom said that Makate could not rescue the Supreme Court’s inchoate order by striking out its inconvenient portions.
Makate has been embroiled in this legal battle with Vodacom since 2008. Vodacom launched its first version of Please Call Me in March 2001 — two months after MTN introduced a similar product.
This article was first published by MyBroadband and is republished with permission