Feb 19, 2025, 01:47 PM
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Article:
Vodacom (Pty) Ltd v Makate and Another (401/2022) [2024] ZASCA 14, [2024] 2 All SA 1 (SCA), 2024 (3) SA 347 (SCA) (6 February 2024) Download original
South Africa: Supreme Court of Appeal. Vodacom (Pty) Ltd v Makate and Another (401/2022) [2024] ZASCA 14, [2024] 2 All SA 1 (SCA), 2024 (3) SA 347 (SCA) (6 February 2024) Download original files. Links to summary.
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THE SUPREME COURT OF APPEAL OF SOUTH AFRICA. Case no: 401/2022. In the matter between: VODACOM (PTY) LTD APPELLANT. KENNETH NKOSANA MAKATE FIRST RESPONDENT. SHAMEEL JOOSUB NO SECOND RESPONDENT. Neutral citation: Vodacom (Pty) Ltd v Makate and Another (Case no 401/2022) [2024] ZASCA 14 (06 FEBRUARY 2024) Coram: MOCUMIE, SCHIPPERS and MOTHLE JJA and NHLANGULELA and KATHREE-SETILOANE AJJA. Heard: 09 May 2023. Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives via e-mail, publication on the Supreme Court of Appeal website and released to SAFLII. The date and time for hand-down are deemed to be delivered on 06 February 2024. Summary: Interpretation of the order of the Constitutional Court – assessment of equitable compensation in a ‘special contract’ – test for reviewability of determination of a Chief Executive Officer (CEO) as a deadlock breaker – test as formulated in Bekker v RSA Factors ( Bekker test) distinct from the test for reviewability under the Promotion of Administrative Justice Act 3 of 2000 – requirements to satisfy the Bekker test – high court did not apply the second leg of the Bekker test – order of the high court remitting the determination to the CEO with a list of directives not sought – Bekker test amplified with the caveat in Dublin v Diner – Dean v Prince : reasonableness, fairness and bona fides . On appeal from: Gauteng Division of the High Court, Pretoria (Hughes J, sitting as court of first instance): 1 Save to the extent set out below, the appeal is dismissed with costs including those of three counsel where so employed. 2 The order of the high court is set aside and substituted with the following: ‘ (a) The decision of the First Respondent delivered on 9 January 2019, determining the compensation to be paid to the Applicant by the Second Respondent, is reviewed and set aside, (b) The decision referred to in paragraph 1 is substituted with a decision that the applicant is entitled to be paid 5% – 7.5% of the total revenue of the PCM product from March 2001 to date of judgment by the Second Respondent, together with the mora interest thereon, alternatively interest in terms of Section 2A(5) of the Prescribed Rate of Interest Act, 55 of 1975 as amended, and that the total revenue of the PCM product shall be that set out in Model 9A, 9B & 9BB submitted to the First Respondent by the Applicant (Annexure “NM30” – “NM32” to the Supplementary Founding Affidavit) © It is directed that first respondent represented by the second respondent shall bear the costs of the negotiations referred to in the Constitutional Court Judgment, which costs shall include: (i) Drafting of the submissions, (ii) Preparation for and the hearing before the first respondent, (iii) Reservation, preparation and qualifying fees of experts, involved in the negotiations and hearing on an attorney and own client scale. (d) The costs of this application are to be paid, jointly and severally, by the first and second respondents, the one absolving the other.’ Mocumie JA (Mothle JA and Nhlangulela AJA concurring) [1] This is an appeal against the judgment and order of Gauteng Division of the High Court, Pretoria (the high court). The order reads: ‘ (1) The application to strike out is dismissed with no order as to costs. (2) The determination by the CEO is referred back to the First Respondent who is obliged to make a fresh determination with the following directives: (a) The Applicant is entitled to be paid 5% of the total voice revenue generated from the PCM product from March 2001 to March 2021 by the Second Respondent, (b) That total voice revenue includes PCM revenue derived from prepaid, contract (both in bundle and out bundle) and interconnect (MTR) fees as set out in the Second Respondent’s annual financial statements as well as the information provided in Annexure 16(a)-16 ® produced by the Second Respondent (CL021-1 to CL021-21) and collated in Annexure NM29 (CL034-1 to CL034-2). (3) The First Respondent must determine the annual effective rate, which effective rate should be a blend between contract effective rate and prepaid effective rate, and in each case the respective rates are not to be less than the public ICASA effective rate: 3.1. The First Respondent must assume that the average call duration of the return calls is 2 minutes, 3.2. For the purposes of the First Respondent’s determination it must not be less than the published ICASA effective rate, 3.3. For the purposes of the First Respondent’s determination it must be assumed that the PCM count in Model 9A is correct. Model 9A is to be found on NM30, (CL035-1 to CL035-8 and CL036-1), 3.4. The Applicant is entitled to 27% of the number of PCM’s sent daily as being revenue generated by the return calls to the PCM, (4) The Applicant is also entitled to the time value of money calculated at 5% for each successive year that the Second Respondent owes to the Applicant and the capital amount or annual portion thereof, (5) That the First Respondent must finalize his determination within one month of this order, (6) Each party is to pay their own costs [in respect of] the negotiations referred to by the Constitutional Court. (7) The costs of this application are to be paid on a party-and-party scale, which costs shall include the costs of two counsel.’ [2] The long history of close to two decades between the appellant, Vodacom (Pty) Ltd (Vodacom), and the first respondent, Mr Kenneth Nkosana Makate (Mr Makate), over the latter’s invention of Please Call Me (PCM) is widely documented and needs no repeating. For purposes of the determination of the core issue in the appeal, it is necessary to restate the order issued by the Constitutional Court on 26 April 2016 (the operative order), from which the second respondent, the CEO of Vodacom, Mr Shameel Joosub (the CEO) derived his mandate. The order reads: ‘ (a) It is declared that Vodacom (Pty) Ltd is bound by the agreement concluded with Mr Kenneth Nkosana Makate and Mr Phillip Geissler. (b) Vodacom is ordered to commence negotiations in good faith with Mr Makate for determining a reasonable compensation payable to him in terms of the agreement. © In the event of the parties failing to agree on the reasonable compensation, the matter must be submitted to Vodacom’s Chief Executive Officer (‘CEO’) for determination of the amount within a reasonable time. (d) Vodacom is ordered to pay the costs of the action, including the costs of two counsel, if applicable, and the costs of the expert, Mr Zatkovich.’ (Emphasis added.) Although this order was intended to finally resolve Mr Makate’s woes, it appears not to have achieved that purpose. [3] The parties commenced with negotiations. When consensus on the amount of compensation to Mr Makate could not be reached, para © of the operative order was triggered. The determination of the CEO, in relevant part, reads: ‘ 10.25.1 2001 looking forward model: R51,5 million, 10.25.2 Employee model: R21,8 million, 10.25.3 TWL model: R38,1 million, and. 10.25.4 Revenue share model: R42,2 million. 10.26 All models other than Model 2 produce a share of the revenue generated by the PCM idea. Model 1 is what the CEO would have had to rely on back in 2001, although the charge of 15c was never implemented. Model 3 produces a result based on the actual idea of PCM for TWL customers. Model 4, which is similar to what Makate has suggested, produces a share in revenue based on incremental call revenue. I think it fair in all circumstances to average the highest two models being 1 and 4 and that is what I have decided to do on a present value basis. 10.27 I think it is clear from everything I have said that I found this to be a difficult exercise with many imponderables. No doubt it may be said that in various respects I have erred by being too generous or by being insufficiently generous. Nonetheless, my aim throughout has been to arrive at a fair outcome overall and I truly believe that on balance I have done so to the best of my abilities.’ The CEO accordingly awarded Mr Makate compensation for his PCM product in the amount of R47 million.
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Article:
Vodacom (Pty) Ltd v Makate and Another (401/2022) [2024] ZASCA 14, [2024] 2 All SA 1 (SCA), 2024 (3) SA 347 (SCA) (6 February 2024) Download original
South Africa: Supreme Court of Appeal. Vodacom (Pty) Ltd v Makate and Another (401/2022) [2024] ZASCA 14, [2024] 2 All SA 1 (SCA), 2024 (3) SA 347 (SCA) (6 February 2024) Download original files. Links to summary.
Click here for rate n date vodacom
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA. Case no: 401/2022. In the matter between: VODACOM (PTY) LTD APPELLANT. KENNETH NKOSANA MAKATE FIRST RESPONDENT. SHAMEEL JOOSUB NO SECOND RESPONDENT. Neutral citation: Vodacom (Pty) Ltd v Makate and Another (Case no 401/2022) [2024] ZASCA 14 (06 FEBRUARY 2024) Coram: MOCUMIE, SCHIPPERS and MOTHLE JJA and NHLANGULELA and KATHREE-SETILOANE AJJA. Heard: 09 May 2023. Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives via e-mail, publication on the Supreme Court of Appeal website and released to SAFLII. The date and time for hand-down are deemed to be delivered on 06 February 2024. Summary: Interpretation of the order of the Constitutional Court – assessment of equitable compensation in a ‘special contract’ – test for reviewability of determination of a Chief Executive Officer (CEO) as a deadlock breaker – test as formulated in Bekker v RSA Factors ( Bekker test) distinct from the test for reviewability under the Promotion of Administrative Justice Act 3 of 2000 – requirements to satisfy the Bekker test – high court did not apply the second leg of the Bekker test – order of the high court remitting the determination to the CEO with a list of directives not sought – Bekker test amplified with the caveat in Dublin v Diner – Dean v Prince : reasonableness, fairness and bona fides . On appeal from: Gauteng Division of the High Court, Pretoria (Hughes J, sitting as court of first instance): 1 Save to the extent set out below, the appeal is dismissed with costs including those of three counsel where so employed. 2 The order of the high court is set aside and substituted with the following: ‘ (a) The decision of the First Respondent delivered on 9 January 2019, determining the compensation to be paid to the Applicant by the Second Respondent, is reviewed and set aside, (b) The decision referred to in paragraph 1 is substituted with a decision that the applicant is entitled to be paid 5% – 7.5% of the total revenue of the PCM product from March 2001 to date of judgment by the Second Respondent, together with the mora interest thereon, alternatively interest in terms of Section 2A(5) of the Prescribed Rate of Interest Act, 55 of 1975 as amended, and that the total revenue of the PCM product shall be that set out in Model 9A, 9B & 9BB submitted to the First Respondent by the Applicant (Annexure “NM30” – “NM32” to the Supplementary Founding Affidavit) © It is directed that first respondent represented by the second respondent shall bear the costs of the negotiations referred to in the Constitutional Court Judgment, which costs shall include: (i) Drafting of the submissions, (ii) Preparation for and the hearing before the first respondent, (iii) Reservation, preparation and qualifying fees of experts, involved in the negotiations and hearing on an attorney and own client scale. (d) The costs of this application are to be paid, jointly and severally, by the first and second respondents, the one absolving the other.’ Mocumie JA (Mothle JA and Nhlangulela AJA concurring) [1] This is an appeal against the judgment and order of Gauteng Division of the High Court, Pretoria (the high court). The order reads: ‘ (1) The application to strike out is dismissed with no order as to costs. (2) The determination by the CEO is referred back to the First Respondent who is obliged to make a fresh determination with the following directives: (a) The Applicant is entitled to be paid 5% of the total voice revenue generated from the PCM product from March 2001 to March 2021 by the Second Respondent, (b) That total voice revenue includes PCM revenue derived from prepaid, contract (both in bundle and out bundle) and interconnect (MTR) fees as set out in the Second Respondent’s annual financial statements as well as the information provided in Annexure 16(a)-16 ® produced by the Second Respondent (CL021-1 to CL021-21) and collated in Annexure NM29 (CL034-1 to CL034-2). (3) The First Respondent must determine the annual effective rate, which effective rate should be a blend between contract effective rate and prepaid effective rate, and in each case the respective rates are not to be less than the public ICASA effective rate: 3.1. The First Respondent must assume that the average call duration of the return calls is 2 minutes, 3.2. For the purposes of the First Respondent’s determination it must not be less than the published ICASA effective rate, 3.3. For the purposes of the First Respondent’s determination it must be assumed that the PCM count in Model 9A is correct. Model 9A is to be found on NM30, (CL035-1 to CL035-8 and CL036-1), 3.4. The Applicant is entitled to 27% of the number of PCM’s sent daily as being revenue generated by the return calls to the PCM, (4) The Applicant is also entitled to the time value of money calculated at 5% for each successive year that the Second Respondent owes to the Applicant and the capital amount or annual portion thereof, (5) That the First Respondent must finalize his determination within one month of this order, (6) Each party is to pay their own costs [in respect of] the negotiations referred to by the Constitutional Court. (7) The costs of this application are to be paid on a party-and-party scale, which costs shall include the costs of two counsel.’ [2] The long history of close to two decades between the appellant, Vodacom (Pty) Ltd (Vodacom), and the first respondent, Mr Kenneth Nkosana Makate (Mr Makate), over the latter’s invention of Please Call Me (PCM) is widely documented and needs no repeating. For purposes of the determination of the core issue in the appeal, it is necessary to restate the order issued by the Constitutional Court on 26 April 2016 (the operative order), from which the second respondent, the CEO of Vodacom, Mr Shameel Joosub (the CEO) derived his mandate. The order reads: ‘ (a) It is declared that Vodacom (Pty) Ltd is bound by the agreement concluded with Mr Kenneth Nkosana Makate and Mr Phillip Geissler. (b) Vodacom is ordered to commence negotiations in good faith with Mr Makate for determining a reasonable compensation payable to him in terms of the agreement. © In the event of the parties failing to agree on the reasonable compensation, the matter must be submitted to Vodacom’s Chief Executive Officer (‘CEO’) for determination of the amount within a reasonable time. (d) Vodacom is ordered to pay the costs of the action, including the costs of two counsel, if applicable, and the costs of the expert, Mr Zatkovich.’ (Emphasis added.) Although this order was intended to finally resolve Mr Makate’s woes, it appears not to have achieved that purpose. [3] The parties commenced with negotiations. When consensus on the amount of compensation to Mr Makate could not be reached, para © of the operative order was triggered. The determination of the CEO, in relevant part, reads: ‘ 10.25.1 2001 looking forward model: R51,5 million, 10.25.2 Employee model: R21,8 million, 10.25.3 TWL model: R38,1 million, and. 10.25.4 Revenue share model: R42,2 million. 10.26 All models other than Model 2 produce a share of the revenue generated by the PCM idea. Model 1 is what the CEO would have had to rely on back in 2001, although the charge of 15c was never implemented. Model 3 produces a result based on the actual idea of PCM for TWL customers. Model 4, which is similar to what Makate has suggested, produces a share in revenue based on incremental call revenue. I think it fair in all circumstances to average the highest two models being 1 and 4 and that is what I have decided to do on a present value basis. 10.27 I think it is clear from everything I have said that I found this to be a difficult exercise with many imponderables. No doubt it may be said that in various respects I have erred by being too generous or by being insufficiently generous. Nonetheless, my aim throughout has been to arrive at a fair outcome overall and I truly believe that on balance I have done so to the best of my abilities.’ The CEO accordingly awarded Mr Makate compensation for his PCM product in the amount of R47 million.
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