Last call for Vodacom in Makate case
In a move that will further delay a bumper payday for the inventor of the Please Call Me service, Vodacom will appeal the Supreme Court of Appeal (SCA) judgment that it must make a new offer for Nkosana Makate in the long drawn-out case.
“Vodacom is surprised and disappointed with the judgment and will bring an application for leave to appeal before the Constitutional Court of SA,” spokesperson Byron Kennedy said in a statement.
His comments came hours after the SCA ordered SA’s biggest mobile network operator to make a new offer for Makate, who has been fighting for recognition and remuneration for his idea, which he said he gave to Vodacom in exchange for a share of the revenue.
The appeal court found that CEO Shameel Joosub made a mistake in limiting the duration of the contract to five years and that he should have taken into account the actual duration of the Please Call Me service — which is 18 years, according to Makate.
Joosub had determined that
Makate was entitled to 5% of the Please Call Me revenue for five years, amounting to R47m. Makate challenged Joosub’s determination on several grounds, such as procedural unfairness, nondisclosure of documents, incorrect calculation of Please Call Me volumes, incremental revenue, effective rate and contract duration.
Vodacom has battled Makate in court for two decades over compensation for his idea, which gave rise to the service that allows a cellphone user without airtime to send an SMS to request a return call from another subscriber.
Approached for comment on Tuesday, an excited Makate said: “I am thrilled with the order, it’s much better than that of the high court.”
The Pretoria high court in February 2022 put aside the award by Joosub, which led to the cellphone giant launching an appeal to the second-highest court in the land.
The three-to-two majority judgment in the SCA found that Joosub exercised wide discretion and acted in accordance with the order of the Constitutional Court, which mandated him to break the deadlock between the parties.
But the appeal court held that Joosub should have used the Bwllfa principle — which requires a third party to use the facts that are known at the time when deciding how much money to pay for something — and considered the actual duration of the contract, which was 18 years, instead of guessing that it would have been five years.
Joosub concluded that Makate was entitled to 5% of the Please Call Me revenue for five years, amounting to R47m. This implies that the product generated R940m in revenue over five years, or R188m a year.
Assuming that the Please Call Me product generated the same amount of revenue per year for 18 years, the total revenue would be R3.4bn. Applying the 5% share. Makate would get at least R169.2m.
However, this is likely to be an underestimate, as the Please Call Me product may have generated more revenue in later years because of increased usage and inflation.