Case Name: Vodacom (Pty) Limited v Nkosana Kenneth Makate and Another
Citation: [2025] ZACC 13
Date: 31 July 2025
This case is reportable due to its significant implications for contractual obligations and the interpretation of fair compensation in the context of intellectual property rights. The judgment addresses the complexities surrounding the determination of reasonable compensation for an idea that has generated substantial revenue, highlighting the balance between corporate interests and individual rights. The case also raises important constitutional questions regarding the right to a fair hearing and the rule of law, making it a landmark decision in South African jurisprudence.
The Constitutional Court of South Africa granted leave to appeal and upheld Vodacom's appeal against the Supreme Court of Appeal's decision regarding the compensation owed to Nkosana Kenneth Makate for his "Please Call Me" idea. The Court found that the Supreme Court of Appeal had failed to properly consider the facts and issues before it, leading to a total failure of justice. The matter was remitted to the Supreme Court of Appeal for a fresh determination by a differently constituted panel.
The key legal issues addressed in this case include: - The validity of the CEO's determination of compensation. - The implications of the Supreme Court of Appeal's decision without a cross-appeal from Makate. - The constitutional right to a fair hearing and the rule of law.
The Constitutional Court held that the Supreme Court of Appeal's judgment was flawed due to its failure to adequately consider the evidence and issues presented. The Court emphasized the importance of proper consideration in judicial decision-making and remitted the matter for a fresh hearing.
The dispute between Vodacom and Makate spans nearly two decades, centering on compensation for the "Please Call Me" idea. After a previous ruling established that Vodacom was bound by an agreement to negotiate compensation, the parties failed to reach an agreement. Vodacom's CEO determined compensation at R47 million, which Makate contested as inadequate. The High Court ruled in favor of Makate, remitting the matter for a fresh determination, which Vodacom appealed. The Supreme Court of Appeal upheld the High Court's decision but did so without a cross-appeal from Makate, leading to Vodacom's appeal to the Constitutional Court.
The legal questions the court had to decide included whether the Supreme Court of Appeal had jurisdiction to make a substituted order without a cross-appeal and whether the CEO's determination of compensation was reasonable. Additionally, the court examined whether the Supreme Court of Appeal's judgment constituted a failure of justice due to its disregard for critical evidence and issues.
The court's reasoning highlighted the importance of the duty of proper consideration in judicial decision-making. It found that the Supreme Court of Appeal had failed to adequately address the factual disputes and evidence presented, leading to a flawed judgment. The court emphasized that a fair hearing requires that all material evidence and submissions be considered, and that a judgment must provide adequate reasons for its conclusions.
The court ordered that the appeal be upheld, the Supreme Court of Appeal's order be set aside, and the matter be remitted for a fresh determination by a differently constituted panel. Each party was ordered to bear their own costs related to the abortive hearing in the Supreme Court of Appeal, while Vodacom was awarded costs in the Constitutional Court, including the costs of three counsel.
The key legal principles established in this judgment include: - The necessity for courts to provide adequate reasons for their decisions, demonstrating proper consideration of all material evidence and issues. - The importance of the right to a fair hearing as enshrined in the Constitution, which requires that parties have their disputes decided based on a thorough examination of the facts and law. - The principle that a court cannot decide issues not properly before it, particularly in the absence of a cross-appeal, as this constitutes a breach of the rule of law and the right to a fair hearing.