Makate v Vodacom (Pty) Limited (08/20980) [2014] ZAGPJHC 135 (1 July 2014)

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[2014] ZAGPJHC 135
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Makate v Vodacom (Pty) Limited (08/20980) [2014] ZAGPJHC 135 (1 July 2014)

REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE NO: 08/20980
DATE: 1 JULY 2014
NOT REPORTABLE
NOT OF INTEREST TO
OTHER JUDGES
In the matter
between:
MAKATE NKOSANA
KENNETH
......................................................................................................
Plaintiff
and
VODACOM
(PTY)
LIMITED
...........................................................................................................
Defendant
JUDGMENT
COPPIN J:
[1].
The defendant, a major cellular phone service provider, offers a
service, appropriately named the
“
Please
Call Me”
service,
which allows a cellular phone user who has run out of airtime to
request a call from another cellular phone user. This
is an action in
which the plaintiff alleges that the service was based on his idea.
He is ultimately claiming a share of the revenue
generated by the
defendant through the service.
[2]. The plaintiff
alleges that he disclosed his idea to the defendant in return for
payment in terms of an oral agreement which
he concluded with the
defendant. The relief that the plaintiff is claiming, in essence, at
this stage (in addition to costs) is
a declaratory order that the
oral agreement was entered into by the parties and for an order
directing the defendant ‘to
commence with bona fide
negotiations to determine a reasonable remuneration payable to the
plaintiff for the use by the defendant
[of] the product known as
“Please Call Me’”.
[3].
I shall deal with the pleadings and the detail of the evidence in due
course. For now, for the purposes of background, the,
facts in
matter, broadly stated, were the following. The plaintiff, who was
working for the defendant as a trainee accountant in
its accounts
department, had an idea in about November 2000, borne out of his
personal circumstances, that the use of the cellular
network could be
increased ,with a concomitant increase in profit for the defendant,
if customers of the defendant, who had no
airtime, could
“
buzz”
or
send
a message using the network to another person with airtime to call
them back, possibly resulting in those
“
buzzed”,
or
to whom the message had been sent, to call back.
[4]. The plaintiff
reduced his idea, which was essentially a business idea, to writing.
The plaintiff’s intention was to sell
this idea. He consulted
with a senior employee of the defendant in its accounts department,
one Mr Lazarus Mr Muchenje, for advice
on how to go about selling the
idea to the defendant. Mr Muchenje, a chartered accountant, who was
in charge of a section of the
accounts department where the plaintiff
was employed, advised him on whom to approach.
[5]. It is not
disputed that Mr Muchenje referred the plaintiff to another senior
employee of the defendant, Mr Geissler, who, at
the time, was a
director of the defendant and head of its product development
section. The plaintiff alleged and testified that
he and Mr Geissler,
the latter representing the defendant, concluded the oral agreement
in terms of which the defendant would take
and test the idea and if
it was successful, pay the plaintiff an amount to be negotiated
between them, but which represented a
share of the revenue generated
by the product that was to be developed based on the idea.
[6].
Electronic messages (i.e. “emails”) were exchanged
between,
inter
alios,
the
plaintiff and Mr Geissler regarding,
inter
alia
,
the use and development of the idea. It was common cause that the
defendant’s
“
Please
Call Me”
service
was launched during March 2001.
It was also common
cause that the plaintiff was not paid for this idea. The plaintiff
alleges that it had been agreed between him
and Mr Geissler that if
the product, that was to be developed from the idea was successful
the plaintiff would be paid a revenue
share. According to the
plaintiff, he proposed to Mr Geissler that he wanted 15% of the
revenue generated by the product. He testified
that he and Mr
Geissler were still to negotiate the amount and that it was agreed
that in the event of them not being able to settle
on a figure the
chief executive officer of the defendant, who then was Mr Alan Mr
Knott-Craig, would determine the amount. The
plaintiff alleges that
the actual amount was never agreed upon and that he got to learn at
the time from Mr Muchenje that Mr Knott-Craig
had told Mr Geissler
that the plaintiff was greedy and would get nothing.
[7]. It is common
cause that about two and a half years after the product was developed
and launched the plaintiff terminated his
employment with defendant
and went to work elsewhere. After about four years from that date the
plaintiff started to pursue his
claim by way of transmitting various
letters of demand to the defendant and in July 2008 he instituted the
action that culminated
in this judgment.
[8]. The defendant
denied entering into an agreement with the plaintiff, either on the
terms alleged by the plaintiff, or at all.
It denies further that Mr
Geissler (or Mr Muchenje) had actual authority to bind it, or that
they were ostensibly authorised to
do so. The defendant,
ultimately,contends that in any event, on the facts, the plaintiff’s
claims had prescribed. The issue
of prescription was dealt with at
the tail end of the proceedings and more particularly, at the
conclusion of argument in the matter.
THE EVIDENCE
[9]. I repeat below,
briefly, the pith, or some aspects of evidence given by each of the
witnesses. I do not propose to repeat the
detail of the evidence
given by each of them, although I have taken into account all of the
evidence, including the detail, in
reaching my conclusions.
[10]. The plaintiff
testified himself and called Mr Muchenje and an American computer
science and telecommunication expert, Mr Zatkovich,
as witnesses. An
erstwhile attorney of the plaintiff, Mr Masilo, was called by the
plaintiff, after the defendant had closed its
case, to give evidence
on an issue relating to the alleged cancellation of the agreement,
which was an issue, which point the defendant
raised and pursued
strongly at some point during the trial, but subsequently, appears to
have abandoned. The defendant only called
Mr Knott-Craig as a
witness.
[11].
The plaintiff criticised the defendant for not calling Mr Geissler,
Mr Mtembu (the managing director of the defendant at the
time of the
launch of the defendant’s
“Please
Call Me”
product)
and for not calling Mr Sotiriades, who was also employed by the
defendant and who the defendant had indicated, by notice,
was to give
expert evidence, in effect, to counter that given by the plaintiffs
expert, Mr Zatkovich. I shall deal with the question
of the failure
to call witnesses in due course.
[12].
In brief, Mr Zatkovich’s testimony covered the nature of the
defendant’s “
Please
Call Me"
product,
including the infrastructural support provided by the Global System
for Communications
(“GSM")
in
South Africa; its relationship to the plaintiffs
“
buzz”
idea;
the meaning an explanation of various technical terms; pricing
comparison of voice and Short Message Services (“SMS”);

the viability pf the plaintiff’s idea; similar services
provided by other service providers and how other businesses would

reward for such a concept. The essence of his testimony, however,
concerned the novelty of the plaintiff’s idea. He testified
in
that regard that the novelty vested in the business model proposed
and not in the technical aspects that went into creating
the service
proposed by the idea.
[13].
Mr Zatkovich holds academic qualifications in computer science and
has, for a period of about 12 years, given expert testimony
in the
United States of America and internationally in,
inter
alia,
patent
litigation and contractual disputes which involve computer software.
[14].
I shall now transverse at this juncture all the definitions of
various technical terms given by the witness and will mention
them in
the course of judgment if and when necessary. Mr Zatkovich testified
inter alia
that
the acronym “
USSD
”
stands
for
“
unstructured
supplementary service data".
It
refers to single packet transmissions, usually from mobile devices to
a central computer, as opposed to something like a ‘Short

Message Service’
(“SMS”),
which
is a single packet message from a cellular phone, usually to another
cellular phone. The USSD messages were designed to enable
one to
communicate with the interna! infrastructure of a telephone company,
for example, to enable a subscriber to send messages,
or to divert
his calls to another number when ordered to report service problems
experienced with his cellular phone.
[15].
The witness testified,
inter
alia,
that
the term
“
VAS
”
stood
for “
Value
Added Service”.
Of
the earlier value added services, within the field of telephony, were
services like call- forwarding, call- waiting or call-blocking.
At
present there are many more value added services available through
telecommunication operators. In the case of mobile, or cellular

phones, services offered include SMS and MMS services
(“Multi
Media Services"),
such
as the ability to send photos or videos electronically. The witness
opined that the defendant’s “
Please
Call Me”
service
was also a VAS. The entity or person that provides the VAS is
referred to as “
the
Value Added Service Provider
3
'.
It
could be the carrier itself, such as the defendant in relation to the
“
Please Call
Me”
service,
or a third party that provides a service, such as a web service, or
music or multimedia, from a web service.
[16].
The witness testified that a
11
WASP’
refers
to a “
Wireless
Service Provider”,
which
traditionally was the telephone carrier itself. The witness opined
that in the case of the
"Please
Call Me”
product,
the defendant was the WASP.
[17].
The witness also explained what was meant by an
“
IVR
system”.
It was not disputed that the defendant’s main competitor in
South Africa, namely MTN, provided a similar service
to th
e
“Please Call Me”
service,
but its service was based on an IVR system The
“
IVR”
stands
for “
Interactive
Voice Response”.
The
witness said that an example of this was the automated voice menu
presented to you when calling an institution, such as a bank
or
insurance company to query something, a voice would come on, saying
“press 1 to check your account balance” or "press
2
to talk to customer services”, etc. To initiate a message in
such a system, an initiation mechanism has to be used. In
the case of
the system of MTN, they initiated the message by having the user call
an IVR system and then enter a key code and then
enter the
recipient’s phone number in order to initiate the
“
Please
Call
Me”.
The witness explained that this was more cumbersome and expensive
than the defendant’s
“
Please
Call Me”
system
which utilised the USSD message system.
[18].
Mr Zatkovich opined that the plaintiff’s idea, encapsulated and
explained in a memorandum that the plaintiff submitted
to,
inter
alios,
Mr
Geissler, was a patentable idea, because, in the memorandum, the
problem that was to be solved was addressed, the solution was

suggested, and the objective to be achieved, was stated. According to
the witness, the problem the plaintiff identified was that,
at the
time, persons with no airtime on their cellular phones could not send
a message to someone else with a cellular phone to
call them back.
The solution, as plaintiff saw it, although not in technical terms,
was to enable someone with a cellular phone,
but no airtime, to
initiate a call from a receiver by means of “
buzzing
This
meant that the former who had no airtime, could at least buzz (dial)
the latter and allow the latter to see the phone number
of the
former. This method was one way of initiating a call. Other methods
were the USSD and IVR methods. The objectives identified
by the
plaintiff, were to increase revenue resulting from the call back and
getting cellular phone subscribers, who otherwise had
no airtime, to
make calls. The witness explained further, that the plaintiff’s
idea was cost-efficient and held great benefits
for a telephone
carrier such as the defendant.
[19].
According to Mr Zatkovich, the defendant utilised the plaintiff’s
idea, but used a USSD method. One reason for using
that method was
because USSD messages are allowed to go into the Telkom system,
regardless of whether the user has airtime. USSD
messages were
generally used for internal maintenance and service messages. In
short, a USSD message, which includes Party A and
Party B’s
phone numbers, gets sent from the cellular phone of Party A (i.e. the
person with no airtime) to the internal USSD
server, which then
extracts Party A’s and Party B’s phone numbers, composes
a message in the form of an actual text
message, which reads “
please
call Party A’s phone number”
(and
gives the number). This message is then sent by the USSD server to
the SMS server which causes Party B to receive the message.
[20].
The witness explained that if Party B, in response, calls Party A,
the service provider, in this instance the defendant, earns
revenue
from that call. Even if the return call is made by party B from a
landline, i.e. in the case of South Africa, a Telkom
line. The amount
earned by Vodacom from the terminating call of Party B is greatest if
Party B made a call from a cellular phone
subscribed to the
defendant. The witness further testified concerning revenue: that it
was possible to track the cost and the revenue
generated by such a
service. In the case of the “
Please
Call Me”
service
a number of
“
call
backs’’
received
for every
“
Please
Call Me"
message
could be tracked by means of cross-referencing and by setting a time
for a call back although this would not be completely
accurate.
[21].
With reference to a patent registered in the United Kingdom by Orange
Personal Communication Services (Pty) Ltd
(“the
orange patent')
Mr
Zatkovich testified that while the plaintiff’s idea (or
invention) seemed similar to that patent on the face of it, there

were material differences in the detail between the two. The
objectives were also different The purpose of the “orange
patent"
was to allow an international traveller to avoid charges
when making calls while travelling abroad. Although the traveller
calls
from outside the country it is as if he called from within the
country. He still pays for the call, but at a lower rate. In the
case
of the plaintiff’s idea, a subscriber without airtime (i.e.
Party A) incurs no charges in the process of getting the
other party
to call him. Party B incurs charges in respect of the responding
call.
[22]. The witness
also described the differences between the patent of MTN and the
plaintiffs idea. The MTN patent, according to
the witness, was
focussed on a shortcut method of sending SMS messages from one person
to another, by way of coded messages through
an IRV system.
[23].
The plaintiff testified about his interaction with Mr Mr Sotiriades
and in particular, with regard to the preparation of the
experts’
minutes. As pointed out earlier, Mr Mr Sotiriades was not called as a
witness. Mr Zatkovich also testified that
the objectives of the
plaintiff’s idea were met by the defendant’s
“
Please
Call Me"
service.
The witness explained that the term “
buzz
”
in
South Africa, refers to a missed call, but has a definite meaning in
the United States and Europe.
[24].
Mr Zatkovich explained that before the
“
Please
Call Me”
service,
if a party with a cellular phone and no airtime, wanted to be called
he could not call (or SMS) Party B and ask Party B
to call him back.
The witness explained that the defendant’s technical solution
in using the USSD system was a way of avoiding
traffic on the voice
network, and that while the plaintiffs idea or proposal did not focus
on technical aspects, it contained a
business objective. His idea was
that the service should be focused on a particular market, namely,
that of people with prepaid
cellular phones who were out of airtime.
The basic difference between the defendant’s idea (proposal)
and the MTN patent
was that the former identified a particular market
and a particular problem that needed to be solved. The MTN patent, on
the other
hand gave no indication of what market it was directed at.
The defendant’s
“
Please
Call
Me”
product eventually resolved to target people who had no airtime.
[25].
The witness also testified concerning the meaning of a
“
Dutch”
or
“
Scotch"
call.
He said that this was a well-known method of getting a message to
somebody else, but it was not a business model. He went
on to
describe the plaintiff s idea as “a
genius
'’
idea and that it was one of five great South African innovations of
this decade because it targeted the poor. The witness
testified that
the term
“
soft
locking
”
,
in telecommunications parlance, meant that a subscriber who ran out
of airtime cannot use his or her cellular until airtime was
loaded.
[26].
Mr Zatkovich also testified that in 2001 MTN and the defendant were
the key players in the cellular phone industry in south
Africa and
must have been constantly monitoring each other’s products. He
said that someone must have seen the value in the
business model
proposed by the plaintiff and that the defendant found the correct
technical solution. The defendant and MTN followed
a model in terms
of which they initially allowed free access to a service and once
users became
ll
hookecf’
on
the service, they would then charge a fee for the service.
[27].
Mr Muchenje testified that he was a chartered accountant. He worked
for the defendant from January 1998 to March 2001, after
which he
joined Vodacom International, At the time when he testified, he was
residing in the Isle of Wight in the United Kingdom.
When he was
employed at the defendant he first worked as a Financial Manager and
then became the Executive Head of Income Financial
Control. He knew
the plaintiff, who, during the period November 2000 to March 2001,
was working as a subordinate in the witness’s
section and
particularly, as an accountant in the Income Finance Control
Division. Mr Muchenje testified that the plaintiff's duties
included
dealing with Value Added Service Providers (i.e. VAS providers);
making payments to them for their services. One of such
a provider
was a Mark Attieh who owned a business called
“
Smart
Calf’
and
co-owned another service provider business called
“
Cointef’.
Mr
Ahmed Ayob was the Managing Director of Cointel. He previously worked
for the defendant in its Product Services Department In.2000
to 2001
there was a product called
“
Sigi
Auto Charge”,
which
was designed to help the defendant with payments made to it by
community franchisees. When the franchisee made the payment
at a bank
the
'
Sigi
Auto Charge
’
enabled
the defendant to become aware of the payment quicker; it was enabled
to identify and credit the franchisee’s account
quicker and in
a more orderly fashion. Before that product was employed, the
defendant had difficulties linking a deposit (i.e.
a payment) to a
particular franchisee, because banks were not capturing the details
of the franchisee completely. There was also
a problem with fraud, in
particular, persons were falsifying deposit slips. The product
“
Sigi
Auto Charge"
resolved
the problem by allocating a virtual credit card number to each
customer which had to be captured by the bank when the customer
made
a deposit. Based on those numbers the defendant was able to allocate
the customer and the account. According to the witness,
Cointel was
an independent VAS, which shared revenue with the defendant, possibly
on a 70/30% basis, but the amount of revenue
was significant and it
was on a continuous payment basis.
[28]. The witness
testified that community franchisees had booths with cellular phones
from which members of the public could make
calls. The franchisees
would buy airtime from the defendant at a specific price and charge
customers making calls from those phones
a slightly higher price than
would have been charged by Vodacom.
[29].
Mr Muchenje testified that in November 2000 the plaintiff came to see
him in his office with the
“
buzzing
option
”
idea
and sought the witness’s opinion on various aspects pertaining
to the commercial exploitation of the idea. The plaintiff
wanted to
know whether he could make money from his idea and, if so, whether he
had to do business with the defendant or with an
independent value
added provider or even join the defendant’s competitor, MTN? Mr
Muchenje stated that he advised the plaintiff
to give the defendant
preference, because he was an employee of the defendant and because
the defendant had the biggest network
which would ensure greater
success with the idea. He testified that the plaintiff wanted to be
compensated for this idea, but he
(i.e. the witness) was not able to
give the plaintiff an answer regarding compensation and discussed the
matter with Group Products
Development and, in particular, with Mr
Geissler, including the fact that the plaintiff had an idea that he
wanted to give to the
defendant in exchange for a reward
commensurate, or proportionate to the successful use of the idea.
[30]. Mr Muchenje
testified that the defendant showed him written a memorandum, which
was addressed to the witness, and for also
addressed for distribution
to Mr Knott-Craig, the CEO of the defendant at the time, Mr Andrew
Mtembu, the Managing Director of
the defendant at the time, Mr Leon
Krause, the Group Finance Director of Vodacom at the time and Mr
Johan van der Walt, the Executive
Head of Financial Management of the
defendant at the time, who also dealt with new products, business
case analysis and reporting.
According to Mr Muchenje, he and the
plaintiff discussed the memorandum and he advised the plaintiff that
the document was to pass
through the Group Products Development
Department (“Products Development”) first, before it
could go to the Group Executives,
that is the Managing Director and
the Chief Executive Officer, because if it was not passed by Products
Development, there would
be no need for the Managing Director and the
Chief Executive Officer to see the memorandum. According to Mr
Muchenje, he suggested
other persons to whom the memorandum had to be
distributed and as per the amended memorandum, namely Mr Geissler, Mr
Van der Watt
and Mr Xolani Mthabela. According to Mr Muchenje, the
plaintiff amended the distribution list on the memorandum in
accordance with
his advice.
[31].
Mr Muchenje testified that he had a discussion with Mr Geissler, who
was amenable to remunerating the plaintiff for his idea,
but could
not decide on the amount or percentage. He was also not certain at
the time whether the idea was workable or whether
it was going to
pass Product Development. Mr Muchenje’s stated that he gave the
plaintiff feedback of this discussion with
Mr Geissler arid on that
basis the plaintiff agreed to release the idea to the defendant. The
witness identified an email that
he had sent to the plaintiff
congratulating him for coming up with the
“
buzz
/ofea”,
when he had heard that the defendant was going to introduce a
product, similar in concept to the
“
buzzef
project.
Mr Muchenje stated that he got information of what the defendant was
going to do, from two sources, namely the Financial
Executive
meetings where Mr Van der Watt (the Executive Head of Financial
Management) would have talked about it and from Mr Geissler,
with
whom he had a good relationship. In an email from MrGeissler, which
was sent to the plaintiff and copied to Mr Muchenje, Mr
Geissler
said:
“
I
will keep you guys in the loop",
implying
that he would keep them updated in respect of the development of the
“Please Call Me” product.
[32].
The witness testified
inter
alia
that
he does not remember seeing at the time the defendant’s product
description document. Vodacom (Pty) Ltd and Vodacom Services
Provider
Company were, at that stage, separate companies. The defendant was
the network and the VSP. The witness remembered receiving
an email
which was sent on 9 February 2001 from Mr Geissler, which was also
addressed to all people working at Vodacom at various
locations and
to the VSP staff. The email was about a new product to be launched
the weekend by Vodacom. The email reads:
“
Dear
Overall Good Staff, Vodacom is launching a new project this weekend
(Sunday Times) which will hopefully stimulate all traffic
on the
network as well as assist some of our subscribers who do not have
balances on their Vodago accounts to be able to communicate
with
friends and family. This service will be free until the end of the
year and then will go to 15c per transaction. Kenneth Makate
from our
Finance Department came up with this idea a few months ago and
brought it to the Product Development Division. We wish
to thank
Kenneth for bringing his idea to our attention
.”
[33].
Mr Muchenje testified,
inter
alia
,
that in March 2001 he left the Division (i.e. Vodacom (Pty) Ltd)
where he was working. He had occasion to discuss with the plaintiff

the question of remuneration for his idea. The plaintiff would
occasionally, whenever they met, ask the witness about remuneration.

The witness testified that he spoke to Mr Geissler about the
remuneration. Mr Geissler was amenable to speak about it, but at the

time of the discussion, it was not known whether the plaintiff’s
idea was going to be a success or not. Mr Geissler was accordingly

not willing to commit to remuneration of 15% (i.e. in the Rand), but
was prepared to discuss the figure depending on the success
of the
idea. Mr Muchenje testified that the plaintiff had raised the amount
(about 15%) with him when they first discussed the
idea and the two
of them discussed the rationale behind that amount. He testified
further, that the plaintiff’s idea was
developed into a
commercially feasible product; that he subsequently, after the
successful launch of the “Please Call Me”
product, spoke
to Mr Geissler about remuneration for the plaintiff and Mr Geissler
informed him that he had discussed the matter
with Mr Mr Knott-Craig,
the CEO, who thought that the plaintiff’s demand was exorbitant
and had said that the plaintiff was
greedy and would get nothing.
[34].
Mr Muchenje testified that while he was at Vodacom it was a dynamic
and growing company and that Mr Knott-Craig was a forceful
and
dynamic person. In those times at Vodacom, because of the pace of
development, a lot of reliance was placed on trust because
certain
things had to be done urgently. Because of pressure
“
to
get the market earl/,
before
formal agreements could be concluded, the parties involved, proceeded
on the basis of trust. The witness expressed himself
thus: “
Sometimes
one could not get through all the paperwork on time, but the
imperative was to be first at any cost
”
The
witness gave actual examples of this. He mentioned instances where he
got calls from Mr Attieh requesting payment for something
that he
(i.e. the witness) did not even know about and when no agreement or
deal was yet in place. The witness would then enquire
from the Sales
Director (Mr Blackbird) why there was no agreement in place. At times
he would know the reason, but at other times
Mr Blackbird would first
consult Mr Knott-Craig about the matter. According to the witness,
service providers were paid without
a contract being in place. He
mentioned
“
Smart
Calf',
which
was owned by Mr Attieh, as one such service provider. He testified
that even if he was not able to make payment because there
was no
contract in place he would be instructed by Mr Knott-Craig to
nevertheless make the payment.
[35].
Mr Muchenje testified that in 2001 he received the Chief Executive
Officer’s award which is given to persons who have
exceeded
what was expected of them in respect of their work. He testified that
“
Talk Time"
is
an internal newsletter that was issued from time to time by the
defendant. The witness read a portion from the March 2001 edition
of
“
Talk Time”
pertaining
to the plaintiff and confirmed the correctness of what was stated
there and related that he also shared the sentiments
expressed in the
article concerning the plaintiff.
[36]. A portion of
the newsletter which he read from was accompanied by a portrait
photograph of the plaintiff, the text states:
“
Vodacom
has launched a new product ‘call me’, thanks to Kenneth
Makate from our Finance Department Kenneth suggested
this service to
the Product Development Team, which immediately took up the idea.
‘
Call
me’ is a world first and allows Vodago prepaid users to send a
free text message to other Vodacom customers requesting
that they
call them back. The main aim of this product is to allow Vodago users
who do not have balances on their accounts to keep
in touch with
their families and loved ones. The service is also available to
contract customers.
HOW IT WORKS
You send what is
called a USSD message to another person asking the person to call you
back. The other person, to whom ‘Call
Me
'
is sent,
must have a Vodacom cellular phone but can use any phone to return
the call.
The
USSD command is *140*082 last seven digits
#
(Send or Call).
A standard SMS
will be sent to the other person asking that person to ‘Call
Me’with a contact number showing.
In
a message to staff, Andrew Mthembu, Managing Director of Vodacom
,
said he was
impressed with the product and the fact that the idea came from a
member of staff. ‘Most impressive to me was
the fact that the
idea of the product came from one of our staff members whose job is
not related in any way to product development
This led me to ask
myself one question:
What would happen
in this company if we were all to come up with workable solutions to
our company’s problems like Kenneth
did? Surely as a young
company that we are, there are many areas that we have not managed to
perfect yet, be it in Finance, IT,
Operations and so forth’,
Andrew said.
‘
Call
Me’has been a big success. On the first day in operation about
140000 customers made use of the service. It will be free
until
December 31 this year and thereafter cost users 15 cents per
transaction."
[37].
Under cross-examination Mr Muchenje testified,
inter
alia,
that
he could not remember approving the plaintiff’s appointment to
the Finance Department. He testified that he reported
to Mr Willem
Swart, Finance Director of Vodacom (Pty) Ltd (i.e. the Group), at the
time. In 2001 Mr Van der Watt was Head of Finance
Management which
was one of the sub-departments under Mr Swart. Mr Muchenje gave
evidence relating to the structure and the directorships
at Vodacom
Group (Pty) Ltd and its relation to its subsidiary, Vodacom (Pty) Ltd
(i.e. the company that operated the network).
Cross-examination was
quite lengthy. I will discuss aspects of it in the course of
evaluating the evidence and in the discussion
of the issues including
the issue of authorisation. At this stage I will mention some salient
aspects.
[38].
Mr Muchenje conceded that there was no mention or record of the
defendant having made a promise or having given an undertaking
to pay
any remuneration to the plaintiff and that the
“
high
watermark
”
of
the emails was that Mr Geissler promised that once the product was
launched and successful he would speak to Mr Knott-Craig about

remuneration. Mr Muchenje was adamant that the plaintiff had raised
the issue of remuneration with him at the outset, when he came
to him
with the memorandum and that the plaintiff also mentioned
remuneration at the rate of 15% (in the Rand) of the revenue
generated through use of the product that was to be developed from
the idea. Mr Muchenje opined with reference to the emails, that,

given the benefit of hindsight, Mr Geissler acted in bad faith. He
also gave the opinion that although he would never know definitely

that somebody was responding to a
“
Please
Call Me
”
message,
rules could be made establishing criteria that would enable one to
treat a particular ‘call back’ as being
in response to a
‘Please Call Me’ message. He did not concede that the
analogy that was drawn between the plaintiff's
position and revenue
sharing with service providers, was not valid. He testified that if
Mr Geissler had told him before that the
defendant was going to take
the plaintiff’s idea, but not pay him for it he (i.e. Mr
Muchenje) would have advised the plaintiff
to take his idea
elsewhere. According to Mr Muchenje, Mr Geissler had indeed told him
that the defendant would pay the plaintiff
for the use of his idea,
although the amount still had to be agreed.
[39]. Mr Muchenje
described Mr Geissler and his relationship with him in the following
terms:
"...
I could pick up
the phone and call Philip Geissler Philip Geissler at that time was
feared in Vodacom, he was the security guy,
checking on cameras on
people etc,. So he was the guy that was checking to make sure
everything is fine and so on, so people are
afraid of him. I
was
one of the few
people that would speak to him. So I guess Mr Makate also
was
a
little bit
intimidated, but I spoke with Mr Geissler myself, yes."
[40].
According to Mr Muchenje, Mr Geissler promised to revert concerning
the amount of the remuneration, but agreed to the use
of the idea for
payment. Mr Geissler promised that once the product was tested and
proved to be commercially viable, he would come
back and finalise
with the plaintiff the issue of remuneration. According to Mr
Muchenje, if Mr Geissler had not made the promise
the plaintiff may
have taken his idea elsewhere, or may have become a WASP
('Wireless
Application Service Provider
3
’)
himself,
or may have gone into partnership with someone like Mr Attieh. Mr
Muchenje testified that the plaintiff had been told that
he should
not discuss his idea with anyone else.
[41]. The witness
testified that he advised the plaintiff not to go to the top
executives first with the memorandum, but to go to
those as reflected
in the changes made to the original memorandum, in other words, to
deal with the Products Department first.
He said that he was not
present when the plaintiff discussed the details with Mr Geissler,
but he had spoken to Mr Geissler before
and Mr Geissler had indicated
that the product (i.e. using the idea) had to be developed and tested
before the amount of the payment
could be finalised. He said that he
knew that it was a new product and that he got guidance from Mr
Geissler who told him about
the technical and commercial viability
tests. The witness further testified that he conveyed what Mr
Geissler had told him to the
plaintiff. He could not remember whether
he had one or two meetings with the plaintiff concerning the report
back from Mr Geissler
Mr Muchenje further testified that after the
initial meeting with the plaintiff he spoke to him numerous times
about progress.
He had related to the plaintiff what Mr Knott-Craig
had allegedly said to Mr Geissler concerning the plaintiff's request
to be
paid 15% of the rand on a revenue sharing basis. The witness
was, however, of the view that Mr Geissler had acted in bad faith in

failing to negotiate in good faith with the plaintiff about
remuneration for the use of the idea. He testified that he did not

know what happened between Mr Geissler and Mr Knott-Craig, but it
could not be negotiation in good faith to say that the plaintiff
was
getting nothing.
[42]. According to
this witness, Mr Geissler was representing the defendant at all
times. He was of the view that if someone came
to the defendant with
a new product he would have had to see the Product Development
Director (someone in the position of Mr Geissler)
who would have had
to get the necessary approvals. The person who came with the product
did not have to get those approvals himself.
In the case of the
plaintiff, it was not for the plaintiff to get the approvals for the
acceptance of his idea by the defendant.
But after Mr Geissler had
approved it, it was for Mr Geissler, to take the matter further and
get the necessary approvals.
[43]. Mr Muchenje
was adamant that Mr Geissler was the correct person to approach with
the idea. He is the one that could say whether
a product could be
developed from the idea, and whether it was going to work or not and
that there was no point in talking to Mr
Knott-Craig about it first.
According to the witness, Mr Geissler said that you only go for Board
approval if the product is shown
to be technically and commercially
viable.
[44]. Mr Muchenje
testified further that he knew that if Mr Geissler did not have
authority to approve, he would get the necessary
approval and
permission and revert to the plaintiff. He also testified that he
knew that Mr Geissler had no authority to make promises
for
remuneration and that he had to get approval. The witness denied
misleading the plaintiff about that According to the witness,
it was
quite normal at the defendant for certain individuals to be given
delegated authority to do certain things. On each occasion
they have
to consider whether they have the authority and if they do not have
the authority, to take the matter to those with the
authority, to get
the required approval. The witness testified further that he could
not question Mr Geissler when he made the
promise to him, because Mr
Geissler was a Director of the defendant.
[45]. Still dealing
with the issue of authority, the witness insisted on seeing the
written delegation of authority. He testified
concerning the
procedure when a product enters Vodacom. According to him it does not
first go to the CEO as the final signatory.
There is a process with
cumulative steps. The memorandum of the plaintiff was addressed,
after discussion with the witness, to
the relevant persons who then
had to see to it that the necessary approvals were obtained and that
the formalities, that were required,
were complied with.
[46].
Mr Muchenje conceded in cross-examination that it was historically
correct that Vodacom had never entered into revenue sharing

agreements with employees, but stated that it does not mean that the
defendant was entitled to say that it would not negotiate
with the
plaintiff after having exploited his idea and then, as justification
for not negotiating with him, raise the fact that
the plaintiff was
its employee. The witness compared the situation with that of Mr
Knott-Craig’s son who owns a company,
“
Cell-Find
"
and co-owns the company
“
Cointel'.
According to Mr
Muchenje, the defendant’s resources were utilised to assist in
developing or bringing the products, offered
by those companies, to
the market. The witness pointed out that when the plaintiff made his
proposal to Mr Geissler, it was not
as an employee and that Mr
Geissler’s email of 6 February, which was addressed to the
plaintiff, also reflects that understanding.
[47].
During his re-examination the witness asked after the written
delegation authority of Vodacom (Pty) Ltd (Issue 5) and pointed
out
with reference to that document that the first person who needed to
approve new products and services was the Group Director
for new
products and services, who, at the relevant time, was Mr Geissler.
The witness testified that it was then Mr Geissler’s

responsibility “fo
walk
it through right up to final approvaf’.
He
pointed out that the delegation of authority document dealt with in
his cross-examination did not bring out that aspect. The
witness
testified that, accordingly, he correctly advised Mr Makate to talk
to Mr Geissler. With reference to the Issue 5 delegation
document, he
pointed out that when it came to commitments different people may
have had to approve, depending on the estimation
of the revenue, or
impact that the contract would have. Thus, if Vodacom (Pty) Ltd
wished to enter into a service provider agreement,
the approval of
the Group Director of Marketing, the Group Finance Director and the
Managing Director would have been required.
Mr Geissler, who was in
charge of products for the whole group, would also have had to look
at the product. With reference to the
approval of the
"Please
Call Me"
product,
the witness testified that the launching of the product indicates
that it was approved by the relevant persons, including
the Chief
Executive Officer at the time, Mr Knott-Craig.
[48].
According to the witness, a service whereby you identify an incoming
call, is a ‘value added service’, as would
be an itemised
billing service. An SMS service would also be a value added service.
1
The witness testified that the service provider did not provide a
value added service, but that those services were provided by
the
network operator. By analogy, the plaintiff could be compared to a
Value Added Service Provider and not to a traditional service

provider. The plaintiff’s work at Vodacom did not entail
product development, in the course of further cross-examination
on
the Issue 5 delegation document, it was put to the witness that the
plaintiff’s claim was not within the approved budget
and ought
to have been dealt with as one falling outside the approved budget.
The witness did not agree with this proposition and
said that it had
to be determined whether one was talking about revenue, or about
expenses claimed, or about the claim that the
plaintiff was making to
be paid. The witness testified that the new product would not have
been provided for in the budget and
that the plaintiff’s claim
was not in the budget for the year 1 April 2001 to end March 2002.
[49].
The plaintiff testified,
inter
alia,
that
after completing his matric he managed, in 1995, to secure a position
as a trainee accountant at Vodacom and was based at its
head office
in Sandton. In 2000 he was studying towards his Bachelor of Commerce
(Honours) degree and was serving his articles
with Vodacom. His
permanent employment contract with Vodacom was concluded in 1998. In
about the years 2000 and 2001 the plaintiff
worked in the incentive
section which was responsible for making payments, or giving
incentives to service providers. This section
was part of the Income
Financial Control Department.
[50]. According to
the plaintiff, his work included ensuring that a complete deal
register was maintained. This involved co-ordinating
with the Sales
Department. Payments would be made as per instruction on the deal
registers. Prior to that and as trainee accountant,
he was assigned
to the Community Services Department where his main job entailed debt
collection from community service providers
who bought airtime from
Vodacom and then resold it. These service providers took 33% and
Vodacom kept 67% of the revenue. The plaintiff
testified that he
assisted the service providers with their banking.
[51]. The plaintiff
testified that he had met Mr Knott-Craig in their coffee cell in his
early days at Vodacom. He testified that
Mr Geissler was the Director
of Product Development and that Mr Muchenje was the most senior
person in the Financial Income Control
Department.
[52].
According to the plaintiff, the basis on which Vodacom (Pty) Ltd
(i.e. the network) did business with service providers, was
on
revenue sharing basis. The service providers got a percentage of the
revenue generated, i.e. there was a revenue split between
the service
providers and Vodacom. The plaintiff mentioned companies such as
“
Smart Calf'
and
“
Diloran"
and
the
“
Sure
Group
”
and
dealers that were involved with prepaid services, as examples of
service providers that did business on such a revenue sharing
basis.
According to the plaintiff, Vodacom would invoice them for its
portion of the revenue share and they service would pay that
amount
to Vodacom. Cointel was a service provider that developed the product
"Auto Recharge”. According to the plaintiff,
this company
also enjoyed payment in the form of a revenue share. The plaintiff
also gave examples of so-called WASP’s and
the services they
provided.
[53].
Regarding his idea, the plaintiff testified that he came up with the
“
buzz"
idea
late in November 2000. He ascribed its origin to a long distance love
relationship that he had with the person who was now
his wife. She
was a student in Cape Town at the time; had limited finances and
could not call him because she could not afford
to buy airtime. He
testified that as a result he ended up calling her most, if not all
of the time. When he asked her why she was
not calling him, she would
say that she was not able to
“
buzz"
him.
He testified that the term
“
buzz"
was
used in the townships. You would call the person and allow the phone
on the other side to ring twice and then cancel the call.
The person
who was being called would see that there was a missed call from a
particular number, or person, and would then call
back.
[54].
The plaintiff explained that the
“
buzz”
then
gave him the idea. He thought along the lines of, what if his
girlfriend could
"buzz”
him
even though she did not have airtime? He realised that it was not
only his girlfriend, but friends, family, the unemployed and
members
of the community at large who could not get contracts with cellular
phone companies such as the defendant, or who experienced
“
soft-locking",
that
were being affected. He said that he was suggesting with his idea a
means (by
“
buzzing")
of
conveying a message to the other party who could then respond by
calling back. He saw that this would enable the use of unused
sim
cards (i.e. for lack of airtime) and would generate revenue by the
return call. According to the plaintiff, there was a rise
in unused
Vodago sim cards and sim cards in the market generally, and he saw
this as an excellent opportunity. He realised that
there was a
potential of substantial interconnect fees being generated by the
return calls
or
"call backs".
The
essential aspect of his idea was that the person with no airtime
should nevertheless be able to send a message to the other
person to
"call back’
and
that
the message should not be charged for. The plaintiff was of the view
that any attempt to charge for the message sent would
defeat the
object of his idea.
[55].
The plaintiff testified that early one morning, on or about 21
November 2000, he composed a memorandum setting out his idea,
its
objectives, etc., and took it to work with him. In his mind he had no
doubt that his idea would result In “
big
moneý
.
He wanted to keep his options open, in case the defendant did not
agree to accept his proposal. He was then going to go to a
competitor, or raise capital to develop the idea himself. The
plaintiff testified that this meant financial security for him. He

said
“
This
was my ticket to long-term, i mean it was, I do not know, it was, I
was thinking that I am now done, I do not have to work
ever in my
life and I will focus on this ... I have arrived, definitely
.”
[56].
The plaintiff explained that Mr Muchenje was like a mentor to him,
giving him useful advice not only about accounting, but
business as
well. They discussed many things and he trusted Mr Muchenje and that
is the reason why his memorandum was also addressed
to Mr Muchenje.
According to the plaintiff, on 21 November he walked into Mr
Muchenje's office holding the memorandum close to
his chest. He sat
down and explained to Mr Muchenje the idea and his business proposal.
He also told Mr Muchenje of his options.
According to the plaintiff,
he told Mr Muchenje that he needed “to
strike
a deal, an ongoing revenue share dear
and
“
if that
[was]
not acceptable
”
to
then exercise his other options.
[57]. The plaintiff
testified that they discussed the pros and cons of his idea. He
thought it was the following day that Mr Muchenje
informed him that
he had spoken to Mr Geissler about the idea and the proposal; that Mr
Geissler was keen and had also stressed
that the memorandum must
first be sent to the Product Development Department. This resulted in
the amendment to the addressees
on the original memorandum, including
the crossing out of Mr Muchenje’s name and the addition of the
name of Mr Xolani Mthabela,
who was then working in Product
Development. The plaintiff explained that his original intention (as
reflected in the memorandum
before its amendment) was to send it to
the persons whose names appear there.
[58].
Mr Knott-Craig testified on a range of topics. He testified,
inter
alia
,
about the structure of the company Vodacom Group Limited, and the
holding company Vodacom (Pty) Ltd, the operating or “network

company”, the position of the Directing Committee in the
holding company and the positions of the persons in the hierarchy
of
authority at the holding company.
[59]. Briefly, he
testified in regard to the structure, that Vodacom in South Africa,
originally comprised of two companies, namely,
the network operating
company and the service provider company. The former operated the
networks and the latter company did the
selling. That was later
changed so that there was a group company, which the two subsidiaries
(i.e. the service provider and network
companies) and others, became
a part of. Each subsidiary had its own board and the Group Company
also had its own Board, (“the
Vodacom Group Board”). The
powers of the Group Board were largely delegated to a Directing
Committee which was made up of
representatives of the shareholders,
and that committee was, ultimately, the authority in the Company. The
witness testified that
he was the Group Chief Executive Officer at
the time and also Executive Chairman of the Operating Company. Mr
Geissler reported
to Mr Mthembu. Common functions such as legal,
human resources, regulatory, group finance and treasury functions
resided in the
Group. Mr Mthembu reported to the witness.
[60]. Executive
directors of the Vodacom Group, including the witness, attended
meetings of the ultimate authority, i.e. the Directing
Committee, by
invitation. Mr Krause, was Group Financial Director. The holding
company itself did not produce any products. But
it concluded
operational agreements with third parties, because the legal function
resided with it and the delegation of authority
required at least the
witness’ approval, if not the board’s approval.
[61]. The divisions
in the subsidiary companies, such as the financial division, fell
under the control of the Group Financial Division
headed by the Group
Financial Director, even though they also reported to their own
Managing Director. In the period 2000 to 2001,
Mr Krause was the
Financial Director and Mr Johann van der Watt was Financial Director
of the network operating subsidiary, Vodacom
(Pty) Ltd. Mr Muchenje
would have reported to Mr van der Watt.
[62]. The witness
testified that he may have met the plaintiff but could not recall
doing so, because every year he would meet “every
single staff
member in the company”. According to him, he would travel
around the country and have “many, many, many
sessions”,
giving staff members an opportunity to raise issues with him, and for
him to keep the staff abreast of developments
in the company. He
testified that Mr Muchenje was possibly at those sessions.
[63].
The witness testified,
inter
alia,
that
budgeting was a “bottom-up” process. Subsidiaries would
prepare budgets and submit them to the Group for approval.
The
witness would engage shareholders concerning the budgets of
subsidiaries. Once a budget was fixed, the subsidiary was obliged
to
work within it. There was little room for exceeding budgets. However,
they always, generally, managed to keep to their budgets.
The
remuneration budget was one that could not be tampered with. However,
the witness testified that he had the limited authority
to adjust the
remuneration scales of junior employees who were being promoted.
[64]. There were
three forms of remuneration, namely a salary, an annual short-term
bonus incentive, and a long-term bonus incentive
scheme, which
comprised of the allocation of phantom shares. In addition to that a
chief-executive-officer’s-award was presented
annually to at
least 6 or 7 employees who had truly excelled. In 2000 the award
comprised something in the nature of a trip for
a family to an exotic
location. Subsequently, the award was in the form of cash. Initially
it was about R1000-00 (one thousand
rands) and in 2008 it was about
R50 000-00 (fifty thousand rands).
[65]. The witness
testified that no one had authority to promise an employee any
remuneration beyond what was envisaged as stated
above. In his
evidence in chief the witness traversed a delegation of authority
document that had been approved by the Group Board
of Directors on 8
November 2000. During his cross examination it became clear that that
document had been revised. I do not consider
it necessary to deal in
detail with that part of his evidence because the plaintiff,
ultimately, did not rely on actual authority
or delegated authority,
but relied on ostensible authority.
[66]. The witness's
further evidence, in essence, dealt mainly with three aspects,
namely, whether Vodacom had ever entered into
a revenue-sharing
agreement with an employee; whether Vodacom would have entered into
such an agreement; and an explanation of
the version given in his
book as to how the product “Please Call Me”, came about.
[67].
Briefly, the witness denied that Vodacom ever entered into a
revenue-sharing agreement with an employee. He testified,
inter
alia,
that
Mr Geissler had no authority to enter into such an agreement with the
plaintiff, nor did he(i.e. the witness) have such authority.
He
further testified that neither he, nor Mr Geissler could have made
promises to the plaintiff regarding any remuneration for
the use of
his idea. The witness could not recall if he had been informed that
the plaintiff had requested to be paid a revenue-share.
He testified
that it is possible, but he could not recall it. He testified that,
in any event, it would have been outside his power
to agree to that.
He said that it would not even have received consideration, because
it was not something that they ever did.
He testified that Mr
Geissler would have been in trouble if he had made a promise of such
remuneration to the plaintiff. The witness
described such trouble as
being either “dismissal or death”.
[68]. Mr Knott-Craig
testified that the delegation of authority document was like their
‘bible’ and they were required
to adhere to it. In 2000
new products had to be approved by the Group Board; all contracts had
to be in writing and had to be scrutinised
by the Legal Department.
Contracts falling outside the delegated authority had to be approved
by the Directing Committee, or the
shareholders. Vodacom would only
have considered a joint venture with a third party if that party
offered to provide an ongoing
service and to do so more efficiently
than Vodacom.
[69].
Mr Knott-Craig,
inter
alia,
denied
seeing the plaintiff’s memorandum (in which he first described
his idea) at any time before 2007. While he was prepared
to concede
that the plaintiff’s idea was good, he gave a lengthy
explanation why he did not consider it to be unique, implying
that it
was possibly not good enough to merit a chief-executive-officer’s
award.
[70]. The witness
testified about his involvement in the development of the “Please
Call Me” product, but a major part
of his evidence under cross
examination related to his knowledge of the plaintiff and his idea
and the version given in his book
about the origin of the product. I
deal in more detail with this aspect below under the heading
“overview of the witnesses”.
Other aspects of this
witness’ evidence are dealt with, where necessary, in the
course of discussing the issues in this matter.
[71]. Mr Masllo,
also gave evidence, but his evidence, in essence, related only to the
question of whether a certain letter of demand
which he authored, and
in which rescission of the agreement had been mentioned, had been
delivered, or transmitted to the defendant.
This was relevant to the
defendant’s defence that the plaintiff could not approbate and
reprobate. This defence was, however,
apparently not proceeded with
when the matter was argued. Mr Masilo’s evidence was that the
letter in question had not been
sent to the defendant
[72]. On behalf of
the plaintiff, it was contended that the evidence given by the
plaintiff, Mr Muchenje, Mr Zatkovich and Mr Masilo,
should be
accepted and that the evidence of Mr Knott-Craig, insofar as it was
relevant to the issues, should be rejected. It was
also contended
that adverse inferences should be drawn, because of the plaintiff’s
failure to call Messrs. Sotiriades, Geissler
and Mthembu. On behalf
of the defendant, it was contended that the plaintiff should not be
believed and that the evidence of Mr
Knott-Craig should be accepted.
It was contended that the calling of Messrs Sotiriades and Mthembu
was not necessary and that no
inference should be drawn because of it
not calingl Mr Geissler The argument was that the plaintiff ought to
have called him.
OVERVIEW OF THE
WITNESSES
[73]. I shall
discuss the evidence given by the witnesses in more detail, where
necessary, in considering the issues that have to
be decided. At this
point and as essential background, I deem it necessary to deal with
my general impression and assessment of
the witnesses. As for the
plaintiff and his witnesses: Mr Zatkovich impressed me as an expert
witness. He gave his evidence in
a fair manner based on sound reason
and without exaggeration. It is clear from the pleadings that his
evidence was necessary. However,
as the trial progressed and reached
a conclusion, it became apparent that what he had to say was not
going to be contradicted by
the defendant. The thrust of his
evidence, namely that the plaintiff's idea (and more particularly the
business part) was a novel
and patentable idea, stood unchallenged,
in argument counsel for the defendant did not criticise Mr
Zatkovich’s evidence,
save for submitting that his evidence was
irrelevant for the purposes of determining the issues in this matter.
Despite the fact
that the defendant had given notice to call Mr Mr
Sotiriades as an expert, apparently to counter Mr Zatkovich’s
evidence,
Mr Mr Sotiriades was not called. In the circumstances and
insofar as Mr Zatkovich’s evidence may be of relevance for a
decision
on the issues, I have no difficulty in accepting it
[74]. Mr Muchenje
similarly impressed me as an honest witness who came to relate what
he personally knew about the matter. The defendant’s

representatives had consulted with him before he was called by the
plaintiff. Notwithstanding a lengthy, searching and if I may
say,
gruelling cross-examination by highly skilled and very experienced
counsel of the defendant, he remained calm and collected.
He did not
contradict himself and readily conceded to not knowing, or being
unable to remember. The defendant’s counsel submitted
that
there were differences in the detail of some aspects of his evidence
and that of the plaintiff. I shall discuss those alleged
differences
in the course of deciding the issues. At this stage, it suffices to
state that the differences, if any, in his evidence
and that of the
plaintiff are, in my view, not material and of a kind that would
detract from his credibility. In my view his evidence
is consistent
with the general probabilities and those arising from the facts as I
shall discuss in more detail.
[75].
The plaintiff gave evidence in a reasonable manner. He too was
subjected to a lengthy, skilful cross-examination. Notwithstanding,

he retained his composure and, in my view, gave fair answers to
questions. I have already dealt with the criticism that there were

(allegedly) differences between his evidence and that of Mr Muchenje.
The defendant’s counsel, however, also levelled strong

criticism at his credibility, in particular, because of alleged
differences between his version, in particular, regarding the terms

of the agreement he alleged he concluded with Mr Geissler, and the
letters (including letters of demand) that were written by him
or on
his behalf concerning the matter, before he instituted this action
against the defendant. The plaintiff stuck to his version,
including
to what he had said in chief concerning the terms of the agreement
that he concluded with Mr Geissler (whom he alleged
represented the
defendant). The plaintiffs version regarding his idea and his
communication with Mr Geissler concerning that idea,
is also
corroborated in material respects by the an article in the
defendant’s newsletter,
"Talk
Time",
dated
March 2001. The novelty of the
“
Please
Call Me”
idea
is acknowledged, in particular, the feature of the idea that Vodago
prepaid users with no airtime are allowed to send a free
message to
someone else requesting them to call back. Mr Mr Mthembu, the
Managing Director of the defendant at the time, is quoted
in the said
newsletter, as lauding the fact that the idea of the
“
Please
Call Me”
product
came from the plaintiff.
[76].
in addition, the emails that came from Mr Geissler to others,
including the plaintiff and Mr Muchenje, concerning the plaintiff’s

idea and the
“
Please
Call Me"
product,
provides further vital corroboration of material aspects of the
plaintiff’s version. The plaintiff's version is also
consistent
with the general probabilities and the probabilities arising from the
common cause facts. Areas of the plaintiff’s
evidence where he
confronted difficulty related, in particular, to his version that Mr
Geissler had agreed with him that he would
be remunerated for the use
of his idea if it proved to be feasible technically and from a
business perspective; and that he had,
concerning remuneration,
proposed to Mr Geissler a 15% share of the revenue (profit) derived
from the product developed from his
idea and that Mr Geissler had
agreed that in the event of them not being able to fix a figure
between themselves, Mr Knott-Craig,
in his capacity as Chief
Executive Officer of the defendant, would determine the figure.
However, the emails confirm the involvement
of Mr Knott-Craig by the
plaintiff and Mr Geissler in the issue of remuneration. Another area
of difficulty for the plaintiff,
was the alleged inconsistency
between his version in court regarding the terms of the agreement he
concluded with Mr Geissler and
the correspondence sent by him, or on
his behalf, before this action was instituted against the defendant.
[77). That the
plaintiff wanted to make money out of the use of his idea is not only
confirmed by Mr Muchenje, a clearly honest
witness, but is probable.
Mr Muchenje’s evidence, albeit hearsay, that Mr Geissler
informed him that Mr Knott-Craig had said
that the plaintiff was
greedy and would get nothing and an email sent by Mr Geissler to the
plaintiff in which he informs the plaintiff
that he would be
discussing the issue of remuneration with Mr Knott-Craig, is also
consistent with the plaintiff’s version
that he and Mr Geissler
agreed on the Chief Executive Officer’s involvement on the
issue of remuneration. Notwithstanding
rigorous cross-examination on
that aspect of his version, the plaintiff consistently maintained his
version.
[78]. No direct
evidence was called to gainsay the plaintiff’s version of the
agreement that he says he concluded with Mr
Geissler, including
concerning its terms. Mr Knott-Craig, whose evidence I have
difficulties with as I shall shortly explain, could
not deny the
plaintiff’s version, although his evidence was seemingly led
with the intention of undermining the probability
of the plaintiffs
version, or certain aspects of it.
[79].
In Mr Geissler’s email of 9 February 2001, which he distributed
throughout Vodacom, he clearly links the defendant’s
“
Please
Call Me”
product
to the plaintiff and ascribed the idea, underpinning the product, to
the plaintiff. In the email he also thanks the plaintiff
for bringing
the idea to the attention of the defendant.
[80].
Notwithstanding the cross-examination of the plaintiff suggesting
that no agreement as alleged by the plaintiff, or any agreement
at
all, was entered into with Mr Geissler concerning the use of the
idea, Mr Geissler himself was not called to contradict the

plaintiff’s version. Mr Geissler was the most obvious person to
call to counter the plaintiff’s version. The defendant’s

counsel in argument suggested that Mr Geissler could have been called
by the plaintiff. Given the circumstances one cannot fault
the
plaintiff for not calling Mr Geissler. Since the defendant was
disputing the plaintiff’s evidence, in particular, about
the
conclusion of the agreement and its terms, it was really for the
defendant to call Mr. Geissler. It was established in evidence
that
Mr Geissler was within South Africa and nothing suggested that he was
unavailable. In my view, the defendant’s failure
to call Mr
Geissler in the circumstances justifies an inference that he was not
able to deny the version of Mr Muchenje and the
plaintiff and/or that
his credibility was seriously compromised and in order to avoid
weakening the case that the defendant endeavoured
to put up,
inter
alia,
by
means of the evidence of a single witness, Mr Knott-Craig, he was not
called by the defendant.
[81].
As regards Mr Knott-Craig, I have difficulty with key aspects of Mr
Knott-Craig’s evidence. The areas of his evidence
that perturb
me in particular were concerning his knowledge or lack of knowledge
of the idea behind the
"Please
Call Me”
product,
despite his position as Chief Executive Officer of the defendant and
his reputation as someone who was ‘hands- on';
the explanation
given, in the part autobiography of his life, a book titled “A
Second is
Nothing",
for
the
Please Cali Me”
idea;
and his evidence in court relating to it and then, his, what I
consider, rather equivocal evidence regarding whether he had

described the plaintiff as being greedy and had decided that the
plaintiff should get nothing.
[82]. The difficulty
I have, with the aforementioned aspects of Mr Knott-Craig’s
version, is intensified in the light of the
fact that the evidence
showed that there was a good, if not very close relationship between
Mr Knott-Craig and Mr Geissler.
[83]. In the part
autobiography that Mr Knott-Craig co-authored with one Eunice Afonso,
at least one of the chapters (Chapter 1)
is written in the first
person. Mr Knott-Craig there writes about himself, while the other
chapters appear to be in the third person,
i.e. Mr Knott-Craig is
written about, including Chapter 10 where the contentious passage,
which I repeat here for convenience,
appears. The passage reads:
“
The
Please Call Me idea happened by chance. Alan was leaning over the
railing of the Vodacom building chatting to a colleague, Phil

Geissler
;
when Phil pointed
out one security guard trying to attract another's attention, and
because his buddy didn't see him, the security
guard called him on
his cellphone. Alan immediately spoke to Leon about creating a Please
Call Me service. Because the Please Call
Me SMS sent
was
free, Vodacom made
money by adding short advertisements just below the message, but the
real money came from the return call. This
concept generated hundreds
of millions in revenue. By 2008, Vodacom generated 20 million Please
Call Me requests daily"
[84].
In this book, which was published in about 2009, the authors do not
say when this chance event occurred, but what is clear
is that
reference was being made to the very product, the idea of which the
Managing Director Mr Mthembu, in the defendant’s
“
Talk
Time”
newsletter
of March 2001, and Mr Geissler,
inter
alia,
in
his email of 9 February 2001 for distribution throughout Vodacom,
ascribed to the plaintiff. The product clearly did not occur
by
chance as Mr Knott-Craig's book asserts.
[85].
It is common cause that the media had confronted Mr Knott-Craig about
the book’s explanation for the idea. Mr Knott-Craig
found it
necessary then to seek corroboration for the book’s account
from Mr Geissler. Mr Knott-Craig testified that there
were media
queries about the “P/ease
Call
Me"
product
and that he then wrote to Mr Geissler and asked him whether he had
the same recollection of the event. Mr Geissler responded
by email on
Christmas Day, the 25
th
December 2009, from Mauritius, where he was on holiday. In his
response Mr Geissler,
inter
alia,
states:
“
A
s
discussed, I read your latest book and agree in principle with the
way Please Call Me
was
created
on the 4th floor outside your office with two of Vodacom’s
security guards playing a role of two “prepaid
”
users
without any credit on their phones
-
communicating
with each other.The concept of ‘Calf Me’
was
refined
inside your office minutes later and launched officially in late
January 2001.I hope this helps with media queries ...”
[86].
This
"explanation”
of
Mr
Geissler is contrary to his earlier assertions. Mr Knott-Craig gave a
very strange answer when he was asked why he felt it necessary
to get
corroboration from Mr Geissler concerning the idea and whether it was
because he was not sure of it. He answered:
“
I
was
very sure
about it but you know, when I wrote this I think this is dated 2009,
so it was ten years ago and I thought that I would
ask for it if he
had a different version to what I put here. I could not imagine him
having a different version, but I wrote to
him”
[87].
The answer is not only circuitous, but also nonsensical. Mr
Knott-Craig says that he wrote because he thought that Mr Geissler

had a different version, but at the same time he could not
“
imagine"’
Mr
Geissler having a different version. Clearly, Mr Knott-Craig had
difficulties answering the question put to him. Mr Geissler
did in
fact have another version of how the
“
Please
Call Me”
product
came about, which is linked to the plaintiff, but which he chose not
disclose in his response to Mr Knott-Craig. On the
probabilities Mr
Knott-Craig must have known the true version of how the product came
about.
[88].
The version Mr Geissler gives in his Christmas email is clearly
nonsensical. How did two persons with
“
no
credit on their phones"
speak
to each other on the phones? That is clearly a notion completely
different from the “
Please
Call Me
”
concept.
The person who sends the Please Call Me message may have no airtime.
But the one calling back on his cellphone must have
airtime. And how
was it possible for Mr Geissler and/or Mr Knott-Craig to see or
establish, from the point where they were, that
the security guards
did not have airtime on their phones? When this anomaly was pointed
out to Mr Knott-Craig in the course of
his cross-examination, he
responded by saying:
“
they
could not have had no credit on their phones”
.
When he was asked where Mr Geissler could have gotten this notion
from, Mr Knott-Craig’s response was that Mr Geissler should
be
asked to explain. However, it appears that at the time when Mr
Knott-Craig got Mr Geissler’s written response on Christmas

Day, he, Mr Knott-Craig, was clearly happy with it;and, apparently
satisfied that it accorded with his version of the matter.
[89].
Trying to stick to the book’s version of how
u
the
Please Call Me”
idea
came about, and in response to questions about Mr Geissler’s
involvement in the refinement, and the time it took to refine
the
idea, Mr Knott-Craig expressed doubts. He was cross-examined at
length about his book’s version about the genesis of
the
“Please Call Me” idea. The book’s version, on
closer analysis, is, similarly, nonsensical. Mr Knott-Craig
in
answering rather pointed questions about the version used Mr Geissler
as a reference point. According to him, it was Mr Geissler
who drew
his attention to the two security guards who were “
trying
to attract each other’s attention, or at least the one was
trying to attract the other’s attention”.
The
way in which the one tried to attract the other’sattention was
not by shouting or waiving at him, but, according to Mr
Knott-Craig,
“
by calling
on his mobile the other security guard which was, they were both in
my vision”.
Mr
Knott-Craig’s attempt to explain how it was possible for him to
see from a distance and know that the one was calling the
other one,
stated that he could see the one dialling and Mr Geissler was
explaining to him what that one was doing. Mr Knott-Craig
testified
that he could see the other one receiving the call when Mr Geissler
told him to look at the man at the bottom of the
building and Mr
Geissler was explaining to Mr Knott-Craig how
u
the
guy at the bottom was trying to attract the attention of the other
guf.
According
to Mr Knott-Craig, the one person was on the ground floor and the
other was on the third or fourth floor, within an enclosed
atrium, of
the Vodacom building. He estimated that they were approximately ten
metres apart. When he was asked why the one security
guard could not
have attracted the attention of the other by shouting out across the
atrium, Mr Mr Knott-Craig’s reply was
that the security guards
do not shout at each other across an atrium. Mr Knott-Craig tried to
rationalise the flawed version, by
adding that the one did not answer
his phone. But this just made matters worse. How did Mr Knott-Craig
or Mr Geissler know, in
those circumstances, that the one security
guard was calling the other one who did not answer his phone? How did
Mr Knott-Craig
or Mr Geissler know that these security guards, or at
least one of them, did not have airtime, and how was it possible in
the days
before “
Please
Call Me"
to
call someone else if you did not have airtime?
[90].
Mr Knott-Craig testified that he was completely ignorant of the
concept until then (i.e. until it was pointed out to him by
Mr
Geissler as described in the autobiography). The version in the book
is completely implausible and Mr Knott-Craig, an intelligent
person
and qualified engineer, had great difficulty explaining it
rationally. Mr Geissler’s “
corroboration
”
in
his Christmas message was yet another implausible version that
complicated matters further for Mr Knott-Craig. But, unlike a
frank
witness, he tried to rationalise it and where he could not at all, he
attributed ‘the observations’ to Mr Geissler
and said
that he should explain.
[91].
Mr Knott-Craig testified that until about 2009 or 2010 he never saw
Mr Geissler’s email of 9 February 2001 that was
sent to the
entire Vodacom announcing the launch of the
"Please
Call Me?
product
and in which Mr Geissler acknowledges that it was developed from the
plaintiff’s idea.
[92].
Mr Knott-Craig conceded that Mr Geissler’s version in his email
of 25 December 2009 and email of 9 February 2001
“
did
not accord with each other
1
',
but,
nevertheless, tried to show that they were not mutually destructive.
This was clearly unconvincing. Mr Knott-Craig, in essence,
testified
that he did not know about the plaintiff's idea and was not aware of
the article in the
Talk
Time
newsletter
and said that no one told him about the plaintiff’s
contribution to the product.
However,
no reason was suggested why Mr Geissler would not have informed Mr
Knott-Craig about the plaintiff and his idea. In the
early stages,
that is, between November 2001 and March 2001, Mr Geissler widely
publicised the fact that the plaintiff’s
idea was behind the
product. It is apparent from the newsletter that even the Managing
Director knew about the plaintiff and his
idea and was quite excited
about it. It is instructive that Mr Knott-Craig also contributed an
article to that very newsletter.
The article is headed
“
From
the CEO’s desk'.
It
is difficult to fathom why the Group Chief Executive Officer and
Chairman of the service provider subsidiary, would be so
ill-informed.
It is not disputed that Mr Geissler had a close
relationship with Mr Knott-Craig and that the
“
Please
Call Me”
idea
was a first for the defendant; a significant product that had the
potential of generating huge revenue. Why Would the Mr Knott-Craig,

who is otherwise said to have been "hands-on”, be in the
dark about the plaintiff and his idea? Why would Mr Geissler
want to
hide those facts from Mr Knott-Craig and then pretend that the idea,
presented itself by chance as they were watching two
security guards?
How did Mr Geissler know that Mr Knott-Craig did otherwise not know
about the plaintiff and his idea, did not
read or become aware of the
article in the newsletter, or in the email of the 9
th
of February? It is only if Mr Geissler knew that Mr Knott-Craig did
not know about the plaintiff and his idea that he could have

confidently misrepresented facts to Mr Knott-Craig, or else Mr
Knott-Craig was not truthful about what he knew and that he and
Mr
Geissler conspired to exclude the plaintiff and his contribution to
the ‘Please Call Me’ product. How does the fact,
that Mr
Knott-Craig did not know of the plaintiff and his idea, fit in with
his (equivocal) testimony that he may have rejected
the plaintiff's
request to be remunerated?
[93].
On the probabilities I find it hard to believe that Mr Knott-Craig
had no knowledge. The probabilities rather point to an
effort on the
part of
inter
alios
Mr
Geissler and Mr Knott-Craig to, as it were, write the plaintiff out
of the
“
Please
Call Me"
script
for financial and other reasons, which, at least, the two of them
could have come to explain. In my view, Mr Knott-Craig
was not frank
and honest about his knowledge of the plaintiff and his idea and its
(ink to the ‘Please Call Me’ product.
[94]. It is clear
that Mr Geissler changed his attitude toward the plaintiff, for
reasons which have not been explained. What is
glaringly lacking is
an explanation for the drastic change in attitude, from a situation
where Mr Geissler’s earlier email
and the article in the
newsletter acknowledged and praised the plaintiff for his idea and
hjs contribution to the product, to a
situation where Mr Geissler,
suddenly, turned to questioning the true origin of the plaintiff’s
idea and eventually ascribed
the product to an idea which, allegedly,
occurred to him and/or Mr Knott-Craig, by chance, when they,
allegedly, viewed two security
guards communicating with each other
by means of cellular phones. Did Mr Geissler attempt to extricate
himself, with the help of
Mr Knott-Craig, from the “trouble”
Mr Knott-Craig referred to in his evidence concerning the authority
to agree to
or to make promises regarding remuneration?
[95]. Mr Masiio was
called after the close of the defendant’s case to prove that
the letter dated the 12
th
of March 2008 was merely a draft
and was never communicated to the defendant. The letter, inter alia,
contained a threat or suggestion
that the agreement would be
cancelled by the plaintiff. Mr Masiio made a good impression and
there is no reason to doubt the veracity
of his version. The letter
in which the cancellation was raised was not communicated to the
defendant. In any event, as I have
pointed out earlier, the issue of
alleged cancellation by the plaintiff by means of this letter, was
clearly abandoned by the defendant
and was not persisted with.
[96]. I shall deal
with other aspects of the evidence, in particular with that relating
to the question of authority, in considering
that point. I should
however point out here that I have not considered the evidence of the
witnesses in isolation or piece-meai
in respect of different issues,
but I have considered all their evidence in respect of all the issues
in the light of that came
to my conclusions regarding their
credibility. I am merely dealing with the aspects separately for the
purposes of convenience.
PROOF OF THE
ISSUES
[97]. I shall now
briefly consider whether the plaintiff succeeded in proving on a
balance of probabilities that he entered into
an agreement with Mr
Geissler on the terms which he alleges.
[98].
The plaintiff (supported in material respects by Mr Muchenje’s
evidence) gave evidence about the terms of the agreement
concluded
with Mr Geissler. Mr Geissler was not called as a witness and the
defendant did not directly contradict the plaintiff’s,
or Mr
Muchenje’s evidence. It was submitted on behalf of the
defendant, that the mere fact that evidence is not directly

contradicted by other evidence does not make it credible and it
should not for that reason be accepted as probable, because it
may in
itself be so improbable as to justify its rejection. In that regard
reliance was placed on what was said on the matter in
Pezutto
v Dreyer
2
and
Cooper
and Others NNO v Seyfretts Trust Ltd
3
.
[99].
On behalf of the defendant it was also argued, in essence, that the
plaintiff's evidence lacked credibility, in particular,
if one
compared his oral evidence in court with documents that were
contemporaneous with the alleged agreement. Here the defendant
was
referring, specifically, to the emails that passed between Mr
Geissler, the plaintiff and Mr Muchenje; the plaintiff’s
“
silence”
when
he could have been expected to record and pursue his version of the
alleged agreement; the various letters of demand sent by
the
plaintiff, or on his behalf, to the defendant; the different versions
contained in the plaintiff's successive pleadings; the
plaintiffs
counsel’s opening address as well as (the alleged) difference
between the plaintiff’s and Mr Muchenje’s
versions and
the differences between the version of the plaintiff and that of Mr
Knott-Craig; and, according to counsel for the
defendant,
“
the
overwhelming improbabilities against the plaintiff's version”.
In
argument counsel for the defendant expanded on each of these points.
I shall now consider
the detail of the points as well as the argument raised on behalf of
the plaintiff in response thereto.
THE
CONTEMPORANEOUS DOCUMENTS
[100].
The defendant was referring in this regard to the various emails that
passed between Mr Geissler, the plaintiff and Mr Muchenje
at the time
the agreement is alleged to have been concluded. According to the
defendant’s counsel, not one of the emails
record any of the
five terms alleged by the plaintiff in his oral evidence, namely,
“
the payment
promise”; “the disclosure condition“the revenue
share term
”
;
“
the
undertaking to negotiate”;
or
“
the Mr
Knott-Craig determination term".
According
to this argument, the high watermark of the emails is what contained
in the emails exchanged by the plaintiff and Mr Geissler
on the 30
January 2001 and 6 February 2001, respectively. The plaintiff in his
email of 30 January, inter alia, says to Mr Geissler:
I
think we should start talking about ‘rewards’
And
Mr Geissler in his email in reply on 6 February 2001 says to the
plaintiff:
“
As
for rewards. All staff are expected to assist the company to achieve
its goafs. That is part of normai business. As for you and
your
assistance, once the product is launched (and assuming it is
successful) I will speak to Alan, you have my word”
[101].
Defendant submitted further, that none of the series of emails
contain a recordal of the terms allegedly agreed to and that
the
plaintiff did not give a satisfactory explanation for the absence of
such a record. It was also argued that plaintiff did not
give a
satisfactory explanation for not recording the terms after he was
told that Mr Knott-Craig had said that he was greedy and
would get
nothing. According to defendant/ relying on what was held in
McWilliams
v First Consolidated Holdings (Pty) Ltd
4
,
the
plaintiff’s failure to respond and record his version of the
alleged agreement supports the inference that his version
is not
true.
[102]. On this same
point, it was submitted by counsel for the plaintiff that a closer
analysis of the emails demonstrates that
they in fact support the
plaintiff's version.
[103]. The first
difficulty I have with the approach of the defendant is in the
isolation of this one aspect without relating it
to all the other
evidence and the probabilities, both, general, and those arising from
the evidence. What is clear from the emails,
is that Mr Geissler
recognises plaintiff as the one who contributed the idea and even
asked the plaintiff for suggestions regarding
the naming of the
product to be developed from the idea. This, in particular, appears
from an email of Mr Geissler to the plaintiff
which is dated 30
January 2001. The plaintiff’s email of 30 January to Mr
Geissler, makes clear that the plaintiff wanted
to be rewarded for
his idea. Read together with Mr Geissler's response of 6 February
2001, it is supportive of the plaintiff’s
evidence that the
plaintiffs reward was dependent on whether the product (to be
developed from the idea), was launched and was
successful. The emails
are also broadly supportive of the plaintiffs evidence that if he and
Mr Geissler could not agree on the
reward, then Mr Knott-Craig would
determine it. The contents of those emails have to be contrasted to
Mr Geissler’s subsequent
version (in his email to Mr
Knott-Craig of 25 December 2009, in which attempts to corroborate Mr
Mr Knott-Craig’s version
of how the product came about), as to
the origin of the idea for the product and Mr Mr Knott-Craig’s
version of that origin,
both of which are false.
[104]. The plaintiff
conceded that the emails did not reflect everything that he discussed
orally with Mr Geissler. The plaintiff
is a layperson and was a
young, inexperienced and junior employee at the time. Not recording
the terms of the agreement at that
stage, cannot, in my view, be
regarded as unusual or abnormal Viewed in the light of all of the
evidence and the probabilities,
I do not consider this point to have
any merit. Mr Geissler could have been called to contradict the
plaintiffs evidence concerning
the terms that were, or were not,
agreed to, but he was not called In my view no reasonable explanation
was given for not calling
Mr Geissler despite evidence showing that
he was readily available and could have been called. All of the
defendant’s arguments
regarding the plaintiff’s
credibility, concerning the agreement and its terms, are compromised
by the failure to call Mr
Geissler.
THE ALLEGED
"SILENCE”
[105].
The defendant argued that the fact that the plaintiff did not utilise
the grievance procedure available to employees and
the fact that
documents, such as Mr Geissler's email of 9 February 2001 to all
Vodacom staff, as well as Mr Muchenje’s email
and the article
in the newsletter,
“
Talk
Time",
were
silent about monetary compensation, supports the inference, or
contention, that no promise of monetary compensation for his
idea was
made to the plaintiff.
[106]. On the
plaintiff’s behalf it was argued that the first point under
this subheading was simply a ‘red-herring’
and that the
second point was a mere ‘make- weight’. There was no
reason for Mr Geissler, or for the newsletter, or
for Mr Muchenje’s
email, to have published any promise of payment, or concerning any
agreement between Mr Geissler and the
plaintiff.
[107]. The
plaintiff’s case was that he did conclude the agreement with Mr
Geissler, acting on behalf of the defendant, while
he was an employee
of the defendant, but that he did not conclude it as, or in his
capacity as an employee; it was a business agreement
outside of his
employment relationship with the defendant. There was, accordingly,
no reason for him to utilise the company grievance
procedure when Mr
Geissler (and the defendant) had appeared to be reneging on the
agreement.
[108]. In my view,
there was no reason for details of any agreement that was made with
the plaintiff to have been publicised by
Mr Geissler in his email to
virtually the whole of Vodacom, Similarly, there was no need to
publish such details in the “Talk
Time” newsletter, a
publication that was, presumably, available to all employees of the
defendant or the Vodacom group.
[109]. It is common
cause that for a period of about six years, after being rebuffed by
Mr Geissler and, almost, four years after
his resignation from the
defendant, the plaintiff did not enforce the agreement. The defendant
submits that the plaintiff did not
furnish an acceptable explanation
for his “inaction” over that period.
[110].
The plaintiffs explanation was that he enjoyed working for the
defendant. Mr Geissler’s email to him, which is dated
the 8
March 2002, in which Mr Geissler questioned the plaintiffs integrity
regarding the origin of the idea, made him very unhappy
and his
unhappiness persisted until he left the defendant. The plaintiff
testified that he was intent on completing his articles
and did not
want to predjudice himself before then. He was bidding his time and
wanted to complete his articles and then enforce
his rights. The
first time there is a written record of him pursuing his complaint,
is his letter which was sent to the defendant
in 2007 in order to
secure a meeting between him and the defendant. That was almost four
years after he left the defendant. However,
he testified that from
the time he left the defendant he consulted various lawyers and did
research. It was a period during which
he was
"trying
to explore”
how
he could
“
address
the matter
31
.
The
plaintiff gave details of the lawyers he consulted. His first
attorney took him to consult with two, well known, senior advocates/

who told him that he had a case. However, nothing really happened
after he had been to see them. At some point they got tired and
he
(i.e. the plaintiff) ran out of money. He, subsequently, consulted
other attorneys, Moledi Attorneys in Pretoria, Dawn Norton
in
Johannesburg and then Masilo Attorneys in Germiston.
[111].
The plaintiff testified that it was
“
an
emotional exercise”
for
him. He had to pay the lawyers out of his salary and that it was
quite hard for him. As far as the plaintiff was concerned,
he was not
supine, but was doing something about the matter, albeit within his
means. He had consulted lawyers and was relying
on them. He explained
that sometimes he became depressed and could not pursue the matter,
or, otherwise, ran out of funds.
[112]. pitted
against a large and still growing commercial giant and the issues The
defendant did not refute the plaintiff’s
explanation. The
plaintiff’s counsel submitted that the explanation was
reasonable. One cannot reject the explanation out
of hand as
unreasonable. The plaintiff was may well have been regarded by
lawyers, not familiar with the topics covered, as complex,
although
the issues now appear relatively simple since they have been reduced,
distilled and refined by the pleadings and the trial
processes.
Furthermore, it is not unlikely that the plaintiff and his advisers
anticipated a tough legal battle that would have
required good,
specialist skills and substantial resources, including funds. The
plaintiff was not financially well off and his
precarious financial
situation and the immense legal challenge facing him, might well have
retarded, or, at times, halted the progress
with his claim,
altogether. In my view, there is nothing improbable, unreasonable, or
unusual about that.
THE LETTERS OF
DEMAND, PARTICULARS OF CLAIM AND OPENING STATEMENT
[113].
The defendant referred to the various letters of demand of the
plaintiff, including to the letter of demand of 16 May 2007,
written
by the plaintiff personally, addressed to the defendant and copied
to,
inter alios,
Mr
Knott-Craig. The letter states,
inter
alia,
that
long before the launch of the product the plaintiff had demanded to
discuss business that would ensure that there was a financial
benefit
that accrued to him for his idea and that Mr Geissler had promised to
speak to Mr Knott-Craig,because he thought that the
plaintiff’s
case was different; but that compensation was subject to the product
being a commercial success. On behalf of
the defendant, it was
submitted that this letter did not refer to any of the materia! terms
alleged by the plaintiff.
[114].
Counsel for the defendant also referred to the plaintiff’s
second letter of demand dated 11 July 2007, also written
by the
plaintiff personally and addressed to the defendant, where the
plaintiff relates the history of how he came to impart the
idea to Mr
Geissler and in which he states,
inter
alia, :
“
4.
On the basis of the commercial success of the concept since 2000, I
have lost revenue that I should have been legally entitled
to. I
therefore demand payment of R500 000 000 (Five Hundred Million Rand)
as compensation for the innovative idea/concept of ‘The
Buzz
option’, now known as ‘Please Call Me’.
5. I seek an
alternative remedy in royalties equivalent to 15% per call induced
by, plus 15 cent per ad placed on, the Please Call
Me ’ concept
since 2000 to date."
[115].It was
submitted on behalf of the defendant, that the plaintiff raised the
payment promise and the 15 cent proposal for the
first time in the
second letter, but that the letter did not refer to the disclosure
condition, the revenue share term, or the
term relating to the
undertaking to negotiate, or to the term that Mr Knott-Craig would
determine the reward.
[116].
Defendant’s counsel also referred to the third letter of
demand, which was written by Masilo Attorneys on behalf of
the
plaintiff. It is dated 19 January 2008 and it referred to the payment
promise, the disclosure condition, and to the undertaking
to
negotiate, but not to the revenue share term, or Mr Knott-Craig’s
determination, or to the 15% proposal. It was, furthermore,
pointed
by the defendant’s counsel, that the letter alleged that the
defendant and the plaintiff
"were
to negotiate and/or determine the reasonable payment and/or reward
”
.
[117].
The defendant’s counsel referred to the further letter of
demand, dated 12 March 2008 and drafted by Masilo Attorneys.
It was
submitted that in this letter no reference was made to the disclosure
condition, the undertaking to negotiate, or to the
term that Mr
Knott-Craig would determine the amount. Reference was also made to
the “open
letter*
drafted
by the plaintiff personally and sent to various persons at the
defendant on 8 July 2008. Counsel for the defendant submitted
that
the letter referred to none of the material terms of the alleged
agreement and pointed out that the plaintiff stated in the
“
open"
letter,
“I
was
emphatically promised that once my concept has proven to be
commercially viable, you would
consider
my simple and straightforward
request
,
i.e. to be allowed
to share in the success of my innovation".
[118].
With reference to the five letters referred to above, it was
submitted on behalf of the defendant, that the alleged five
material
terms “
were
so belatedly and so inconsistently mentioned that the allegations in
the letters of demand ... have no credibilit
y”;
secondly, that none of the letters ever made mention of the term that
Mr Knott-Craig would determine the amount; thirdly,
that the
plaintiff could not give a satisfactory explanation why the version
regarding the terms of the agreement as set out in
his letters of
demand, differed from his version in court.
[119].
On behalf of the plaintiff it was submitted that the letters which
the plaintiff wrote himself,
“
are
broadly in line with his evidence
”
and
that they were written “in a
manner
to try and resolve the dispute
,
by a layman and
not a lawyer”.
[120].
Counsel for the defendant also referred to the plaintiff’s
pleadings and pointed out that in the original particulars
of claim
it was alleged that the defendant’s obligation was to take
measures that would ensure that the plaintiff receives
a reasonable
reward or remuneration, which was continuous and in proportion to the
use of the product. It was pointed out that
according to the
plaintiff’s original pleadings, the appropriate amount of the
remuneration payable to the plaintiff would
properly be determined
after the defendant had ascertained if the product would be of
benefit to it and would continue to be of
benefit for a sustainable
period and further that it was alleged that it was agreed that “
the
defendant is allowed by the plaintiff to use the commercial idea
and/or product
for
[an]
indefinite
period but on condition that the plaintiff would be paid a
proportionate amount in the sum of 15% of the money that accrued
to
the defendant from or through induced calls".
But
that the original particulars of claim contain no reference to the
disclosure condition, the undertaking to negotiate or to
the ‘Mr
Knott-Craig determination’ term. Developing this argument
further, counsel for the defendant contended that
the plaintiff’s
particulars of claim, after it was amended on the 14
th
of March 2012, now alleged that the defendant was obliged to enter
into
bona fide
negotiations
with the plaintiff in order to agree on a reasonable remuneration to
be paid to the plaintiff, as well as the
“
Mr
Knott-Craig determination term
",
with an alternative allegation that the plaintiff would be paid a
reasonable remuneration for the “
type
of idea, the product and ongoing services
”
which
the plaintiff was to provide to the defendant - and that such
remuneration would not be “/ess
than
15% of ail monies accrued to the defendant from or through the
induced calls”.
[121].
The defendant further pointed out that the amended particulars of
claim still did not contain the disclosure condition, or
the term
relating to the obligation to negotiate a reasonable remuneration,
and that there was no mention made that the plaintiff’s

remuneration would be a share of the revenue generated by the calls
induced by the plaintiff’s idea. It was submitted that
the
“
Mr
Knott-Craig determination
”
term
was alleged for the first time, four years after the issue of summons
in the matter. Regarding the alleged differences in the
original and
amended particulars of claim, the defendant submitted that they
undermine the credibility of the plaintiff's evidence
concerning
“
what terms,
if any, had been agreed upon and consequently on whether the alleged
agreement had been concluded at air.
The
defendant further submitted that the plaintiff’s explanation
for the discrepancies in the pleadings, where he blames the
pleaders
(i.e. the lawyers), was
“
implausible
[122].
The plaintiff’s counsel submitted, in response to the argument
regarding the pleadings, that the defendant’s
contention
regarding thedifferences in the original pleading and the amended
pleading, “
loses
sight of the fact that the very purpose of an amendment is to
varypleadings
It
was pointed out that the
“
Mr
Knott-Craig determination
”
term
was not a recent invention, because the emails that passed between
the plaintiff and Mr Geissler on the 30
th
of January and the 6
th
of
January, read with the email of the 18
th
of January clearly points to this having been a term. In the email of
the 18
th
of January the plaintiff enquired from Mr Geissler
“
how
are we doing on this ... Any developments so far (we still have to
meet)".
In
the email of the 30
th
of January the plaintiff, having suggested a name for the product,
states:
“
Lastly
as per our verbal conversation, I think we should start talking about
‘REWARDS’, can you please notify me when
can this be
feasible.”
In
his email in response dated the 6
th
of February, Mr Geissler, after indicating that he would pass the
suggested name to their
“
advertising
people”,
says
to the plaintiff the following:
“
As
for rewards. AH staff are expected to assist the company to achieve
its goals. That is part of normal business. As for you and
your
assistance. Once the product is launched (and assuming its
successful) I will speak to Alan. You have my word.”
(It is common cause
that the ‘Alan’ being referred to, is Mr Knott-Craig).
[123].
Counsel for the plaintiff further submitted that in the amended
particulars of claim the
“
Mr
Knott-Craig determination”
term
was alleged and that the plaintiff adequately explained in his
evidence how the term came about.
[124].
It is now trite that the importance of pleadings should not be unduly
heightened.
5
It is common for parties to make mistakes in pleadings, or to not
plead what had to be pleaded, or to not state their versions

adequately, or correctly in every material respect, in the pleadings.
The mere fact that the pleading does not contain an allegation,
that
is then later added by means of an amendment, does not justify, as an
only inference, that it is an afterthought. All other
facts and
circumstances, including evidence fed of and concerning that
allegation must be considered and it is only in light of
all of that
material, that an inference may be drawn.
[125] In this case
it is apparent that the amendment introduced new or different
allegations about the terms of the alleged agreement.
That fact, on
its own, does not undermine the credibility of the plaintiff.
Generally, pleadings are not drafted by clients, where
the client has
engaged a professional to do so. There is nothing to suggest that the
plaintiff had any knowledge or skill in the
drafting of pleadings. On
the contrary, his evidence, to the effect that he was functionally
illiterate when it came to such matters,
was not countenanced. The
plaintiff did not merely rely on his pleadings, but gave evidence on
oath as to what the terms, of the
agreement that he concluded with Mr
Geissler, were. The defendant could have called Mr Geissler to refute
the plaintiff’s
version. The plaintiff’s explanations for
the discrepancies in the pleadings are not of such a nature that they
could be
rejected out of hand. They are reasonable. In the absence of
any evidence from the defendant to counter the plaintiff’s
version
as to the terms, (despite Mr Geissler’s availability to
be called as a witness), the only plausible inference to be drawn
is
that the version of the plaintiff could not be countenanced other
than by way of technical points. Mr Knott-Craig could not
take the
matter in respect of the agreement and its terms any further. On his
version, he had no knowledge of such agreement or
its terms. He could
not deny there was such an agreement on the terms alleged by the
plaintiff. The same, in essence, could be
said concerning the letters
of demand that were written before summons in the matter was issued.
[126],
The defendant also relied on what the plaintiff’s counsel said
and may not have said in his opening address, as ammunition
for
undermining the plaintiff’s version regarding the conclusion of
the agreement with Mr Geissler and the terms of the agreement.
The
defendant selected certain passages from the address. The plaintiff’s
counsel submitted that this was a “
nit-picking
exercise”
and
that the defendant was ignoring irrefutable, common cause facts. I
need not deal with much of the detail. This address was not
a
statement under oath and cannot serve as a replacement for what the
plaintiff said under oath about the agreement and its terms.

Notwithstanding the technicalities, the defendant elected not to call
evidence to refute the plaintiff's version, which was given
under
oath. Mr Knott-Craig, on his own version, had no knowledge of the
matter. He could not deny the conclusion of the agreement,
but could
only comment on Mr Geissler’s authority to conclude such an
agreement and the consequences for him if he acted
outside the scope
of his authority or powers.
[127]. Considering
all of the evidence, including the emails and the defendant’s
election not to call Mr Geissler, the plaintiff,
in my view, has
proven, on a balance of probabilities, that he entered into an
agreement with Mr Geissler on the terms he testified
to under oath.
IS
THE DEFENDANT BOUND BY THE AGREEMENT
?
[128]. A second and
more difficult issue for determination is whether the plaintiff has
proven on a balance of probabilities that
the defendant is bound by
the agreement.
[129]. Counsel for
the plaintiff submitted that it has been proven that the defendant
was bound on the basis of Mr Geissler’s
ostensible authority.
The plaintiff sought to amend its replication by pleading “an
estoppel in conjunction with the ostensible
authority of Mr
Geissler”. I will revert to that issue later. Counsel for the
defendant has disputed this and has argued,
in essence, that the
plaintiff cannot by virtue of the pleadings, as they stand, rely on
ostensible authority The defendant opposed
the plaintiff’s
application to amend his replication, but submitted, in the
alternative, that even if the plaintiff were
to be allowed to amend,
the plaintiff did not make out a case of ostensible authority.
[130].
In his particulars of claim, as they stood at the time of trial, the
plaintiff did not rely on actual authority, but alleged,
inter
alia,
in
paragraph 2.4 of the particulars of claim, that he (i.e. the
plaintiff) acted in person in entering into the agreement and that

“[t]
he
defendant was represented by Mr Muchenje and Mr P Mr Geissler
(hereinafter referred to as the representatives) who were then

occupying the positions of the Head of Finance Division and the
Director of Product Development, respectively, in the employ of
the
defendant The representatives were acting within the course and scope
of employ with the defendant.
The
representatives had
ostensible authority to negotiate and to contract for
and/or on behalf of the
defendant
(emphasis
added).
[131].
In paragraph 3 of the particulars of claim the plaintiff alleged,
that after the conclusion of the agreement the defendant
ratified it
and
“
used
and/or utilised [
the]
product (Please
Call Me) to generate income”.
In
argument the plaintiff did not rely on this point, but relied on the
ostensible authority point. I shall, nonetheless, discuss
this basis
later.
[132].
In response to the plaintiff’s allegations of ostensible
authority, the defendant, in its main plea, denied all the

allegations in paragraph 2.4 of the particulars of claim
“
as
if specifically traversed
’
and
pleaded in amplification of that denial, that it denied that
“
the
representatives
”
referred
to in paragraph 2.4.2, i.e. Mr Muchenje and Mr Geissler, had either
express, or implied, authority to conclude the agreement
on its
behalf; also denied that it represented to the plaintiff that they
had authority to conclude the alleged agreement on its
behalf and
denied that any agreement, either on the terms alleged,
“
or
any other terms whatsoever,
was
concluded between the parties.
[133]. The plaintiff
delivered a replication, but did not deal at all with the issue of
authority or ostensible authority in that
pleading. The replication
was very brief and only replicated to the defendants allegation that
the plaintiff had cancelled or rescinded
the agreement by a letter
dated the 12-of March 2008.
[134]. In argument
the plaintiff’s counsel disavowed reliance on actual authority,
or ratification and relying squarely and
solely on ostensible
authority, submitted that the plaintiff had proved that Mr Geissler
had ostensible authority to bind and did
bind the defendant in
entering into the agreement with the plaintiff.
[135].
A great deal of the time in argument on this issue was expended on
whether the plaintiff could rely on ostensible authority,
because of
the manner in which it was pleaded. The defendant’s submissions
in this regard were premised on the authority
of “
Amler’s
Precedents of Pleadings”,
and
particularly, the cases cited in that work under the topic of
“
Agency”,
where
the author discusses ostensible authority and estoppel.
6
[136]. The defendant
submitted that if reliance is placed on ostensible authority, the
elements of estoppel must be alleged, including
a representation by
the alleged principal, as well as the necessary causation. It was
furthermore submitted on behalf of the defendant,
that since the
plaintiff did not plead the elements of estoppel, the plaintiff could
not rely on ostensible authority. According
to this argument, the
plaintiff was obliged to rely in his particulars of claim on the
actual authority of the defendant’s
representative and once the
defendant denied it, to then plead an estoppel in the replication.
[137]. On behalf of
the plaintiff, it was submitted that actual authority could not be
pleaded in the particulars of claim if there
was no actual authority
and if the case that was to be made out was that there was ostensible
authority. It was furthermore argued,
that in this instance,
ostensible authority had been fully pleaded in the particulars of
claim, albeit, with less particularity.
[138],
The plaintiff's counsel submitted further that by alleging
“
ostensible
authority
in
his particulars of claim, the plaintiff had
"axiomatically
pleaded an estoppef’]
that
the defendant’s remedy was to serve a notice upon the plaintiff
to remove the cause of complaint, but, instead, the defendant
pleaded
to the allegation
of
“ostensible authority”
and
even requested further particulars concerning the issue. According to
the plaintiff's counsel, “
that
meant that there was a triable issue on the pleadings as they stood’.
It
was further submitted on behalf of the plaintiff, on this point, that
the plaintiff in his particulars of claim, did allege that
Mr
Geissler, in entering into the agreement with the plaintiff, was
“
acting in
his capacity as Director of Product Development and Management, in
the employ of the defendant’.
[139].
Notwithstanding the submission that the plaintiff had made out a case
of ostensible authority on the pleadings as they stood,
the
plaintiff, nevertheless, after the close of the defendant’s
case, after he had led evidence in rebuttal on the issue
of
cancellation and after the matter had been adjourned for final
argument, sought an amendment of his replication, to, in effect,

plead an estoppel and the facts supporting it. It was argued in
support of the amendment, that it was in order to allege in what

respects Mr Geissler had the
“
trappings
of authority'.
It
was submitted further, that the plaintiff had raised ostensible
authority from the outset and that the defendant could not contend

that it was taken by surprise on the issue. It was further contended
that the defendant’s denial in its plea that Mr Geissler
had
ostensible authority to conclude
[142].
It was further submitted on behalf of the plaintiff, that he
reasonably relied on the defendant’s representation that
Mr
Geissler had authority to enter into the agreement. The plaintiff
could not be blamed for placing full reliance on the aura
of
authority that ‘
engulfed”
Mr
Geissler; that the plaintiff had been advised by his superior, Mr
Muchenje, that Mr Geissler was the appropriate person to deal
with
and even Mr Knott-Craig had testified that he could not blame the
plaintiff for believing that Mr Geissler had the necessary
authority.
[143]. The
plaintiff’s counsel submitted further, that the plaintiff was
clearly prejudiced by the representations made by
the defendant. The
plaintiff would not have imparted his idea to the defendant through
Mr Geissler, but for Mr Geissler’s
promises that if the product
proved to be technically and commercially viable, further
negotiations in respect of remuneration
would follow.
[144].
It was submitted further on this point, that the test for
establishing whether the representations were sufficient to establish

ostensible authority, was whether Mr Geissler had “
the
trappings of authority, set in context
as
laid down in
NBS
Bank Ltd v Cape Produce Co (Pty) Ltd and Others
8
Mr
Geissler, it was submitted,
“
in
his conduct and his environment fulfils all the requirements’’
laid
down in
Northern
Metropolitan and passes the test
’
laid
down in
NBS
Bank.
It
was submitted further that it was not contested that Mr Geissler had
the authority to agree to test the product (or idea) and
there was no
evidence to suggest that he could not have negotiated with the
plaintiff about the payment of compensation for the
use of the
plaintiff's idea. It was pointed out, that according to Mr Muchenje,
he thought that the promise which was made to the
plaintiff (i.e. by
Mr Geissler) was that if the product works he (Mr Geissler) was going
to further engage with the plaintiff and
obtain whatever other
approvals that were required; and that Mr Geissler never said to the
plaintiff that the plaintiff was not
going to be compensated. In this
regard it was submitted that there was no suggestion that Mr Geissler
did not have the authority
to enter into negotiations and then
obtaining any other approvals that were required
[145].
With reference, specifically, to its late amendment, it was submitted
on behalf of the plaintiff, that his counsel had made
it clear that
the plaintiff would seek an amendment dealing with the issue of
authority in due course. Further, that this was not
a new case of
authority, because the plaintiff had already pleaded
“
ostensible
authority’
from
the outset. Further, that the requirements of estoppel had been fully
canvassed with the witnesses, including by the defendant’s

counsel in his cross-examination of Mr Muchenje. Further, that the
defendant, despite its opposition to the amendment, did not
indicate
that it would seek leave to re-open its case, or that it would suffer
prejudice. Further, that it was permissible in terms
of law for a
party, during the course of a trial, to bring the pleadings in line
with the evidence. The plaintiff’s counsel
likened the
defendant’s opposition to the amendment to hypocrisy, in that
it had also, during the course of the trial, amended
its plea in
order to bring it in line with the evidence
9
.
[146].
On behalf of the defendant, relying on
Northern
Metropolitan,
it
was submitted that “
ostensible
authority,
is
just another name for an estoppel which is raised against a denial of
actual authority; that it had to be pleaded comprehensively,
i.e. not
just as a
“
label
'
,
but
by averring all the factual elements in satisfaction of the
requirements of an estoppel, which are conveniently summarised in
Northern
Metropolitan
10
;
that
the plaintiff’s cryptic reference to the label
“
ostensible
authority’
in
his particulars of claim, was inadequate and did not entitle him to
rely on the estoppel.
[147],
The defendant opposed the plaintiff’s application to amend his
replication so as to plead estoppel, on the following
grounds: that
the absence of a pleading of estoppel in the plaintiff’s
replication was raised by the defendant in the course
of its argument
on absolution from the instance; that, notwithstanding, the
plaintiff’s counsel, realising that an amendment
was required,
did not apply for an amendment there and then to introduce estoppel
but, instead, moved a notice of intention to
amend in the form of a
draft replication dealing with the issue of cancellation; that by
introducing an amendment to deal with
estoppel, the plaintiff was
attempting to introduce a new case that had not been pleaded before
and in respect of which the plaintiff
was not cross-examined and
which was not in issue when the plaintiff and his witnesses
testified. It was further submitted on behalf
of the defendant, that
the potential prejudice to the defendant was obvious. The amendment
should have been moved at the earliest
opportunity and holding it
over until completion of the evidence and then
“
unequivocally
withdrawing it, only to reintroduce it at a much later stage, when
the matter was argued, was impermissible".
It
was submitted that the plaintiff should not at this late stage be
allowed to introduce a new case on ostensible authority, and

particularly in circumstances where the plaintiff’s witnesses
were not cross-examined concerning the allegations now intended
to be
introduced by way of the amendment. It was also not the basis upon
which the defendant presented its evidence. Referring
to
CIBA
- Geigy (Pty) Ltd v Leishof Farms (Pty) Ltd
11
and
Randa
v Radapile Projects CC
12
,
it
was submitted that the amendment should not be allowed in the
circumstances.
[148]. It was
further submitted on behalf of the defendant that the intended
amendment did not, in any event, make out a case of
ostensible
authority, was excipiable, and should, for that reason, also be
refused. In the alternative, it was submitted that even
if the
amendment was to be granted, the plaintiff has not proved the
ostensible authority of Mr the agreement on its behalf and
its denial
that it made any representation to the plaintiff that Mr Geissler had
such authority, entitled the plaintiff to replicate
on those issues.
[140].
It was further submitted on behalf of the plaintiff that the
requirements for relying on ostensible authority, as explained,
inter
alia,
in
Northern
Metropolitan Local Council v Company Unique Finance (Pty) Ltd and
Others
7
,
had
been met. Elaborating on this point, it was submitted that the
defendant made representations that Mr Geissler had authority
to bind
it contractually. The defendant appointed Mr Geissler to its board
and he was a full director, carrying the title of
“
Director'’.
His
designation was “
Director
of Product Development and Management
(i.e.
he was an Executive Director); the management of New Products was an
important duty within the defendant; Mr Geissler was
feared at the
defendant and he was also charged with the security role; the
plaintiff was intimidated by Mr Geissler and it was
the defendant who
permitted Mr Geissler to portray himself as someone who was to be
feared in the organisation; Mr Geissler did
not give the impression
that he did not have the authority to enter into the agreement with
the plaintiff; deals were concluded
at the defendant, in general,
without authority and were then later ratified; both the plaintiff
and Mr Muchenje were aware of
this; the
“
Vodacom
way'
was
a culture at the defendant in terms of which deals worth millions of
rands were concluded merely on a handshake and the defendant

encouraged this culture; Mr Geissler is the one that announced the
launch of the “
Please
Call Me”
product
and even though that occurred after the conclusion of the contract,
it shows that he had authority concerning the implementation
of the
deal and it also confirmed
"his
aura of authority”.
It
was further submitted that the defendant, through its internal
newsletter,
“
Talk
Time",
informed
its employees of the plaintiff’s idea and that it also appears
from the newsletter that the Managing Director of
the defendant at
the time, Mr Mtembu, praised the plaintiff for his contribution to
the development of the
"Please
Call Me”
product.
Even though this occurred after the conclusion of the contract,
according to the plaintiff's counsel, it demonstrated that
Mr Mtembu
must have assumed that whoever negotiated the transfer of the
innovation from the plaintiff to the defendant had concluded
some
kind of agreement with the plaintiff and that Mr Mtembu must have
known that the person was Mr Geissler. That, according to
the
plaintiff’s counsel,
"gives
credence to the trappings of authority of Mr Geisslef.
[141]. It was
further submitted on behalf of the plaintiff that the defendant’s
representations of Mr Geissler’s authority
was, firstly, in
written form by means of Mr Geissler’s name appearing on
letterheads of the defendant with his designation
as ‘Director
of Product Development and Management', as well as his designation on
emails directed at staff and, secondly,
the representations were in
other forms, creating an aura of authority around Mr Geissler,
particularly, concerning new product
development and management.
Geissler and that
the evidence does not support the estoppel, which was intended to be
pleaded.
[149]. With
reference to the requirements of estoppel and particularly in
relation to the plaintiff’s proposed amendment,
it was further
submitted as follows: with regard to a representation by words or
conduct, that the allegations in paragraph 1.1.1
of the proposed
amendment were factually incorrect, because Mr Muchenje never
testified that he had told the plaintiff that Mr
Geissler was the
correct person, with the capacity to negotiate with the plaintiff in
order to conclude a contract. On the contrary,
so it was submitted,
Mr Muchenje knew that Mr Geissler had no such authority and did not
mislead the plaintiff concerning that.
It was submitted further, that
the plaintiff could not rely on the representation of someone who had
no authority to make such
representation on behalf of the defendant,
particularly, in relation to the kind of unique agreement that the
plaintiff sought
to conclude. Furthermore, that any representation by
Mr Geissler concerning his authority, could not bind the defendant,
therefore,
the allegation that Mr Geissler had said that he had such
authority, was irrelevant. Even as a director, Mr Geissler had no
more
authority than anyone else to act on behalf of the company.
[150].
With reference to paragraphs 1.1.1, 1.1.2, 1.1.3, 1.1.5, 1.1.6, 1.1.7
and 1.1.9 of the proposed amendment, it was submitted
that the
appointment by the defendant of Mr Geissler and Mr Muchenje to their
respective positions, did not constitute a representation
that they
could contractually bind the defendant and that the plaintiff, as an
employee, ought to have known this. Mr Geissler’s
job was to
attend to new products of the defendant, which was something
different from having authority to bind the defendant contractually.

The conduct referred to in paragraph 1.1.3, namely that Mr Muchenje
expressly dissuaded the plaintiff from presenting his idea
to Mr
Knott-Craig, and persuading him to present it to Mr Geissler Van der
Watt and Mtabela, instead, did not constitute a representation
that
Mr Geissler had authority to enter into contracts on behalf of the
defendant, but, on the contrary, conveyed that
“
practical
tests at a level below the level of contracting had to be passed
before dealing with persons authorised to bind the defendant’.
[151].
It was further submitted on behalf of the defendant, that the conduct
referred to in paragraphs 1.1.5 and 1.16, namely, that
the defendant,
represented by Mr Geissler and Mr Sotiriades, gave effect to the
agreement (at least partially) by commencing with
the development of
the product (i.e. based on the plaintiff’s idea) and that Mr
Geissler informed the plaintiff that the
agreement was being
implemented,
“
constitute
ratification arguments”
and
have nothing to do with Mr Geissler’s ostensible authority to
contract on behalf of the defendant. In any event, this
conduct
followed upon the alleged conclusion of the agreement with the
plaintiff and was not relied upon by the plaintiff to enter
into the
contract with Mr Geissler.
[152],
It was also submitted that the conduct alleged in paragraph 1.1.7,
namely that the defendant had previously concluded and
conducted
business with third parties on a revenue share basis, was factually
incorrect. With reference to the evidence of Mr Knott-Craig,
it was
submitted that the defendant paid third parties for services rendered
to it on an ongoing basis and that third parties paid
the defendant
for the ongoing use of the defendant’s network, but the
defendant never entered into
“
revenue
share?'
agreements
with anyone. In any event, so it was submitted, the defendant never
concluded such agreements with employees and the
agreements that were
concluded for the defendant with third parties, were concluded by
those with the authority to do so, in accordance
with the defendant’s
written delegation of authority. On this point it was also submitted,
inter alia,
that
there was no evidence of any precedent that could have conveyed the
impression that Mr Geissler had the authority to enter
into a
contract such as the one contended for by the plaintiff.
[153]. It was argued
concerning the allegation in paragraph 1.1.9 of the proposed
amendment, namely, that Mr Knott-Craig entered
into oral agreements
with third parties and only had them ratified later, that in this
case there was no ratification. With reference
to the evidence of Mr
Knott-Craig on the issue, it was submitted that the board of the
defendant had no knowledge of the agreement
between the plaintiff and
Mr Geissler when it decided to launch the product. In any event, the
allegation did not support the foundation
for the alleged ostensible
authority, because it related to ratification. In any event, so it
was argued, agreements with third
parties were different from
agreements with employees and the plaintiff did not allege that he
had contracted with Mr Knott-Craig.
[154].
The defendant’s counsel argued further that there was no
evidence, or sufficient proof, that the representations alleged
by
the plaintiff, were representations of the defendant. For estoppel to
succeed the representation must be by the defendant. It
was submitted
in this regard, that neither the board, nor Mr Knott-Craig, were
aware of the negotiations between Mr Geissler and
the plaintiff, and
that no representation of Mr Geissler’s authority can be
attributed to the defendant. A failure to prove
that a representation
was made by the defendant would be fatal to the plaintiffs purported
reliance on estoppel, as was illustrated
by the facts in
Northern
Metropolitan.
[155].
Counsel for the defendant submitted, in the alternative, that even if
a representation by the defendant of Mr Geissler’s
authority
could be assumed to have been proved, it could not have been a
representation of which it could be said, that the defendant
should
reasonably have expected insiders or even outsiders to act upon it.
Further, that it could never have been reasonably relied
upon by the
plaintiff, because, firstly, mere absence of knowledge (or proof of
knowledge) on the part of the defendant, of the
negotiations between
the plaintiff and Mr Geissler, was fatal to a finding that the
defendant should reasonably have anticipated
that its conduct (i.e.
representation) would mislead the plaintiff and, secondly, it could
not have been reasonable for the plaintiff
to have relied on Mr
Geissler having authority to enter into the agreement, which was
unique and unprecedented at the defendant.
In support of this latter
point, reference was made to
Glofinco
v Absa Bank
13
Finally,
it was argued on behalf of the defendant concerning the proposed
amendment, that there was, in any event, no evidence of
reliance by
the plaintiff on any alleged representation. In elaboration of this
point, it was argued that there was evidence that
the plaintiff did
not question Mr Geissler’s authority, but there was no evidence
that he relied on any representation of
the defendant that Mr
Geissler had authority to negotiate and conclude the agreement with
him. At best for the plaintiff, he relied
on Mr Geissler’s own
representations of his authority, but that was not a basis to found
an estoppel (i.e. ostensible authority).
[156].
In my view, it is indeed so, that the plaintiff ought to have made
the necessary allegations to found his reliance on ostensible

authority. The requirements for the estoppels, to found a reliance on
ostensible authority, have been conveniently summarised in
Northern
Metropolitan
14
,
where
Mpati P, stated:
“
In
order to hold the appellant liable on the basis of ostensible
authority the respondents had to prove the following -
a representation
by words or conduct;
made by the
appellant and not merely by Du Plessis and/or Van Wyk that they had
authority to act as they did;
a representation
in a form such that the appellant should reasonably have expected
that outsiders would act on the strength of it;
reliance by the
respondents on the representation;
the
reasonableness of such reliance; and
consequent
prejudice to the respondents."
[157],
These requirements had also been stated informatively and succinctly
in an earlier decision in
NBS
Bank
15
where
Schutz JA, having referred to the simple explanation of the
distinction between the concepts
“
actual
authority
"
and
“
ostensible
authority'
by
Denning MR in Hely-
Hutchinson
v Brayhead Ltd and Another
16
,
stated:
“
As
Denning MR points out ostensible authority flows from the appearances
of authority created by the principal Actual authority
may be
important, as it is in this case, in sketching the framework of the
image presented, but the overall impression received
by the viewer
from the prínciplé may be much more detailed. Our law
has borrowed an expression, estoppel, to describe
a situation where a
representor may be held accountable when he has created an impression
in another's mind, even though he may
not have intended to do so and
even though the impression is in fact wrong
.
Where a principal
is held liable because of ostensible authority of an agent, agency by
estoppel is set to arise. But the law stresses
that the appearance,
the representation, must have been created by the principal himself.
The fact that another holds himself out
as is agent cannot, of
itself
;
impose liability
on him. Thus, to take this case, the fact that Assante held himself
out is authorised to act as he did is by the
way what Cape Produce
must establish is that NBS created the impression that he was
entitled to do so on its behalf. This was much
stressed in argument,
and rightly so. And it is not enough that an impression was in fact
created as a result of the representation.
It is also necessary that
the representee should have acted reasonably in forming that
impression: Connock’s (SA) Motor Co
Ltd v Sentraal-Westelike
Ko-operatiewe Maatskappy Bpk
1964 (2) SA 47
(T) at 50A-D, Although an
intention to mislead is not a requirement of estoppel, where such an
intention is
lacking and the
course of conduct is relied on as constituting the representation,
the conduct must be of such a kind as could reasonably
have been
expected by the person responsible for it, to mislead. Regard is had
to the position in which he is placed and the knowledge
he possesses.
A court will not hold a person bound by consequences which he could
not reasonably expect and are therefore not the
natural result of his
conduct: Monzali v Smith
1929 AD 382
at 386, Poort Sugar Planters
(Pty) Ltd v Minister of Lands
1963 (3) SA 352
(A) at 364A B:
[26] What Cape
Produce therefore has to prove in order to establish Assante’s
ostensible authority is:
A representation
by words or conduct
Made by the NBS
and not merely by Assante, that he had the authority to act as it
did.
A representation
in a form such that the NBS should reasonably have expected that
outsiders would act on the strength of it.
Reliance by Cape
Produce on the representation.
The
reasonableness of such reliance.
Consequent
prejudice to Cape Produce.
[157]
The mere allegation in the particulars of claim, that Mr Geissler had
“
ostensible
authority’,
was
not enough. The plaintiff had to plead an estoppel in the
replication. If the plaintiff was aware at the outset of the true

facts, namely, that there was no actual authority and that he was
relying on ostensible authority, he should have pleaded the facts,
as
represented to him, to found such authority, in his particulars of
claim. If he was not aware that Mr Geissler had no actual
authority
and had pleaded actual authority and the defendant had, in turn,
pleaded the true facts (i.e. a denial of actual authority),
the
plaintiff may then have relied on estoppel in his replication
17
.
But it was essential for the plaintiff to have pleaded the facts as
represented to him, if he was aware of those facts. The estoppel,

which is not a cause of action, should then have been pleaded in a
replication, in response to the defendant’s plea.
[158]. An amendment
of the plaintiff’s particulars of claim, alternatively an
amendment introducing, or amending, his replication,
was necessary to
include the facts as represented to him The plaintiff’s legal
representatives were clearly aware of the
need for an amendment at an
early stage of the proceedings, if not before the actual trial,
nevertheless, they deliberately held
back the amendment and only
sought it at a late stage after both parties had closed their
respective cases and final submissions
were to be made on the main
issues
[159]. The plaintiff
relied heavily on Rule 28(10) of the Uniform Rules which provides
that the court may grant a party leave to
amend a pleading at any
stage before judgment and submitted that pleadings may even be
amended on appeal. No reason of any substance
was furnished for the
obvious delay and for only seeking the amendment at a very late
stage. It was submitted on behalf of the
plaintiff that the purpose
of the amendment was to bring the pleadings in line with the evidence
and to plead the issue of estoppel
and ostensible authority in the
replication.
It
was submitted that this Court, in considering the application, was to
exercise a discretion, but has to lean in favour of the
grant of the
amendment in order “to
ensure
that justice was done between the parties by deciding the real issues
between them
18
,
[160].
While it might be so that courts will quite readily grant amendments
to ensure and facilitate a proper ventilation of the
real issues
between the parties, courts are also sceptical of late amendments,
particularly those that are withheld deliberately
until all the
necessary evidence had been led and witnesses have been
cross-examined. In the well-known case
of
Florence Soap and Chemical Works (Pty) Ltd v Ozen Wholesalers (Pty)
Ltd
19
the
court refused an amendment which was deliberately withheld and only
moved when the trial was almost concluded. What was stated
in that
case is still valid now. There Neser J stated:
“
I
do not consider it
necessary to enquire whether the delay was mala fide, as, in my
opinion, it is not competent for a party to an
action to refrain from
raising in its pleadings an issue of which it is well aware because
it is of the opinion that the witnesses
of the other party to the
action might testify falsely if apprised of the allegations prior to
giving evidence. The object of pleadings
is to define the issues in
the action and the failure by a party to plead causes of action or
defendants of which it is aware cannot
be condoned if the only reason
for the failure is a desire to cross-examine witnesses before the
issues are pleaded. The fact that
some order in regard to costs could
be made which would compensate the other party is not the only
consideration. In the present
case the trial had proceeded for 5 days
and was nearing its end before notice of the amendment
was
given. Defendant
is, in my opinion, entitled to claim that the trial should proceed on
the issues raised in the pleadings and that
it should not at this
late stage be called upon to decide whether it would have to proceed
to trial had the issues sought to be
raised in the amendment been
timeously pleaded.”
[161].
As reasons for the delay it was submitted by the plaintiff’s
counsel, that the issue of ostensible authority was raised
in the
particulars of claim and was
“
fully
ventilated
”
in
the evidence; that the amendment was just to correct a technical
defect; that the documents relating to delegated authority were
only
discovered on 19 July 2013; that the defendant’s board’s
resolution to implement the plaintiff’s idea was
never
discovered, but handed to Mr Knott-Craig during his evidence; and
further, that it would not have been prudent to launch
the
application for amendment before the record of the hearing was
available, in this regard, the attorney of the plaintiff, Ms
Wilna
Lubbe, who deposed to the affidavit in support of the application to
amend, states,
inter
alia,
that
parts of the record and especially, the crucial cross-examination of
Mr Knott-Craig, was not transcribed and only became available
on 13
September 2013. Lastly, it was contended, as part of the reasons,
that the defendant was granted an amendment to include
its,
so-called,
“
repudiation
defence
”
and
that this had led to the re-opening of its case and protracted
cross-examination.
[162]. I do not
regard the reasons furnished as cogent. It is reasonable to assume
that the plaintiff would have known at the outset
what had been
represented to him by the company and what he had relied on to
conclude that Mr Geissler had authority to enter into
the agreement
with him. I cannot see how the alleged delays in respect of the
document on delegated authority, or the board’s
resolution and
the transcript pertaining to Mr Knott-Craig’s evidence, could
have, reasonably, prevented the bringing of
the amendment, unless the
amendment was dependent on the information gleaned from those
documents. As for the defendant’s
amendment, the circumstances
involved there were not the same as in the case of the amendment
sought by the plaintiff.
[163].
In the absence of cogent reasons for withholding the amendment until
a very late stage it might be inferred that, either
the facts to be
introduced by way of the amendment were not known to the plaintiff
until after all the evidence was in, or that
the amendment was
withheld for the same kind of reason that it was withheld in
Florence
Soap.
That
courts may grant amendments at any stage up to judgment, is without
question, but that rule is subject to a rider that the
application
must be brought within a reasonable time. There is no reason given
why the amendment was not sought at the outset (or
at least, at the
stage when absolution was sought by the defendant). If the amendment
had been brought earlier the defendant may
have proceeded
differently. This is not a case where costs could reasonably or
adequately make up for the predjudice that would
result if the
amendment is granted. Its grant may, technically, necessitate a
re-calling of the relevant witnesses. In my view,
the deliberate
withholding of the amendment until a very late stage cannot be
condoned. In the exercise of my discretion I would
not be justified
in allowing the plaintiff to amend, by introducing, for the first
time, the estoppel and the facts on which it
is based, at a very late
stage in the proceedings, having consciously and deliberately
refrained from amending earlier
[164]. The result of
the refusal of the amendment is that the plaintiff cannot rely on the
facts, he sought to introduce by way
of the amendment and
consequently, on the estoppel, because it was imperative for the
plaintiff to have alleged estoppel and the
facts in support of it in
full in his pleadings. In the circumstances, the plaintiff has not
made out a case of ostensible authority
and accordingly the defendant
has not been proved to be bound by the agreement that the plaintiff
concluded with Mr Geissler.
[165].
However, if I am found to be wrong in refusing the amendment, or if
the plaintiff may, notwithstanding the absence amendment,
still be
able to rely on
“
ostensible
authority”,
which
I do not find, I am of the view that the plaintiff failed to prove a
representation, or representations, that were made by
the defendant
knowingly, or at all that Mr Geissler had the authority to enter into
the agreement with the plaintiff, and has failed
to prove the
requirements for an estoppel. This is dealt with fully below.
[166].
The high watermark of the plaintiff's case, regarding the
representations, was that the defendant appointed Mr Geissler to
its
board and that he was a full director with that title and his
designation was
“
Director
of Product Development and Management.
The
mere fact that the defendant appointed Mr Geissler to that designated
position cannot, in the circumstances, be said to have
been a
representation by the defendant that Mr Geissler had the authority to
enter into the agreement on its behalf. The fact that
Mr Geissler was
a Director did not mean that he had the authority. The directors of a
company only have such authority as is conferred
on them expressly,
or implicitly, by the company's constitution
20
and, invariably, the powers to bind the company, in any transaction,
are bestowed on the directors as a collective (i.e.are bestowed
on
the board) and not on individual directors. Individual directors only
have such authority as the board, or someone authorised
to delegate,
delegates to them
21
.
The fact that it was Mr Geissler’s job to attend to new
products did not translate into him having authority to enter into

agreements pertaining to the same.
[167]. The fact that
Mr Muchenje dissuaded the plaintiff from submitting his memorandum
(i.e. containing his idea) to the list of
persons, as originally
envisaged by the plaintiff in his memorandum (including Mr
Knott-Craig), and to, instead, submit it to Messrs
Geissler, Van der
Watt and Mthabela first, was not a representation by the defendant or
conduct ascribable to the defendant. At
best, it was Mr Muchenje’s
representation to the plaintiff that Mr Geissler had authority which,
in turn, was based on Mr
Geissler’s representation of his own
authority. Mr Muchenje never testified to the effect that he relied
upon a representation
or conduct of the defendant that Mr Geissler
had authority to contract, on behalf of the defendant, with the
plaintiff in respect
of the plaintiff’s idea. Mr Muchenje was
clearly merely suggesting a more practical approach to the plaintiff,
namely to
start with Messrs Geissler, Van der Watt and Mthabela,
instead of starting at the top, namely with the Chief Executive
Officer,
Mr Knott-Craig, the Managing Director and the like.
[168].
The fact that Mr Geissler was feared at the defendant, or that he was
in charge of security, or that the plaintiff was
“
intimidated”
by
him, does not assist the plaintiff in proving the estoppel. Even if
this was some
“
aura"
which
the defendant allowed to be created around Mr Geissler, this did not
amount to a representation, or conduct, that was reasonably

foreseeable to indicate and which could be reasonably be taken to
indicate, that Mr Geissler had the authority to conclude contracts
on
behalf of the defendant (including with third parties in the position
of the plaintiff).
[169]. What Mr
Geissler told the plaintiff about his authority is not sufficient,
and neither was the fact that, neither Mr Geissler,
nor Mr Muchenje
informed the plaintiff that Mr Geissler did not have authority to
contract on behalf of the plaintiff. Furthermore,
the fact that Mr
Geissler and Mr Sotiriades subsequently developed a product utilising
the plaintiff’s idea, or that such
a product was subsequently
launched and marketed by the defendant would be relevant to an
argument of ratification (which the plaintiff
did not rely upon), but
is not relevant to whether Mr Geissler had ostensible authority to
contract on behalf of the defendant
with the plaintiff. Since such
production and marketing followed after the agreement, it could not
have been relied upon by the
plaintiff in entering into the agreement
with Mr Geissler
[170]. The
allegation by the plaintiff that the defendant had previously
conducted business with third parties on a revenue share
basis was
disputed. But assuming that this was so, (although I make no finding
in that regard), that too does not assist the plaintiff,
who is
required to show that there was a representation by the defendant or
conduct on the part of the defendant, which reasonably
represented to
him, that Mr Geissler had authority to conclude such agreements with
third parties, and, more particularly, with
someone in the
plaintiff’s position.
[171]. The fact that
Mr Knott-Craig may have entered into oral agreements with third
parties which were only ratified subsequently
by the board, in my
view, does also not assist the plaintiff. Mr Knott-Craig was the CEO
of the defendant and Mr Geissler was not
the CEO and was a mere
director It does not mean that if Mr Knott-Craig could do it, Mr
Geissler also had the authority to do likewise.
It would clearly not
be reasonable to assume so. In any event, there is no evidence that
either the plaintiff, or Mr Muchenje,
took into account such facts
before deciding to deal with Mr Geissler and that the plaintiff
relied on such facts in concluding
the agreement with Mr Geissler.
Even if there was such evidence, it would not have been sufficient to
meet the legal requirements
for the estoppel.
[172]. The fact that
the defendant’s internal newsletter carried the story of the
plaintiff's idea and that almost everybody
at the defendant knew and
was supposed to know of the plaintiff’s contribution to the
“Please Call Me” product,
was not a representation, or
conduct, of the defendant which was relied upon by the plaintiff to
conclude the agreement with Mr
Geissler. The fact that the Managing
Director of the defendant at the time, Mr Mthembu, knew of the
plaintiff's contribution to
the product, as appears from the article
in the newsletter, and the fact that Mr Mthembu may have assumed that
some agreement was
concluded with the plaintiff by someone from the
defendant, also does not assist the plaintiff in establishing the
ostensible authority
of Mr Geissler. Furthermore, the fact that the
plaintiff believed that Mr Geissler had the necessary ‘pre-eminence'
in the
organisation to negotiate with him on this concept, also does
not assist the plaintiff.
[173].
The plaintiff did not establish on the evidence, on a balance of
probabilities, that words, or conduct, of the defendant
in relation
to the authority of Mr Geissler, caused him to conclude that Mr
Geissler had the authority to contract with him. On
that basis alone
the estoppel should fail.
22
[174].
Furthermore, the plaintiff did not establish that
the defendant, by its representation of Mr Geissler’s

authority, assuming such finding could be made, should reasonably
have expected that such representation or conduct would mislead
the
plaintiff into believing that Mr Geissler had the authority to
conclude the agreement with the plaintiff
23
.
On the evidence, the plaintiff and Mr Muchenje relied on Mr
Geissler’s representation of his authority. There is no
evidence
that the plaintiff (or Mr Muchenje) relied on the
defendant’s representation of Mr Geissler’s authority to
conclude
a contract on its behalf
24
.
[175]. The plaintiff
has neither pleaded, nor relied on, ratification of an unauthorised
agreement. It was emphasised that the plaintiff
relied on ostensible
authority. However, insofar as it may be contended that there was
reliance on ratification, it has not been
proved that the defendant
had full knowledge of the facts, including the detail of the
negotiations and the agreement between the
plaintiff and Mr Geissler
and that, with such knowledge, it adopted Mr Geissler’s
unauthorised act (the conclusion of the
contract with the plaintiff).
Even though it was common cause that the Board of the defendant
authorised the launch of the product,
there was no proof that it was
aware of the detail of the negotiations between the plaintiff and Mr
Geissler, including Mr Geissler’s
agreement in respect of
payment for the idea and the promise to negotiate concerning the
amount of the payment. The fact that Mr
Knott-Craig, on the evidence,
was in all probability aware that the idea for the product emanated
from the plaintiff and that the
plaintiff wanted to be remunerated
for its use, does not assist the plaintiff.
PRESCRIPTION
[176].In
response to the plaintiff’s claim the defendant,
inter
alia,
raised
a special plea of prescription and asked that any claims of the
plaintiff which had arisen between November 2000 and 14 July
2005 be
dismissed with costs.
[177]. In its
special plea on prescription, to which the plaintiff did not
replicate, the defendant alleged:
“
1.
The plaintiffs claim against the defendant, as pleaded by the
plaintiff
;
are based on ‘an
ora! commercial contract' (‘the agreement’), which the
plaintiff alleges was concluded in and
during November
2000.
The plaintiff's
claim and debt according to his allegationsbecame due, as envisaged
in terms of section 12(1) of the Prescription
Act, No. 68 of 1969
(‘the Act) at the latest from 12 March 2001, alternatively
within a reasonable period of time from such
date which would not
have been later than 13 July 2005.
The launch of the
product occurred on 12 March 2001, from which date the alleged
generation of income and/or revenue from the use
of the product on
the part of the defendant would have commenced.
The
plaintiff's summons
was
served on the
defendant on 14 July 2008.
insofar as the
claims by the plaintiff in his prayers relate to any period between
12 March 2001 and 14 July 2005, such claims have
prescribed in terms
of the provisions of section 11 (d) of the Act, in that the summons
was served on the defendant more than three
years after the date upon
which the said claims arose.
WHEREFORE the
defendant prays that any claims of the plaintiff which have arisen
between November 2000 and 14 July 2005 be dismissed
webcasts.’'
[178].
It was not disputed that the plaintiff’s combined summons was
issued on the 8
th
of July 2008; was served on the defendant on the 14
th
of July 2005 and that claims of the plaintiff (in relation to the
contract that had arisen between November 2000 and 14 July 2005),

which were
“
debts”
in
terms of the Prescription Act No. 68 of 1969
(“the
Act’),
would
have prescribed within a period of three years from the date the
claims arose, but, definitely, by the time the summons was
issued.
[179].
Instead, the plaintiff’s counsel argued was that the
prescription plea did not relate to the relief that the plaintiff
was
seeking, namely a declarator and an order that the defendant
negotiate within him concerning remuneration. The plaintiff’s

counsel, with reference to the defendant’s plea of
prescription, submitted the following in written heads of argument:
“
It is trite
that prescription has to be pleaded and the onus rests upon the
defendant averring prescription. The defendant has failed
to plead
any prescription other than income and revenue up until the 14
th
of July 2005. The defendant is attempting to smuggle In a
prescription argument which is not being pleaded ”
[180].
In my view there is merit in the defendant's plea and no merit in the
argument of the plaintiff in response to it. It is
apparent from the
plea that it is couched in broad terms to cover any and all claims,
or “debts”, which arose between
November 2000 and 14 July
2005. The plea is not confined to claims for
“
income
and revenue",
whatever
that might mean. The language of the plea certainly covered all
claims that arose and were due between the said dates.
[181]
In terms of the Act, what prescribes is a “debt”. The
word
“
debt'
in
section 10(1), read with sections 11(d), 12(1) and 12(3) of the Act
has a wide meaning
25
and would not only include a claim to pay a plaintiff a share of
revenue, but also a claim that the defendant complies with its

obligations in terms of the contract, including its obligation to
negotiate with the plaintiff concerning reasonable remuneration
for
the use of his idea.
[182].
According to the plaintiff, the obligation of the defendant to
negotiate was a term of the contract which he concluded the

defendant, represented by Mr Geissler and arose at the time of
contracting, that is, within the period November 2004 and July 2005.

On the plaintiff’s own version, the contract was concluded
during about November 2000. According to the emails exchanged
between
the plaintiff and Mr Geissler, on 30 January 2001, the plaintiff
referred to “
the
verbal conversation that he had with Mr Geissler and said to Mr
Geissler
I
think we should
start talking about internal “rewards”. Can you please
notify me when can this be feasible’”.
Mr
Geissler's response is dated 6 February 2001 in which he,
inter
alia,
promises
to speak to Mr Knott-Craig about a reward once the product has been
launched and was successful. The product was launched
in February or
March 2001 and proved a success upon its launch. The debt to
negotiate arose and was due at any time after conclusion
of the
contract, or the launch of the product, but, most certainly, on the
plaintiffs own version, it arose and was due before
the end of 2001.
[183].
As I mentioned, the plaintiff did not plead in response to the plea
of prescription. On his version, he was clearly aware
of the debt and
the identity of the debtor (that is, the defendant) as well as the
facts from which the debt arose, long before
the end of 2001. The
debts that he is claiming in terms of prayers 1 and 4 (including the
alternative prayer 4) have clearly been
extinguished by prescription.
The relief claimed in prayer 1 is a declaratory order that the oral
contract, referred to in paragraph
2.1 of his particulars of claim,
was entered into between the parties, as alleged, and this prayer was
combined with an order directing
the defendant to “
comply
with the obligations in terms of the agreement.
This,
in my view, would also constitute a “
debf,
which
had prescribed. A declaratory order in respect of a debt which has
prescribed would be of academic value only and serve no
practical
purpose
26
[184]. In the result
the claims of the plaintiff stand to be dismissed for having
prescribed.
COMPETENCE OF THE
RELIEF SOUGHT
[185]. The
defendant’s counsel also argued extensively that the relief
sought by the plaintiff in prayers 1, 2, 3 and 4 of
his particulars
of claim was not competent. The plaintiff’s counsel also
presented a counterargument in that regard. However,
in light of the
conclusion I reached in respect of the authority of Mr Geissler and
on prescription, it is not necessary for me
to deal with this issue.
COSTS
[186]. For the
defendant it was submitted that costs should follow the outcome and
should include the costs reserved during the
course of the trial and
in respect of two counsel. Plaintiff’s counsel did not submit
the contrary. The plaintiff employed
two and the defendant employed
three counsel. Given the nature of the matter I am of the view that
the employment of two counsel
was justified. The costs that were
reserved are to be treated as costs in the cause.
[187].In the result
I make the following order:
1. The plaintiff’s
claims are dismissed with costs.
2. The costs are to
include all costs reserved during the course of the trial and
argument, as well as the costs of the amendment
which the plaintiff
sought, but exclude the costs of the amendment which the defendant
sought and was granted.
3. The costs shall
be in respect of two counsel.
P COPPIN
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
APPEARANCES:
FOR THE PLAINTIFF: C
PUCKRIN SC
WITH HIM R MICHAU SC
INSTRUCTED BY:
STEMELA AND LUBBE INC
FOR THE DEFENDANT: S
A CILLIERS SC
WITH HIM R A SOLOMON
SC AND A MCMANUS
INSTRUCTED
BY: LESLIE COHEN AND ASSOCIATES
1
According
to the witness Mr Zatkovich a Value Added Service' is a popular
telecommunication industry term for non-call services,
or, in short,
all services beyond standard voice calls and fax transmissions.
2
Pezutto
v Dreyer
[1992] ZASCA 46
;
1992
(3 SA 379
(AD) at 391E-F.
3
Cooper
and Others NNO v Seyfretts Trust Ltd
[2000] ZASCA 128
;
2001
(1) SA 122
(SCA) paras 5 and 16-18.
4
McWilliams
v First Consolidated Holdings (Pty) Ltd
1982
(2) SA1 (AD) at 10E-H
5
Shill
v Milner
1937
AD 101
at 105. And see also
Myers
v Abramson
1951
(3) SA 438
(C) and
Middeldorf
v Zipper NO
1947
(1) SA 545
(SR).
6
See
“Amler’s
Precedents
of Pleadings"
(Sixth
Edition) by L T C Harms pages 166-167,particularly page 166.
8
2002
(1) SA 396
(SCA)
9
Reference
was made here to the amendment brought by the defendant in relation
to the issue of the cancellation letter written
by Mr Masiio a
former attorney of the plaintiff.
10
Northern
Metropolitan, (supra)
at
para 28.
11
2002
(2) SA 447
(SCA) paras 30-46.
12
2012
(6) SA 128
(GSJ) paras 4-17.
7
2012
(5) SA 323
(SCA).
13
2002
(6) SA 470
(SCA) para 27
14
Northern
Metropolitan, (Supra)
at
para 28.
15
(Supra)
at para
2.
16
[1968]
1 QB 549
(CA) at 583A-G ([1967]
3 All ER 98
at 102 A~E).
17
See
‘
Amier’s
Precedents of Pleadings’
(6
th
edition) by L T C Harms at page 166.
18
Relying
on
‘
Amler’s
Precedents of Pleadings'
(2003
Edition) by L T C Harms.
19
1954
(3) SA 945
(T).
20
Ex
Parte Russlyn Construction (Pty) Ltd
1987
(1) SA 33
(D).
21
See
generally on the powers of directors M S Blackman et al “Commentary
on the Company's Act” (Volume 1) pp 4-28 up
to and including
4-31
22
See the facts in
Northern Metropolitan (supra).
23
See
the
Northern Metroplitan
case
(supra)
paras
45-46.
24
See
Glofinco v Absa Bank (supra)
para
13;
Northern Metropolitan (supra)
para
29.
25
See
Desai NO v Desai
[1995] ZASCA 113
;
1996
(1) SA 141
(A) at 146H-147A;
LTA Construction Ltd v
Minister
of
Public Works and Land Affairs
1992
(1) SA 837
(C) at 849H-J and the cases cited there.
26
See
Absa Bank Bpk vJanse van Rensburg
2002
(3) SA 701
(SCA) para 14.