Last week, the Constitutional Court comprehensively overruled the Supreme Court of Appeal (‘the SCA’) in the highly publicised case of Vodacom v Makate. The decision adds another twist to the nearly 20-year legal battle over fair compensation owed to Kenneth Makate for purportedly inventing Vodacom’s ‘Please Call Me’ (‘PCM’) service.
As we reported in February 2024, the SCA previously ordered the telecommunications giant to pay Makate 5–7.5% of the total revenue derived from PCM from March 2001 to date of judgment, plus mora interest. At the time, forensic analysts estimated this payout to be somewhere between R29 billion and just over R55 billion.
On appeal to the Constitutional Court, Vodacom argued that the SCA had not only overstepped its powers by substituting a previous High Court order – despite Makate not cross-appealing – but also carelessly disregarded or misinterpreted key facts and evidence. As such, Vodacom contended that the SCA’s ruling amounted to a ‘total failure of justice’ and violated its constitutional right to a fair hearing.
In a unanimous decision, the ConCourt found in favour of Vodacom. In his final ruling from the bench, departing Acting Deputy Chief Justice Madlanga delivered a scathing, landmark judgment. In a careful assessment of the evidence and the SCA’s flawed adjudication, Madlanga ADCJ formulated a new constitutional standard – the ‘duty of proper consideration’ – that requires courts to provide adequate reasons and engage meaningfully with all material issues and facts before it.
Finding that the SCA failed to discharge this duty, Madlanga ADCJ held that the ruling lacked sufficient reasoning, disregarded certain critical facts and issues, omitted to meaningfully evaluate certain arguments and crucial evidence, and readily and unfairly accepted Makate’s version without explanation. He concluded that the SCA’s defective assessment was so ‘fundamental and pervasive as to vitiate [its] judgment’, constituting a breach of the rule of law and impeding Vodacom’s right to a fair hearing under section 34 of the Constitution. In addition, the SCA lacked the jurisdiction to substitute its own order in the absence of a cross-appeal. Resultantly, the matter was remitted to the SCA to be reheard by a different panel of judges.
While the ruling is highly critical of the SCA’s adjudication, it also provides a pivotal reminder to prospective litigants facing high-stakes disputes: The importance of experienced and strategic legal guidance that anticipates procedural and constitutional challenges cannot be overstated.
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