How Vodacom won 'Please Call Me' case

2014-07-02 09:01 - Duncan Alfreds, Fin24
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Vodacom has won the 'Please Call Me' case brought by Nkosana Makate. (Duncan Alfreds, Fin24)

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Cape Town - The case between Vodacom and Nkosana Makate seems to have been dismissed on technical grounds, according to the judgment given in the Gauteng High Court in Johannesburg.

The lawsuit came about because Makate claimed that he developed the idea of a "Please Call Me" service that could lead to revenue for the operator when people made extra calls.

In his book, Second is Nothing, former Vodacom CEO Alan Knott-Craig talks about the service and the impact it had on the company in the early days.

Makate had submitted that he met with Vodacom official Lazarus Muchenje who passed on the idea to Philip Geissler. At the time, Geissler was head of product development and negotiations over compensations began.

Makate the judge found, asked for 15% of the revenue generated by the "Please Call Me" service which was launched in March 2001, and he was given credit in a Vodacom newsletter e-mail.

Authority

However, Judge Phillip Coppin found that the Makate had not shown that Geissler had, in fact, been authorised to represent Vodacom or had the right to promise any kind of compensation for the service.

"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 the plaintiff concluded with Mr Geissler," wrote Coppin.

Though Geissler was later appointed as a Vodacom director, the judge found that this did not mean he automatically had any authority to make deals on behalf of Vodacom.

"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, and, invariably, the powers to bind the company, in any transaction, are bestowed on the directors as a collective (ie are bestowed on the board) and not on individual directors."

The judge also ruled that simply having being given credit in an e-mail did not meet the criteria for evidence that an agreement was in place between Vodacom and Makate.

Vodacom was cautiously optimistic in its response to the judgment.

"It's a large (99 page) judgement and we're currently reading through it to better understand the ruling. We are, however, pleased with the outcome and that our position on this case has been upheld," Vodacom spokesperson Richard Boorman told Fin24.

Costs

The case was dismissed with costs.

Some reports suggest that Makate had expected to win anywhere from R700m to R6.7bn from Vodacom and a number of individuals and companies had invested in the case, which had substantial legal costs.

Sterling-Rand, formed by a team of attorneys, are reported to have funded Makate to the tune of R5m to fight the case and had expected around 40% to 50% of the settlement.


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