Having been a part of the litigation landscape for less than a
decade, the full impact of litigation funding companies is yet to
be determined. However, the now notorious 'Please call me'
case has provided a hint of what may be hiding in the shadows
including the potential for wide-scale reform of South African
As has been widely reported, Mr Makate has been locked in a
dispute with Vodacom (a monolithic mobile phone operator) since
2008. In short, he argues that he developed the novel 'please
call me service' (in terms of which pre-paid users, reluctant
or unable to initiate a call, send a text to somebody calling on
that person to ring them). He further alleges that he entered into
an agreement with Vodacom in terms of which he undertook to hand
over the concept, which if proved technically and financially
viable, in exchange for remuneration on terms to be negotiated.
Backed by litigation funders, and after Vodacom apparently reneged
on the "agreement", he instituted an action for damages
against Vodacom, claiming 15% of the estimated ZAR 70 billion
revenue generated by Vodacom since 2001.
The legal process has, unsurprisingly, taken many years to wend
its way through the South African courts. In an uncontroversial
judgment, the High Court dismissed Mr Makate's claim on two
it noted that the agreement relied on was void because the
person who represented Vodacom in concluding the agreement lacked
authority to do so1; and
it ruled that the claim had been time-barred (or
Given that it considered the appeal without merit, the Supreme
Court of Appeal ("SCA") dismissed Mr Makate's
application for leave to appeal (in other words, the merits of the
matter was not argued before this court).
Undeterred, Mr Makate filed an application for leave to appeal
to the apex appeal court ie the Constitutional Court
("CC"). In his application for leave to appeal to the CC,
he raises the following arguments:
that the law on prescription (time barring) is
that the CC should use its expanded jurisdiction to decide the
issue of authority.
To put the latter argument into context, until two years ago the
CC was the final court of appeal only in relation to constitutional
matters. An amendment to the South African constitution which came
into effect in August 2013 extended the court's jurisdiction to
include deciding appeals that raise matters of public interest.
Until the CC's decision in Paulsen and Another v Slip Knot
Investments 2015 (3) SA 479 CC the question of what
constitutes the public interest had yet to be determined. In broad
terms the CC held that where the impact and consequences of a
decision would be "substantial, broad-based, transcending the
litigation interests of the parties, and bearing upon the public
interest" it will entertain the merits of an appeal.
Notwithstanding the tenuous merits of Mr Makate's appeal, in
a surprise move the CC has recently granted him the right to argue
his appeal before the full court in October this year. He will be
free to raise both grounds of appeal.
The result is surprising for the following reasons: the
constitutionality of the application of a time bar has already been
the subject of a decision by the CC - and validated. Accepting that
the case of Napier vs Barkhuizen (2007 (5) SA 323 CC)
dealt with a challenge to the validity of a time bar clause
contained in an agreement of insurance and that Mr Makate is
challenging the validity of a statute of general application, it
would surprise us to see the statute being declared
unconstitutional. Similarly, the issue of authority had been
cogently dealt with by the High Court and confirmed by the SCA.
The case is significant for two reasons:
It highlights a nascent trend of a developing tension between
the SCA and the CC. Given the expanded jurisdiction of the CC, and
the divergence in opinion, the outcome of litigation may become
much more unpredictable in the future.
As we have seen in the silicosis litigation (See
Mankayi v AngloGold Ashanti article), litigation funders
have the potential to fundamentally change the legal landscape.
Even if Mr Makate fails in his bid to challenge the statutory
regime that has been in place since 1969, he has already put
Vodacom to significant legal costs.
1. For purposes of this newsletter, we have not dealt
with Mr Makate's attempts to amend his pleadings to cater for
the issue of estoppel prior to judgment being granted but after
evidence had been led
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Generally, Garnishee proceedings is done in two different stages. The first stage is for the garnishee order nisi, while the second stage is for the garnishee order absolute.
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