Mr Kenneth Nkosana Makate, a Vodacom employee, conceived the idea for the "Please Call Me" mobile service in 2000. He disclosed the idea to Mr Philip Geissler, Vodacom’s Director of Product Development, and they orally agreed that Vodacom would test the idea and, if successful, negotiate reasonable compensation for Makate, with Vodacom’s CEO to determine the amount if negotiations failed. The product was developed, launched, and became hugely successful, generating billions of rands. Despite internal acknowledgements crediting Makate as the inventor, Vodacom failed to negotiate compensation and later denied both the agreement and Geissler’s authority, and alleged that Makate’s claim had prescribed. Makate instituted action in the High Court to enforce the agreement or, alternatively, sought development of the common law under section 39(2) of the Constitution.
Leave to appeal was granted and the appeal upheld. The High Court’s order was set aside and replaced with an order declaring Vodacom bound by the agreement, directing Vodacom to commence good-faith negotiations with Makate to determine reasonable compensation, failing which Vodacom’s CEO must determine the amount. Vodacom was ordered to pay Makate’s costs in all courts.
This landmark decision affirmed the enforceability of agreements to negotiate in good faith in South African law, clarified the doctrine of ostensible authority, and reinterpreted prescription law through a constitutional lens. It is a leading authority on the application of section 39(2) of the Constitution to statutory interpretation and significantly advanced fairness in commercial and employment-related innovation disputes.