The initial backers of “Please Call Me” inventor Nkosana Makate in his two-decade case against Vodacom are threatening legal action if they do not receive a portion of the settlement.
Last week, Vodacom settled with Makate out of court for an undisclosed sum.
For a number of years, Makate has had a strained relationship with the original funders of his case against South Africa’s largest mobile operator.
Chris Schoeman, through his company Raining Men Trade, provided the initial funding for Makate’s legal fees in exchange for a percentage of any eventual settlement. However, their relationship broke down when Makate attempted to cancel the agreement in 2015, leading to further legal disputes and arbitration.
At the heart of the legal conflict was whether Schoeman was still entitled to a significant cut of Makate’s compensation.
In letters seen by Business Day, SN Mnguni Attorneys — on behalf of Black Rock Mining, a company associated with Schoeman — wrote to Makate and Vodacom’s lawyers on the matter.
Should you fail to furnish the aforesaid written undertaking by close of business today [Monday], our client intends, without further notice, to launch urgent proceedings in the appropriate high court for an order interdicting and restraining you from paying out, transferring or in any way dealing with any portion of our client’s share of the settlement proceeds paid by Vodacom
— SN Mnguni Attorneys to Vodacom
“We have reason to believe that Stemela and Lubbe will not pay to our client, the funder, its 40% entitlement of the award,” the lawyers wrote to Vodacom on Monday.
According to the 2011 agreement, Schoeman is entitled to 40% of the payout, with the balance going to Makate.
Schoeman is threatening to take Makate to the high court if his demands are not met: “Should you fail to furnish the aforesaid written undertaking by close of business today [Monday], our client intends, without further notice, to launch urgent proceedings in the appropriate high court for an order interdicting and restraining you from paying out, transferring or in any way dealing with any portion of our client’s share of the settlement proceeds paid by Vodacom.”
On November 6 Vodacom’s board approved a settlement agreement for an undisclosed sum.
In recent years the fight evolved beyond whether the former Vodacom employee invented the service. Legal action in the latter half of the battle was premised on how much Makate was owed for his contribution.
Preliminary calculations indicate the amount being about R748m.
As part of the settlement process, a notice was sent to the Supreme Court of Appeal (SCA) withdrawing Vodacom’s appeal. Additionally, a notice was sent to the high court to abandon the February 8 2022 judgment.
In February, the mobile operator filed an application for leave to appeal against the SCA judgment that it must make a new offer to Makate. Vodacom argued in its application for leave to appeal to the Constitutional Court that the SCA judgment and order were “fundamentally flawed”.
The judgment saw two possible increases to Makate’s potential payout. The minority judgment of the SCA would have raised Makate’s compensation to about R186m, while the majority judgment would have entitled the inventor to a minimum amount of R29bn.
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