Tag: court case

By Zelda Venter for IOL

In a victory judgment for Please Call Me (PCM) inventor Nkosana Makate the Gauteng High Court, Pretoria on Tuesday found he was shortchanged by Vodacom and that the cellphone giant must go back to the drawing board to come up with a suitable amount.

The court gave Vodacom’s CEO Shameel Joosub one month in which to recalculate what is owed to Makate, using the guidelines issued by the court.

Judge Wendy Hughes made it clear that the calculations used by Joosub earlier in offering Makate R47 million, for what the judge called a brilliant invention, was by far too conservative.

While the judge said Vodacom was in a better position than the court to calculate the true worth of the invention, she gave certain guidelines of what must be taken into account when the amount due to him is recalculated.

Judge Hughes ordered that Makate is entitled to be paid 5% of the total voice revenue generated from the PCM product – starting from March 2001 to March 2021 – and not only for five years, as earlier calculated by Joosub.

She ordered that the total voice revenue must include PCM revenue derived from prepaid, contract (both in bundle and out of bundle) and interconnect fees as set out in Vodacom’s annual financial statements.

“The CEO was disingenuous to project that PCM, as a third party service provider, should only be allocated a duration of five years,” the judge said. She pointed out that Joosub claimed that the R47-million calculation to which he had arrived, was “generous” as well as his conclusion that the invention had generated money for Vodacom over five years.

“The facts demonstrate otherwise. In my view, it is therefore projectable that PCM as a brilliant concept would have had the longevity which it has today. Thus, the eighteen years proposed by Makate (over which time Vodacom has benefitted from PCM) is reasonable and probable.”

The judge added that in regard to the duration to which Vodacom had benefited from the PCM concept, the CEO is to apply the eighteen-year period when he recalculated the amount due to Makate.

As part of his calculations, the CEO must assume that the average call duration of the return calls is two minutes and payment in this respect must not be less than the published Icasa effective rate;

In finding that Vodacom did shortchange Makate, she said he is entitled to 27% of the number of PCM’s sent daily over the years as being revenue generated by the return calls to the PCM.

While it is not yet known what the amount due to Makate will be using the guidelines issued by the court, it will be far more than the R47 million offered to him. Makate, during his application to the high court, said he is owed at least R10-billion.

Makate and Vodacom have been embroiled in litigation over the PCM product for more than two decades.

The Constitutional Court earlier ordered Vodacom to negotiate in good faith and that reasonable compensation had to be paid to Makate for PCM. Unhappy with the R47 million offered to him by the CEO, Makate asked the court to review this amount and to make its own calculations as to which his invention was worth.

But the judge said the CEO is better equipped in making the sums, as he has decades of specialist experience, and is exposed and privy to all the relevant and necessary resources and documents of Vodacom, to compute a reasonable and just compensation for Makate.

Judge Hughes commented that, regrettably, the CEO’s earlier model placed reliance on assumptions which are not backed up by facts or documents.

The judge added that to her, it is clear that Vodacom earlier defied the Constitutional Court order to act and negotiate in good faith.

E-toll mess just gets messier

Sanral may have to restart the legal process from scratch should it want to recover the money it claims it’s owed, or abandon the cases entirely.

Last week, the Organisation Undoing Tax Abuse (Outa) barred roads agency Sanral from pleading 55 cases against its members in court on the grounds that it had not followed court procedures and had delayed presenting its cases in court. These 55 cases represent nearly R2-million in outstanding e-tolls.

What this means is that Sanral may have to restart the legal process from scratch should it want to recover the money it claims it’s owed, or abandon the cases entirely. The roads agency has issued several thousand summonses to collect outstanding e-tolls and has obtained default judgement against some who failed to put up a defence in court. Though Sanral has trumpeted these default judgments as precedent-setting victories, Outa says they are nothing of the sort. They merely mean the defendants failed to show up in court and argue the case.

Outa is defending roughly 150 summonses issued against its members, roughly a third of which it says have now been barred.

Sanral is attempting to recover about R11bn in outstanding e-tolls from Gauteng motorists. Some 3m motorists are reckoned to owe e-tolls, out of 3,5-4m registered motorists in the province.

As usual, Outa and Sanral have entirely different interpretations of the same facts. Says Vusi Mona, Sanral’s GM for communications: “There are no matters in which Sanral has been barred from pleading. There have been ongoing engagements with Outa’s attorneys for agreed timeframes for the exchange of pleadings and there are no operative bars against Sanral.”

Both Sanral and Outa had previously agreed to run a “test case” which would serve as a legal precedent, so as to avoid clogging the courts with thousands of cases. Last month, Outa pulled out of the test case process as this was taking too long to get to court, opting instead to lodge papers in the high court in Pretoria in defence of one of its members, Thandanani Truckers and Hauliers, which outlines its opposition to e-tolls.

“We were aware that while developing the complicated e-toll test case process, Sanral was issuing default judgments and declarations against the general public, in the belief they would be able to secure a precedent-setting case,” says Ben Theron, Outa’s chief operating officer. “One would have thought Sanral would have learnt by now that coercion and intimidation have not worked in the past and will not resolve the entity’s mounting debt.

“As far as Outa is concerned, Sanral’s journey of following an extensive litigation process to collect outstanding debt will take years to unfold and is a significant waste of the courts’ time and taxpayers’ money,” says Theron.

Another potential problem for Sanral is the issue of prescription in terms of the Prescription Act, which makes it difficult for creditors to recover debts older than three years.

Who is going to criminalise 3m motorists? We know what happens to governments who go to war with their own people on issues such as this
E-tolls came into being in December 2013, so any outstanding e-tolls from December 2013 to May 2014 may have to be written off by Sanral. Outa chairman Wayne Duvenage reckons that more than R1bn of the outstanding e-tolls have now prescribed and are therefore unrecoverable by Sanral. And it’s getting worse every day.

Sanral’s Mona takes a different view: “To date, the issue of prescription has not been raised by any defendant in any matter where Sanral has sought payment of outstanding e-tolls. In any event, the failure to pay e-tolls is a criminal offence which is not subject to prescription.”

Sanral is relying on the Administrative Adjudication of Road Traffic Offences (Aarto) Act, which criminalises certain traffic-related offences in the Joburg and Pretoria metropolitan areas.
Wayne Duvenage
A legal expert specialising in prescription told Moneyweb that Sanral is treading on thin ground if it is relying on Aarto to recover its debts. “Sanral’s attempts to recover debts is a civil matter, and the Prescription Act applies. If I was defending clients summonsed by Sanral I would argue this vigorously and have any debt older than three years thrown out. I doubt any court is going to look at this as a criminal matter.

“Another point I would argue is that Sanral is potentially engaging in reckless lending in terms of the National Credit Act, since it is effectively issuing credit without doing the requisite credit assessment, despite the fact that Sanral says it is exempt from the NCA.”

Duvenage says the matter of prescription is likely to be contested by Sanral but any entity attempting to criminalise 3m defaulting motorists through the courts is playing with fire. Who is going to criminalise 3m motorists? We know what happens to governments who go to war with their own people on issues such as this.”

Theron says despite warnings from civil society that the Gauteng e-toll scheme would collapse due to its cumbersome, costly and burdensome administrative processes, Sanral and the department of transport have decided to continue their litigious war against motorists.

Meanwhile, earlier this month, Sanral announced that it had cancelled all future bond auctions pending the outcome of a governmental task team inquiry into road funding. Sanral needs to borrow about R600m/month to cover its interest bill and operations, but the auctions have been poorly supported over the last year. Sanral says it has enough cash to last a few months. Institutional investors and rating agencies are increasingly concerned at the state of governance in state-owned companies, which means the government will be left to pick up the tab.

Source: MoneyWeb

Follow us on social media: 

               

View our magazine archives: 

                       


My Office News Ⓒ 2017 - Designed by A Collective


SUBSCRIBE TO OUR NEWSLETTER
Top