Makate v Vodacom (Pty) Ltd

• Jurisdiction: South Africa
• Citation: 2014 (1) SA 191 (GSJ)

Makate v Vodacom (Pty) Ltd
2014 (1) SA 191 (GSJ)

2014 (1) SA p191

Citation	2014 (1) SA 191 (GSJ)
Case No	2011/07680
Court	South Gauteng High Court, Johannesburg
Judge	Spilg J
Heard	August 24, 2011
Judgment	November 18, 2011
Counsel	F Magano for the applicant.; A McManus for the respondent.

Flynote : Sleutelwoorde B

Discovery and inspection — Discovery — Deferral — Whether to defer discovery to be decided on facts of particular case with reference to listed factors — Uniform Rules of Court, rule 35(7).

Discovery and inspection — Discovery — Electronic data — Rule 35 covering data stored on databases, that is retrievable by data searches — Uniform Rules C of Court, rule 35.

Headnote : Kopnota

This case concerns one Mr Makate who sued Vodacom (Pty) Ltd. In issue was whether he was the originator of a product — the 'Please Call Me' sms; whether Vodacom had agreed to pay him for it; and — if the court found for Makate on those issues — what he was owed. D

Pursuant to his claim Makate sought to discover documents in Vodacom's possession. However Vodacom failed to make proper discovery and this led Makate to apply to a court for it to order Vodacom to do so. Among the documents Makate applied for were ones relating to the amount Vodacom allegedly owed, and Vodacom objected to their discovery on two grounds.

The first was that discovery relating to quantum was premature. This was E because consideration of quantum was contingent on the court finding favourably for Makate on the issues of origination and the existence of a remuneration agreement. (Paragraph [24] at 199B.)

The court held that Uniform Rule 35(7) gave it a discretion to order or not order discovery and considered authority on its exercise. This was to the effect that whether to defer discovery had to be considered on a case-by-case F basis, with reference to factors such as the prejudice to the respondent, were the information to be revealed. Other factors were the potential for an applicant to abuse the discovery process; whether deferring discovery might impact on the possibility of a settlement; and the interests of justice in the particular case. Here, deferral was not justified. (Paragraphs [26] and [28] – [30] at 199E – G and 199I – 200I.) G

Vodacom's second objection to discovery was that it did not possess material relating to quantum. The court rejected this assertion and held that Vodacom's computer databases contained such data and that it could be extracted. The data comprised, inter alia, details of the senders and receivers of 'Please Call Me' SMSes — the product in dispute. (Paragraphs [33] – [34] at 201F – 202A.) H

This raised the question of whether rule 35 covered such electronic data. The court held that it did, the rule extending to data stored on a computer database that was retrievable by a data search. It accordingly ordered further discovery of the record of 'Please Call Me' sms's. (Paragraphs [37], [40] and [43] at 202G – 203B, 203J – 204B and 204E – 205D.)

Cases Considered

Annotations I

Case law

Southern Africa

Continental Ore Construction v Highveld Steel & Vanadium Corporation Ltd 1971 (4) SA 589 (W): considered J

2014 (1) SA p192

Federal Wine and Brandy Co Ltd v Kantor 1958 (4) SA 735 (E): referred to A

Genac Properties JHB (Pty) Ltd v NBC Administrators CC (previously NBC Administrators (Pty) Ltd) 1992 (1) SA 566 (A): referred to

Le Roux and Others v Viana NO and Others 2008 (2) SA 173 (SCA): referred to

Marais v Lombard 1958 (4) SA 224 (E): referred to

Middleton v Carr 1949 (2) SA 374 (A): referred to B

N Goodwin Design (Pty) Ltd v Moscak 1992 (1) SA 154 (C): referred to

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A): applied

Swissborough Diamond Mines (Pty) Ltd and Others v Government of the Republic of South Africa and Others 1999 (2) SA 279 (T): applied.

England C

Buchanan-Michaelson v Rubenstein and Others (1965) 1 WLR 390 (CA): referred to.

Rules Considered

Rules of court

The Uniform Rules of Court, rule 35: see The Supreme Court Act and the D Magistrates' Courts Act and Rules (Juta 2012) at 56-58.

Case Information

F Magano for the applicant.

A McManus for the respondent.

E An application for further discovery. The order is in para [43].

Judgment

Spilg J:

Nature of application

[1] The applicant, Mr Makate, instituted action proceedings against the F respondent, Vodacom (Pty) Ltd, for an order declaring that he had concluded a binding oral agreement with Vodacom, represented by Mr P Geissler, its Director of Product Development, and Mr Muchenje, the head of its Finance Division. The applicant also seeks an order for a statement and debatement of account, together with payment of the G amount to be found due.

[2] The trial which had been set down for November 2010 was postponed pursuant to a formal application by the applicant. The applicant claimed that he was unable to proceed because the respondent had failed to properly discover relevant documents, necessitating a rule 35(3) notice. The notice was served on 15 October 2010. It sought both H discovery and inspection of documents (rule 35(6) and (10) notices had previously been served). Subsequent to the postponement, and because not all the documents sought were produced, in May 2011 the applicant brought an application under rule 35(7) to compel the respondent to make further and better discovery of certain specified documents, and to I inspect them. The rule 35(7) application was opposed and is now before me for adjudication.

Background

[3] The issues in the main action are principally concerned with whether or not the applicant was the originator of a product used by Vodacom, J known as 'Please Call Me', and if so whether Vodacom had agreed to

2014 (1) SA p193

Spilg J

remunerate the applicant. Vodacom effectively denies both these allegations A in what can best be described as a rolled-up plea to which objection has not been taken.

[4] The applicant faces formidable obstacles, not the least of which is B documentation in the hands of Mr Alan Knott-Craig, the former CEO of Vodacom, claiming that he originated the product. He is supported by Vodacom's Director of Product Development and Management, Mr Philip Geissler. If correct, the documentation is destructive of the applicant's claim. Even if the applicant can demonstrate that the product was not the creation of Mr Knott-Craig, a further difficulty is overcoming C the defence that any rights attaching to a product originated by him during the course and scope of his employment with Vodacom belonged to it. In this regard the applicant claims that he was employed in Finance and not in the Research and Development Department ('R & D') of Vodacom. He also claimed that staff in R & D received additional remuneration for originating or devising products, and that Mr Geissler had expressly agreed on behalf of Vodacom to remunerate him. D

[5] In his published biography Second is Nothing (with Eunice Afonse), Mr Knott-Craig wrote (at p 154):

'The Please Call Me idea happened by chance. Alan was leaning over E the railing of the Vodacom building chatting to a colleague, Phil Geissler, when Phil pointed out one security guard trying to attract another's attention, and because his buddy didn't see him, the security guard called him on his cellphone. Alan immediately spoke to Leon about creating a Please Call Me service. Because the Please Call Me SMS sent was free, Vodacom made money by adding short advertisements F just below the message, but the real money came from the return call. This concept generated hundreds of millions in revenue. By 2008, Vodacom generated 20 million Please Call Me requests daily.'

[6] The colleague mentioned in the extract, Mr Geissler, sent an email to Mr Knott-Craig on 25 December 2009 effectively corroborating the account. He wrote: G

'As discussed, I read latest book and agree in principle with the way Please Call Me was created on the 4th floor outside your office with two of Vodacom's security guards playing a role of two prepaid users without any credit on their phones communicating with each other.

The concept of Call Me was refined inside your office minutes later H and launched officially in late 2001.

I hope this helps with media queries.

Merry Christmas

Philip' I

[7] By contrast the applicant relies in his particulars of claim on a number of admitted documents emanating from Vodacom, acknowledging that he had originated the product and undertaking to discuss remuneration. This appears from certain emails between Mr Muchenje, Mr Geissler or the applicant, the salient portions of which read: J

2014 (1) SA p194

Spilg J

A 'From: Lazarus Muchenje

Sent: . . . December 19, 2000

To: Kenneth Makate

Cc: . . . Philip Geissler; . . .

Subject: Buzzer product

B Ken,

The company is going to introduce a product similar in concept to the buzzer project soon. So well done for coming up with the buzz idea. We appreciate your innovative ideas

Lazarus Muchenje

Executive Head of Income Financial Control Division'

C From: Philip Geissler

Sent: 26 December 2000

To: Lazarus Muchenje: Kenneth Makate

Subject: Re Buzzer product

I will keep you guys in the loop

Philip Geissler

Director

D Product Development and Management'

'From: Kenneth Makate

Sent: . . . January 18, 2001

To: Philip Geissler; . . .

Subject: Buzzer product

How are we doing on this . . . . Any developments so far? (We still have E to meet.)'

Mr Geissler then requested the applicant to provide a name for the service ('What do you think we should call it? I need a name'), and the applicant replied by suggesting the name 'Voda-Back', and added 'Lastly F as per our verbal conversation, I think we should start talking about "REWARDS", can you please notify...