Case  CCT 51/24
[2025] ZACC 13

Hearing Date: 21 November 2024

Judgement Date: 31 July 2025

Post Judgment Media Summary  

The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.

On 31 July 2025 at 10h00 the Constitutional Court handed down a unanimous judgment authored by Madlanga ADCJ in an application for leave to appeal against a judgment of the Supreme Court of Appeal, handed down on 6 February 2024. This application was yet another instance of the unending litigation between Vodacom (Pty) Limited, the applicant, and Mr Nkosana Kenneth Makate, the first respondent, a former employee of Vodacom. The litigation, which spanned just under two decades, concerned compensation owed by Vodacom to Mr Makate for the “Please Call Me” (PCM) idea.

The first round of litigation culminated in a judgment in which the Constitutional Court, in 2016: (a) declared that Vodacom was bound by an agreement concluded by Mr Makate and Mr Phillip Geissler, the then Director of Product Development and Management at Vodacom, in respect of the PCM idea; (b) ordered that Vodacom and Mr Makate negotiate in good faith to determine reasonable compensation payable to Mr Makate in terms of the agreement; and (c) mandated that in the event of disagreement on reasonable compensation, Vodacom’s Chief Executive Officer (CEO), the second respondent, would break the deadlock and determine such compensation.

The second, and current, round of litigation commenced as follows. Negotiations between Mr Makate and Vodacom were unsuccessful and the matter was referred to the CEO. After a thoroughgoing process the CEO determined that R47 million was reasonable compensation for Mr Makate. Dissatisfied, Mr Makate took the CEO’s determination on review to the High Court of South Africa, Gauteng Division, Pretoria. The High Court found in Mr Makate’s favour and ordered a remittal of the determination to the CEO, subject to certain parameters. Vodacom appealed to the Supreme Court of Appeal, which dismissed the appeal and, further, substituted the High Court order with its own order, the pertinent portion of which read as follows: Mr Makate was entitled to 5%-7.5% of the total revenue of the PCM product, together with mora interest thereon, alternatively, interest in terms of the Prescribed Rate of Interest Act 55 of 1975; and that the total revenue of the PCM product should be calculated according to the computation models for compensation proposed by Mr Makate.

In this Court, Vodacom’s main arguments against the Supreme Court of Appeal’s judgment were two-fold. First, Vodacom submitted that the Supreme Court of Appeal acted beyond its jurisdiction by substituting the High Court order with an order of its own, where Mr Makate did not cross-appeal against the order of the High Court. The Supreme Court of Appeal thus determined an issue that was not before it in breach of the rule of law and the right to a fair hearing protected in section 34 of the Constitution. Secondly, Vodacom averred that there were several seriously disputed issues in this matter, in respect of which swathes of evidence were adduced and written and oral argument was presented by both parties, all which were – according to Vodacom – disregarded or misunderstood by the Supreme Court of Appeal. Vodacom argued that the Supreme Court of Appeal’s disregard of the true issues before it constituted a total failure of justice that breached the rule of law and violated Vodacom’s constitutional right to a fair hearing.

Mr Makate countered that this Court had neither constitutional nor general jurisdiction to hear the matter, as it essentially concerned a factual dispute. Mr Makate argued that the Supreme Court of Appeal did not exceed its jurisdiction, as the substitution issue was pleaded before the High Court and it was relevant to the proceedings before the Supreme Court of Appeal. As a result, the appropriateness of that substitution was fully ventilated by the parties before the Supreme Court of Appeal. Mr Makate, further, argued that the Supreme Court of Appeal did not disregard or misconstrue the evidence or facts before it.

In considering the Supreme Court of Appeal’s judgment, the Constitutional Court recognised that the exercise involved an assessment of the facts in the matter. It clarified how this analysis differed from that involving a purely factual dispute, such as in S v Boesak [2000] ZACC 25 and Mbatha v University of Zululand [2013] ZACC 43, which would not otherwise engage its jurisdiction. In this case, however, the Court explained that the purpose of its analysis was to determinate whether the Supreme Court of Appeal substantially misunderstood or disregarded, amongst other concerns, certain key issues and evidence before it with the result that there was a total failure of justice in breach of the rule of law and the fair hearing right protected in section 34 of the Constitution. Since this was founded on the rule of law and the fair hearing right, the Court concluded that its constitutional jurisdiction was engaged.

In its assessment of the Supreme Court of Appeal’s judgment, the Constitutional Court formulated a new constitutional standard, the “duty of proper consideration”, and recognised it as an integral component of the constitutional right to a fair hearing. Briefly, in terms of the rule of law and the constitutional right to a fair hearing, a court should have regard to all material evidence and all material submissions bearing on the issues before it. Albeit not exclusively, a court can demonstrate that it has discharged its duty of proper consideration if it has provided adequate reasons for its judgment, which the Constitutional Court has termed the “duty to provide reasons”.

The “duty to provide reasons” relates to whether a court has sufficiently explained how it reached its ultimate conclusions. This depends on the complexity or otherwise of each case. Ultimately, adequate reasons demand that each of the main issues in the case are dealt with by, for example, identifying each such issue, explaining how and why the court has resolved any material factual dispute in a particular way and explaining how and with what result the court has applied the law to the facts.

In South African jurisprudence, there was no direct support for the position that a court breached the constitutional right to a fair hearing if it failed to discharge its duty of proper consideration. However, for support, the Constitutional Court referred to and relied upon international and foreign authorities that have recognised the duty of proper consideration, albeit not referring to it as such, and the duty to give reasons. This included the jurisprudence of the European Court of Human Rights, which recognised the duty of proper consideration and the duty to give reasons as integral to the right to a fair hearing contained in the European Convention on Human Rights.

The Constitutional Court cautioned that unsatisfactory, or even incorrect, reasoning and defects in a judgment do not necessarily equate to a failure by a court to discharge its duty of proper consideration. The duty of proper consideration is about the substance of a judgment viewed holistically. In short, a court fails in its constitutional duty of proper consideration and to give reasons for its decision if a court’s judgment does not contain adequate reasons evidencing such proper consideration. Therefore, flaws in the assessment during the adjudicative process that are so fundamental and pervasive as to vitiate the court’s judgment constitute a failure of justice and, thus, a breach of the rule of law and the fair hearing right guaranteed in section 34 of the Constitution.

The Constitutional Court then considered whether the Supreme Court of Appeal’s judgment breached the duty of proper consideration, as assessed through the duty to provide adequate reasons. On an assessment of the Supreme Court of Appeal’s judgment, and identifying certain key examples in it, the Court held that the Supreme Court of Appeal: (a) failed to provide adequate reasons for its judgment; (b) disregarded or was unaware of certain material facts and issues before it; (c) at times, merely highlighted the parties’ arguments in respect of central issues but did not engage with those arguments in any meaningful way; (d) failed to assess evidence that was adduced by the parties, which it ought to have assessed; and (e) readily accepted whatever Mr Makate proffered without explaining why it did so. The judgment gives full substantiation on all these.

Based on these holdings, the Constitutional Court concluded that the Supreme Court of Appeal failed to discharge the duty of proper consideration. The Court held that this failure violated the rule of law and Vodacom’s constitutional right to a fair hearing.

The Constitutional Court further held that, absent a cross-appeal by Mr Makate against the order of the High Court, the Supreme Court of Appeal did not have jurisdiction to substitute its own order – also favourable to Mr Makate – for that of the High Court.

Vodacom had raised other grounds of appeal. The Court held that, having disposed of the two issues discussed above, it was not necessary for it to address these other grounds.

Accordingly, the Court upheld the appeal with costs and remitted the matter to the Supreme Court of Appeal for the appeal to be heard before a differently constituted panel.

The Full judgment  here