Prescription of claim

In Makate v Vodacom (Pty) Ltd [2016] ZACC 13, the Constitutional Court addressed, amongst other things, the correct interpretation to be given to the Prescription Act 68 of 1969. In terms of section 10(1), a debt is extinguished by prescription after the lapse of a certain period of time. For an ordinary debt, this is three years.

In November 2000, Nkosana Makate had been employed by Vodacom as a trainee accountant. He developed the Please Call Me -idea which he intended to sell to a willing buyer. The idea was first discussed with a senior director at Vodacom. This led to a verbal agreement to the effect that Vodacom would experiment with the idea and if it proved commercially viable then Makate would be paid a share of the proceeds, subject to terms that would be negotiated.

The idea was successfully implemented by Vodacom in March 2001. After Makate failed to persuade Vodacom to give effect to the verbal agreement, he instituted a claim in the High Court. Amongst other things, the claim was dismissed on the basis that it had become prescribed under the Act.

On appeal, the Constitutional Court held that Makate’s debt had not become prescribed. The word, ‘debt’, had to be interpreted in accordance with section 39(2) of the Constitution, which requires the courts to interpret statutes in a way that is consistent with the Bill of Rights. Here, a statute such as the Act, which limits the right of access to the courts through the imposition of a three year time period, had to be interpreted narrowly. The Constitutional Court held that Makate’s claim was not a debt. He had not attempted to enforce an obligation to pay money, deliver goods or render services.

In the circumstances, Makate’s appeal was upheld and Vodacom was ordered to commence negotiations in good faith to determine the amount of reasonable compensation payable.

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