Investor Errol Elsdon’s decade-long dispute claiming entitlement to 40% of Nkosana Makate’s multimillion-rand payout from Vodacom could drag on for longer before reaching finality after the South Gauteng High Court dismissed his urgent application on Monday.
Elsdon, a former director of Black Rock Mining, registered in the British Virgin Islands, wanted a court order compelling Makate’s attorneys, Stemela & Lubbe, to ring-fence 40% of the payout pending the outcome of the dispute over whether Black Rock Mining is entitled to a substantial share of the money.
Makate entered into an agreement with Black Rock to pay for all his legal costs in 2011 in his 17-year battle with Vodacom to pay him for the incorporation of the “Please Call Me” service.
The company would be entitled to 40% of his payout. The relationship soured in 2015 when Black Rock was deregistered and had cash-flow troubles.
Acting judge Don Mahon dismissed the application on Monday after Black Rock failed to meet requirements for an interim interdict. This means Makate can access the funds.
“It appears to me that, in the absence of evidence of an intention to dissipate [the funds], the application is neither urgent nor capable of satisfying the requirements for interim relief,” Mahon found.
Black Rock Mining could not give the court substantial reasons as to why the company ran a risk of not getting the 40% if breach of contract litigation is enrolled in a normal court and urgently needed to protect the funds.
“The evidence of an intention to dissipate, or a reasonable apprehension of dissipation, therefore informs not only whether the matter ought to be entertained as one of urgency, but also whether the applicant has established a well-grounded apprehension of irreparable harm and the absence of an adequate alternative remedy.
“Once it is found, as I have concluded, that the applicant has not established any basis for apprehending dissipation, the foundation for both urgency and interim relief falls away. Because these requirements are essential to the claim for interim relief, this finding is dispositive of the application,” the judgment read.
Makate’s counsel, Reinard Michau, argued in court that Black Rock needed to enrol the matter in the normal roll because it had known the contract was in dispute since 2015 and failed to litigate it. Black Rock has yet to initiate a legal challenge for a court to decide whether it is entitled to the 40%.
Michau argued Black Rock was not entitled to the 40% because it last funded Makate in 2014 and failed on its contractual obligation to fund all of Makate’s legal costs.
The loss of the urgent application will force Elsdon to enrol the matter in the normal court roll, and it could take months or years for it to be heard because the high court struggles with backlogs.
Makate is also likely to appeal against a court judgment not in his favour in the legal challenge, as he has pushed back against arbitration in the matter, describing Elsdon as a “fraud”.
According to Elsdon, he and his associates, the late Christian Schoeman and Tracey Roscher, paid an initial R500,000 and a further R2.4m towards Makate’s fees before there were cash-flow issues.
Elsdon argues the agreement remains in effect and wants Makate to pay him the 40%.
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