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[2021] ZASCA 136
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NBC Holdings (Pty) Ltd v Akani Retirement Fund Administrators (399/2020) [2021] ZASCA 136; [2021] 4 All SA 652 (SCA) (6 October 2021)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable/Not
Reportable
Case no: 399/2020
In the matter between:
NBC HOLDINGS (PTY)
LTD
APPELLANT
and
AKANI RETIREMENT FUND
ADMINSTRATORS
(PTY) LTD
RESPONDENT
Neutral citation:
NBC
Holdings (Pty) Ltd v Akani Retirement Fund Administrators (Pty) Ltd
(299/2020)
2021 ZASCA 136
(6 October
2021)
Coram:
WALLIS, MAKGOKA, SCHIPPERS, PLASKET and CARELSE
JJA
Heard
:
3 September 2021
Delivered
:
This judgment was handed down electronically by circulation to the
parties’ representatives by email, publication
on the Supreme
Court of Appeal website and release to SAFLII. The date and time for
hand-down is deemed to be 09h45 on 6 October
2021
Summary:
Defamation – application
proceedings – relief directed at compensating the claimant for
harm caused by publication of
defamatory material – such
relief, whether damages, an apology or a retraction cannot be claimed
in motion proceedings where
there are disputes of fact, but requires
evidence to be led.
Discretion of
judge in granting relief in defamation case – factors to be
taken into account
Interpretation
of allegedly defamatory material – approach of reasonable
reader – statement that findings had been made
in judgment of
the existence of strong evidence of corruption – thrust of
defamation lies in the implication of corruption,
not that it was a
finding by a judge – respondent leading evidence of corruption
– such evidence relevant to support
possible defences of truth
and public interest or privilege – no order can be made in
motion proceedings where respondent
produces evidence in support of
the existence of a defence.
ORDER
On appeal from:
Gauteng Division, Johannesburg of the
High Court (Sutherland ADJP, as court of first instance):
1
The application to lead further evidence on appeal is dismissed with
costs, such costs
to include the costs of two counsel.
2
The appeal is upheld with costs, such costs to include the costs of
two counsel.
3
The order of the high court is set aside and replaced by the
following:
'The application is
dismissed with costs, such costs to include the costs of two
counsel.'
JUDGMENT
Wallis JA (Makgoka,
Schippers, Plasket and Carelse JJA concurring)
[1]
The appellant, NBC Holdings (Pty) Ltd
(NBC), and the respondent, Akani Retirement Fund Administrators (Pty)
Ltd (Akani), are competitors
in the field of pension fund
administration. The present dispute arises out of an ultimately
successful endeavour by Akani to supplant
NBC as the administrator of
the Chemical Industries National Provident Fund (the Fund). The
threat of this precipitated an urgent
application by certain
trustees, supported by NBC, to interdict the transfer of the Fund's
administration from NBC to Akani. On
27 February 2020 the court ruled
that the status quo should be maintained until 10 March 2020 when the
urgent review proceedings
were to be determined. The urgent
application for interim relief was heard on 10 March 2020 and, on
12 March 2020, Vally J
granted an interim interdict restraining
the respondents, which included Akani, from implementing Akani's
appointment to provide
administrative, consulting and actuarial
services to the Fund.
[1]
[2]
The order granted by
Vally J was expressly limited in its operation until 31 July
2020, unless extended by the court. The balance
of the order was
directed at securing that the review proceedings would be finally
determined before 31 July 2020. On receipt of
the order, NBC
addressed a letter dated 12 March 2020 to the employers in relation
to the Fund. They referred to the urgent case
to interdict the
termination of NBC's appointment as fund administrators, consultants
and actuaries and said:
‘
The
court handed down judgment today (12 March 2020), having found strong
evidence of corruption in the matter at hand and that
the appointment
of Akani was unlawful.
The
interdict remains in force until 31 July 2020 unless extended by the
court of its own accord or upon good cause being shown.’
[3]
Shortly after 27 March 2020, and apparently
prompted by the publication of an article in a Lesotho based
newspaper, Akani launched
urgent proceedings against NBC and its
Lesotho-based subsidiary for declaratory relief in relation to both
the letter and the article.
[2]
As against NBC it contended that the portion of the letter quoted
above was defamatory and it sought extensive relief aimed at
‘restoring’ Akani’s reputation. NBC opposed the
application saying, in the first instance, that the passage in
the
letter was justified by the terms of Vally J’s judgment.
Apart from that, it contended that the letter contained
a statement
about the contents of the judgment and was subject to qualified
privilege, alternatively was published on a privileged
occasion,
alternatively was true and its publication was in the interest of the
members of the public to whom it was directed.
[4]
The case was argued and decided by
Sutherland ADJP on an urgent basis on the papers. He granted an
extensive order declaring that
the passage quoted above was a
material distortion of Vally J's judgment and was defamatory,
wrongful and unlawful. He then granted
ancillary relief in paras 3, 4
and 5 of the order, consisting of:
(a)
an order that NBC publish to every recipient of the previous letter a
statement detailed in the order
consisting of three paragraphs, the
last one of which contained seven sub-paragraphs;
(b)
an order that the statement be published within 10 days of the order
and that the Chief Executive Officer
of NBC was to depose to an
affidavit that to the best of his knowledge it had been distributed
as directed;
(c)
an order that a copy of the statement and the affidavit be filed with
the registrar of the court,
uploaded on the Caselines digital
platform and sent to Akani's attorney of record.
[3]
[5]
The present appeal is against that judgment
and order with the leave of the high court. The appeal suspended the
operation of the
order, so that no effect was given to the ancillary
relief. An application under
s 18
of the
Superior Courts Act 10
of 2013
to enforce the order pending the appeal was refused. In the
meantime events moved on. The balance of the original review
proceedings
was heard and disposed of by Vally J before 31 July 2020.
He dismissed the application and made no finding in favour of NBC
that
Akani’s behaviour was corrupt. He suggested that the
financial authorities were better equipped than a court to
investigate
these issues and highlighted potential malfeasance on the
part of both parties.
Mootness
[6]
Arising from this it seemed possible that
the high court order had been overtaken by events. In Akani's heads
of argument, counsel
said in regard to the portions of the order
summarised in para 4 that:
‘
Publishing
that correction now would achieve nothing, because Part B has been
determined and the judgment therein speaks for itself.
No party will
now be concerned with the Part A interim order or judgment – or
any inaccurate characterisations thereof –
in circumstances
where Part B has overtaken and discharged the Part A regime.
[7]
By reference to this passage in the heads,
the court directed the Registrar to address an enquiry to Akani's
attorneys asking whether
their client was undertaking not to seek to
enforce paras 3, 4 and 5 of the high court's order. They confirmed
that their client
would not seek to enforce those paragraphs of the
order. As it was possible that the issues in the appeal were now of
such a nature
that the decision sought would have no practical effect
or result, we directed that we would first hear argument on that
issue.
This was in accordance with the established jurisprudence of
this court under
s 16(2)(
a
)(i)
of the
Superior Courts Act 10 of 2013
. At the end of the argument we
directed that the parties proceed to argue the remaining issues.
[8]
It is unnecessary to traverse the issue of
mootness in detail. Counsel for NBC submitted that the case was not
moot because the
effect of the judgment remained that the statement
was defamatory of Akani and that NBC had no defence to a claim based
on defamation.
There can be no doubt that this was correct. If the
judgment remained in place, it would possibly provide a foundation
for a claim
for damages and could, in any event, be used in the
market place to discredit NBC. The submission that NBC was entitled
to clear
its name by having the judgment overturned was a powerful
one, which we accepted. The ensuing debate in court also demonstrated
that certain important issues in regard to the conduct of proceedings
based on defamation required the attention of this court.
The issues
[9]
It was accepted that the
statement that a judge had 'found strong evidence of corruption in
the matter at hand and that the appointment
of Akani was unlawful'
was calculated to damage the esteem in which Akani was held by the
recipients of the letter. It was therefore
prima facie defamatory and
NBC bore the onus of showing either that it was not published
unlawfully, or that it was not published
with the intent to injure
(
animo injuriandi
).
The only further question related to the relief to be granted to
Akani if successful. Historically relief in a defamation action
consisted of an award of damages and possibly an interdict. The
damages were compensation for the loss already caused and the
interdict was directed at preventing further loss in the future. Now
that remedies other than, or in addition to, the payment of
damages,
such as apologies, retractions and the publication of corrections,
may be given in defamation cases, the determination
of appropriate
relief has become a potential minefield in such cases.
[4]
[10]
A good deal of the complexity of this case
arose because Akani sought relief by way of urgent motion proceedings
and not by way
of action. In order to do this, it tied its claim for
the publication of a retraction to a vague and general interdict.
Furthermore
it said that it reserved its right 'to pursue other
aspects and relief flowing from NBC's … misconduct at later
date', justifying
this on the basis that only urgent matter could be
traversed in these proceedings. This procedural manoeuvring
unravelled as the
case proceeded. The judge rightly rejected the
claim for an interdict, thereby exposing the true nature of the
proceedings as being
for final relief to remedy the damage that Akani
claimed it had suffered as a result of the publication of the letter.
This left
lingering in the background the claim to pursue at a later
stage such other remedies as it might deem fit.
[11]
The outcome of this was a failure by the
parties to address the true nature of the proceedings and the proper
test to be applied
to the assessment of the defences raised by NBC.
There was also a failure to appreciate the proper approach to
remedies for defamation
because of the attempt to engage in the
piecemeal disposal of litigation, contrary to long-established
procedure. In the result
the appeal must succeed for three reasons.
First, the dispute was not one that could be disposed of in
application proceedings
without the hearing of oral evidence. Second,
the confused procedural approach to the litigation resulted in a
misdirection in
determining how to exercise the judicial discretion
in regard to remedy. Third, on a proper appreciation of the nature of
the claim
for defamation and the defences raised to it, Akani was not
entitled to relief.
Procedural
issues
[12]
Akani's founding affidavit dealt with the
relief being sought under the heading 'The requirements for an
interdict are met'. It
claimed that an award of damages would not be
an adequate remedy for the commercial harm it had suffered by the two
offending publications.
However, an interdict was only claimed as a
secondary remedy to its primary relief of a declaration that the
statement in the letter:
'…
having found strong evidence
of corruption in the matter at hand and that the appointment of Akani
was unlawful';
was false and
defamatory of Akani. In addition it sought relief directed at
procuring an immediate retraction of those words, by
way of a letter
of correction addressed to each of the recipients of the letter.
[13]
The claim for an interdict following these
prayers was couched in general terms, namely:
'Interdicting
the respondents from making any further statements of a defamatory
nature and effect against the applicant, including
but not limited to
repeating the statements made in the NBC letter …'
The
ostensible aim was to prevent future publication of the same or
additional defamatory statements. The interdict was directed
at
preventing future unlawful conduct and needed to be based on a
reasonable apprehension of future harm.
[5]
Absent a risk of the defamation being repeated an interdict was
unjustified.
[6]
Granting a prohibitory interdict in respect of conduct that has
already occurred is pointless, because the prohibition relates
to the
future and cannot undo what is past.
[7]
[14]
The only evidence presented by Akani in
support of the notion that there might be further publication of
defamatory matter by NBC
was a paragraph in the founding affidavit
reading in material part:
'There
is every reason to believe that NBC … will continue to
disseminate their defamatory and false statements if their
conduct is
not interdicted and they are not required to issue an apology and a
retraction.'
There can be
little surprise that the response in the answering affidavit, not
refuted in reply, was that NBC had not further distributed
the letter
and would have no reason to do so. It is even less surprising that
the learned judge held that the chances of future
publication were so
slim that no interdict, final or interim, was warranted.
[15]
Once the question of an interdict to
restrain future unlawful publication of defamatory material fell
away, the only remaining issue
in regard to remedy was compensation
for the harm already done by the publication of the letter. Such
compensation is no longer
confined to an award of damages as was the
case in the past. It has been extended by our courts recognising that
an apology, or
a publicised retraction of the defamatory slur, may
serve a similar purpose to damages, or may be ordered in conjunction
with an
award of damages. Whether individually or collectively, these
are all directed at the same purpose, namely compensating an injured
party for the harm caused by the publication of defamatory matter.
[16]
That means that the high court was
confronted with the difficulty adverted to in
EFF
v Manuel
,
[8]
where this court said:
'In
our view, whether an order for an apology should be made is
inextricably bound up with the question of damages.'
The published
retraction Akani sought stood on the same footing as the apology in
that case, as would any other remediatory measure.
But one cannot
determine what is appropriate compensatory relief in a piecemeal
fashion, granting some now while leaving open the
possibility of
further relief being claimed and granted later.
[17]
Akani purported to reserve its right to
'pursue other aspects and relief' against NBC. On the face of it this
included a possible
future claim for damages against NBC. The damage
it alleged was suffered as a result of the letter's publication was
not distinguished
from the damage occasioned by the publication of
the article in Lesotho. A general allegation was made that it had
suffered and
would continue to suffer financial loss in the market
place as a result of both publications and would lose market share
and business
opportunities. It sought to justify the claim for urgent
relief by alleging that these losses could not be quantified in terms
of definite future profits, so that damages would not be an
alternative remedy to an interdict.
[18]
These allegations were vigorously denied
and it was not suggested that they could be resolved on the papers. A
successful claimant
in a defamation action is entitled to an award of
general damages to compensate for the damage to its reputation. It is
also entitled
to claim special damages in the form of financial loss
occasioned by the defamatory publication.
[9]
The alleged difficulties facing Akani in proving that it had suffered
special damages as a result of the publication of defamatory
matter
should not be overstated. In this type of case the court does the
best it can on the material placed before it. Its assessment
of
damages will inevitably be no more than a rough estimate.
[10]
Had a plausible case for an interdict been made the judge would still
have needed to consider whether damages would be a suitable
alternative remedy.
[19]
Akani was only entitled to a single global
remedy against NBC to remedy all the harm occasioned to it by the
publication of the
letter. In general the law requires a party with a
single cause of action to claim in one and the same action whatever
remedies
the law accords them upon such a cause.
[11]
Akani was not entitled to separate its claim for the publication of a
retraction from its claim for a permanent interdict and any
possible
claim for damages. This is well illustrated by the two Constitutional
Court cases in which the problem has been considered.
In one
[12]
an apology was ordered as an adjunct to an award of damages. In the
other damages were ordered, but the court declined to order
an
apology.
[13]
As pointed out in
EFF v Manuel
,
which of these different remedies should be granted and in what
combination, requires a single exercise of judicial discretion
at the
close of the case. For that reason this court held that the claims
for damages and an apology could only be resolved after
hearing oral
evidence on damages.
[14]
[20]
I can see no basis for distinguishing this
case from
EFF v Manuel
,
so far as these principles are concerned. That would have been so
even if Akani had expressly eschewed any claim for further relief
beyond the published retraction. The relief being claimed would still
have been relief directed at compensating it for harm caused
by the
publication of the letter and its defamatory contents.
[15]
It made no difference whether that relief was couched in monetary
terms or was claimed on some other basis. The purpose it served
remained the same. It was to compensate the claimant for the harm
caused by the defamation and the same factors were relevant to
the
relief whatever form it took. The facts in regard to that harm were
disputed. How then was the court to determine whether the
publication
of a retraction was an appropriate remedy? In order to determine what
was appropriate it had to know what harm had
been caused by the
publication and its impact on Akani's reputation.
[16]
It would have been highly relevant to hear the reaction of the
recipients of the letter to its contents. In consequence of its
receipt, did any of them join the parties trying to block the change
in administrator of the Fund? Did the employer trustees adopt
a more
cautious, or even a hostile, attitude to Akani's endeavours to
persuade them to move the Fund's administration? We do not
know and
nor did the judge, because there was no evidence in this regard.
Would a retraction serve any useful point in restoring
Akani's
reputation, or was its reputation largely untarnished? These are the
questions that needed to be asked and answered before
the grant of
relief in this case, but they were not.
[21]
A claim for damages for defamation, whether
general or special, was always unliquidated and the damages could
only be determined
in proceedings by way of action, or possibly in
special circumstances after hearing oral evidence in application
proceedings. The
position has not changed as a result of courts now
being empowered to grant other compensatory remedies, either in
addition to,
or to the exclusion of, a claim for damages. Relief such
as an apology or the publication of a retraction remains compensatory
relief and for that reason requires oral evidence in the same way as
a claim for damages requires oral evidence. That is inevitably
so
when the facts concerning the claimant's allegedly damaged reputation
are disputed.
[22]
I fully appreciate that in a trial
action the plaintiff may rely solely on the defamatory nature of the
publication and the presumption
that everyone has a reputation that
may be harmed by a defamatory utterance or publication,
[17]
for the assessment of damages. The plaintiff may give no evidence,
relying on the right to lead evidence of rebuttal to refute
any
evidence from the defendant directed at diminishing the effect of the
defamatory publication. But, if the defendant then chooses
not to
give evidence, the plaintiff loses the opportunity to bolster the
damages by giving evidence of the effect of the defamation
on their
reputation and standing. Where the proceedings start by way of
application the evidence has already been led. If the matter
proceeds
on the papers and the damage to the applicant's reputation has been
placed in issue, no relief can be granted, because
there is a dispute
of fact on the papers and the rules governing the resolution of
disputes of fact on paper apply. For that reason
it was inappropriate
for the high court to grant the order it made in this case. That is
the first ground upon which the appeal
must succeed.
Judicial
discretion
[23]
The determination of the appropriate
compensatory relief in a defamation case is a matter for the
discretion of the judge at first
instance and the discretion is a
wide one. That proposition requires little citation of authority.
[18]
However, the nature of the discretion and, if relief were to be
granted, how it fell to be exercised in this case, appears not
to
have attracted any attention in argument and consequently in the high
court's judgment. The only paragraphs in the judgment
dealing with it
read as follows:
'[66]
Relief for what has already occurred is appropriate as a clear right
has been violated. The irreparable harm is axiomatic.
There is no
suitable alternative relief obtainable in respect of the
misrepresentation of the judgment of Vally J and no more suitable
time to say so than now.
[67]
In respect of NBC, a letter to correct the misleading letter is the
appropriate way to address the harm the first letter causes.
The text
need not be grovelling; a bland correction in the terms set out in
the order suffices.'
[24]
Several errors occur in these paragraphs.
There was nothing axiomatic about the harm allegedly suffered by
Akani. Even assuming
that the letter was defamatory of it, for the
reasons canvassed in paragraph 20, the nature and extent of that harm
was indeterminate.
There was a clear dispute of fact on the papers in
regard to whether Akani suffered any harm arising out of this letter.
Whether
it was substantial, or trivial, or virtually non-existent,
could not be decided on these papers.
[25]
Second, and also for reasons
canvassed in the previous section of this judgment, it was by no
means clear that there was no alternative
relief available to Akani.
One distinct possibility was that they might be vindicated in the
forthcoming review litigation, due
to be heard within a couple of
months. Another was whether any retraction was required. If the harm
was exiguous the appropriate
remedy might have been the 'damages of
one farthing' with which British juries were wont to condemn
successful plaintiffs in defamation
cases, where they regarded the
claim as trivial or otherwise inappropriate.
[19]
These instances are not purely relics of the Victorian era. In the
trial court in the famous case of
Reynolds
v Times Newspapers
[20]
that led to Mr Reynolds downfall as Taoiseach (Prime Minister) of
Ireland, the jury dismissed the newspaper's defence, but awarded
nothing by way of damages, an award that the judge altered to one
penny.
[26]
Third, given the proximity of the
hearing in the review, far from 'now' being the appropriate time to
grant an order, the caution
of waiting should have been considered.
The judge accepted that there was no risk of further publication of
the letter. Any harm
that it did, had already occurred. A delay would
enable feelings to subside and Akani (and the court) to assess
whether the letter
had indeed done any significant damage. The
alleged urgency was based on the need for an interdict to prevent
future publication.
Once that disappeared there was no need to deal
with this litigation urgently. Furthermore, granting an order at that
point in
time ran the risk that NBC's charges of corruption would be
vindicated in the review. In that event an order to correct a
'misrepresentation'
of Vally J's judgment would have been pointless,
especially as it would have been accompanied by the later judgment
vindicating
NBC's claims. Lastly under this head, the issues
canvassed were of such a nature that they led to feelings on both
sides running
high, so that there was a risk that the high court's
order would be the subject of an appeal, as indeed happened. The
result of
granting leave was to stultify the order that the court had
just made. The immediacy the judge perceived in paragraph 66 of his
judgment was removed by his order granting leave to appeal.
[27]
None of these considerations were addressed
in the judgment. It appears that the learned judge concluded that
merely because he
upheld Akani's claim he was obliged, given the form
of the relief Akani sought, to grant relief in that form, albeit not
in the
terms they suggested. This resulted in his granting an order
in very different terms. Those terms are set out above in a footnote,
but their very prolixity should have raised a warning flag that
imposing this obligation on NBC might not be appropriate relief.
Consideration should have been given to whether any of the addressees
would bother to read such a technical description of the
contents and
effect of Vally J's judgment. And if they were unlikely to do so what
was the point of the remedy? In not considering
the matters set out
above, the learned judge misdirected himself in regard to the remedy.
It suffices for me to say that the order
he crafted was not as
anodyne or bland as he intended. In view of the misdirection we would
have been at large to reconsider the
relief he granted. Had matters
turned out differently it would have been necessary to consider what
order should be made, but as
the appeal must succeed in its entirety
there is no need to do so.
The merits
[28]
This leads directly to the next
problem. Akani elected to proceed by way of motion and did not ask
for the proceedings to be referred
to trial or for the hearing of
oral evidence. Where final relief is sought in motion proceedings the
Plascon-Evans
rule provides that the case is determined on the respondent's version
of the facts, together with any undisputed facts forming
part of the
applicant's version. The only exception to this is where the
respondent's version is so inherently unworthy of belief
that it can
be rejected on the papers. The fact that the onus in relation to its
defences rested on NBC did not affect the operation
of the
Plascon-Evans
rule. The case had to be decided on the evidence advanced by NBC in
support of its defences, together with any undisputed evidence
from
Akani that bore on those defences.
[21]
[29]
In principle there has never been an
objection to pursuing a claim for an interdict against the future
publication of defamatory
matter by way of an urgent application.
This court reaffirmed that in
EFF v
Manuel
[22]
in saying:
'
There
is, of course, no problem with persons seeking an interdict, interim
or final, against the publication of defamatory statements
proceeding
by way of motion proceedings, on an urgent basis, if necessary. If
they satisfy the threshold requirements for that
kind of order, they
would obtain instant, though not necessarily complete, relief.'
However,
the entitlement to proceed in that way is constrained by the fact
that in motion proceedings, where the issue is whether
the defendant
has a defence to a claim based on defamation, it cannot be decided on
motion if there is a dispute as to the applicant's
right to that
relief. As Greenberg J said:
[23]
'…
if the injury which is sought to be restrained is defamation, then he
is not entitled to the intervention of the Court
by way of interdict,
unless it is clear that the defendant has no defence.'
In
Hix
Networkin
g
[24]
the court emphasised that this did not mean that the mere
ipse
dixit
of the respondent would suffice
to establish a defence. It must be based on evidence.
[30]
A
respondent wishing to resist an interdict against the future
publication of defamatory material can do so by presenting evidence
that provides a sustainable foundation for a defence recognised in
law.
[25]
This may be done not only by way of direct evidence, but also by
making the case that at a trial further evidence could be procured
and would be available to sustain the defence.
A
plausible claim by a respondent that, with the advantage of discovery
and being able to subpoena witnesses and documents, they
will be able
at trial to produce evidence to sustain their defence, will
ordinarily suffice to establish the requisite foundation
for the
defences raised.
[26]
This is well-illustrated by the recent judgment of this court in
Malema v Rawula
[27]
where, after analysing the evidence, Schippers JA concluded that:
'
These
facts comprise not only direct information placed before the court,
but material showing other information not in his control
but
potentially available at a trial in due course, such as the EFF’s
financial records and documents relating to receipt
of VBS funds. All
these factors must be weighed up in order to decide whether there is
a dispute of fact regarding the existence
of a defence.'
[28]
[31]
It appears that these principles were not
drawn to Sutherland ADJP's attention, as they were not referred
to in his judgment
and counsel did not refer us to them in the heads
of argument. The result was that the learned judge embarked upon a
detailed analysis,
first of Vally J's judgment to determine what it
had decided, and then of the letter, where his focus fell upon the
words 'having
found' as a description of the contents of the
judgment. He concluded that the 'commuter on the Parkhurst bus' would
have concluded
that a final judgment had been made by a court in
regard to what followed, namely corruption on the part of Akani and
the unlawfulness
of Akani's appointment in place of NBC. This so he
held was a misrepresentation by NBC and defamatory of Akani.
[32]
In my view that was not the correct
approach. In the first place it treated the letter as if it stood
alone. It did not. It had
been preceded by a letter dated 28 February
2020 written shortly after the review was launched and its subject
was the same, namely
the payment of contributions by employers to the
Fund. It read:
'At
the end of November 2019 NBC received an email notice from the
Chemical Industry National Provident Fund ('the Fund")
purporting to terminate all services rendered to the Fund by NBC,
effective 29 February 2020.
A
number of Fund members, together with the NBC, lodged an urgent
review application with the South Gauteng High Court in Johannesburg
on 5 February 2020 in terms of the Promotion of Administrative
Justice Act 3 of 2000 ("PAJA") to have NBC's termination
and the appointment of substitute service providers in its place set
aside. PAJA is the legislation which protects the constitutional
right of persons to administrative action that is lawful, reasonable
and procedurally fair.
CONTRIBUTIONS
DUE ON OR BEFORE 7 MARCH 2020 (FOR THE MONTH OF FEBRUARY 2020)
The
hearing commenced on 26 February 2020, but has not yet completed and
it is set to continue on 10 March 2020. Accordingly, on
27 February
2020, the Court ruled that the
status
quo
pertaining to
Fund service providers is retained until 10 March 2020 or such time
as the urgent PAJA proceedings have been adjudicated
upon, that is
when judgment is delivered. In the circumstances,
please
ensure all contributions to the Fund for and on behalf of your
employees takes place as normal …
'
[33]
Although not addressed specifically
to the employers to whom the offending letter was addressed, it
appears to have come to their
attention because the later letter
commenced by referring to it. The letter of 28 February informed
its readers that review
proceedings had been instituted to prevent
NBC being removed as administrators of the Fund. The recipients would
presumably have
been aware of the intended change of administrator
from NBC to Akani. The notice of termination of NBC's appointment had
been given
at the end of November. Employers, who bore the
responsibility of deducting members' contributions from their
salaries and adding
their own before remitting payment to the
administrator, would have needed to know that they would have to
adjust their systems
accordingly to be ready for the change with
effect from 29 February 2020. Documents in the record indicate
that issues over
NBC's continued appointment had been simmering for
several months prior to the notice of termination.
[34]
The 28 February letter provides the
background to the later letter. It told its readers that the validity
of the termination of
NBC's appointment was disputed and that NBC
claimed that it was unlawful. Given the references to PAJA and the
right to administrative
action that is lawful, reasonable and fair,
they would have understood that this was not a contractual dispute
arising from the
interpretation of the terms of a contract, but that
the source of the alleged unlawfulness lay elsewhere. It is likely
that some,
and possibly many, of the readers would have realised that
charges of untoward behaviour by someone was at issue. They would
also
have realised that the court might have thought there was some
substance in these charges, as it had stopped the transfer of
administration
from NBC to Akani until the urgent proceedings had
been adjudicated upon. In other words there was to be a temporary
delay in implementing
the transfer.
[35]
The hearing continued on 10 March and Vally
J handed down his judgment on 12 March. Regrettably the only
transcript is one produced
from a recording made by counsel attending
to note the judgment on behalf of Akani. It does not appear to have
been submitted to
Vally J for checking and it would not have
been available to NBC, although presumably they had someone present
to note the
judgment and make some record of what the judge said. The
result is that what was presented to the high court has had headings
and paragraph numbering inserted that are not part of the judgment.
Whoever transcribed it also inserted punctuation. The transcript
suffers from a malady, with which the judges of this court are
familiar, of obvious imperfect hearing and transcription of what
was
said. Be that as it may the parties accepted it as accurate,
notwithstanding its shortcomings.
[36]
Vally J granted an interdict
restraining the Fund's trustees from implementing the appointment of
Akani and two other companies
that had played no active part in the
litigation from providing administrative, consulting and actuarial
services to the Fund.
He granted a further order that NBC and an
associated company were to continue providing those services until 31
July 2020, unless
extended by the court. He had earlier said that if
the Fund was dissatisfied with NBC's performance it was not possible
to draw
the inference that its termination had been engineered for
corrupt purposes. Accordingly, these orders were not directed at
overturning
the termination of NBC's services. They appear to have
been directed at avoiding a vacuum in the Fund's administration. Even
if
the conduct of certain named individuals and Akani was corrupt,
that did not, in his view, allow for a conclusion that the Board
of
the Fund was contaminated by that corruption.
[37]
The key passage in the judgment reads as
follows:
'With
that said then, it cannot be, it cannot nevertheless, on the other
hand, be said that the applicants are not entitled to the
relief
sought. Their case has been that even if the termination of the
contract with NBC is allowed to stand, the applicant, uh,
the
appointment of Akani should not be allowed to stand. This is because
Akani is engaged, or is accused of engaging in unlawful
conduct,
which conduct is a breach of Section 12 of PRECCA.
[29]
In this they are correct.
The
evidence that they, that they have brought before the court indicates
evidence of an alleged corrupt relationship between Akani
and Messrs
Chaane [and] Ginya is very strong. And Akani and the two individuals
will have to do better than what they did in these
papers to show
that the applicants are incorrect in their allegation.
This is despite the fact that the
allegations presented [are] presently founded on inferential logic.
So strong is the
evidence that if no equally strong evidence is forthcoming from them,
the inference may well be drawn. In that
case the Fund will be
legally bound to have no relationship with them, failing which Board
members will be acting in breach of
their statutory and common law
fiduciary duties.
Hence it remains a reasonable prospect that should it be found that
Akani, that the appointment … that the relationship
between
Akani and the two individuals is one that is tainted by corruption,
then the appointment of Akani may well be set aside.'(Emphasis
added.)
[38]
Two further passages are relevant for
present purposes. In the one Vally J said that:
'As
I said on the basis of these papers it cannot be said that there is a
prospect of the appointment of Akani being set aside is
relatively
high. In the circumstances the most practical and reasonable solution
woold be to grant the interdict and to leave NBC,
er,
[30]
and to leave the issue of NBC providing the services as it has been
doing over the last few years in place. That will be only until
this
issue is finalised …'
On the same
page of the judgment he added:
'I
wish to once again reiterate that [t]his judgment makes no finding
that there has been any untoward conduct on the part of the
Fund or
on the part of CEPPWAWU. At this stage, it is mainly the allegations
against Messrs Chaane and Ginya and Akani which leads
me to make the
following order that I will now make.'
[39]
The letter of 12 March that was sent to
employers, the Fund, the trade union and Akani was sent the same day
as the judgment was
handed down. It referred to the earlier letter
and the urgent application to interdict the termination of NBC's
appointment. It
then continued:
'The
court handed down judgment today (12 March 2020), having found strong
evidence of corruption in the matter at hand and that
the appointment
of Akani was unlawful.
The
interdict remains in force until 31 July 2020 unless extended by the
court of its own accord or upon good cause being shown.'
The letter
repeated the earlier letter's admonition that contributions should
continue to be paid to it and that matters would continue
as in the
past.
[40]
The primary purpose of both letters was to
secure that there was administrative continuity while the litigation
progressed. Neither
was directed at providing more than a brief
update of the litigation. It is important then to consider Akani's
complaint. This
is set out in the following paragraphs of its
founding affidavit:
'[35]
The NBC letter, however, entirely misrepresented the true position.
It refers only to an urgent case having been brought to
secure an
interdict, and then states that the Court found that Akani's
appointment was unlawful, on the basis of "strong evidence
of
corruption".
In so doing, NBC has reported the learned
judge's preliminary observations as if they were final findings of
fact made on an assessment
of all the evidence.
[40]
… Akani contends that a reader would understand from the NBC
letter that:
40.1
A court has weighed up the evidence in the Review application
and
finally determined
that the appointment of Akani to provide
services to the [Fund} was unlawful.
40.2
A court has reached the aforementioned conclusion, having considered
the allegations of corruption
that were relied on by NBC and the
members in their papers.
40.33
A Court has found that Akani was itself corrupt or at least party to
corruption, and that this corruption rendered
its appointment
unlawful.'(Emphasis added.)
[41]
The affidavit continued to hammer away at
the contention that the impression given by the letter was that the
judgment was a final
judgment. One sees this in the contention that
NBC has sought 'to create the impression … that Akani's
appointment …
has already been finally determined to be
unlawful' and that this was based on corruption. The sting of the
letter was said to
be that Akani 'was corrupt and has been found by a
Court to be corrupt'. It was said 'in short' that Akani had lost a
significant
client because it secured its appointment through
corruption 'and a Court has ruled as much'.
[42]
These contentions were based upon the
faulty premise that the letter misrepresented the judgment as a final
determination of the
issues. It did nothing of the sort. The flaw
emerges from the sentence recording that the interdict would remain
in force until
31 July 2020, unless extended by the court of its
own cause or upon good cause being shown. The reasonable reader
[31]
would readily appreciate that things were therefore not final. The
letter said in plain language that the order would expire on
31 July,
unless extended. The readers knew, because they were told as much in
both letters, that the litigation's purpose was to
forestall the
termination of NBC's appointment. If the order were to lapse on
31 July, it was obvious that NBC would have
lost. Any reasonable
reader would realise that. Any doubt was removed by the qualification
that the court might of its own volition
extend that date, or might
do so if good cause was shown for an extension. The impetus for that
could only come from NBC and the
parties supporting it.
[43]
None of this involves imputing to the
reasonable reader any knowledge of the subtle distinction between an
interim and a final order.
Nor does it involve a pedantic parsing of
the relevant sentence, something in which both sides engaged in the
affidavits, with
resort to subtle consideration of the differences
between adverbial phrases of time, place, manner and reason, concepts
of misplaced
modifiers and other linguistic analysis more suited to
the classroom than an affidavit. I mean no disrespect to either
deponent
when I say that these debates were inappropriate in
affidavits and had the appearance of an attempt by the lawyers who
drafted
them to smuggle argument into what should be limited to
evidence. The debate as to whether the expression 'strong evidence'
qualified
both corruption and the unlawfulness of Akani's appointment
was neither here nor there. Sutherland ADJP rightly said that the
reasonable
reader would not worry about such niceties, but would
think that there was serious evidence of corruption and this meant
that Akani's
appointment was unlawful.
[32]
After all it was the appointment that was the source of the dispute
between the parties.
[44]
Once it is accepted that the
letter did not convey that the court had made a final and conclusive
judgment about anything, the basis
for holding it to be a
misrepresentation of Vally J's judgment fell away. The judge had made
preliminary observations, as Akani
said in the passage quoted earlier
in paragraph 40. Those observations were clear. Based on the evidence
before him and the absence
of any adequate response thereto, there
was strong evidence of corruption. This involved Akani and two
employees of NBC who had
been responsible for the Fund and suddenly
left their employment and commenced working for an entity connected
to Akani. The judge
said that if corruption was established the
appointment of Akani might well be set aside. That could only be
because the appointment
of Akani to replace NBC was unlawful because
it was tainted by corruption.
[45]
No case was made that if the letter
referred to proceedings that had not been finalised, a claim for
defamation could succeed. On
the principles outlined earlier in
paragraphs 28 to 30 NBC had clearly produced evidence that might
sustain at least one of the
three defences it raised specifically.
Accordingly Akani's claim for final relief on the papers had to fail.
[46]
On any reading of the letter the heart of
the defamation was the statement that there was strong evidence of
corruption. The addition
that a judge had made such a finding would
strengthen the reasonable reader's understanding that the evidence of
corruption was
strong, but it would not alter the essential thrust of
the defamation, namely that Akani was a party to corruption. NBC
produced
some evidence that there had been a corrupt relationship
between Akani and the two individuals formerly employed by NBC. It
seems
to me that this evidence was properly relevant to the defences
of truth and public interest and privilege. I leave aside the defence
that this was an accurate report of legal proceedings, because it is
by no means clear to me that a passing statement in a letter
about
the contents of a judgment falls within the notion of a report of
legal proceedings.
[47]
Akani's counsel sought to avoid
this conclusion by contending that actual corruption was irrelevant
to Akani's claim. He argued
that the basis of the claim lay in the
statement that a court had found that Akani was corrupt. He submitted
that the stress of
the defamation lay on the court's finding, not the
corruption itself. Therefore, if the description of the court's
finding was
incorrect, it mattered not whether Akani was in fact
corrupt. The complaint was that the letter had communicated findings
by Vally J
that he had not in fact made at that time. The
distinction strikes me as tenuous and artificial. The defamation lay
in the content
of the alleged finding, not the fact that it had been
made by a judge. Any statement to the effect that Akani acted
corruptly would
be defamatory, irrespective of whether its force was
bolstered by saying that a judge had held that there was strong
evidence of
the corruption. The fact that a judge was said to have
made such a finding might serve to add weight and credibility to the
essential
charge of corruption, but it cannot alter the fact that the
imputation of corruption lay at the heart of the defamation. In both
the founding and replying affidavits it was the imputation of
corruption that lay at the heart of Akani's case.
[48]
Proof that Akani had engaged in corrupt
activities was therefore central to the defences that NBC wished to
raise. It was also central
to other issues such as the nature and
extent of any defamation, the extent of the harm suffered by Akani
and the nature of any
relief to which it was entitled. Even on the
basis of the artificial distinction that Akani sought to draw in
argument, a factual
finding that Akani had acted corruptly would
affect the final determination of the case. A misrepresentation that
Vally J
had made a finding of the existence of strong evidence
of corruption would pale into insignificance against actual proof of
corruption.
One is reminded of the line from Shakespeare's
King
Lear
[33]
that 'Where the greater malady is fixed, the lesser is scarce felt'.
[49]
In summary reasonable readers would not
read the offending letter as relating to a final judgment by a court,
but would understand
that it related to something said by a judge in
the course of ongoing and yet to be finalised litigation. They would
view the thrust
of the sentence in question as saying that there was
strong evidence of corruption on Akani's part in relation to it
securing its
appointment as administrator by the Fund in place of
NBC. The unlawfulness of that appointment would flow from the
corruption.
Proof of actual corruption in that process would, on that
reading of the letter be supportive, if not necessarily decisive, of
NBC's defences to the claim based on defamation. On its own that
meant that Akani's claim could not succeed and, as it chose to
proceed on application and not request a reference to trial or oral
evidence, it should have been dismissed. Even on its own case
as to
the meaning of the letter, and its focus on the finding by the court,
as opposed to the issue of corruption, that would not
assist Akani as
proof of corruption would still be relevant to NBC's defences and to
the court's appreciation of the nature of
the harm occasioned by the
defamation; the extent of the damage to Akani's reputation and the
determination of the appropriate
remedy. For those reasons, on this
ground also, the application should not have succeeded.
Result
[50]
Before concluding I need to deal with an
extensive application by NBC to lead further evidence on appeal. The
purpose of the application
was to strengthen the evidential basis for
its contentions that the relationship between Akani and the two
former employees of
NBC was corrupt. I do not think the additional
evidence tendered by way of this application satisfied the tests for
admitting further
evidence on appeal. In the light of the proper
approach to the determination of the application the additional
evidence could not
affect the outcome of the appeal. NBC's defence
rested on whether it had laid an evidential basis for saying that it
had proper
grounds to resist Akani's claim. If it had then there was
no need for the additional evidence. If it had not it could not
remedy
that deficiency at the appellate stage. The application must
be dismissed.
[51]
In the result the following order is made:
1
The application to lead further evidence on appeal is dismissed with
costs, such costs
to include those consequent upon the employment of
two counsel.
2
The appeal succeeds with costs, such costs to include those
consequent upon the employment
of two counsel.
3
The order of the high court is set aside and replaced by the
following:
'The
application is dismissed with costs, such costs to include those
consequent upon the employment of two counsel.'
M J D WALLIS
JUDGE OF APPEAL
Appearances
For appellant:
C E Watt-Pringle SC (with him K S McLean)
Instructed by:
Shepstone & Wylie, Johannesburg
McIntyre Van der Post, Bloemfontein
For respondent:
J P V McNally SC (with him B L Manetsa)
Instructed
by:
Webber Wentzel, Johannesburg
Symington De Kok, Bloemfontein.
[1]
There was no official transcript of the judgment and the case
proceeded on the basis of what was said to be a transcript of a
recording by counsel on his mobile phone of the judgment as it was
being delivered
ex tempore
.
[2]
An order was granted by the high court against
the subsidiary, but that is not the subject of this appeal.
[3]
Paragraph 3 of the order read as follows:
'The first
respondent is ordered to publish to every recipient of the letter of
12 March 2020 the following statement:
3.1
On 11 May 2020 the Gauteng Local (
sic
) Division of the High
Court of South Africa ordered us to communicate this statement to
you.
3.2
Our letter of 12 March 2020, insofar as it purported to report on
the
order and judgment of Vally J (the Vally judgment) in the legal
proceedings between Akani Retirement Fund Administrators (Pty)
Ltd
(Akani) and NBC concerning the alleged impropriety of Akani's
appointment to manage the CIPF and thereby replace NBC as manager,
did not accurately report the meaning and import of the Vally
judgment when it stated that:
"[The
Court] [h]aving found strong evidence of corruption in the matter at
hand and that the appointment of Akani was unlawful."
3.3
The respects in which the quoted statement did not accurately or
fairly
convey the meaning and import of the Vally judgment were, in
particular, that:
3.3.1.
It suggested that a finding of corruption on the part of Akani had
been made when there had
been no such final finding, and merely that
ostensibly plausible evidence had been tendered that could support
such an allegation;
3.3.2.
It suggested that a finding of unlawful conduct on the part of Akani
had been made when there
had been no such finding;
3.3.3. It
omitted to fairly contextualise the proceedings which were in
respect of an application for an interim status quo order
to keep
NBC in office until such time as the allegations of corruption and
unlawful conduct made by NBC were adjudicated in subsequent
proceedings;
3.3.4.
In proceedings for interim relief a court deals with allegations on
affidavit and on the
basis thereof, in this case, Vally J had to
decide whether it was appropriate, in the interim, to allow the
arrangements which
exist for the management of the CIPF to remain
undisturbed and left in the hands of NBC;
3.3.5.
The decision to grant the interim order in favour of NBC was not a
final order and the question
whether or not the allegations that
Akani is corrupt or acted unlawfully, are yet to be decided;
3.3.6.
The Vally judgment expressed the view that on the allegations on
affidavit presented to the
court there was strong evidence alleged
that supported the possibility that Akani was corrupt, and that were
acts of corruption
to be proven in later proceedings, the inference
could be drawn that Akani had acted unlawfully in procuring an
appointment to
manage the CIPF;
3.3.7
A copy of a transcript of the Vally judgment is available and anyone
who wants a copy
may ask for it to be sent.'
[4]
Economic Freedom Fighters and Others v Manuel
[2021] ZASCA 172
;
2021 (3) SA 425
(SCA) paras 128-130 (
EFF v Manuel
).
[5]
Setlogelo v Setlogelo
1914
AD 221
at 227. As to what is a reasonable apprehension of harm see
Minister of Law and Order and Others v
Nordien and Others
1987 (2) SA 894
(A)
at 896;
End Conscription Campaign and
Others v Minister of Defence and Others
[1989]
4 All SA 82
(C) at 110.
[6]
Herbal Zone
(Pty) Ltd v Infitech Technologies (Pty)
Ltd and Others
[2017] ZASCA 8
;
[2017]
2 All SA 347
(SCA), para 36.
[7]
Philip
Morris Inc v Marlboro Shirt Co SA
1991
(2) SA 720
(A) at 735B-C;
Tau
v Mashaba and Others
[2020]
ZASCA 26
;
2020 (5) SA 135
(SCA) para 26.
[8]
Op cit, fn 4, para 130. In fairness to both
counsel and the learned judge that judgment had not yet been
delivered when this case
was argued in the high court.
[9]
Ibid, para 91.
[10]
Caxton Ltd and Others v Reeva Forman (Pty) Ltd
and Another
[1990] ZASCA 47
;
1990 (3) SA 547
(A) at
573H-I.
[11]
Custom Credit Corporation (Pty) Ltd v Shembe
1972 (3) SA 462
(A) at 471H- 472F.
Whether the grant of relief to Akani in these proceedings would
debar it from pursuing a claim for damages,
in the face of the 'once
for all' rule, was not debated before us. As matters stood in the
high court there was a real possibility
of such an action being
brought.
[12]
Le Roux and Others v Dey (Freedom of
Expression Institute and Restorative Justice Centre as amici curiae)
[2011] ZACC 4
;
2011 (3) SA 274
(CC)
paras 199, 202 and 203.
[13]
The Citizen 1978 (Pty) Ltd and Others v
McBride
[2011] ZACC 11
;
2011 (4) SA
191
(CC) para 134.
[14]
An application for leave to appeal to the
Constitutional Court against this order was dismissed.
[15]
For present purposes it is assumed that the
letter is defamatory of Akani and that NBC had no defence to the
claim for defamation,
so that the only issue would be that of
remedy.
[16]
See for example the discussion on what evidence
may be led in such cases in
Naylor and
Another v Jansen; Jansen v Naylor and Others
2006
(3) SA 546
(SCA) paras 15 and 16.
[17]
Tuch and Others NNO v Myerson and others NNO
[2009] ZASCA 132
;
2010 (2) SA 462
(SCA) para 17.
[18]
Ibid para 19.
[19]
In the famous defamation case between the artist
James Whistler and the critic John Ruskin over the latter's comment
in a review
of the exhibition of Whistler's
Nocturnes
- a series of paintings exploring light – that:
'
For
Mr. Whistler’s own sake, no less than for the protection of
the purchaser, Sir Coutts Lindsay ought not to have admitted
works
into the gallery in which the ill-educated conceit of the artist so
nearly approached the aspect of wilful imposture. I
have seen, and
heard, much of Cockney impudence before now; but never expected to
hear a coxcomb ask two hundred guineas for
flinging a pot of paint
in the public’s face.'
Whistler
won, but the jury awarded him only a farthing – the smallest
coin in circulation – as damages and he was
refused costs. The
result bankrupted him. Similarly in the litigation between
Cadbury
Brothers Ltd and Others v Standard Newspapers Ltd
(unreported)
the jury awarded the successful plaintiffs one farthing over an
article suggesting that it was complicit in using
slave labour to
produce cocoa in São Tomé and Príncipe.
[20]
Reynolds v Times Newspapers Ltd and Others
[1999] UKHL 45; [2001] 2 AC 127;
[1999} 4 All ER 609 (HL).
[21]
Ngqumba en ń Ander v Staatspresident en
Andere; Damons NO en Andere v Staatspresident en Andere; Jooste v
Staatspresident
en Andere
1988 (4) SA
224
(A) at 259H-263D;
President of the
Republic of South Africa and Others v M & G Media Ltd
2011
(2) SA 1
(SCA) paras 13 and 14.
[22]
Op cit, fn 4, para 111.
[23]
Heilbron v Blignaut
1931
WLD 161
at 168-169.
[24]
Hix
Networking Technologies v System Publishers (Pty) Ltd &
another
1997
(1) SA 391 (A).
[25]
Herbal
Zone, op
cit, fn 6, para 38.
[26]
Room Hire Co (Pty) Ltd v Jeppe
Street Mansions (Pty Ltd
1949
(3) SA 1155
(T) at 1163.
[27]
Malema v Rawula
[2021]
ZASCA 88
paras 34 to 64.
[28]
Ibid para 64.
[29]
The
Prevention and Combating of Corrupt
Activities Act 12 of 2004
.
[30]
This is typed 'err', but that makes no sense. It
seems that what was intended was to convey a hesitation. The Shorter
Oxford English
Dictionary (6 ed, 2007) gives as the first meaning
for 'er': '
interjection
Expr
the inarticulate sound made by a speaker who hesitates or is
uncertain what to say.'
[31]
The reasonable reader is a legal construct by
which the potentially defamatory nature of a publication is
determined. It is an
objective standard and evidence of what any
particular reader understood it to mean is inadmissible.
EFF
v Manuel
, op cit, fn 4, para 30.
Whether the reasonable reader corresponds to the person 'on the
Parktown bus' as suggested by the judge,
I cannot say.
[32]
In the replying affidavit it was said on behalf
of Akani that a reader who knew of the basis for the review would
understand the
allegations of strong evidence of corruption and
Akani's appointment as unlawful as being linked and that Akani was
guilty of
corruption. The reader without that knowledge would also
link the corruption to Akani. The central concern was linkage
between
the evidence of corruption and Akani.
[33]
William Shakespeare
King
Lear
Act 3, Scene 4, line 10.