Young v Shaikh (10646/01) [2003] ZAWCHC 50; 2004 (3) SA 46 (C) (26 September 2003)

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[2003] ZAWCHC 50
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Young v Shaikh (10646/01) [2003] ZAWCHC 50; 2004 (3) SA 46 (C) (26 September 2003)

IN
THE HIGH COURT OF SOUTH AFRICA
CAPE
OF GOOD HOPE PROVINCIAL DIVISION
CASE NO: 10646/01
In
the matter between:
RICHARD
MICHAEL MOBERLY YOUNG
Plaintiff
And
YUNIS
SHAIKH
Defendant
JUDGMENT: 26 SEPTEMBER 2003
NEL,
J
The plaintiff, Richard Michael Moberly
Young (‘
Young
’),
claims payment of an amount of R250, 000-00 from the defendant, Yunis
Shaikh (‘
Shaikh
’).
This represents a claim for damages
which allegedly arose from the defamatory contents of an interview of
Shaikh
which was broadcasted on a South African television station known as
eTV on 21 November 2001 and repeated on
26 November 2001.
The interview related to the much
debated arms acquisition program of the government and more
specifically to the role played by
Shaikh
’s
brother “Chippy” in the award of a major contract to a company in
which a third brother, Shabir, held a not insignificant
minority
shareholding.
During the interview
Shaikh
denied any wrongdoing by “Chippy”, and in the process accused
Young
of lying, of having initiated a programme of sleaze and slander and
of having tendered in respect of an untested product which he
had
refused to guarantee.
The contents of the interview and the
defamatory meaning of the statements about and concerning
Young
were not denied.
A
half hearted attempt to advance a defence of fair comment was not
pursued.
Paragraph
4, 5 and 6 of the Particulars of Claim read as follows:
“
4. eTV is capable
of being received throughout South Africa, without a digital decoder,
and broadcasts to all parts of South Africa,
including the
jurisdictional area of this Honourable Court.
5. 5.1 eTV
has a substantial audience in South Africa.
The interview in
question would have been watched by between 400 000 and 600 000
viewers on 21 November 2001, and by between 200
000 and 300 000
viewers on 26 November 2001.
During the course of
the interview, the defendant made inter alia the following
statements about and concerning the plaintiff:
‘
Yes,
he’s the owner of C
2
I
2
.
Richard Young won R30 million worth of contracts. He intended to
win more. He put forward a tender saying he has a demonstrator
model of a product that has never been tested under battle
conditions, for which product he refused to stand guarantee for.
When called upon to do so, he declined. So he wants to offer a
product to the military that’s worth R30 million. He refuses
to
stand guarantee for that product when called upon to do so.’
‘
When the cabinet
refuses to carry the cost of that guarantee, Richard Young in a fit
of pique, then begins a programme of sleaze
and slander.’
‘
Bear in mind he
has already won a R30 million contract; he wants to win another R30
million product, er, tender with a product
that he doesn’t even
have.’
‘
He then says,
‘Chippy Shaikh, because you will not give me that R30 million
contract, you are guilty of conflict of interest.’
‘
Richard Young has
embarked on a campaign of sleaze and slander, using the press –
the gullible press, I may add.’
‘
No, our
victimization is that we are now subjected to mob justice, the mob
justice Patta, that you and members of the Fifth Column,
by means
of sleaze and slander and a tissue of lies have allowed and whipped
up the public into a frenzy that now they bay for
the blood of
anybody.’
‘
The media has
kept the issue alive, it has given the issue publicity, except it
has done so unfairly. It has accepted a tissue
of lies from
Richard Young and yet, on the other hand and as a matter of course,
it has denigrated, humiliated, caricatured
the Shaikh family to be
a bunch of rogues …’ “
Paragraph 7 & 8 read as follows:
“
7. The said
statements are in their ordinary meaning defamatory of the plaintiff,
alternatively and in any event were intended to
mean, and were
understood by viewers of eTV to mean, the following:
the plaintiff is a
liar;
the plaintiff is
dishonest;
the plaintiff is
dishonourable and untrustworthy;
the plaintiff is
guilty of disgraceful conduct;
the plaintiff
defames people in order to achieve his ends;
the plaintiff
misuses the media in order to achieve his ends.
The publication as
aforesaid took place with the intention of injuring the plaintiff in
his reputation.”
In reply thereto,
Shaikh
pleaded as follows:
“
6.(a) To the extent
that the statements contained in paragraph 6 of the Particulars of
Claim, taken in their context, exceed the bounds
of fair comment, the
Defendant admits that they are, in their ordinary meaning, defamatory
of the Plaintiff.
In amplification of
paragraph (a) above the Defendant admits that to the extent that the
meanings set forth in paragraph 7 of the
Particulars of Claim may
fairly be attributed to the statements quoted in paragraph 6 of the
Particulars of Claim, the said statements
in paragraph 6 of the
Particulars of Claim are not fair comment.
The Defendant
otherwise denies the allegations contained in paragraph 7 and 8 of
the Particulars of Claim.
The Defendant hereby
unconditionally and unreservedly apologises to the Plaintiff and
further tenders to pay the Plaintiff’s costs
of this action up to
and including the consideration of this Plea.”
Background
Young
is the managing director of a company registered in 1992 as CCII
Systems (Pty) Limited but also known as C
2
I
2
.
He
is an electronics engineer and holds a Masters degree in electronics
engineering from the University of Cape Town and a Doctorate
in
engineering from the University of Witwatersrand.
His
involvement with data communication systems started during his
university years and his specialist field is real-time data
communications
for mission-critical distributed systems.
This
means (in his words)
“
Well, the area of
my speciality is actually combat systems for naval combat ships and
naval systems employ a variety of distributed
subsystems, sensors and
effectors such as weapons and these days computers to correlate the
data. Because of the very short time
scales of engagements, these
combat systems operate on what they call real-time. When we use the
term mission critical, it means
that if there is a failure of the
systems to operate in these short times, that there could be severe
catastrophies such as loss
of life, loss of the ship. So, that
encompasses the terms mission critical and real-time.”
“…
Okay, the
typical scenario is actually an in-coming missile, because it’s
very small, it’s travelling very fast. It’s normally
fired to
travel just above the sea. So, the time that the ship senses this
missile is normally about between 15 and 20 kilometres
away, which
gives the ship about say between 10 and 15 seconds to react. It
requires the whole correlation of data from the search
radar, the –
getting the traffic radars to start tracking this missile, the guns
or the missiles to slew around to engage and of
course, there are
safety elements such as the – the involvement of the crew. So,
there is a lot of different things happening
in a very short time,
all very tightly coordinated in terms of the data and the time in
which the data has to be shared.
All right. C
2
I
2
,
this is the work that it does, it is inter alia to create combat
suites which will do this job of taking the in-coming data,
translating
it and sending messages through to the weaponry on the
ship. Is that more or less correct?”
In 1983, South Africa started to
develop combat suites for naval vessels. A combat suite is a set of
systems that enables a naval
vessel to engage in combat.
In 1985
Young
started to work for a company then known as Triveth-UEC (Pty) Limited
and was personally involved in the development of a combat
suite for
the South African submarines. This company became UEC Projects (Pty)
Limited which later became Altech Defence Systems
(Pty) Limited, then
100% owned by the South African electronics group Altech Limited.
The submarine project was superseded
by a frigate project but this was also cancelled during 1991.
Young
then decided to first complete his Masters degree but was approached
by Armscor to continue his work but now in respect of a smaller
surface combat vessel, a patrol corvette.
During
1993 the navy started a formal corvette acquisition project (Project
Sitron) and because a combat system was considered to
be
strategically advantageous to the country, the navy and Armscor
decided to effectively retain the capabilities they had built
up
during the eighties and early nineties on the submarine and frigate
programmes.
To
this end a number of companies were tasked by Armscor to investigate,
define and develop the various sections of technologies in
which they
had been involved or in which they had specialised.
C
2
I
2
was known to be a specialist in data communications and was
approached not only for it’s input in that field, but also for
development
of a system architecture, namely, the integration of the
various elements of the combat systems, also known as an Information
Management
System (IMS).
During 1995 when C
2
I
2
was already in it’s third year of development of the systems a
defence review was initiated and the development continued under
a
so-called ‘Technology Retention’ programme.
As
a number of companies were working on various elements of the
integrated combat systems their individual endeavors had to be
integrated
and the technical coordinating and management thereof was
carried out by Altech.
In
addition Altech was also involved in developing a navigation system
and a combat management system, both completely indigenously
developed for the requirements of the strike craft.
To
circumvent problems commonly encountered on modern warships, the navy
specified the use of fibre optic cabling for the Combat Suite
data
network.
At the beginning of 1999 C
2
I
2
had fully completed the IMS in accordance with the technical
baseline, consisting of specifications, test plans and technical
plans
which had encompassed all the requirements.
By
October 1999 and with the complete involvement of the navy, Armscor
and the systems integrator, by then known as African Defence
Systems,
the IMS system had been fully tested and had qualified in all
respects.
In
the meantime and in March 1998, 50% of the shares of Altech Defence
Systems were sold to a French company, Thompson-CSF and the
remaining
50% in February 1999.
During
November 1999 Thompson International transferred 80% of the shares of
Altech Defence Systems to its South African subsidiary,
Thompson-CSF
Holding (Southern Africa) (Pty) Limited and changed the name of
Altech Defence Systems to African Defence Systems.
Thompson-CSF
of France held 85% of the shares of the Thompson-CSF Holding
(Southern Africa), Gestilac S.A. held 5% and Nkobi Investments
(Pty)
Limited held the remaining 10%.
The
latter company is a wholly-owned subsidiary of Nkobi Holdings (Pty)
Limited of which Shabir Shaikh is a director and a major shareholder.
He is also a director of Thompson-CSF Holding (Southern Africa).
Soon
after the acquisition by Thompson-CSF of the first 50% shareholding
in Altech, it had become apparent that it was trying to
persuade the
navy and Amscor that the indigenous systems which had been developed
were not appropriate for the corvette combat suite
and that they
should be replaced by it’s own system, a system which did not
comply with the required specifications.
Eventually,
and contrary to the initial specifications and wishes of the navy,
including the specified use of fibre optic cabling,
and at a price in
excess of that of the indigenous systems, the French owned system was
purchased by the weapons-acquisition committee.
At the time, a brother of
Shaikh
and
Shabir,
‘Chippy’ Shaikh, (‘
Chippy
’)
was the chief of acquisitions for armaments at the Department of
Defence.
Following
upon concern expressed about various aspects of the arms procurement,
an investigation by the Public Protector the Auditor-General
and the
Director of Public Prosecutions was launched.
Young
was subpoenaed as a witness and presented his evidence in accordance
with an 76 page ‘
Aide
Memoire
’, exhibit ‘A’.
At the end thereof Y
oung
summarised his complaints as follows:
“534. In
conclusion, I wish to state the following:
Regarding the System
Management System (SMS), the price offered by C
2
I
2
Systems was fraudulently misrepresented to justify awarding this
contract to ADS, when clearly C
2
I
2
Systems’s
price was lower than that of ADS.
Regarding the IPMS
Simulator, C
2
I
2
Systems was clearly and unambiguously selected by the PCB to supply
this element and this was communicated to the GFC by Armscor
on
behalf of the DoD. However, the GFC have with or without Armscor’s
permission deselected C
2
I
2
Systems’s IPMS Simulator for reasons they refuse to explain.
Notwithstanding the responsibilities of the parties, nor the
legalities
of this matter, it would appear that C
2
I
2
Systems are being punished for crying foul on other parts of the
Corvette contract.
With respect to the
Information Management System, C
2
I
2
Systems was involved in the development of the IMS for the SAN for 7
years and was
nominated
in terms of the formal tender documents (i.e. Request for
Information and Request for Offer) as the supplier of this
sub-system
for the Corvettes Combat Suite. Later, this nomination
evolved into
selection
in terms of the Request for Best and Final Offer. Thus a legitimate
expectation that C
2
I
2
Systems would be selected as the supplier was created by our
previous involvement in the project as well as the tender
documentation
of Armscor and DoD and events relating to the process
of acquiring the Corvettes.
It was specified by
Armscor and SAN that the South African industry should be the
suppliers of the sub-systems of the Combat Suite
and that a South
African company should be the Combat Suite contractor, responsible
for the integration of the Combat Suite sub-systems.
The end result,
however, was that C
2
I
2
Systems was manoeuvred out of the contract, by the French-controlled
company ADS, which also became the Combat Suite main contractor.
There were no lawful
reasons for not awarding the contract to C
2
I
2
Systems.
A clear conflict of
interest arose, which led to unfair and unlawful competition namely:
The fact that ADS,
the nominated and eventually selected main contractor, could compete
with other bidders for the sub-system contracts.
The fact that ADS
obtained C
2
I
2
Systems’s price and technical specifications and directly or
indirectly, disclosed these to what later became C
2
I
2
Systems’s competitor.
The fact that Detexis
and ADS are both in the Thomson-CSF group and form part of the prime
contractor, i.e. the European South African
Corvette Consortium
(ESACC).
The fact that Mr
Shamin (Chippy) Shaikh played a role in the process regarding the
selection of the contractors for the Combat
Suite, is improper
considering that his brother Schabir Shaikh has a direct interest,
as director and shareholder in both ADS and
Thomson-CSF (Southern
Africa).
.
In the bigger
picture, Thomson-CSF, through an irregular acquisition process,
obtained a major share of the Corvette supply contract,
contrary to
what was envisaged by Armscor and the SA Navy.”
The interview of
Shaikh
followed after the investigation and the publication of a joint
report by the Public Protector, the Auditor General and the Director
of Public Prosecutions in which they recorded their finding that
there had been a conflict of interest situation when the contract
was
awarded.
The Issues
Young
concluded his evidence by stating that in his profession and in the
arms industry his reputation and perceived integrity and honesty
are
of critical importance.
He
sells hardware which is difficult to conceptualise and software which
is a completely intangible component of very complex and
expensive
systems on which the combat capacities of very expensive battle ships
are based.
People
must therefore be able to trust him when he markets his own products
or when he reviews other system designs.
On a personal level his reputation is
also important to him and it is not possible to reach all members of
his family who might have
seen the program. With the exception of
the apology in the plea,
Shaikh
has never apologized to him and has not published an apology in the
media.
Young
also stated that if
Shaikh
had attended the inquiry and if he had listened to the evidence, he
could not have come to the conclusions which he claimed to have
come
to.
He
also stated that the product in respect of which he had tendered was
not a demonstrator model but a very sophisticated product
which to
this day can be seen and touched and which had been evaluated by the
navy and Armscor as a superior product.
Since
early 1999 he has sold the hardware and the four lowest levels of
protocol software of the IMS for use in Awacs aircraft, to
the United
States Navy, the Unites States Marine Corpse, the Swedish Navy and
the German Navy.
It
is being used in the latest United States aircraft carrier, the USS
Ronald Reagan, commissioned this year, as well as in the US
Navy’s
latest class of ships, the San Antonio class of Marine Corpse assault
vessels.
He also denied ever having lied or
ever having started a campaign of sleaze and slander as alleged by
Shaikh
.
During
cross-examination it was put to him that he could have claimed
publication of an apology as an alternate to damages and that
he
should have accepted the apology in the plea. He responded by
stating that the interview had been seen by between 400, 000 and
600,
000 people and that this should be compared to the apology in the
plea which had only been by him and his legal team. He agreed
that
he had not demanded an apology prior to the issue of summons.
He agreed that C
2
I
2
is in fact challenging it’s deselection and has sued the Government
for damages. He also agreed that during a period prior to the
interview, his views had been sought and published in the media.
He
had made a formal complaint to the Auditor-General about a conflict
of interest between the two brothers and this had been picked
up by
the media during the course of the public hearing.
His
evidence in regard to the facts set out above under the heading
‘Background’, and his evidence regarding his product and the
necessity to protect his good name and reputation were not put in
issue.
Shaikh
testified that he is an attorney, practices as a labour law
consultant and that he had been a candidate for appointment as a
Judge
in the Labour Court.
His brother “
Chippy
”
was chief of acquisitions for armaments at the Department of Defence.
A third brother, Riaaz, was the South
African ambassador to Algeria, and the fourth brother,
Shabir
,
a businessman.
The original arrangement was that
Shabir
and “
Chippy
”
would have appeared on the television program but as “
Chippy
”
had been suspended and
Shabir
had taken ill, it was decided that
Shaikh
would participate to express their point of view in regard to the
impression which had been created that they had colluded in a corrupt
practice.
According
to his evidence this was decided only approximately an hour and a
half before the interview, which was recorded a day or
two before the
broadcast.
He also stated that he had not had any
intention to defame
Young
and had merely sought to defend his family’s name and their
integrity.
He also felt that
Young
had been pursuing his cause in the wrong forum, ie. the press and in
the media in general.
He had attended the public hearing of
the investigation by the Public Protector and having listened to the
evidence of
Young
and naval personel had come to the conclusions expressed during the
interview.
He conceded however, that he had read
the official report which had been published a week before the
interview, and that there was
nothing contained therein which
suggested that
Young
had fabricated anything or that he had initiated a program of sleaze
and slander.
Shaikh
also stated that having seen the replay of the interview he had been
surprised to see that he had been so intemperate, and to the
extent
that he had exceeded the bounds of fair comment and had given offence
to
Young
,
he apologised.
The Claim
Shaikh
is an attorney and a member of an obviously prominent family, not
only in business circles but also in political circles.
During
the interview he did not attempt to justify the award of the contract
to the foreign company as having been regular or even
in the best
interests of the navy.
When questioned about the implications
of the joint report he started to blame
Young
and in effect accused him of being an opportunistic liar.
It
reads as follows: (DP is the interviewer, Deborah Patta)
“
DP: You say that
it’s not, that the Auditor-General didn’t say that there was
anything unlawful. He can’t make that finding
because there is no
law. There is no law to disobey because we don’t have proper laws
about conflict of interest in this country.
I mean that is one of
the problems with this whole procurement process. It was a very
murky and very shady area. The implication
that is (sic) takes from
this report, the perception of the public is that there was some
thing unethical that happened and that
this was a self-enrichment
scheme for the Shaikh family.
YS: That
perception is created by you, Patta, and the others in the media and
how did that come about? It is you Patta, in an interview
in Terror
Lekota insisted that Shamin Shaikh is guilty of conflict of interest
even before the Auditor-General had concluded his
report. Now where
did you get? … [Interrupted]
DP: [Inaudible]
but was that opening the way? [Interrupted]
YS: Yes,
now here did you get the way from? The media got the way from no
less than Richard Young. Richard Young was a supplier
to ADS and
Thomsons (sic). Richard … [Interrupted]
DP: This
is C-Squared I-Squared company?
YS: Yes,
he’s the owner of C2I2. Richard Young won R30 Million worth of
contracts. He intended to win more. He put forward a
tender saying
he has a demonstrator model of a product that has never been tested
under battle conditions, for which product he refused
to stand
guarantee for. When called upon to do so, he declined. He wants to
offer a product to the military that’s worth R30
Million. He
refuses to stand guarantee for that product when called upon to do
so. When the cabinet refuses to carry the cost
of that guarantee,
Richard Young, in a fit of pique, then begins a program of sleaze and
slander. Bear in mind he has already won
that R30 million contract,
he wants to win another R30 million product. (ahh) tender with a
product that he doesn’t even have.
He then says ‘Chippy Shaikh
because you will not give me that R30 million contract, you are
guilty of conflict of interest’.
Chippy Shaikh was standing up for
good governance. Richard Young has embarked about a campaign of
sleaze and slander, using the
press- the gullible press, I may add.
DP: Do
you think it’s fair that your brother has been singled out for
charges?
YS: It’s
not fair and we certainly feel we have been victimized, but we are
not victimized by our government, we are not victimized
by Bululane,
we are not victimized by Selby Baqwa, we are not victimized by
Shauket Fakie. No, our victimization is that we are
now subjected to
mob justice, the mob justice Patta, that you and members of the Fith
column, by means of sleaze and slander and
a tissue of lies, have
allowed and whipped up the public into a frenzy that now they bay for
the blood of any body.”
The statement by
Shaikh
,
an attorney that he had no intention to defame
Young
while rabidly attacking his integrity, must obviously be rejected as
false.
Mr
Vahed
who appeared on behalf of
Shaikh
submitted that
Young
should have claimed the publication of an apology instead of damages
and should, in any event, have been satisfied by the apology
tendered
in the plea.
He referred to the judgment of
Willis
J
in
Mineworkers
Investment Co (Pty) Ltd v. Modibane
2002 (6) SA 512
at p. 525 where, after referring to the
amende
honorable
as ‘a little
treasure lost in a nook of our legal attic’, the learned judge
continued as follows (E-H)
“
Even if I am wrong
in the conclusion that the amende honorable is still part of our
law, there are other reasons why I believe a
remedy analogous thereto
should be available. I agree with the submission of Mr Chaskalson
that if the only remedy available in
a defamation action is damages,
then very often an appropriate balance will not be struck between the
protection of reputation on
the one hand and freedom of expression on
the other. It fails in two respects: (i) often, it does not afford
an adequate protection
to reputation and (ii) it can, at least
indirectly, impose restrictions on freedom of expression. Awards of
damages can ruin defendants
financially and this risk can operate to
restrict information being published which may indeed be in the
public interest. The uncertainty
as to whether the ‘truth plus
public benefit’ defence will succeed can inhibit freedom of
expression. As Hefer JA, as he then
was, said in the case of National
Media Ltd v Bogoshi (supra at 1210G-I):
‘
Much has been
written about the ‘chilling’ effect of defamation actions but
nothing can be more chilling than the prospect of
being mulcted in
damages for even the slightest error.’
Furthermore, the harm
done by a defamatory statement is the damage to the reputation of the
victim. A public apology which will usually
be far less expensive
than an award of damages, can ‘set the record straight’, restore
the reputation of the victim, give the
victim the necessary
satisfaction, avoid serious financial harm to the culprit and
encourage rather than inhibit freedom of expression.”
Even if the “little treasure” can
be recovered from a “nook in our legal attic”, I do not believe
that a published apology
in this matter would serve the interests of
justice.
Freedom
of expression does not include the right to falsely attack the
integrity of a fellow citizen for selfish reasons or for reasons
which having nothing to do with “public benefit”.
If
the award which I intend to make will have a “chilling” effect on
possible future and similarly baseless and selfish attacks
on the
integrity of others, it would certainly, in my view, be and
additional reason not to make use of the lost “little treasure”.
An apology in a plea and a
half-hearted apology in evidence (“
to
the extend that I exceeded the bounds of fair comment and I gave
offence to Mr. Young, I apologise
”)
can certainly not be regarded as adequate.
Mr.
Fagan
,
who appeared on behalf of
Young
referred to a number of decisions in which awards of damages for
defamation were made. The awards ranged (in today’s terms) between
approximately R30, 000-00 and R400,000-00.
Shaikh
showed no compunction when attacking the integrity of
Young
and was indifferent to any financial harm which his baseless
accusations could have caused.
In the circumstances there should in
my view, not be any reasons to try to avoid ‘
serous
financial harm to the culprit.
’
As submitted by Mr.
Fagan
,
previous judgments as to the determination of appropriate awards
serve only a limited purpose and can only be instructive.
In this regard he referred to
Van
der Berg v Coopers & Lybrand Trust (Pty) Ltd and Others
[2000] ZASCA 77
;
2001
(2)
SA 242
(SCA).
Having regard to
Buthelezi
v Poorter and Others
1975
(4) SA 608
(W) referred to by Mr.
Fagan
,
and having regard to the often expressed reluctance of our Courts to
award huge amounts as damages for defamatory statements, I
am of the
view that an appropriate award would be R150, 000-00.
In
the result, Defendant is ordered to pay to the Plaintiff
The amount of R150, 000-00;
Interest thereon
a
tempore morae
calculated
at the prescribed rate of 15,5 per cent per annum from the date of
service of the summons to date of payment;
Costs of suit.
H C NEL