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[1988] ZASCA 173
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Dhlomo v Natal Newspaper (Pty) Ltd and Another (407/87) [1988] ZASCA 173; [1989] 2 All SA 136 (A) (1 December 1988)
Case no. 407/87
E du P
IN THE SUPREME COURT OF SOUTH
AFRICA
APPELLATE DIVISION
In the matter between:
DOCTOR
OSCAR DHLOMO
Appellant
and
NATAL NEWSPAPERS (PTY)
LIMITED
First Respondent
I M WYLLIE
Second Respondent
Coram
: RABIE ACJ, CORBETT,
JOUBERT, VAN HEERDEN JJA et
VILJOEN AJA.
Heard
: Delivered:
18 August 1988 7 December 1988
JUDGMENT RABIE ACJ:
This is an appeal against the judgment of Van Heerden J in the Durban and
Coast Local Division in which
2
he upheld an exception to a claim f or damages for defamation
and dismissed the claim with costs. The judgment has been reported: see
Dhlomo N 0 v. Natal Newspapers (Pty) Ltd and Another
1988(4) SA 63
(D&CLD).
The claim for damages was instituted by Dr Oscar Dhlomo on
behalf of Inkatha Yesiswe ("Inkatha"), of which he is the Secretary-General.
Inkatha is a legal
persona
, and in terms of its constitution its
Secretary-General can insticute action on its behalf. (Inkatha is described in
the Particulars
of Claim as a "non-incorporace associacion, a universitas", and
"a national popular movemenc, having a membership of some 1,2 million
persons.")
The first defendant in the action (the first respondent in the appeal) was the
proprietor, publisher and prinLer of the
newspaper, "The Sunday Tribune". The
second defendant was the editor of the newspaper. In an article which appeared
in the newspaper
on 30 March 1986 it was stated that serious violence had been
committed at a certein conference by members of a Zulu impi, and that
"A
spokesman for police headquarters in Pretoria
3
said that according to their information the Amabutho impi was backed by
Inkatha." The plaintiff, stating that it was known to the
defendants and readers
of the newspaper that Inkatha had publicly rejected on many occasions "(i) the
policies of the National Government
and in particular the policy of apartheid,
and (ii) the use of violence to achieve political aims", alleged that the
article was
defamatory of Inkatha; thet the "reputation, dignity and esteem of
Inkatha and its ability to promote and further its aims and objects"
had been
"impaired and injured" by the defamatory article, and that Inkatha had suffered
damages in the amount of R20 000,00.
The defendants (the respondents in the appeal) excepted to the plaintiff's
Particulars of Claim on the following grounds:
"1. The Plaintiff is Inkatha which in terms
of its constitution is represented for the purpose of these proceedings by
its Secretary General.
4
2. The Plaintiff is alleged to be a
universitas
and a national popular movement established and existing
for political purposes.
3.
The Plaintiff is not alleged
to have any trading rights nor is it alleged to have suffered any loss to its
patrimony in consequence
of the publication of the article, a copy of which is
annexure "A" to the Particulars of Claim;
4.
The Plaintiff is incapable of being defamed and has no title to sue
to recover damages for defamation."
This statement
of the grounds of the exception is followed by a prayer that the exception be
upheld and that the plaintiff's claim
be dismissed with costs.
It is common cause that Inkatha's claim is not one under the
lex
Aquilia
for damages for a loss actually sustained by it. The real issue
raised by the exception is, therefore, whether the right on the part
of a legal
persona
5
to claim damages for defamation is limited to a legal
persona
which is
engaged in trade and which alleges that it has been injured in its business
reputation or status. (For the sake of convenience
I shall, in what follows
below, refer to such a legal
persona
as a trading corporation.) It
follows that if the Court should hold that the right to claim damages for
defamation is not so limited,
or ought not to be so limited, the exoeption must
fail. This was, also, the basis on which the exception was argued in the Court
a quo
; see the last sentence of the penultimate peragraph of the
judgment of the Court
a quo
(at 72 H-I of the report), where the learned
Judge indicates that counsel for the excipients (the present respondents)
conceded that
the exception was "simply aimed at drawing a line between trading
and non-trading concerns", and that Inkatha, not being a trading
corporation,
could for that reason, and not because of its character as a
quasi
-political organisation, not sue.
It is clear from what I have said above that
the
6
respondents accept, for the purposes of the exception, that a trading
corporation can claim damages for defamation, but that they
contend that a
non-trading corporation has no such right. Their contention is that our Courts
have never decided that a non-trading
corporation has such right, and, also,
that no such right should now be recognised. The questions which call for
discussion are,
therefore, (a) whether a trading corporation can in our law
claim damages for defamation, and (b), if it can, whether a non-trading
corporation can also do so, or (c), if it has not yet been decided that a
non-trading corporation can do so, whether the right to
do so should be accorded
to it.
In
Cape Times,Ltd v. South African Newspaper Co., Ltd
(1906) 23
SC 43
the Court accepted the law to be that a "trading company" could sue for
libel in the event of injury to its "business reputation"
(at 49). In
Witwatersrand Native Labour Association, Ltd v. Robinson
1907 TS 264
Innes CJ stated (at 265):
7
"The rule apparently adopted, both in England and
in South Africa, is that a trading corporation -
which I take to mean a corporation engaged in some
business for the purpose of profit - may sue for
defamation which affects it in its trade or
business or property. But that is the high-water
mark of the decisions
affirming the right of
companies or corporations to
bring actions for
defamation."
In the same case Bristowe J said (at
266):
"The functions and activities of a natural individual are manifold in their
character; the functions and activities of a corporation
are limited to the
objects for which it is created, and in the case of a joint-stock company are
limited to the objects stated in
the articles of association. So that a
corporation oannot, from the nature of its foundation and of its constitution,
be defamed
unless something is said or written which will interfere with it in
the pursuit of the purposes for which it was created; and in
the case of a
trading corporation it must, as was laid down in the cases to which we have been
referred, be calculated to injure
its business reputation, or to affect the
trade or business which it was formed to carry
on."
8
In
Rand Water Boerd v. Lane
1909 TH 4
Bristowe J raised
the
question whether a non-trading corporation could claim
damages for
defamation. The learned Judge said (at 7):
"First, is the Rand Water Board a trading corporation? I am not sure that this
affects the matter, for I suspect that in the case
of any corporation
established to carry out a particular undertaking, if it were injured by a libel
in that undertaking, the corporation
would have a right to sue on the
libel."
He proceeded to hold, however, that the Rand
Weter Board was
a trading corporation and that it could, therefore, sue
for
damages for defamation. In
Bhika v. Prema and Others
1910
TS
101
, where the respondents claimed to be an "association",
Innes CJ held (at
103):
"But even if this were in law an association which could sue for libel, it is
clear that it cannot do so apart from its business.
And it has no business which
can be libelled."
In the same case Smith J, who
concurred in the judgment of
Innes CJ, also said (at 104):
9
"An association or corporation has no personal honour which can be attacked, and
therefore this association, which had no business,
cannot be libelled in the way
plaintiffs allege."
This takes me to the case of
G.A. Fichardt, Ltd v.
The
Friend Newspapers, Ltd
1916 AD 1
- the first case
in which
questions of the kind mentioned in the cases referred to
above
were discussed in the Appellate Division. The
appellant company, a trading
corporation, claimed damages for
defamation, alleging that it had been
defamed in headlines
to an article which appeared in a newspaper owned and
printed
by the respondent company. Innes CJ said (at 5/6):
"That the remedy by way of action for libel is open to a trading company admits
of no doubt. Such a body is a juridical
persona
, a distinct and separate
legal entity duly constituted for trading purposes. It has a business
status
and reputation to maintain. And if defamatory statements are made
reflecting upon that
status
or reputation, an action for the
injuria
will lie. (See de Villiers'
Law of Injuries
, p. 59.) In
the present case no special damages were proved; but that
circumstance
10
does not really affect the position. Where words are defamatory of the business
status
and reputation of a trading company, I am not aware of any
principle of our law which would make the right of action depend on proof
of
special damage."
Solomon JA, in whose judgment
Maasdorp JA concurred, said (at
8):
"It has been settled by a series of decisions, both in England and in South
Africa, that an action will lie at the suit of a trading
company for statements
defaming it in its business character or reputation. For example it is
actionable to write or say of such
a company that it conducts its business
dishonestly or that it is insolvent. And for defamatory statements of that
nature general
damages may be given, just as when an individual is defamed, nor
is it necessary to prove that actual loss has been sustained. The
law on this
subject is now well settled, and it is unnecessary, therefore, to discuss the
authorities dealing with it."
And also (at 9):
"Now, as already pointed out, just as it is defamatory to make any statement
concerning an
11
individual which reflects upon his character or reputation, so it is defamatory
to make a statement concerning a trading corporation
reflecting upon its
business reputation."
Innes CJ and Solomon JA held
that the headlines of which the
appellant complained were not defamatory, and
that the
appellant could therefore not succeed. Both of them
expressed the
view that the appellant might have been
entitled to institute an action based
on false, but not
defamatory, statements concerning its business. De
Villiers
AJA (with whom Juta AJA agreed) held that the appeal should
be
dismissed on the ground that the words of which the
appellant complained were
not defamatory.
In
Goodall v. Hoogendoorn, Ltd
1926 AD 11
the Court
held
that a trading corporation could claim damages on the
ground
of statements defaming it in its business reputation. It was
held on exception in that case that the action could not
succeed because it was not the company itself which sued, but
a shareholder who apparently claimed in respect of a loss
12
allegedly suffered by himself.
In
Die Spoorbond and Another v. South African
Railways
1946 AD 999
the Railways, which was a legal
persona
and
which, so the Court held, was engaged in trade,
claimed
damages on the ground of defamatory statements which had
allegedly
injured it in its reputation as the authority which
managed and superintended
the railways. Watermeyer CJ (in
whose judgment Tindall JA, Greenberg JA and
Davis AJA
concurred) accepted, without discussing the matter, that a
trading corporation could claim damages for an injury done
to its business reputation. It was held, however,
inter alia
on the ground of what may be said to be considerations of
public and legal policy, that such right should not be
accorded to the State. As to the question of damages in a
claim made by a trading corporation, Watermeyer CJ said (at
1007):
"There have been several decisions in Courts in South Africa which recognise
that a trading or business corporation has, like an individual,
a
13
reputation in connection with its trade or business and that it can sue for
damages for injury to the reputation, e.g.
Fichardt Ltd. v. The Friend
Newspapers
(1916, A.D. 1)
;
Witwatersrand Native Labour Association v.
Robinson
(1907, T.S. 264)
;
Rand Water Board v. Lane
(1909, T.H. 4)
;
African Theatres Trust v. McWilliams
(1915, E.D.L. 102)
;
African Life
Society v. Phelan
(25 S.C. 743).
But there have also been cases in which the
Courts have decided or suggested that no action for libel affecting the
reputation of
a corporation will lie without proof of damage. See
Cape Times
Ltd. v. S.A. News Ltd.
(16 C.T.R. 40);
Cape Times Ltd. v. Richards &
Sons
(10 C.T.R. 727). There has been no decision of this Court upon the
subject so far as I am aware."
I have read the cases
of
Cape Times Ltd v. S.A. News
and
Cape Times Ltd v. Richards &
Sons
, mentioned in this passage,
but, with great respect, I do not think
that either of them
should be taken to have decided that in a claim for
defamation by a
trading corporation there must be proof of
actual damage suffered by the
corporation. Reference may be
made in this connection to what Bristowe J said in
Rand
14
Weter Board v. Lane
,
supra
, at 5, in regard to the case of
Cape Times Ltd v. S.A. News
,
snpra
. The learned Judge said:
"Mr.
Nathan
has cited the case of
Cape Times, Ltd v. South African
News
(16 C.T.R. 40), from the report of which it is made to appear that
special damage must be alleged in a case of this kind. But I do
not believe that
the court meant to lay down that special damage must be alleged in the sense in
which that term is usually understood.
By special damage is meant simply damage
to the plaintiff's trade or business. If the court intended to decide more than
that, then
I think it decided contrary to the decision in
South Hetton Coal
Co. v. North Eastern News Association
([1894]
1 Q.B. 133)
, which was
approved of by the Supreme Court in
Witwatersrand Native Labour Association
v. Robinson
([1907] T.S. 264)."
In his judgment
in the
Spoorbond
case,
supra
, Schreiner
JA dealt with the question of the development of the law of
defamation from early times up to the time when recognition
began to be given to the right of a corporation to claim
damages for defamation. The relevant passage reads as
follows (at 1010-1011):
15
"Our action for defamation is derived ultimately from the Roman
actio
injuriarum
which 'rested on outraged feelings, not economic loss' (Buckland,
Textbook of Roman Law
, sec. 202). Even in the eerly days of recorded
Roman law mention was specifically made, in this connection, of
public
insults, but the gist of the action was the intentional and unjustified
hurting of another's feelings and not the damage to his reputation
considered as
something that belonged to him. In our modern law, as often happens, the wide
old delict of
injuria
has split up into different delicts, each with its
own name, leaving a slight residue to bear the ancient title. The particular
delict
now known as defamation has lost a good deal of its original character
since it is no longer regarded primarily as an insulting incident
occurring
between the plaintiff and the defendant
16
personally, with publicity only an element of aggravation by reason of the
additional pain caused to the plaintiff. Although the remnant
of the old delict
of
injuria
still covers insults administered privately by the defendant
to the plaintiff, the delict of defamation has come to be limited to
the harming
of the plaintiff by scatements which damage his good name, The opinion.of other
persons is of value to him and although
it is not usual to speak, with Iago, of
defamation as a form of theft, it has become in some degree assimilated to
wrongs done to
property. Thus special damage can be recovered in a defamation
action, as a matter of convenience, although if one looks at the history
of the
action it would appear to be logical to require a separate action to be brought
under the
lex Aquilia
in respect of that loss (see
Matthews v.
Young
(1922, A.D. 492
at p. 505)). It is because of this
17
development in the character of actions for defamation, so it seems to me, that
some logical justification can be found for the recognition,
even in our law, of
such actions at the suit of corporations, although the latter have no feelings
to outrage or offend."
Schreiner JA also touched on
the question whether the right
of trading corporations to sue for defamation should be
extended to other
corporations which rely on their reputation
to win them public support. The
learned Judge said (at
1011):
"Whether the right to sue for defamation, assuming that some corporations at
least have such a right, is to be limited to trading
corporations or is to be
extended to such other corporations as rely on their reputations to win them
public support for the conduct
of their affairs, has certainly not been settled
in our law."
In the case of
Universiteit van Pretoria v. Tommie
Mever
Films (Edms) Bpk
1979(1) SA 441(A) I did not
find it
18
necessary to discuss the law as stated by Innes CJ and Solomon JA in
Fichardt
's case,
supra
, and merely said (at 454 G-H), referring to
Fichardt
's case, that: "Wat
fama
betref, is in hierdie hof al
gesê dat 'n handelsmaatskappy 'n
fama
het en dat sodanige
maatskappy belaster kan word . ..". I accepted in that case, for the purposes of
the appeal, that the appellant,
which was a University and not a trading
corporation, could in appropriate circumstances sue for defamation (see at 455
E). I also
left open the question whether the right enjoyed by a trading
corporation to sue for
defamation should be extended to legal
personae
which have
a
fama
and are dependent on financial support from the public for the
conduct of their affairs.
Fichardt
's case,
supra
, has been criticised for accepting that
a trading corporation can sue for defamation. See
Universiteit van Pretoria
v. Tommie Meyer Films (Edms) Bpk
1977(4) SA 376 (T);
Church of
Scientology in SA
Incorporated Association Not For Gain and Another v.
Reader's
19
Digest Association SA (Pty) Ltd
1980(4) SA 313 (C). The
basis of
the criticism is, briefly put, that a natural person, who has rights of
personality, can be defamed, but not a legal
persona
, which does not have
such rights. A trading corporation, it is said, can sue for damage done to its
reputation if it suffers actual
loss, its reputation being an asset which has
economic value. Such corporation's remedy, thus the argument, is an Aquilian
action,
not an action for defamation which does not require proof of actual
loss.
The question now to be decided is, therefore, whether one should hold the law
as stated in
Fichardt
's case,
supra
, to be the law of South
Africa, or whether one should decide that the law is that only a natural person
can sue for defamation.
The aforesaid statements of the law by Innes CJ and Solomon JA were, as I
said in
Universiteit van Pretoria v. Tommie Meyer Films (Edms) Bpk
1979(1) SA 441 at 455 A-C,
20
strictly speaking not necessary for the decision of that case. The claim was
one for damages arising from allegedly defamatory newspaper
headlines, and when
it was found that the headlines were not defamatory, the Court could have
dismissed the claim on that basis,
without entering on a discussion of the
question whether a trading corporation could in iaw sue for defamation. It is
clear at the
same time, however, that those statements were made as reflecting
settled law. Innes CJ, as pointed out above, stated: "That the
remedy by way of
action for libel is open to a trading company admits of no doubt", and Solomon
JA, as has also been shown above,
reearded it as settled law that a trading
corporation could sue for defamation. In the
Spoorbond
case,
supra
, decided thirty years after
Fichardt
's case, Watermeyer CJ,
without discussing the matter, accepted the law to be that a trading corporation
can sue for defamation. I
appreciate that it may be said that the recognition of
the right of a trading corporation to sue for defamation
21
involves an extension of the princíples of Roman and Roman-Dutch law
which dealt with the right of action only in relation
to natural persons, but,
having considered all this, and having taken account of South African academic
writings in textbooks and
legal journals
pro
and
contra
the idea
that a trading corporation should have the right to sue for defamation, I have
come to the conclusion that it would be unrealistic
not to hold that the law as
stated by this Court in
Fichardt
's case more than seventy years ago has
become the law of South Africa. I accordingly so hold.
With regard to the question of the proof of damages in an action for
defamation, Innes CJ held in
Fichardt
's case that it was not necessary
for a trading corporation to prove special damage, i.e., to prove an actual
loss. The judgment of
Solomon JA was, as has been pointed out above, to the same
effect. In the
Spoorbond
case, as indicated above, Watermeyer CJ referred
to several decisions which recognised that a trading corporation has, like an
individual,
"a reputation in connection with its trade or business and that
22
it can sue for damages for injury to that reputation." One of the cases
mentioned by him was
Fichardt
's case, and he dealt with the case before
the Court on the assumption that a trading corporation could sue for defamation
without
proof of special damage. I have already dealt with the Chief Justice's
reference to
Cape Times Ltd v. S.A. News, Ltd
,
supra
, and
Cape
Times Ltd v. Richards & Sons
,
supra
, as being cases in which it
was "decided or suggested that no action for libel affecting the reputation of a
corporation will lie
without proof of damage." In my view we should follow what
was said in
Fichardt
's case. It would be wrong, I think, to demand of a
corporation which claims for an injury done to its reputation that it should
provide
proof of actual loss suffered by it, when no such proof is required of a
natural person who sues for an injury done to his reputation.
I may point out, in conclusion, on this part of the case, that the rule that
a trading corporation can sue for injury to its business
reputation is also
known to other
23
legal systems. See, e.g., as to England:
Salmond
and
Heuston on the Law of Torts
, 19th ed. (1987), at 482;
Gatley
on Libel and Slander
, 8th ed. (1981) para. 954;
Duncan and
Neill on Defamation
, 2nd ed. (1983), para. 9.02; as
to
Scotland: David M. Walker,
Principles of Scottish Law
, Vol. II, Book
IV (3rd ed.) at 624; and as to the United States of
America:
Corpus Juris Secundum
, Vol 53, in the chapter on
Libel and Slander, para. 113;
Restatement of the Law
,
2nd ed., Vol. 3 (1977), in the chapter on Invasions of Interest in
Reputation, para. 561. German law accepts that a legal
persona
can be
defamed.(See e.g. Rolf Serick,
Rechtsform und Realitat Juristischer
Personeu
(1955) at 173-175.) In Dutch law there are conflicting Court
decisions as to whether a legal
persona
can be defamed, but it is said
that most writers hold the view that it can be defamed. (See Asser,
Verbintenisrecht
,
De Verbintenis uit de Wet
, 6th ed. (by Rutten,
1983) at 214, Vol 4-III; Asser,
Vertegenwoordiging en Rechtspersoon
,
De Rechtspersoon
, 6th ed.,
24
(by Van der Grinten, 1986) para. 72.
I turn now to the question whether
the right to sue for defamation should be restricted to trading corporations, or
whether such right
should also be extended to non-trading corporations - or at
least some kinds of non-trading corporations. As I pointed out above,
the
respondents' exception was brought on the narrow basis that no such extension to
any kind of non-trading corporation should be
permitted, and that the
appellant's claim should, for that reason, be dismissed.
As to the aforesaid question, one could, I suppose, adopt the attitude that
the extension of the right to sue for defamation to a
trading corporation
constituted an extension of the earlier law which conferred such a right only on
natural persons, and that one
should not go further along that road. I do not
think, however, that such an attitude would be justified. It was rightly not
contended
by the respondents that no non-trading corporation can have a
fama
25
which deserves the protection of the law; the contention was that a
corporation which has such a
fama
can protect it by means of an interdict
or by claiming damages in an Aquilian action, but not by suing for defamation.
It seems to
me, however, that once one accepts - as one must, in my view -that a
trading corporation can sue for an injury to its business reputation,
there is
little justification for saying that a non-trading corporation should not, in
appropriate circumstances, be accorded the
right to sue for an injury to its
reputation if the defamatory matter is calculated to ceuse financial prejudice
(whether or not
actual financiel prejudice results.) It is conceivable that in
the case of a non-trading corporation such as a benevolent society
or a
religious organisation - these are but examples - which is dependent upon
voluntary financial support from the public, a defamatory
statement about the
way in which it conducts its affairs would be calculated to cause it financial
prejudice in the aforementioned
sense. It would in my view be
26
illogical and unfair to deny such a corporation the right to sue for an
injury to its reputation, but to grant it to a trading corporation
when it
suffers an injury to its business reputation. In my opinion we should hold, and
I so hold, that a non-trading corporation
can sue for defamation if a defamatory
statement concerning the way it conducts its affairs is calculated to cause it
financial prejudice.
This finding involves, in view of what I said above
concerning the narrow basis on which the respondent's exception was brought,
that the exception cannot be sustained. It is accordingly unnecessary to
consider the further question whether a non-trading corporation
can sue for
defamation if the defamatory matter of which it complains relates to the conduct
of its affairs but is not calculated
to cause it financial prejudice.
My aforesaid finding must not be taken to mean that I hold the view that
every non-trading corporation will in all circumstances be
entitled to sue for
defamation. It is
27
conceivable, I think, that such a corporation may, in certain circumstances,
be denied the right to sue on the ground of considerations
of public or legal
policy. (Such considerations moved the Courk in the
Spoorbond
case,
supra
, to hold that a department of the State should not be permitted to
sue for defamation,) The present case can conceivably give rise
to the question
whether it would be in the public interest to permit attacks on political
bodies, whose policies and actions are
normally matters for debate on public and
political platforms, to be made the basis of claims for damages in Courts of
law. However,
I express no opinion thereon.
With regard to my finding above regarding the right of a non-trading
corporation to sue for defamation, it may be useful to indicate
that it appears
to be in line with American law on the subject. In the
Restatement of the
Law, Torts
(2nd), a publication of The American Law Institute, the following
is said in Vol. 3 (1977), para. 561, regarding the
28
question of the defamation of a corporation:
"One who publishes defamatory matter concerning a corporation is subject to
liability to it
(a) if the corporation is one for profit, and the matter tends to prejudice it
in the conduct of its business or to deter others
from dealing with it, or
(b) if, although not for profit, it depends upon financial support from the
public, and the matter tends to interfere with its activities
by prejudicing it
in public estimation."
In a caveat to (b) it is said
that the Institute expresses
no opinion on "whether there may be liability
for defamation
of a corporation that is not for profit, if the corporation
does not depend upon financial support from the public or the
defamation does not tend to interfere with that support"; and
in a comment on this caveat it is stated that there have not
been cases involving the publication of defamatory matter
concerning a corporation not for profit, where the
corporation did not depend on the financial support of the
public, or where the matcer published did not tend to
interfere with the activities of the corporation by
29
preventing it from obtaining financial support. It is
suggested, however (although it is expressly stated that the matter is left
open), that "cases may arise in which the defamatory publication will so
seriously injure a corporation not for profit, or so seriously
interfere with
its activities otherwise than by preventing financial support, that the action
will be held to lie."
Further, as to American law on the subject, the following is said in
American Jurisprudence
, 2nd ed., Vol. 50 (1970), in the chapter on "Libel
and Slander", para. 315:
"A corporatlon, even chough noc engaged in
business, may maintain an action for libel without proof of special damages,
where it is dependent for its support on voluntary contributions,
the number and
amount of which are likely to be affected by the publication of which complaint
is made."
One of the cases cited in support of this statement is
New York Society
for the Suppression of Vice v. MacFadden Publications et al
., decided in the
New York Court of Appeals
30
and reported in 86 American Law Reports (1933) at 440. The
plaintiff in
that case was a society which had been
established for the purpose of doing
social welfare work, and
it was dependent on voluntary contributions for its
support.
It instituted an accion for libel against the defendant
company,
the publisher of a newspaper, and was awarded
damages. On appeal ic was
contended chat only a crading
corporation could maincain an action for libel;
that the
plaintiff wes not a corporation engaged in business for
pecuniary gain, and that, to justify a claim for damages,
special damage should have been alleged and proved. The
Court rejected these contentions and said
inter alia
(at 441-
442):
"Corporations engaged in charitable, social welfare, benevolent and religious
work, have the right to acquire and hold property which
may produce a profit or
income, Indeed, the statute under which plaintiff was organized expressly grants
that power to it. Many such
corporations own and control very valuable
properties, and in
31
their management such corporations establish a reputation, rights and
interests similar to the reputation, rights and interests acqulred
by
individuals and corporations engaged in business for profit. To deoide that such
corporations have no reputation acquired in the
management of their affairs and
property which can be injured or destroyed by a malicious libel, unless special
damage is proved,
would constitute a reflection upon the administration of
justice. Benevolent, religious, and other like corporations have interests
connected with property and its management which should have the same protection
and rights in courts in case of injury as corporations
engaged in business for
profit.
Their usefulness depends largely upon their reputation for honesty, fair
dealing and altruistic effort to improve social conditions.
The respondent depends entirely upon voluntary contributions for its support.
The number and amount of such contributions would necessarily
be affected by the
publication of false and malicious articles to the effect that it engaged in
illegal and reprehensible conduct
in the management of its affairs.
32
It has never been decided by this court that a nonbusiness corporation could not
maintain an action for libel without alleging and
proving special
damages."
So much for American law.
In English law the position would appear to be less
clear. According to
Gatley on Libel and Slander
, 8th ed.,
para. 957, a non-profit corporation can maintain an action
for libel "in respect of charges which tend injuriously to
affect its
property or financial position." The cases cited
in support of this statement are Canadian and American (one
of which is
the case of
New York Society for the Suppression
of Vice v. Macfadden Publications et al
., to which I referred
above). In para. 958 it is pointed out that it was held in
Bognor Regis Urban District Council v. Campion
(1972) 2 QB
169 that a municipal corporation has a "governing" reputation
which it can protect by bringing an action for defamation.
In the case of
National Union of General and Municipal
Workers v. Gillian and Others
(1945)2 All E R 593 (CA) at 605
33
A-B Uthwatt J said:
"It is well established that in certain cases a trading corporation may bring
suit in respect of an imputation on its trading reputation
and I see no reason
why a non-trading corporation should not have the same rights as respects
imputations on the conduct by it of
its
activities."
In
Duncan and Neill on
Defamation
, 2nd ed. (1983), in para.
9.05, it is said that the law as to non-trading corporations
is "less clear" than it is ín the case of trading
corporations, but the submission is made (in para. 9.06) that
"there is no distinction in principle between the rights of
a trading corporation and the rights of a non-trading
corporation." In 1975 the Faulks Committee on Defamation
recommended that a non-trading corporation should be entitled
to sue for defamation if it can establish either "(i) that
it has suffered special damage, or (ii) that the words were
likely to cause it pecuniary damage." (See para 342 of the
Committee's report (Cmnd 5909; March 1975) and sec. 17 of
its draft Defamation Bill.)
34
As indicated above, the exception should, in my view, not have succeeded. The
appeal is accordingly upheld with costs, including the
costs of two counsel. The
order made by the Court
a quo
is set aside and the following order is
substituted therefor: "The exception is dismissed with costs, including the
costs of two
counsel".
P J RABIE
ACTING CHIEF JUSTICE.
CORBETT JA
JOUBERT JA Concur.
VAN HEERDEN JA
VILJOEN AJA