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[1993] ZASCA 3
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Financial Mail (Pty) Ltd. and Others v Sage Holdings Ltd. and Another (612/90) [1993] ZASCA 3; 1993 (2) SA 451 (AD); [1993] 2 All SA 109 (A) (18 February 1993)
CASE NO 612/90
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE DIVISION
)
In the matter
between:
FINANCIAL MAIL (PTY) LIMITED
1st Appellant
TIMES
MEDIA LIMITED
2nd Appellant
MICHAEL COULSON
3rd
Appellant
JIM JONES
4th Appellant
KNL PUBLISHING (PTY) LTD
5th
Appellant
and
SAGE HOLDINGS
LIMITED
1st Respondent
LOUIS SHILL
2nd Respondent
CORAM
: CORBETT CJ, VAN HEERDEN, KUMLEBEN, et GOLDSTONE JJA, et
HOWIE AJA.
DATE OF HEARING
: 24 August 1992
DATE OF JUDGMENT
: 18 February 1993.
JUDGMENT
/
CORBETT
CJ
2
CORBETT
CJ:
The parties
concerned in this litigtion are the following: (1) Financial Mail (Pty) Ltd,
first appellant and first respondent in the
Court a quo, which is the proprietor
of a weekly magazine, registered as a newspaper and known as the "Financial
Mail"; (2) Times
Media Ltd, second appellant/second respondent, which publishes
the Financial Mail; (3) Mr Michael Coulson, third appellant/third
respondent,
who at the time of the proceedings in the Court a quo was the acting editor of
the Financial Mail (in the absence of
the editor, Mr Nigel Bruce, abroad); (4)
Mr James (Jim) Jones ("Jones"), fourth appellant/fourth respondent, who at all
relevant
times was employed by the first appellant as a financial journalist and
the senior assistant editor of the Financial Mail; (5) KNL
Publishing (Pty) Ltd,
fifth appellant/fifth respondent, the printer of the Financial
3
Mail; (6) Sage Holdings Ltd ("Sage"),
first respondent and first applicant in the Court a quo, which is a South
African corporation
listed on the Johannesburg Stock Exchange and carries on
business from its principal place of business in Johannesburg as a holding
and
investment company; and (7) Mr Hyme Louis Shill ("Shill") second
respondent/second applicant, the chairman of and a substantial
shareholder in
Sage.
At the time of the proceedings in the Court below Sage had two
operating subsidiaries, Sage Financial Services Ltd ("Sage Financial")
and Sage
Property Holdings Ltd ("Sage Property"), both of which were listed companies.
They, together with various other subsidiaries,
formed the Sage group of
companies. Sage Financial was engaged in the business of life assurance, mutual
fund services, trust company
and financial planning services and investment
services. It held what were termed "strategic investments" in the
Allied
4
Group Ltd ("Allied") and in the Rand Merchant Bank
Ltd ("Rand Bank"). Sage Property headed a large property group which managed or
controlled assets totalling approximately Rl billion. Sage and its subsidiaries
employed about 3000 persons and was said (in the
founding affidavit) to have "a
25 year old record of strong long term profit growth, financial stability and
business integrity".
More than 50 per cent of the shares in Sage were owned by
the Mines Pension Fund, the Rembrandt Group and Shill.
On Tuesday, 11 September 1990 the respondents launched an urgent
application in the Witwatersrand Local Division seeking interdicts
restraining
the appellants from publishing, disclosing or disseminating certain information
concerning Sage and its business activities
which was derived from sources said
to be unlawful; and from publishing in the Financial Mail a certain article
written by Jones
concerning Sage and its business
5
activities. The matter came before Joffe J who,
having heard argument on 11, 14 and 17 September, delivered a judgment on 25
September
granting final interdicts, with costs. This judgment has been
reported: see
Sage Holdings Ltd and Another v Financial Mail (Pty) Ltd and
Others
1991 (2) SA 117
(W). With leave of the Judge a quo, appellants now
come on appeal to this Court, seeking a reversal of the decision of the Judge
a
quo.
In the two years which have intervened since the granting of the
interdicts the information and the draft article which was the subject-matter
of
this litigation have ceased to be pertinent or topical. The appeal is
nevertheless being pursued because of the important legal
issues which it
raises, and also, I need hardly add, because of costs.
The facts of the matter may be stated as follows. On 17 August 1990 an
article entitled "Reading Between the Lines" and written by
Jones appeared in
the
6
Financial Mail. It is a wide-ranging and critical
commentary upon the financial position of Sage and three of the themes to which
it gives prominence are the possibility that Sage could be, or become, short of
ready cash (or "cash-hungry", as the article puts
it); the relationship between
Sage and Allied; and a business venture in the United States of America embarked
upon by Sage through
the medium of an American subsidiary. Independent Financial
Services ("Independent"). In accordance with what is termed "normal Financial
Mail policy" a draft of the proposed article was submitted before publication to
Shill and a Mr B Nackan ("Nackan"), an executive
director of Sage, for comment.
Discussions took place, certain corrections were made and comments were
incorporated in the article.
On 31 August 1990 Jones sent a copy of a further draft article which it
was proposed would be published in the Financial Mail during
the course of
the
7
week commencing Monday, 3 September 1990.
According to Shill, much of the information and many of the statements contained
in this
draft article (which I shall refer to by its exhibit number, "LS4") were
inaccurate, untrue and defamatory and were calculated to
have the effect of
injuring the business status, reputation and goodwill of Sage. Shill was also
"intrigued and disturbed" by the
fact that certain of the information contained
in the article was of the kind that would not ordinarily be available to the
public
or capable of being obtained by financial journalists through normal
channels.
After Shill had consulted with Sage's attorney a meeting was arranged
between him (accompanied by his attorney) and Jones and Bruce,
representing the
Financial Mail. During this meeting it transpired that Jones had used
information gleaned from a confidential document,
which had been prepared by
certain members of the management of Allied and had been submitted to
the
8
executive committee of Allied, but rejected by it
("the Allied document"). The document never came before Allied's board and
Allied
never gave permission for it to be disclosed to third parties, apart from
Shill, to whom a copy was sent in confidence. The Allied
document was evidently
critical of the relationship between Allied and Sage and recommended that this
be terminated. It was marked
"Strictly private and confidential".
Shill informed Jones and Bruce of the confidentiality of the Allied
document and pointed out to them that the use of "unsubstantiated
information"
of this nature would be severely damaging to Sage. The parties failed to agree
upon a postponement of the publication
of the article. Sage's attorney thereupon
informed Bruce that unless first appellant undertook not to publish the article
the Court
would be approached for an urgent interdict to restrain publication.
Bruce indicated that he wished to consult first appellant's
9
legal representatives.
Immediately
thereafter both sides, through their respective attorneys, consulted counsel and
certain further negotiations took place
between the parties and their legal
representatives in counsel's chambers. During the course of these negotiations
an additional
source of information utilized by Jones in his article emerged.
First appellant's counsel disclosed that his client was in possession
of certain
tape recordings of telephone conversations between Nackan and various third
parties. Subsequent investigation revealed
that an eavesdropping or tapping
device had been secretly and unauthorisedly installed in the basement of Sage's
premises which enabled
conversations on the telephone line used by Nackan to be
intercepted and tape-recorded. No other lines had been tapped. It is stated
by
Bruce and Jones that the appellants were in no way party to the making of these
tapes and did not solicit them. Accord-
10
ing to Jones, they were made available to him by
a "confidential source", whose identity he was not prepared to divulge. At a
certain
meeting between the parties Bruce suggested (on hearsay information) a
reason for the tapes having been made, but this was not substantiated.
Be that
as it may, the telephone-tapping was a reality and Jones candidly conceded (in
an affidavit filed by appellants) that some
of the information in the article
LS4 was derived from these tapes.
According to Shill, he was concerned and surprised by these revelations
of how Sage's "privacy and confidentiality" had been breached
and by the fact
that the appellants wished to exploit these sources of information for the
benefit of their publication and to the
detriment of Sage's business status,
reputation and goodwill. He also realized that Jones had "substantially
misunderstood and misconstrued"
certain "delicate negotiations" and other
transactions which may have been
11
referred to "intermittently and cryptically"
during the course of these tapped telephone conversations.
In the
negotiations which followed this latest revelation counsel expressed Shill's
wish to have full access to Jones's next draft
of the article in order to
approve and vet it in all respects, including both fact and opinion. The
Financial Mail representatives
were not prepared to permit such approval rights
and late on the afternoon of 3 September negotiations broke down.
Later, that evening, and after reconsidering the matter, Shill indicated
that he would be prepared to accept the position that -
".... the applicants would approve the article only in order to see that
its answers and views were fairly represented." In the result
an agreement in
principle was arrived at by
the parties that evening.
12
On the following morning (4
September) the
agreement was reduced to writing in the form of a
handwritten
document ("LS5") and thereafter the substance
of LS5, with certain
minor alterations, was incorporated
in a letter dated 4 September 1990 and addressed by
Sage's attorneys to appellants' attorneys ("LS6"). This
letter reads:
"This serves to confirm the following arrangement between Sage Limited
and the Financial Mail.
1.
Financial Mail
will not publish the draft article shown to
Sage.
2.
Sage (Mr L Shill)
and Allied (Mr N Alborough) will meet the Editor and journalist of Financial
Mail on the morning of 7 September
1990 from llhOO to 13h00 at Sage headquarters
and be interviewed concerning the relationship and state of affairs between Sage
and
Allied.
3.
Insofar as any
question may require research, it will be researched and then
answered.
4.
Sage may be
interviewed concerning
13
non-Allied topics canvassed in the article and
Sage will in is own words present its view and facts on these topics.
5. The article will be an exclusive but
Financial Mail is
aware that Sage is
about to issue a statement
concerning
industrial espionage.
6. Before publication Sage will approve
(vet) the article
only in order to
see that its answers and views
are
fairly represented."
On the same day appellants' attorneys replied in the
following terms ("LS7"):
"We are in receipt of your letter of the 4th September 1990. We are
instructed to advise you as follows:
1. Our client accepts that you have
recorded the arrangement
accurately.
2. With regard to point 6, we confirm
that it was agreed that
the vetting
will not mean that if your client is
unhappy
with the article as a whole,
our client will be precluded
from
publishing.
3. Kindly provide us with a copy of the
press release in
relation to Indus-
14
trial espionage as soon it is available (by
telefax if necessary)".
The date for the interview referred to in par 2 of the letter LS6 was
chosen with a view to the fact that Sage's interim results for
the six months
ended 30 June 1990 were due to be published on Wednesday, 5 September and it was
envisaged that the interview would
take place "against that background". Sage
duly presented its interim results on 5 September and the interview took place
on Friday
7 September as arranged. The latter was tape-recorded by agreement
between the parties and a transcript thereof (an exhibit) reveals
a long and
rather rambling discussion, in which the main participants were Shill, Nackan,
Mr N Alborough (the chairman of Allied),
Bruce and Jones.
During the afternoon of Saturday, 8 September Jones gave to Nackan a new
draft of the article ("LS9") prepared (purportedly) in accordance
with the
agreement
15
evidenced by the letters LS6 and LS7. According
to Shill it was immediately apparent from LS9 that in drafting the article
appellants
had not complied with the agreement and indeed had made no endeavour
to do so. It was essentially a revision of the former draft
LS4 in which certain
materially incorrect statements had been excluded, but in which the gist
remained the same. This description
of LS9 is disputed by Jones in an answering
affidavit, but he concedes that it contained "elements of what had appeared in
the previous
proposed article". The founding affidavit particularizes the
respects in which LS9 is alleged to be "substantially inaccurate, defamatory
and
damaging". I shall ideal with some of these later in this judgment. It was also
apparent to Shill that much of the article was
based upon Jones's
interpretations of the confidential information derived from the telephone tapes
and the Allied document.
Thereafter there were various exchanges between
16
the parties, the details of which are not
important. The general attitude of Sage and Shill was that the proposed article
LS9 was
not in accordance with the agreement between the parties and they
demanded an immediate undertaking that it would not be published.
Appellants
were not prepared to give such an undertaking: hence the urgent application. The
details of the relief claimed and that
granted by the Court a quo appear from
the reported judgment, pages 120 F-I and 137 C-F.
The case, as presented by the parties on appeal, raises three main
issues:
(a)
whether the use
by appellants of information derived from the tapes and the Allied document (for
convenience when referring to them
collectively I shall speak of "the
confidential sources") in a published article in the Financial Mail would have
been unlawful;
(b)
whether
the proposed article contained
17
statements which were defamatory of the
respondents and actionable or amounted to injurious falsehoods concerning them;
(c) if (a)
and/or (b) be answered in the affirmative, whether the agreement
evidenced by the letters LS6 and LS7 (which I shall call "the publication
agreement") precluded respondents from taking action to prevent publication of
the article LS9. These issues will be considered in
turn.
Use of Information derived from Confidential
Sources
In determining whether or not appellants were entitled
to use in a published article information derived from the confidential sources,
the Judge a quo turned his attention to two legal concepts, a person's right to
privacy and the law relating to unfair (or rather
unlawful) competition. After
surveying the
18
former and referring to a number of decided cases
on the
subject the learned Judge concluded that (at 131 F) -
".... the right to privacy, being a real right of personality, only
applies to natural persons and does not apply to a company."
The question whether the publication of information
derived
from the confidential sources would constitute an
invasion of Sage's right to privacy was accordingly
not
pursued.
Joffe J then proceeded to consider unlawful
competition as a basis for denying appellants the right
to publish the information. Again, having referred to
various authorities on the topic, he concluded as follows
(at 132 F - 133 A):
"Any person's conduct which interferes with the trader's right to carry
on his lawful business, whether he is a competitor or not,
may constitute
unlawful competition. Does a company's right to
19
trade without wrongful interference from others encompass the right to
have the confidentiality of its internal oral and written communications
respected? To put it another way: Are the secret boardroom deliberations of a
company to be respected, or is it open season on information
so that he with the
best listening device or bugging apparatus can ascertain the business secrets
and plans, indeed the innermost
business secrets, of a company?
To my mind it is clear that the ordinary conduct of business postulates
the need that, included in the right to conduct business without
unlawful
interference, is the right of a company that its internal communications will
not be eavesdropped upon, nor recorded, nor
intercepted.
In exercising the right to trade and carry on a lawful business, a
company or other juristic person would be entitled to regard the
confidential
oral or written communications of its directors and employees as sacrosanct and
would in appropriate circumstances be
entitled to
20
enforce the confidentiality of the aforesaid oral and written
communications. To my mind, such right would in appropriate circumstances
be
enforceable against whosoever is in possession thereof and whosoever seeks to
utilise it. The fact that the person who is in possession
thereof was not party
to the unlawful conduct in obtaining it does not exclude the right which the
applicants would have."
He
further held that in determining whether in the circumstances of this case
information from the confidential sources could be utilised
as source material
for the article regard should be had to the interests of Sage, the appellants
and the general public, more particularly
those who held a financial interest in
Sage (at 133 F-G). Having weighed these various interests he concluded that the
respondents
were entitled to the interdicts claimed (at 133 F - 134 I).
For the reasons which follow I agree that it
21
would have been unlawful for
appellants to use information gleaned from the confidential sources in the
proposed article. And in stating
those reasons I propose to deal first with
information derived from the tapes.
I think, with respect, that the learned Judge a quo erred in concluding
that it had been held, or stated, in
Universiteit van Pretoria v Tommie Meyer
Films (Edms) Bpk
1979 (1) SA 441
(A) that the right to privacy pertains only
to natural persons and that an artifical person, such as a company, enjoys no
such right.
It is clear from the passage in the judgment of Rabie JA which
appears at the bottom of page 456 that the Court proceeded on the
assumption,
without deciding the matter, that the appellant, a university and an artificial
person, would in appropriate instances
("gepaste gevalle") enjoy a right to
privacy.
Since the decision in the
Tommie Meyer
case, supra, this Court has
held that a trading corporation can
22
sue for damages in respect of a defamation which
injures its good name and business reputation; and that it may recover such
damages
without having to prove actual loss (see
Dhlomo N O v Natal
Newspapers (Pty) Ltd and Another
1989 (1) SA 945
(A), at 952 E - 953 D). In
so holding this Court endorsed what had been stated in
G A Fichardt Ltd v The
Friend Newspapers Ltd
1916 AD 1
and other cases decided after 1916. In
addition, a corporation so defamed may also claim damages to compensate it for
any actual
loss sustained by it by reason of the defamation (
Caxton Ltd and
others v Reeva Forman (Pty) Ltd and Another
[1990] ZASCA 47
;
1990 (3) SA 547
(A), at 560 I -
J). In
Dhlomo
's case the Court went on to consider 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 and held
that (at 954 D) -
".... a non-trading corporation can sue
23
for defamation if a defamatory statement
concerning the way it conducts its affairs is calculated to cause it financial
prejudice."
(Per Rabie ACJ, who delivered the unanimous judgment of
the
Court.)
The Court left open the question whether a
non-trading
corporation could sue for defamation if the
defamation
related to the conduct of its affairs but was
not
calculated to cause it financial prejudice (at 954 E);
and Rabie ACJ added this further rider (at 954 F-G):
"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 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 Court in the
Spoorbond
case, supra, to hold that a department of the
24
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."
The
point left open by this rider came before
this Court for decision in the recent case of
Argus
Printing and Publishing Co Ltd v Inkatha Freedom
Party
[1992] ZASCA 63
;
1992 (3) SA 579
(A) and it was held as follows (I quote
the headnote):
"Public policy, and in particular the need to protect freedom of
political expression, does not require that any class of persons
should be
prevented from bringing proceedings for defamation. Where a right to sue exists,
the law of defamation itself recognises
the importance of freedom of
political
25
expression, and makes provision for it. Moreover, this provision is tailored
to the needs of particular situations and does not entail
that a large class of
juridical persons, including some which may be very deserving, would be entirely
prevented from protecting
their reputations by recourse to law. There is
accordingly no good reason for excluding political bodies from the class of
non-trading
corporations which are entitled to sue for damages for
defamation."
These
developments in the law of defamation are not directly pertinent to the issues
in the present case, but I refer to them to indicate
that as a matter of general
policy the Courts have, in the sphere of personality rights, tended to equate
the respective positions
of natural and artificial (or legal) persons, where it
is possible and appropriate for this to be done. In the sphere of defamation
this can be done for, as Schreiner JA explained in
Die Spoorbond and Another
v
26
South African Railways
1946 AD 999
, at
1010:
"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 early 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 personally, with publicity only an element of aggravation by
reason of the additional pain caused
to the plaintiff. Although the remnant
of
27
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
statements which damage his good name."
Although a corporation has "no feelings to outrage or offend" (see
Spoorbond
case, at 1011), it has a reputation (or fama) in respect of the
business or other activities in which it is engaged which can be
damaged by
defamatory statements and it is only proper that it should be afforded the usual
legal processes for vindicating that
reputation. (Cf. Neethling, Potgieter and
Visser,
Deliktereq
, 2 ed, at 324, also the article by Neethling and
Potgieter in
(1991) 54 THRHR 120
, at 122-3.)
In
Deliktereq
the learned authors discuss (at pp 324-5) the
question whether the protection thus afforded to a legal person in regard to
defamation
can be
28
extended to other personality rights; and in
regard to
some such rights conclude that because they
relate
essentially to wounded feelings, they are not
available
to a legal person. The authors continue (at 325)
"Hierteenoor kan die persoonlikheids-nadeel by krenking van die regte op
privaatheid
en
identiteit
op dieselfde wyse as by die op die fama
ontleed word en sal daar tot dieselfde gevolgtrekking geraak word as in die
geval van aantasting
van die fama. Dit beteken dat ook in geval van privaatheid
en identiteit 'n persoonlikheidskrenking sonder 'n gevoels-krenking kan
bestaan
(privaatheid en identiteit kan immers ook geskend word sonder dat die benadeelde
daarvan bewus is). Gevolglik behoort die
actio iniuriarum 'n regspersoon
teoreties ook by privaatheid- en identiteitskending toe te kom al kan daar nie
van gekrenkte gevoelens
sprake wees nie."
I am in general agreement with this viewpoint in regard to the right to
privacy.
29
I need not essay a definition of the right to
privacy. Suffice it to identify two forms which an invasion thereof may take,
viz (i)
an unlawful intrusion upon the personal privacy of another and (ii) the
unlawful publication of private facts about a person (see
McQuoid-Mason,
The
Law of Privacy in South Africa
, at 37-9, 86-8, 135 et seq, 169 et seq;
Deliktereg
, at 346-7; Neethling
Persoonlikheidsreq
, 2 ed, at
217-34). Of course, not all such intrusions or publications are unlawful. And in
demarcating the boundary between lawfulness
and unlawfulness in this field the
Court must have regard to the particular facts of the case and judge them in the
light of contemporary
boni mores and the general sense of justice of the
community, as perceived by the Court (cf
Schultz v Butt
1986 (3) SA 667
(A), at 679 B-C;
S v A and Another
1971 (2) SA 293
(T), at 299 C-D;
S
v I and Another
1976 (1) SA 781
(RAD), at 788 H -789 B; Deliktereg, p 346) .
Often, as was pointed out
30
by Joffe J (see reported judgment at
130 C - 131 E), a decision on the issue of unlawfulness will involve a
consideration and a weighing
of competing interests. For example, in the case of
S v I and Another
, supra, the Appellate Division of Rhodesia held (in a
prosecution for criminal injuria) that where an estranged wife, together with
a
private detective employed by her, had peeped at night into her husband's
bedroom, this invasion of his privacy was "justified"
in that they did so solely
with the bona fide motive of obtaining evidence of the husband's adultery; and
that accordingly the wife
and private detective were not guilty of criminal
injuria. Here the Court had to weigh the husband's right to privacy against the
wife's interest in obtaining evidence of his infidelity. Similarly, in a case of
the publication in the press of private facts about
a person, the person's
interest in preventing the public disclosure of such facts must be weighed
against the interest of the
31
public, if any, to be informed about such facts.
In this weighing-up process, there are usually a number of factors to be taken
into
account (see
Persoonlikheidsreq
, at 243 et seq). Whether the
defendant's competing interest should be regarded as a ground of justification
("regverdigingsgrond"
- see
Persoonlikheidsreg
, at 237 et seq) which
rebuts a prima facie unlawfulness or whether it is simply one of the factors to
be taken into account in determining
unlawfulness in the first place, need not
now be considered.
I now return to the facts of this case. The telephone-tapping which
occurred was manifestly an unlawful invasion of the privacy of
Sage and its
corporate executives and appellants did not seek to justify the tapping; nor is
there any acceptable evidence on record
which would possibly provide such
justification. Indeed I did not understand appellants' counsel to argue to the
contrary. The actual
tapping, however, is not the
32
real issue in the case. The real issue is
whether
appellants, having come into possession of the tapes
that
were produced in the tapping process, were entitled
to
use information derived therefrom in an article to
be
published in the Financial Mail. Furthermore, it
should be pointed out that in the Court a quo the legal
proceedings were for an interdict to prevent unlawful
publication; not for damages arising from an unlawful
publication which had taken place.
In considering this issue, the fact that the
information in question was obtained by means of an
unlawful intrusion upon privacy is a factor of major
significanceIn
Persoonlikheidsreq
, Prof Neethling
states (at 223):
"Dit behoef myns insiens geen betoog nie dat indien 'n persoon kennis van
private feite deur 'n onregmatige indringings-handeling
bekom, enige
openbaarmaking van sodanige feite deur daardie persoon, of trouens enige ander
persoon, die be-
33
nadeelde se reg op privaatheid
skend."
While I agree, with respect, with this as a general proposition, I would
be hesitant to hold that it is subject to no exceptions.
It might well be that
if in the case of information obtained by means of an unlawful intrusion the
nature of the information were
such that there were overriding grounds in favour
of the public being informed thereof, the Court would conclude that publication
of the information should be permitted, despite its source or the manner in
which it was obtained.
In this connection the English case
Lion Laboratories Ltd v Evans and
Others
[1984] 2 All E R 417
(CA) provides an interesting analogy. There the
plaintiff company manufactured and marketed an instrument known as an
intoximeter
which was used by the police for measuring levels of intoxication by
alcohol. Plaintiff
34
discovered that two technicians who
had worked on the instrument and had thereafter left the plaintiff's employ were
in possession
of copies of some of the plaintiff's internal and confidential
correspondence, which indicated doubts as to the reliability and accuracy
of the
intoximeter, and that they had given this correspondence to a national daily
newspaper with a view to publication. At first
instance the plaintiff obtained
an injunction (pending trial) against the newspaper restraining publication. An
appeal against this
order succeeded and the injunction was discharged. It was
held that even though the confidential information in question had been
unalwfully obtained "in flagrant breach of confidence", it was necessary to
weigh two competing public interests: firstly the public
interest in the
preservation of the right of organizations to keep secret confidential
information, and secondly the interest of
the public in being kept informed of
matters which are of real public
35
concern. In the instant case this meant weighing
the public interest in maintaining the confidentiality of the plaintiff's
documents
against the public interest in the accuracy and reliability of an
instrument on which depended the liability of a person to be convicted
and
punished for a drink-driving offence. The Court concluded that the latter
interest should prevail. Three points made in the judgments
in this case are
worthy of repetition for present purposes:
(1) There is a wide difference between what is interesting to the public and
what it is in the public interest to make known. (See
at 423 c.)
(2) The media have a private interest of their own in publishing what
appeals to the public and may increase their circulation or
the numbers of their
viewers or listeners; and they are peculiarly vulnerable to the error of
confusing the public interest with
their own
interest.
36
(See at 423 d.) (3) "There is a public interest
of a high order in preserving confidentiality within an organisation. Employees
must
be entitled to discuss problems freely, raise their doubts and express
their disagreements without the fear that they may be used
to discredit the
company and perhaps imperil the existence of the company and the livelihood of
all those who work for it. And I
am old-fashioned enough to think that loyalty
is a virtue that it is in the public interest to encourage rather than to
destroy by
tempting disloyal employees to sell confidential documents to the
press, which I am sure would be the result of allowing the press
to publish
confidential documents under cover of a shadowy defence of public interest."
(Per Griffiths LJ at 433 d - e.)
37
(See also
Attorney General v
Guardian Newspapers Ltd and Others (No 2) and related appeals
[1988] 3 All E
R 545
(HL), the well-known "Spycatcher" case.) With respect, I would
enthusiastically endorse this viewpoint. In my view there is a public
interest
in preserving confidentiality in regard to private affairs and in discouraging
the leaking of private and confidential information,
unlawfully obtained, to the
media (and others).
The proposed article LS9 (which for convenience of reference has been
divided into 24 paragraphs), like its predecessor, concentrates
on Sage's
financial situation, using as its opening salvo Sage's interim report which
announced a 2c cut in the interim dividend
(from 22c to 20c). The article
commences with the somewhat sensational statement that when this announcement
was made "the alarm
bells started to ring all over Diagonal Street". The article
makes passing
38
reference to the dispute between the parties and
the threat of an interdict, and to the alleged differences between Sage and the
Allied
Group, and then concentrates for the next nine paragraphs on what are
termed Sage' s "American problems", i e the financial problems
associated with
Independent and Sage's decision to dispose of its interest in Independent. The
general theme is that, as the article
puts it, "(t)he cash crunch is now very
close". The following six paragraphs revert to the problems in the relationship
between Sage
and Allied; and the final four paragraphs purport to be an analysis
of Sage's interim results.
It is common cause (or at any rate not in dispute) that six of the nine
paragraphs relating to Sage's "American problems" were based
on information
gleaned from the tapes. The actual contents of the tapes are not before us, but
it is accepted that they include recordings
of discussions and
negotiations
39
between Nackan and third parties of
a confidential and sensitive nature relating to Sage's American interests. All
that Jones, in
his supplementary answering affidavit, says in this regard is
that he did not make the recordings or instigate their making. This
is beside
the point. As I have held, the tapes were made in the course of an unlawful
intrusion into Sage's privacy and at all material
times Jones and the other
appellants were well aware of this fact.
Assuming, in favour of the appellants, that in a case where the
information sought to be published was obtained by means of an unlawful
intrusion, there may nevertheless still be overriding considerations of public
interest which would permit of it being published,
it seems to me that such a
case would be a rara avis and that the public interest in favour of publication
would have to be very
cogent indeed. In my opinion, this was not such a case.
Here the information in question
40
related to sensitive and confidential information
concerning Sage's internal affairs and delicate business negotiations being
conducted
by it and no good reason was advanced by the appellants as to why the
public should have been informed about all this or why indeed
the appellants
should have been permitted to use this information as the springboard for what
is generally a fairly hostile article
concerning Sage and its financial
affairs.
The Allied document was also a confidential, internal
document belonging to Allied, but a copy of which was sent to Shill. It had
a
very limited circulation within Allied and was not even placed before the full
board of directors. It dealt with confidential and
sensitive matters concerning
the relationship between Sage and Allied. Mr Alborough filed an affidavit in
these proceedings confirming
these facts and stating that Allied had never
given, and would never give, permission
41
for the document to be disclosed to third
parties. The recommendations contained in the document were never accepted by
Allied. There
is no explanation on record as to how the Allied document came to
be abstracted from Allied's possession and passed on to Jones.
When questioned
about this at the meeting of 7 September Jones appears to have been vague and
evasive. It must have been obvious
to Jones from the start that the document was
a confidential one and that his possession of it was unlawful. And certainly
after
the first meeting with Sage's representatives on 3 September he would have
been under no illusions in this regard.
It seems to me that in substance the Allied document stood on the same
footing as the tapes. It contained private information relating
to the
relationship between Sage and Allied and Jones's possession thereof was
unlawful. There was, in my view, no overriding consideration
of public interest
justifying
42
publication. It was argued by appellants that
because it was an Allied document Sage did not have locus standi to seek an
interdict
restraining its publication. The argument is artificial and without
substance. Alborough made it clear what Allied's attitude was
and at the
interview on 7 September he associated himself with the demand that the contents
of the document were not to be disseminated.
Having regard to the contents of
the document, it seems to me that Sage also had a direct and substantial
interest in ensuring that
information which it contained was not unlawfully
published.
In the result, therefore, the position is that at least half of the
article LS9 (twelve paragraphs) was based on information derived
from the tapes
and the Allied document and that the publication by appellants of this
information would have infringed Sage's right
of privacy. Although the
appellants tendered in the supplementary answering affidavit to delete or
reformu-
43
late a few sentences in the proposed article,
this obviously did not meet the gravamen of Sage's complaint. There was never
any tender
to excise from the article the portions based upon information
derived from the confidential sources. And it was not for the respondents
or the
Court to attempt such an excision. Subject, therefore, to the defence based upon
the publication agreement, the respondents
were, in my view, entitled to the
interdicts granted.
Defamation and/or Injurious Falsehood
The Court a quo (see reported judgment at 135 I) held that the proposed
article LS9 was defamatory of both Sage and Shill. Because
of the confidential
nature of the information concerned the learned Judge did not particularize the
defamation and forbade reporting
of the contents of the papers in the case (at
137 F-G).
In argument before us respondents' counsel
44
identified five separate defamations in the
proposed article. The alterations to the article which, as I have indicated,
were tendered
in appellants' supplementary answering affidavit were designed to
meet certain charges of defamation. In addition, it was contended
on appellants'
behalf that in so far as certain portions of the article were defamatory of
respondents they constituted fair comment.
It was argued, on the authority of
Heilbron v Bliqnaut
1931 WLD 167
, at 169, that it was sufficient for
appellants merely to have "set up" such a defence in order to defeat a claim for
an interdict
restraining publication and that the meaning attributed to the
phrase "set up" in
Buthelezi v Poorter and Others
1974 (4) SA 831
(W) was
incorrect.
In view of the conclusion to which I have arrived in regard to the use by
appellants in the proposed article of information derived
from the confidential
sources and in regard to the relief to which
45
respondents were entitled, it is not necessary
for me to
finally decide the various issues relating to
defamation.
I would, however, stress that in all five instances
there
were reasonable grounds for respondents feeling that
they
had been defamed (in other words, the averments were
not
frivolous); and that in two instances, at least, my prima
facie view is that the relevant passages in the article
were
defamatory. I refer in this connection to par 17
of the article LS9 in which the following statement
appears:
"Some of Allied's executives believe Sage attempted unduly to influence
the Allied's lending policies over a R26m loan request from
Sacib, then a
troubled encyclopedia company equally owned by Sage and the now-collapsed
Sprintex. In turn Sprintex was 14%-owned
by Sage. The loan request was
eventually turned down";
and also to par 18 in which it is suggested that at some stage salesmen
attached to Sage Financial "took unaccept-
46
able advantage of Allied's branch network and
client lists".
The Publication Agreement
It was submitted by appellants' counsel that the publication agreement,
as evidenced by the letters LS6 and LS7 (quoted above), precluded
respondents
from approaching the Court for the relief which it claimed. It seems to me that
this defence, to be effective, must go
the length of establishing that in terms
of the agreement respondents consented in advance to the article LS9 being
published in
its entirety in the Financial Mail or (which seems to amount to the
same thing) that the respondents waived their right to object
to the publication
of the entire article.
It is to be noted that although this defence was placed at the forefront
of counsel's submissions to us, the point was never taken
by appellants on
the
47
papers. Whether respondents would
have wished to place additional facts before the Court had the point been so
taken is uncertain.
In view, however, of the conclusion to which I have come as
to the merits of the argument it is not necessary to pursue this aspect
of the
matter.
In determining whether the publication agreement should be interpreted as
appellants suggest it is important to note that the article
which was to be
published was not yet in existence at the time when the agreement was entered
into. All that then existed was the
draft article LS4, which it was agreed in
terms of par 1 of LS6 would not be published.
LS6 proceeds to provide for the meeting described in par 2 thereof and
pars 3 and 4 regulate the nature of the interview to be conducted
at that
meeting. Where par 4 speaks of Sage being "interviewed concerning non-Allied
topics canvassed in the article", it presumably
refers to the draft article LS4,
since at the
48
time that the meeting was due to take place that
would
have been the only relevant article in existence. Par
5, by contrast, appears to refer to the proposed article
(which later came into existence in the form of LS9);
and so
does par 6. This last paragraph is a critical one
and I quote it again:
"Before publication Sage will approve (vet) the article only in order to
see that its answers and views are fairly represented." With
this must be read
par 2 of the letter LS7 reading:
"With regard to point 6, we confirm that it was agreed that the vetting
will not mean that if your client is unhappy with the article
as a whole, our
client will be precluded from publishing."
(In all the circumstances respondents must be taken to have accepted this
gloss upon par 6 of LS6.)
These two paragraphs, read together, are far from clear. For instance,
though Sage appears to have
49
been given the right in par 6 to
"approve (vet)" the article in respect (only) of the representation of its
answers and views, it
is not clear what its position would be if it did not
approve the article in these respects. Moreover, it is also not clear whether
par 2 means that if Sage were unhappy about the presentation of its answers and
views, the article might nevertheless be published;
or whether par 2 should be
confined to matters unrelated to the presentation of Sage's answers and views
(which I shall call "extraneous
matters").
Be that as it may, it would seem that as far as extraneous matters are
concerned (and these would for the most part include the portions
later objected
to in LS9), Sage's unhappiness therewith would not, in terms of par 2, result in
the appellants being "precluded from
publishing". The essential question is: do
the words quoted mean -
(1) that appellants are not precluded by
the
50
publication agreement
from publishing; or
(2) that appellants are not precluded on any
grounds from publishing, i e are given carte
blanche to publish?
In deciding this
question of interpretation the following background facts and surrounding
circumstances should be borne in mind:
(a) It was clearly contemplated that the proposed
article
referred to in par 6 and par 2 would be
a revised version of and
cover more or less the
same ground as the draft article
LS4.
(b) Respondents had voiced fierce objection to the
use in LS4 of
information derived from the
confidential sources and to statements
therein
which it regarded as being damaging
and
defamatory. Appellants, on the other hand,
were
unyielding in their determination to use
information from the
confidential sources and
51
the parties had failed to reach
agreement, save
on a very limited basis.
(c) Respondents
accordingly had good reason to
believe, or at any rate suspect, that
the
proposed article would similarly use
information
from the confidential sources and
might contain damaging or
defamatory material.
In the circumstances it seems to me to
be
improbable in the extreme that Sage would have
intended,
in exchange for the very limited (and dubious)
advantage
of being entitled to "vet" (whatever that may mean)
the
manner in which the article represented its answers
and
views, to forego all its rights to prevent
the
publication of an article which had not yet seen
the
light of day, the contents of which were at that stage
an
unknown quantity, but concerning which Sage had
grounds
to believe that it might be subject to the same
or
similar objections as those raised in respect of LS4.
52
(And, of course, as events turned out the
proposed article L59 was in fact subject to such objections.) It also seems
improbable that
appellants intended to exact so one-sided a bargain. In a case
such as this, where the meaning of the words used in the contract
is not clear,
there is room for the rule of interpretation which puts an equitable
construction on the contract and does not adopt
a meaning which gives one party
an unfair or unreasonable advantage over the other (Wessels
The Law of
Contract in South Africa
, 2 ed, secs 1974-77;
Rand Rietfontein Estates
Ltd v Cohn
1937 AD 317
, at 330-1; Christie,
The Law of Contract in South
Africa
, 2 ed, at 253;
Paddock Motors (Pty) Ltd v Igesund
1975 (3) SA
294
(D), at 298 D-F).
Moreover, as I have said, the interpretation advanced by appellants'
counsel amounts to a waiver by respondents of the right to object
(and to
enforce that objection by legal action) on any ground to this future
53
article, whatever it might contain, however much
it might
also be based on the confidential sources of information
and
however injurious or defamatory it might also turn
out to be. The
locus classicus on waiver is the
following statement by Innes CJ in
Laws v Rutherfurd
1924
AD 261, at 263:
"The onus is strictly on the appellant. He must show that the respondent,
with full knowledge of her right, decided to abandon it,
whether expressly or by
conduct plainly inconsistent with an intention to enforce it. Waiver is a
question of fact, depending on
the circumstances."
(See also
Hepner v Roodepoort-Maraisburg Town Council
1962 (4) SA
772
(A), at 778 D - 779 A.) In considering whether waiver has been established
in a particular case the Court may take cognizance of
the fact that persons do
not as a rule lightly abandon their rights (see
Alfred McAlpine & Son
(Pty) ltd v Transvaal Provincial
54
Administration
1977 (2) SA
310
(T), at 324 A - 325 A and
the authorities there cited;
Le
Roux v Odendaal and
Others
1954 (4) SA 432
(N), at 441 D
- E).
As the case of
Ellis and Others v Laubscher
1956 (4) SA 692
(A) shows, this general approach to the
establishment of a waiver also applies to the
interpretation of an ambiguous contractual provision.
In delivering the majority judgment Fagan JA stated (at
702 E - F):
"'n Afstand van regte word nie vermoed
nie, maar moet streng
bewys word; en
selfs as ek gemeen het dat die dokument
in
hierdie opsig dubbelsinnig is (wat nie my
mening is
nie), sou ek die vertolking moet
laat geld wat regte onaangetas
laat. Ek
mag vir hierdie stelling verwys na 'n
lang
reeks gewysdes waarin hierdie Hof die
beginsel
neergelê en toegepas het, "
This is a further cogent reason for adopting the interpretation of the
publication agreement which is
55
set out in (1) above.
Accordingly I
hold that the publication agreement did not preclude the respondents from
seeking the interdicts which they obtained
on the grounds advanced by
them.
The appeal is dismissed with costs, including the costs of two
counsel.
M M CORBETT
KUMLEBEN
JA)
HOWIE AJA) CONCUR
VAN HEERDEN
JA
:
2
If the agreement reached by the parties on 3 September 1990 is left out
of consideration, I agree with the Chief Justice that it would
have been
unlawful for the appellants to use information derived from the tapped telephone
conversations ("the tapes"). I have some
doubt, however, as to whether the
respondents would have been entitled to prevent publication of material gleaned
from the Allied
document, which was not compiled by or on behalf of the
respondents. But I shall assume that publication and dissemination of such
information would also have been unlawful vis-a-vis the
respondents.
I respectfully disagree, however, with the Chief
Justice's construction of the agreement. I do so for the following
reasons.
The agreement falls to be interpreted against the following
background:
1) The first draft article (LS4), which
3
was received by the second respondent ("Shill") on 31
August 1991, contained material culled from the tapes as well as from the Allied
document. This included references to the book-over of 50 000 Sage shares; the
financial difficulties experienced by American affiliates
of the first
respondent ("Sage"); attempts by Sage's officials to influence the Allied's
lending policy; the use made by salesmen
of FPS (a so-called financial off-shoot
of Sage) of the Allied's computer network, and negotiations between Shill and Mr
Ball of
First National Bank regarding a take-over of the Allied by Sage or that
bank.
2) When the respondents threatened to apply for an interdict
prohibiting publication of LS4, Shill knew that the fourth respondent
had
utilised information derived from the Allied document.
3) - During the subsequent negotiations
4
between the parties' legal advisers it was disclosed that the tapes
constituted an additional source of information upon which portions
of LS4 were
based.
4)
Shill was
concerned about the breach of Sage's "privacy and confidentiality". Hence, as
stated in the founding affidavit, he wished
"to have full access to the ... next
draft article in order to approve and vet that article
in all respects
including both fact and opinion". (My
emphasis.)
5)
Subsequently
Shill relented somewhat. This led to the conclusion on 3 September 1990 of an
agreement "in principle". The following
morning the wording of the agreement was
settled in the form of a handwritten document (LS5) which in turn was confirmed
by letters
written by the parties'
attorneys.
For ease of
reference I quote the full
contents of LS5:
"1. FM [the first appellant] will not publish the draft
article shown to
5 Sage [the first respondent].
2.
Sage (L Shill)
and Allied [?] will meet the editor or his deputy and journalist of FM on 10
September 1990 and be interviewed concerning
the relationship and state of
affairs between Sage and
Allied.
3.
In so far as any
question may require research it will be researched and then
answered.
4.
Sage may be
interviewed concerning any tapes canvassed in the article and Sage will in its
own words present its view and facts of
these
tapes.
5.
The article will be
an exclusive but FM is aware that Sage is about to issue a statement concerning
industrial
espionage.
6.
Before
publication Sage will approve (vet) the article only and in order to see that
its answers and views are fairly
represented."
One notes the
following important features
of the agreement. Firstly, the first appellant
undertook not
to publish LS4 in its then existing
6
form. In return Sage would arrange a meeting at which representatives of
Sage and the Allied would be interviewed on the relationship
between those
concerns. Clearly this interview would focus on the contents of the Allied
document. Thirdly, the respondents consented
to be interviewed on those portions
of LS4 gleaned from the tapes. Finally, Sage obtained the right to veto the
article to be written
as a result of the interviews but
only
if its
"answers and views" were not fairly represented.
In my view the
parties to the agreement clearly envisaged that the revised article would, to a
considerable extent, be based on information
derived from the tapes and the
Allied document ("the confidential sources"). LS4, of course, also contained
material culled from
those sources, but the agreement contemplated that the
rewritten article would also embody the answers given and, views
7
expressed during the envisaged interviews - and Sage could prevent
publication of the whole article if it did not fairly represent
such answers and
views ("the
condition"). If the parties did not contemplate that,
subject to the condition, information obtained from the confidential sources
could be published notwithstanding its confidentiality, I have diffi-culty in
grasping the purpose of the agreement. On such a construction
the envisaged
interviews would have been futile. After all, those interviews, which would
primarily focus on the confidential sources,
would serve no purpose if the
answers given and views expressed in regard thereto could not be published in
conjunction with the
confidential matter to which they pertained. Moreover, the
fact that Sage was granted the right to veto the article if the condi-tion
was
not fulfilled, irresistibly leads to the conclusion that it could be published
if the condi-
tion was in fact satisfied.
It should also
be borne in mind that the agreement conferred very real benefits upon
Sage.
Firstly, it obtained a conditional rigth to veto publication
of material irrespective of whether such publication would be unlawful
because
of the con-fidentiality of its sources. Secondly, Sage could "vet" the whole
article and not only those parts relating to
the confidential sources.
In the final analysis the effect of the agreement may be thus
summarised.
1)
If the condition
were not fulfilled the article could not be
published.
2)
If it were
fulfilled the respondents could not prevent publication on the sole ground that
it contained confidential information -
which was to be the very subject of the
envisaged interviews.
It is
unnecessary to determine whether Sage
9 could "vet" the rewritten article in its unfettered discretion (which,
of course, would have to be arrived at honestly), or whether
it had to
exercise
an
arbitrium boni viri
. I say so because, whatever
the true import of the condition may have been, the respondents effectively and
deliberately prevented
its fulfilment. Firstly, at the outset of the interview,
Shill stated that he was not prepared to answer any questions relating to
the
tapes (although it would appear that subsequently its contents were discussed to
some degree). Secondly, and more importantly,
Shill declined to "vet" the
revised article before the date on which, to his knowledge, it was to be
published. Indeed, it seems
clear that Shill would have refused to approve of
the article even if satisfied that the condition had been fulfilled. Such
refusal
would have stemmed from his attitude that the article "was founded
substantially
10 upon ... unlawful information".
It is
true that in their opposing affidavits the appellants did not specifically rely
on
the agreement as a defence to the application. However, all the
relevant facts were set out in the founding affidavit, and since the
application
was an urgent one the appellants, without filing any papers, would have been
entitled to contend that that affidavit
did not, or did not fully, warrant the
granting of the orders sought by the respondents.
I am consequently
of the view that the respondents should not have been granted an injunction on
the basis that publication of the
confidential material without more would have
been unlawful. I do not think, however, that the agreement provided a licence
for publishing
matter, and in particular unlawful defamatory material, which
would be objectionable on a ground not relating to its confi-
11
dentiality. Properly construed, the agreement merely prevented the
respondents from objecting to the
publication of information which
would have been unlawful because, and only because, of its confidentiality
(provided, of course,
that the condition was fulfilled). Clearly, therefore, the
agreement also did not cover defamatory inferences drawn from confidential
information.
In my view paragraphs 7, 17, 18 and 19 of the rewritten
article contain defamatory matter. I am furthermore of the opinion that the
appellants failed to justify the proposed publication of those paragraphs. Since
this is a minority judgment no purpose would be
served in spelling out my
reasons for those conclusions.
I would therefore uphold the appeal
with costs, including the costs of two counsel, and substitute the following for
the orders made
by the
12 court
a quo
:
"1. The respondents are interdicted from printing, publishing or
distributing paragraphs 7, 17, 18 and 19 of annexure LS5.
2. The respondents are ordered to pay the costs of the application,
including the costs reserved on 11 September 1990."
H J O VAN
HEERDEN JA GOLDSTONE JA
CONCURS