Brief Summary

Defamation — Interim interdict — Application for interim interdict to restrain publication of allegedly defamatory article — Appellant, a distributor of Novell products, sought to prevent publication of article claiming it sourced products through grey markets — Respondents contended that the article was true and in the public interest — Court a quo dismissed application, finding that the respondents had a sustainable defence — Appeal against dismissal of interdict granted on the basis of legal principles regarding defamation and interim relief.

Comprehensive Summary

Summary of Judgment

Introduction

The matter concerned appellate proceedings in the Supreme Court of South Africa (Appellate Division) against the dismissal of an urgent application for an interim interdict. The interim relief sought was aimed at restraining publication of a newspaper article on the basis that it was defamatory.

The appellant was Hix Networking Technologies CC, a close corporation engaged in the importation and sale of computer hardware and software. The first respondent was System Publishers (Pty) Ltd, the owner of the weekly trade journal ComputerWeek, and the second respondent was Hendlers (Pty) Ltd, the printer and distributor of that publication.

Procedurally, the appellant launched an urgent application by notice of motion dated 17 February 1995 to prevent publication in the edition scheduled for 20 February 1995. By the time the matter was first called, a substantial portion of the relevant issue had already been dispatched and could not be recalled. The matter was postponed by interim order to 20 February 1995 to allow answering and replying affidavits. After argument, the court a quo (Heher J) dismissed the application with costs. Leave to appeal was granted on 13 April 1995, and the appeal was heard on 15 August 1996, with judgment delivered on 25 September 1996.

The general subject-matter of the dispute was whether an interim interdict should be granted to restrain the press from publishing an article alleged to be defamatory, and, more broadly, what approach South African law requires when publication is sought to be restrained in advance on grounds of defamation, including the relevance of freedom of expression considerations.

Material Facts

The court accepted as material the background concerning the distribution of Novell computer products and the commercial context in which the impugned article was written and published. Novell Incorporated (Utah, USA) manufactured computer network operating systems and related software. The judgment treated it as material that software was protected by copyright, and that Novell’s market success depended significantly on reliable support services to end users.

For the South African market, Novell’s distribution model included appointed authorised distributors, selected for financial stability, technical competence, and inventory capacity. Authorised distributors were contractually appointed, allocated territories, obliged to purchase from Novell, and permitted to use the logo “Novell Authorised Distributor”. Authorised distributors supplied authorised resellers, while authorised distribution was described as central to maintaining support services and reputation. The answering affidavits asserted that authorised pricing incorporated a component related to support service costs and ongoing product development.

In November 1993, Novell Incorporated registered a wholly owned South African subsidiary, Novell South Africa (Pty) Ltd (Novell SA), to serve as a channel for Novell products in South Africa and to provide user support services locally. To strengthen Novell SA’s position, the South African copyright in Novell products was assigned to Novell SA on 8 February 1995. On 14 February 1995, Novell SA’s attorneys notified Hix that Novell SA was now the owner of copyright in South Africa and asserted rights flowing from that ownership.

The impugned article, authored by Frank Heydenrych and published in ComputerWeek on 20 February 1995, reported on Novell SA’s copyright assignment and described it as aimed at stopping distribution through “grey” or “parallel” channels. It stated that Novell SA, through Spoor and Fisher, had delivered a “letter of constraint” to “HIX Distribution”, informing Hix of the copyright assignment and forbidding Hix to supply grey or parallel-sourced Novell product into the South African market. It further reported remarks about Novell’s protection of logo, packaging and executable code, and included comments attributed to Novell SA’s managing director about the proportion of grey product in the market and the value of business allegedly lost. It recorded that Hix’s managing director declined to comment.

The court distinguished between what was actually published and what appeared in the draft article. A significant part of the appellant’s initial complaint related to a phrase in the draft describing Hix as “a leading grey importer”, but that phrase was omitted from the published article, which the court treated as the operative text for purposes of determining defamation.

On the facts relevant to justification, the respondents’ answering papers included an affidavit from Novell SA’s managing director, dealing with the status of Hix’s stock and distribution rights, and asserting that (for the South African market) the only authorised source was in the United Kingdom, while the appellant had asserted it had acquired stock from a source in America. The court treated these competing accounts as creating a material dispute that weakened the appellant’s ability to show a clear prima facie entitlement to restrain publication.

A further fact the court regarded as material to the interim interdict enquiry was that, in reply, the appellant refused expressly to tender an undertaking to cover the respondents’ losses should it later transpire that the interim relief ought not to have been granted, despite such undertakings being a common feature in cases where interim restraints may cause loss.

Legal Issues

A central legal question was the correct approach in South African law to an application for an interim interdict restraining publication on the ground that the intended publication is defamatory. This included whether, and in what manner, the court should consider a respondent’s asserted defence of truth and public benefit (justification) at the interim stage.

A further legal issue concerned the relationship between the general requirements for interim interdicts as expressed in Setlogelo v Setlogelo 1914 AD 221 and earlier defamation-interdict decisions such as Heilbron v Blignaut 1931 WLD 167 and Buthelezi v Poorter and Others 1974 (4) SA 831 (W). The appellant contended that the latter approach impermissibly deviated from Setlogelo or was unduly influenced by English law, while the respondents argued for an approach more protective of publication, particularly in light of constitutional free speech protection.

The dispute also raised the role of freedom of expression under section 15 of the Constitution of the Republic of South Africa Act 200 of 1993 and the directive in section 35(3) concerning development of the common law, specifically whether those provisions required a “differentiated” approach favouring the press in interim interdict applications.

Finally, the court had to determine—on the facts and the language of the article—whether the published article was prima facie defamatory of the appellant. This last issue primarily involved the application of legal standards for defamation to the content of the publication, and the court’s evaluative assessment of the meaning and effect of the statements complained of.

Court’s Reasoning

The court restated the general principles for interim interdicts in South African law, identifying the familiar requisites of a prima facie right, a well-grounded apprehension of irreparable harm, a balance of convenience favouring relief, and the absence of another satisfactory remedy, together with the discretionary character of the remedy. The court treated these principles as the proper framework within which applications to restrain publication should be assessed.

In dealing with conflicting authority, the court rejected the contention that Heilbron v Blignaut represented an English-law driven deviation from South African interim interdict requirements. It construed Heilbron as an application of accepted local principles, particularly the proposition that because motion proceedings require sufficiently clear facts, an interdict will not follow where it is not clear that the conduct to be restrained would be actionable (in the sense that no lawful defence exists). The court further accepted the analysis in Buthelezi v Poorter and Others, which treated Heilbron as not requiring acceptance of a respondent’s mere ipse dixit: the respondent must lay a sustainable foundation for the asserted defence.

The court also considered Cleghorn & Harris Ltd v National Union of Distributive Workers 1940 CPD 409, which had expressed concern that a literal reading of the Heilbron/Roberts line might make defamation interdicts practically unattainable. The court’s reasoning was that the apparent conflict was overstated; properly understood, Heilbron was not intended to be applied literally in the extreme form suggested, and the two strands of authority were reconcilable once it was accepted that an asserted defence must be supported by a sustainable factual basis.

On the constitutional arguments, the court acknowledged the constitutional duty to develop the common law with due regard to the spirit, purport and objects of the fundamental rights chapter, and it affirmed the importance of freedom of thought and speech in a democratic society. However, it held that section 15 did not require a separate, “differentiated” approach that systematically favoured the press in interim interdict applications. Instead, the court reasoned that the competing interests—reputation and dignity on the one hand, and free publication on the other—could be accommodated within the existing Setlogelo framework, particularly at the stage of weighing the balance of convenience.

In that balancing exercise, the court explained why restraint of publication demanded caution. It emphasised that a person allegedly defamed generally retains a claim for damages if publication occurs, whereas an interim restraint may effectively end the matter from the publisher’s side because the news value may dissipate; additionally, urgent proceedings may leave respondents with limited time to marshal proof for a defence. The court also noted that interim relief may operate in substance as a permanent interdict, even if framed as temporary.

The court dealt with the nature of the “discretion” involved in interim interdicts by relying on Knox D’Arcy Ltd and Others v Jamieson and Others [1996] 3 All SA 669 (A). It treated that decision as clarifying that references to a “wide discretion” mean that courts may consider multiple disparate factors, and that appellate interference is not limited to the narrow constraints applicable where a lower court has a truly free choice between outcomes on identical facts.

Applying these principles to the facts, the court indicated that the respondents had articulated a case of truth and public benefit supported by evidence, and that the appellant’s response did not materially challenge public interest. As to the disputed issue about the source of the appellant’s stock, the court considered that enough had been said to contradict the appellant and to cast serious doubt on the appellant’s prima facie case, rendering it open to doubt and supporting the conclusion that the appellant had not shown that the respondents clearly lacked a defence. The court also considered it relevant, for balance of convenience purposes, that the appellant refused to provide the usual undertaking to cover losses if the restraint proved unwarranted, a factor which the court regarded as favouring the respondents.

The court then adopted what it described as a more direct approach, namely to examine whether the article was defamatory at all. It restated the standard that a defamatory statement is one that lowers a person in the estimation of ordinary intelligent or right-thinking members of society, as explained in Mohammed v Jassiem [1995] ZASCA 115; 1996 (1) SA 673 (A). On a close reading of the published article, the court concluded that the principal complaint based on the draft (“leading grey importer”) fell away because the words were omitted from the published version. It further held that the article did not state that Hix’s existing stock was grey or parallel-sourced, but rather reported that Novell SA had forbidden Hix to supply grey or parallel-sourced product into the South African market following the copyright assignment and letter. The court was unable to identify how that reportage, as framed, lowered Hix’s reputation among right-thinking people.

Similarly, the court rejected the contention that the article implied that Hix was an unauthorised dealer in a defamatory sense, construing relevant passages as dealing with future events and the changed legal posture after copyright assignment. It also held that any implication that Hix’s conduct resulted in loss of business to Novell SA would not, without more, be defamatory in a modern competitive context. Finally, it held that the article did not state that products sold by Hix in the past were illegitimate or required legitimisation, and that the article’s discussion of checking serial numbers and legitimising software did not support the defamatory sting alleged.

On this basis, the court concluded that the court a quo’s acceptance (even if only for purposes of its approach) that the article was prima facie defamatory was incorrect, and that the appellant therefore failed at the foundational level for interim relief.

Outcome and Relief

The appeal was dismissed with costs.

The effect of the dismissal was that the court a quo’s order—refusing an interim interdict restraining publication—stood, and no interim restraint against the respondents was granted.

Cases Cited

Buthelezi v Poorter and Others 1974 (4) SA 831 (W)

Heilbron v Blignaut 1931 WLD 167

Cleghorn & Harris Ltd v National Union of Distributive Workers 1940 CPD 409

Roberts v The Critic Ltd and Others 1919 WLD 26

Norris v Mentz 1930 WLD 160

Raw v Botha and Another 1965 (3) SA 630 (D)

Erasmus and Others NNO v SA Associated Newspaper Ltd and Others 1979 (3) SA 447 (W)

Church of Scientology in SA Incorporated Association Not for Gain and Another v Readers Digest Association (Pty) Ltd 1980 (4) SA 313 (C)

Setlogelo v Setlogelo 1914 AD 221

Du Plessis and Others v De Klerk and Another [1996] ZACC 10; 1996 (3) SA 850 (CC)

Publication Control Board v William Heinemann Ltd and Others 1965 (4) SA 137 (A)

Argus Printing and Publishing Co Ltd and Others v Esselen’s Estate 1994 (2) SA 1 (A)

Bonnard v Perryman [1891] 2 Ch 269

Knox D’Arcy Ltd and Others v Jamieson and Others [1996] 3 All SA 669 (A)

Hillman Bros (West Rand) (Proprietary) Limited v Van Den Heuvel 1937 WLD 41

Cronshaw and Another v Fidelity Guards Holdings (Pty) Ltd [1996] ZASCA 38; 1996 (3) SA 686 (A)

Mohammed v Jassiem [1995] ZASCA 115; 1996 (1) SA 673 (A)

Legislation Cited

Constitution of the Republic of South Africa Act 200 of 1993 (including sections 15 and 35(3))

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that the established South African requirements for interim interdicts, as formulated in Setlogelo v Setlogelo 1914 AD 221, govern applications to restrain publication in advance on grounds of defamation, and that there is no separate or “differentiated” test that favours the press as a matter of principle, although freedom of expression is a weighty factor to be considered (typically within the balance of convenience).

On the facts, the court held that the appellant failed to show a basis for interim restraint. The respondents’ asserted defence of truth and public benefit was supported to an extent that rendered the appellant’s prima facie entitlement open to doubt, and the appellant’s refusal to tender a customary undertaking as to respondents’ losses further favoured refusal of the interim relief.

Independently and decisively, the court held that the published article was not prima facie defamatory of the appellant when assessed according to the ordinary meaning and the standard for defamation. The key sting relied upon by the appellant was absent from the published article, and the remaining complaints did not, in the court’s view, lower the appellant in the estimation of right-thinking members of society.

LEGAL PRINCIPLES

An interim interdict in South African law requires, consistently with Setlogelo v Setlogelo 1914 AD 221, a prima facie right, a well-grounded apprehension of irreparable harm, a balance of convenience favouring the applicant, and the absence of an adequate alternative remedy. The remedy is discretionary in the sense that the court may consider multiple relevant factors in deciding whether the requirements are met.

In applications seeking to restrain publication on the basis of defamation, courts must act with particular caution because prior restraint implicates freedom of speech and the press, and because refusal of publication may effectively terminate the publisher’s opportunity to disseminate the information. Considerations of free speech do not displace Setlogelo but are accommodated within it, especially when weighing the balance of convenience and the practical effect of interim relief.

Where a respondent raises a defence such as truth and public benefit, an interim restraint is generally inappropriate unless the applicant can show that it is clear the respondent has no sustainable defence on the papers. The respondent’s defence is not accepted merely on assertion; it must be supported by a sustainable factual basis sufficient to render the applicant’s entitlement open to doubt in motion proceedings.

A defamatory statement is one that lowers the claimant in the estimation of ordinary intelligent or right-thinking persons. If the publication complained of is not prima facie defamatory on a proper reading, the foundational requirement for restraining publication on grounds of defamation is absent, and interim relief should be refused.

Hix Networking Technologies CC v System Publishers (Pty) Ltd. and Another (222/95) [1996] ZASCA 107; 1997 (1) SA 391 (SCA); [1996] 4 All SA 675 (A); (25 September 1996)