Media 24 Ltd and Others v SA Taxi Securitisation (Pty) Ltd (437/2010) [2011] ZASCA 117; 2011 (5) SA 329 (SCA); [2011] 4 All SA 9 (SCA) (5 July 2011)

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Media 24 Ltd and Others v SA Taxi Securitisation (Pty) Ltd (437/2010) [2011] ZASCA 117; 2011 (5) SA 329 (SCA); [2011] 4 All SA 9 (SCA) (5 July 2011)

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THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 437/2010
In the
matter between:
MEDIA 24 LIMITED
….....................................................................
FIRST
APPELLANT
KATHU MAMAILA
…..................................................................
SECOND
APPELLANT
JACKIE
MAPILOKO
…...................................................................
THIRD
APPELLANT
v
SA TAXI SECURITISATION (PTY) LTD
….............................................
RESPONDENT
AND
AVUSA MEDIA LTD
….............................................................
FIRST
AMICUS CURIAE
BDFM
PUBLISHERS (PTY) LTD
…....................................
SECOND AMICUS
CURIAE
INDEPENDENT NEWSPAPERS (PTY) LTD
….......................
THIRD
AMICUS CURIAE
FREEDOM OF EXPRESSION INSTITUTE
….....................
FOURTH
AMICUS CURIAE
Neutral citation:
Media 24 v SA Taxi Securitisation
(437/2010)
[2011] ZASCA 117
(5 July 2011)
Coram:
Brand, Nugent, Maya, Snyders and Theron JJA
Heard:
5 May 2011
Delivered:
5 July 2011
Summary: Defamation action by corporation – claim for
general damages considered – claim for special damages to be
brought
under the
actio legis Aquiliae
.
________________________________________________________________
ORDER
________________________________________________________________
On appeal from:
On appeal from South Gauteng High Court,
Johannesburg (Mathopo J sitting as court of first instance):
(1) The appeal is upheld with costs, including the costs of two
counsel.
(2) The order of the court a quo is set aside and replaced with the
following:
‘
(a) The defendants’ special plea with
reference to the plaintiff’s claim for general damages,
referred to in para 16
and prayer 1 of its particulars of claim, is
dismissed.
(b) Save for para (a) above, the defendants’ special plea is
upheld.
(c) The plaintiff’s claim for special damages referred to in
para 17 and prayer 2 of the particulars of claim, is dismissed.
(d) The plaintiff is ordered to pay the costs of these preliminary
proceedings, including the costs of two counsel.’
________________________________________________________________
JUDGMENT
________________________________________________________________
BRAND JA
(MAYA, SNYDERS AND THERON JJA CONCURRING):
[1] This appeal has its origin in a defamation action instituted by
the respondent against the three appellants in the South Gauteng
High
Court, Johannesburg. The respondent is a finance company that
provides financial assistance to purchasers and lessees of taxis.
The
first appellant publishes a newspaper, City Press, which is
distributed countrywide in South Africa. The second appellant is
the
editor of City Press. The action derived from an article which was
published in City Press in June 2008 under the title ‘Taxi

owners taken for a ride by finance body’. It was written by the
third appellant.
[2] For reasons that will shortly become apparent, the appeal does
not turn on the exact content of the article. Suffice it therefore
to
capture it in broad outline. As can be inferred from the title, the
article is highly critical of the way in which the finance
body
referred to in the article conducts its business. The respondent’s
case is that the finance body referred to would be
understood by the
readers of the article as relating to it. This is denied by the
appellants in their plea. But because of the
procedure adopted by the
parties, the allegation must for present purposes be assumed to be
true. Among other things the article
accused the respondent of
‘cheating on taxi operators’; of conducting its business
in a way that is illegal and criminal;
of arbitrarily repossessing
taxis; and of taking away the means of taxi owners to feed their
families.
[3] In its particulars of claim the respondent contended that the
article was defamatory of it and that it was published with the

intention to defame and to injure it in its business reputation. On
these grounds it claimed general damages in an amount of R250 000

as well as special damages in the form of lost profits, that it
allegedly suffered as a result of the defamation, in an amount

exceeding R20 million.
[4] The appellants’ first response was an exception that the
particulars of claim were vague and embarrassing, alternatively
that
it failed to disclose a cause of action. In due course, the exception
was dismissed in the high court with costs. We are not
required to
revisit that dismissal and no more needs to be said about the
exception. The appellants’ next step was to file
a document
which contained both a special plea and a plea on the merits. The
special plea challenged the respondent’s right
to obtain either
general or special damages under the law of defamation. For general
damages, so the appellants contended, the
respondent has no claim at
all in defamation, while its claim for special damages is not
available under the
actio iniuriarum
, from which the action
for defamation derives, but only under the
actio legis Aquiliae.
[5] Eventually the matter came before Mathopo J. By agreement between
the parties, he was asked to determine only those issues
arising from
the appellants’ special plea while all other issues stood over
for later determination. During the preliminary
proceedings that
followed no evidence was led by either parties and the matter was
argued on the pleadings. At the end of these
proceedings Mathopo J
dismissed the special plea with costs. The appeal against that
judgment to this court is with his leave.
The four
amici curiae
only became involved on appeal. They all have as their object the
protection of the right to freedom of expression, in general,
and
freedom of the press in particular. At their behest, they were
allowed by this court to present argument, both written and
oral, as
part of the appeal proceedings.
[6] On appeal the respondent raised, as it were, a point
in limine
that the judgment of the court a quo is not appealable, because
it amounted in the circumstances to the dismissal of an exception.
As
authority for the proposition that the dismissal of an exception is
in principle not appealable, the respondent relied on the
decision of
this court in
Maize Board v Tiger Oats Ltd
2002 (5) SA 365
(SCA) which confirmed a long line of earlier decisions to that
effect. The way in which the special plea was formulated, is
certainly
reminiscent of an exception rather than a special plea. In
essence it is aimed at alleged defects in the respondent’s case

that appears from its particulars of claim while a special plea
generally requires the introduction of new facts from outside the

plaintiff’s pleadings. Yet it appears to me that because the
matter was in fact not raised by way of exception but by special

plea, that part of the case circumscribed for separate adjudication
by the court a quo had been finally decided, which renders
it subject
to appeal. But be that as it may. At the hearing, counsel for the
respondent formally abandoned the point
in limine
. It
therefore requires no further discussion at this stage. In dealing
with the merits, I turn first to the issues surrounding
special
damages.
Special Damages
[7]
The appellants’ case is not that the
respondent has no claim for special damages in the form of the
profits it allegedly lost
as a result of the defamatory statements.
What they contended was that a claim for special damages is not
available under an action
for defamation, which derives from the
actio injuriarum
, but only under the
lex Aquilia
.
They were supported in this contention by the
amici curiae
.
The question whether the contention is well-founded, was left open by
Corbett CJ in
Caxton Ltd v Reeva Forman (Pty) Ltd
[1990] ZASCA 47
;
1990 (3) SA
547
(A) at 560I-561A when he said:
‘
. . .
[I]t is common cause that such a corporation may also claim damages
to compensate it for any actual loss sustained by it by
reason of the
defamation. It is not necessary in this case to decide whether this
latter claim falls under the
actio
injuriarum
or
is rather to be classified as Aquilian.’
[8] Despite the absence of any pertinent decision by this court in
favour of the appellants, the respondent conceded that its claim
for
special damages can only succeed if it satisfies the requirements of
the
actio legis Aquiliae
. I believe the concession was rightly
made. As was explained by De Villiers JA in
Matthews v Young
1922 AD 492
at 503-505, the rule of our law, in principle, is that
patrimonial damages must be claimed under the
actio legis
Aquiliae
, while the
actio iniuriarum
and its derivative
actions, including the action for defamation, are only available for
sentimental damages. In theory, the person
injured by a defamatory
publication would therefore have to institute two actions: a
defamation action for general damages and
the
actio legis Aquiliae
for special damages. But, as further explained by De Villiers JA,
even at the time when
Matthews
was decided, two actions were
no longer required by our practice. Accordingly, so De Villiers JA
held, if one suffers an injury
to your reputation, you can claim both
kinds of redress in the same action, provided, of course, that the
requirements of both
actions are satisfied.
[9] The decision in
Matthews
was followed in a number of older
provincial judgments (see eg
Bredell v Pienaar
1924 CPD 203
at
213;
Van Zyl v African Theatres Ltd
1931 CPD 61
at 64-65).
These decisions have been supported by most of our academic writers
on the subject (see eg Burchell
The Law of Defamation in South
Africa
(1984) 40-41; Neethling, Potgieter and Visser
Law of
Delict
5 ed (2006) 298 and the authorities there cited). More
recently, Magid J considered – in
Minister of Finance v EBN
Trading (Pty) Ltd
1998 (2) SA 319
(N) at 325G – whether the
fundamental legal position had changed since
Matthews
. The
conclusion he arrived at is that it had. I find no reason to disagree
with that conclusion. What this means, of course, is
that a plaintiff
who seeks to recover special damages resulting from a defamatory
statement, must allege and prove the elements
of the
Aquilian
action. And, I may add, it matters not in this regard whether the
plaintiff is a corporation or a natural person.
[10] The respondent’s contention was that, although its claims
for both special and general damages were couched in the form
of a
defamation action, its claim for special damages contains the four
well-known elements of an
Aquilian
action, namely, (a) a
wrongful act or omission, (b) fault (in the form of either
dolus
or
culpa
), (c) causation and (d) patrimonial loss. In
support of this contention, which found favour with the court a quo,
the respondent
referred to allegations in its particulars of claim
that the publication of the professed defamatory article was
intentional and
wrongful and that the respondent suffered the damages
claimed as the result of that publication.
[11] However, unlike the court a quo, I agree with the appellants’
contention that the respondent’s argument is flawed
and that
the flaw lies with the allegation of ‘wrongfulness’.
Since we are dealing with a claim for pure economic loss,
it has by
now become settled law that wrongfulness depends on the existence of
a legal duty and that the imposition of that duty
is a matter for
judicial determination involving criteria of public and legal policy.
In the result, conduct causing pure economic
loss will only be
regarded as wrongful – and therefore actionable – if
public or legal policy considerations require
that such conduct
should attract legal liability for the resulting damages (see eg
Minister of Safety and Security v Van Duivenboden
2002 (6) SA
431
(SCA) paras 12 and 22;
Fourway Haulage SA (Pty) Ltd v
SA National Roads Agency Ltd
[2008] ZASCA 134
;
2009 (2) SA 150
(SCA) para 12).
As a matter of pleading, a plaintiff claiming for pure economic loss
must allege wrongfulness and plead the facts
in support of that
allegation (see eg
Telematrix (Pty) Ltd t/a Matrix Tracking v
Advertising Standards Authority SA
2006 (1) SA 461
(SCA) para 2).
It does not follow that because a defamatory publication is wrongful
for purposes of a defamation action, that policy
considerations will
automatically indicate the imposition of liability for pure economic
loss resulting from that publication.
Consequently, the respondent’s
allegation in its particulars of claim that the statement was
‘wrongful’ for purposes
of its defamation action may not
be adequate in the present context. Whether it is adequate or not
will depend on judicial determination
as to what is wrongful in the
context of a claim for actual loss resulting from a defamatory
publication.
[12] Public and legal policy sometime require that a plaintiff be
compensated for pure economic loss in some cases, only in the
event
of an intentional wrong. In that event, fault in the form of
negligence on the part of the defendant will not suffice. Intent
will
then be an integral part of the element of wrongfulness (see eg
Minister of Finance v Gore NO
2007 (1) SA 111
(SCA) para 86;
South African Post Office v De Lacy
2009 (5) SA 255
(SCA) para
4). The appellants contended that this is such a case. They found
support for their argument in a species of Aquilian
liability
recognised in the sphere of unlawful competition as ‘
injurious
falsehood
’. It originated from the policy consideration
that fair and honest competition is open to anyone, even if it
involves interference
with the trade of others, but that no one is
permitted to carry on trade by fraudulent misstatement, either in
respect of its own
business or with reference to the business of its
competitor (see eg
Combrinck v De Kock
(1887-1888) 5 SC 405
at
415;
Schultz v Butt
1986 (3) SA 667
(A) at 678F-J).
[13] In order to succeed with a claim for injurious falsehood, the
plaintiff has to allege and prove that the defendant has, by
word or
conduct or both, made a false representation; that it knew the
representation to be false; that the plaintiff has lost
or will lose
customers; that the false representation is the cause of the loss;
and that the defendant intended to cause the plaintiff
that loss by
the false representation (see eg
Geary & Son (Pty) Ltd v Gove
1964 (1) SA 434
(A) at 441C-D). Departing from the analogy of
injurious falsehood, the appellants contended that liability for pure
economic loss
resulting from a defamatory publication should only be
regarded as wrongful – and thus result in the imposition of
liability
– if the publication was false and the defendant knew
it to be so.
[14] I find the appellants’ contention an attractive one. I can
think of at least two considerations of policy why it should
be
accepted. First, there appears to be no reason why the press should
be worse off than a competitor of the plaintiff when it
comes to
liability for injurious statements. After all, the right to freedom
of expression should at least rank equal to the competitor’s

right to do business. Secondly, the suggested limitation will serve
to curb the excessive claims for loss of profits by major
corporations which intimidate newspapers by their sheer magnitude.
[15] But, after due consideration, I do not believe it is necessary
to arrive at a final decision as to whether the requirements
of a
claim for special damages resulting from defamation should mirror the
requirements of injurious falsehood. During the course
of argument,
counsel for the respondent had to concede that, in order to found a
claim for special damages, the statement injurious
to the plaintiff’s
reputation must at least be proved to be false. I believe this
concession was rightly made. If the statement
is true, the corollary
is that the plaintiff’s reputation was based on a false premise
and thus undeserved. I believe the
gist of this consideration can be
illustrated with reference to the facts of this case. Say it should
transpire to be true that
the respondent has indeed conducted its
business in a way which was dishonest and illegal. In that event, any
reputation it may
have as an honest business enterprise would be
built on a masquerade, which plainly deserves no protection. So, in
the present
context, falsehood is an integral part of wrongfulness
which the plaintiff must allege and prove.
[16] This being so, I can see no reason why the law of delict should
extend its protection to a reputation which is undeserved.
To
complete the picture; under the defamation action truth of the
defamatory statement can be raised by the defendant, as part
of the
defence that relies on the truth and public benefit, the onus is on
the defendant. With regard to the Aquilian action based
on injurious
statements it is the plaintiff who bears the onus to allege and prove
that the statement is false. Thus understood,
it is plain that the
respondent’s case as formulated in its particulars of claim,
lacks an essential averment, namely that
the defamatory statements
relied upon were false. To that extent the special plea should
therefore succeed.
General Damages
[17] This brings me to the objections relating to the respondent’s
claim for general damages. The nature of these objections
will be
better understood against the background of what follows. Our action
for defamation is derived ultimately from the Roman
actio
iniuriarum
which rested on wounded feelings rather than
patrimonial loss. Since corporations and other legal personae have no
feelings, simple
logic seems to dictate that they should have no
claim for defamation. Yet it was held by Innes CJ in
G A Fichardt
Ltd v The Friend Newspapers Ltd
1916 AD 1
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
iniuria
will
lie . . . In the present case no special damages were proved; but
that circumstance 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 damages.’
[18] The alleged defamation relied on in
Fichardt
was the
statement in the Friend newspaper that the appellant was a German
company. This allegation must be understood against the
background
that the publication took place during the First World War, shortly
after the sinking of the Lusitania, when anti- German
feelings ran
high. Nonetheless, this court held that even in those circumstances,
the statement complained of was not defamatory.
In consequence, the
exposition of the law by Innes CJ was
obiter.
So was the
following equally strong statement by Solomon JA in the same case (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 had been sustained.
The law on this subject is now
well settled, and it is unnecessary, therefore, to discuss the
authorities dealing with it.’
[19] Thirty years later the law was stated with virtually the same
degree of certainty in
Die Spoorbond v South African Railways; Van
Heerden v South African Railways
1946 AD 999
by both Watermeyer
CJ (at 1007) and Schreiner JA (at 1010-1011). But again these
statements were
obiter
because the trading company involved,
the South African Railways, was held to be part of the Government.
For that reason, so this
court held, it should, for considerations of
public and legal policy, not be afforded an action for damages on the
basis of defamation.
(Cf
Derbyshire County Council v Times News
Papers Ltd
[1992] UKHL 6
;
[1993] AC 534
(HL) where the same decision was taken
for essentially the same policy considerations in English law.)
[20] Because the statements in
Fichardt
and
Spoorbond
were
obiter
, it left room for a debate which went on for a number
of years thereafter as to whether a juristic person should indeed be
afforded
the right to sue for defamation. On the one hand, various
judgments reflected the view that in contrast to a natural person, a
juristic person has no personality rights, including the right to
privacy and the right to a good name or reputation (see eg
Universiteit van Pretoria v Tommie Meyer Films (Edms) Bpk
1977
(4) SA 376
(T) at 387 and
Church of Scientology in SA
(Incorporated Association not for Gain)
v Reader’s
Digest Association SA (Pty) Ltd
1980 (4) SA 313
(C) at 317F-H).
[21] As appears from these judgments, the underlying reasoning went
along the following lines: defamation derives from the
actio
iniuriarum.
This Roman remedy was available, not to recover
economic loss, but for the protection of personality rights
consisting of physical
integrity (
corpus
), dignity (
dignitas
)
or reputation (
fama
). In the same way as a corporation has no
corpus
, it can have no
dignitas
nor
fama
in the
sense of a personality right. What it can have is a reputation in the
sense of ‘goodwill’. But that reputation
is not a
personality right. It is an integral part of the corporation’s
patrimony. Damage done to the reputation could therefore
constitute a
patrimonial loss for which compensation could be claimed under the
actio legis Aquiliae
and not the
actio iniuriarum.
[22] On the other hand it was accepted in several cases that, as far
as trading corporations were concerned, the law had been clearly

stated by way of considered pronouncements in
Fichardt
and
Spoorbond
, albeit that the pronouncements were
obiter
.
(See eg
Multiplan Insurance Brokers (Pty) Ltd v Van Blerk
1985
(3) SA 164
(D) at 166B-168A;
A Neuman CC v Beauty Without Cruelty
International
1986 (4) SA 675
(C) at 688B-C.) According to these
authorities, the only uncertainty that remained was whether a
defamation action was also available
to non-trading corporations (see
eg
Universiteit van Pretoria v Tommie Meyer Films (Edms) Bpk
1979
(1) SA 441
(A) at 458A; Burchell
The Law of Defamation in South
Africa
43-46; J Neethling & J M Potgieter
‘Persoonlikheidsregte van ‘n Regspersoon’
1991
THRHR
120
at 121).
[23] As far as this court is concerned, the debate eventually came to
a head in
Dhlomo NO v Natal Newspapers (Pty) Ltd
1989 (1) SA
945
(A). The appellant, Dr Oscar Dhlomo, sued for defamation on
behalf of a non-trading legal person. In the course of his judgment

Rabie ACJ formulated the three questions to be decided as follows (at
948F-G):
‘
(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.’
[24] In considering the first question, Rabie ACJ referred to the
obiter dicta
by this court in
Fichardt
and
Spoorbond
to the effect that a trading corporation can claim damages for
defamation. He then referred (at 952) to the contrary view expressed

by the high courts in
Universiteit van Pretoria
and in
Church
of Scientology
, on the basis that a legal person can have no
rights of personality and that the protection of its reputation, in
the sense of
goodwill, therefore lies, not in a claim for defamation
but in a claim for actual damages under the Aquilian action.
[25] After thus formulating the conflicting points of view, the
learned Acting Chief Justice proceeded to answer the first question

(at 952E-J). I propose to quote that answer in full. I make no excuse
for doing so because, as I see it, it contains the kernel
of the
answer of the appellants’ argument under the present rubric. It
reads:
‘
The
aforesaid statements of the law by Innes CJ and Solomon JA [in
Fichardt’s
case]
were . .
.
strictly
speaking not necessary for the decision of that case . . . 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, regarded 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 involves an extension
of the
principles 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.’
[26] As to the second question, namely whether the right to sue for
defamation should be restricted to trading corporations, Rabie
ACJ
gave the following answer (at 954A-B):
‘
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 cause financial prejudice
(whether
or not actual financial prejudice results).’
[27] The case that followed upon
Dhlomo
in this court was
Caxton Ltd v Reeva
Forman (Pty) Ltd
[1990] ZASCA 47
;
1990 (3) SA 547
(A). In
Caxton
the respondents, who were the plaintiffs in the court below, were
trading companies. As in this case, they claimed damages for

defamation in the form of both general damages and special damages.
Rather unsurprisingly in the light of the clear statements
by this
court in
Dhlomo
,
Corbett CJ could succinctly formulate the legal position as follows
(at 560H-561A):
‘
It is
respondents’ case that the article not only injured generally
their respective business reputations and goodwill, but
also actually
caused them special patrimonial loss in the form of reduced profits.
A trading corporation has a right to sue for
damages in respect of a
defamatory statement which is calculated to injure its business
reputation . . . and it is common cause
that such a corporation may
also claim damages to compensate it for any actual loss sustained by
it by reason of the defamation.
It is not necessary in this case to
decide whether this latter claim falls under the
actio
injuriarum
or
rather to be classed as Aquilian.’
[28] In
Caxton
the right of a trading corporation to sue for
general damages was therefore not in dispute. Yet, it is clear from
the judgment
of Corbett CJ that he was not unaware of the problems
arising from the adherence to strict mathematical reasoning, which
departs
from the premise that a claim for damages is aimed at
compensation for wounded feelings and arrives at the conclusion that
it should
therefore not be available to a corporation. Nor was he
unaware that part of the corporation’s reputation will be
compensated
for by a claim for special damages. This appears from his
statement (at 561B-C) that:
‘
The
question as to whether and to what extent the article in all its
facets was calculated to injure respondents in their respective

business reputations is one to be decided by reference to the nature
of the defamation, the character of the businesses conducted
by them
and the likely impact thereon of the defamation; and the damages must
be assessed in accordance with the principles relating
to claims for
defamation, bearing in mind that a corporation has “no feelings
to outrage or offend” (
per
Schreiner
JA in
Die
Spoorbond
case
supra
at
1011).’
[29] And (at 574I-575B):
‘
The injury to trade
reputation would normally be reflected to a large extent in a reduced
volume of business and lower profits.
But injury by way of loss of
profits is catered for by an award of special damages. I recognise
that there is room in a case such
as this for claims for both special
and general damages . . . but it cannot be denied that notionally
there is a measure of overlapping
between the two claims; and I
consider that this is a factor which must be taken into account in
computing the general damages
in this case.’
[30] After
Dhlomo
and
Caxton
it has consistently been
accepted by our courts, including this court, that corporations, both
trading and non-trading, have a
right to their good name and
reputation which is protected by the usual remedies afforded under
our law defamation, including a
claim for damages (see eg
Argus
Printing and Publishing Co Ltd v Inkatha Freedom Party
[1992] ZASCA 63
;
1992 (3)
SA 579
(A);
Financial Mail (Pty) Ltd v Sage Holdings Ltd
[1993] ZASCA 3
;
1993
(2) SA 451
(A) at 460G-I;
Delta Motor Corporation (Pty) Ltd v Van
der Merwe
2004 (6) SA 185
(SCA);
Treatment Action Campaign v
Rath
2007 (4) SA 563
(C) at 568).
[31] The appellants’ arguments as to why we should deviate from
this powerful authority were essentially three-fold:
(a) As far as trading corporations are concerned, the decisions by
this court –
Fichardt
,
Spoorbond
,
Dhlomo
,
Caxton
and
Financial Mail
– were either
obiter
or based on assumptions as to the legal position.
(b) That all these cases were wrongly decided.
(c) That the extension of the law defamation to trading companies is
unconstitutional.
I propose to deal with these three arguments in turn.
[32] As to the argument based on the
obiter
nature of the
prior decisions of this court, the statements in
Fichardt
and
Spoorbond
, plainly fall into that category. The same can be
said about the statement of the law by Corbett CJ in
Financial
Mail
, because the issue in that case was whether a corporate body
has a right to privacy. But the statements in
Dhlomo
were not
obiter
. Though the ultimate issue related to non-trading
companies, the first question that this court posed itself was
whether trading
corporations have a claim for damages based on
defamation. After it had answered that question in the affirmative,
it proceeded
to the next question as to whether that right should be
extended to non-trading corporations. Thus understood, the first
mentioned
decision was clearly part of the rationale or basis for the
decision, that is, in the parlance of the doctrine of precedent, the
ratio decidendi
.
[33] As to the decision in
Caxton
, it is true to say that the
issue under present consideration was not fully discussed. It simply
accepted that in the light of
Dhlomo
, a trading company can
sue for damages in respect of a defamatory statement. That, however,
does not render the decision less binding
than one which had been
fully discussed. In accordance with the doctrine of precedent, also
expressed in the principle of
stare decisis
, this court is
therefore bound to the decisions in
Dhlomo
and
Caxton
–
which constituted part of the
ratio decidendi
in both cases –
unless we are satisfied that those decisions were clearly wrong.
[34] Considerations underlying the principle of
stare decisis
were formulated extensively by Hahlo and Kahn
The South African
Legal System and its Background
1968 (at 214-5) in a passage
which had been quoted with approval by the Constitutional Court in
Ex
Parte Minister for Safety and Security: In Re S v Walters
[2002] ZACC 6
;
2002
(4) SA 613
(CC) para 57. What it boils down to, according to the
authors, is: ‘Certainty, predictability, reliability, equality,
uniformity,
convenience: these are the principle advantages to be
gained by a legal system from the principle of
stare decisis
’.
Moreover, as has been underscored by the Constitutional Court in
Camps Bay Ratepayers’ and Residents’ Association v
Harrison
2011 (2) BCLR 121
(CC) para 28, the principle of
stare
decisis
is a manifestation of the rule of law itself which in
turn is a founding value of our Constitution. I say all this to
accentuate
why mere lip service to the doctrine of precedent is not
enough; why deviation from previous decisions should not be
undertaken
lightly.
[35] Apart from constitutional arguments, which I propose to consider
separately, it appears to me that the arguments raised by
the
appellants and the
amici curiae
as to why the cases I referred
to had been wrongly decided, were not essentially different in
content from those presented to this
court in
Dhlomo
. What
should also be borne in mind is that the decision of this court in
Dhlomo
was essentially one of policy which could not be
described as ‘right’ or ‘wrong’ in absolute
terms, either
way. What this court therefore did was to weigh these
arguments, which were plainly not without substance, against equally
weighty
arguments to the contrary. Ultimately it took the policy
decision that it did. As explained in
Brisley v Drotsky
2002
(4) SA 1
(SCA) (para 8), when this court has taken a policy decision,
we cannot change it just because we would have decided the matter
differently. We must live with that policy decision, bearing in mind
that litigants and legal practitioners have arranged their
affairs in
accordance with that decision. Unless we are therefore satisfied that
there are good reasons for change, we should confirm
the status
a quo.
[36] Broadly stated the arguments as to why
Dhlomo
and
Caxton
were wrongly decided, went as follows:
(a) Our action for defamation derives from the
actio injuriarum
,
which in Roman and Roman-Dutch law was confined to the protection of
personality rights. It provided a
solatium
for wounded
feelings and was not available for the recovery of patrimonial
damages.
(b) Patrimonial damages could only be recovered by means of the
actio
legis Aquiliae
.
(c) A corporation has no personality rights to protect. Nor can it
have any feelings of hurt or shame for which it can be compensated

under the
actio injuriarum
.
(d) The reputation of a trading corporation affects its goodwill,
that is, its capacity to attract custom and make profits.
(e) If its reputation is damaged, that damage ordinarily diminishes
its capacity to attract customers and make profit. This damage
is
then reflected in and can be measured by the diminished profits of
the business and the resultant reduction in the value of
its
goodwill.
(f) The common law protects the capacity of trading corporations to
attract custom by their name and reputation. It does so by
means of
the
actio legis Aquiliae
.
[37] As to the historical argument based on the original scope and
purpose of the
actio iniuriarum
it was pointed out by
Schreiner JA in
Spoorbond
how the law had since changed, when
he said (at 1010):
‘
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 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.
The opinion of other persons is of value to him and . .
. it has
become in some degree assimilated to wrongs done to property.’
[38] Though traditionally the function of the
actio iniuriarum
was to provide
a
solatium
or solace money
(satisfaction or ‘
genoegdoening
’ in Afrikaans) for
injured feelings, the position has become more nuanced in modern law.
A natural person is not required
to show sentimental loss. He or she
will receive damages for defamation even in the absence of injured
feelings. A medical doctor
defamed by allegations of malpractice will
receive non-patrimonial damages for injury to his or her professional
reputation, despite
the absence of any feelings of hurt or shame and
the same will apply to the damaged credit reputation of a business
man. It will
be no defence for the defendant to show that the
statement did not in fact cause the plaintiff any personal distress.
As was said
in
Boka Enterprises (Pvt) Ltd v Manatse & another
NO
1990 (3) SA 626
(ZHC) at 631J-632A:
‘
Hurt
feelings,
per
se
,
matter to a decreasing extent in a crowded, materialistic society.
The reality, I perceive, is that actions for defamation are
used to
an ever increasing extent to protect what was referred to . . . as
“
the
external dignity
”
of
the
persona
.’
[39] On the other hand, it is recognised – and in my view,
rightly so – that juristic persons have an interest in their

external dignity or reputation, akin to that of its natural
counterpart, which is worthy of legal protection, despite the fact

that it cannot be translated into a quantifiable monetary loss. Why I
say ‘rightly so’ is that I can see no reason
why, for
example, the corporate trader would not have a protectable interest
in the pride of its employees to work for that company.
Or in the
fact that because of the defamatory allegations people would be less
inclined to deal with the company. Or as Lord Bingham
put it in
Jameel (Mohammed) v Wall Street Journal Europe Sprl
[2006] UKHL 44
;
[2007] 1
AC 359
(HL) para 26:
‘
First,
the good name of a company, as that of an individual, is a thing of
value. A damaging libel may lower its standing in the
eyes of the
public and even its own staff, make people less ready to deal with
it, less willing or less proud to work for it. If
this were not so,
corporations would not go to the lengths they do to protect and
burnish their corporate images. I find nothing
repugnant in the
notion that this is a value which the law should protect.’
[40] According to the appellants’ argument damage to the
reputation of trading corporations will ultimately be measurable
by
its loss of profits which can be recovered under the
lex Aquilia
.
Though the argument has its superficial attraction, it gives rise to
several difficulties. I propose to name some of these, though
the
list is plainly not exhaustive.
40.1 If reputation of a trading corporation can only be recovered by
a claim for loss of profits, what about a non-trading corporation?
As
a matter of course, they will not be able to show any loss of
profits. Generally they will not even be able to show a financial

loss. Does that mean that non-trading corporations have no reputation
worthy of protection, even though they may be dependent on
that very
reputation for their future existence? If, on the other hand, a
non-trading corporation has a claim for general damages
under the law
of defamation, what is the difference between it and a trading
corporation? Just like the latter, the former can
have no feelings of
hurt or shame.
40.2 It is simply not true that injury to reputation of a trading
company will always be measurable in terms of lost profits. In
answer
to this problem, the
amici
relied on the principle that even
where patrimonial damages are not exactly quantifiable – as in
the case of future loss
of income – the court is obliged to
base its award on what has been described as no more than ‘an
informed guess’
(see eg
Griffiths v Mutual & Federal
Insurance CO Ltd
[1993] ZASCA 121
;
1994 (1) SA 535
(A) at 546G). But it is clear
from the decisions relied on that the plaintiff must at least show
some patrimonial loss. So what
if the corporation can show no loss of
profit at all because, for example, it made the same profit or an
even greater profit during
the year following the defamation? And
what about those harmful consequences of the injury to reputation
that cannot be translated
into money terms at all, such as the lost
pride of employees and representatives? Eventually, the rhetorical
question arises whether
a company that can show no actual loss, may
be defamed with impunity. Sight should not be lost of the fact that,
although the defamation
action has lost its penal character, the
award of general damages still serves a deterrent function. This is
illustrated by the
following statement in
Buthelezi v Poorter &
others
1975 (4) SA 608
(W) at 617E-F:
‘
In my view the
appropriate way of impressing upon all concerned that attacks of the
kind to be found in this case are not to be
lightly made is by
awarding substantial damages.’
(See also eg
Young v Shaikh
2004 (3) SA 46
(C) at 57E-F;
Visser & Potgieter
Skadevergoedingsreg
2
ed
(2003) para 15.3.2.4 and the authorities there cited.)
40.3 Apart from not having to show any general damages, the
defamation action affords the plaintiff several further advantages.

All that he, she or it has to prove is publication of a defamatory
statement. This gives rise to rebuttable presumptions of both

wrongfulness and
animus iniuriandi
(see eg
Le Roux v Dey
[2011] ZACC 4
paras 85 and 171). If, under the rubric of
justification, the defendant pleads the defence of truth and public
benefit, it has
to prove both these elements. By excluding trading
corporations from claims for defamation, they will be deprived of
these benefits.
That will constitute discrimination against
corporations which cannot, in my view, be justified and which may
even amount to an
infringement of the right to equality under s 9 of
the Constitution.
[41] In the end I find the arguments proffered by appellants and the
amici
in support of the abolition of a defamation action for
corporations no different from those that informed the decisions of
the
high court preceding
Dhlomo
, ie in
University of
Pretoria
and
Church of Scientology
. These were also the
same arguments considered in
Dhlomo
. Yet, as I have said,
although this court found these arguments weighty and of substance,
it decided, for reasons of policy, to
go the other way. Particularly
in the absence of new arguments, I am not persuaded that our policy
should change. Of course, the
position would be different if our
common law, in this context, were found to be in conflict with
constitutional principles. In
that event, s 39(2) of the Constitution
would exact development of the common law to remove the conflict.
That leads me to the
further contention by the appellants and the
amici
, that the extension of the law of defamation to trading
corporations is unconstitutional.
Extension of the law of defamation to trading corporations -
unconstitutional
[42] Broadly stated, the argument in support of this contention went
as follows:
42.1 The law of defamation ‘lies at the intersection of the
freedom of speech and the protection of reputation or good name’

(per O’Regan J in
Khumalo v Holomisa
[2002] ZACC 12
;
2002 (5) SA 401
(CC) para 26). Both these rights are now constitutionally entrenched
– freedom of expression in s 16 and reputation as an
element of
dignity in s 10 of the Constitution. The law of defamation limits the
one for the protection of the other. It is a balance
struck by law.
42.2 Both this court and the Constitutional Court have emphasized the
fundamental importance of freedom of expression in an open
and
democratic society. The common law of defamation limits that right.
The limitation is constitutionally permissible only if
it is
justified in terms of s 36(1) of the Constitution. The basis upon
which the common law of defamation has been held to be
a justified
limitation of freedom of expression, is that it protects dignity –
a fundamental right equal in status to freedom
of expression (see
Khumalo
para 41).
42.3 The right to dignity which justifies the limitation of freedom
of expression through the law of defamation is a right of personality

which inures only to natural persons. This substratum is therefore
entirely absent in the case of corporations. They are not the
holders
of the human dignity. Their interest in their reputation is limited
to the capacity to attract custom and make a profit.
It is a purely
financial interest with little or no constitutional recognition.
42.4 The extension of the law of defamation to trading corporations
is not only unjustified but brings about a significantly greater

limitation of freedom of expression. That is because the potential
claims for loss of profits of trading corporations tend to be

considerably higher than those of natural persons. The claim in this
case, eg, is R20m. The sheer magnitude of claims of this kind
has a
particularly chilling effect on freedom of expression. In fact, they
put the media at risk of insolvency.
42.5 These considerations motivated the Australian States and
Territories to enact legislation which prevents all but the smallest

corporations from suing for defamation. Their general rule is that
corporations may not claim damages for defamation. The only
exception
to this rule is corporations established for charitable purposes and
those which have fewer than ten employees. (See
eg Megan Ashford
‘Legislation Note: Defamation Act 2005 (WA)’ (2006) 13
eLaw Journal
(2006) 14.) In the same vein it was noted by
Baroness Hale in
Jameel
(para 158) that:
‘
The
power wielded by the major multi-national corporations is enormous
and growing. The freedom to criticise them may be at least
as
important in a democratic society as the freedom to criticise the
government.’
[43] Though these are obviously forceful arguments, I am left
unpersuaded that the recognition of a corporation’s claim for

general damages in defamation constitutes an unjustified limitation
to freedom of expression. As to the argument based on the thesis
that
the reputation of a corporation is not protected by the Constitution,
I am not convinced that the premise is well founded.
Section 8(4) of
the Constitution provides that ‘a juristic person is entitled
to the rights in the Bill of Rights to the
extent required by the
nature of the rights and the nature of that juristic person’.
Subject to these qualifications, juristic
persons therefore also
possess personality rights, which are protected as fundamental
rights. (See eg J H Neethling ‘‘n
Vergelyking Tussen die
Individuele en Korporatiewe Persoonlikheidsreg op Identiteit’
2011
TSAR
62.)
[44] In terms of our Constitution, the concept of ‘dignity’
has a wide meaning which covers a number of different values.
So, for
example, it protects both the right to reputation and the right to a
sense of self-worth. Under our common law, on the
other hand,
‘dignity’ has a narrower meaning. It is confined to the
feeling of self-worth. (See eg
Khumalo
para 27;
Le Roux v
Dey
para 138.) It is plain therefore that the protection of
‘dignity’ in s 10 is not confined to ‘dignity’
in the narrower – common law – sense but that it also
extends to other personality rights, and that at least some of
these
can be possessed by corporations, as eg the right to privacy.
[45] Our common law recognises the personality right of a non-natural
person to privacy. The inferential reasoning that led to
this
recognition appears from the following statement by Corbett CJ in
Financial Mail (Pty) Ltd v Sage Holdings Ltd
[1993] ZASCA 3
;
1993 (2) SA 451
(A) at 460G-461H:
‘
. . .
[T]his
Court
has held that a trading corporation can 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
. . . 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 . . . 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 . . .’
[46] In
Investigating Director: Serious Economic Offences v
Hyundai Motor Distributors (Pty) Ltd: In re Hyundai Motor
Distributors (Pty)
Ltd v Smit
[2000] ZACC 12
;
2001 (1) SA 545
(CC) the
Constitutional Court accepted, on the basis of
Financial Mail
,
that corporations have a right to privacy which is protected by
common law. It then decided that the same protection is recognised
by
the Constitution. This appears from the following statement by Langa
DP (paras 17 and 18):
‘
The
protection of the right to privacy may be claimed by any person . .
.. Neither counsel addressed arguments on the question of
whether
there was any difference between the privacy rights of natural
persons and juristic persons. But what is clear is that
the right to
privacy is applicable, where appropriate to a juristic person . . .
Juristic persons are not the
bearers of human dignity. Their privacy rights, therefore can never
be as intense as those of human
beings. However, this does not mean
that juristic persons are not protected by the right to privacy.’
[47] In the light of this historical development it will be anomalous
if the corporations’ right to reputation which, through

inferential reasoning, gave rise to the acknowledgement of its right
to privacy, would be held not to enjoy the same constitutional

protection as its right to privacy. In the present context, I can see
no conceptual difference between the corporations’
right to
privacy, on the one hand, and its right to reputation, on the other.
Both privacy and reputation fall outside the ambit
of the narrow
meaning of ‘human dignity’ which a corporation cannot
have. At the same time, they are both included
in the wider meaning
of ‘dignity’, protected by s 10 of the Constitution.
[48] But even if the reputation of a corporation is not protected by
the Constitution, it by no means follows that its reputation
is not
protected by the law of defamation. Though freedom of expression is
fundamental to our democratic society, it is not of
paramount value
(eg
Khumalo
para 25). Nor does it enjoy superior status in our
law (eg
S v Mamabola (ETV & others intervening)
[2001] ZACC 17
;
2001 (3)
SA 409
(CC) para 41). Accordingly, limitations of the right to
freedom of expression has been admitted in the past for purposes not
grounded
on fundamental rights (see eg integrity of the courts in
S
v Mamabola
para 48).
[49] For the reasons I have given, I believe that the reputation of a
corporation is worthy of protection. Moreover, I believe
that the
common law rule protecting that reputation is in turn recognised by s
39(3) of the Constitution. In
Khumalo
the Constitutional Court
considered our common law of defamation and concluded that it strikes
a proper balance between the protection
of the right to freedom of
expression, on the one hand, and the right to reputation, on the
other. As I see it this also applies
to the reputation of
corporations.
[50] I am fortified in my views that the recognition of a
corporation’s entitlement to general damages does not
constitute
an unjustified limitation to freedom of expression by the
decisions of the House of Lords (as it then was) in
Jameel
and
the European Court of Human Rights in
Steel and Morris v United
Kingdom
(2005) 41 EHRR 403.
Both cases involved a challenge to
the rule of English law affording a defamation action to corporate
entities, on the basis that
it constitutes an infringement of Article
10 of the European Convention. Article 10 is the counterpart of s 16
of our Constitution,
in that it guarantees everyone’s right to
freedom of expression. In both instances the rule in English law,
which is conceptually
no different from our rule, was held not to be
inconsistent with Article 10. In the main, the ratio of these
decisions was
that the English law of defamation, which shows a
marked resemblance to ours, strikes a proper balance between the
right enshrined
by Article 10 and the right of corporations to their
reputation.
[51] This brings me to the argument based on the chilling effect of
excessive awards of damages. Though I agree with the underlying

sentiment, I find the argument flawed. The excessive awards referred
to would, in the South African context constitute special
damages
which, as we now know, are not recoverable by a defamation action.
Traditionally awards for special damages by our courts
are relatively
low. So, ie, the amount awarded for a serious defamation in
Caxton
was around R150 000 while the amount claimed in this case is only
R250 000. Reference to excessive amounts claimed for special
damages,
therefore only serves to confuse the issue.
[52] There is no formula for the determination of general damages. It
flows from the infinite number of varying factors that may
come into
play. So, ie, the court will have regard to the character of the
corporations’ business, the significance of its
reputation, the
seriousness of the allegations, the likely impact of those
allegations on the corporations’ reputation, and
so forth. But,
as was pointed out by Corbett CJ in
Caxton
, the court will
also have regard to the fact that the company has no feelings that
can be consoled. At the other end, the court
will consider that part
of the loss could have been recovered as special damages. Finally,
the court will have to perform the balancing
act between the
different interests involved, including the chilling effect of
excessive awards on freedom of expression.
[53] I am mindful of the criticism based on mathematical logic, that
an award of damages for defamation to a corporation is inappropriate,

because it cannot serve to compensate the wounded feelings of an
entity which has none. But the impropriety of damages as a remedy
for
defamation has also been cogently raised in cases outside the ambit
of corporations (see eg
Kritzinger v Perskorporasie van
Suid-Afrika (Edms) Bpk
1981 (2) SA 373
(O) at 389G-H;
Mineworkers
Investment CO (Pty) Ltd v Modibane
2002 (6) SA 512
(W) paras
16-30; Burchell
The Law of Defamation in South Africa
315-319). Yet, despite this criticism, the Constitutional Court
stated in
Le Roux v Dey
[2011] ZA CC 4
at para 195, albeit
with clear reluctance, that:
‘
The
present position in our Roman-Dutch common law is that the only
remedy available to a person who has suffered an infringement
of a
personality right is a claim for damages. One cannot sue for an
apology and courts have been unable to order that an apology
be made
or published, even where it is the most effective method of restoring
dignity [or reputation]. A person who is genuinely
contrite about
infringing another’s right cannot raise an immediate apology
and retraction as a defence to a claim for damages.
At best it may
influence the amount of damages awarded. This is an unacceptable
state of affairs illustrated by what happened in
this case.’
[54] As long as this position prevails, it is not open to us to say
that a corporation has a reputation worthy of protection under
the
law of defamation, but that the remedy should be something other than
damages. Leaving aside the restraining of publication
by means of an
interdict, which finds no application in a case such as this, there
is simply no alternative. The only remedy available
at present that
can serve to protect the reputation worthy of protection, is damages.
A legal system which acknowledges an interest
worthy of protection,
but provides no remedy to afford that protection fails in the
performance of its function. And, as I see
it, the same must be said
about a legal system that says to a plaintiff in the position of the
present respondent that, although
it should have a remedy, the nature
of that remedy is unclear; that although an award of damages has been
regarded as the only
appropriate remedy for nearly a century, we now
hold that it is no longer the case, without offering a firm
alternative; and that
because the respondent is seeking a remedy
which we now decide to exclude, its claim based on the protection of
its reputation
is dismissed with costs. All I can say is that I find
myself unable to subscribe to this conclusion.
[55] Despite the arguments to the contrary I can therefore find no
legitimate reason why we should deviate from the rule of our
common
law, which had been endorsed by our courts for nearly a century, that
a corporation has a claim for general damages in defamation.
To that
extent, the court a quo was therefore right in its dismissal of the
appellants’ special plea.
Remedy
[56] What remains to be considered is the remedy. With regard to
special damages, I have recorded the finding that the respondent’s

claim under this heading lacks an essential averment, that the
defamatory statements relied upon as the basis for its claim, were

untrue. To that extent the special plea must therefore succeed. As to
the further consequences, a controversy arose between the
parties in
argument. While the appellants contended that respondent’s
claim for special damages should be dismissed, the
respondent argued
that it should be afforded an opportunity to amend its particulars of
claim. In support of its counter argument,
the respondent contended
that the resulting position is akin to an exception being upheld.
[57] I find myself in agreement with the appellants’ argument.
With regard to the respondent’s counter argument, the
fact is
that the defence against its claim for special damages was not raised
by way of exception. It was put forward as a substantive
defence,
albeit in the form of a special plea as opposed to a plea. By
agreement between the parties the court a quo was then asked
to
decide that substantive defence separately. It was obviously
understood by both parties that the decision would be final. If

despite a decision in the respondent’s favour, the appellants
would seek to raise the same defence, they would rightly have
been
met by a plea of
res judicata
. As I see it, the result cannot
be different now that the decision goes the other way.
Order
[58] For these reasons it is ordered:
(1) The appeal is upheld with costs, including the costs of two
counsel.
(2) The order of the court a quo is set aside and replaced with the
following:
‘
(a) The defendants’ special plea with
reference to the plaintiff’s claim for general damages,
referred to in para 16
and prayer 1 of its particulars of claim, is
dismissed.
(b) Save for para (a) above, the defendants’ special plea is
upheld.
(c) The plaintiff’s claim for special damages referred to in
para 17 and prayer 2 of the particulars of claim, is dismissed.
(d) The plaintiff is ordered to pay the costs of these preliminary
proceedings, including the costs of two counsel.’
______________
F D J BRAND
JUDGE OF APPEAL
NUGENT JA
[59] I agree in some, but regrettably not all, respects with the
conclusions reached by my colleague Brand JA. And while I agree
with
the order that he proposes, so far as it goes, I would take it a step
further.
[60] In their special plea the appellants took issue with the
respondent’s entitlement to damages – both special and

general – in the absence of allegations that, taken together,
would amount to an allegation of injurious falsehood. The concomitant

was a further allegation in the special plea that an action for
defamation ‘is not available to a trading corporation in
the
circumstances pleaded by the plaintiff’. Elaborating upon that
in the heads of argument presented on their behalf, and
in argument
before us, counsel for the appellants submitted that the damages
claimed by the respondent were founded in both cases
upon damage to
pecuniary interests, which was not recoverable under the actio
injuriarum. Moreover, to allow an action for damages
for defamation
at the hands of a trading corporation, so it was submitted, would
intrude unjustifiably upon the now constitutionally
protected right
to free expression.
1
[61] Counsel for the respondents accepted that financial loss is
recoverable only under the lex Aquilia but contended that the

allegations in the particulars of claim sufficiently made out such a
claim. As for general damages it was submitted that the cases
in this
court have recognised such a claim at the hands of a trading
corporation, and that, by analogy with cases concerning natural

persons, and drawing upon foreign authority, such a claim is a
justified intrusion upon the right of free expression.
[62] Counsel for the amici aligned themselves with the submissions
made on behalf of the appellants, but made further submissions
in
their heads of argument that steered a course between the two
extremes chosen by counsel for the respective litigants. Those

submissions formed the main thrust of the oral argument that they
advanced before us. It is not controversial that awarding damages
for
defamation intrudes upon the right of free expression, nor that the
protection of human dignity justifies such an intrusion
when they are
awarded to a natural person.
2
But counsel for the amici submitted that a trading corporation does
not qualify for equal protection. They submitted that if an
action
for defamation at its hands is to be recognised, then there are ‘less
restrictive means to achieve the purpose’
3
of vindicating its reputation than awarding damages, and that the
availability of those means strike an appropriate balance between
its
rights and the right of free expression.
[63] They submitted that damages ought not to be seen as the only
appropriate remedy for defamation, and they referred us to the

observation by John Fleming
4
that:
‘
the
preoccupation of the law of defamation with damages has been a
crippling experience over the centuries. The damages remedy is
not
only singularly inept for dealing with, but actually exacerbates, the
tension between protection of reputation and freedom
of expression,
both equally important values in a civilized and democratic
community. A defamed plaintiff has a legitimate claim
to vindication
in order to restore his damaged reputation, but a settlement for, or
even an award of damages, is hardly the most
efficient way to obtain
that objective.’
They submitted in their heads of argument, and developed this in oral
argument, that there is ‘an array of other remedies
by which
reputation can be better protected while at the same time imposing
less restriction on freedom of expression’. They
submitted that
a declaration of falsity, an order that the defamer publish a
correction, or publish the judgment vindicating its
reputation, or a
summary of that judgment, or that he or she publish a retraction, and
in appropriate cases an apology, would all
serve to vindicate the
reputation of a trading corporation, while not intruding
unjustifiably on the right of free expression.
[64] I agree with my colleague that special damages for financial
loss are recoverable only in an Aquilian action – indeed,
that
was not controversial before us – and that the respondent’s
pleadings do not make out an Aquilian claim. That
leaves in issue
only its claim for general damages. In my view awarding general
damages to a trading corporation for defamation
is indeed
constitutionally objectionable, for reasons that I come to, but that
need not imply that it has no recourse at all if
it is defamed. I
think there is force in the submissions made on behalf of the amici,
both in their heads of argument and expanded
upon orally, that absent
the remedy of damages and confined instead to other available
remedies, the action for defamation at the
hands of a trading
corporation is reconcilable with the right to free expression. Thus
the difference between my colleague and
me on this issue falls within
a narrow compass.
[65] We agree that a trading corporation has a protectable interest
in its reputation, and we agree that it is entitled to redress
once
the elements of unlawful defamation have been established in the
ordinary way.
5
Where we differ is only on the nature of the redress to which it is
entitled. My colleague takes the view that we are bound to
follow
earlier precedent to the effect that a trading corporation, like a
natural person, is entitled to general damages if it
is unlawfully
defamed. I take the view that it is open to us to reappraise the
remedies for defamation, and that remedies other
than damages are
capable of vindicating its reputation. The view that I take is that
general damages to a trading corporation are
inherently punitive, and
thus not permitted by our law, from which it must follow that to
award general damages to a trading corporation
is also an unjustified
intrusion upon the right of free expression. Our difference thus
focuses on remedies for defamation and
not on its substantive
elements.
[66] Damage that has been done to property, or money that has been
lost, is capable of being repaired through a compensatory award
of
damages. Impairment of reputation, on the other hand, has this unique
feature, that it is repaired by words, so far as it is
repaired at
all. Good name is restored when those who have heard the defamation
are told that what was said is not true and it
is retracted. So far
as courts can restore good name, it is restored when a declaration to
the same effect is made.
6
Just as reputation is impaired by words, so it is by words that
reputation is repaired. That applies as much to a natural as to
a
juristic person. When monetary damages for defamation are awarded to
a natural person, they function for the different purpose
of
compensating for the harm that was meanwhile suffered until such time
as his or her good name is restored.
[67] In recent years comparable jurisdictions, upon review of their
law of defamation, have introduced by legislation innovative
remedies
aimed at expeditiously repairing damaged reputation. In England, for
example, the Defamation Act 1996 permits a court,
on the application
of the plaintiff, and in some cases on its own initiative, to dispose
summarily of a claim for defamation at
any stage of the proceedings,
by granting summary relief, which may be ‘
a
declaration that the statement was false and defamatory’ alone,
or ‘an order that the defendant publish or cause to
be
published a suitable correction and apology’.
[68] The Defamation Act 2009 in Ireland permits a person who claims
to have been defamed to apply, on notice of motion grounded
on
affidavit, for a declaratory order, with nothing more, ‘that
the statement is false and defamatory of him and her’.
Upon an
application for such relief the court must make a declaratory order
if it is satisfied that:
‘
(a)
the statement is defamatory of the applicant and the respondent has
no defence to the application,
(b) the applicant requested the
respondent to make and publish an apology, correction or retraction
in relation to that statement,
and
(c) the respondent failed or
refused to accede to that request or, where he or she acceded to that
request, failed or refused to
give the apology, correction or
retraction the same or similar prominence as was given by the
respondent to the statement concerned.’
[69] In New South Wales the Defamation Act 2005, which is replicated
in the other states of Australia, allows the publisher of
defamatory
matter to make a written ‘offer to make amends’
7
to the aggrieved person within a limited time. An offer to make
amends must include (s 15(1)):
‘
(d) .
. . an offer to publish, or join in publishing, a
reasonable
correction
of the matter in question or, if the offer is limited to any
particular defamatory imputations, the imputations to which
the offer
is limited, and
(e) if material containing the
matter has been given to someone else by the publisher or with the
publisher's knowledge . . . must
include an offer to take, or join in
taking, reasonable steps to tell the other person that the matter is
or may be defamatory
of the aggrieved person, and
(f) must include an offer to pay
the expenses reasonably incurred by the aggrieved person before the
offer was made and the expenses
reasonably incurred by the aggrieved
person in considering the offer . . .’.
The offer may also include, but this is not obligatory, ‘any
other kind of offer’ to redress the harm, including an
offer to
pay monetary compensation. If the offer is accepted, and its terms
are carried out, the action comes to an end. If it
is not accepted,
then the fact that the offer was made is a defence to the action if,
amongst other things, the offer was reasonable.
[70] In New Zealand the Defamation Act 1992 permits the plaintiff in
an action for defamation to ask for, without more, a ‘declaration

that the defendant is liable to the plaintiff in defamation’. A
plaintiff may also ask the court to recommend that the defendant

‘publish or cause to be published a correction of the matter
that is the subject of the proceedings’. If the court
makes
such a recommendation, and it is complied with, the proceedings end.
If the defendant fails to comply with such a recommendation,
and the
court finds in favour of the plaintiff, then the failure must be
taken into account in the assessment of damages, and the
plaintiff is
generally entitled to solicitor and client costs.
[71] The function of the civil law is to right a wrong, and its first
objective must be to repair the damage so far as that is
possible.
There is no reason why a wrong must be left to fester, on the basis
that damages can later salve the festering, when
the wrong is capable
of being repaired before the festering occurs. A 1995 report of the
New South Wales Law Commission, referred
to by Willis J in
Mineworkers Investment Co (Pty) Ltd v Modibane
,
8
made the point succinctly when it called damages as the sole remedy
for defamation ‘remedially crude’.
[72] It seems to me that our courts are quite capable of
expeditiously granting reparatory remedies, without damages, even
without
the intervention of legislation. As it is, an order that
damages are payable implicitly declares that the plaintiff was
unlawfully
defamed, thereby clearing his or her name, and there can
be no reason why a plaintiff should be forced to have damages as a
precondition
to having the declaration. And if a declaration alone is
claimed, there can also be no reason why it should not be claimed in
the
more expeditious procedure of application, instead of by action,
which is traditionally considered to be necessary when illiquid

damages are claimed.
9
If a defence advanced by the defamer were to raise a factual dispute,
then the factual dispute is capable of being resolved by
oral
evidence in the ordinary way, and to be resolved expeditiously.
[73] I also see no reason why a court is not capable of granting
other reparatory remedies of the kind that I have mentioned, and
that
were advanced by counsel for the amici, if that is what the occasion
requires. That they have not traditionally been granted
is by itself
not a reason to preclude them. The law is there to right a wrong and
if an appropriate way of doing so presents itself
then I think it
would be most unfortunate if a court were to spurn it for no reason
but that it is new. The common law at any time
is not set in stone.
It owes its existence to the courts, which have always taken new
steps from time to time so that the law remains
relevant to its
times. As Oliver Wendell Holmes Jr. said in the introduction to his
work on the common law,
10
‘[t]he substance of the law at any given time pretty nearly
corresponds, so far as it goes, with what is then understood
to be
convenient . . .’. Lord Tomlin in
Pearl Assurance Company v
Government of the Union of South Africa,
11
cited in by Davis AJA in
Feldman (Pty) Ltd v Mall,
12
described the Roman-Dutch system of law as
‘
a
virile living system of law, ever seeking, as every system must, to
adapt itself consistently with its inherent basic principles
to deal
effectively with the increasing complexities of modern organised
society. That those principles are capable of such adaption
cannot be
doubted.’
[74] The Constitutional Court recently reminded us of that again in
Le Roux v Dey
,
13
in which it said that the Roman-Dutch law was a ‘rational,
enlightened system of law, motivated by considerations of fairness’,

a feature that is ‘sometimes lost from view in pursuit of
doctrinal purity’,
14
and that the restriction of remedy in defamation to damages is ‘an
unacceptable state of affairs’.
15
Referring to the value of apology and retraction it said that ‘it
is time for our Roman-Dutch common law to recognise the
value of this
kind of restorative justice’,
16
and it indeed did so in that case.
[75] If this court is capable of introducing new rights, like the
right to recover pure financial loss in delict,
17
and to an administrative hearing where a person has a legitimate
expectation of being heard,
18
I have little doubt that it may also introduce new remedies to
vindicate existing rights.
[76] For a century and more, in this country and abroad, it has been
the law that trading corporations, like natural persons, have
an
interest in their reputations that is protectable by the action for
defamation. Thus in
South Hetton Coal Co Ltd v North-Eastern News
Association Ltd,
19
the English Court of Appeal held that the law of libel was one and
the same for both, and that remains the law in that country.
With one
exception, that is also the case in other countries that have adopted
the English common law. In this country, in
G A Fichardt Ltd v The
Friend Newspapers Ltd
,
20
it was accepted by this court, almost as if it was self-evident, that
a trading corporation, like a natural person, may protect
its
reputation through the action for defamation.
21
To the extent that any doubt might have remained on that score, that
was put to rest in
Dhlomo NO v Natal Newspapers (Pty) Ltd
22
(which also extended the protection to non-trading corporations in
some circumstances).
23
[77] The right of a trading corporation to protect its reputation by
the action for defamation has more recently been questioned
under the
growing weight of the right to free expression, and in all the states
of Australia the action has been abolished for
all but small
corporations whose reputation is tied up with that of natural
persons.
24
We were invited to follow that example in this case, but I do not
think we should do so, though with the reservation I have already
to
relating to remedies.
[78] This court has found, in considered judgments, that a trading
corporation has an interest in its reputation that is deserving
of
legal protection. It has also found that the corporation is entitled
to have redress in an action for defamation, which allows
a remedy
upon proof alone of impairment to its reputation, absent the defamer
showing legal cause for having done so. Those findings
formed part of
the ratio decidendi of the decision in
Dhlomo
when it affirmed
that right, and there can be no quarrel with the ratio so far as that
goes. I see no reason why a trading corporation
should not have the
right to insist that others must not damage its good name unless they
show legal justification for doing so,
and that it is entitled to a
legal remedy when that occurs. No doubt the right to express oneself
is restrained to a degree by
knowing that criticism of a corporation
will have to be justified, but that restraint is so slight in
comparison to the infringement
that it can hardly be said not to be
justified. The difficulty lies only with the further finding in
Dhlomo
, which has been followed by other cases in this court,
that damages may be awarded to vindicate that right.
[79] Damages in our law are meant to compensate for loss.
25
Humans suffer loss from defamation because humans experience feeling,
and they experience feeling because they are alive. They
experience
the feeling of pleasure and they experience the feeling of pain. A
human experiences the feeling of joy and the feeling
of grief. And
amongst the desires of humans is to enjoy the feeling that comes with
a dignified life. That desired feeling waxes
when they are held in
esteem and it wanes when they are not. The loss that is compensated
for when a human is defamed is the diminution
in the desired feeling
that comes with living a dignified human life. What is compensated
for is harm to feelings.
[80] Juristic persons do not experience feeling because they exist
but they are not alive. They are capable of possessing property,
and
engaging in property transactions, because the law is capable of
giving them that capacity, but the law has no capacity to
bring them
to life. They are not capable of sustaining human loss from
defamation because that is unique to human beings. If a
trading
corporation sustains loss from defamation it must necessarily be loss
of a different kind.
[81] We are not concerned in this case with the reasons why a trading
corporation has an interest in its reputation, some of which
are
given in the judgment of my colleague. We are concerned with the loss
that is caused to the corporation when that interest
is infringed –
if any loss is sustained at all. It is true that employees might feel
less pride in working for a corporation
that has been defamed, but a
corporation exists separately from its human associates, and the
corporation itself does not experience
that lack of pride. And it is
true that a corporation has an interest in being held in public
esteem, but it feels nothing when
that esteem is lost.
[82] I am not able to picture any loss that might be sustained by a
trading corporation that is defamed – if there is loss
at all –
that does not sound in property, no matter how indirectly or remotely
that loss might be brought about. But if there
is one thing of which
one can be quite certain, it is that if there is loss at all it is
not loss to its feelings. As Professor
Neethling has said of what he
calls ‘eergevoel’ and ‘gevoelslewe’, which
are what concern us in defamation,
in his seminal work on rights of
personality:
26
‘
Weens
die feit dat ‘n aantasting van hierdie persoonlikheidsgoedere
uitsluitlik in ‘n gevoelskrenking geleë is
en ‘n
regspersoon, soos reeds betoog is, nie gevoelens het wat gekrenk kan
word nie, is ‘n erkenning en beskerming
van hierdie
persoonlikheidsgoedere in die geval van ‘n regspersoon
onbestaanbaar.’
[83] My colleague has amply explained that property loss is
recoverable through the Aquilian action and not the actio injuriarum.

I think it would be most extraordinary if the law were to deny to a
trading corporation the right to recover damages for proved
property
loss in an action for defamation, yet allow it to recover damages for
assumed property loss that is not shown to have
been sustained at
all. It would mean that, in some cases at least, a trading
corporation would be best advised not to show that
it has suffered
loss, even if it is easily capable of doing so, because otherwise it
would need to recover its loss under the more
rigorous standard of
the Aquilian action. The present case demonstrates the absurdity. The
respondent alleges that it has indeed
suffered loss, which it is told
it may not recover in these proceedings, but it is nonetheless said
to be entitled to compensatory
general damages, although there is no
reason to think it has lost any more than it might in due course
recover.
[84] That property loss must be recovered under the Aquilian action
goes beyond mere doctrinal purity. The actio injuriarum vindicates

personality rights. Rights of that kind are not traded on markets,
and they have no empirical money value. But if harm to those
rights
is to be compensated at all, then money is all that there is for
doing so. When personality rights are infringed a court
does the best
it can, and determines, in general, the amount that it considers
sufficient to compensate for the loss. Damages that
are awarded under
the actio injuriarum for injury to personality rights are general,
and not specific to the money value of the
loss, because the loss has
no demonstrable money value.
[85] It is different when it comes to property rights. Rights of
property are traded in markets and they have an empirical value
in
money. If a court is to make an award of money that is compensatory
alone, it must award not one cent more than the money value
of the
loss, because otherwise the excess is not compensation but a penalty.
Thus the Aquilian action requires a plaintiff to quantify
and prove
the money value of the loss and will award no more than that money
value, because it is a compensatory action. The amount
of money that
is awarded for infringement of property rights is specific to the
money value of the loss.
[86] When general damages are awarded to a human under the actio
injuriarum it is ordinarily not possible to show that they are
other
than compensatory, because harm to dignity cannot be determined
empirically in terms of money. The award might be excessive
relative
to other awards but one can say nothing more than that. There are
some cases in which courts have made awards which they
have suggested
included a punitive element, but Professor Burchell has pointed out
that awards that were made in those cases might
just as well be
described as ‘aggravated’ (but still compensatory)
damages,
27
increased from the norm because the conduct of the defamer has been
such as to cause more harm than might normally be expected.
[87] The opposite is true if damages are awarded for unquantified
harm to property. It is not possible to show that they are
compensatory
alone – or, indeed, compensatory at all –
because the loss indeed has a money value, and if that value is not
established
it cannot be said that the damages are equivalent to the
loss. A defendant who is made to pay money for unquantified property
loss
will have good reason to complain that he or she is being
punished, for no reason but that it is not possible to show the
contrary.
General damages to compensate for property loss is an
enigma that is foreign to the principles of our law of compensatory
damages.
[88] When the reputation of a human is harmed, the law presumes
consequent loss that is compensatable by general damages
28
– though it is open to the defamer to rebut that presumption.
If proof of actual loss is not to be required when a trading

corporation is defamed, then that legal presumption must necessarily
be changed so as to presume loss of a different kind, because
a
trading corporation is not capable of suffering the kind of loss that
is presumed when a human is defamed. And if general damages
are to be
allowed in compensation for that loss, then the substituted loss that
is presumed must necessarily not be property loss,
because the
principles of our law do not allow for property loss to be
compensated by general damages.
[89] So what is the consequent loss, then, that is to be presumed
when a trading corporation is defamed, if it is not to be property

loss? It is not identified in the cases, it was not identified in
argument before us, and it is not identified by my colleague.
Indeed,
every case that mentions the loss that a trading corporation suffers
when it is defamed, speaks of it only in terms of
property.
[90] This court has never pertinently asked what kind of loss is to
be presumed when a trading corporation sues for defamation.
Fichardt
says nothing on the subject. In
Die Spoorbond v South African
Railways; Van Heerden v South African Railways
,
29
Watermeyer CJ assumed, without deciding, that a trading corporation
may recover damages for defamation without proof of actual
loss, so
that judgment is not helpful on the issue.
30
Schreiner JA said no more than that ‘some logical
justification’ could be found in our law for the recognition of
an action for damages by a trading corporation, but also decided the
case on the assumption that that was so. Cases decided after
Dhlomo
31
based themselves on that decision and had no cause to consider the
question.
[91] In
Dhlomo
the reason why actual loss need not be proved
when a trading corporation sues for defamation was disposed of by
Rabie ACJ in a
single but important sentence, when he said:
32
‘
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.’
[92] The ratio of the judgment – the legal rule that it states
33
– is abundantly clear from that reason. Expressed colloquially,
the reason for not requiring proof of actual loss was no
more than
what holds good for the goose also holds good for the gander. But
what holds good for a human goose, and also for a trading
corporation
gander, when both succeed in an action for defamation, are only two
of the ordinary elements for defamation. Both have
established –
as a matter of law – that they have protectable reputations.
Both have established – as a fact
– that they have been
defamed. But the human has established – by legal presumption –
that he or she has suffered
loss. That presumption is not capable of
being applied to a trading corporation without alteration, and no
such alteration was
suggested by the learned judge.
[93] There are only two possible inferences to be drawn from the fact
that no reference was made to the presumption of loss. One
is that
the learned judge meant the legal rule to be that a trading
corporation must be presumed to have suffered the same harm
as a
human, but that is so absurd that it can be rejected out of hand that
that is what he meant. The only other possible inference
is that he
meant the rule to be that loss need not be established by a trading
corporation at all – whether that be by presumption
or by
evidence.
[94] The inexorable conclusion from that ratio is that damages
awarded to a trading corporation are intended to be punitive and
not
compensatory. For if there is to be no presumption of loss at all,
and no loss needs to be proved, it follows that it is not
capable of
being said that the damages are compensatory.
[95] This court in
Caxton Ltd v Reeva Forman (Pty) Ltd
34
seems to have been of the view that general damages might in some way
combine unquantified property loss, and punitive damages,
because in
that case the major corporation proved its property loss, but general
damages were nonetheless awarded. With regard
to general damages
Corbett CJ said the following:
‘
The
injury to trade reputation would normally be reflected to a large
extent in a reduced volume of business and lower profits.
But injury
by way of loss of profits is catered for by an award of special
damages. I recognise that there is room in a case such
as this for
claims for both special and general damages indeed the contrary was
not argued by appellants’ counsel –
but it cannot be
denied that notionally there is a measure of overlapping between the
two claims; and I consider that this is a
factor which must be taken
into account in computing the general damages in this case. It is not
clear to me that the trial Judge
did so.’
At
574J-575B.
On that basis he reduced the general damages award.
[96] With regard to the minor company, which proved no actual loss,
he said the following:
‘
The
learned trial Judge concluded – rightly in my view – that
second respondent did suffer actual loss of profits, but
in view of
the difficulties of quantification flowing from the defects in the
company’s accounting records he awarded a lump
sum of R75 000
to cover both general and special damage.’
35
[97] It cannot be contested that in the first case the general
damages were solely punitive. To the extent that they corresponded

with the ‘measure of overlapping’ with the special
damages, they repeated what had already been awarded.
36
And to the extent that they did not overlap there was no suggestion
that anything other than the proved loss had been sustained.
In the
second case, even if unquantifed loss of profits is capable of being
proved, which the trial court held that it had been,
it cannot be
said that the award did not exceed those alleged profits.
[98] But apart from demonstrating that the awards in that case can
only have been punitive, at least in part, I do not think that

anything should be drawn from the decision, because the issue now
before us was not placed in issue, and received no pertinent

consideration.
[99] In my view, then, the rule of law laid down in
Dhlomo
can
only have been that loss consequent upon defamation is not an element
of an action for general damages by a trading corporation,
and that
damages may be awarded solely to punish. I think that is also the
unarticulated premise upon which all the cases have
been decided –
I can see no other basis for the decisions – and I think that
the true nature of damages awarded in
such cases should not be left
hidden in a closet. Indeed, my colleague recognises, with reference
to
Buthelezi v Poorter,
37
which was adamant on that score, that the award of general damages to
a trading corporation serves a deterrent function (which
is one of
the purposes of punishment), but it is not clear to me from his
judgment what compensatory function it serves in addition.
[100] I find myself driven to conclude that damages for defamation of
a trading corporation, if no actual loss is proved, can only
be said
to be punitive, for no reason but that the contrary cannot be shown.
Even if proof of unquantified property loss were to
be shown, the
defamer is entitled to complain that he or she is being punished, at
least to a degree, because it is not capable
of being shown that the
damages do not exceed that unquantified loss.
[101] Damages as punishment for defamation is by no means unusual. It
is accepted in the English law jurisdictions, though the

circumstances in which they may be imposed are usually
circumscribed,
38
and for that reason alone cases from those countries ought to be
approached with some care. Moreover, in English law defamation
is a
discrete and comprehensive tort, with its particular rules that have
been developed over time, that are not necessarily consistent
with
the principles of our law. While it is often beneficial to draw from
foreign jurisdictions it has been said many times that
care should be
taken to ensure that what is extracted conforms with the principles
of our law.
[102] Once it is accepted that general damages to a trading
corporation are punitive, or at least that the contrary cannot be
shown, the question arises whether punitive damages are permitted in
our law. Professor Burchell has given consideration to the

uncertainty that existed at the time he was writing,
39
but this court has since said, in
Mogale v Seima
,
40
that damages to punish may not be awarded in an action for
defamation. Harms JA expressed that as follows:
‘
As to
the general approach to quantum, there are many dicta that create the
impression that compensation may be awarded as a penalty
imposed on
the defendant and that the amount is not only to serve as
compensation for the plaintiff’s loss of dignity, for
example
Die
Spoorbond and Another v South African Railways, Van Heerden and
Others v South African Railways
1946
AD 999
at 1005. These dicta were put in context by Didcott J in
Fose
v Minister of Safety and Security
[1997] ZACC 6
;
1997
(3) SA 786
(CC) . . . at 830 para [80] when he said the following:
“
Past
awards of general damages in cases of defamation,
injuria
and
the like coming before our courts have sometimes taken into account a
strong disapproval of the defendant's conduct which was
judicially
felt. That has always been done, however, on the footing that such
behaviour was considered to have aggravated the actionable
harm
suffered, and consequently to have increased the compensation payable
for it. Claims for damages not purporting to provide
a cent of
compensation, but with the different object of producing some
punitive or exemplary result, have never on the other hand
been
authoritatively recognised in modern South African law.”
In a like vein Hattingh J said
in
Esselen v Argus
Printing and Publishing Co Ltd and others
1992
(3) SA 764
(T) at 771G-I:
‘‘
In
a defamation action the plaintiff essentially seeks the vindication
of his reputation by claiming compensation from the defendant;
if
granted, it is by way of damages and it operates in two ways –
as a vindication of the plaintiff in the eyes of the public,
and as
conciliation to him for the wrong done to him. Factors aggravating
the defendant's conduct may, of course, serve to increase
the amount
awarded to the plaintiff as compensation, either to vindicate his
reputation or to act as a
solatium
.
In general, a civil court, in a defamation case, awards damages to
solace plaintiff's wounded feelings and not to penalise or
to deter
the defendant for his wrongdoing nor to deter people from doing what
the defendant has done. Clearly punishment and deterrence
are
functions of the criminal law, not the law of delict. Only a criminal
court passes sentence with the object of
inter
alia
deterring
the accused, as well as other persons, from committing similar
offences in future; it is not the function of a civil court
to
anticipate what may happen in the future or to 'punish' future
conduct (cf
Lynch
v Agnew
1929
TPD 974
at 978 and Burchell
The
Law of Defamation in South Africa
(1985)
at 293).”’
[103] But quite apart from what was said by this court, the matter
seems to me to have been put to rest authoritatively by
Fose v
Minister of Safety and Security.
41
That case concerned a claim for ‘constitutional damages’
for assault, including ‘punitive damages’, over
and above
ordinary compensatory damages, but I think the ratio binds us to find
that it applies as much to punitive damages for
defamation.
42
[104] In that case the claim was dismissed, on the grounds that the
Constitution does not permit punishment without the legal safeguards

of criminal proceedings.
43
Ackermann J referred with approval to criticisms of punitive civil
damages, and said the following:
44
‘
I can
see no reason at all for perpetuating an historical anomaly which
fails to observe the distinctive functions of the civil
and the
criminal law which sanctions the imposition of a penalty without any
of the safeguards afforded in a criminal prosecution.
I can do no
better than repeat and adopt the following telling condemnation of
Lord Devlin:
“
I do
not care for the idea that in matters criminal an aggrieved party
should be given an option to inflict for his own benefit
punishment
by a method which denies to the offender the protection of the
criminal law”
45
and the incisive comments of
Lord Reid:
“
To
allow pure punishment in this way contravenes almost every principle
which has been evolved for the protection of offenders.
There is no
definition of the offence . . . (t)here is no limit to the punishment
except that it must not be unreasonable . . .
(a)re we wasting
sympathy on vicious criminals when we insist on proper legal
safeguards for them?”
46
In my view it becomes even more
unacceptable in a country which has become a constitutional State,
which has enacted an interim
Constitution which is the supreme law of
the land and in which extensive criminal procedural rights are
entrenched.’
[105] I have expressed the view that general damages for defamation
can never be said not to be punitive, even if that is so only
in
part, if only because the contrary cannot be shown, and if they are
only partly punitive the good is not capable of being separated
from
the bad. I cannot see how we can compel a defendant to pay money for
a wrongful act if he or she is justified in saying that
it serves to
punish. Indeed, I think it would be absurd if a trading corporation
that is not capable of exacting punishment for
criminal defamation
because it is not able to demonstrate its elements,
47
were to be capable nonetheless of exacting punishment from the less
exacting standards of the civil law. In those circumstances
I
consider
Fose
to bind me to find that they are
constitutionally prohibited, if for no reason but that to punish
without the protections that
are afforded by the criminal law is not
constitutionally permitted. Even if I had not been bound
Fose
in
that regard I would in any event not hesitate to reach that
conclusion for the reasons given in that case.
[106] It seems to me also to follow inexorably that to impose general
damages on a person who has defamed a trading corporation
must then
also be an unjustified invasion of the protected right of free
expression. It is true that the European Court of Human
Rights found
in
Steel and Morris v The United Kingdom
48
that the award of damages to a trading corporation will not
necessarily infringe the protection of free speech in s 10 of the
European Charter. But that was on the basis that the state ‘enjoys
a margin of appreciation as to the means it provides under
domestic
law to enable a company to challenge the truth, and limit the damage,
of allegations which risk harming its reputation’,
49
and it is for the courts in this country to decide what falls within
our own ‘margin of appreciation’.
[107] It needs also to be borne in mind that, notwithstanding the
decision in
Steel and Morris
, it was by only a bare majority
that the House of Lords in
Jameel (Mohammed) v Wall Street Journal
Europe Sprl
50
affirmed the rule in that jurisdiction that damages to a trading
corporation without proof of actual loss did not offend free speech.

I find nothing in the reasons that were given by Lord Bingham for
affirming the rule that persuades me that it ought also to be
the
rule in this country. It is true that a trading corporation has an
interest in its reputation, as Lord Bingham found, and that
is also
recognised in our law, but it does not follow that it must be
protected by what amounts to a criminal fine. Baroness Hale,

supported by Lord Hoffman, opined that there must at least be
evidence of the ‘likelihood’ of financial loss, observing

that
‘
[t]hese
days, the dividing line between governmental and non-governmental
organisations is increasingly difficult to draw. The power
wielded by
the major multi-national corporations is enormous and growing. The
freedom to criticise them may be at least as important
in a
democratic society as the freedom to criticise the government
.’
51
[108] The position, in my view, is even clearer here. Once it cannot
be said that general damages are not punitive, and in my view
that
will invariably be so, then quite clearly the award of prohibited
damages will not justify an intrusion upon freedom of expression.
It
is different where a human is defamed, because then the award cannot
be said to be other than compensatory, and it is not controversial

that compensatory damages for harm to human dignity justifies that
intrusion.
[109] I am not sure that there really was anything for us to decide
in this case that has not already been authoritatively decided.
Dhlomo
affirmed that a trading corporation has an interest in
its reputation that requires legal protection, and in that respect I
agree.
Upon analysis, its ratio was that proof of unlawful
defamation, without more, entitles it to relief, with the inevitable
implication
that general damages might be awarded to punish.
Mogale
found that our law does not allow for damages to punish.
Fose
went further and found that they are constitutionally prohibited, for
denying the protections of the criminal law, and I think
that it must
follow that they are also an unjustified intrusion upon freedom of
expression. For both reasons, then, I would disallow
the claim for
general damages.
[110] But I need to reiterate that a trading corporation is entitled
to a remedy to vindicate the interest that it has in its reputation
–
and I would find that even if
Dhlomo
was not binding upon us
in that respect. I have also pointed out that there are alternative
remedies available for that purpose.
I am not sure why it should be
thought to be uncertain what those remedies are. Leaving aside the
availability of an interdict
against anticipated future conduct, I
have already said that a trading corporation – indeed, any
plaintiff in an action for
defamation – is entitled to a
declaration of falsity in respect of defamation that has already
occurred. If it is warranted
by the occasion, in my view a plaintiff
is also entitled to an order directing publication of a correction,
or publication of a
retraction, with or without an apology, or an
order directing that the judgment or a summary be published, or
directing publication
of the correct facts, as submitted on behalf of
the amici. Indeed, as pointed out by their counsel, an order
incorporating substantially
all those features was sought, and
granted by Musi J (in my respectful view correctly) in
University
of Pretoria v South Africans for the Abolition of Vivisection.
52
What was claimed, and granted, in that case, was a declaration that
the respondents had published defamatory and false statements,
an
order directing them to publish an unqualified statement that what
had been published was false and that they retract it and
apologise,
and an order directing that the statement to be published must
include the true facts, which were set out extensively
and in detail
in the order.
[111] It is true that an order of that kind will not serve to punish,
and that the prospect of such an order being granted will
have a
lesser deterrent effect than an award of damages. But if it is
punishment and deterrence that is really wanted then civil

proceedings are not the place to exact them. Unlawful defamation
constitutes a criminal offence – as this court recently

affirmed in
Hoho v S
53
– and it is the criminal process that must be looked to for
punishment and deterrence, as in the case of any act that constitutes

both a criminal offence and a civil wrong. Indeed, in my view it
would be unconscionable if a plaintiff were to be permitted to
abjure
its criminal remedy in favour of exacting punishment and deterrence
through the medium of the civil law.
[112] For those reasons, and the reasons given by my colleague for
dismissing the claim for special damages, I agree with counsel
for
the appellants that damages are not recoverable by the respondent in
this action. In the circumstances I would extend the order
proposed
by my colleague so as to uphold the special plea in relation to
general damages as well and dismiss both claims.
________________
R W NUGENT
JUDGE OF APPEAL
SNYDERS JA
[113] I have had the benefit of reading the judgments of both of my
colleagues, Brand JA and Nugent JA. I agree with the judgment,

conclusion reached and order proposed by Brand JA. Insofar as the
judgment of Nugent JA is concerned, I agree with it, but for
the
observations that follow.
[114] The special plea taken is that a claim for
defamation as a derivative from the
actio
iniuriarum
is not available to the
respondents for the recovery of general damages. The point that
general damages are not available as a remedy
to a juristic person
that avails itself of a claim for defamation, as found by Nugent JA,
was not raised in the special plea, nor
argued on behalf of the
appellants. His judgment, compelling as it is, should therefore not
lead to a dismissal of the respondent’s
claim for general
damages. Counsel for the amici argued that a trading corporation does
not have a claim for defamation, and only
if this court is to hold
that it does have such a claim, it should be for remedies other than
damages. Brand JA has dealt fully
with the reasons why the first
point is not to be upheld and at no stage was a solution suggested to
the implications stated in
para 40.3 of his judgment.
[115] Insofar as the second point is concerned,
even though I agree with the view expressed by Nugent JA, I am
disinclined to deny
the respondents at this stage of the proceedings,
general damages as a possible remedy considering that it has been
available to
them for as long as the action for defamation itself has
been available to them, the point has not been raised between the
parties
to the litigation and we have not had the benefit of full
ventilation of the issue of the availability or appropriateness of
alternative
remedies in the relevant factual context. It is
conceivable that an award of damages may, in a given situation, be
the only appropriate
alternative, unsatisfactory as it may be, that
would prevent the denial of a remedy to a juristic person for a
legitimate claim.
The remarks of Froneman and Cameron JJ in
Le
Roux v Dey
[2011] ZACC 4
at paras 195
to 202, also referred to by Brand JA at para 53 above, are apposite.
It is clear that the direction taken by Nugent
JA needs to be
explored in future litigation of this kind.
________________
S SNYDERS
JUDGE OF APPEAL
APPEARANCES
For Appellant: J Suttner SC (with him R Moultrie)
Instructed by:
Garratt Mbuyisa Neale Inc, Johannesburg
Rossouws Attorneys, Bloemfontein
For Respondent: A Subel SC (with him A R G Mundell SC)
Instructed by:
Marie-Lou Bester Inc, Johannesburg
Bezuidenhout Attorneys, Bloemfontein
For the Amici Curiae: W Trengove SC (with him K Hofmeyer)
Instructed by:
Webber Wentzel, Johannesburg
Honey Attorneys, Bloemfontein
1
Section
16(1): ‘Everyone has the right to freedom of expression, which
includes (a) freedom of the press and other media;
(b) freedom to
receive or impart information or ideas; (c) and (d) . . .’.
2
Khumalo
v Holomisa
[2002] ZACC 12
;
2002 (5) SA 401
(CC) para 33.
3
Section
36(1)(e) of the Constitution.
4
J
Fleming: ‘Retraction and Reply: Alternative Remedies for
Defamation’
(1978) U B C Law Review
15 at 15. See, too,
Frasier ‘An Alternative to the General-Damage Award for
Defamation (1968)
20 Stan L Rev
504; Marc A Franklin ‘A
Declaratory Judgment Alternative to Current Libel Law’ (1986)
74 California L Rev
809.
5
The
ordinary elements of unlawful defamation are conveniently summarized
in
Holomisa
, above, para 18.
6
Jonathan
M Burchell
The Law of Defamation in South Africa
(1985) p
292, seems to suggest, that damages in addition might be required
for that purpose, though it might be that I am reading
more into his
observations than is justified. Nonetheless, I cannot see how a
declaration that there was no truth in the defamatory
statement is
added to in that respect by damages.
7
The
English and Irish statutes have comparable provisions.
8
2002
(6) SA 512
(W) para 26.
9
Cadac
v Weber-Stephen
2011 (3) SA 570
(SCA) paras 13 and 14 held that
even a claim for unliquidated damages is capable of being brought
upon application.
10
O
W Holmes Jr
The Common Law
(Little Brown and Company 1881) p
1.
11
Pearl
Assurance Company v Government of the Union of South Africa
1934
AC at 578.
12
Feldman
(Pty) Ltd v Mall
1945 AD 733
at 789.
13
2011
(3) SA 274
(CC). The paragraphs of the judgment of Froneman and
Cameron JJ that I refer to below were supported by all the members
of the
court: see para 9
14
Para
198, citing John Dugard ‘No Jurisdiction Over Abducted Persons
in Roman-Dutch Law: Male Captus, Male Detentus (1991)
7
SAJHR
199
at 203, and John Dugard ‘Grotius, The Jurist and International
Lawyer: Four Hundred Years On’
(1983) 100
SALJ
213
at
216-7.
15
Para
195.
16
Para
197.
17
Administrateur,
Natal v Trust Bank van Afrika Bpk
1979 (3) SA 824
(A).
18
Administrator,
Transvaal v Traub
[1989] ZASCA 90
;
1989 (4) SA 731
(A).
19
South
Hetton Coal Co Ltd v North-Eastern News Association Ltd
[1894] 1
QB 133
(CA).
20
G
A Fichardt Ltd v The Friend Newspapers Ltd
1916 AD 1.
21
See,
too, Melius de Villiers
The Roman and Roman-Dutch Law of Injuries
pp 59-60.
22
Dhlomo
NO v Natal Newspapers (Pty) Ltd
1989 (1) SA 945
(A).
23
At
954D-H.
24
For
example, s 9 of the New South Wales Defamation Act 2005.
25
Mogale
v Seima
2008 (5) SA 637
(SCA).
26
J
Neethling
Persoonlikheidsreg
4ed (1998) p. 89. See, too, J
Neethling and J M Potgieter ‘Persoonliksheidsregte van ‘n
Resgspersoon’
1991 (54) THRHR 120.
27
Burchell
Defamation
, above, pp 290-294. See, too, Jonathan Burchell
Personality Rights and Freedom of Expression: The Modern Actio
Injuriarum
(1998) p 448.
28
Burchell
The Law of Defamation
, above, p 144.
29
1946
AD 999.
30
At
1008.
31
Caxton
Ltd v Reeva Forman (Pty) Ltd
[1990] ZASCA 47
;
1990 (3) SA 547
(A);
Argus
Printing and Publishing Co Ltd v Inkatha Freedom Party
1992 (3)
SA 579 (A).
32
At
953C-D.
33
Per
Schreiner JA in
Fellner v Minister of the Interior
1954 (4)
SA 523
(A) at 542E.
34
[1990] ZASCA 47
;
1990
(3) SA 547
(A).
35
At
575J-576A.
36
Although
allowance was made for the ‘measure of overlapping’ by
reducing the award it is not possible to say that
the reduction
corresponded with that ‘measure of overlapping’.
37
Buthelezi
v Poorter
1975 (4) SA 608
(W) at 617E-F.
38
Gatley
on Libel and Slander
10 ed (2004) para 9.15. The circumstances
in which punitive damages may be awarded are expressly limited by s
28 of the New Zealand
Act, and by s 32 of the Irish Act. Section 37
of the New South Wales Act (and comparable legislation in the other
states) prohibits
punitive damages.
39
Burchell
Defamation,
above pp 290-294.
40
Above,
paras 10 and 11.
41
Fose
v Minister of Safety and Security
[1997] ZACC 6
;
1997 (3) SA 786
(CC).
42
Burchell
Personality Rights
, p 474, suggests that the effect of the
decision might be more confined, but I can see no distinction in
principle.
43
See
Hoho v S
[2008] ZASCA 98
;
[2009] 1 All SA 103
(SCA) para 33 for the difference
in proving civil and criminal defamation respectively.
44
Para
70.
45
Rookes
v Barnard
[1964] AC 1129
(HL) at 1230.
46
Broome
v Cassel & Co
[1972] AC 1027
(HL) at 1087.
47
See
the requirements for criminal defamation in
Hoho v S
, above,
para 33.
48
Steel
and Morris v The United Kingdom
[2005] ECHR 103.
49
Para
94.
50
Jameel
(Mohammed) v Wall Street Journal Europe Sprl
[2006] UKHL 44
;
[2007] 1 AC 359
(HL).
51
Para
158.
52
University
of Pretoria v South Africans for the Abolition of Vivisection
2007 (3) SA 395
(O).
53
Above.