Argus Printing and Publishing Co Ltd v Inkatha Freedom Party

• Jurisdiction: South Africa
• Judge: Corbett CJ, Hoexter JA, Hefer JA, E M Grosskopf JA, Goldstone JA
• Judgment Date: 15 May 1992
• Citation: 1992 (3) SA 579 (A)
• Hearing Date: 06 March 1992
• Court: Appellate Division

E E M Grosskopf JA:

In Dhlomo NO v Natal Newspapers (Pty) Ltd and Another 1989 (1) SA 945 (A) ('the Natal Newspapers case') this Court held (at 954D) that a non-trading corporation may sue for defamation if a defamatory statement concerning the way it conducts its affairs is calculated to cause it financial prejudice. However, this did not necessarily mean, the Court stated, that every non-trading corporation F would in all circumstances be entitled to sue for defamation - it was conceivable that such a corporation might, in certain circumstances, be denied the right to sue on the ground of considerations of public or legal policy. Indeed, the Court said (at 954G), the Natal Newspapers case could conceivably give rise to the question whether it would be in the public interest to permit attacks on political bodies, whose policies and actions G are normally matters for debate on public and political platforms, to be made the basis of claims for damages in courts of law.

The question which, it was said, could conceivably arise from the Natal Newspapers case now in fact falls to be answered in the present case. The facts are not in dispute. The respondent, the Inkatha Freedom Party H ('Inkatha') (which, incidentally, was the successful appellant in the Natal Newspapers case, in that case represented by its Secretary-General), now, after amendments to its constitution and a consequential amendment to its pleadings, appears in its own name. It, together with a co-plaintiff, issued summons in the Witwatersrand Local Division against the present I appellant, the Argus Printing and Publishing Co Ltd, for damages in respect of defamatory statements alleged to have been published in two articles in The Sowetan, a newspaper of which the appellant was the proprietor, publisher and printer. Mr J Latakgomo, the editor of The Sowetan, was joined as second defendant. These two articles reported on the same events as those dealt with in the articles which was in issue in J the

E M Grosskopf JA

Natal Newspapers case, and the nature of the alleged defamations complained of is similar. Since the nature and effect of the articles are not in dispute it is not necessary to deal with them in any detail. A

After close of pleadings in the present case the parties came to an agreement to limit the issues. This agreement was embodied in a minute of B a pre-trial conference held in terms of Rule 37 of the Uniform Rules of Court. The minute recorded that the claim by the second plaintiff had been disposed of, and that the trial would continue with Inkatha as the sole plaintiff. Neither party would lead evidence, and the parties agreed that the sole issue for adjudication was

'. . . inasmuch as Inkatha is a non-trading corporation (a universitas C capable of suing and being sued in its own name) . . . which depends on financial support from the public, . . . whether Inkatha, as such a body, has the right to claim damages for defamation in respect of the articles complained of, assuming those articles, for the purposes of argument, to be defamatory in the manner alleged by the plaintiff, and assuming further that the articles were calculated to cause financial prejudice in the nature of loss of membership dues and donations'.

D Attached to the minute was an agreed statement of facts concerning Inkatha's nature and aims, as well as a copy of its constitution at the time. For present purposes it will suffice to quote the following passage from the statement of facts:

'Inkatha may be described as a political body in the wide sense in that E it enters into debates of national and international significance, and in the narrow sense in that Inkatha puts up candidates for participation in local authority and parliamentary elections within KwaZulu.'

Although expressions such as 'assuming . . . for the purposes of argument' were used in the minute, it is clear that the question posed to F the Court was not a merely theoretical one. Indeed, the minute proceeded to state unequivocally that, if the Court were to hold that Inkatha did not have a right to claim damages for defamation, its claim should be dismissed with costs, but if the Court were to hold otherwise, judgment should be entered in Inkatha's favour in the sum of R7 000 with costs. Save for the question submitted to the Court for decision, the appellant G must accordingly be taken to have admitted all the elements of Inkatha's claim and to have settled the quantum of Inkatha's damages.

In accordance with the minute of the pre-trial conference, no evidence was led at the trial before Stegmann J and only the question submitted by the parties for decision was argued. The Court a quo answered this question as follows: H

'There are no considerations of legal or public policy which deprive juristic persons which are or which resemble political parties of the ordinary remedy for defamation.'

As a result of this finding it gave judgment against both defendants I jointly and severally for payment of the sum of R7 000 and costs in accordance with the agreement between the parties.

The two defendants applied to the trial Judge for leave to appeal, which was duly granted. The attorneys of the second appellant (the editor of The Sowetan), however, subsequently withdrew his appeal. Despite this withdrawal, Mr Daley, who appeared for Inkatha at the hearing of the J appeal, informed us that, if the appeal were to succeed at the instance of

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A the first appellant (which is now the only appellant), Inkatha would not wish the judgment to stand against the former second appellant.

It is convenient at the outset to determine the exact ambit of the Court's decision in the Natal Newspapers case. In that case, as I have already stated, Inkatha claimed damages for defamation. The defendant (respondent on appeal) excepted to this claim. The issue raised by the exception, Rabie ACJ said in delivering the judgment of this Court (at B 948C), was 'whether the right on the part of a legal persona to claim damages for defamation is limited to a legal persona which is engaged in trade and which alleges that it has been injured in its business reputation or status'. For convenience the Court referred to such a legal persona as a trading corporation. To decide this issue, the Court found it C necessary to consider the following questions, viz:

'(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'.

D (Ibid at 948G.)

The first question was answered in the affirmative, mainly on the strength of G A Fichardt Ltd v The Friend Newspapers Ltd 1916 AD 1 (ibid at 952I). Moreover, the Court held (also following Fichardt's case) that it was not necessary for a trading corporation which claims for an injury E done to its reputation to provide proof of actual loss suffered by it (ibid at 953C-D).

The Court then turned to the second question, stated as follows (at 953H)

'whether the right to sue for defamation should be restricted to trading F corporations, or whether such right should also be extended to non-trading corporations-or at least some kinds of non-trading corporations'.

The manner in which the question was formulated flowed from the nature of the exception which 'was brought on the narrow basis that no such extension to any kind of non-trading corporation should be permitted, and that the appellant's claim should, for that reason, be dismissed'. (Ibid G at 953H.)

The reasoning of the Court in answering this question is contained in one paragraph, and I quite it in toto. It reads as follows (at 953I-954E):

'. . . (O)ne could, I suppose, adopt the attitude that the extension of the right to sue for defamation to a trading corporation constituted an extension of the earlier law which conferred such a right only on natural H persons, and that one should not go further along that road. I do not think, however, that such an attitude would be justified. It was rightly not contended by the respondents that no non-trading corporation can have a fama which deserves the protection of the law; the contention was that a corporation which has such a fama can protect it by means of an interdict or by claiming damages in an Aquilian action, but not by suing for I defamation. It seems to me, however, that once one accepts - as one must, in my view - that a trading corporation can sue for an injury to its business reputation, there is little justification for saying that a non-trading corporation should not, in appropriate circumstances, be accorded the right to sue for an injury to its reputation if the defamatory matter is calculated to cause financial prejudice (whether or not actual financial prejudice results). It is conceivable that in the case of a non-trading corporation such as a benevolent society or a J religious

E M Grosskopf JA

A organisation - these are but examples - which is dependent upon voluntary financial support from the public, a defamatory statement about the way in which it conducts its affairs would be calculated to cause it financial prejudice in the aforementioned sense. It would in my view be illogical and unfair to deny such corporation the right to sue for an injury to its reputation, but to grant it to a trading corporation when it B suffers an injury to its business reputation. In my opinion we should hold, and I so hold, that a non-trading corporation can sue for defamation if a defamatory statement concerning the way it conducts its affairs is calculated to cause it financial prejudice. This finding involves, in view of what I have said above concerning the narrow basis on which the respondents' exception was brought, that the exception cannot be...