Dhlomo NO v Natal Newspapers (Pty) Ltd and Another

• Jurisdiction: South Africa
• Judge: Rabie ACJ, Corbett JA, Joubert JA, van Heerden JA, Viljoen AJA
• Judgment Date: 01 December 1988
• Citation: 1989 (1) SA 945 (A)
• Hearing Date: 18 August 1988
• Court: Appellate Division

Rabie ACJ:

This is an appeal against the judgment of Van Heerden J in the Durban and Coast Local Division in which he upheld an exception to a claim for damages for defamation and dismissed the claim with costs. The judgment has been reported: see Dhlomo NO v Natal Newspapers (Pty) Ltd and Another 1988 (4) SA 63 (D).

The claim for damages was instituted by Dr Oscar Dhlomo on behalf of Inkatha Yesiswe ('Inkatha'), of which he is the E Secretary-General. Inkatha is a legal persona, and in terms of its constitution its Secretary-General can institute action on its behalf. (Inkatha is described in the particulars of claim as a 'non-incorporate association, a universitas ', and 'a national popular movement, having a membership of some 1,2 million persons'.) The first defendant in the F action (the first respondent in the appeal) was the proprietor, publisher and printer of the newspaper, The Sunday Tribune. The second defendant was the editor of the newspaper. In an article which appeared in the newspaper on 30 March 1986 it was stated that serious violence had been committed at a certain conference by members of a Zulu impi, and that '(a) spokesman for police headquarters in Pretoria said that G according to their information the Amabutho impi was backed by Inkatha'. The plaintiff, stating that it was known to the defendants and readers of the newspaper that Inkatha had publicly rejected, on many occasions, '(i) the policies of the National Government and in particular the policy of apartheid, and (ii) the use of violence to achieve political H aims', alleged that the article was defamatory of Inkatha; that the 'reputation, dignity and esteem of Inkatha and its ability to promote and further its aims and objects' had been 'impaired and injured' by the defamatory article, and that Inkatha had suffered damages in the amount of R20000.

The defendants (the respondents in the appeal) excepted to I the plaintiff's particulars of claim on the following grounds:

'1.

The plaintiff is Inkatha which in terms of its constitution is represented for the purpose of these proceedings by its Secretary-General.

2.

The plaintiff is alleged to be a universitas and a national J popular movement established and existing for political purposes.

Rabie ACJ

3.

A The plaintiff is not alleged to have any trading rights nor is it alleged to have suffered any loss to its patrimony in consequence of the publication of the article, a copy of which is annexure ''A'' to the particulars of claim.

4.

The plaintiff is incapable of being defamed and has no title to sue to recover damages for defamation.'

B This statement of the grounds of the exception is followed by a prayer that the exception be upheld and that the plaintiff's claim be dismissed with costs.

It is common cause that Inkatha's claim is not one under the lex Aquilia for damages for a loss actually sustained by it. The real C issue raised by the exception is, therefore, 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 the sake of convenience I shall, in what follows below, refer to such a legal persona as a trading corporation.) It follows that if the Court D should hold that the right to claim damages for defamation is not so limited, or ought not to be so limited, the exception must fail. This was, also, the basis on which the exception was argued in the Court a quo ; see the last sentence of the penultimate paragraph of the judgment of the Court a quo (at 72H - I of the report), where the learned Judge indicates that counsel for the excipients (the present respondents) E conceded that the exception was 'simply aimed at drawing a line between trading and non-trading concerns', and that Inkatha, not being a trading corporation, could for that reason, and not because of its character as a quasi -political organisation, not sue.

It is clear from what I have said above that the respondents F accept, for the purposes of the exception, that a trading corporation can claim damages for defamation, but that they contend that a non-trading corporation has no such right. Their contention is that our Courts have never decided that a non-trading corporation has such right, and, also, that no such right should now be recognised. The questions which call for discussion are, therefore (a) whether a trading G corporation can in our law claim damages for defamation, and (b), if it can, whether a non-trading corporation can also do so, or (c), if it has not yet been decided that a non-trading corporation can do so, whether the right to do so should be accorded to it.

In Cape Times Ltd v South African Newspaper Co Ltd (1906) 23 SC 43 H the Court accepted the law to be that a 'trading company' could sue for libel in the event of injury to its 'business reputation' (at 49). In Witwatersrand Native Labour Association Ltd v Robinson 1907 TS 264 Innes CJ stated (at 265):

'The rule apparently adopted, both in England and in South Africa, is that a trading corporation - which I take to mean a corporation I engaged in some business for the purpose of profit - may sue for defamation which affects it in its trade or business or property. But that is the high-water mark of the decisions affirming the right of companies or corporations to bring actions for defamation.'

In the same case Bristowe J said (at 266):

'The functions and activities of a natural individual are manifold in their character; the functions and activities of a corporation are J limited to the objects for

Rabie ACJ

A which it is created, and in the case of a joint-stock company are limited to the objects stated in the articles of association. So that a corporation cannot, from the nature of its foundation and of its constitution, be defamed unless something is said or written which will interfere with it in the pursuit of the purposes for which it was created; and in the case of a trading corporation it must, as was laid down in the cases to which we have been referred, be calculated to injure its business reputation, or to affect the trade or business B which it was formed to carry on.'

In Rand Water Board v Lane 1909 TH 4 Bristowe J raised the question whether a non-trading corporation could claim damages for defamation. The learned Judge said (at 7):

'First, is the Rand Water Board a trading corporation? I am not sure that this affects the matter, for I suspect that in the case of C any corporation established to carry out a particular undertaking, if it were injured by a libel in that undertaking, the corporation would have a right to sue on the libel.'

He proceeded to hold, however, that the Rand Water Board was a trading corporation and that it could, therefore, sue for damages for defamation. In Bhika v Prema and Others 1910 TS 101, where D the respondents claimed to be an 'association', Innes CJ held (at 103):

'But even if this were in law an association which could sue for libel, it is clear that it cannot do so apart from its business. And it has no business which can be libelled.'

In the same case Smith J, who concurred in the judgment of Innes E CJ, also said (at 104):

'An association or corporation has no personal honour which can be attacked, and therefore this association, which had no business, cannot be libelled in the way plaintiffs allege.'

This takes me to the case of G A Fichardt Ltd v The Friend F Newspapers Ltd 1916 AD 1 - the first case in which questions of the kind mentioned in the cases referred to above were discussed in the Appellate Division. The appellant company, a trading corporation, claimed damages for defamation, alleging that it had been defamed in headlines to an article which appeared in a newspaper owned and printed by the respondent company. Innes CJ said (at 5 - 6):

G 'That the remedy by way of action for libel is open to a trading company admits of no doubt. Such a body is a juridical persona, a distinct and separate legal entity duly constituted for trading purposes. It has a business status and reputation to maintain. And if defamatory statements are made reflecting upon that status or reputation, an action for the injuria will lie. (See De Villiers' Law of Injuries at 59.) In the present case no special damages were proved; but that circumstance does not really affect the position. H Where words are defamatory of the business status and reputation of a trading company, I am not aware of any principle of our law which would make the right of action depend on proof of special damage.'

Solomon JA, in whose judgment Maasdorp JA concurred, said (at 8):

'It has been settled by a series of decisions, both in England and in South Africa, that an action will lie at the suit of a trading I company for statements defaming...