20 November 2011 by

Confirmation of the South African law relating to defamation of trading entities

Media 24 Limited & Others v SA Taxi Securitisation (Pty) Ltd (Avusa Media Limited & Others as Amici Curiae) 2011 (5) SA 329 (SCA).

Media 24 Limited published an article in the City Press newspaper in June 2008, under the title "Taxi owners taken for a ride by finance body". SA Taxi Securitisation (Pty) Ltd sued Media 24 for defamation claiming damages in excess of R20 million and the matter drew interest from groups advocating press freedom and freedom of speech.

The two principal defences raised were firstly that there was no allegation made by SA Taxi Securitisation that the statements made by Media 24 were untrue and secondly that in any event, damages are not available to a trading entity in an action for defamation.

When Media 24 appealed the decision of the South Gauteng High Court the matter came before the Supreme Court of Appeal (the SCA).

In regard to the failure to allege that the statements complained of were untrue, SA Taxi Securitisation conceded that the statements they complained of must be proved to be false if they were to be entitled to damages for defamation under the actio injuriarum. Mr Justice Brand found that the concession was correctly made stating that if it was "...true that the respondent has indeed conducted its business in a way which was dishonest and illegal...any reputation which it may have as an honest business enterprise would be built on a masquerade, which plainly deserves no protection".

He went on to find a similar requirement in the Aquilian action as he could "...see no reason why the law of delict should extend its protection to a reputation which is undeserved". In the result, the absence of an allegation that the statement alleged to be defamatory was untrue meant that the claim by SA Taxi Securitisation had to fail.

The SCA then dealt with the second issue, being the availability of damages for defamation to a trading entity. Media 24 asked the SCA to depart from a long line of cases stretching back almost 100 years that confirmed that such a remedy exists. Media 24 argued, among other things, that those cases were wrongly decided and also that an extension of the law of defamation to trading companies is unconstitutional. In the majority judgment of Mr Justice Brand, the SCA found no legitimate reason to depart from the settled position that a corporation has a claim for general damages in defamation and the appeal of Media 24 was dismissed.

Mr Justice Nugent in his dissenting judgment agreed with the contention that juristic entities have a right to protect their reputation in the same way as natural persons but in his view, remedies other than general damages should be afforded to successful juristic plaintiffs in defamation actions, such as an order that a retraction and apology be published.

Although SA Taxi Securitisation was able to show the existence of a remedy for defamation, they failed in their claim as they omitted the necessary element of the claim that the statements they alleged to be defamatory were untrue.

Tim Fletcher and Rebecca Thomson

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