South Africa: ConCourt Hands Critics of Australian Mine Partial Victory - but Defamation Battle Is Not Over

14 November 2022

It is up to Parliament to develop more comprehensive SLAPP suit defence, says court

The Constitutional Court has found that six South Africans being collectively sued for R14.25-million in a defamation case brought by Australian mining interests have achieved "substantial" success in their argument for being able to bring a "SLAPP" defence if and when the case goes to full trial.

This was despite two orders by the court on Monday in respect of appeals that technically went against the six.

SLAPP is an acronym for Strategic Litigation Against Public Participation. It describes a legal strategy often employed by big corporations who bring defamation actions for huge damages against people who criticise them as a means of discouraging, censoring, intimidating and silencing them.

Read judgment one and judgment twoThe applicants in this case are Australian mining company Mineral Commodities Ltd (MRC), its South African subsidiary Mineral Sands Resources, previous MRC executive chairman Mark Caruso, and MRC black empowerment partner Zamile Qunya.

The six respondents are environmental lawyers Christine Reddell, Tracey Davies and Cormac Cullinan, social worker John GI Clarke, and community activists Mzamo Dlamini of the Wild Coast and Davine Cloete from Lutzville on the West Coast. They are alleged to have defamed the mining interests in books, interviews and/or presentations relating to the miners' controversial activities on the Pondoland coast at Xolobeni and at the Tormin mineral sands mine on the West Coast.

When the case reached the Cape High Court in February last year, Western Cape Deputy Judge President Patricia Goliath ruled that the action of the Australian mining interests "matches the DNA of a SLAPP suit", and that the defendants could raise this as a "special plea" in their defence. If this special plea was accepted by a trial court, it could effectively end the hearing before any evidence was led about the alleged defamation.

The applicants' (the miners) filed an "exception" -- a legal challenge -- to this special plea, but it was rejected by the Cape High Court.

This rejection was challenged by the applicants (the miners) in one of two linked appeals to the Constitutional Court.

The second appeal to the Constitutional Court was brought by the six respondents (the critics of the miners) - in this instance now applicants - in which they appealed Judge President Goliath's dismissal of their second special plea. Their argument was that for-profit trading corporations are juristic persons (as opposed to natural persons) and are not entitled to general damages for defamation without first proving falsehood, wilfulness and actual quantifiable loss.

The Constitutional Court heard the two appeals in February this year, when it reserved judgment.

Judgments, delivered on Monday, were both penned by Justice Steven Majiedt who wrote that "the issues are plainly of manifest importance". The first judgment was unanimous, while two judges dissented from the second judgment.

Citing the background, Justice Majiedt said the defendants first special plea - the SLAPP special plea - was that the actions were brought "for the ulterior purpose of discouraging, censoring, intimidating and silencing the applicants and members of the public in relation to public criticism of the mining companies". According to the mine critics, litigation brought for an ulterior purpose was "patently impermissible" and constituted an abuse of process".

The applicants (the miners) had "excepted" - argued against - this special plea by contending that SLAPP suits did not exist in South African law and was therefore not a proper defence.

Justice Majiedt said true SLAPP suits, as they operate in other legal jurisdictions elsewhere in the world, had particular features "which require a more nuanced approach than simply ulterior purpose".

"It appears that both parties have used the term 'abuse of process' too broadly and interchangeably with ulterior purpose and frivolous and vexatious proceedings ...

"Abuse of process ... can appear in different forms ... These various forms, though often referred to as abuse of process, do not have one common feature. Not all of them ought really to be called abuse of process."

The mine critics had supported their special plea on the basis that improper motive alone was sufficient to warrant dismissal of the defamation action, the judge said. "That is not so. The merits also bear consideration. It follows that the first special plea does lack averments necessary to satisfy the requirements of the SLAPP suit defence. To this extent, the exception taken by the applicants holds good, and must be upheld.

"However, the substantive grounds upon which the exception was pleaded have not been sustained. I have found that the SLAPP suit defence does form part of our law. To make out the defence requires more than the respondents have pleaded, but the defence commands a place in our law that the applicants have unsuccessfully resisted. This has consequences both for the order to be made and the question of costs."

The miners were correct that their critics' first special plea lacked averments [statements] necessary to sustain a defence, the judge said. "The first special plea cannot be allowed to stand. The exception must be upheld, and for this reason, so too the appeal. The respondents [the critics] must be afforded the opportunity to amend their first special plea, should they wish to do so.

"The respondents [the critics] have secured the recognition of the SLAPP suit defence, albeit not on the basis that they pleaded the defence, or supported the defence in their submissions. The respondents' success is nevertheless, substantial and they deserve part of their costs."

It was up to Parliament to consider whether a more comprehensive, specific SLAPP suit defence of the kind developed in Canada and the United States ought to be legislated in South Africa, the judge said.

Justice Majiedt's order confirmed that the miners' "exception" to the first special plea was upheld, but he granted their critics 30 days to amend this plea.

He awarded the mine critics 60% of their legal costs in the Constitutional Court application with both parties to pay their own costs in the High Court.

The critics' second special plea, styled the "corporate defamation special plea" was that the claims of the mining companies were bad in law because a for-profit company had no claim for general damages in relation to defamation without alleging and proving falsity, wilfulness and patrimonial loss.

Although upholding the High Court decision and dismissing the six respondents' appeal regarding this second special plea, Justice Majiedt, for the majority, ruled that both parties had "attained some measure of success".

His order states:

"It is declared that, save for where the [allegedly defamatory] speech forms part of public discourse on issues of public interest, and at the discretion of the court, trading corporations can claim general damages for defamation."

No costs were awarded for this second application.

A dissenting minority judgment relating to the second appeal (by the mine critics) was penned by Justice David Unterhalter, with Justice Jody Kollapen concurring.

Justice Unterhalter said there were "many aspects" of the majority judgment that he agreed with. However, aspects that he disagreed with included "some doubt" that the constitutional right to dignity conferred by the Constitution cannot be enjoyed by a trading corporation.

"There are aspects of reputation that are of great importance to a trading corporation but are not reflected as goodwill, not as a quantifiable asset of the firm. It is the firm's social capital. It does not appear in the firm's accounts. But it is nevertheless of value, seen most clearly when it is harmed and, sometimes, when that harm leads to ruination ... In the result, I would dismiss the appeal with costs, including costs of two counsel," wrote Justice Unterhalter.

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