The “True and in the Public Interest” defence to defamation claims and effect of allegations of fraud on tender eligibility

Oct 5, 2022 | , , , , | News

The Free State High Court Judge in Defensor Electronic Security Systems (PTY) Ltd v Africa Community Media (PTY) Ltd (ZAFSHC) describes Defensor as a security company with “vast commercial interests in the Free State and Northern Cape.”

PAIA

The case arose from a media statement about a Kimberley Magistrate Court case under the Pension Fund Act, concerning more than R14 million in alleged pension fraud involving a Defensor director, which was published on the 9th of May by the Directorate for Priority Crime Investigation (the “Hawks”).

Private Security Sector Provident Fund (PSS-PF) contributions were allegedly deducted from employee salaries without being transferred. Unpaid pension fund contributions made up the bulk of the R14 Million, while interest accumulated on the amount comprised the rest. In conclusion, the article stated that the case against the Director had been postponed.

The Independent Online published an article on the 9th of May titled: “Security boss in court for R14m pension fund fraud“.

The media statement issued by the Hawks was reported in the article. A similar article was published the following day under the same headline, this time focusing on the Hawks’ statement.

Defensor brought the matter to the High Court in Bloemfontein, claiming that the article defamed it and its director. As a result, it sought an interdict against the publisher as well as the Minister for Police.

As a result of the fraud allegations, Defensor would also be unable to participate in future tenders, which would cause irreparable harm. Defensor’s counsel relied primarily on Economic Freedom Fighters and Others v Manuel in its application.

Here, the EFF tweeted that the recommendation by Mr Trevor Manuel of Mr Edward Kieswetter as the new SARS Commissioner, was “patently nepotistic and corrupt.” Also, that “…it has now emerged that the reason is that … Kieswetter … is not only a relative of Trevor Manuel, but a close business associate and companion”.

This claim was found to be untrue, and Mr Manuel’s good name was restored after the EFF failed to substantiate it.

In order for the present statement not to be defamatory, Defensor argued that the publisher and SAPS had to prove that it was substantially true and in the public interest.

The media house’s counsel argued that the language used did not suggest that the director was guilty. This was a fact, not a defamatory statement. The Hawks obtained information about the R14 Million from pension fund administrators. Furthermore, the applicants failed to address this aspect in their opposing papers. Thus, in the absence of contrary evidence, this statement is true.

According to the court, the published information must be substantially true.
In the article, it is clearly stated that there are only allegations of fraud at this point. Neither is it stated or implied that the accused committed or was convicted of any crime. Neither the Hawks nor the media have published anything defamatory or unlawful.

The reference to R14 Million must be read in context. According to the articles, it is an allegation and not a fact. Pension fund administrators provided evidence in their affidavit that this amount is owed to the pension fund. The applicants had not contradicted this aspect.

As for the potential irreparable harm caused by not being eligible for tenders as a result of the publications, the court finds that Defensor does business with both public and private entities. The argument that publication of the articles poses a threat to business ventures and tender applications in the future, is rejected.

The court agrees with the Minister that tender awards are made according to procurement legislation, and that this particular incident will not affect future eligibility. Accordingly, the element of irreparable harm was not proved.

The application is dismissed with costs.

The content does not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. Kindly contact us on info@cklaw.co.za or 021 556 9864 to speak to one of our attorneys.

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