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Reddell & Others v Mineral Sands Resources (Pty) Ltd & Others (corporate claim for general damages in defamation cases in Constitutional Court)

14 November 2022

The judgment of the the Constitutional Court is available here.

  • Neutral citation: Reddell  and Others v Mineral Sands Resources (Pty) Ltd and Others [2022] ZACC 38
  • Case Number: CCT 67/2021
  • Coram: Kollapen J, Madlanga J, Majiedt J, Mathopo J, Mhlantla J, Mlambo AJ, Theron J, Tshiqi J and Unterhalter AJ
  • Judge: Majiedt J (majority judgment), Unterhalter AJ (dissenting)
  • Date of judgment: 14 November 2022
  • Date of hearing: 17 February 2022
  • Outcome:
    • Leave to appeal directly to Constitutional Court granted and appeal dismissed.
    • Save for where 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.

Summary

This case is about whether a trading corporation ought to be able to sue for general damages in a defamation suit and, if so, whether it ought to be able to do so without having to allege or prove:

  1. the falsity of the statement in question;
  2. the wilfulness of the false statement; and
  3. that it suffered any financial loss.

The matter originates from three defamation suits instituted by Australian mining companies against environmental justice activists (who included environmental attorneys, a social worker, journalist and member of a community which would be impacted by the proposed Xolobeni mineral sands mining project). In response to each of the defamation actions, the activists raised two special pleas. A special plea is a legal objection to a claim which is used to eliminate a case before the merits are even considered.

The first special plea was that the defamation actions were brought by the mining companies for the ulterior purpose of discouraging, censoring, intimidating, and silencing the activists and members of the public in relation to public criticism of the companies and their mining operations in South Africa (i.e. that they were SLAPP suits). Note that the first special plea is the subject of a separate Constitutional Court judgment – see Mineral Sands Resources (Pty) Ltd & Mineral Commodities Ltd v Reddell, Davies, Cloete & Others.

The second special plea raised by the activists was that the claims of the mining companies were bad in law because for-profit corporations do not have a claim for general damages ( i.e. damages that compensate for non-monetary loss) in relation to defamation without alleging and proving that the statements were false, made willfully and caused financial loss to the companies.

The mining companies raised exceptions to both the special pleas. An exception is a procedural objection and, in this case, the mining companies argued that the corporate defamation special plea of the activists was not recognised as a defence in South African law.

The court considered the tension between the protection of dignity, reputation and freedom of expression which the law of defamation seeks to balance.

Justice Majiedt for the court set out the present state of our common law of defamation. He then assessed the constitutionality of awarding general damages to trading corporations in defamation cases. The court distinguished between instances where statements are made as part of public discourse on issues of public interest, and other forms of expression.  The court examined the concepts of human dignity, personhood, reputation, corporate identity and the right to a good name. It confirmed that corporations do not have a Constitutional right to dignity, but they do have a right to reputation under the common law.

The court also discussed the applicability of the right to dignity of corporations, and the defences to defamation actions in South Africa. It confirmed that corporations have a right to claim general damages – under certain circumstances. It held:

… juristic persons can lay claim to personality rights because they can objectively suffer personality harm without experiencing subjective injured feelings. Thus, a juristic person such as a trading corporation has a legitimate interest in the protection of its reputation.”

Justice Majiedt further held:

I am prepared to accept that a trading corporation can suffer non-patrimonial harm in an infringement of its right to reputation.”

However, the court importantly carved out an exception to the general rule regarding companies’ ability to claim damages for non-financial loss holding that:

Where the defamatory statements are made in the course of such public discourse on issues of legitimate public interest, general damages may not be considered.”

This was because the court took cognisance of the context in which the alleged defamatory statements were made, holding that “Public discourse about matters that affect all or many of us and are of grave public concern, such as damage to the environment, must be encouraged and not stifled in a vibrant democracy like ours.”

Order

The court issued the following order:

  1. Leave to appeal directly to this Court is granted.
  2. The appeal is upheld to the extent that it is declared that, save for where the 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.

The court made no order as to costs, as both parties attained some measure of success.