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Clover SA (Pty) Limited and Another v Sintwa (CA2011/2015) [2016] ZAECGHC 77; [2016] 12 BLLR 1265 (ECG); (2017) 38 ILJ 350 (ECG) (13 September 2016)

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IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE DIVISION, GRAHAMSTOWN)

CASE NO: CA2011/2015

In the matter between:

CLOVER SA (PTY) LIMITED                                                                                 First Appellant

FREDERICK BOPP                                                                                         Second Appellant

and

HARRISON SINTWA                                                                                                Respondent

JUDGMENT

MBENENGE J:

[1] The present appeal relates to qualified privilege which our law confers on witnesses and litigants in respect of defamatory statements made during the course of quasi-judicial proceedings. 

[2] The respondent had been in the employ of the first appellant[1] as team leader tasked, inter alia, with conducting checks on machines and products in order to ensure that the products passed the stringency health and safety standards before being dispatched to the market.  To that end, it was incumbent on the respondent to certify on the relevant form that the necessary checks had been completed.

[3] It came to pass that the respondent was charged with misconduct, the allegation being that he “acted fraudulently on 06 December 2009, ...[by co-signing] the DOR (daily operator report) claiming that a certain test, which is not performed on this machine, [had] indeed been performed on the TBA 8 machine.”  It is common cause that the respondent appended his signature on the relevant form signifying certification that certain products passed the stringency  health and safety standards without having performed the requisite test.

[4] The respondent thereupon faced internal disciplinary proceedings which resulted in him being dismissed from the employ of the first appellant on 27 December 2009.  On a previous occasion the respondent and certain other employees of the first appellant had been issued with a warning after having been found guilty of causing the first appellant loss in the sum of R2.6 million.

[5] Having been dissatisfied with the dismissal sanction the respondent referred the matter to the Commission for Conciliation, Mediation and Arbitration[2]  in terms of the relevant provisions of the Labour Relations Act 66 of 1995.  The challenge to the outcome of the disciplinary proceedings eventually served before an Arbitrator who was called upon to decide whether or not the respondent’s dismissal from the first appellant’s employ was substantively fair, the respondent having not contested the procedural fairness of the disciplinary proceedings.

[6] In his capacity as production manager of the first appellant and a functionary to whom the respondent reported, the second appellant is one of the witnesses who testified during the arbitration proceedings, and is on record as having stated that “it [had] come to [his] attention that [the respondent]...co-signed a DOR report sheet so [he] committed fraud by gross negligence.”[3]

[7] In his award handed down on 29 March 2011 the Arbitrator found that the first appellant had not substantiated the claim that the respondent was guilty of fraud, but instead concluded that he had been guilty of negligence.  On that basis the dismissal was found to have been substantively unfair.  Even though the respondent had sought reinstatement, the Arbitrator issued an award directing the first appellant to pay the respondent compensation “equal to 4 months salary in the amount of R33 200.00.”[4]  Neither party took the award on review, even though such a course had been open to both of them.

[8] The respondent’s claim, which served before the court a quo, subject to this appeal, is a sequel to the arbitration proceedings.   The respondent sought to recover damages in the sum of R100 000.00.[5]  The claim before the court a quo was founded on the contention that during the arbitration proceedings the second appellant had wrongfully and unlawfully alleged that the respondent had committed fraud.  That is the case the appellants were called upon to meet in answer before the court a quo.  Nothing more, nothing less.

[9] In pursuit of their defence to the claim, whilst admitting that during the arbitration proceedings the second appellant had “placed evidence before the Arbitrator to support an allegation that [the second appellant] committed fraud,”   the appellant denied that the allegations were wrongful and unlawful.  The appellants further contended, in amplification, that the allegations complained of were made in quasi-judicial proceedings and therefore enjoyed qualified privilege.

[10] The court a quo held the appellants liable to the respondent in damages in the amount claimed,[6]  and was of the view that the statement implicating the respondent as having committed fraud had been irrelevant and unconnected to the arbitration proceedings in circumstances where the second appellant could easily be referred to as having been negligent.   Hence the appellants were found to have exceeded the bounds of qualified privilege.

[11] The court a quo also reasoned that because the operator of the machine who had co-signed the form had not faced fraud related misconduct proceedings, and no evidence in relation to that was placed before the court a quo, there were sufficient bases for inferring that the impugned statement had been actuated by malice.

[12] At the hearing of the appeal, Mr Grogan who appeared for the appellants, quite correctly in my view, did not persist with the contention advanced in his heads of argument namely, that there was no evidence before the court a quo to indicate that the second appellant alleged during the arbitration proceedings that the respondent had been guilty of fraud,[7] leaving the issues for determination in this appeal being principally the correctness or otherwise of the court a quo’s findings that-

(a)       the defamatory utterance made by the second appellant was not privileged; and

(b)       there were facts established from which an inference of malice could be made.

[13] It is trite law that publication of defamatory material in privileged circumstances is justified and therefore lawful.[8]

[14] As this case concerns qualified  (as against absolute[9]) privilege, it becomes necessary to draw a distinction between “discharge of a duty or furtherance of an interest” and “judicial and quasi-judicial proceedings” as part of the few categories of qualified privilege[10] that have developed in our law.[11]  For reasons that will become clearer shortly, the distinction is not without significance.

[15] “Discharge of a duty or furtherance of an interest” is present where a person has a legal,[12] moral or social[13]duty or a legitimate interest in making defamatory assertions to another person who has a corresponding duty or interest to learn of the assertions.[14]   Consequently, the key question is whether such a duty or interest is present in the case of both the defamer and the bystander.[15]   In the event of it being proved (by means of the reasonable man test) that both parties had a corresponding duty or interest, the defendant must prove that he acted within the scope or limits of the privilege.  This is done by proving that the defamatory assertions were relevant to, or reasonably connected with, the discharge of the duty or furtherance of the interest.[16]

[16] In an instance of defamatory statements made during the course of judicial or quasi-judicial proceedings, however, the position is slightly (but significantly) different.  To enjoy provisional protection, the defendant need only prove that the statements were relevant to the matter at issue.[17]   Once that is achieved a duty is cast on the plaintiff to prove that, notwithstanding the statements’ relevance, the statements were not supported by reasonable grounds.[18]  The onus resting on the defendant to establish that the statements were relevant has been held to be a full onus, as opposed to an evidentiary burden, and the required quantum of satisfaction is therefore on a balance of probabilities.[19]

[17] In both categories of qualified privilege dealt with above, the plaintiff may, even if the defendant establishes provisional protection, show that the defendant exceeded the limits of the privilege because he acted with an improper motive (malice).[20]

[18] Because the line of distinction between these categories of privilege subject to discussion may sometimes be blurred or hard to draw, the risk of conflating the applicable principles is always high.

[19] In sum, therefore, a litigant relying on qualified privilege, which is what the instant case is about, must establish the following requisites:

(a)       that the occasion is privileged;[21] and

(b)       that the defamatory statements complained of  were relevant to the purpose of the occasion. [22]

Once it is accepted that the statement fell within the bounds of a qualified privilege the onus shifts to the plaintiff to prove that the defendant was malicious.[23]

[20] In Zwiegelaar v Botha[24] the plaintiff sued the defendant for defamation arising out of a statement made by the defendant while testifying under oath at a meeting of creditors of a close corporation which was in the process of being wound up.  In upholding the defence of qualified privilege the court held:

Generally, a witness enjoys a qualified immunity or privilege in respect of defamatory statements made during the course of legal proceedings.  This qualified immunity applies not only to proceedings in a court of law but also to proceedings before certain quasi-judicial bodies, including, for instance, a judicial commission of enquiry (Basner v Trigger 1946 AD 83, and apparently any tribunal recognised by law (see Burchell The law of Defamation in South Africa at 254).  It was not disputed that this qualified immunity will generally extend to inquiries of the kind at which the defendant testified and made the statement forming the subject-matter of the present proceedings (cf Allardice v Dowdle 1965 (1) SA 433 (D) at 436 C).  The qualified nature of the immunity is such, however, that once the circumstances giving rise to the immunity are established, the plaintiff is entitled to ‘destroy’ or ‘defeat’ the immunity or privilege by showing, inter alia that the defendant, in making the defamatory statement, was actuated by malice in the sense of an improper or indirect motive, as explained in Basner v Trigger (supra at 94-5) (see Joubert and Others v Venter (supra at 699))” [25]

[21] Even though the CCMA is not part of the judiciary and thus an administrative tribunal, its proceedings are quasi-judicial in nature. [26]  The functions performed by the CCMA have been held to be “substantially similar in form and substance to those performed by a court of law,” even though the CCMA is not a court of law.[27]

[22] The respondent did not dispute that, by reason of the nature of its functions, the CCMA is an occasion at which qualified privilege can be raised.  In fact Mr Knott, counsel for the respondent, quite correctly, made the concession upfront.  This aspect of the case which effectively disposes of the first requisite set out in paragraph [19] (a) above need therefore not detain us any further.

[23] The next question to pose and answer is whether the statement made by the second appellant during the relevant arbitration proceedings was relevant to those proceedings.

[24] The transcript of the proceedings of the court a quo embodies questions posed to the respondent under cross-examination and the answers he gave.  In so far as relevant hereto it reads:

“…It is not in dispute that in December 2009 you were dismissed as a result of an internal disciplinary enquiry held at Clover.  Is that correct?  Yes

What I am saying to you Mr Sintwa is that there was a process that had happened that ultimately led in the internal disciplinary finding against you and that ultimately leading to your dismissal. Yes…

Is it correct Mr Sintwa that you were not satisfied with the outcome of the disciplinary enquiry?

It is so.

And Mr Sintwa is it further correct that you then referred your dismissal to the CCMA?...Yes

Now Mr Sintwa the arbitration proceedings happened and you were presented by an attorney P Bono.  Is that correct? That is so.

I just want to at the expense of stating the obvious, these arbitration proceedings happened because you initiated them.

Is that correct?...Yes

In other words you would have been the applicant in the arbitration proceedings?  Yes.

And …Clover SA was the respondent your former employer? Yes…

Now Mr Sintwa just to understand this clearly, the reason why you initiated the CCMA proceedings that ultimately led to the arbitration proceedings, was because you were unhappy with the outcome of the internal disciplinary hearing.  Correct? It is so.

Now would you be correct to say that as the applicant you were required to lead evidence on your behalf? It is so…

To say why it is that the internal disciplinary was wrong in the dismissal of you? Yes…

And similarly on behalf of Clover you will agree with me that Clover were or elected also to lead evidence before the arbitration proceedings? Yes, it is so…

Mr Gajjar: Now Mr Potgieter presided in the arbitration hearing would have been obliged once the evidence was tendered to consider the evidence that you led and consider the evidence that was led on behalf of Clover.  Dou you agree with me? Yes…

Now would you agree with me Mr Sintwa that you would have placed evidence before Mr Potgieter the arbitrator to enable your attorney to persuade the arbitrator that the sanction of dismissal was not fair? Yes…

And similarly once Clover elected to place evidence before the arbitrator, the arbitrator was entitled to hear that evidence and receive that evidence.  Do you agree with me? Yes, it is so…

The reason why he was entitled to receive that evidence and information for both you and against you Mr Sintwa would you agree with me because the arbitrator had to make a fair decision in order to make a decision he needed to receive evidence, do you agree with me? It is so.”

[25] Elsewhere the transcript reads:

Mr Gajjar: Page 5 “On 29 March 2011, the arbitrator found that the plaintiff (that is yourself) did not have intention to be dishonest and was not guilty of the misconduct” Yes…

But in order to arrive at that conclusion he needed to have heard all the evidence that was material to the case.  Do you agree with me? Yes(emphasis suppied)

[26] The record[28]reveals that each one of the parties before the Arbitrator presented evidence and arguments in support of their respective contentions.  It was the duty of the Arbitrator to assess and choose between the opposing contentions.  In the first place, the reason for which the respondent was dismissed was the allegation of fraudulent conduct.  Therefore, the version of the second appellant must indeed have been self-evidently relevant.  Without that version the Arbitrator would have been oblivious to the reason for the respondent’s dismissal and would thus have been rendered unable to assess the validity of that reason.

[27] In my view, therefore, the appellants did establish with the requisite degree of proof that the otherwise defamatory allegation made by the second appellant during the relevant arbitration proceedings that the respondent had been dismissed for having committed fraud was relevant to the issue that fell to be determined by the Arbitrator and thus covered by qualified privilege.  The court a quo ought to have found as much.  The court a quo’s finding that “the statement of fraud made was irrelevant, unconnected to the matter and it was unnecessarily dragged into the matter that could easily be referred to negligence” was accordingly incorrect.

[28] I now cross to deal with the question whether the respondent proved that, notwithstanding its relevance, the impugned statement was not supported by reasonable grounds.  In Joubert & Others v Venter [29] it was held that “[o]ne of the ways in which the plaintiff can do this is by proving that the defendant did not have ‘some foundation’ in the evidence or the surrounding circumstances for making the statement in issue.”[30]  The plaintiff could also prove that the defendant knew that his statement was false or that there was no evidence to substantiate it[31] or that the defendant’s real motive was personal spite or ill-will[32].

[29] Quite apart from the fact that the respondent had not delivered a replication in which it was alleged that in the event of the defence of privilege being established it could not prevail as the statement in question had not been supported by reasonable grounds,[33] no basis for such a conclusion was laid when the respondent gave his testimony.[34]  Even though the respondent depicted a picture of a strained relationship between the second appellant and himself, no suggestion was made that the laying of misconduct charges and the allegation of fraud made during the ensuing arbitration proceedings were, for example, motivated by spite or ill-will.

[30] In my view, therefore, the respondent did not prove that the impugned statement was not supported by reasonable grounds.  On this ground, as well, the appeal must succeed.

[31] There remains the final question to answer namely, whether the respondent had shown that the appellants exceeded the limits because they acted with malice.  Here, too, neither by way of a replication to the appellants’ defence of qualified privilege nor by way of viva voce evidence was a suggestion made that the second appellant exceeded the limits of qualified privilege because he acted with an improper motive (malice).  It is quite clear from the answers given by the respondent whilst being cross-examined that the second appellant acted out of a sense of duty or was bent on protecting an interest.[35]  In so pronouncing, I am not unmindful of the fact that owing to its subjective nature the plaintiff will usually find it most difficult to furnish direct evidence of malice.[36]

[32] The court a quo assumed the existence of malice by inference; the fact that the operator who had also signed the relevant form had not been charged was, according to the court a quo, a basis for inferring malice.  The conclusion is illogical.  A proper cause of action in such an instance would have been for the respondent to complain of unequal treatment or discrimination.  There are no other intrinsic or extrinsic facts from which an inference of malice could properly have been made.

[33] In all these circumstances-

1.           the appeal succeeds, with costs; and

2.         the order of the court a quo is set aside and the following is substituted in its place:

The action is dismissed with costs, such costs to include the costs occasioned by the employment of counsel, taxed on the applicable Magistrate’s court scale.”



_______________________

S M MBENENGE

JUDGE OF THE HIGH COURT

 

I agree

 

_______________________

R GRIFFITHS

JUDGE OF THE HIGH COURT



Counsel for the Appellants                         :          Mr J G Grogan

Instructed by                                               :          Joubert Galpin Searle

                                                                                    Port Elizabeth

                                                                                    C/O Huxtable Attorneys

                                                                                    Grahamstown



Counsel for the Respondent                       :           Mr J A Knott

Instructed by                                              :           Mgangatho Attorneys

                                                                                     Grahamstown



Date heard                                                 :           19 August 2016

Judgement delivered                                  :           13 September 2016



[1] The first appellant’s business is one of processing and packaging  a range of dairy products and its production line comprises operators, team leaders, production managers and quality managers

[2] The CCMA

[3] This has been captured from the relevant part of the first appellant’s testimony before the court a quo, a version which was not controverted by the appellants who closed their case without testifying.

[4] After deductions this amounted to R27 022.00

[5] R50 000.00 for contumelia, and R50 000.00 for defamation

[6] R100 000.00

[7] Referring to a person as having committed fraud is per se defamatory of and concerning that person.

[8] J C Van der Watt & J R Midgley, Principles of Delict (3rd Ed) par 100, pp 14G-15D; De Waal v Ziervogel 1938 AD 112;Borgin v De Villiers 1980 (3) SA 556 (A) 577; May v Udwin 1981 (1) SA 1 (A); Mohamed v Jassiem 1996 (1) SA 673 (A) 710.

[9]  Sometimes referred to as “relative” privilege.

[10] In  the case of absolute privilege the defendant is protected absolutely in the sense that liability for defamation is completely excluded.

[11]Privilege reports” (i e defamation contained in the publication of the proceedings of the courts, parliament and certain public bodies) is the third category, which has no bearing on these proceedings.

[12] Kinghorn C “Defamation” 7 LAWSA 193 (First re-issue) 223 (revised by Roos A)

[13] For example such relations exist eg between a father and his daughter with regard to the character of her fiancé ( Fick v Watermeyer 1874 Buch 86); or between members of a voluntary association with regard to the misconduct of one of the members (Kennel Union of Southern Africa v Park 1981 1 SA 714 (C); or between members of a church council (or even an ordinary member of the church and members of the church council) with regard to the moral life of the minister (cf Ehmke v Grunewald 1921 AD 575; De Waal v Ziervogel 1938 AD 112); or between  congregants and a priest concerning the sexual molestation of her daughter by a family member (O v O 1995 4 SA 482 (W);or between parents with regard to the competence of the teacher who teaches their children (Jordan v Van Biljon 1962 1 SA 286 (A)).

[14] Neethling’s Law of Delict idem, 336; Yazbeks v Seymour 2001 (3) SA 695 (E) 701-702; NEHAWU v Tatsi 2006 (6) SA 327 (SCA) 331.

[15] Neethling, Potgieter Visser Neethling’s Law of Personality, (2nd Ed),146.

[16] Borgin v De Villiers 1980 (3) SA 556 (A) 578-579.

[17] Van der Berg v Coopers & Lybrand Trust (Pty) Ltd [2000] ZASCA 77; 2001 (2) SA 242 (SCA) at 252-255; Zwiegelaar v Botha 1989 (3) SA 351 (C) at 356-359.

[18] May v Udwin 1981 (1) SA 1 (A) 19-20; also see the Coopers &Lybrand case supra at 907.

[19] Mohamed v Jassiem [1995] ZASCA 115; 1996 (1) SA 673 (A) 709; Coopers & Lybrand Trust case supra 252

[20] Mc Phee v Hazelhurst 1989 (4) SA 551 (N) 555; Naylor v Jansen; Jansen v Naylor 2006 (3) SA 546 (SCA) 555 (in the case of discharge of a duty or furtherance of an interest); Joubert v Venter 1985 (1) SA 654 (A) 702 704 and Hardaker v Phillips 2005 (4) SA 515 (SCA) 527 (in the case of judicial or quasi-judicial proceedings)

[21] The defence of privilege (including qualified privilege), which is what the appellants rely on in hoc casu applies to the occasion, not to the truth of the statement (Yazbek v Seymour supra 701).

[22] Mohamed v Jassiem supra 710; Coopers & Lybrand Trust (Pty) Ltd supra  para [17]; also see Chalom Raymond Edward v Wright Graham and Another (4104/13) [2015] ZAGP JHC 105, where (at para [24]) it was held that a defendant does not, however, escape liability merely because the statements are made in judicial or quasi-judicial proceedings; he must show that the statements were relevant and germane to the matter at issue.

[23] Yazbek case supra 702 G; May v Udwin supra at 19-20.

[24] Zwiegelaar supra

[25] Zwiegelaar, at 356 D-G

[26] Chirwa v Transnet Ltd & Others [2008] 2 BLLR 97 (CC); also see Sidumo & Another v Rustenburg Platinum Mines Ltd & Others [2009] 12BLLR 1097 (CC) where it was held that a commissioner must approach the dismissal dispute impartially, taking into account-

(a)           the totality of the circumstances;

(b)           the importance of the rule that had been breached;

(c)           the reason for the dismissal; and

(d)           the basis of the employees challenge to the dismissal.

[27] Sidumo supra; cf Palaborwa Mining Company Ltd v Chectam and Others [2008] BLLR 553 (LAC), where Wallis JA referred to the position of commissioners of the CCMA as having “elements of both administrative and judicial powers and functions without, in any conventionally understood sense, quite being either.”

[28] The transcript of the arbitration proceedings does not form part of the record in this appeal, but the summation made by the Arbitrator, handed in by consent at the hearing before the court a quo, captures the essence of how the arbitration proceedings were conducted.  During his testimony before the court a quo the respondent acknowledged as much.  

[29] Supra

[30] Joubert,  supra, 704 B-C

[31] Cf Findlay v Knight 1935 AD 58 at 70; Gluckman v Chneider 1936 AD 151 and Basner v Trigger 1946 AD 22

[32] Brisco v Benson 1914 TPD 598 at 600-3

[33] Because the respondent did not deliver a replication to the plea of privilege, it follows that there was a denial that the bounds of privilege were not exceeded (Joubert, supra, 695 H-I

[34] It is by no means being suggested that the respondent was precluded from testifying that the statement in question had not been supported by reasonable grounds because he had filed no replication.

[35] Cf De Waal v Zievogel supra, 127

[36] Neethling’s Law of Personality, 149