Calderwood v City of Cape Town and Another (3756/03) [2009] ZAWCHC 234 (30 April 2009)

IN THE HIGH COURT OF SOUTH AFRICA

(WESTERN CAPE HIGH COURT, CAPE TOWN)

CASE NO: 3756/03

In the matter between:

MALCOLM CALDERWOOD

Plaintiff

and

CITY OF CAPE TOWN

First Defendant

KIM VAN DEVENTER

Second Defendant

JUDGMENT

RILEY, A.J.

1. The Plaintiff Malcolm Calderwood was originally employed with the First Defendant during the period 1971 to 1974. He completed

the BA Social Science and an Honours Degree in Economics in 1992 whereafter he was employed in the Town Planning Division of the First Defendant from 1986 to the year 2005.

2. In this matter Plaintiff seeks to hold First Defendant, The City of Cape Town liable for damages resulting inter alia from defamation by Defendant as a result of the publication of certain defamatory material in two newspaper articles, in relation to an e-mail prepared and circulated by Second Defendant and in regard to the publication of an affidavit of a certain Inspector Michael (hereinafter referred to as Michael) an employee of First Defendant, which contained defamatory matter of and about Plaintiff.

3. The complaints by Plaintiff of him related to two newspaper reports which are, referred to hereunder:

3.1. The report of 20 March 2003

3.2.1. The report of 20 March 2003 contained the following statement:

"Cape Town Film Office has been shut down as allegations surfaced of staffers running a "shadow office" issuing fake permits for international film shoots while raking in thousands of rand.

City of Cape Town auditors, backed by the Metro Police confiscated computers and sent their entire staff complement home as they started their probe into fraud and corruption ...

Documents confiscated by the Council's internal investigators suggest staff had been intercepting applications from production companies and issuing fake permits.

Auditors also found one of the stalwarts in the section had a private company which accepted payment from film companies for permits and services at shoots normally provided by the film office."

3.2. The Report of 21 March 2003

3.2.1. The Report of 21 March 2003 stated the following:

"A Civic Centre insider close to the investigation said the initial allegation against only one clerk accused of running a shadow film office intercepting applications from selected film companies appeared to be the tip of the iceberg.

She said many more film office staff were being implicated to some degree or the other, but she warned that the probe was in the early stages and the true magnitude of the scam would only be determined later."

4. Plaintiff's cause of action can be summarised as follows:

4.1. The publication of defamatory material of and about the Plaintiff which publication according to Plaintiff was caused by and assisted by the actions of Ms Bolton (hereinafter referred to as Bolton) and I or Ms Van Deventer (hereinafter referred to as Second Defendant) and I or Mr Strange (hereinafter referred to as Strange) who were acting in the course and scope of their employment with the First Defendant who intentionally caused the fact of Plaintiff's suspension based on alleged acts of dishonesty, to be passed on to newspaper journalists,

with the constructive intention to facilitate publication thereof in a context that was to link Plaintiff's suspension from office to his alleged involvement in dishonest actions.

4.2. It was Plaintiff's case that the information was passed on to a newspaper reporter during the period between 19 March 2003 and shortly thereafter.

5. The second cause of action relates to the publication of the defamatory material by Second Defendant relating specifically to an e-mail dated 24 March 2003 addressed to thirty two (32) senior staff members of First Defendant. The e-mail informed the staff members inter alia that:

5.1 Plaintiff and others had received and signed for letters of suspension relating to the issuing of film permits. That the suspensions were without prejudice; and

5.2 No assumption has been made as to their guilt or innocence as a result of the suspension. That they were under investigation based on irregularities into the issuing of film permits.

6. The third cause of action related to the publication (on 20 March 2003) of an affidavit by Michael who is employed by the First

Defendant, whilst acting in the scope of his employment with the First Defendant, whilst Michael effectively knew and foresaw that the publication thereof would result in the republication of the contents thereof in the media and would defame the Plaintiff. In particular that Michael stated 1n his affidavit that:

"during the month of January 2003 Mr Randolf Solomons of the Cape Town Film Office visited me at my office at the Cape Town Traffic Department. He informed me that his colleagues, namely Clifford Delcie, Pearl Piet, William, Grant, Malcolm Calderwood, Arafat Davids, Irene Dreyer and other, formed their own Company K L D Contractors".

THE LEGAL PRINCIPLES:

7. The Law of defamation exists to protect reputation.

8. In England and Australia a claimant in a libel case need only establish that the publication was defamatory, referred to him and was published. Thereafter the burden shifts to the Defendant to raise a defence such as justification, fair comment or privilege.

9. In general defamation liability is strict; so that the state of mind of the publisher is irrelevant to liability, though one important development 1s that the defence of qualified privilege now in principle protects certain publications to the world at large if the publisher acted responsibly.

See: Milo; Defamation and Freedom of Speech Oxford University Press 2008 p. 11

10. In South African common law the same elements of the Plaintiff's cause of action apply. According to Milo (Supra, p. 11- 12)

"On proof of these elements, three presumptions arise. The first is that the publication was unlawful. This presumption may be rebutted if the Defendant proves a defence such as truth in the public interest, honest comment, or privilege. One recent additional defence that applies to members of the media is that of reasonable publication. In respect of all the defences where the Defendant seeks to rebut the presumption of unlawfulness, the Defendant bears the onus of proof. The Second presumption that flows from this is that the publication was made with fault in the form of animus injuriandi, the intention to defame. This may be rebutted by defences such as mistake for example where the Defendant subjectively believed he was justified in defaming Plaintiff; ... The third presumption is that the Plaintiff has suffered damage, though unlike the position in England, the Defendant can seek to rebut this presumption."

11. In Hill v Church of Scientology of Toronto [1995] 2 SCR 1130 [1995] 126 DLr (4th) the Court held that "the protection of the good reputation of an individual is of fundamental importance in a democratic society."

12. Defamation has been defined as the unlawful publication animo injuriandi of a defamatory statement concerning the Plaintiff. The statement is defamatory, if it has the effect of injuring the Plaintiff's reputation. The Plaintiff's reputation is injured if a statement intends to lower the Plaintiff in the estimation of right thinking members of society.

See: Joubert, THE LAW OF SOUTH AFRICA, Vol 7, 2nd Edition, p. 230.

Botha v Marais 1974 (1) SA 44 (AJ.

Mohamed v JASSIEM 1966 (1) SA 673 (A), at 709.

S A Associated Newspaper Ltd v Schoeman 1962(2) SA 613 (A) 616 - 617

13. A person's right to a good name and unimpaired reputation is also protected by our constitution as has been set out in the matter of Khumalo and Others v Holomisa, [2002] ZACC 12; 2002 (5) SA 401 where it was stated at 418 that:

"The value of human dignity in our Constitution is not only concerned with an individuals sense of self­ worth, but constitutes and affirmation of the worth of human beings in our society. It includes the intrinsic worth of human beings shared by all people as well as the individual reputation of each person built upon his or her own individual achievements. The value of human dignity in our constitution therefore values both the personal sense of self-worth as well as the public's estimation of the worth or value of an individual. It should also be noted that there is a close link between human dignity and privacy in our constitutional order. The right to privacy, entrenched in Section 14 of the Constitution, recognises that human beings have a right to a sphere of intimacy and autonomy that should be protected from invasion. This right serves to foster human dignity."

14. The elements of the delict can therefore be summarised as the unlawful or wrongful publication, animo injuriandi of a defamatory statement concerning the Plaintiff.

15. It is not an element of defamation that the statement should have been false because the defamatory nature of a statement is not dependant on its falsity. Once the Plaintiff establishes that a Defendant has published a defamatory statement concerning him or herself it is presumed that the publication was both unlawful and intentional.

BACKGROUND:

16. In and during May 1999 Plaintiff was mandated by Ariefdien his manager at the time in the Economic Development Department of First Defendant to investigate and make recommendations for the establishment of a Film Office. Plaintiff prepared a report and based on his recommendations the Cape Town Film Office (hereinafter referred to as Film Office) was established. After the Film office was operating for approximately 6 months or so First Defendant requested the auditing firm Deloitte & Touche (hereinafter

referred to as Deloitte) to do an investigation into certain irregularities or problems within the Film Office of which Plaintiff

was then the Supervisor.

17. The irregularities related to allegations about the issuing of fake permits for filming, irregular behaviour of staff members whilst on location, accepting cash for after hour work and in general to investigate the structure and operational side of the Film Office.

18. Some of the problems in the Film Office related to the fact that not sufficient time was allocated to overtime for members in the Film Office and staff were required to work weekends and also at night. Staff members refused to work overtime as they felt that they were not being adequately rewarded for overtime.

19. The auditors expressed particular concern about the conduct of one of the staff members of the Film Office, a certain Delcie, who was trying to persuade the auditors and I or First Defendant to allow film crews to pay the staff of First Defendant directly.

20. The auditors and First Defendant were obviously not happy with this request and the auditors expressed concern about whether Delcie was properly qualified for the position he held and whether he should not function at a more junior level. The report recommended that Delcie be trained in the areas of expertise required of a film co-ordinator.

21. According to the evidence presented by Plaintiff; First Defendant did not act on the recommendations made by Deloitte in their report relating to their investigation into the alleged irregularities in the Film Office.

22. On 11 April 2001, Ariefdien informed Plaintiff by letter that he would be required to take full responsibility for the operational

side of the Film Office. He was also told to involve the film co-ordinator in the management of the film unit to ensure that the

Film Office functioned effectively.

23. Plaintiff was surprised by this, particularly bearing in mind the comments made by Deloitte about Clifford Delcie.

24. On or about 6 June 2001 Randolph Solomons (hereinafter referred to as Solomons) an employee of the Film Office complained in a written affidavit of two

(2) senior traffic officers who took part in the making of the film and who allegedly used their official vehicles during the shooting of the film "Manhunt".

Notwithstanding this report First Defendant took no action against these employees.

25. Subsequent to this D Begley assistant City Treasurer (Auditing) prepared a report on 12 December 2001 in which he expressed concern about the fact that although Deloitte had prepared a report expressing concerns about the manner in which the Film Office

operated and that film permits were still being issued from that office in an irregular manner.

26. Plaintiff reported the incident to his superior and made certain recommendations to rectify the system, but his recommendations were not implemented.

27. I find First and Second Defendants lack of response and failure to follow the recommendations by Deloitte, D Begley and Plaintiff most bizarre in light of the raid that followed at a much later date, the subsequent suspension of Plaintiff and other members of the Film Office and the closure of the Film Office.

28. What seems clear from Plaintiff's evidence was that First Defendant was aware that there were alleged financial irregularities in the Film office which indicated that certain staff members were still pocketing money when dealing with the issuing of film permits.

29. The evidence further indicates that there were no problems between either Plaintiff and Second Defendant on the one side or Plaintiff and Cuff (of the Film Commission) on the other side.

30. In a letter addressed by the Film Commission in their Newsletter of August 2002 the interaction between Plaintiff's Film Office and the Film Commission was described as "an excellent working relationship" and the Film Commission praised the assistance

provided by Plaintiff's Film Office as "excellent".

31. According to Plaintiff the Second Defendant was appointed director of Economic Development and Tourism in early March 2002.

32. On or about 18 March 2002 Plaintiff addressed a letter to Second Defendant with reference to the report containing negative aspects in the Film Office. In his report he expressed concern about inter alia the heavy workload, lack of staff and he requested that staff be seconded to the Film Office. He also requested that additional staff be appointed to help with the heavy workload.

33. Second Defendant responded to his plea by stating that there was no money for additional staff.

34. According to Plaintiff his investigation however found that there was indeed funding available which could be allocated for additional staff albeit on a contract basis.

35. I am satisfied that Plaintiff has shown that the assertion by Second Defendant that there was no money available for additional staff was false. In fact the documentary evidence showed that for the period June 2002 and June 2003 an amount of approximately R1.7 million rand was available for use within the Film Office.

36. Second Defendant later conceded that the request for additional staff was warranted.

37. Plaintiff testified further that Michael prepared a report or letter to his supervisors in which he alleged that there was inter a/ia secrecy surrounding the hiring of traffic officers for film shoots, the payment of these officers and the fact that a private vehicle was driving around the City Centre displaying the decals of the Cape Town City Traffic Department with Plaintiff's approval.

38. I find that not a shred of evidence was presented to support this unsubstantiated allegation by Michael. Michael was not called to testify at the trial on behalf of the Defendants.

39. Plaintiff in any event denied these allegations and denied that he refused to co-operate with the Cape Town City Traffic Department.

40. As a result of his unhappiness about these developments Plaintiff lodged a formal grievance on 22 July 2002.

41. The grievance related specifically to the failure on the part of management to respond to his request for the employment of contract staff in the Film Office especially during peak filming season. He concluded the grievance by stating that if matters were not rectified he would be forced to resign. He also made certain suggestions to rectify the situation.

42. Plaintiff followed up his grievance with an e-mail dated 2 August 2002 addressed to Second Defendant requesting her to either support his recommendations or to indicate what her attitude was regarding his

recommendations by the 7th of August 2002.

43. According to Plaintiff Second Defendant did not respond by the deadline date.

44. On the 8th of August 2002 Second Defendant sent an e-mail to Plaintiff in which she requested him to withdraw his grievance as according to her there seems to have been a misunderstanding regarding her position.

45. Second Defendant explained that she was in hospital with a miscarriage, was not aware of his e-mail, expressed concern with the cut-off date for her to respond and the fact that Plaintiff seemed to imply that she did not support his requests.

46. According to Plaintiff the effect of the further contents of the e-mail from Second Defendant was that Plaintiff had first to show that his office was better organised, worked more intelligently, before the appointment of more staff for that office could be justified.

47. Plaintiff testified about the Cape Film Commission which was a Section 21 Company funded mainly by the Provincial Government and on a secondarily basis by First Defendant.

48. The Cape Film Commission is a regional body which served the whole region and which operated as an overseeing body to look after the interest of the film industry.

49. Plaintiff was dead set against the merger of the Cape Film Commission with the Film Office. He was also never consulted by the Defendants or asked for his input in regard to the merger of the Film Commission with the Film Office.

50. The evidence show that without Plaintiff's knowledge arrangements were being put in place for the secondment of staff to the Film Commission when the merger was affected.

THE FIRST CAUSE OF ACTION:

51. The basis of Plaintiff's first cause of action namely the contents of the articles containing the defamatory material were identified by the Plaintiff in his evidence and the existence thereof is common cause.

52. Defendants deny that a causal nexus exist between any conduct on the part of the First Defendant and I or its employees and the publication of the aforesaid newspaper articles.

53. It was argued on behalf of the Plaintiff that the nexus did indeed exist between the conduct of certain employees of First Defendant,

acting within the course and scope of their employment with First Defendant, and the publication of the said newspaper reports.

54. According to the Plaintiff it was clear that the newspaper report of 20 March 2003 identified him by name and linked him to the criminal activities of:

Issuing fake permits; Actions of fraud and corruption; and Actions that could "embarrass the City internationally."

55. It was further contended that the report that followed on 21 March 2003 need not have identified Plaintiff again as this had been done the day before and by such implication yet again, linked the Plaintiff to:

The issuing of fake permits; A "lucrative syndicate" that suggested Plaintiff's involvement in organised crime; A massive body of criminal activities resembling an "iceberg" of which only the "tip" was referred to in the newspaper report.

56. To illustrate the connection between the First Defendant and the publication of the newspaper reports Mr Barnard for the Plaintiff

referred to the judgment of LAWS LJ in McManus and Others v Beckham [2002] EWCA Civ 939; [2002] 4 ALL ER 497 where it is stated that:

"The observation of Bingham LJ as he then was in Slippers case [1991] 1 ALL ER 165 at 179, (1991) 1 QB 283 at 300 "that defamatory statements are objectionable not least because of their propensity to percolate through underground channels and contaminate hidden spring" states an ancient an persistent truth, long ago vividly described in Virgil's account of Aeneas and Dido Queen of Carthage (see Aeneid iv 173 - 188)."

57. According to the Plaintiff the primary publication affected by First Defendant in having passed on or caused to be passed on certain information to newspaper reporter, Mr Johan Schronen (hereinafter referred to Schronen) of The Argus newspaper, and the republication of such information by Schronen and a further newspaper reporter, Mr Ashley Smith of the Cape Times newspaper, constituted the cause of his defamation.

58. The approach 1n English Courts relating to republication of defamatory statements is set out in Halsbury, Laws of England, 4th ed, Vol 28, para 80, pp 40 - 41:

"The circumstances in which the original speaker is responsible for the repetition are -

(i) where the original speaker authorised the repetition to the other person,

(ii) where the original speaker intended that the person to whom he uttered the slander should repeat it to the other person,

(iii) where the repetition of the slander to the other person was the natural result of the original publication to him who repeated it, or

(iv) where he to whom the original publication was made was under a duty to repeat the slander to the other person and the original speaker was aware, at the time of the original publication, of the facts and circumstances out of which that duty arose."

59. In Vengtas vs Nydoo 1963 (SA) 358 (D & CLS) at 393 a - g it was stated in similar vain that:

"It seems to me that a person who publishes a defamatory statement is prima facie not liable for damages flowing from its unauthorised voluntary republication by either person to whom in the first instance he published it, but there may be exceptional cases in which he is liable. Those exceptional cases are: (1) where the person who published the defamatory statement originally authorised or intended that their should be a republication to a third person, or (2) where it's repetition to the third person was the natural and probable result of its original publication to him who repeated it, or (3) where he to whom the original publication was made was under a moral duty to repeat it to the third person and the original publisher was aware at the time of the original publication, of the facts and circumstances out of which that duty arose."

Moolman v Slovo 1965 (1) SA 760 (WLD) at 762 G - 763 C

Buthelezi v Poorter and Others 1975 (4) SA 608 (WLD) at 615 D - I

60. Mr Barnard for the Plaintiff argued that if a person submits material to a newspaper or tells a reporter a story defamatory of the Plaintiff without the restriction on its publication, makes statements at press conference or issues a press release he will be liable for the publication in the newspapers.

(See McManus and Others v Beckham Supra; Shepard v Nabb 581 A.2d 839 (Md.Ct.App.1990) at 844[6] to 845;

Brown v First National Bank of Mason City 193 N.W.2d 546(1owa) 1972) at 554 (V);

Gordon v Panday (Trinidad & Tobago) H.C.A No Cv 1443 of 1997 at pp 33 - 37;

Thomas v McMullan et al 2002 BSCS 22 (British Columbia) at p 40 (121);

Gatley on Libel and Slander, 9th ed, (London: Sweet and Maxwell, 1998) Vol 1 at p 155 - 156

61. It was argued on behalf of the Plaintiff that the republication of the defamatory material relating to Plaintiff's first cause of action occurred under circumstances where:

61.1. Defendants by necessary implication authorised the republication, and in any event intended that there should be a republication thereof, and in any event,

61.2. The republication was the natural and probable consequence of the original publication to Schronen.

62. Mr Barnard contended that any distinction between the above sets of circumstances, in the present case is therefore not necessary as he argued that Plaintiff had discharged the onus of proving both such sets of circumstances.

63. The Plaintiff bears the onus of proving what statements were made or that the information was given by Second Defendant and or Bolton and or Strange.

64. Plaintiff further bears the onus of showing that it was used for the purposes of the articles in question and that the Defendants were therefore responsible for the publication of the articles.

65. In the present case I am satisfied on the evidence that the Plaintiff has proved that the articles that appeared in the newspaper of and about him does indeed create the impression that he is linked to criminal activities such as for example the issuing of fake permits; actions of fraud and corruption and actions that could embarrass the City internationally.

66. One of the articles goes further in that it suggests that he is involved with a lucrative syndicate and that he is involved in organised crime and much more serious criminal activities.

67. These articles were published of and about Plaintiff in circumstances where there was with respect no evidence to support the averments. I have no doubt that the contents of the articles of and about the Plaintiff constitute defamation.

See: Independent Newspapers Holdings Ltd and Others v Suliman [2004] 3 All SA 137 (SCA)

68. I agree with the learned judge in the above matter where he states at para (47) that:

"... the consequences of premature disclosure of the identity of a suspect can be so traumatic for and detrimental to the person concerned when he or she may never be charged or appear in Court and, in fact innocent, that greater weight should be assigned to the protection of the constitutional right to dignity and privacy and the common-law right of reputation, than to the right of the press to freely impart information to the public."

69. The Plaintiff relied upon inferences he seeks to draw from the information contained in the press articles and the surrounding

circumstances.

70. From the evidence presented it seems clear that Bolton, Strange and Second Defendant were well aware of the fact that Schronen; the news reporter, wanted to do a story on the alleged irregularities in the Film Office.

71. The evidence presented creates a great suspicion that the information that formed the subject matter of the newspaper articles, had been passed on to Shronen by someone who was employed by the First Defendant or was acting in the scope of employment of, First

Defendant.

72. Based on the contents of the articles, which strengthens this suspicion, it would appear that Shronen was being kept abreast with the developments based on inter alia the following facts and circumstances as contended by Plaintiff:

72.1 the raid and the confiscation of the documents and computer equipment occurred during the late afternoon of 19 March 2003;

72.2 the early edition of the Argus newspaper of 20 March that carried the first report of Schronen; appeared at approximately noon;

72.3 in order to have had a report ready for publication on 20 March at noon; the script thereof had to be submitted substantially prior to the publication;

72.4 the article of 20 March (published at noon) stated that "emergency measures had been put in place";

72.5 Bolton's evidence confirmed that the measures were only put in place during the afternoon of 20 March i.e. after the publication of the article;

72.6 Charles Cooper of the media office of First Defendant could not have been the spokesman referred to in the article of 20 March (relating to the emergency measures) as he would not have known of these arrangements, and the media statement he was authorised to make, makes no mention of such arrangements;

72.7 the "spokesman" thus had to be an "authoritive" City Council official such as Bolton, Strange or Second Defendant since no regular employee; or outsider would have had any information on this highly confidential aspect;

72.8 in relation to the newspaper report of 20 March it was contended that reference to the fact that certain of the documents confiscated could only have emanated from person(s) who:

Controlled or was 1n charge of the possession of the documents had allowed Schronen access to some of such documents; or If a person(s) who had read the confiscated documents imparted such information to Schronen.

73. From the evidence of Strange it is also clear that the confiscated documents were under his control during the crucial period of 19 to 21 March and that the documents were under guard on First Defendant's premises.

74. Strange also confirmed that the confiscated documents had been inventorised and sorted by Maurer an employee of the First Defendant.

Strange also confirmed that at the time of the raid they believed that what they had found was what they had been looking for.

75. I am satisfied that Bolton herself had paged through some of the confiscated documents which must have made her aware of the contents of certain vital documents confiscated in the raid.

76. The members of the Forensic Unit of First Defendant were therefore clearly in a position to pass information to Schronen.

77. I was generally not impressed by the evidence of either Bolton or Strange in regard to their access to the crucial information that later appeared 1n the newspapers and their involvement and contact with Schronen.

78. I am satisfied that Strange in fact attempted to mislead the Court as to the knowledge held by him and members of the Forensic Unit and in relation to the contents of the seized documents. Strange could not explain to the Court why he concealed the information or tried to mislead the Court in this regard.

79. There are several other aspects of the evidence presented by Plaintiff's witnesses which raise suspicion and concern about their

involvement in regard to the publication of the newspaper reports which I need not refer to at this stage.

80. Neither First or Second Defendant presented any conclusive evidence (apart from the say so of Bolton of an e-mail, written and circulated by her to deny that she had been Schronen's informant) that First Defendant or Second Defendant and I or First Defendant's employees in the forensic office was the source of the newspaper articles that had been published.

81. Bolton's e-mail was never discovered, nor produced nor referred to by any other witness.

82. It was contended on behalf of Plaintiff that it was not necessary for Plaintiff to prove specifically who the guilty party was:

82.1 as Bolton, Strange, Maurer and Second Defendant were employed with the First Defendant and at the time acted in the course and scope of their employment with First Defendant and that their actions were therefore "vicariously attributable" to First Defendant;

82.2 any disclosures by the above parties to the press would not have been possible without the consent of Bolton and that Bolton had caused or facilitated the disclosure by Strange or Maurer.

83. Unfortunately Plaintiff was not able to provide any direct evidence of any communications between Second Defendant, Bolton, Maurer or Strange and Schronen that could have given rise to the articles in question.

84. It was argued on behalf of the Defendant that in order for the Court to draw inferences from the passages in the articles concerning the identity of the sources of the information that the reliability and accuracy of the articles must be examined.

85. It is important to mention that the author of the article, Schronen, was not called to testify by either party.

86. It is common cause that Schronen had advised both parties that he was not prepared to reveal the source of his information.

87. In the premises I am not persuaded by Mr Barnard's argument that a negative inference should be drawn; against Defendants for not having called Schronen to as he put it, to confirm "without revealing the identity of his informant; that his informant was neither Bolton, nor Van Deventer".

88. I am of the view that even if Schronen had testified that, that would not have taken the matter any further as it was clear that Schronen was not prepared to reveal the source of his information.

89. In the premises I am not prepared to draw a negative inference due to Defendants failure to call Schronen.

90. Plaintiff himself conceded that in the pursuit of sensation newspaper reporters misrepresent facts.

91. Bolton testified that Schronen was not regarded by the City's Communications Department as somebody who is trustworthy and one

always dealt with Schronen with a certain degree of circumspection.

92. The Plaintiff himself testified that he had considerable experience in dealing with the press and testified about an occasion where he had been misquoted in The Star newspaper.

93. Under cross examination he conceded that he had been extensively misquoted by Schronen in the articles in question. He conceded that the reference in the articles to the involvement of the Scorpions was a blatant untruth.

94. Plaintiff also conceded that prior to the involvement of Second Defendant, Bolton and Strange in the events relating to the Film Office, Schronen must have been in possession of a "wealth of information" of irregular activities in that office.

95. From the evidence presented to the Court it appears that the article of 20 March 2003 was based upon information which Schronen had in his possession prior to 19 March 2003, together with information given to him by the Plaintiff himself during the meeting on 17 March 2003.

96. Regarding the publication of the article in the Cape Times on the 28th of March 2003 the Plaintiff testified that he was named as one of the persons who was suspended from employment.

97. Mr Cooper the official spokesman for the City testified and it is clear from the article which was published that he refused to confirm whether or not Plaintiff had been suspended.

98. It is further clear from the transcript of the conversation between Plaintiff and Mr Cooper on 1 April 2003 and from the evidence of Mr Cooper himself that when Mr Ashley Smith the author of the article in question attempted to obtain telephonic confirmation from Mr Cooper of Plaintiff's suspension, Mr Smith was already in possession of the names of the persons who had been suspended.

99. It is further important to note that both Mr Cooper and Strange testified that whilst the draft press release prepared by Africom, a consultant to the City, included the names of the persons suspended, it was agreed by everyone, in particular the Second Defendant, that the persons should not be identified in the press release.

100. It is common cause that the handwritten amendments on the draft press release wr1ich was presented as evidence were those of Second Defendant and that the handwritten amendments specifically included an instruction "please do not list names".

101. Both Strange and Bolton testified that they had no dealings with Mr Ashley Smith. Plaintiff was unable to refute this testimony.

102. I find that prior to the 28th of March 2003 the fact of the suspensions must have been common knowledge amongst a large number of people employed with the First Defendant. This could include people whom Schronen refers to as unidentified informants.

103. When considering the evidence and bearing in mind what I have already said regarding Schronen's "Civic Centre insider" source of the article in question, and even with the concerns and suspicions that I may have regarding the evidence of Bolton and Strange, I find that the reference to a Civic Centre insider could refer to anyone working for the First Defendant or even an outsider who l1ad contacts within the Civic Centre.

104. I do not agree with the argument that if Schronen had received the information from either the Second Defendant, Bolton or Strange that he would indeed have identified his source as being either the Director of the Department or one of the Forensic Auditors involved in the investigation.

105. On the evidence before me I must therefore find that even if I am satisfied that the contents of the articles of and about the Plaintiff is defamatory and even if there is a high degree of suspicion about the role played by Second Defendant, Bolton and or Strange, that I am not satisfied that the Plaintiff has proved that the Second Defendant, or Bolton or Strange played any role in the publication of the aforesaid articles in the newspapers concerned.

106. Plaintiff has also not proved that either Second Defendant, Bolton or Strange gave any information to Mr Ashley Smith relating to the suspension of the Plaintiff and I or others.

THE SECOND CAUSE OF ACTION:

107. It is now necessary to examine whether or not Plaintiff has made out a case against Defendants based on the circulation of the e-mail sent by Second Defendant.

108. It was argued on behalf of Plaintiff that the actions of Defendants which included his suspension from employment and the defamatory

publication of facts relating thereto was foreseen and intended by Defendants and were prompted by particularly Second Defendant's

malice towards him and that:

108.1 Second Defendant having had a grudge against him as a result of the fact that he had lodged a harshly worded formal "grievance" against her and independently, or arising from such grudge,

108.2 Second Defendant's desire shared by First Defendant to remove Plaintiff from the Film Office to facilitate the merger of the Film Office with the Film Commission under the control of Martin Cuff in circumstances where Defendants knew that such merger would have been substantially difficult, if not impossible, to achieve whilst Plaintiff was to remain a person of authority in the Film Office and if all the processes of transparency required for a merger or privatisation within the ordinary course of events, were to be adhered to.

109. I agree that if one considers the evidence of Second Defendant's husband, Gary Nevin relating to how much value she placed on her professional reputation that it 1s not unreasonable to conclude that Second Defendant's reaction to the lodging of the grievance against her would have been severe and was likely to have resulted in the kind of reaction as alleged by Plaintiff.

110. It is not disputed that Second Defendant was upset by Plaintiff's e-mail and her response to the grievance raised by Plaintiff at the grievance hearing was to threaten to close down the Film Office.

111. It is further interesting that at the crucial time of the grievance hearing and even though Cuff had earlier sang the praises of the Film Office, that he as was argued, launched "a scurrilous, and vicious attack, in scandalous terms" against the Plaintiff.

112. Mr Barnard for the Plaintiff submitted that this attack by Cuff had the appearance of having been orchestrated and commissioned by Second Defendant.

113. Eventhough there are signs that this may be the case I am unable to find this as a fact.

114. What is however clear is that Second Defendant's intention was clearly to merge the Film office with Cuff's Film Commission.

115. I am satisfied from the evidence presented to me that the merger with Cuff's Film Commission could not take place unless Plaintiff was removed from office.

116. It is however incomprehensible that eventhough the Defendants knew about the alleged irregularities in the Film office since 2000 and as late as 2001 that no action whatsoever was taken to address such irregularities; particularly since these were the same irregularities Plaintiff was later accused of and which resulted in his suspension.

117. From the evidence presented it is clear that First Defendant was aware of and about the alleged irregular conduct of its employees in the Film office at least 10 days prior to the raid on 19 March 2003 and even earlier.

118. No action was however taken by First Defendant, nor was there at that time any talk of suspensions or talk of closing down the Film Office.

119. I find this most strange particularly bearing in mind the raid which followed on 19 March 2003 and the conduct of Second Defendant and the other employees of First Defendant involved in the raid.

120. The evidence indicates that the raid that took place on 19 March 2003 was pursuant to a meeting between Strange and Michael. At this meeting Michael alleged that Plaintiff as well as one Solomons had been involved in irregularities relating to the Film Office.

121. It is important to emphasize that in a sworn affidavit dated 20 March 2002 Michael's relied on and used Solomons as the source of his information relating to the involvement of the Plaintiff.

122. Both Strange and Bolton testified that the Film Office was closed down based on the information provided by Michael on 19 March 2003. It is not disputed that at the time of the raid Michael had not deposed to an affidavit.

123. From the evidence presented to me Second Defendant also issued letters of suspension to Plaintiff based on the affidavit of Michael.

124. I am most disturbed by the conduct exhibited by the Defendants in deciding to place any reliance on the say so of Michael who was in any event relying on information conveyed to him by Solomons. The contents of Michael's affidavit is a classical example of double hearsay.

125. I am satisfied that Defendants could not have had any real or reasonable belief in the truth of either Solomons or Michael's

allegations. I find that by relying on the double hearsay that they acted in a reckless manner.

126. It is clear from the evidence that Solomons was himself accused of fraud and later convicted of theft in relation to the irregularities

in the Film Office.

127. Any reasonable person who was confronted with information from such a source would have treated it with the utmost caution.

128. Strange testified that neither he nor any one in the Forensic Unit checked the veracity of the information provided by Solomons.

Interestingly, no affidavit was obtained from Solomons.

129. Defendants should have been further alarmed by the fact that apart from Michael basing his report on hearsay, that he himself had made unsubstantiated allegations against Plaintiff in May 2002.

130. It is common cause that First Defendant neither acted upon, nor did it pursue Plaintiff based on those earlier aIlegations.

131. Neither Strange nor Bolton, who was a qualified attorney with vast experience as a forensic investigator, could give a reasonable

explanation why the Registrar of Companies records were not searched and checked to verify the allegations of Michael and Solomons that Plaintiff and other employees had formed a company. Bolton's behaviour is inexplicable and quite frankly reckless since she was supposed to be an experienced attorney.

132. No attempt was made by anyone in the Forensic team to give Plaintiff the opportunity to respond to the allegations of his alleged

involvement as a stakeholder in KLD Contractors.

133. It is clear from the evidence that there was absolutely no basis in fact or law to rely on the allegations made by either Michael or Solomons.

134. I am satisfied that Plaintiff has in any event shown that the allegations made against him were false.

135. Eventhough I am not for purposes of this matter required to decide thereon, I am satisfied that Plaintiff's suspension was highly irregular and probably unlawful.

136. Of further concern to me is that eventhough Defendants established at an early stage of its investigation that the allegations against Plaintiff were false it refused to uplift Plaintiff's suspension.

137. It is important to note that Defendants were advised of the absence of evidence against Plaintiff by KPMG (who was working with and advising Defendants forensic investigators on this matter).

138. In fact Jane Prinsloo, the acting director of Second Defendant's department proposed that Plaintiff be reinstated when she too realised that there was no evidence implicating the Plaintiff.

139. I find that Defendants failure and refusal to uplift Plaintiff's suspension entrenched the untrue and false allegation that Plaintiff was guilty of irregularities.

140. I find that Defendants by their conduct on the whole paid little or no regard to Plaintiff's rights.

141. It is not unreasonable to conclude that since there was never any basis whatsoever for disciplinary action against Plaintiff, that for this reason Defendants could never proceed with a case against him.

142. Eventhough Plaintiff was described by Second Defendant's husband, Nevin (a defence witness) as "not a dishonest man", he was still suspended.

143. No reasonable explanation was given why the financial control officer (Irene Dreyer) or Arafat Davids who worked with Plaintiff were not suspended.

144. I am satisfied that the contents of the e-mail linked Plaintiff to irregularities into the issuing of film permits. I am further

satisfied that Plaintiff was implicated in the alleged irregularities, without any evidence whatsoever, and before any charges had been brought against him.

145. I find that the premature disclosure of Plaintiff's name in the e-mail linked to the alleged irregularities has been "so

traumatic for and detrimental" to Plaintiff that it constitutes defamation by the Defendants on the Plaintiff.

See: Independent Newspapers Holdings Ltd and others v Suliman (Supra) at par [47]

146. I reiterate that Defendants must have been aware of the dangers inherent in relying on the unsubstantiated allegations against the Plaintiff.

147. Notwithstanding this, the Second Defendant proceeded to circulate the damaging e-mail.

148. Cooper and Nevin testified that "the City of Cape Town "(i.e. First Defendant) leaks like a sea."

149. I accordingly find that Second Defendant must have foreseen that the addressees of the e-mail would read the newspaper reports of 20 and 21 March 2003 and associate it with the e-mail sent by Second Defendant.

150. Accordingly I find that the contents of the e-mail read together with the newspaper articles of and about Plaintiff based on the legal principles hereinbefore set out has resulted in the Plaintiff being defamed.

151. I am not satisfied that Defendants has discharged the defence of qualified privilege due to inter alia:

151.1 the fact that there was no justification for sending the e-mail to the addressees;

151.2 Second Defendant knew that there was no basis for the suspension and consequently the sending of the e-mail was sent with the full knowledge of the consequences and damage that may be caused to Plaintiff;

151. Second Defendant did not believe or could not have believed that the facts stated by her in particular in relation to the Plaintiff were true.

See: Naylor and Another v Jansen 2007(1) SA 16 (SCA)

THE THIRD CAUSE OF ACTION:

152. Plaintiff's third cause of action is based on the publication and I or republication of the contents of the affidavit of traffic inspector Michael.

153. It is common cause and it is not disputed that Michael was employed by the First Defendant as a traffic officer.

154. It can also be accepted t11at Michael acted in the course and scope of his duties with the First Defendant when he made and deposed to the affidavit and made it available to Strange.

155. From the evidence presented to the Court it is clear that Michael had, had prior contact with Schronen. It would also appear from the affidavit of Strange and from his notes that Michael had conveyed or revealed certain allegations to Schronen.

156. It must be accepted that particularly Michael knew that his source of information; i.e. Solomons, was a dishonest person and was himself involved in irregularities in the Film Office.

157. It is therefore not unreasonable to conclude that at the time that Michael made his affidavit and later disclosed the contents thereof to Strange and Schronen that he must have foreseen that Schronen would do a story about the events set out in his affidavit and in particular the irregularities attributed to the Plaintiff by Michael.

158. Michael was never called by the Defendants to testify about his involvement and contact with Schronen and I or to testify about the background and circumstances surrounding the affidavit prepared by him and how he dealt with it.

159. No reasonable explanation was given by the Defendants about why Michael was not called to testify. I must accept that he was readily available to testify on very crucial issues in this case.

160. In the premises I have no alternative but to draw a negative inference against the Defendants for their failure to call Michael

since as was stated by Watermeyer CJ in Elgin Firec/ays Ltd v Webb 1947(4) SA 744 (A) at 749, 750:

"It is true that if a party fails to place evidence of a witness, who is available and able to elucidate the facts before the trial Court, this failure leads naturally to the inference that he fears that such evidence will expose facts unfavourable to him. See Wigmore SS 285 and 286). But the inference is only a proper one if the evidence is available and if it would elucidate the facts."

161. It is obvious that the Defendants failed to call Michael as it feared that his evidence would expose facts unfavourable to Defendants.

162. I find that, it is indeed the information provided by Michael and the affidavit by Michael which set in motion this whole train of devastating events for the Plaintiff.

163. I am accordingly satisfied that the actions of Michael amounted to a publication of the defamatory material about Plaintiff, which publication was at the least reasonably foreseen to be republished.

164. I therefore find that as in the case of the e-mail circulated by Second Defendant that the publication and I or republication of the contents of Michael's affidavit constituted defamation by Defendants of the Plaintiff.

The application for absolution of the instance:

165. Before dealing with the quantum of Plaintiff's claim I deal briefly with the application brought by Defendants for absolution of tl1e instance.

166. Based on what I have already found hereinbefore, I am satisfied that Plaintiff had submitted evidence substantially beyond what is required of him to establish that Defendants had a case to answer.

167. Without finding that the application for absolution of the instance by the Defendants was vexatious, I am satisfied that Defendants must have realised at the time of bringing the application that it had a definite case to answer.

168. I am not however persuaded that the order for costs against the Defendant should be as between attorney and client.

169. Accordingly I order that Defendants are ordered to pay Plaintiff's costs of suit for the unsuccessful application for absolution of the instance.

The Quantum of Plaintiff's Claim:

170. In this matter the various causes of action by the Plaintiff are "so intertwined that any attempt to compensate for each of them separately would have been attended by a substantial risk of

compensating twice for what was essentially one delictual act, namely, the unlawful publication of the Plaintiff's identity in

articles defamatory of him."

See: Independent Newspapers Holding Ltd & Others v Suliman (supra) at [53]

171. In considering the appropriateness of the award for the amount of damages to be awarded to the Plaintiff I place reliance on what was said by Watermeyer J in Muller v SA Associated Newspapers Ltd and Others 1972(2) SA 589 (c) at 595 A where he stated that:

"The character and status of the Plaintiff, the nature and the words used, the effect that they are calculated to have upon him, the extent of the publication, the subsequent conduct of the Defendant and, in particular, his attempts, and the effectiveness thereof, to rectify the harm done."

172. From the evidence presented I find that Plaintiff was a loyal servant to the First Defendant. Prior to the events which caused him to be defamed he was praised for the good work he was doing in the Film office and Nevin (Van Deventer's husband) said of him that he was "not a dishonest man".

173. The effect of the e-mails, the contents of the affidavit of Michael's and the combined effect of the newspaper reports however portrayed the Plaintiff as a person who was involved in a crime syndicate, involved in criminal and corrupt activities of a very serious kind.

174. The defamatory articles were published in two local newspapers which has wide spread circulation in the Western Cape and the circulation of Second Defendant's email through the internet could be accessed in other provinces and internationally. No doubt the information would have been sourced and I or have come to the knowledge of international companies and film crews who used Cape Town as a destination to do film shoots.

175. As I have already stated, Defendants produced no evidence of any retraction, apology or any press release informing the public and I or persons employed by First Defendant, of Plaintiff's innocence or that he had been exonerated of wrongdoing.

176. Based on the evidence I have come to the conclusion that Defendants maintained an unrepentant attitude throughout.

177. Their conduct is worsened by the fact that even after they were advised of the lack of evidence against Plaintiff at an early stage of the investigation they indefinitely maintained Plaintiff's suspension on the unsubstantiated grounds of acts of dishonesty even after Plaintiff had been exonerated by external auditors.

178. Defendants further bizarrely rejected the recommendation of Jane Prinsloo on 31 July 2003 that Plaintiff be reinstated to "active

duty".

179. No disciplinary hearing was ever held against the Plaintiff. In fact Defendants refused and I or neglected to convene a disciplinary hearing notwithstanding Plaintiff's request that they do so.

180. Defendants instead brought new charges against Plaintiff, failed to provide further particulars to the charges and failed to pursue these new charges against Plaintiff.

181. Defendants were further dead set on not employing Plaintiff in his previous position in the Film Office and employed him on condition that he did not demand to be reinstated in the position he previously held.

182. It is common cause that Plaintiff eventually resigned his employ with the City Council.

183. I find that the defamation perpetrated by the Defendants on the Plaintiff had a huge financial and prejudicial effect on the

Plaintiff.

184. The manner in which the Plaintiff was treated and the effect of the defamation on him necessitates that I make an order commensurate with the damage suffered by the Plaintiff.

185. Since Second Defendant did not act in her personal capacity in relation to the e-mail of 24 March 2003, but rather in the course and scope of her employment, and eventhough her estate remained involved in the proceedings, I have decided not to make orders for damages or costs against the Second Defendant's Estate.

186. In the premises I make the following order:

Judgment for the Plaintiff against the First Defendant in the sum of R 100 000,00 with interest on such sum at the rate of 15.5 per centum per annum from the date of judgment to the date of payment and costs of suit.

30 April 2009