In the south gauteng high court johannesburg

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CASE NO: 2012/18758




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In the matter between:






[1] The plaintiff has instituted action against the defendant for damages for defamation in the amount of R15 million.

[2] The alleged defamatory statements were made by the defendant in an answering affidavit in opposition to a business rescue application brought by the plaintiff in terms of the provisions of sec 131 of the Companies Act 71 of 2008.
[3] The plaintiff, a businessman, and in person, brought the business rescue application against a company called Miranda Mineral Holdings Limited (“Miranda”). The defendant, as a non-executive director, was duly authorised by the board of directors of Miranda to depose to the answering affidavit in question, on behalf of Miranda. More about the business rescue application proceedings and the contents of the impugned affidavit later.
[4] Some factual background is necessary. From the papers as well as the oral evidence led, what is stated next is not in dispute or seriously challenged. Miranda is listed in the General Mining Sector of the Johannesburg Stock Exchange Limited (“JSE”). Miranda is essentially concerned with the identification, exploration and development of selected mineral resources, with a major focus on coal. In addition to its interests in the coalfields of KwaZulu-Natal, Miranda has interests in gold, diamonds, base and industrial minerals.
[5] In what becomes of significant importance later, in July 1999, Miranda acquired from Gold Fields Mining and Development (Pty) Ltd (“Gold Fields”), the rights to minerals, excluding the rights to gold, silver and precious stones, in Remainder of the Farm Rozynenbosch No 104, Division of Kenhardt, Northern Cape Province (“Rozynenbosch”). Rozynenbosch measured 3979,8494 hectares. The purchase price was R40 000,00 (Forty Thousand Rand).
[6] It is also not in dispute that during 2010 Miranda sought, without success, funding from Yakani Investments (Pty) Limited (“Yakani”), a shareholder holding at that stage about 32% of the shares in Miranda. However, subsequent funding was secured through Dr Thaksin Shinawatra (“Shinawatra), a Thai businessman. To this end, a written irrevocable agreement was concluded for an investment in Miranda by Shinawatra’s company of R108,6 million. In terms of the agreement Shinawatra, through his company, Global P S Telecom Investment Company Ltd (“Global”), would underwrite a form of rights issue known as a “clawback” offer. As a consequence, shares of about 15% of Miranda’s issued share capital were allocated to Global against an immediate payment to Miranda of R25 million, accompanied by a promise of further funding of some R83,6 million.
[7] Pursuant to the clawback agreement, and upon insistence by Shinawatra, the Miranda board agreed that Global would have three representatives on its board. These appointments included the Chief Financial Officer (“CFO”) and the Chief Executive Officer (“CEO”) positions. At the time, the plaintiff was the CEO of Miranda. At the same time Yakani, a Black Economic Empowerment (“BEE”) component of Miranda, insisted on similar representation on the board of Miranda. It was eventually agreed that Global would appoint three directors, Yakani two directors, and Miranda would retain three directors. The plaintiff says he thereafter agreed to resign as CEO in favour of Global’s nominee, Mr Glen Poff, but he remained on the board. In this regard the version of the defendant is that since both Yakani and Global had invested substantially in Miranda, whilst the plaintiff held only 4,09% shareholding through his family trust, Investment Facility Company 44 (“IFC”), the plaintiff had no right to continue as CEO.
[8] It is further not in dispute that during March 2011 Yakani appointed the defendant to the board to join Mr Gilbert Phalafala as Yakani’s second director. There was increasing acrimony between the plaintiff, on the one hand, and the defendant and Yakani representatives, on the other hand, about the conduct and the running of the affairs of Miranda. This, for a variety of opposing reasons, including the contention that the board of Miranda was controlled by Global and Yakani through their nominees on the board. On 2 September 2011, the plaintiff was removed by the board after invoking the provisions of sec 71 of the Companies Act 71 of 2008. The board was reconstituted. The clawback agreement concluded with Global in August 2010 was cancelled at the instance of Global and approved by the board in June 2011. As a consequence, there was no major funding from Global except short-term loans. The decision of the board to cancel the Clawback agreement remains controversial amongst the contending parties. The acquisition from Gold Fields involved 894 mining properties, giving Miranda 158000 hectares of land in the Northern Cape, North-West Province, Free State Province, Gauteng Province and Mpumulanga Province. Of the 894 properties, 54 of the original farms were identified as sites with potential mineral wealth. Applications to explore and possibly exploit these findings were lodged with the Department of Mineral Resources. The obtaining of permits from the Department of Mineral Resources ultimately led Miranda to the JSE in 2005, where it was reverse-listed in the General Mining Sector of the main Board. In January 2012, the business rescue proceedings were terminated as a result of a settlement agreement (“the Settlement Agreement”) entered into between the plaintiff and Miranda and the other entities involved in the litigation. The above factors and other facts as identified later in the judgment are largely common cause.
[9] With the above somewhat condensed background, I now turn to the events leading to the present action. In bringing the urgent business rescue application in the North Gauteng High Court, Pretoria, against Miranda, the plaintiff cited himself as the Deputy Chairman and non-executive director of Miranda. In the application, the plaintiff alleged, inter alia, that Miranda was financially distressed, and that it would be just and equitable for financial reasons that Miranda be placed under supervision and that the business proceedings commence. The plaintiff also made other allegations concerning the Miranda board, Global, Yakani and as well as the defendant.
[10] One of the supplementary affidavits relied upon by the plaintiff in the business rescue application came from Mr Lourens van Wyk (“Van Wyk”). The allegations made by Van Wyk were confirmed by the plaintiff in a confirmatory affidavit. The defendant was duly authorised by the board of Miranda to depose to the impugned answering affidavit in opposing the plaintiff’s application as supported by Van Wyk. This led to the current action.
[11] In the particulars of claim the plaintiff claims that several of the allegations made by the defendant in the said affidavit defamed him. The alleged defamatory allegations are set out in para 6 of the plaintiff’s particulars of claim and are, for the sake of completeness, reproduced in full immediately below.

6.1 Paragraph 17 – In essence Nel had caused the net asset value of Miranda to be overstated by approximately 80%. This overstated position was concealed by Nel and used by him to induced investors to take up shares in Miranda.
6.2 Paragraph 40.3 – Global’s agreement to invest was based on the strength of Miranda’s position. A financial position that Nel had caused to be misstated.

6.3 Paragraph 42.2 – Nel concealed the gross overstatement of Miranda’s financial position from Global, as he had done with Yakani and every other investor since the listing. Global would not have been interested in investing in Miranda but for this misrepresentation by Nel.

6.4 Paragraph 51.4 – Nel was negligent in attending to the conversion of the Old Order Mineral Rights to New Order Mineral Rights … The process was being mismanaged by Investment Facility Company 44. The Company owned by Nel and used by him to provide services to Miranda.
6.5 Paragraph 51.5 – Nel deliberately misled investors as to the value of Miranda’s mineral rights.

6.6 Paragraph 51.7 – Nel’s persistence in the appeals is a futile attempt to further conceal the loss of the rights from Miranda’s Board, its shareholders and potential investors.
6.7 Paragraph 61.14 – Nel’s approach was clearly a stratagem to acquire as many discarded rights as possible in order to create an illusion of value.
6.8 Paragraph 52.2.2 – Miranda is investigating if J H van der Merwe participated in Nel’s concealment of the loss of the mineral rights.
6.9 Paragraph 53.2 – Miranda is cleaning up the mess created by Nel.
6.10 Paragraph 54.2 – The mess created by Nel is best illustrated by the Rozynenbosch debacle. Van Wyk has been misled by Nel.
6.11 Paragraph 54.6 – Nel must have concealed the refusal from Miranda’s auditors and its Board.
6.12 Paragraph 54.16 – Nel was deliberately concealing the loss of the mineral rights from investors.
6.13 Paragraph 54.20 – Miranda has reported its suspicious [sic] of fraud as it is obliged to do in terms of section 34 of the Prevention of An Combatting Corrupt Activities Act No 12 of 2004.
6.14 Paragraph 54.21.6 – Another asset, Yaarl, has a value of R9 million. Nel failed to mention it would cost approximately R35 million to develop.
6.15 Paragraph 54.22 – Nel does not appear to have appreciated the abovementioned difficulties or he chose to ignore them in order to induce investors to invest in Miranda.
6.16 Paragraph 54.23 – The above difficulties present a situation where Miranda does not have a business. Miranda’s Board (and its shareholders) believed, based on the representations made by Nel that it was moving towards a position where it could sustain itself from the revenues to be generated by the mining operation of its subsidiaries and in particular Sesikhona Uithoek and Burnside. Miranda’s shareholders were providing funding to develop these assets to a point where they would generate revenue. It now appears that the assets in these subsidiaries are not capable of being developed. Miranda must find other means of generating income. Miranda is currently in the process of identifying and acquiring new assets.
6.17 Paragraph 59.1 – Nel raised funding through rights issues without disclosing the Rozynenbosch debacle.
6.18 Paragraph 65.3 – The Board is only now, after Nel’s removal as a director and with the assistance of KPMG, uncovering the extent of the misrepresentations made by Nel.
6.19 Paragraph 74.2 – The share price has fallen as a result of the failed clawback process, business rescue application and the uncertainty created thereby amongst investors in relation to the future existence of Miranda, and the removal of Rozynenbosch from Miranda’s balance sheet. All of this is attributable to Nel not the current Board.
6.20 Paragraph 75.5 – Nel had a policy of last minute fundraising that placed Miranda in difficulty when the clawback process stalled.
6.21 Paragraph 76.2 – Van Wyk has simply failed to appreciate the real issues and the extent to which he has been deceived by Nel.
6.22 Paragraph 85.4 – Global was induced by the misstated financial position to conclude the clawback agreement.

6.23 Paragraph 93.4 – Global had been misled by Nel and agreed to invest in Miranda based on the recognition of Rozynenbosch as an asset on the balance sheet.

6.24 Paragraph 93.4 – Global would have elected to cancel the clawback agreement based on the misrepresentations and Miranda would have found itself without any funding and without a benevolent shareholder in the form of Global.
6.25 Paragraph 96.2 – In my view it was irresponsible for Nel to have concluded such an agreement.
6.26 Paragraph 97.2 – The directors are not playing games with Nel. It is investigating serious misconduct by him. The purpose of the investigation is to place Miranda on a sound financial footing by correcting the damage caused by Nel.

6.27 Paragraph 100.6 – The decline in the share price is directly attributable to the business rescue application and the uncovering of the misstatements of value by Nel.
6.28 Paragraph 102.5 – Despite the business rescue application and Nel’s misrepresentation.
6.29 Paragraph 105.1 – The Respondent’s shareholders have been deceived by Nel. Nel faces claims by Miranda and its shareholders for damages occasioned by him.
6.30 Paragraph 111.2 – Global and Yakani have been steadfast in their support for Miranda and to continue to provide support despite having discovered Nel’s misconduct.
6.31 Paragraph 120.2 – A significant discovery from the various investigations has been Nel and IFC’s involvement in the Rozynenbosch debacle and the problems relating to Miranda’s prospecting rights.
6.32 Paragraph 121.2 – The Rozynenbosch debacle, for example, relates to an assets that has been repeatedly and falsely recognised in Miranda’s balance sheet at a value of R284 million.
6.33 Paragraph 121.3 – The business rescue application is clearly an attempt by Nel to regain control of Miranda and to continue to use it to his personal benefit.
6.34 Paragraph 130.2 – Miranda is recovering from the disastrous effects of Nel’s policies and misconduct.

    1. Paragraph 132.3 – Nel was recently removed from the Board as a result of his misconduct.

[13] The particulars of claim continue to allege in paras 7 to 11 as follows:
7. The said statements were untrue, malicious and made with the specific intention to defame the plaintiff and to injure his reputation. The plaintiff avers that the defamatory words were not necessary or relevant to the litigation of which they formed part and were not founded on any reasonable cause.

  1. The said statements meant, were intended to mean and were understood to mean or contain one or more or all of the following defamatory inferences, all of which are defamatory of the plaintiff –

    1. That the plaintiff had over a long period of time misrepresented the value of Miranda’s assets with the specific intent of defrauding investors to invest money in Miranda.

    1. That the plaintiff had committed a crime.

    1. That the plaintiff was dishonest.

    1. At all material times, the plaintiff was known to and understood or believed by the public generally and specifically persons with whom he had business dealings that –

      1. The plaintiff was the former Chief Executive Officer of Miranda Mineral Holdings Limited; and

      1. The plaintiff had been a highly respected businessman especially in the field of mining and mineral exploration.

      1. The plaintiff had been instrumental in founding Miranda Mineral Holdings Limited and other businesses over a long period of time.

    1. Accordingly the said statements were intended to mean and were understood to mean one or more of the following –

      1. That the plaintiff managed Miranda carelessly, negligently, fraudulently.

      1. That the plaintiff fraudulently misrepresented values to investors.

      1. That the plaintiff cannot be trusted generally and specifically with regard to the running of a public company or any business for that matter.

    1. The statement cost the plaintiff hurt, insult and humiliation and has affected his reputation and dignity.

  1. As a result of the aforesaid defamatory statements, the plaintiff has suffered damages in the sum of R15 million.

  1. The plaintiff’s damages are of a non-patrimonial nature in respect of the hurt, insult and humiliation suffered by him due to the aforesaid malicious and defamatory statements made by the defendant.

  1. The plaintiff avers that the defendant acted with malice or improper motives which evidenced over a long period of time and which lead to the forfeiture of any privilege which the defendant may claim in consequent [sic] of the statements being made in the course of judicial proceedings.

[14] The defendant on his turn, in his plea has raised several defences to the plaintiff’s claim. These include that the impugned statements were made in circumstances of qualified privilege; that the statements were true and in the public interest; that the publication of the statements was reasonable; and that pursuant to the business rescue proceedings, the parties entered into a written agreement in terms of which all the disputes between the plaintiff and Miranda were settled finally. In this regard the defendant contends that the Settlement Agreement was inclusive of the statements complained of in the business rescue proceedings.
[15] I now turn to the evidence led at the trial. The plaintiff testified and also called to testify as a witness Mr Peter du Preez (“Du Preez”). On the other hand, the defendant testified and also called as an expert witness a forensic auditor, Mr Allan Greyling (“Greyling”). In addition to the evidence led, several other documents, including financial statements of Miranda, pamphlets, articles, journals, reports, as well as the plaintiff’s Curriculum Vitae (“CV”), were handed up by consent of the parties during the trial. Reference will be made to some of these documents whenever relevant in the course of the judgment. Reference will also be made to specific evidence in relation to the applicable legal principles.
[16] The plaintiff testified about his business acumen and experience gained over several years. He admitted readily in extended cross-examination that some of the information as contained in his CV was incorrect. His evidence shows undoubtedly that he had vast experience in mining and the development of mines from a feasibility perspective to becoming fully operational. Although Afrikaans speaking, he testified in fluent English throughout. He, however, became somewhat emotional when he testified on how he felt hurt, degraded and defamed by the allegations of the defendant as outlined above. In his view, the allegations made by the defendant in essence conveyed that Nel was deceitful in his conduct of the affairs of Miranda and the publication of information from time to time.
[17] Both parties have in their rather helpful heads of argument succinctly summarised the extensive evidence. It is therefore unnecessary to ‘re-invent the wheel’, particularly in the light of the common cause facts set out earlier in this judgment.
[18] The plaintiff is a director of Investment Facility Company 44 (Pty) Ltd (“IFC”). In this capacity, he spearheaded the purchase of Miranda, an associated company from Gold Fields. Miranda holds some 158,000 hectares of precious metals, base metals and diamond mineral rights. As the CEO/Managing Director and shareholder of Miranda, the plaintiff was involved actively and intimately in the business of Miranda. He was invited to attend the audit committee of Miranda.
[19] The application for a prospecting permit in respect of Rozynenbosch was done by the plaintiff on behalf of Miranda. The plaintiff was also active in the reverse-listing of the Proper Group Limited (“Proper”), which later changed its name to Miranda. This was all in 2005. What is of significance for present purposes is that Proper did not rely on Rozynenbosch as an asset of any value in the listing save for the value of certain clay deposits. In this regard, the relevant documentation in the court bundle describe the deposit as follows:
Geological investigations costing in excess of R11.7 million in current terms have been conducted on the deposits located on the farm of 4000 hectares between Kakamas and Kenhardt in the Northern Cape. The resource size is estimated at 6 million tons, with estimated in situ contents of copper (30,000 tons), lead (240,000 tons), zinc (60,000 tons), and silver (31 million ounces).

[20] The evidence and documentation also show that in Miranda’s Annual Report prepared by the plaintiff, as CEO, and dated 30 November 2006, reflected that the board of directors had placed a value of R284 million as a fee income for Rozynenbosch. In this regard the 2006 Report at p 5 stated as follows:
Two exploration assets have been treated in this way to date:
The first CPR and valuation, approved by the South African Mineral Resources Committee (SAMRC) and the JSE, were prepared on the Turffontein clay deposit in North West Province. An indicated resource was identified; a valuation in excess of R22 million was substantiated. A second CPR and valuation were prepared during the reporting period on the Rozynenbosch base metal and silver deposit in the Northern Cape. An indicated resource was again identified and Miranda’s anticipated share of income was valued at R284 million on 31st August 2006. More detailed information on these two projects, and on Miranda’s other exploration assets, is provided in the Mineral Reserve and Resource Statement.

For the sake of completeness, the said Annual Report under the heading, “Valuation of Rozynenbosch Base Metal Project” stated as follows:
At the beginning of the current financial year, the board commissioned a Competent Persons Report (CPR) on the Rozynenbosch deposit, using in part an extensive data base of geological information produced by the Gold Fields group and Phelps Dodge dating back since the mid-1970’s. The report proved an indicated resource within an estimated in situ value of R3.6 billion. Furthermore, an internal project pre-feasibility study was completed to establish the economic viability of the project, and therefore the future cash flows from which Miranda would earn a royalty income. In terms of International Financial Reporting Standards (IFRS), the board placed a value of R284 million on the fee income that would be earned from Miranda’s anticipated share of the project’s revenue and which was reflected in the company’s February interim results. Details of the valuation model are available on the company’s website at

[21] The 2006 Report also mentioned that the conversion application in respect of Rozynenbosch was under appeal, and that Miranda possessed intangible assets to the value of R307 842 000,00 which included Rozynenbosch which was valued at R284 500 000,00.
[22] The evidence and the documentation also reveal that the application made by the plaintiff on behalf of Miranda for a prospecting right in respect of Rozynenbosch became controversial during 2006. On 5 July 2006 the Department of Minerals and Energy addressed a letter to the Director, Miranda, in the following terms:
Kindly be informed that after careful consideration of your application for a prospecting right, I, the Deputy Director-General: Mineral Regulation have by virtue of powers delegated to me in terms of section 103(1) of the Mineral and Petroleum Resources Development Act, 2002 (Act 28 of 2002) and in terms of section 17(2)(a) thereof, decided to refuse to grant a prospecting right in respect of the abovementioned property for the following reasons:

  1. Failure to comply with the requirements of section 17(1)(a) and

(b) Read with Regulation 7(1)(i) and (j) of the Mineral and Petroleum Resources Development Act, 2002 in that the applicant did not prove technical ability and proof of financial ability as required by Regulation 5(1)(i) and (j).

[23] I shall in due course return to the implications of the refusal of the prospecting right in favour of Miranda. For ease of reference, the Mineral and Petroleum Resources Development Act 28 of 2002, shall henceforth be referred to as (“the MPRDA”). The evidence further show that there was a further development in this regard. That is that, on 7 October 2007, the Department of Minerals and Energy granted a prospecting right to a company called Gumba Resources (Pty) Ltd (“Gumba”) in respect of Rozynenbosch. This was issued in terms of section 17(1) of the MPRDA. In the context of the present matter, it is significant to note that section 16(2)(b) of the MPRDA provides that:
No other person holds a prospecting right, mining right, mining permit or retention permit for the same mineral and land.

[24] On the evidence, it is not in dispute that in the 2007 and 2008 Annual Reports Miranda again included Rozynenbosch as an asset. In respect of the 2007 Report the annotation at p 58 read:
The effect of the depreciation of the Rand to the US dollar and the rise in commodity prices, has resulted in the value of this project increasing to some R617 million (August 2006 – R410 million). Given the current boom in commodity prices and the uncertainty as to the sustainability of prices over the long term, the board is of the opinion that the previously reported value of R284 million is a more realistically achievable value over the life of the project. The value of the project has therefore not been adjusted at year-end. Shareholders are referred to note 7 of the director’s report wherein the board has exercised its rights under the MPRDA to take the necessary legal action to ensure the conversion of its ‘old order’ rights to ‘new order’ rights in terms of the Act.

In the 2008 Annual Report p 55, also prepared by the plaintiff, the following was stated in regard to Rozynenbosch:
Prior to the enactment of the Minerals and Petroleum Resources Development of 2002 [sic], certain minerals rights were acquired from Gold Fields Limited one of which was the Rozynenbosch project. The new Act required that all ‘old order’ rights be converted to ‘new order’ rights and a date of 1st May 2005 was given by which applications should be made. The holder of any ‘old order’ rights has first preference to convert to ‘new order’ rights. Miranda consequently applied for the conversion of these rights within the prescribed period. The group was subsequently advised by the DME that these applications had been refused. Consequently the board of Miranda has exercised its rights in terms of the Act to appeal against this decision which the board believes is without foundation. The appeals have been lodged with the DME and are now in the process of being evaluated during which time the DME may not grant any of these rights to a third party. The board is confident that the group will be successful with its appeal and will be granted new order rights prospecting rights over these properties.
The contents of this report must be seen in conjunction with the evidence to the contrary, and also the letter from the Department of Minerals and Energy referred to in para [22] of this judgment, above.
[25] The evidence and documentation further show that, although there was a change in the accounting policy in regard to assets in 2009, the financial statements of Miranda still reflected Rozynenbosch as an asset. In his report (Directors’ Report at p 45), the plaintiff reported, inter alia, as follows:
in March 2009, Miranda Minerals filed a claim amounting to R284 million regarding the potential loss of mineral rights on Rozynenbosch and lodged an application for compensation. Summons was issued against government on 18 November 2009 in the amount of R284 million. The board has decided to follow this course of action as it represents the only appropriate legal means, protecting its rights and ensuring that it be compensated by government in the event of the expropriation of its mining title.
In addition, and under the heading, “Litigation Statement”, on the same page, and in regard to the appeal mentioned in the 2008 Annual Report, the plaintiff went on to state that:
Other than the appeal process and the legal proceedings related to Rozynenbosch, the directors are not aware of any other legal or arbitration proceedings, including proceedings that are pending or threatened, that may have or have had in the recent past, being at least the previous twelve months, a material effect on the company’s financial position.

[26] The Notes to the actual 2009 Financial Statements confirmed the legal action contemplated as set out in the plaintiff’s report. The Notes expressed the view that the directors of Miranda had assessed the most likely outcome to be either that the “new order” rights would be awarded to Miranda or that the company would be awarded compensation for having been expropriated.
[27] The evidence also showed that the 2010 Annual Report and Financial Statements again showed the Rozynenbosch as an asset of Miranda. In this regard it may be useful to reproduce somewhat extensively from the Report dealing with Rozynenbosch:
The project involves a lead, silver, zinc and copper deposit located on the farm Rozynenbosch in the Kenhardt district of the Northern Cape. Extensive exploration by Gold Fields and Phelps Dodge in the 1970’s and 1980’s has resulted in a clearly defined ore body of about 14 million tonnes, which carries SAMREC indicated resource status. Based on a “royalty” business model for the project, the directors placed a value of R284 million on the project in February 2006. The value has been calculated by discounting the future cash flows attributable to Miranda that are based on forecast commodity prices and exchange rates over the life of the mine as well as the market-related, revenue participation income appropriately discounted for risk. Applying commodity prices and exchange rates at 31 August 2010 to the model, gives rise to a 70% premium in the project valuation over the directors’ valuation, which is based on long-term prices and exchange rates. In a breakthrough for Miranda in its efforts to have its old order mining rights converted, the Department of Mineral Resources has recently confirmed the legitimacy of Miranda’s appeal against the initial refusal of the conversion. Miranda is confident it has a strong case to finally conclude this matter in its favour during the next six months. On the assumption that the new order prospecting right is granted, Miranda expects to proceed with its exploration programme by conducting additional drilling to confirm previous results and metallurgical recoveries, as well as to complete the scoping study. This is expected to be followed by the completion of a bankable feasibility study and an upgrade of the project’s indicated resource status to that of a probable or proven reserve.”

[28] It is also not in dispute on the evidence that, in the meantime and during 2008, the company Yakani, duly represented by the defendant, bought 34% of the shares in Miranda. These shares were purchased at 63 cents per share. The total amount of the shares acquired by Yakani was approximately R60 million. As set out in the plaintiff’s business rescue application, and confirmed by the defendant in his testimony, the defendant became a director of Miranda during February 2011 only.
[29] It was in his capacity as a board member of Miranda that the defendant had a meeting with attorney, Mr J H van der Merwe in September 2011. The evidence of the defendant is that it was during this meeting that he discovered that Miranda did not have a mineral right in respect of Rozynenbosch.
[30] As mentioned under the common cause facts at the commencement of this judgment, the plaintiff was removed as director of Miranda during 2011. The 2011 Annual Report of Miranda shows that Mr Andrew Johnson was subsequently appointed as CEO during August 2011. The defendant and his co-director representing Yakani, Mr Gilbert Phalafala, resigned from the Miranda Board during January 2012.

[31] What is of particular significance is that in the 2011 Annual Report, following the departure of the plaintiff, it was for the first time correctly reported that no asset value could be ascribed to Rozynenbosch. Equally significant, is the statement in this report at p 39 that:
Notwithstanding the above, it came to the attention of the Board that the PR in question has been granted to the third party whilst the application by Miranda is still pending. Miranda intends to lodge an appeal against this decision …
As noted in paragraph [23] of the judgment above, the third party beneficiary referred to is Gumba which was granted the prospecting right in respect of Rozynenbosch on 7 October 2007 already.
[32] The rest of the Report and the reflection of Rozynenbosch is captured as follows:
In the reviewed, abridged, provisional of financial results of Miranda for the year ended 31 August 2011, which were released in the SENS announced on 30 November 2011, this asset was reflected as derecognised. This was resultant upon an interpretation of the finalisation of an appeal process regarding an application for a Prospecting Right (‘PR’) in respect of an unused, old order Right subsequent to the implementation of the MPRDA … Due to the continued uncertainty surrounding the PR and the outcome of the application, the Board decided that the asset would remain derecognised.” (underlining added). SENS refers to the Stock Exchange News Services.

[33] Furthermore, on the evidence and the documentation, the reflection of Rozynenbosch as a non-asset in the 2010 Annual Report in the balance sheet of Miranda, is not in dispute.

[34] In regard to the 2011 Annual Report and in the annual financial statements of Miranda, the auditors, Deloitte & Touche, reported on 24 February 2012, inter alia, as follows:
In accordance with our responsibilities in terms of sections 44(2) and 44(3) of the Auditing Profession Act, we report that we have identified certain unlawful acts or omissions committed by persons responsible for the management of Miranda Mineral Holdings Limited which constitute a reportable irregularity in terms of the Auditing Profession Act, and have reported such matters to the Independent Regulatory Board for Auditors. The matters pertaining to the reportable irregularities are discussed in the Directors’ Report.

[35] The evidence of the plaintiff must be seen, not only in the light of the contentions of the defendant, but also with regard to the above largely common cause facts as revealed by the various documentation. The main and consistent contention of the plaintiff is that the information contained in the annual reports as captured above was prepared carefully and in consultation with other entities. He said that other persons/entities, including experts, were involved prior to the board, including himself, approved the information. However, towards the end of cross-examination the plaintiff was driven to make certain crucial and significant concessions. These included that if the board of Miranda and other said external parties/entities were factually incorrect in including Rozynenbosch as an asset of value in the annual reports and financial statements – up to the time it was subsequently derecognised – the plaintiff may also have been incorrect. The plaintiff also conceded readily that if the inclusion of Rozynenbosch as an old order mineral right of value in the annual reports and financial statements was factually incorrect, the entire board of Miranda should have been joined in the present action. He, however, says that he played no part in the preparation of the 2011 Annual Report.
[36] In regard particularly to the instant action, the plaintiff made a concession which, in my view, negated profoundly his current claim. This was that he could not say with certainty that the defendant acted with malice in deposing to the impugned answering affidavit. Neither could he dispute that the defendant actually took certain steps to verify the information published in the annual reports prior to deposing to the said affidavit. So too, when confronted with the resolution passed by the Miranda board authorising the defendant to represent Miranda and depose to the impugned affidavit, the plaintiff proffered no reasonable response. His insistence throughout the trial that the appeal against the refusal of the mining right permit in respect of Rozynenbosch by the Department of Mineral Resources and Development was still alive and an intangible asset of Miranda in the face of credible evidence to the contrary, is mindboggling. The application for prospecting rights was refused in 2006 and its file had been closed as showed by the documentary undisputed evidence. As stated above, the plaintiff maintained he was not acting and deciding alone but in consultation with others, including the audit committee. However, in evidence he attempted, rather lamely, to absolve himself from the clear misrepresentations by saying that Miranda held a mineral right in respect of Rozynenbosch and that he was corroborated by the board and the audit committee.
[37] I deal with the evidence of Du Preez. In the context of the present matter, the observation that the evidence of Du Preez, who testified on behalf of the plaintiff, does not advance in any meaningful manner the case of the plaintiff, is not out of place at all. He testified that he knew and worked with the plaintiff for a long period. In his view, the plaintiff is incapable ever to misrepresent or mislead people associated with him. He was involved when Miranda acquired the ‘old order’ mining prospecting rights from Gold Fields. He did not make decisions relating to Miranda independently but consulted with others, such as the board, the executive committee and the remuneration committee. He saw nothing wrong in the annual reports and financial statements showing Rozynenbosch mineral rights as an intangible asset. As in the case of the plaintiff, Du Preez, for some unconvincing reasons, maintains that the appeal to the Department of Minerals and Energy for prospecting rights of Rozynenbosch was re-activated and still alive. This is clearly contrary to the credible documentary evidence. Furthermore, like the plaintiff, Du Preez, towards the end of his cross-examination was driven to make certain concessions in favour of the defendant. It suffices to say that he conceded that his testimony does not establish any malicious intention on the part of the defendant. This had to be so since on his own version, Du Preez did not study fully and properly the defendant’s impugned answering affidavit, and the actual context in which it was made.
[38] As a consequence, and as argued by counsel for the defendant, Du Preez was not an impressive witness on crucial issues, for a variety of reasons. This is so in spite of his denial that he was called as a witness solely to portray the plaintiff in a favourable light. The assessment that he evaded questions and asked questions to be repeated or answered questions in cross-examination by posing questions, is not unfair to him. At best for him, the testimony of Du Preez failed dismally to contribute to a fair and objective adjudication of the disputes in this matter.
[39] On the contrary, the evidence of the defendant and his witness, Greyling, was extremely impressive, particularly on pertinent issues and for numerous reasons. There is no conceivable reason not to accept their testimony. For example, Greyling, who also prepared a written expert report on this matter, testified that for the Miranda board, which included the plaintiff as the CEO, to have reflected Rozynenbosch as an asset in the Annual Reports of 2006 to 2010, amounted to a clear misrepresentation about the true financial affairs of Miranda. This evidence is not only supported by the documentation referred to above, which is uncontested, but there is also no other evidence to counter it. Greyling is an admitted chartered accountant and a director of accountants at Law (Proprietary), a company specialising in forensic accounting. He is often appointed by the High Courts as a rescue business practitioner. His expertise as a forensic auditor is not in question.

39.1 Greyling was mandated by the defendant to provide an expert accounting opinion, particularly on the issue whether the accounting for mineral rights in respect of Miranda for its financial year 2006 to 31 August 2011 complied with International Financial Reporting Standards (“IFRS”). Prior to undertaking his investigation, Greyling was provided with all the relevant documentation, including Miranda’s annual financial statements for 2006 to 2011, the pleadings, the letter from the Deputy-Director General of the Department of Mineral and Energy addressed to the Directors of Miranda dated 5 July 2006 refusing the application for prospecting rights in respect of Rozynenbosch, as well as the relevant IFRS statements and related publications impacting on the appropriate accounting for mineral rights.
39.2 In his impressive evidence, Greyling advanced several cogent reasons for his opinion. As stated above, Greyling’s opinion was simply that the placing of a value of R284 million in respect of Rozynenbosch was a misrepresentation and misstatement in the annual financial statements of Miranda for the financial years ending 31 August 2006 through to 31 August 2010. Furthermore, that the annual financial statements for 2011 in fact correctly derecognised the Rozynenbosch intangible asset for the reasons advanced in such financial statement. These reasons were dealt with earlier in this judgment in paras [31] and [32] above. The misstatements were subsequently identified by the auditors, Deloitte and Touche, as “unlawful acts or omissions”, as set out in para [34] of this judgment. In regard to these misrepresentations, Greyling concluded that at best, the Rozynenbosch intangible asset should have been disclosed as a contingent asset only as a note and not in the balance sheet. As a consequence, the alleged defamatory statements of the defendant were relevant and true and in the public interest.
I prefer to deal in more detail with the defendant’s testimony later in this judgment below. However, it is to be remembered that one of the main defences raised by the defendant to the plaintiff’s action, is one of qualified privilege when he deposed to the impugned answering affidavit. In this regard I deal with some applicable legal principles directly below.
[40] It is settled law that the delict of defamation is the unlawful publication, animo iniuriandi, of a defamatory statement about the plaintiff. It is required of the plaintiff to allege and prove that the statement complained of refers to him/her. See in this regard Council For Medical Schemes v Selfmed Medical Scheme 2011 JDR 1608 (SCA) at para [52]. Similarly, in Khumalo v Holomisa 2002 (5) SA 401 (CC), at para [17], the Court stated that the elements of defamation are:
(a) the wrongful and

  1. intentional

  2. publication of

  3. a defamatory statement

  4. concerning the plaintiff.

See also Neethling Law of Delict 6 ed at 331.
[41] In the present matter, it is not in dispute that the impugned statements were in fact made by the defendant and also published. There is therefore a presumption of wrongfulness which calls on the defendant to rebut it by proving the presence of a ground of justification. There are several types of justification such as qualified privilege, truth, public interest and fair comment. In the instant matter the defendant’s main defence is that the statements he made were in the course of the litigation between plaintiff and Miranda in opposing the business rescue application. In Neethling op. cit. at 337, the learned authors state as follows:
To enjoy provisional protection, the defendant need only prove that the statements were relevant to the matter at issue. The plaintiff may then prove that, notwithstanding their relevance, the statements were not supported by reasonable grounds. In the absence of relevance or reasonable grounds, the defendant exceeds the limits of this privilege and acts wrongfully. If, however, it is found that the defendant’s assertions conform to these two requirements, the plaintiff may nevertheless show that the defendant exceeded the limits because he acted without an improper motive.

[42] As to the test to the approach, the Court in Borgin v De Villiers and Another 1980 (3) SA 556 (A) at 577D-G said:
The particular category of privilege which, in the light of the above finding, would apply in this case would be that which arises when a statement is published by one person in the discharge of a duty or the protection of a legitimate interest to another person who has a similar duty or interest to receive it (see De Waal v Ziervogel 1938 AD 112 at 121-3). The test is an objective one. The Court must judge the situation by the standard of the ordinary reasonable man, having regard to the relationship of the parties and the surrounding circumstances. The question is did the circumstances in the eyes of a reasonable man create a duty or interest which entitled the party sued to speak in the way in which he did? And in answering this question the Court is guided by the criterion as to whether public policy justifies the publication and requires that it be found to be a lawful one. (See generally De Waal v Ziervogel (supra at 122-3); Benson v Robinson and Co (Pty) Ltd 1967 (1) SA 420 (A) at 426D-F; Suid-Afrikaanse Uitsaaikorporasie v O’Maley (supra at 420-3)).

[43] In Zwiegelaar v Botha 1989 (3) SA 351 (C), 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 eventually upholding the defence of the defendant that the defamatory words were spoken on a privileged occasion, the Court at 356D-G said:
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 inquiry (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 436C). 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)).

[44] Prior to applying the above legal principles to the facts of the present matter, it is necessary to deal further with what the entire documentary evidence show, and thereafter again with the defendant’s evidence. The substantial controversy in this case centers around Rozynenbosch, its inclusion in Miranda’s annual reports and financial statements as an asset of value, as well as Miranda’s precise interest therein.
[45] Consequently, it has been argued on behalf of the defendant, correctly so in my view, that the statements contained in the 2006 Annual Report about Rozynenbosch, as outlined above, constituted misrepresentations for a number of reasons. These include the following: (In this regard I deliberately propose to borrow much from the heads of argument filed on behalf of the defendant):

  1. Miranda’s application for the prospecting right was already declined by the Department of Minerals and Energy on 5 July 2006. This fact was dealt with in paragraph [22] above of the judgment. The plaintiff knew about this as the letter from the Department of Minerals and Energy was addressed to “The Director Miranda Minerals (Pty) Ltd”;

  1. The declined application was not a conversion application but a new application. There is some importance in this regard since there is clearly a vast difference between a conversion application and a new application in terms of the MPRDA;

  1. If the old order right was unused in the one year period before the commencement of the MPRDA, such right is referred as an unused old order right. The holder of an unused old order right had the exclusive right to apply for a prospecting right in terms of section 8 of Schedule 2 to the MPRDA, but it had to be done in terms of a new application and the applicant’s application had to comply with the requirements of the MPRDA. This is so as the holders of unused old order rights, in terms of the provisions of the MPRDA, would be deprived of their rights (apart from the transitional arrangements) and such deprivation, coupled with the State’s assumption of custom and administration of those rights constituted an effective expropriation thereof. This was in fact confirmed in the cases of Agri South Africa v Minister of Minerals and Energy; Van Rooyen v Minister of Minerals and Energy 2010 (1) SA 104 (GNP) and Agri South Africa v Minister of Minerals and Energy 2012 (1) SA 171 (GNP);

  2. On the other hand, if the holder of an old order right had used that prospective of mining right in the one year period before the commencement of the MPRDA, then that right is referred to as a used old order right. In such an event, the holder of an used old order right could apply for a conversion of that right to a new order right without having to meet the requirements of a new application provided for in the MPRDA, but only subject to certain requirements in terms of section 6 of Schedule 2 to the MPRDA;

  1. As Miranda had an unused old order right in respect of certain base metals in respect of Rozynenbosch, it had to make a new application for new order rights. There can be no dispute that Nel knew this as he made a new application for the unused old order rights in respect of Rozynenbosch;

  1. As such, it was a misrepresentation to refer to the application in respect of Rozynenbosch as a conversion application and not as a new application;

  1. According to the Annual Report for 2006, Rozynenbosch was for lead, silver, zinc and copper, as stated above. This is a misstatement as silver was specifically excluded in the cession and Miranda did not apply for a new order right in respect of silver;

  2. It was also a misstatement to refer to “geological investigations costing in excess of R11.7 million in current terms” as neither Gold Fields nor Miranda spent R11,7 million to geological investigations. Nel admitted this in cross-examination;

  1. Miranda did not do prospecting at Rozynenbosch, which was a further requirement before Rozynenbosch could be shown as an asset, even if Miranda had the right;

  1. Even if Miranda had a prospecting right and even if Miranda was prospecting, the existence of a mining right, including exploration, could only be capitalised (shown on the balance sheet as an asset) when the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. It is demonstrable when “proven reserves” are determined to exist. In the case of Rozynenbosch, it was not a proven reserve but at its highest, an indicated mineral resource.

[46] The evidence of Greyling who testified on behalf of the defendant was truly significant. He made it clear that under the International Financial Reporting Standards (“IFRS”) entitled International GAAP 2012, Rozynenbosch could not be shown as an intangible asset or as a net asset value in the balance sheet, even if the refusal of the application for the prospecting right was under appeal, it was still merely a contingent spes that may be noted but may not be reflected as an intangible asset or as a net asset value.
[47] Based on the above as well as the documentary evidence, it was quite correctly in my view, pointed out and argued on behalf of the defendant that there were several reasons why Rozynenbosch should not have been shown as an intangible asset to the alleged value of R284 million in the financial statements contained in the Annual Report of 2006. It is clear that Miranda did not have that right and at best had a pending appeal, which is not equivalent to a right; Rozynenbosch was not a proven reserve but at best an indicated mineral resource; and Miranda did not actively prospect at Rozynenbosch. In this regard it was also, correctly in my view, argued that there was no basis that Nel, as the heart and sole of Miranda and as the person coming from a background in mining, would not have known that Rozynenbosch could not have been shown as an intangible asset let alone an intangible asset with value of R284 million. It was further argued, and also correctly in my view, that the above explains why Rozynenbosch was not shown as an asset in the reverse-listing, as the board of directors must have known that the reading panel of the JSE would not have permitted Miranda to rely on Rozynenbosch as an asset. The evidence of Nel, and in particular Du Preez, showed that the directors of Miranda became aware of the granting of a prospecting right to Gumba only by the end of 2009. However, the Annual Reports for 2007 for Miranda repeated all the misrepresentations contained in the Annual Report of 2006. From this it is clear that a conscious decision was taken by the board of directors to repeat its reliance on Rozynenbosch as an asset to the value of R284 million in the balance sheet of Miranda. There is merit in the argument that the probable inference to be made from this is that they must have known that the potential investors would not invest in Miranda (by buying shares in Miranda) in the absence of the value attributed to Rozynenbosch as that value constituted more than 80% of the assets of Miranda. As it appears from the common cause facts described above, the Annual Report for 2008 of Miranda repeated the aforesaid misrepresentations under the pretence of a potentially successful appeal against the refusal of Miranda’s application for a conversion to a new order prospecting right in respect of Rozynenbosch.
[48] I have already commented briefly on the evidence of the defendant, and as corroborated, where necessary by his witness, Greyling. He testified that he is a qualified chartered accountant and businessman. He is a director of Yakani, a Black Economic Empowerment (“BEE”) Company and became its executive director in 2010. His expertise include the financial, minerals and telecommunications sectors. It is common cause that he later became a member of the Miranda board. His company, Yakani, also has interests in mining.
[49] He said that prior to joining Miranda, and during 2008, Yakani was approached on behalf of Miranda with the invitation to invest in Miranda. He was told of Rozynenbosch as an asset valued at R284 million or even more. In considering the invitation Yakani relied on the 2006/2007 Annual Reports of Miranda, the SENS JSE announcements and reports. He took the trouble to verify the information supplied about Miranda by consulting other experts in the field of mining. Thereafter Yakani, as a BEE Company was convinced that it was the correct opportunity to invest in Miranda based on the value placed on Rozynenbosch and that there was a true and real right in Rozynenbosch. He understood the difference between ‘old order’ rights and ‘new order’ rights perfectly.
[50] As stated elsewhere in this judgment, it is common cause that Yakani subsequently proceeded to invest in Miranda by purchasing shares. At the time the plaintiff was at the head of Miranda and also the managing director. Yakani then became involved actively in the affairs of Miranda.
[51] It is also common cause that there was brewing and continuous tension between Yakani and the plaintiff representing the board of Miranda. There were various reasons for the tension. Chief of which were the defendant’s insistence on information relating to the assets of Miranda and the title deeds thereto. Yakani also wanted effective representation on Miranda’s board. The information was not forthcoming. This state of affairs led to an application for the removal of the plaintiff from the board. The issue of Rozynenbosch still listed as an asset of value in the records remained a vexed one up to 2010. It arose again in 2011 after the defendant had become a board member of Miranda. In July 2011 the plaintiff ceased to be the CEO of Miranda. The plaintiff, unhappy with the defendant’s probing and demanding information tendencies, threatened to proceed with the business rescue application, which he did subsequently. On the other hand, the defendant and the other board members thought that the business rescue application was not justified. This, in essence, led to the present action.
[52] The defendant testified that once he became part of the board of Miranda, he conducted his own investigations into the assets of Miranda, including Rozynenbosch. In this regard he consulted with the board’s attorney, Mr J H van der Merwe. The latter appraised him of the true position, namely that Miranda had no mineral rights in respect of Rozynenbosch and that such right was given to the company, Gumba, as stated above. The appeal against the refusal of the mineral right relied on by Nel was a futile exercise. In order to satisfy himself, the defendant testified that he studied the archives, confronted Miranda’s board about Rozynenbosch and studied a huge file from the board. The complete investigations carried out by the defendant on the affairs and assets of Miranda were handed over to the auditors, Deloitte and Touche and the auditors brought out a report as stated earlier in this judgment.
[53] In the defendant’s testimony, the plaintiff’s conduct as well as the persons or entities he consulted by including in the annual reports Rozynenbosch as an asset of value, from 2006 up to 2010, was a misrepresentation. The plaintiff as CEO and Managing Director misrepresented the true state of affairs to the public, shareholders and investors. He testified that in deposing to the impugned answering affidavit, he was merely responding to and rebutting the misrepresented allegations made by Van Wyk, as supported by the plaintiff in the business rescue application. He was duly authorised by the board of Miranda to do so. He had no intention at all to defame the plaintiff, nor malice towards him. Significantly, it was never put to the defendant in cross-examination that the alleged defamatory statements were made by him with any improper motive, intent or malice.
[54] In my view, the defendant was truly a genuine and impressive witness. This is also evident from his CV. He was a consistent witness throughout. He rendered his version clearly and eloquently in English. The explanation he gave about what steps he took once he discovered the misrepresentations by the plaintiff and the board in respect of Rozynenbosch, was reasonable and convincing. He explained satisfactorily the alleged defamatory allegations relied upon by the plaintiff in the context of his affidavit and opposing plaintiff’s business rescue application as instructed by the board of Miranda. The defendant, however, became slightly confused when cross-examined on as to at what stage the plaintiff acted as CEO or MD of Miranda. However, this confusion was later cleared up on re-examination when reference was made to the bundle of documents pointing out at which stage the plaintiff signed documents on behalf of Miranda in his capacity as managing director. It is however, significant that during cross-examination it was not suggested to the defendant at all that the alleged defamatory statements were untrue or irrelevant. When properly construed, the testimony of the defendant was not only corroborated by the undisputable documentary evidence, but also by the acceptable evidence of Greyling as discussed above.
[55] Based on the entirety of the above evidence, the crucial question is whether the defendant has proved on a balance of probability all the defences pleaded by him in particular, the defence based on qualified privilege. In deciding this question, guidance is given by the legal principles set out in paras [41] to [44] of this judgment above. In addition, the plaintiff’s counsel relied on, inter alia, Van der Berg v Coopers and Leybrand Trust (Pty) Ltd and Others 2001 (2) SA 242 (SCA), also reported in [2001] 1 All SA 425 (A); Burchell, The Law of Defamation in South Africa; May v Udwin 1981 (1) SA 1 (A); Universiteit van Pretoria v Tommy Meyer Films (Edms) Bpk 1977 (4) SA 376 (T); Homed v Cassim 1973 (2) SA 1 (RAD); and Joubert and Others v Venter 1985 (1) SA 654 (A). The defendant, on the other hand, relied on, inter alia, Hardaker v Phillips 2005 (4) SA 515 (SCA); LAWSA Vol 7, 2nd ed para 251; National Media Limited v Bogoshi [1998] All SA 347 (SCA) (also reported at 1998 (4) SA 1196 (SCA); and Khumalo and Others v Holomisa 2002 (5) SA 401 (CC). I have had regard to all these authorities and case law, as well as other authorities mentioned later below.

[56] In the heads of argument on behalf of the plaintiff, the main contentions can be summarised as follows: that the defendant was not entitled to qualified privilege protection since he clearly called the plaintiff a ‘deceiver’ based solely on the annual reports of Miranda; the personal defamation of the plaintiff leads to one conclusion only and that is that malice was glaringly apparent; the defendant was attacking the plaintiff in order to achieve Yakani’s stated objective of taking over control of Miranda; the reference to the plaintiff as being deceptive etc were not relevant; pertinent or germane to the issue of the proceedings, and could not be justified by the defendant saying that the plaintiff was the driving force behind Miranda; and finally, rather interestingly too, the plaintiff argues that the alleged defamatory statements were based on Miranda’s approach to Rozynenbosch, which is a complex and technical issue.
[57] At the risk of getting bogged down in legal principles applicable to matters of this nature, I have to refer to a case decided some 99 years ago. That is Rubel v Katzenellen-bogen 1915 CPD 627. The head note reads:
A party, who, in a judicial proceeding, makes an affidavit containing a defamatory statement of the plaintiff, in a matter pertinent to the enquiry, enjoins a qualified privilege, and it is incumbent on the plaintiff to prove that the words complained of were used not in the reasonable and bona fide performance of a duty; that they were used maliciously with intent to injure, and that they were false, the defendant not having any reasonable cause for believing them to be true.

Some 33 years later, in Blumenthal v Shore 1948 (3) SA 671 (A) and in ultimately dismissing the plaintiff’s claim for defamation, the Court said that:
There are two questions which a Court must answer, in deciding whether a defamatory statement was published on a privileged occasion, if defamatory matter apparently unrelated to the purpose of the occasion was included in the communication:

  1. Did a duty or interest exist which entitled the person to speak?

(b) Was the speaker in fact speaking in discharge of his duty or in protection of his interest?
See also Hardaker v Phillips supra in which the SCA held that the statement complained of fell within the scope of qualified privilege afforded to witnesses in judicial proceedings, and enunciated several significant principles, including that the protection afforded to a litigant or witness was not limited to those defamatory statements relevant to an issue in the ‘true or real sense’. If that were the case the protection would be extremely limited and litigation would be a lot more perilous than it already was. The Court went further to find that in that case the defamatory statement was not only a response to what the respondent had said in his answering affidavit about his attitude to drugs but was undoubtedly relevant to that professed attitude. See also Defamation, Vol 32 (2012) 5th ed at para 503. (Cf Tuch and Others NNO v Meyerson and Others NNO 2010 (2) SA 462 (SCA).) The cases of May v Udwin supra; Joubert and Others v Venter supra, particularly at 699; and Van der Berg v Coopers & Lybrand Trust supra, are also exceedingly important on the question of qualified privilege.
[58] In applying all of the above legal principles to the facts of the present matter, the conclusion that the defendant has proved his defence of qualified privilege, became irresistible. He has proved that the statements complained of were made in judicial proceedings in which he was responding to the proven misrepresentations of the plaintiff. He was protecting legitimate interests of Miranda who had duly authorised and given him the duty to depose to the impugned answering affidavit. The statements were also relevant to the specific proceedings. It has not been proved that the defamatory statements were made by the defendant with any improper motive or with malice, as, correctly in my view, argued on his behalf. Both the plaintiff and indeed his witness, Du Preez, conceded that they could not detect any malice on the part of the defendant. Significantly, the plaintiff readily conceded that, if his present claims have any merit, the whole Miranda board and those who had a hand in the compilation of the annual reports and financial statements should have been part of the present action. The statements, I find, were also true and in the public interests. The argument of the plaintiff to the contrary was without merit. On the probabilities, the consistent various misstatements made in the financial statements of Miranda over several years, as detailed in the body of this judgment, suggested that such misrepresentations were made deliberately. In my view, in any event, when considered in its entirety, the sum total of the plaintiff’s complaint that reference to him as been deceptive, is doubtfully not defamatory in the circumstances of this case. Moreover, as dealt with immediately below, the business rescue proceedings brought by the plaintiff were later settled. For all these reasons, I find that the defendant was protected by privileged occasion and, he has also proved that the alleged defamatory statements constituted a reasonable publication as referred to in National Media Limited v Bogoshi supra, and Khumalo and Others v Holomisa supra. The plaintiff’s action calls to be dismissed on this ground alone.
[59] If, however, I am incorrect in my determination set out above, I am of the view that the plaintiff cannot succeed in his action for an additional reason. This is that, the business rescue application proceedings brought by the plaintiff against Miranda, which led to the present action, were later settled. The Settlement Agreement was in full and final settlement. As stated earlier in this judgment, the written Settlement Agreement, bundle A141-147, was entered into between the plaintiff and Miranda and other entities pursuant to the business rescue application.
[60] In terms of clause 2 of the Settlement Agreement, the plaintiff not only undertook to withdraw the business rescue application, but significantly, also to, “immediately withdraw all other pending litigation against the company and abandon any claims not yet instituted”. In the definitions’ section of the Settlement Agreement (clause 1.1.3), “Company” is defined as, “… means Miranda Mineral Holdings Limited …”. Clause 7 of the Settlement Agreement provides that:
This agreement is in full and final settlement of all claims of whatsoever nature that any of the parties hereto has now or may in the future have against any of the other parties hereto.

[61] In determining this issue, and for the sake of brevity, it is required that the basic principles of interpretation of contracts be applied in order to ascertain the true meaning of the Settlement Agreement as enunciated in, inter alia, Coopers & Lybrand and Others v Bryant 1995 (3) SA 761 (A) at 767E-768E. See also Engelbrecht and Another NNO v Senwes Ltd 2007 (3) SA 29 (SCA) at para [7].
[62] In the present action, the defendant in his plea contended that the Settlement Agreement included all the disputes between the plaintiff and Miranda in full and final settlement, including the alleged defamatory statements made by him on behalf of Miranda in the business rescue proceedings. On a proper interpretation based on the above legal principles, the contention of the defendant in this regard had merit. In any event, the plaintiff when he testified, conceded, and quite correctly so in my view, that if the defendant in fact made the statements and was duly authorised by Miranda (which is the case), that would have been included in the full and final settlement as envisaged in the Settlement Agreement. On this basis too, the plaintiff’s action calls to be dismissed.
[63] Prior to concluding this judgment, one matter deserves mention. That is that, during the trial the parties undertook to provide the Court with a transcript of the trial record. This never occurred fully, regrettably. Whilst preparing this judgment during December 2013, the parties were contacted to comply with their undertaking but to no avail. The Court was provided only with a portion of the transcription which contains the evidence of Du Preez. In any event, it was possible to finalise this judgment based on the Court’s notes made during and immediately after the trial. This tendency calls to be discouraged as it clearly delays the preparation and finalisation of reserved judgments. I need say no more.
[64] I deal briefly with the question of costs. It is a discretionary matter. There is no reason why the costs should not follow the result. The defendant has achieved substantial success. He is entitled to his costs.

[65] In the result the following order is made:

  1. The plaintiff’s action is dismissed with costs.





DATES OF HEARING 30 MAY 2013 – 6 JUNE 2013

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