IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)
Case No: A530/2008
In the matter between:

and

JUDGMENT: 26 JUNE 2009

OWEN ROGERS AJ 
Introduction

[1] The appellant as defendant was sued by the respondents as plaintiffs in the Magistrates Court for the District of Cape Town for damages arising from alleged defamation. For convenience, and meaning no disrespect, I shall refer to the appellant as Steyn and the second respondent as Cheminais. I shall refer to the first respondent as Alexandra Security.

[2] Sunset Links is a housing estate adjacent to the Milnerton golf course. At the time relevant to this case there was a substantial number of completed and occupied houses on the estate but some were still under construction and some erven were vacant.

[3] Alexandra Security was appointed with effect from 1 December 2005 to provide security services to the estate. The terms of the appointment were subsequently recorded in a written contract. The schedule to the contract, which set out the services to be provided by Alexandra Security, was not attached to the copy of the contract adduced as an exhibit. However, the proposal by Alexandra Security, which was accepted by the trustees of the Sunset Links Home Owners Association ("the SLHOA"), indicates that the company was to provide four security officers and a security manager for the day shift, and three officers and a security manager for the night shift. Alexandra Security was also to supply, for the use of these employees, a response vehicle, a golf cart, a bicycle, four two-way radios, a guard monitoring system and two surveillance cameras at the entry and exit booms.

[4] By and large the estate was incident-free until March 2007. On 2 March 2007 there was a break-in at a home and the intruder fired a shot while fleeing. A number of further break-ins or attempted break-ins occurred over the period March to June 2007. It appeared that the estate was being targeted by criminals.

[5] Steyn was the owner of an erf in the estate. In the first half of 2007 he was having a dwelling built on the erf and was regularly on site to supervise the contractors.

[7] On 7 June 2007 Alexandra Security, under Cheminais' signature, wrote a letter to all residents as follows:

"It has been noted over the past three months that 95% of the home owners at THE LINKS still to date have not yet looked at their general security needs at home. Home owners are still not making use of their alarm systems, alarms systems are still found not working and very importantly patio doors and windows are still left open at night.

Over the past two weeks we have had no less that five incidents of house breaking and theft reported at THE LINKS. Not one of these incidents was forced entry and access was obtained by climbing through open windows and walking through patio doors.

The following issues have been noted with regard to some homes that had been visited over the last two weeks.
	No system installed at all.
	Current system is totally outdated and in serious need of an upgrade.
	Current system is faulty and therefore it is not in use.
	Residents do not understand the workings of the system and therefore it is not in use.
	Alarm system is not linked to any monitoring company.

We as a concerned security company still offer you as a home owner at THE LINKS a free service with regard to the inspection of your current alarm system, intercom and CCTV systems.

Please note that because of the amount of houses on the estate this would need to be done on a first come first serve basis.

Should you have any queries please do not hesitate to contact our office for assistance in this regard."

[8] Steyn was angered by this letter. He felt Alexandra Security was blaming the residents for the increased crime. The exit camera was still being held in place by the same piece of wood. He decided to pen an open letter to Alexandra Security and to the trustees for circulation to all residents. He showed a draft to a friend on the estate, one Gomes, who suggested that the letter be toned down in what it said concerning Mr Wesley Van Rooyen, the estate manager (an employee of the SLHOA). The finalised letter dated 12 June 2007 was then issued and distributed by Steyn.

"1.     The security service to our beautiful estate is totally unacceptable.

3.	I invested in this beautiful estate because of the security promise made available 	to us as a community. I did not invest in this estate to have an ineffectual 	imbecile, who 	the SLHOA Trustees have agreed to pay nearly R1m a year, tell 	me that it isn't his job, because, actually, it is my job; that it is my fault if I get 	robbed, shot at or raped in my home. I reject with contempt Messrs Alexandra 	Security's aforementioned contention and its service delivery standards, as well 	as the perceived endorsement thereof by the SLHOA Trustees.
4.	I recently had a discussion with Mr. Andre Cheminais, the Managing Director 	of Alexandra Security, whereby I identified to him that the security camera to 	the exit of 	the estate was being held in position by an arbitrary piece of 	wood, a situation that I find unacceptable. It is unprofessional and it creates an 	impression of an unfocussed and tardy security service, not to mention the 	obvious risk to the operation of the camera, should the wood rot away and/or 	fall out. Mr. Andre Cheminais purported to be entirely unaware of this situation 	but promised to personally attend to the matter with immediate effect.
5.	Alas, some 27 days later, the camera is still held in position by an arbitrary 	piece of wood.
6.	At no other secure resident estate at which I have either business or personal 	interests is such unprofessional behaviour tolerated, nor would it ever be 	condoned by the relevant estate Trustees.

[10] In March 2007 the trustees had given notice to Alexandra Security of concerns about the company's performance. A further notice followed on 21 June 2007 concerning the alleged ineffective and inferior cameras and surveillance equipment. On the same day the trustees notified residents that they were assessing the position and taking expert advice from another company on the way forward. On 22 June 2007 Alexandra Security informed the SLHOA that the company was terminating the security contract with effect from 30 June 2007 because (as it was put in the letter) the SLHOA could no longer afford the company's services (this presumably a reference to the fact that the company had made certain upgrading proposals). Alexandra Security also complained that its staff had been abused by residents. With effect from 1 July 2007 a firm called Thorburn was contracted to provide security services to the estate.

[12] In their particulars of claim the plaintiffs alleged that Steyn's letter was defamatory of Alexandra Security because the words would have been understood by readers to mean that the security service being rendered by the company was of an unacceptably poor quality; that the company's employees and representatives were callous and dismissive towards clients; that the company was not capable of curbing crime at Sunset Links; that the company was blaming its clients for the crimes that had been committed at the estate; that the level of service was disproportionately poor compared to the income being earned; that the company was shirking its responsibilities; that the company was unprofessional; and that the company had failed to properly install a security camera at the exit of the estate and had failed to attend to Steyn's complaints in that regard. The letter was alleged to be defamatory of Cheminais personally because the words would have been understood by readers to mean that he was incompetent; that he shirked his responsibilities as managing director of the company; that he was unprofessional; and that he was dishonest by claiming to be unaware of an unsatisfactory situation of which he was in truth aware and by promising personally to attend to Steyn's complaint and then failing to do so.

[13] Alexandra Security alleged that in consequence of Steyn's letter its contract had been terminated and alleged patrimonial loss in that regard of R77 000. Alexandra Security also claimed general damages of R50 000 for harm to its reputation. To bring its claim within the jurisdiction of the magistrates court, Alexandra Security claimed only R100 000. Cheminais claimed R30 000 as damages for harm to his reputation.

[15] By agreement Steyn (the defendant) led his evidence first. He himself testified and was followed by Graham Manchip (an employee of the estate's managing agents), Wesley Van Rooyen (the estate manager), Michael Gomes (a resident) and William Soden (also a resident). The plaintiffs called Jacques Ferreira (the company's regional director) and Cheminais (the erstwhile managing director and former shareholder of the company - he had in the meanwhile left the company after his shares had been bought in an empowerment transaction). The magistrate found that Steyn's letter was indeed defamatory. She rejected the defences (though did not expressly address the question of qualified privilege) and awarded Alexandra Security R10 000 and Cheminais R30 000. (Alexandra Security's claim for patrimonial loss fell by the way as it was apparent that the company itself had cancelled the contract.)

[16] Steyn in his notice of appeal contended that the magistrate had erred in every material respect and these contentions were developed in argument in this court. Not surprisingly the plaintiffs (as respondents in the appeal) submitted that the magistrate's judgment was correct.

Defamation

[17] Mr White, for Steyn, submitted that in deciding whether the letter was defamatory one needed to consider the position of the two plaintiffs separately. I think that is right, but a defamation of a company's managing director may at the same time be a defamation of the company itself.

Qualified privilege

[25] As noted earlier, the magistrate failed to address Steyn's defence of qualified privilege. Steyn pleaded that the letter was published by him as a member of the SLHOA to members of the SLHOA and that he had a right or duty to make the publication. It is convenient to deal with this defence first, because in the context of this case it seems to impose the least exacting evidential burden on the defendant.

"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."

[29] Once these elements of the defence are established, it is not necessary for the defendant to go further and prove that the statements he made were true or constituted fair comment. To make a defamatory statement one knows to be false would generally defeat the privilege because of malice, but that is attributable to the defendant's state of mind rather than the objective falsity of the statement.

[31] Steyn was a member of the SLHOA. The recipients of his letter were homeowners and residents of Sunset Links. Those who were owners would have been members of the SLHOA. Residents who were not owners may not have been members of the SLHOA. It is obvious, I think, that all owners and residents at Sunset Links had an interest in the security services at the estate. The legitimate interest in this issue was heightened by the crime spike they were experiencing. In my view, the relationship between Steyn and his fellow owners and residents, coupled with the circumstances in which they found themselves (victims of a spate of recent break-ins), created a situation in which the reasonable person would recognise that it was desirable that they should be able to speak their minds freely to each other on the topic of security. The circumstances of the present case, from the perspective of the reasonable person, entitled Steyn to speak out as he did in the protection of the security interests common to him and his audience. The responses which Steyn received from residents confirm that the issues he raised were indeed important to them.

[32] Obviously the constitutional interests of individual dignity (s10 of the Constitution) and freedom of expression (s16) are often in tension with each other in the field of defamation. In this particular case, though, one must also remember the right of people to personal security (s12(1)) and that the SLHOA is a manifestation (though an uncontroversial and mundane one) of the fundamental right of people to associate together for lawful purposes (s18). In my opinion, the balancing of the constitutionally-based policy considerations at play do not require an unduly restrictive approach in assessing whether the occasion was privileged. The dignity of persons implicated in statements made on such occasions is sufficiently accommodated by the requirement that the statements should be relevant and by the rule that privilege will not be available to one actuated by malice. A further consideration in this regard is that even if the defamed person has no remedy in damages owing to the defence of qualified privilege, he or she would generally have a protected right of response to the same audience as received the defamatory communication.

[36] I thus conclude that the occasion of Steyn's communication with the residents was one enjoying qualified privilege. I should add that Mr Coughlan who appeared in the appeal for the respondents (but not at the trial) did not press us to rule otherwise.

[39] Paragraphs 4 to 6 of the letter all appear to deal with the same topic, namely the fact that a security camera was being propped up by a piece of wood and that this had not been remedied for some time despite the matter having been drawn to Cheminais' attention. This fact, and Steyn's view as to the unprofessionalism which it exhibited, were relevant to the issue of security at the estate.

[40] Whether Steyn's opinions and assessments were fair and true is not relevant to the availability of the defence of qualified privilege. Nor is it necessary, given the presence of the required elements of qualified privilege, to undertake an assessment of whether Steyn's statements concerning Alexander Security and Cheminais were true. In fairness to them, though, I should say that I share the magistrate's view that much of the criticism was exaggerated. Steyn did not call expert evidence to establish what standards are maintained by reasonably competent security firms or to explain what level of service could have been expected in the light of the contract (bearing in mind that Alexandra Security could not be blamed for failing to provide a more extensive service than that for which it had contracted and that according to Cheminais he had informed the trustees from the outset that the budget to which he was confined did not make it possible to provide an adequate security service). The trustees had expressed satisfaction with Alexandra Security's services over the period December 2005 to February 2007. There were certainly some points of criticism, but I would be surprised if that were not true of most security companies. Although the witnesses for Steyn described Thorburn's level of performance as superior, there was no evidence as to the terms of its contract with the SLHOA.

[41] I should also say that the way Steyn portrayed Alexandra Security's attitude as reflected in the company's letters to residents was not altogether fair. It appears that some residents had been lax, and it was perfectly appropriate for Alexandra Security to indicate to residents how they could assist in combating the surge in crime. Alexandra Security was not thereby indicating that the company itself was not obliged to provide an efficient security service in accordance with its contract. The company's letters to residents were approved by the SLHOA's trustees. It would be unrealistic to suppose that the provision of an efficient security service (by efficient, I mean proper performance within the parameters of the contract) would guarantee an absence of crime. The estate presented particular difficulties in security because of the absence of perimeter fencing, proximity to a public golf course and the beach, and limited external lighting. This said, one must acknowledge that given the crime surge confronting the residents they (or some of them) might have felt frustration at not hearing from their security service provider what steps the latter was taking to meet the threat.

Other defences

Damages

[48] Since the magistrate found that the first page of Steyn's letter was as a whole defamatory of Cheminais and since I have come to the view that Steyn is only liable for a more limited defamation, this court is at large to assess an appropriate award of damages.

[50] In the present case the publication was quite widespread - there were several hundred recipients of Steyn's letter. The offending phrase was calculated to stir up feelings against Cheminais, though it is difficult to isolate the effect of the offending phrase from the letter as a whole. Cheminais headed a company with security contracts with a number of prestigious hotels and property groups. He personally knew the majority of the residents at Sunset Links. He testified that the letter's effect was to cause him to leave the adjacent Sunset Beach estate where he then resided. On the other hand, the very fact that the offending phrase was an exaggerated insult probably meant that fair-minded readers would attach relatively little weight to it.

Order and costs

[52] In this court Steyn as the appellant has achieved substantial success by reversing the lower court's decision in favour of Alexandra Security and by a substantial reduction in the award of damages to Cheminais. He is thus entitled to his costs of appeal.

[54]   I would thus make the following order:
a)	The appeal succeeds with costs, such costs to be payable by the respondents jointly and severally.
b)	

"(i)    The first plaintiff's claim is dismissed.

(ii) The defendant is ordered to pay the second plaintiff damages in the amount of RI0 000 together with interest thereon at 15,5% per annum from 17 September 2007.

(iii)    No order is made as to costs. "
OWEN ROGERS AJ

[53]   I concur and it is so ordered.