Parastatal cannot sue for defamation, rules court Inhibiting criticism held to be against public policy

Parastatal cannot sue for defamation, rules court

Inhibiting criticism held to be against public policy

The Supreme Court of Zimbabwe held that the Post and Telecommunication Corporation (PTC) was an organ of the State, and since at common law the State could not sue for defamation, a fortiori, neither could PTC. But the judgment failed to decide on the more controversial question of whether or not PTC has Afama@ that would find protection under Aactio injuriarum@. The Supreme Court also declined to determine the question of whether the free speech provision in s 20 of the Zimbabwe Constitution operated to bar a quasi-governmental body from bringing an action for injuria, preferring instead to rely on the common law.

Facts

Modus Publications, in its newspaper, the Financial Gazette, had on three occasions in 1995 published articles which were allegedly defamatory of PTC. The latter, alleging general damages to its reputation sued for Z$ 60, 000. In the High Court, Devittie J, allowed an exception to PTC=s claim on the ground that the Plaintiff was an alter ego of the State and had no locus standi in judicio to sue for defamation. The granting of the exception effectively defeated PTC=s claim. PTC appealed to the Supreme Court against the High Court=s finding.

Posts and Telecommunication
Corporation v. Modus
Publications (Private) Limited
Civil Appeal No. 812/96
Judgment No. S.C. 199/97
Supreme Court of Zimbabwe, Harare
6 & 25 November 1997

Decision

The Supreme Court, McNally JA; with Gubbay CJ and Korsah JA concurring, held that there were three issues to be tried. First, could an artificial person sue for defamation? Second, could the State sue for defamation? And, third, was the PTC covered by the phrase Athe State@? The court answered the first question in the affirmative. It cited Derbyshire CC v Times Newspapers Ltd. [1992] 3 All ER 65 (CA) at 75, where the English Court of Appeal held (later upheld by the House of Lords): AYany corporation, whether trading or non-trading, which can show that it has a corporate reputation (as distinct from that of its members) which is capable of being damaged by a defamatory statement, can sue in libel to protect the reputationY.@ Citing the South African cases of Dhlomo NO v Natal Newspapers (Pty) and Another (1989) 1 SA 945, and Argus Printing Co. Ltd v Inkatha Freedom Party (1992) 3 SA 579 (A) at 581 E, the court held that it was now established that an artificial person could sue for defamation. But with the growth of democracy, the court held, there had evolved a jurisprudence that denied that right to certain artificial persons which were loosely described as Athe State@.

PTC had argued that it was not correct to categorize it as Athe State@ or an alter ego thereof. The court therefore found it necessary to review the case law to determine whether PTC had been properly thus categorized by the lower court. In Die Spoorbond & Anor v South African Railways & Ors (1946) AD 999, it was held that the Crown could not sue for defamation as its normal remedy was political action and not litigation. Further, the Crown had the remedy of criminal prosecution, where the onus of proof was on the State; and freedom of expression was too important to be limited in this manner. Finally the court said that the wealth of the State, derived from its subjects, should not be used to silence its critics.

Artificial persons

Derbyshire made it clear that the principle which denied certain artificial persons the right to sue for defamation, did not deny it on the basis that the artificial person was Athe State@ in the sense of Athe central government@, but on a wider basis. The Supreme Court therefore concluded that the right to sue for defamation was not available to those artificial persons which were Apart of the governance of the country,@. The question that then needed to be answered was, What was meant by Apart of the governance of the country@? PTC=s counsel had submitted that his client was a separate legal persona with the right to sue and be sued and therefore should be able to sue for defamation. But the court said that although this was indisputable, it by no means followed that because PTC was a separate and distinct artificial persona it could not be a Agovernment instrumentality@. AAlter ego of the State@ or Aorgan of the State@ were not terms of art which had a specific legal definition, but they had to be defined in their contexts. In the context of defamation, the court did not consider it wise or desirable to attempt an exhaustive definition of the category of artificial persons which should be denied the right to sue for defamation because they are Athe State@, A the alter ego of the State@, Aan instrument of governance.@ The court therefore set six broad criteria for the purpose of helping determine whether PTC, in this context, was Athe State@:

First, whether the body had a discretion of its own, and if it had, what was the degree of control by the executive over the exercise of that discretion. Second, whether the property vested in the corporation was held by it for and on behalf of the government. Third, whether the corporation had any financial autonomy. Fourth, whether the functions of the corporation were government functions. Other criteria included whether, if the body was not a statutory trading company, it performed governmental functions either at local or national level. Finally, whether, if the body concerned was, at least largely or effectively, a monopoly, providing what were generally regarded as essential services traditionally provided by the government. If so, it would be contrary to public policy to muzzle criticism of it. Ministerial control Examining the PTC vis-à-vis these criteria, the court found that PTC was a statutory corporation whose statute was administered by the Minister of Information, Posts and Telecommunications. The Minster appointed the Board which governed PTC, and he could give directions to the Board Ain the national interest@. He also had to approve the charges and levies for PTC=s services. It was therefore clear that the Minister had extensive control over PTC. Further, PTC=s financial policy was basically dictated by the State; and its functions were essential public services traditionally provided by government. PTC also had a monopoly and used the public=s money, and its criticism should not be muzzled.

In this regard, the key principle was enunciated in Spoorbond: AY it would involve a serious interference with the free expression of opinionYif the wealth of the State, derived from the State=s subjects, could be used to launch against those subjects actions for defamation because they haveY criticized the management of the country.@ Uninhibited public criticism Lord Keith of Kinkel echoed similar sentiments in Derbyshire: AIt is of the highest public importance thatY any governmental body, should be open to uninhibited public criticism.@ But the court added that a governmental body was not wholly deprived of a remedy for it always had the action for economic loss resulting from injurious falsehood. But the onus lay upon the body complaining of the loss.

The Supreme Court stressed that it had reached its conclusions based on the common law Zimbabwe without having to rely on s 20 of the Constitution which provides for the right to freedom of expression. It also found that it was unnecessary to rule that the PTC had no fama or reputation capable of injury. It merely fell into the category of Aorgans of State@ for the purposes of the law of defamation, and thus had no locus standi in judicio in that matter. PTC=s appeal was therefore dismissed with costs.

Njonjo Mue, Article 19,
with Tendai Biti, Practising Attorney,
Harare, Zimbabwe