Court Day: The Johannesburg High Court has reserved an emergency injunction brought by RE Capital Holdings and Newman George Leach against the Mail and Guardian newspaper.Photo: Sharon Celetro/Gallo Images
LThe same week, the Mail & Guardian went to court to oppose an emergency application seeking a preliminary injunction against the publication order.
It argued, as other media outlets have recently done, that such gag orders raise constitutional red flags because they serve to prevent the press from reporting freely and in the public interest.
The filing was published on January 10, when RE Capital Holdings, a company incorporated in the UK, and director Newman George Leach pointed to an apparent relationship between the company and Global and Local Financial Advisors. This was submitted in response to the article. South African invests in BHI Trust's alleged Ponzi scheme.
Global & Local Managing Director Michael Haldane was a director of RE Capital Holdings until October 30 last year, when the trust collapsed.
Mr Leach is listed as a director of Geneva Management Group, a Switzerland-based company associated with Global & Local, as evidenced by share certificates filed by M&G in court.
RE Capital Holdings and Reach asked the Johannesburg High Court to grant an order finding the article to be false and defamatory and directing M&G to remove it from all platforms and post an apology.
It also wants the court to prevent the paper from publishing “any future articles containing substantially similar allegations to the M&G article about the applicant”.
The matter was heard last Thursday, with the publisher's lawyers and the bench arguing that orders of this type violate both the freedom of the press and the public's right to be informed, and are therefore unlawful. did.
Therefore, given that media gag orders are rarely granted by the courts, as Media Monitor Africa submitted in its filing as a friend of the court, this remedy is considered part of a legal strategy to intimidate the media. There seems to be a sudden tendency to seek
The M&G's acting editor Luke Feltham said in court papers that the applicants are seeking an order as a final relief, so that the publication will eventually write about the ongoing investigation under the Financial Sector Conduct Act. He said he would be prevented from doing so. Power to a scheme that would potentially cause thousands of people to lose their investments.
“This results in an unreasonable restriction of the freedom of the press and the constitutional right to disseminate information,” he argued, adding that coverage of the ongoing investigation is clearly unreasonably restricted. . in the public interest.
The scheme collapsed last October, and co-trustee Craig Warriner surrendered to police in mid-October. He told the Palm Ridge Commercial Crimes Court he would plead guilty to fraud charges for managing the fund “irresponsibly”.
Mr Leach, who has South African and Swiss citizenship, and RE Capital Holdings refused to put the article on the record and did not respond to repeated requests to exercise the right of reply after publication. They also did not contact the Press Ombuds before taking legal action 11 days after the article appeared.
However, in the applicant's founding affidavit, Mr Leach denied any association with BHI Trust or knowledge of the Ponzi scheme.
“The applicants have nothing to do with the fraud, the misappropriation of investor funds, or the Ponzi scheme allegedly run by Mr. Wariner. They did not facilitate it, did not participate in it, and did not participate in it. We were not aware of this and the applicant does not have any relevant relationship with BHI Trust or G&L.”
His attorney filed a notice with the court stating that the matter should not be submitted to mediation. They argued that the newspaper's refusal to retract the article risked continuing harm to the applicant, including reputational damage and “catastrophic consequences” for its business.
The lawyers say that RE Capital is “looking to complete a number of significant new investments in Europe totaling €50 million (R1.02 billion) within the next three months” and that these agreements will They say they face a real risk of being revoked. article in question.
“Referring to mediation in this situation would unnecessarily increase costs and delay the final determination of the matter.”
They accuse M&G of failing to raise a factual defense to wrongful defamation and argue that their customers therefore have a clear right to vindication. And, in the absence of alternative remedies, a final injunction must be granted, they continued.
The paper countered that it had raised a complete defamation defense by showing that the material statements in the article were true and in the public interest.
Feltham said in court papers that the article does not allege beyond that BHI has extensive international connections through which it is connected to the applicants. It is not intended to expose fraudulent activity by the applicant.
“These global or international connections exist. They are true and they are relevant.
“Read as a whole, the point of this article is just what the blurb says: 'There appears to be a relationship between the second applicant.' [Leech] and Global & Local, which apparently sold a Ponzi scheme.
“These material statements in the article indicate that the links and connections between the applicant, Mr. Haldane, Global & Local, and the BHI Trust exist and extend over multiple years, extending from at least 2010. , 2016, and 2023, there is evidence that there was a business relationship. We are simply providing public access to the information through our articles.”
Apart from being an unreasonable remedy in cases of alleged defamation, a gag order itself does not provide relief for the harm the applicants claim to have suffered, as the information is not removed from the public domain. do not have.
Therefore, the motive is punitive and this approach to the court is an abuse of process.
“What the applicants are actually seeking through this application is to punish those of us who have committed such acts and urgently muzzle and gag us indefinitely. should not be allowed. The applicant's hidden agenda is clear.”
This, the paper argued, gave the case two of the hallmarks of a strategic case against public participation: the purpose of punishment and deterrence.
RE Holdings and Reach acknowledged that the prior restraint of publication order interferes with the right to free speech enshrined in Article 16 of the Constitution, but because the restraining order merely prohibits publication, it is has no or little influence in this application.” Newspapers should refrain from publishing claims similar to the article.
The applicants did not publish a Rule 16A notice that allows interested parties to apply to join the Bench in cases of constitutional impact. M&G's lawyers filed the notice on February 2, with Media Monitoring Africa (MMA) and the Freedom of Expression Campaign both applying to join as tribunal amici.
MMA Director William Byrd rejected suggestions that in this case, the order would not undermine the media's ability to report in the public interest.
“Additionally, there are important questions regarding the defense of qualified privilege in relation to matters that may be under investigation by bodies such as the FSCA.” [Financial Sector Conduct Authority] — or if no such investigation is currently being conducted, but should be.
“In particular, the public has a right to know about claims and concerns about companies they do business with, and not just after a final decision by bodies like the FSCA.”
Mr Bird said there was also punitive intent when RE Holdings and Reach initially sought a personal costs order against the editor and author of the article, Lise Cummins, but waived this on the day of the hearing. Stated.
“Orders for damages and costs should not, in principle, be simply sought jointly and severally against the journalist's media publication or against the journalist himself,” he said, especially in cases where journalists are innocent. He said that this is true if he acts within the scope of the law. How they work in newspapers.
“For this score, a lot of practice has been done. [that] Its use in attempts to intimidate and silence journalists, particularly investigative journalists, has increased in recent years, a worrying trend. ”
Moti Group seeks to block Amabhungane Center for Investigative Reporting with a prior restraining order and private criminal charges against News24 reporter Karin Maughan for publishing information that is part of public court records. He referred to former President Jacob Zuma's attempt to do so. Both were ultimately rejected by the courts.
“Ultimately, this court will need to consider whether the current application is in the same vein as those cases,” Byrd said.
Judge Mossamai Makume reserved judgment.
