/ 15 June 2020

Corporate bullying in fight over Xolobeni mining

A view of the targeted area for the Xolobeni Mineral Sands project on the Wild Coast.
A view of the targeted area for the Xolobeni Mineral Sands project on the Wild Coast.

A cat, yes, the actual animal, made an appearance in court as junior counsel on June 10 2020. 

It was a virtual court hearing on an exceptional application by global mining and development company Mineral Sands Resources (MSR) and its subsidiaries against environmental activists. 

In the comfort of their homes and offices, lawyers argued before Deputy Judge President Patricia Goliath for a case that could radically change South African jurisprudence in terms of the right to freedom of expression and a corporation’s right to vindicate its reputation. 

The appearance of a cat on one of the counsel’s video feeds happened before the judge appeared on the last day of proceedings to formally start the hearing. Everyone had a good chuckle.

This is certainly not the first case to be held virtually via Zoom since the start of lockdown. It is, however, one of the first not related to Covid-19 to be heard in this way. Courts have been limited to matters deemed urgent, meaning many cases have been postponed to later dates, delaying the administration of justice as cases pile up on the court roll.

The proceedings went well using the online platform during the two-day hearing.

Defamation applications 

The virtual proceedings before Goliath revolve around three defamation applications by Mineral Commodities Ltd, an Australian mining company, and its subsidiary, MSR. 

MSR wants to mine the wild coast in Xolobeni in the Eastern Cape. Ever since the company proposed mining in the area, there has been unrest in the Amadiba community in Xolobeni. Activists against the mine have been killed for resisting being relocated off their ancestral land.

The first case involved lawyers Christine Reddell and Tracey Davids and community activist Davine Cloete. They were sued by MSR for statements they made while giving lectures in the University of Cape Town summer school held in 2017. The company wants damages of R750 000 and the company’s director seeks R500 000.

The second defamation matter was brought by Mineral Commodities and its chief executive Mark Caruso against environmental lawyer Cormac Cullinan and community activist Mzamo Dlamini for statements they made on different platforms. The company and its chief executive are demanding R30million and R1.5-million respectively in damages. 

The third matter was a defamation claim by Mineral Commodities against John Clark, an environmental activist. The company and its director seek R10-million against Clark for various things he said in books and other publications about the company.

Represented by the same lawyers, the six environmental activists elected to defend themselves against the defamation action by raising two similar “special pleas”. First, activists contended that the defamation suit against them amounted to abuse of court process or strategic litigation against public participation, commonly known as a Slapp suit. The second was that the mining companies and its subsidiaries did not plead patrimonial or financial loss and that the company did not deny the defamatory statements.

Slapp suits emanate from the US. Big business uses this litigation against activists, with no intention of obtaining justice. Rather, these suits intimidate and bankrupt the activist, making sure anyone critical is silenced.    

The Centre for Applied Legal Studies (Cals), who were admitted as friends of the court, said that a Slapp suit has two elements: the action is meritless and the intention is to discourage validation of rights.

Court proceedings 

From these special pleas, the company launched an exception application in the high court in Cape Town.

Thandeka Kathi, attorney at Cals, told New Frame, “An exception is … just another party saying, ‘No, you cannot raise that argument.’” The company wanted the court to dismiss the defendant’s pleas and proceed with the trial. “You have a powerful actor … abusing court processes … to silence people who are criticising it,” said Kathi.

Senior council for MSR, advocate Peter Hodes, told the court that the special pleas were tantamount to “closing the doors of court”, denying them a chance to exercise their right in terms of Section 34 of the Constitution – and this was done by not engaging the substantive claim and merits of their cases. 

Exception to the special plea

In terms of proper procedure, Hodes said, if the issue was “vexatious litigation” or abuse of court process, the activists had to bring a separate motion application. This, he argued, was required by the Vexatious Proceedings Application Act and common law principles. In making this point, Hodes said the defendants could bring such an application only through common law rules, as it was too late to rely on the Act.

On the question of common law principles in relation to abuse of court process, Hodes argued that defendants will have to show that the case of defamation against them is unsustainable in law and is without reasonable grounds in its merits. He further argued that to say the company had ulterior motives was irrelevant in the legal test for abuse of court process. 

This point was further emphasised by his co-council, advocate Johan de Waal, in reply to the defendants’ argument. Developing common law that takes motive into account could have dangerous consequences. He said every person taken to court on any action will then be permitted to say the plaintiff had ulterior motives, and this could not be permissible. 

On the point of pleading financial loss, plaintiffs argued that this was not a requirement in making out a case for defamation, and the court was bound by precedent.

Both De Waal and Hodes argued that South African law did not have legislation or common law regulating Slapp suits. It would be preferred for the legislature to develop an Act, given the complexity of anti-Slapp defences. 

Batting for the same team

Father and son senior counsels, advocates Geoff and Steven Budlender, were in the same defence team with advocate Sha’ista Kazee. When advocate Steven Budlender was about to commence his argument after being introduced by the senior Budlender, Goliath rhetorically asked whether father and son were on the same team. Steven Budlender responded, saying they had agreed not to litigate against each other to preserve peace at family dinners. 

But Budlender junior had no peace offering for MSR. In his opening remarks, he reminded the court what was before it: a claim of R14.25-million against three environmental lawyers and three community activists – and the plaintiffs had not shown they had suffered financial loss because of the defamatory remarks. 

He told the court the only logical explanation for suing these six people for such a huge sum was the ulterior motive of discouraging and censoring criticism of the company. The intention was to silence members of the public.

The action amounted to abuse of the court process that forced people without money into costly, long and undesirable litigation. Budlender said without legal representation, the defendants would have been compelled to abandon any defence they have in law and publicly apologise. He revealed they were representing the defendants for free – while the company had limitless resources to litigate.   

Budlender said by way of example that a community activist in a mining community in the North West, for instance, cannot say to a big corporate company or powerful person, “You are exploiting workers”, because they might be sued for defamation. 

The case brought by the plaintiffs was a classic Slapp suit, said Budlender, and corporate bullying could not be allowed in a constitutional democracy. All they wanted through the pleas was to avoid abuse of court process. They had demonstrated to the court their pleas were sustainable in law. 

Academic freedom

The University of Cape Town, admitted as the friend of the court, told the court that academic freedom should be extended to the defendants who gave talks at the university’s summer school. The court had to recognise academic freedom as a privilege to be used against defamation suits. 

Reacting to the arguments of the university, De Waal called the university’s advocate, Anton Katz, a “rebel without a cause”. 

De Waal said the university was advancing a defence not pleaded by the defendants. He conceded that universities enjoyed institutional autonomy, but only academic staff and students – people with qualifications and engaged in scholarly work could be protected by academic freedom. 

Goliath asked De Waal to explain why activists with sophisticated knowledge of their areas of expertise were excluded from academic freedom.

Katz, rebutting the assertion that academic freedom was exclusive to academics in universities, quoted from advocate De Waal’s very own book, saying that both activists and lawyers were protected by academic freedom – and even more so when invited to give addresses and share knowledge and ideas with the university community. Such a case could deter activists, lawyers and other members of society from participating in discourse when invited by universities.   

Gap in our law

Advocate Lerato Phasha, representing Cals, told the court to develop the common law and create a mechanism to protect activists from Slapp suits by corporates. Such a development, she argued, will encourage public participation.

Phasha’s argument was characterised as “radical” by Budlender. Cals made a distinction between abuse of court process and Slapp suits. While they agreed with the defendants that the action by the plaintiff amounted to a Slapp suit, they argued that defendants conflated a Slapp suit with abuse of court processes. Making a distinction was important, said Phasha.

Cals further agreed with the plaintiffs on the issue of a Slapp suit being complex, but disagreed that only parliament had the power to introduce law into our jurisprudence. Phasha said the court had inherent power to develop the common law.

Budlender echoed Phasha’s sentiment, saying South Africa never had a legislation dealing with class actions, for example, and that had never deterred our courts from developing the common law.   

For Kathi, it is important that South Africa develops a law that guarantees freedom of expression. “More and more big corporations around the world are using Slapp suits to silence activists, and it’s not right. Because not a lot of people actually have access to pro-bono attorneys. And also, even pro-bono attorneys do not have limitless purses, they also dry out, so, there needs to be something, the legislature must find a way to enact … legislation [against Slapp suits].”

Goliath thanked all involved and reserved judgment.

This article was first published on New Frame