Smalle v Southern Palace Investments 440 (Pty) Ltd

The appellants, Jacques Smalle (a Democratic Alliance provincial leader) and Heidi Lee Smith (publisher of the Kruger2Canyon Newspaper), issued and published a media release and newspaper article alleging that Southern Palace Investments 440 (Pty) Ltd (SPI) and its director, Soren Burkal Nielsen, were involved in irregular and potentially corrupt dealings concerning a bulk water supply agreement with the Lepelle Northern Water Board. The statements suggested that SPI was allegedly hawking water to farmers at grossly inflated prices, that tender procedures were not followed, and that the matter was under investigation by authorities. SPI and Nielsen sued for defamation in the Gauteng Division of the High Court, Pretoria, which found the statements defamatory per se and awarded damages. The appellants appealed to the Supreme Court of Appeal.

The appeal was upheld with costs, including the costs of two counsel. The order of the High Court was set aside and replaced with an order dismissing the plaintiffs’ claims with costs.

The case clarifies South African defamation law relating to innuendo and secondary meaning, reaffirming the requirement that special circumstances must be pleaded and proved. It also reinforces the principle that allegations framed as 'alleged' conduct or as matters under investigation are not necessarily defamatory, thereby protecting political speech and media reporting on issues of public interest.