Michael Naylor and Atomaer (RSA) (Pty) Ltd v Pieter Johann Jansen

Pieter Johann Jansen was a manager employed by Atomaer (RSA) (Pty) Ltd, in charge of the group's South African operations. Michael Naylor was the Australian chief executive of the parent company, Atomaer Holdings (Pty) Ltd, and its subsidiaries including Atomaer (RSA). Following an investigation in September 2002, it was discovered that Jansen had breached his service contract by failing to protect intellectual property and, importantly, by having an undisclosed 45% interest in JFP Chemical Corporation CC, an entity engaged to do manufacturing work for Atomaer (RSA). Jansen was suspended on 30 September 2002. On 2 October 2002, at a meeting with Iscor Ltd at Vanderbijlpark attended by some eight Iscor representatives, Naylor stated (as recorded in minutes) that Jansen had been suspended because he had "misappropriated Atomaer funds to a company of which he holds a directorship." Jansen instituted defamation proceedings. Prior to instituting action, Jansen obtained an ex parte order for Naylor's arrest to confirm jurisdiction (Naylor being an Australian citizen and peregrine). Naylor put up security and was not taken into custody. The defamation trial was held before Willis J, who found in favor of Jansen. Subsequently, Willis J ordered Jansen to pay the costs of the ex parte arrest application on the basis that Naylor would have submitted to jurisdiction if asked. Both parties appealed.

• Whether the statement made by Naylor was defamatory of Jansen
• Whether Naylor uttered the defamatory words with animus injuriandi
• Whether the occasion was one of qualified privilege and if so, whether malice defeated the privilege
• Whether evidence of Jansen's breach of employment conditions was admissible in mitigation of damages
• Whether a plaintiff who obtains an ex parte arrest order to confirm jurisdiction against a peregrine defendant should be deprived of costs if the defendant would have submitted to jurisdiction if asked
• Whether cross-examination on matters relevant to mitigation of damages was properly excluded

Defamation appeal (243/04): Appeal succeeded only to the extent of reducing damages from R30,000 to R15,000. Otherwise dismissed. Costs appeal (251/04): Appeal upheld with costs. The order depriving Jansen of costs of the arrest application was set aside and replaced with an order that Naylor pay those costs.

1. In defamation, proof of publication gives rise to presumptions of unlawfulness and animus injuriandi, which the defendant must rebut on a balance of probabilities. 2. The word "misappropriate" in the context used means dishonestly taking money belonging to another, constituting an allegation of theft which is clearly defamatory. 3. Where a defendant makes a defamatory statement knowing it to be untrue with intent to injure the plaintiff's reputation, this constitutes malice which defeats the defense of qualified privilege. 4. Evidence of specific acts of misconduct by the plaintiff is admissible in mitigation of damages in defamation proceedings where such conduct is directly related to or "linked up" with the defamatory statement, even if it does not justify the defamatory statement entirely. 5. An incola plaintiff is entitled as of right to obtain an order for arrest or attachment of property to found or confirm jurisdiction against a peregrine defendant, without first being required to invite the defendant to submit to jurisdiction. 6. The costs of an unopposed ex parte application for arrest or attachment to confirm jurisdiction are normally costs in the cause of the main action, and there is no basis for depriving a successful plaintiff of such costs merely because the defendant claims he would have submitted to jurisdiction if asked.

Scott JA made several obiter observations: (1) Whether the arrest of a person to found or confirm jurisdiction will survive constitutional scrutiny was noted as not being an issue the court was called upon to decide (para 20). (2) The court noted but refrained from commenting on the appropriateness of an order giving defendants the option of tendering an apology instead of paying damages, as there was no cross-appeal by Jansen on this issue (para 17). (3) The court observed that in modern times, arrest to found or confirm jurisdiction has become "no more than a technique to obtain security" with the practice being to negotiate security immediately upon arrest so the defendant is not taken into custody (para 20). (4) The court noted that an attachment or arrest serves not only to confirm jurisdiction but also provides security against which judgment can be executed, whereas submission to jurisdiction provides no such security, making attachment/arrest generally preferable from an incola's perspective (paras 26, 30).

This case is significant in South African defamation law for clarifying: (1) the test for malice defeating qualified privilege - that knowingly making an untrue statement with intent to injure constitutes malice; (2) the scope of admissible evidence in mitigation of damages in defamation - evidence of specific acts of misconduct is admissible if directly linked to the defamatory statement, not only when it justifies part of the statement but also when the conduct is related to or "linked up" with the words complained of; (3) the procedural rights of incola plaintiffs seeking to confirm jurisdiction against peregrine defendants - there is no obligation to invite submission to jurisdiction before seeking arrest or attachment, and no basis for depriving the successful plaintiff of costs of the ex parte application merely because the defendant claims he would have submitted if asked. The judgment reinforces the historical purpose of arrest and attachment procedures to assist incolae in obtaining security and protecting their rights against peregrines.