Court ruling says mining group MRC is abusing court process

Written by Ciaran Ryan. Posted in Journalism

Australian mining group MRC and its CEO’s attempt to bring defamation suits against South Africans questioning its environmental and corporate practices, defeated. From Moneyweb.

Image: Shutterstock

In a ground-breaking ruling, Deputy Judge President Patricia Goliath has set a high bar for anyone contemplating bringing a Slapp suit as a way of silencing criticism of corporate behaviour.

The ruling says corporations should not be allowed to weaponise our legal system against ordinary citizens and activists to intimidate and silence them.

Strategic Litigation Against Public Participation (Slapp) suits are outlawed in many parts of the world on the grounds that they are intended to censor, intimidate, and silence critics, by burdening them with the cost of a legal defence until they abandon their criticism or opposition.

In 2016, Australian mining group Mineral Commodities (MRC) and its CEO Mark Caruso started filing defamation suits against six South African lawyers and environmental activists over comments they made criticising the company’s environmental and corporate practices.

The judge agreed with the activists that MRC and Caruso were engaged in a Slapp suit and ruled they were abusing the court process in doing so.

“The right to freedom of expression, robust public debate and the ability to participate in public debates without fear is essential in any democratic society. I am accordingly satisfied that this action matches the DNA of a Slapp suit,” reads the judgment.

“Litigation that is not aimed at vindicating legitimate rights, but is part of a broad and purposeful strategy to intimidate, distract and silence public criticism, constitutes an improper use of the judicial process and is vexatious. The improper use and abuse of the judicial process interferes with due administration of justice and undermines fundamental notions of justice and the integrity of our judicial process. Slapp suits constitute an abuse of process, and is inconsistent with our constitutional values and scheme.”

SA’s lack of anti-Slapp legislation such as exists in other countries “renders civil society vulnerable when they embark on pursuing legal challenges and raising legal defences.”

Two attorneys at the Centre for Environmental Rights (CER), Tracey Davies and Christine Reddell, and activist Davine Cloete, were accused of making defamatory statements about MRC’s subsidiary company Mineral Sands Resources (MSR) and its director Zamile Qunya during presentations at the University of Cape Town in 2017.

Prominent environmental lawyer Cormac Cullinan was sued over comments he made in a Cape Talk radio show suggesting the company had bought off traditional leaders as a way of pushing through the Xolobeni mineral sands project on the Wild Coast, against the wishes of most community members.

Social worker and journalist John GI Clarke had most to lose, with a defamation claim of R10 million, over an article in which he says he was misquoted as suggesting the company had been involved in the 2016 murder of Pondoland community activist Sikhosiphi “Bazooka” Rhadebe.

The arguments

In their defence, the defendants filed two special pleas: the first claimed that the case brought by Caruso and MRC was a Slapp suit and therefore an abuse of the court process; and the second claimed the company should have to demonstrate financial harm for its case to succeed.

MRC and Caruso filed exceptions (objections) to these pleas.

The court dismissed the first set of exceptions, effectively agreeing with the activists that the defamation cases are an abuse of the court process.

The second set of exceptions were upheld, meaning the court did not agree with the activists that the company must show financial harm for its defamation claim to succeed.

Cullinan says this part of the ruling was expected, because the High Court had to follow a binding Supreme Court of Appeal (SCA) judgment. This ruling in the Cape High Court can now be appealed to the SCA.

“We want to appeal that part of the judgment that went against us so that it can be decided by the SCA and if the SCA agrees with Goliath J our legal system will have a framework for dealing with Slapp suits in the future. Once MRC and Caruso picked this fight, our primary objective was to ensure that they became an example that would discourage others from using Slapp suits. The spotlight will now be on them to show why the defamations cases they launched are not Slapp suits,” he says.

Says Clarke in response to the ruling: “It’s a huge relief. This judgment is akin to the release of a hostage. It’s said in warfare truth becomes the first casualty. In lawfare, truth becomes the prized hostage where the more powerful party uses legal procedure and arcane legal procedure to harm the truth.

“Going forward, so much more truth will be able to be shared and told, not just on the Xolobeni mining saga, but in other areas where powerful mining companies have tried to constrain the truth.”

Last year Australian press reported that Caruso is facing criminal charges of assault and aggravated home burglary. MRC issued a statement in October last year that Caruso had stepped down as chairman of the MRC board but would continue as CEO after “an alleged incident which occurred whilst Mr Caruso was assisting a friend in enforcing an abandonment order and a subsequent property seizure and delivery order at that friend’s premises.”

An abandonment order is when a tenant leaves a property before the end of the tenancy agreement without notifying the landlord or letting agent.

Quotes from the judgment:

Individuals or NGOs must have the freedom to respond to issues affecting society, such as those related to the environment and sustainable development.

The present matter arises in the context of debates about whether the mining companies have complied with their legal obligations and whether they have caused environmental damage. Matters such as this, self-evidently require public engagement and public debate.

The social and economic power of large trading corporations renders it critically important that they be open to public scrutiny without the inhibiting risk of crippling liability for defamation.

The mining companies are claiming inexplicably exorbitant amounts for damages, which the defendants can ill-afford. They instituted these proceedings fully aware of the fact that there is no realistic prospect of recovering the damages they seek.

However, it appears that the action is not aimed at obtaining monetary, or financial damages, but rather vindicating a right, or for some other purpose. The plaintiffs have indicated that in the alternative, they would be satisfied to dispose of the matter on the basis of a public apology. This is a signature mark of many Slapp suits.

Ciaran Ryan

The Writer's Room is a curated by Ciaran Ryan, who has written on South African affairs for Sunday Times, Mail & Guardian, Financial Mail, Finweek, Noseweek, The Daily Telegraph, Forbes, USA Today, Acts Online and Lewrockwell.com, among others. In between he manages a gold mining operation in Ghana, and previously worked in Congo. Most of his time is spent in the lovely city of Joburg.