Access to Public Information, Other (see tags), Political Expression
Gomes Lund v. Brazil
Closed Expands Expression
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The Supreme Court of Appeal upheld the right of the media and the public to have access to companies’ share registers. The Court held that an unqualified right of access to a company’s securities register was essential for both effective journalism and a well informed citizenry. The case had come about after a media outlet and one of its journalists had requested access to several companies’ registers and the companies challenged the journalist’s right to do so, alleging that he had not sought access for proper journalistic purposes.
The respondents, Moneyweb (Pty) Ltd and Mr JP Cobbett, a financial journalist specializing in the investigation of illegal investment schemes, had attempted to exercise a statutory right in section 26 of the Companies Act 71 of 2008 (the Companies Act) to access the securities registers of the appellant companies: Nova Property Group Holdings Ltd (Nova), Frontier Asset Management & Investments (Pty) Ltd (Frontier) and Centro Property Group (Pty) Ltd (Centro).
Moneyweb, a publisher of business, financial and investment news, had commissioned Cobbett to investigate the shareholding structures of the companies and to write articles on his findings for publication. In 2013, Cobbett requested access to the companies’ securities registers to make copies in terms of section 26(2) of the Companies Act. His requests were refused and Moneyweb made an application in the High Court of Pretoria to compel the companies to provide access. The Companies did not respond to the application but instead filed notices requesting different documents from Moneyweb for the purpose of interrogating Moneyweb’s ‘real motives’ because they believed that Moneyweb had a ‘sinister agenda’ directed against Nova and its subsidiaries and wanted to discredit the Companies and undermine their integrity. They sought the documents to prove that Moneyweb did not intend to publish for journalistic motives.
The High Court ruled in favor of Moneyweb, ordering the companies to hand over the documents for copying. The High Court also held that section 26 of the Companies Act did not confer an absolute right to document inspection and that the court retained discretion to refuse to order inspection.
The companies appealed the decision to the Court of Appeal which had to decide the proper interpretation of Section 26(2) of the Companies Act, and in particular, whether the Act confers an unqualified right of access to a company’s securities register. They argued that the right was qualified and that access could be refused on grounds set out in the Promotion of Access to Information Act (PAIA), as well as on the grounds of the ‘motive’ of the requester.
Moneyweb argued that any person meeting the procedural requirements of Section 26(2) had an unqualified right. The Centre for Investigative Journalism, also known as amaBhungane, which had joined the case, argued that if access to securities registers is subject to grounds of refusal applying under PAIA or based on the motive of the requester the impact on investigative journalists and the public’s right to know would be significantly negative.
Acting Judge Kathree-Setiloane delivered the judgment, and Judges Maya, Majiedt, Mbha and Plasket concurred. The Court held that companies play a significant role in society and that their obligation of disclosure, which arise from the right of access to information enshrined in section 32 of the Constitution, is central to the interpretation of Section 26(2) of the Companies Act. The Court held that the Companies Act gives specific recognition to a culture of openness and transparency and recognizes that the establishment of a company is not private but may impact the public in several ways. Therefore, it imposes strong rights of access in respect of specific and limited types of information held by companies. It followed that Section 26 must be interpreted in accordance with this purpose.
The Court held that there were two aspects of Section 26 that required particular emphasis: the interaction between Section 26 and PAIA, and the nature of the right conferred by Section 26. With regard to the former, the Court held that it was clear that the Section 26 right was additional to the rights conferred by PAIA and that it need not be exercised in accordance with PAIA. Whilst PAIA is a general statute that regulates access to many types of information held by various types of bodies, Section 26 conferred a specific right of access in relation to one type of information: securities and directors’ registers. This constitutes an unqualified right capable of prompt vindication and without the built-in balances and counterbalances contained in PAIA that are complex and entail delay. The Court therefore rejected the companies’ arguments in respect of PAIA and held that there was no requirement in Section 26 that a request for access to securities registers only be exercised in accordance with PAIA.
The Court acknowledged that Section 69(1) of the Companies Act allows companies to refuse access to a record of a company if that record contains trade secrets, information the disclosure of which could cause harm to the commercial and financial interests of the company, or information the disclosure of which will prejudice the company in contractual and other negotiations or in commercial competition. But the Court held that securities registers clearly do not contain any of the information contemplated by section 68(1) of PAIA.
The Court held that the ‘motive’ of a person seeking access to a register is irrelevant, as section 26(2) confers an unqualified right on members of the public and the media. The Court analyzed the legislative history of the Companies Act and concluded that this directly contradicted the arguments made by the companies. The legislative history demonstrated that there was a clear intention on the part of the legislature to provide an independent right separate from PAIA, and that a company could not require a reason for its exercise as it is unqualified. The Court held that this meant that when a company fails or refuses to provide access to the requested information, the person requesting is entitled, as of right, to an order compelling access.
The Court also held that accepting the companies’ construction of Section 26 would have a negative impact on openness and transparency and undermine the work of Moneyweb, amaBhungane and other investigative journalists, as it limits the right to freedom of expression. Journalists must be able to have speedy access to information such as securities registers. This is critical to accurate reporting and imparting accurate information to the public. the court emphasized that interference with the ability of the media to access information impedes the freedom of the press; and because the right to freedom of expression also includes the right of the public to receive information and ideas, preventing full and accurate reporting also violates the rights of all the people who rely on the media to provide them with information and ideas. Therefore, the Court held, an unqualified right of access to a company’s securities register is essential for effective journalism and an informed citizenry.
The Court rejected the Companies’ argument that interpreting section 26(2) as unqualified would constitute a violation of shareholders’ right to privacy. It considered that shareholders’ privacy and dignity rights are only minimally implicated, as Section 26(2) confers only a narrow right of access limited to securities and directors’ registers. Shareholders are only required to provided limited personal information to be included in the register and to the extent that identity numbers and email addresses are included they may be regarded as confidential at the instance of the company or the shareholder. Privacy is not an absolute right and in this context, the legislature had chosen to prioritize the right of access to information over the privacy rights of shareholders and companies.
Finally, the Court held that the media cannot be precluded from accessing information because the subject of the reporting considers that the reportage will be unfavorable or unfair. Such an interpretation would go against two well established principles: first, that access to accurate information is critical for the right to freedom of expression, and second, that courts will only rarely make orders which amount to prior restraints on freedom of expression. The Court held that if publication occurs and it is unlawful then the Companies’ would be entitled to sue for damages, but they could not in advance seek the courts’ assistance to prevent Moneyweb from investigations as that would undoubtedly amount to prior restraint.
For all the above reasons, the appeal was dismissed.
Decision Direction indicates whether the decision expands or contracts expression based on an analysis of the case.
This case expands expression by upholding transparency in the ownership of companies, the public’s right to know, and freedom of the press. It holds that limitations cannot be read into legislation that clearly allows for access to companies registers, and it reaffirms the importance of the ability of the media to scrutinize and report on the activities of corporations, particularly given the important role corporations play in modern society.
Global Perspective demonstrates how the court’s decision was influenced by standards from one or many regions.
Case significance refers to how influential the case is and how its significance changes over time.
Judgments of South Africa’s Supreme Court of Appeal set precedent within South Africa. Outside South Africa,sit’s judgments are well-regarded and can be influential in the interpretation of legislation particularly on issues such as access to information, on which the law in many countries is relatively new and in flux.
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