Case Summary and Outcome

In November 2015, three major news outlets of South Africa, Business Daily, Moneyweb, and Media 24, sought to publish the contents of a confidential legal memorandum prepared by an in-house counsel of the South African Airways (SAA). The memo primarily concerned the legal implications of the airways’ potential withdrawal from its ongoing agreement to purchase an aircraft due to its inability to pay and the absence of a government bailout. As the SAA is a State-owned company, the disclosure of the memo by unknown sources and the decision to publish it came out at the height of public scrutiny over the company’s financial viability and its mismanagement of public funds.

After publishing the contents of the memo, a court of first instance granted a temporary restraining order against the news outlets on the grounds that the SAA was entitled to invoke its attorney-client privilege of confidentiality. On appeal, the High Court of South Africa in Johannesburg set aside the order. While finding that the disclosure of the information could not be imputed to the SAA, its attorney-client privilege was not absolute and could not suppress the dissemination of the information in which the public had an interest.

Facts

In October 2015, an in-house counsel of the SAA drafted a legal memorandum as to whether it was legally feasible for the company to annul its ongoing agreement to purchase a commercial aircraft in light of its financial difficulty to make the initial payment at the time when securing a government bailout remained in doubt and highly controversial. Through unknown sources, the contents of the memo were later disclosed to three South African news outlets in November 2015: Business Daily, Moneyweb, and Media 24. Prior to publishing the information, several journalists working for the news companies contacted the SAA’s officials for comment. The court records indicate that during this period, the SAA did not demand journalists to cease the publication.

At the time when the SAA brought an injunction action, the news companies had already circulated the contents of the memo. Yet a court of first instance issued a temporary restraining order on the grounds that the SAA was entitled to invoke the attorney-client privilege of confidentiality. Subsequently, the news outlets joined by two amici curia, the South African National Editors Forum and Section 16 organization concerned with the promotion of freedom of expression, brought an appeal before the High Court in Johannesburg.

Decision Overview

Judge Sutherland delivered the opinion of the High Court.

The main issue surrounding the present case was whether it was proper for the lower court to issue a temporary restraining order against the news outlets, considering the fact that the purported confidential information was already in the public domain. The Court first addressed the jurisprudence of South Africa and a number of foreign countries on invoking the right to privacy of disclosed information. In Tshabalala-Msimang v Makhanya & Others, 2008 (6) SA (W), the High Court held that while the violation of the plaintiff’s right to privacy was egregious, the prohibition against the circulation of information, which was already in the public domain “may suspend journalism in a manner too dangerous to accept.”

The Court also noted the non-feasibility of a restraining order against known or disclosed information that once was confidential. In SABC v. Avusa, 2010 (l) SA 280 (GSJ), the plaintiff demanded the Sunday Times of South Africa to return a confidential document revealing several irregularities. The Court ruled that in the absence of any duty of confidentiality, the requested restraining order would not restore the violation and that the newspaper could not be liable for the dissemination and publication of the document. Moreover, the High Court emphasized that “an interdict is an appropriate form of relief to prevent future harm, not afford redress for past harm.” [para. 38]

The SAA argued that the attorney-client privilege, also known as legal professional privilege, is a fundamental human rights and even when the confidentiality of the information communicated between an attorney and his or her client, the right to protection of information should not be extinguished. The Court disagreed. It first defined the privilege as a right that is vested “in the client, not in the information, and the right is an entitlement to claim ‘privilege’ over the information. This can and must mean no more than a right to refuse to divulge the information and prevent it being adduced in evidence in any proceedings.” [para. 46.2] Moreover, the Court was of the opinion that “if the confidentiality is lost, and the world comes to know of the information, there is no remedy in law to restrain publication by strangers who learn of it. This is because what the law gives to the client is a ‘privilege’ to refuse to disclose, not a right to suppress publication if the confidentiality is breached.” [para. 49] The Court further disagreed with the SAA that the attorney-client is an absolute right, holding that “any relief sought from a court to protect any form of confidential information is subject to any recogni[z]ed public interest overrides, an exercise which requires a balancing of contending values in a fact-specific context.” [para. 53.4]

Next, the Court assessed whether the SAA as the holder of the attorney-client privilege should be held to an imputed waiver of confidentiality. In State v. Tandwa, 2008 (1) SACR 613 (SCA), South Africa’s Supreme Court of Appeals held that “[i]mputed waiver occurs where regardless of the holders intention, fairness requires that the court conclude that the privilege was abandoned. Implied waiver entails an objective inference that the privilege was actually abandoned; imputed waiver proceeds from fairness, regardless of actual abandonment.” Applying to the present case, the Court held that while the SAA must be criticized for not promptly claiming its privilege due to the uncertainty of its employees as to whether the privilege could be invoked prior to speaking to the in-house counsel, the delay did not justify imputing a waiver of confidentiality to SAA. [para. 60] It therefore concluded that SAA was entitled to invoke the privilege. Despite of this ruling, the issue remained as to whether the SAA’s right to confidentiality could override the suppression of the information that purportedly concerned the public interest.

The High Court held that the controversy surrounding the SAA’s purchase agreement and its dependence on public funds in either finalizing or annulling the purchase was “demonstrably obvious topic about which every citizen [had] a tangible interest to be informed. If the constitutional promise of transparency in public administration is to mean anything, then awareness of what public bodies do with the nation’s money is a low threshold to demand.” [para. 63] Accordingly, the Court ruled that the public interest in being informed outweighed the right of SAA to confidentiality in the contents of the memo.

Based on the foregoing analysis, the High Court set aside the temporary restraining order against the three news outlets.