Case Summary and Outcome

The Western Cape High Court in Cape Town, South Africa, held that a private company was not entitled to refuse access to a financial report commissioned to investigate alleged auditing irregularities. Two media entities had filed access to information requests with the company after the company’s share price dropped when its auditors were unable to sign the annual financial statements. The company refused the requests, stating that the report was subject to legal privilege. The Court focused on the purpose of the report, finding that it had not been commissioned for the “express” purpose of anticipated litigation and so was not subject to legal privilege. The Court set aside the company’s decision to refuse access, and ordered the report be released within ten days.

Facts

In December 2017, South African company Steinhoff was unable to release its annual financial statements as their auditors, Deloitte Accountants BV from the Netherlands, had refused to sign off on the statements because of “alleged accounting irregularities” [para. 5]. Steinhoff’s share price lost 98% of its value, and shareholders threatened legal action.

On December 6, 2017, Steinhoff announced that it had appointed PriceWaterhouseCoopers Advisory Services Pty Ltd (PwC) to conduct an independent investigation into the irregularities. It later transpired that Steinhoff had briefed its lawyers, Werksmans, to appoint PwC. PwC handed its report to Steinhoff and Werksmans in March 2019, and Steinhoff released an “overview of the Forensic Investigation” to the public.

On March 29, 2019, Tiso Blackstar, the owner of various South African media publications, filed an application for access to the PwC report in terms of the Promotion of Access to Information Act 2 of 2000 (PAIA). Tiso Blackstar sought access to the report as “a member of the media that investigates and exposes corporate scandals and is … responsible for providing the public with accurate information regarding issues that lie within the public interest” [para. 10]. On April 26, 2019, Steinhoff refused Tiso Blackstar’s request on the grounds that the PwC report contained information that was legally privileged, in terms of section 67 of PAIA. Section 67 states: “The head of a private body must refuse a request for access to a record of the body if the record is privileged from production in legal proceedings unless the person entitled to the privilege has waived the privilege”.

On September 2, 2019, amaBhungane Centre for Investigative Journalism, a non-profit media entity, filed its own PAIA request. Steinhoff refused amaBhungane’s request on September 30, 2019 on the same grounds as it had refused Tiso Blackstar’s.

Tiso Blackstar and amaBhungane approached the Western Cape High Court in Cape Town, seeking an order setting aside Steinhoff’s decisions to refuse to grant the PAIA requests and directing Steinhoff to provide them with a copy of the PwC report.

Decision Overview

Judge Nuku delivered the judgment of the Western Cape High Court. The central issue for the Court’s determination was whether the PwC report was covered by legal privilege and so could not be released under PAIA.

Tiso Blackstar and amaBhungane (the applicants) argued that Steinhoff could not refuse access to the PwC report because the report was “never subject to legal privilege” and “Steinhoff has waived any privilege, if any privilege applied” [para. 15]. The applicants referred to section 70 of PAIA – the “public interest override” – which “provides that a request made in terms of PAIA must be granted if the public interest in the disclosure of the record outweighs the harm contemplated” by the provisions that permit a refusal of disclosure [para. 16]. The applicants argued that if there were sections of the report that were legally privileged, the sections which were not privileged should be severed and released, or a “judicial peak” of the report should occur.

The applicants argued that the right they sought to protect through the PAIA request was the right to freedom of expression, which includes freedom of the press, and the right to receive information and impart ideas. They referred to the Constitutional Court case of Brümmer v. Minister of Social Development , which had noted that “[a]ccess to information is crucial to accurate reporting and thus to imparting accurate information to the public” [para. 32]. One key factual element of this case was that the first announcement from Steinhoff that PwC had been appointed to conduct a forensic investigation made no mention of their lawyers – Werksmans – and so, the applicants contended, because no lawyers were initially involved, the report could not have been obtained for the express purpose of anticipated litigation. In addition, the applicants argued that simply including lawyers in communication and marking a document as “privileged” is not sufficient to confer legal privilege on that document: the privilege results only from the purpose for which the document was created and the applicants argued that the only possible purpose for the commissioning of the PwC report was to enable Steinhoff to report its annual financial results by addressing the auditing irregularities.

Steinhoff maintained that the report was privileged and that it had not waived that privilege: it stated that the PwC report was prepared for the “’express’ purpose of obtaining legal advice and in respect of actual or contemplated litigation”, as litigation against Steinhoff as a result of the events of December 2019 was anticipated [para. 42]. Steinhoff submitted that the public interest override did not apply and that the report could not be severed nor had the applicants demonstrated the conditions for a “judicial peak”. Steinhoff submitted that the Brümmer case was distinguishable from the present case as it concerned a PAIA request to a public – not private – body, and that there was no jurisprudence on the “right to freedom of expression in the context of private bodies” [para. 33]. Steinhoff argued that Rob Rose – a journalist at a Tiso Blackstar media house – had published various articles and a book on Steinhoff and so his (and other journalists’ who had also reported on the matter) right to freedom of expression was not affected by the refusal of access to the PwC report.

The Court noted that section 32 of the Constitutions provides for the right of access to information, and that subsection (2) requires the enactment of legislation to give effect to that right. PAIA was enacted for this purpose, and covers the right of access to information held by private (as well as public) bodies. Section 50 of PAIA requires that access be given to information held by a private body if that information is “required for the exercise or protection of any rights” and if the correct procedure is followed and there are no exemptions which apply permitting the refusal of the request for access [para. 22]. Section 59 of PAIA permits the severability of the requested record, and requires the disclosure of all information that is not covered by any exemption and can be severed from that excluded information. In section 70 of PAIA, the legislation sets out what circumstances will lead to the imposition of the “public interest override” and stipulates that a record must be disclosed by a private body if that record would “reveal evidence of a substantial contravention of, or failure to comply with, the law or imminent and serious public safety or environmental risk” and that the public interest in disclosure outweighs any harm.

The Court noted that it is only in respect of a request to a private body that PAIA requires the requester to demonstrate that the information sought is “required for the exercise or protection of any rights” and that as there is nothing in PAIA to indicate that only some rights can found a PAIA request, “the right to freedom of expression is among the rights which would entitle a requester to a record held by a private body” [para. 35]. The Court also noted that the applicants had referred to the case of M&G Media Ltd v. 2010 FIFA World Cup Organising Committee South Africa , which had held that the right to freedom of expression “applies in respect of private bodies” and that Steinhoff had not argued that the M&G case was wrongly decided. Accordingly, the Court held that the applicants were entitled to argue that access to the PwC report was necessary for the exercise of their right to freedom of expression.

The Court rejected Steinhoff’s argument that because journalists had been able to report on what happened at Steinhoff their right to freedom of expression was not impacted by the PAIA refusal. The Court acknowledged that the information in the public domain was incomplete without the PwC report, and accepted the applicants’ argument that “the fact that there is information in the public domain cannot be a basis of refusal of access to information under PAIA” [para. 38]. The Court described Steinhoff’s argument as “difficult to follow” and reiterated the position taken in Brümmer that “access to information is crucial for accurate reporting” [para. 39]. It held that the “refusal to provide the PwC report limits the applicants’ right to freedom of expression” and so the only relevant inquiry is whether the refusal is justified under section 67 of PAIA. In addition, the Court emphasized that Steinhoff had not raised this point when it first refused the PAIA requests.

The Court examined whether Steinhoff had met its burden of proving that its refusal to grant access to the PwC report was justified in terms of PAIA. The Court referred to the case of Competition Commission v. ArcelorMittal South Africa which had set out the requirements for proving a document is protected by legal privilege and stated that Steinhoff therefore had to prove that the PwC report was “obtained or brought into existence for the purpose of submitting it to Werksmans for legal advice in respect of litigation which was either pending or contemplated at the time” [para. 44]. The Court held that the evidence provided by Steinhoff did not demonstrate that the PwC report was commissioned in anticipation of litigation. It commented that even if Steinhoff appointed Werksmans when it “became nervous on learning of the alleged accounting irregularities” that would be insufficient to prove that the PwC report was privileged [para. 69].

Accordingly, the Court dismissed Steinhoff’s arguments and set aside its refusal to grant Tiso Blackstar and amaBhungane access to the PwC report and ordered Steinhoff to provide the applicants with a copy of the report within ten days.