Martin Welz and Noseweek publisher abused their powerful positions

The media is in a powerful position to uncover the truth and expose wrongdoing for the public good.

President Cyril Ramaphosa, in his second day of testimony to the Zondo Commission in regard to state capture and the Gupta Leaks, said: “I must commend the media for playing such a patriotic role, in the way they have followed all this through. They often make us [politicians] very uncomfortable.”

The Gupta saga is a prime example of how the media and journalists went out on a limb and carried out tough investigations to expose the truth and inform the public.

Journalists also run the risk of being fed fake information, and in the interests of getting a salacious story out may fall foul of the law.

Public figures have to stand up to scrutiny and criticism, and the public has a right to be informed – and as long as the criticism or statement is in the public interest, is true, justifiable, not unlawful, and not negligent, all should be well.

Katz versus Welz

The latest defamation case involving media is that of Leonard Katz versus Martin Welz and Chaucer Publications, heard in the Western Cape Division of the High Court.

Leonard Katz is an ENSafrica executive and head of its Insolvency, Restructuring and Business Rescue department.

In a decision handed down last week, Acting Judge Ncumisa Mayosi held that Welz and the publisher of Noseweek, Chaucer, published defamatory statements in regard to Katz. They were ordered to pay damages of R330 000 as well as the costs of the action.

Katz is a respected senior attorney of many years’ standing, and specialises in insolvency law, corporate rescue and recoveries. He is a director of one of the largest legal firms in the country.

Welz, a journalist and the editor and owner of Noseweek through Chaucer, penned articles about Katz in 2014.

The cover of the July 2014 issue of Noseweek featured a graphic/digital image of Katz and the headline ‘The man who stole justice’. There was a ‘Dear Reader’ editorial titled ‘Lennie the Liquidator makes mockery of the law’, while the article itself was titled ‘Katz and mice’, with a sidebar article titled ‘Call in Lennie the Liquidator’ and another titled ‘And then there’s Brakspear’.

In writing the articles, Welz had relied on all the information and explanations given to him by Ian Brakspear, a futures trader.

Background to Brakspear

Readers interested in the background to the convoluted structure set up by Brakspear, which was covered in Welz’s articles, can refer to the 2004 judgment of Brakspear v West Dunes Properties 5 (Pty) Ltd and Another, heard by Judge N F Kgomo.

Brakspear, in trying to halt the winding-up process of West Dunes Properties, had made various allegations and accusations of fraud and forgery in his application to the court.

Brakspear represented himself, and was aided by Welz.

This was consented to by Judge Kgomo: “Although I generally baulked at the idea of a lay-person sitting as some pseudo- or quasi counsel to an unrepresented litigant, I relented, at the applicant’s plea and entreaty, and permitted him to do so …”

Judge Kgomo, alluding to Brakspear’s “extreme bias and hostility” included in the judgment an email written by Brakspear to Katz, and copied to various journalists, which was peppered with threats, accusations and bad language.

The judge was critical of Brakspear’s evidence, and found that it “must be treated with great circumspection … he jumped from one standpoint to another and back without blinking an eyelid …” and that his evidence contained “contradictions and inherent improbabilities”.

The judge also noted that Brakspear “confirmed in his evidence that it was his ‘life mission’ to bring about the downfall of Katz”.

Brakspear’s petition for leave to appeal to the Supreme Court of Appeal was dismissed on December 9, 2015.

Defamation case

Katz asserted that the digital image and the caption ‘The Man who stole justice’ are “wrongful and defamatory”, and were understood by Noseweek readers to mean that he “acted to subvert the course of justice; was dishonest; and had conducted himself in an unlawful and unprofessional manner”.

In ‘Call in Lennie the Liquidator’ Welz made various allegations, including that Katz had negotiated a R1 million bonus fee, a debt was fraudulently manufactured, and a “friendly liquidator” was appointed.

Welz asserted that the contents of the articles were “substantially true” and published in the public interest; or amounted to “fair comment premised on substantially true facts”; there was a social/moral duty to publish the contents, and that it was “a privileged occasion”.

Welz also intimated that Noseweek readers would see the articles as published in Noseweek’s style of “uniquely free, irreverent and occasionally entertainingly cheeky style of writing”.

The defamatory statements

This court found that:

• The statements written and published by the defendants on the cover page, the editorial and the Brakspear article are defamatory of Katz.

• The statements made in regard to Katz which were published “are likely to injure the good esteem in which Katz is held by the reasonable average person to whom they were published”.

Defendants bear the onus of proving their defence

The court noted that both the Supreme Court of Appeal and the Constitutional Court have held that the defendants bear the full onus of proving their defences, on a balance of probabilities.

The court had to consider whether:

• The defamatory statements are true, and if so, whether they were published for the public benefit.

• Whether the defamatory statements were published on a “privileged occasion”. The defendants would only be able to rely on qualified privilege, and not absolute privilege, but this would not offer absolute immunity to a defamatory statement.

• Whether the defamatory statements are “fair comment on facts that are true and are matters of public interest”.

• Whether the defamatory statements are reasonable. The court referred to National Media Ltd v Bogoshi in which the Supreme Court of Appeal accepted that publication of a defamatory statement by the press may be lawful if the publication was reasonable. 

The defence imploded

The court found that:

• The defamatory statement that Katz “immediately negotiated a R1m bonus fee” was not true.

• The defence failed to prove the truth of the statements published about Katz.

• The Brakspear article was published a month before Brakspear’s high court case before Judge Kgomo. Just before the article was published, Brakspear emailed Welz “FYI – case has been set down on the opposed roll 14 August 2014 – hopefully I can use your story”. The court found that: “This calls into question the objectivity of Welz.”

• There was no truth to the statements that part of Katz’s “fraudulent plan” included appointing a friendly liquidator. The defendants knew this was not true before the offending articles were published. There was no evidence justifying why it was reasonable to publish the article.

• There was no truth to the statements that Katz fraudulently obtained and/or relied on a fake order for the provisional winding up of West Dunes.

• Welz “was not about to let the truth get in the way of what he considered to be a good story”.

• There was no truth to the statements that Katz charged excessive fees.

• There was no evidence that Katz devised fraudulent schemes.

• The statements published regarding Katz are highly defamatory: “Accusing any person, let alone an attorney, of corruption and/or fraud is about as serious and damaging an allegation as can be made.”

• The defendant “embarked on a deliberate and unfounded attempt to destroy the plaintiff’s reputation”.

Defamation award

In considering the defamation award, the court held that neither Welz nor Chaucer could produce any evidence to substantiate the statements made about Katz, and they “failed to uphold their defences to Katz’s summons”.

“Persistence in a defence of truth and public benefit which fails may increase the award, as may recklessness and irresponsibility on the part of the defendants … [and that they] abused their powerful position as members of the media and a publisher of a widely distributed magazine to launch and sustain a vicious unsubstantiated attack against the person of Katz.”

Read: ‘Moneyweb committed its duty as the Fourth Estate’ – Acting Assistant Press Ombud (Oct 2020)