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Gold Reef City sues Carte Blanche for R47 million: Whos...

Business Maverick

Business Maverick, Media, Politics

Gold Reef City sues Carte Blanche for R47 million: Whose side are you on?

The difference between a lawyer’s letter that threatens to sue for defamation and an actual summons is vast. Media houses get the former all the time, the latter happens less often. But Gold Reef City has gone a step further with Carte Blanche. At the moment, in the South Gauteng High Court, a history-making trial is underway – and the implications are potentially much larger than a damages claim for R47 million. By KEVIN BLOOM.

On Monday 30 August 2010, Paul Boshoff, a “non-destructive testing technician,” appeared in the South Gauteng High Court to give evidence in the case of Gold Reef City Theme Park versus Electronic Media Network and Combined Artistic Productions. He provided Advocate Paul Louw, the senior counsel for the defence, with a description of his job – essentially, he said, he tests steel for defects – and then he answered a series of technical questions about his methods and qualifications. Slightly over half-an-hour into his testimony, Louw asked Boshoff how he came to be involved with Gold Reef City.

“Basically it was a cold call,” said Boshoff, explaining that in 2004 he contacted the theme park to see whether they might want someone to perform tests on their “fun rides”. The man who took his call, Boshoff continued, invited him to provide a quote. A few days later, he was up on the Crazy Cocopan with his tools.

What Boshoff couldn’t know then, and what Louw obviously didn’t refer to in leading his evidence, was that this was the beginning of a chain of events that would result in the largest defamation claim against a South African media house in recent history. To summarise: Boshoff noticed a few problems with the Crazy Cocopan, and was then asked to check out the Golden Loop, where he noticed much bigger problems; when he didn’t get paid what he was promised, he went with his findings to Carte Blanche, who put together a story that allegedly cost Gold Reef City millions in lost revenue.

Of course, as with most matters that go through our courts, the case is nowhere near this simple. Although there are two defendants named in the court records, they are in fact the same – let’s call them, for the sake of clarity, Carte Blanche. And although there is one plaintiff named in the records, Gold Reef City Theme Park, it appears on closer inspection that there are two entities claiming damages – the theme park and the casino. More specifically, each is claiming R200,000 from Carte Blanche for “general damages” (the defamation part); for “consequential damages” (the lost revenue part) the theme park is claiming R43,1 million and the casino R3,66 million.

Got it? Neither did we at first, but suffice to say that Gold Reef City believes Carte Blanche owes them something in the region of R47 million, and they’re willing to pay a four-member legal team – consisting of two senior counsels, a junior counsel, and an attorney – around R100,000 a day to prove it. The matter appears unprecedented because, while legal threats to sue for ridiculous sums are sent to local media houses almost every week, these threats are hardly ever carried through to the summons stage, and even less frequently into the halls of the High Court. Carte Blanche, being in the position they’re in, have little choice but to fork out an equivalent R100,000 a day to defend themselves.

It’s no doubt meaningless, given the above, to say that Carte Blanche could put that money to better use elsewhere. They have legal insurance, and a significant proportion of their costs are covered. And yet, despite ourselves, The Daily Maverick is saying it anyway – who needs the stress of a High Court action less: a South African provider of rollercoaster rides and R5 slot machines, or a South African provider of widely viewed and respected investigative reports? Which is not to argue that media houses shouldn’t be forced to pay for their mistakes when they’re wrong, just that in this specific instance (again, The Daily Maverick isn’t pretending objectivity) it appears that the media house in question wasn’t. Wrong, that is.

Famously, the two primary defences in a defamation case are “truth” and “reasonableness”. Regarding the former, the defence team in the case of Gold Reef City versus Carte Blanche could choose to roll out a procession of experts who’d all assert, with the aid of charts and photographs and diagrams, that the theme park rides were indeed unsafe and that the programme, aired in March 2005 and produced by Susan Puren, therefore reflected the truth. What the defence team could then expect, however, is that the plaintiff’s team would do the same (except in reverse) – roll out a procession of equally qualified experts who’d argue, equally persuasively, that the rides weren’t unsafe. It would end, most probably, in a stalemate.

With the reasonableness defence, the test is different. Did Carte Blanche act reasonably in airing the programme? In other words, was there any negligence on their part, or any malice in their intent? Here’s one fact that should stand in the defendant’s favour: George Mazarakis, Carte Blanche’s executive producer, suspected that Boshoff may have been acting with malice – he had, as mentioned, released the information to the media because he hadn’t been fully paid – and a private meeting was subsequently held where Mazarakis cross-questioned Boshoff until he’d satisfied himself that the story was important. Important why? Important, Mazarakis thought, because people might have died on those rides.

Four further facts that should stand in the defendant’s favour are all in the content of the programme itself, a transcript of which is in The Daily Maverick’s possession.

The first additional fact is a man by the name of Dr Roelf Mostert, a forensic engineer and metallurgist who’d acted as an expert witness in investigations that followed the collapse of the Brooklyn Mall and the Kolonnade Centre in Pretoria, as well as the Injaka Bridge in Mpumalanga. Mostert, as the Carte Blanche insert made clear, didn’t much like the evidence of cracks, rust and visible disrepair he’d seen on several of the rides at Gold Reef City. “My first reaction is that we are pretty close to a problem,” said Mostert. “It has happened in other countries, it could happen again. Looking at the indications that we see here, it could be closer than we think.”

The second fact is Amanda van der Westhuizen, an independent consultant and a highly qualified expert in testing steel and aluminium for defects and weaknesses not visible to the naked eye. As Van der Westhuizen told the camera: “Tragedy, that’s what’s waiting and my response would have been, ‘Stop this, now, until further investigation can be done’.”

Facts three and four in the defendant’s favour are surprisingly similar – the technical director of the South African Institute of Steel Construction, Dr Spencer Erling, who was taken by Carte Blanche to do a visual inspection of the rides and noted that because the cracks had been welded and repaired several times, the situation had become more dangerous; and Allan Mann, a British structural engineer employed by a range of UK amusement parks, who said that the number of cracks on the Golden Loop was “pretty astonishing”.

As is standard practice with Carte Blanche, Gold Reef City was given a chance to respond to the allegations. They initially agreed to a request for an interview, but then rejected the request on the basis that they wouldn’t be able to view Susan Puren’s video evidence of the allegedly unsafe structures prior to meeting. Said presenter Zaa Nkweta when the final programme aired: “In the interests of public safety we made the video material available, expecting that we would finally get our elusive interview. What we got were threatening legal documents, demands to disclosure of our sources and a series of responses related to the technical issues that we raised, made by unnamed consultants.”

The question for the court, as the opposing sides now get ready to present their heads of argument, is straightforward: how much more could Carte Blanche have done? The plaintiff’s legal team may claim that their client wasn’t given adequate time to prepare a detailed response to Carte Blanche’s accusations, but a current affairs show is not a trial – it has an entirely different set of parameters and expectations. So was there any aspect of their duty as journalists that Carte Blanche neglected? In their belief that the rides were dangerous and the programme needed to go out quickly, did they treat Gold Reef City maliciously or were they acting in the public interest?

Then there’s the vexing question of Gold Reef City’s own assessment of lost revenue. How do they get to R43,1 million in losses for the theme park and R3,66 million for the casino? How can they prove that the Carte Blanche show led directly to a shortfall of these amounts? Have their accountants put together detailed spreadsheets linking the one to the other beyond any doubt? And why is the casino included in the equation anyway? Do people stop gambling when the safety of the rides in the theme park outside is at stake? How does Gold Reef City know that some of those people who allegedly would’ve been in the casino had it not been for Carte Blanche wouldn’t have had a brilliant night at the craps table?

These are all issues for the judge to decide, of course. The Daily Maverick’s interest is in the chilling effect this case will almost certainly have on one of South Africa’s most important outlets for investigative journalism.

We are also interested in the timing of the case, the fact that the Media Appeals Tribunal and Protection of Information Bill are looming in the background, the unavoidable truth that big business appears not to give a damn about the potential erosion of freedoms, and the dangerous precedent the judge will set if she finds for the plaintiff.

An award for consequential damages, even for something less than the full amount, would in no uncertain terms undermine the media’s role as the Fourth Estate. The implication would be that South African media is a business before a societal watchdog, a commercial entity first and a safeguard of democratic ideals second. The chilling effect would extend way beyond Carte Blanche; it would ice up the veins of every newspaper, magazine, radio show, TV programme and website that believes part of its mission is to speak truth to corporate power.

And we already know what’s up with the mission to speak truth to political power. It’s compromised, it’s not a right (or a duty) that’s indefinitely guaranteed. The worst-case scenario, unlikely but evidently possible, is that the populist idiocracy – in the form of a pact between business and government – reigns supreme. For this democracy to survive, Gold Reef City, like the blind apparatchiks in the ANC, have to lose. DM





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