SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case No: 1003/2018
In the matter between:

MARION SMITH

APPELLANT

and

MOUNTAIN OAKS WINERY (PTY) LTD        FIRST RESPONDENT
EIKENBOSCH FARM (PTY) LTD
SECOND RESPONDENT

Neutral citation: Marion Smith v Mountain Oaks Winery (Pty) Ltd &
another (1171/18) [2019] ZASCA 123 (26 September
2019)

Coram:

Navsa, Swain, Zondi and Mokgohloa JJA and
Dolamo AJ
Heard:

6 September 2019
Delivered:
26 September 2019
Summary:
Interdict sought on the basis of injurious falsehood –
elements not proved - appeal upheld

ORDER
On appeal from: Western Cape Division of the High Court, Cape Town
(Boqwana J sitting as a court of first instance)
1. The appeal is upheld with costs such costs to include costs of two
counsel.
2. The order of the court a quo is set aside and replaced with the following:
‘The application is dismissed with costs’.
JUDGMENT
Mokgohloa JA (Navsa, Swain, Zondi JJA and Dolamo AJA concurring):

[1] The respondents brought an application in the Western Cape Division of
the High Court seeking an order directing the appellant to retract a false
statement published on a website created and controlled by the appellant, and to
publish a statement setting out what the respondents claimed were the correct
facts.  The court a quo granted an order and reformulated the retraction sought
by the respondents. This appeal is against that order with leave of the court a
quo. The nature of what was published and argued is set out later. The
background to the appeal is contained in the paragraphs that follow.

[2] The second respondent is the owner of Eikenbosch farm, which is an
organic farming operation. Its wines are produced and distributed by the first
respondent. The wines are bottled and labelled under the brand ‘Mountain
Oaks’. Mark Stevens is the director in both respondents.

[3] The appellant is a businesswoman resident at Elgin Ridge Farm, Elgin. She
is the creator and co-owner of the website http://biodynamicorganicwine.co.za
registered on 9 March 2017. The website was launched and made available for

public access from 14 August 2017. Its purpose as stated on the appellant’s home
page is that:
‘The Biodynamic and Organic Wines of South Africa is an association of certified
Biodynamic and Organic wine producers. The association was created to form a platform for
bringing together certified Biodynamic and Organic wine producers to help consumers and
media to easily see which wine producers are certified Biodynamic and organic in South
Africa.’

[4] On 11 September 2016, the first respondent sent an email to Stevens,
explaining that she was interested in starting a register of organic and
biodynamic wine producers. She enquired whether Mountain Oaks was a
certified organic or biodynamic wine producer.  Stevens responded by email
dated 13 September 2016 and stated that:
‘Eikenbosch farm is a certified organic farming operation and wine is one of our outputs. We
have been certified organic since 2005 and, although not biodynamic, I am well connected
with the biodynamic movement and use their concepts to solve organic farming issues.
Our wine was marketed under the “Mountain Oaks” label, but this label was the creation of
my ex-wife, as she was a wine maker with assistance from Ross Gower, and now that she has
left the farm, the label will revert to “Eikenbosch”.’
On the same day, the appellant sent another email in which she asked Stevens to
identify their certification body so that it could be added to their register.
Stevens told her that it was SGS/ LACON.

[5] On 15 August 2017, Stevens received a group email from SA Winery
Industry Information & Systems NPC (SAWIS), which is an industry body set
up for the purpose of disseminating topical information of interest to various
stakeholders in the wine industry. The email read:

‘The Biodynamic and Organic Wines of South Africa
The association was created to form a platform for bringing together certified Biodynamic and

Organic wine producers to help consumers and media to easily to see which wine producers
are certified Biodynamic and organic in South Africa.
Click here to read more <http:/biodynamicorganicwine.co.za/>’

[6] He followed the link which took him to the appellant’s website. The
website contained a page entitled ‘Organic Wine Producers’. This page gave a
brief explanation of what organic wine production entails and stated that ‘the
wine producers on this site are all certified organic’. This was followed by a
table prepared by the appellant which gave the certification status of various
wine producers. This table had an entry for Mountain Oaks Winery and in the
notes column, Stevens noted that the appellant had written the following words
in bold and red ‘no longer organic’ (my emphasis). Following his demand, the
website was subsequently altered and the entry relating to Mountain Oaks was
removed entirely.

[7] The respondents alleged that the statement that Mountain Oaks Winery is
no longer organic is entirely false because every vintage that Eikenbosch
produced enjoyed full certification to the highest possible international standards
for organic wine production. They contended that they were the first wineries in
the Cape to be certified for organic wine production.

[8] The appellant conceded that she published the alleged statement on her
website for 48 hours. She insisted that the statement was true because the
respondents failed to provide any evidence that they were certified for organic
wine production at the time when the publication was made. According to her,
and from her investigations, the certificate from LACON only relates to wines
made from organic grapes and not organic wines. Therefore the respondents
were not certified to produce organic wine. The significance of the distinction
alluded to will be apparent in due course.

[9] In their founding affidavit, the respondents relied on their clear right to
have the reputation and goodwill of the brand ‘Mountain Oaks’ protected. They
alleged that the right not to have one’s reputation tarnished is well established
and goodwill is a recognised asset having commercial value. On the injury
committed or reasonably apprehended, the respondents stated that the entire
South African wine industry community and observers are likely to have sight of
the false statement published by the appellant. They stated further that the nature
of the industry is such that, consumers rely on the reputation of an organic wine
producer, as a high degree of trust is required to ensure that products that are
marketed as ‘organic’ are actually organic.

[10] Dealing with these facts, the court a quo found that the statement by the
appellant was a misrepresentation, the publication of which would have been
injurious to the reputation and goodwill of the respondents who had traded and
marketed their wines as organic since 2005. It found further that the appellant
was the respondents’ competitor and that there was no reason why the
respondents should not succeed on the basis of unlawful competitive trading.

[11] On defamation, the court held that the appellant has not been able to show
that her conduct was not wrongful, or that it was justified in any respect. The
court found that she had no reason to publish a statement that Mountain Oaks
Winery was no longer organic particularly because that was not the purpose of
the website. The court rejected the appellant’s version that she had no intention
to injure and found that that was not supported by the facts. It further found that
there was no reason not to accept that the respondents, by virtue of the
certification as producers of organic wine that they held since 2005, had built a
reputation and goodwill over time which needed to be protected. The court then
found that the respondents have succeeded in proving defamation and it granted
an interdict.

[12] The appellant’s counsel argued that the court a quo erred in its findings in
that first, the respondents had failed to prove that the statement complained of is
defamatory. Second, that the respondents claimed that they were entitled to the
relief sought on the basis that they had made out a case for an interdict founded
on unlawful competition and injurious falsehood when in fact the statement
complained of was true. Before us, counsel for the respondents was constrained
to limit the basis of justification to the interdict to injurious falsehood.

[13] That being the case, the issue is whether the respondents succeeded in
proving the essential elements of injurious falsehood which are: (a) that the
appellant by word or conduct, or both, made a false representation to others
concerning the respondents; (b) the appellant knew that the representation was
false; (c) the respondents suffered damages as a result of the presentation
through for example, loss of business; and (d) the false representation was the
cause of such loss1.

[14] I deal with each of these requirements in turn.

Did the appellant make a false representation to others concerning the
respondents?
[15] Stevens alleged in his founding affidavit that the first respondent
produced organic wine annually from the 2005 vintage up to and including the
2012 vintage. He caused the 2011 and 2012 vintage to be destroyed in the
presence of SARS officials. Since then, the first respondent has not produced
wine and the youngest wine it produced is from the 2010 vintage.

[16] The complaint by Stevens in my view is contrived. In terms of the
European Union Rules for Organic Wine Production, since 1991 and therefore

1 Geary & Son (Pty) Ltd v Gove 1964 (1) SA 434 (A) at 441C to D

prior to August 2012 wines could be labelled as ‘made from organic grapes’,
whatever the subsequent wine making process might have entailed because that
was the acceptable standard set by the EU. However, after 1 August 2012 the
EU standards and regulations changed and a new standard was set. In terms of
these regulations, a wines producer was limited to the use of the label ‘wine
from organic grapes’ and not ‘organic wine’ if the wine making process was not
wholly organic for example chemicals were introduced or the wine was not
otherwise wholly organically produced. It was for that reason that the website
stated that the wine was no longer organic as there is no proof or acceptable
certification to that effect. Therefore, the appellant’s statement that the
respondents’ wine is no longer organic is not false. That should be the end of the
matter. For completeness I however deal with the remaining requirements.

Did the respondents prove that the appellant knew that the representation
was false?
[17] In disputing the falsity of the publication the appellant stated the
following in her answering affidavit:
‘[44] As neither Mountain Oaks nor Eikenbosch has made wine since 2011, they have never
produced a certified organic wine within the meaning of the EU standards and regulations for
the production of organic wine . . . .
[62] As I have stated previously, before 1 August 2012 wine was certified as “wine made
from organic grapes”. From 1 August 2012 organic wine per se had to be made under strict
organic conditions and only those wines made under those conditions could be certified as
organic.
. . . .
[67] At the risk of repeating myself, according to the EU standards and regulations for
certification from 1 August 2012, Mountain Oaks or Eikenbosch did not produce organic
wine.’

The respondents’ reply to this was a bare denial. Nowhere in the papers did they
allege specifically that the appellant knew that the publication was false.
Furthermore, and based on the Plascon Evans’ rule2, I cannot find that the
appellant’s version is so farfetched or clearly untenable that it should be
rejected. Knowledge of falsity must be alleged specifically.3 Furthermore, the
respondents had to prove that the appellant had subjective knowledge that her
statement was false. This, the respondents failed to prove.

Did the respondents suffer damages as a result of the representation?
[18] The respondents alleged that they are not in a position to quantify the
damages that will be suffered as such damages will only become apparent as
their reputation and business relationships are affected. This therefore means
that the respondents could not prove that they suffered damages as a result of the
representation.

[19]    In the light of the conclusions made, it follows that the court a quo erred
in granting the order as it did. Accordingly, such order falls to be set aside.

[20] In the result, the following order is made:
1.
The appeal is upheld with costs such costs to include costs of two counsel.
2.
The order of the court a quo is set aside and replaced with the following:
‘The application is dismissed with costs’.

___________________
FE Mokgohloa
Judge of Appeal

2 Plascon – Evans Paints v Van Riebeeck Paints 1984 (3) 620 (AD)
3 Breedt v Elsie Motors (Edms.) Bpk 1963(3) SA 525 (A) at 529B–529H.

APPEARANCES:

For Appellant:
A Sholto Douglas

F Landman

Instructed by:
Michael Ward Attorneys, Wynberg

Honey Attorneys, Bloemfontein

For Respondent:
F J Gordon - Turner

Instructed by:         Andrew Miller and Associates
McIntyre van der Post, Bloemfontein