Martin Fraser Wingate-Pearse vs. Daily Maverick


Thu, Mar 9, 2017

Ruling by the Press Ombud and a Panel of Adjudicators

9 March 2017

This ruling is based on the written submissions of Mr Raoul Hooghuis from KWP Attorneys, on behalf of Mr Martin Fraser Wingate-Pearse, and those of Marianne Thamm, assistant editor of Daily Maverick (DM), as well as on a hearing that took place in Johannesburg on 8 March 2017. Wingate-Pearse attended the meeting, together with his wife Donatella and his mother Moira. Representing him were Adv Christopher Whitcutt and Hooghuis.

Less than 24 hours before the hearing was due to start, the editor of the Daily Maverick informed us that Thamm would not be able to attend the meeting due to work restraints. The complainant was not willing to postpone the meeting.

Based on Section 3.5 of the Complaints Procedures, the decision was taken to go ahead with the hearing. This section reads, “Both parties are expected to attend and address the Adjudication Panel… Failure by a publication to send a representative may lead to the matter being adjudicated in their absence.”

This was unfortunate, as the panel would have liked to have counter arguments before us in order to ventilate the issues more fully.

Assisting the Ombud on the Panel of Adjudicators were Susan Smuts (press representative) and Philip van der Merwe (public representative).

Complaint                                            

Wingate-Pearse is complaining about an article in Daily Maverick of 12 January 2017 headlined SARS WARS: Moyane/Gordhan cold war to reach breaking point in 2017.

He complains that the:

·         article falsely and unfairly:

o   labelled him as a tax offender and a suspected drug smuggler;

o   stated that he paid millions of rands in penalties after a SARS probe in 2005;

·         journalist did not:

o   verify these unsubstantiated and defamatory statements; and

o   give him a right of reply prior to publication.

He argues that the reportage has unnecessarily damaged his dignity and reputation.

The text

The article, written by Marianne Thamm, was about the “frigid” relationship between SARS Commissioner Tom Moyane and Minister of Finance Pravin Gordhan.

“Meanwhile,” she continued, “alleged Cape underworld figure Mark Lifman, who is challenging an almost R400-million tax bill using the ‘rogue unit defence’, will be back in court later this month. However, Lifman’s defence could backfire and inadvertently expose Moyane’s original ‘rogue unit’ allegation as a scam.” 

She explained that this “rogue unit defence” consisted of a claim that “information illegally obtained by the ‘rogue unit’ had informed the original SARS inquiry and that this information had been based on ‘untested covert intelligence procured’.”

In this regard, the sentence in dispute read, “This has become known as the ‘rogue unit defence’ and it is one that has been used in another case by tax offender, suspected drug smuggler and Carnilinx tobacco shareholder, Martin Wingate-Pearse, who coughed up millions in penalties after a 2005 SARS probe.”

The Daily Maverick responds

Tax offender

Thamm says Wingate-Pearse was found to owe SARS on account of non-compliance with tax legislation – therefore, he is viewed in law at this stage as a tax offender in that he is charged with failing to declare all income as required by tax laws and was found to have to pay SARS accordingly. His attempt to have this set aside failed as per SCA judgment. (Reference: http://www.saflii.org/za/cases/ZASCA/2016/109.html)

Suspected drug smuggler

Thamm argues that allegations about Wingate-Pearse having been suspected of drug smuggling have been in the public domain for several years and her text referred to those articles. In this regard, she refers to three such articles.

The first one was carried in the Mail & Guardian. (Reference: http://mg.co.za/article/2007-06-29-agliotti-and-the-cuban-drug-lord)

She quotes the following paragraphs from this article:

The Mail & Guardian has identified a notorious international fugitive as part of Glenn Agliotti’s former circle of intimates—adding a new twist to the probe of Agliotti’s relationship with police National Commissioner Jackie Selebi.

Antonio Lamas, as he was then known, joined the group around Agliotti in the late 1990s when they met almost daily for lunch at the Brazilian coffee shop in Sandton City.

The idyll didn’t last. By 2002, Lamas was behind bars, fighting extradition. He was exposed as Nelson Yester-Garrido, wanted in the United States on suspicion of trafficking large quantities of cocaine and negotiating to buy a Soviet-era submarine for a Columbian drug cartel.

Yester-Garrido denies “any illegal activity anywhere in the world”.

Three years later, in 2005, two further members of the coffee-shop set, Martin Wingate-Pearse and Adriano Mazzotti, became the target of a massive South African Revenue Service (Sars) raid based on suspicion of drug smuggling. No drugs were found and both men maintain their innocence.

Last year, Agliotti was charged with the murder of mining magnate Brett Kebble and, separately, for alleged involvement in a scheme to smuggle hashish and marijuana worth R200-million. Agliotti has admitted having a hand in Kebble’s “assisted suicide”, but has yet to plead in the drugs case.

There are conflicting versions of the relationship between the main players and their activities. However, they all tend to support the view that Agliotti, Selebi’s friend, was a significant player in the drugs business and that senior officers at police headquarters knew this.


A further reference to Wingate-Pearse, Thamm continues, appeared in the Independent on 24 November 2013, headlined SARS ready to tackle tobacco big guns. This article, she says, reported that Carnilinx was linked to convicted drug dealer Glenn Agliotti through two of its directors, Adriano Mazzotti and Martin Wingate-Pearse. The latter two men were reportedly “brothers in law”. (Reference: https://www.pressreader.com/south-africa/the-sunday-independent/20131124/281487864133014)

The third example comes from an article in Business Day of 15 October 2015, which described Wingate-Pearse as being “suspected of drug smuggling”. (Reference: https://www.pressreader.com/south-africa/business-day/20151015/281479275253271/TextView; and http://www.taxtalk.co.za/featured-article/court-case-puts-sars-on-the-spot-over-rogue-unit/)

Having paid money to SARS

Thamm admits that her article erroneously stated that Wingate-Pearse had paid money to SARS; she says that Daily Maverick is willing to correct this statement.

Wingate-Pearse replies

Tax offender

Wingate-Pearse replies that an offender is a person who has been found guilty of an offense – he says he has not been found guilty of an offense, adding that his tax affairs are sub judice and therefore confidential.

Moreover, DM misinterprets the finding of the Supreme Court of Appeal – the court has not made any judgment regarding his tax affairs; the case revolved around the single issue of whether a decision of the Tax Court regarding onus was applicable. This decision, relating to an interlocutory application, did not represent the final judgment of the Tax Court. “There is therefore no adverse judgment against me regarding what I allegedly may or may not owe SARS,” he said.

Suspected drug smuggler

Wingate-Pearse argues that what was published in other newspapers has no bearing on his complaint – his issue is with DM, and not with other publications. (He notes that Thamm, in her response to his complaint, has omitted his side of the story as articulated in the same M&G article she quotes.)

In any event, he continues, DM drew information from articles without conducting its own investigations into this matter. He attests, “The Daily Maverick has failed to provide any satisfactory evidence that I am an alleged drug smuggler. They have made the allegation without any legal or factual basis.”

No right of reply

Wingate-Pearse says DM did not reply to his complaint that it failed to ask him for his comment prior to publication.

Taking the matter further

Some of the above arguments have left me with more questions than answers. In an attempt to speed up matters, I have therefore asked Thamm to reply to Wingate-Pearse’s reply to her response.

This is her reply:

Tax offender

Wingate-Pearse’s definition on the word “offender” (a person must have been found guilty of an offence, in a criminal court of law) is incorrect, particularly so where it refers to tax offenders – it is a well-established principle in South African law that taxpayers found to have contravened tax laws are penalised by way of statute in the form of penalties, compound interest and additional tax, and not necessarily always by way of criminal prosecution only.

“This ‘definition’ put forth by Mr Wingate-Pearse is an over-simplification of the notion of how the state may go about in applying sanctions and punitive measures against citizens who break the laws of the land. Criminal prosecutions are but one way of punishing offenders of statutes, regulations and common law in South Africa. Punitive measure available to the state are by no means limited to ‘finding persons guilty of an offence’.”

The facts of the matter were reported by the court in the appeal case which Wingate-Pearse refers to and relies on. He was the appellant in this case. Additional comments are added to amplify the point that Mr Wingate-Pearse is indeed considered a tax offender until found otherwise, which in this case has not happened:

Quote: Appeal Case

Comment: Thamm

 

The appellant taxpayer, Mr Martin Wingate-Pearce, submitted returns of income for the tax years ending on the last day of February from 1998 to 2005. In April 2006, SARS issued revised assessments for each of those years.

 

This statement sets out that what Wingate-Pearse declared to SARS in the 7 relevant years was found to have been in contravention of the Income Tax Act by SARS. A revised assessment is a legal and binding demand issued by SARS to taxpayers when they have been found not to have declared all income to SARS as required by law. Simply put, the Commissioner for SARS found Wingate-Pearse to have broken the law of Income Tax. A revised assessment remains in place and is binding unless SARS sets it aside following a process of objection by the taxpayer. An objection is, in effect, a means for a taxpayer to prove that he/she did not evade tax, provide evidence to the contrary and then have the assessment set aside and until this happens, that taxpayer remains to have been found an offender.

 

 

...interest and penalties were taken into account, these amounted cumulatively to some R41 million.

 

Where SARS levies penalties and interest, these are premised on precisely the notion that the taxpayer has failed to act in accordance with tax laws and found by the Commissioner an offender. Simply put, the taxpayer is fined in no different a manner as someone caught driving an unlicensed vehicle or speeding beyond lawfully imposed speed limits on public roads. The maximum penalty that SARS may raise in law in such circumstances amount to 200% and are, again by law, prevailing practice and SARS procedural rules, applicable in instances of gross negligence, intentional evasion and fraud.

 

 

...Mr Wingate-Pearce objected to the revised assessments and further revised assessments were issued reducing his tax liability to slightly less than R23 million.

 

These facts show that Wingate-Pearse exercised the option to object to the revised assessments and tried to prove that he did not contravene the Income Tax Act and was not a tax offender, and as a consequence seemed to have been partially successful in reducing the tax amount SARS believed he had evaded. But despite this partial success, the revised assessments remained in place, albeit now for a lesser amount of R23-million. Simply put, despite his objection, SARS still issued a legally binding document that clearly resulted from Wingate-Pearse’s having failed to comply with tax legislation for the relevant tax years.  He therefore remained a tax offender as found so by the Commissioner for SARS.

 

 

...Dissatisfied with these, he lodged an appeal with the Tax Court in terms of s 83 of the Income Tax Act 58 of 1962 (the Tax Act). That was on 1 August 2007. This prompted further consideration of his objections to the assessments and some downward adjustment in the form of further revised assessments, but the accrual of interest substantially increased his overall liability.

 

 

Wingate-Pearse exercised the option to further appeal the revised assessments. This seemed to once again having been partially successful in further reducing the tax amount SARS believed he had evaded. However, despite the further adjustment, the revised assessments remained in place. This means that even at this stage, Wingate-Pearse remained having been found to have failed to comply with tax legislation for the relevant tax years. He therefore remained a tax offender as found so by the Commissioner for SARS.

 

 

...For reasons that are unexplained it took until 9 February 2015 for the appeal to be set down in the Tax Court before Khumalo J...

...Notwithstanding opposition by SARS, the Tax Court permitted argument to proceed on the point in limine, reserved judgment and in April 2015 handed down the following ruling:

...The Plaintiff also carries the onus and evidential burden to prove that he did not have the intent to evade tax and therefore the onus to prove that the 200% additional tax should, either in part or as a whole be remitted...

 

The levying of the maximum penalty of 200% by SARS is by law, prevailing practice and SARS procedural rules (standard for taxpayers found to have evaded tax). In the case of Wingate-Pearse, this maximum penalty was applied and applicable. The SARS revised assessments which included a 200% penalty renders him a tax evader by any reading of the facts and law. Wingate-Pearse therefore remained a tax offender as found so by the Commissioner for SARS and he received the maximum penalty. Therefore, the descriptor of him being a tax offender is accurate in fact and law.

 

 

Thereafter, on 26 August 2015, the Tax Court granted leave to appeal to this court in terms of ss 134 and 135 of the Administration Act…

These events simply deal with the interlocutory action which Wingate-Pearse then brought with a view to appeal aspects of the matter. He lost this appeal with costs. Nothing turns in this court case except for the fact that it ventilated the facts in the public domain as highlighted above. These events are irrelevant to the article in question and the assessment and statements made by the court as quoted above are sufficient to render Wingate-Pearse a tax offender for all purposes and intents. The status of Wingate-Pearse having been found a tax evader and offender has not changed. It is not an absolute requirement for a tax evader to be found guilty of an offence in a criminal court, for a tax evader to be considered a tax evader. The levying of a penalty and the existence of a legally binding assessment by SARS is more than sufficient proof of the fact that Wingate-Pearse was found by SARS to have evaded tax. Just as the examples of a person who drove an unlicensed vehicle or the speedster were issued fines by the traffic police, they too are deemed offenders. Where such offenders then pay their fines, they cannot be said to have been “found guilty of an offence”" as Wingate-Pearse seems to want to apply the term. They remain offenders, regardless of the fact that they did not appear in a criminal court, were not found guilty by a criminal court, and were not prosecuted. 

 

In findings of the Press Ombud, the language used in some rulings refers to the three tiers of seriousness of breaching the Press Code – and in this regard refers to “offences”. The term “offence” is used to refer to a breach of the rules of the Press Code and renders the party an "offender".

Suspected drug smuggler

Wingate-Pearse has been referred to as an "alleged drug dealer" in many publications over a span of years. Thamm highlights some of them, and adds, “Court records submitted by Mr Martin Wingate-Pearce in 2015 in his matter against the Commissioner for SARS and others included affidavits and supporting documents originating from the SAPS wherein allegations of his alleged involvement in illegal drugs were set out. In light of the above, it would be entirely justified to refer to Mr Wingate-Pearse as an alleged drug dealer or having allegedly been involved in the illegal drug trade.”

Unquote Thamm.

At the hearing

Tax offender

Whitcutt explained that SARS assessed what Wingate-Pearse owed in taxes – at first it was R53-million, then the amount decreased several times to the R12-million where it presently stands.

He said that the process of assessment was still ongoing as Wingate-Pearse was challenging the latest calculation as well – which meant that he could not be labelled as a tax offender, as the process had not been finalised.

Hooghuis pointed out that, in law, the onus was on SARS to prove that his client was a tax offender, which had not happened.

The panel believes it is not reasonable and fair to label Wingate-Pearse as a tax offender while the process is still underway. As far as we are concerned, he is innocent until proven guilty.

Suspected drug smuggler

Wingate-Pearse explained that SARS had raided his house in 2005, looking for evidence that he had been involved in drug smuggling. He pointed out that this “information” came from Mr Glen Agliotti – who was a convicted criminal.

No evidence of drugs was ever found.

The panel noted Thamm’s argument that this issue had been in the public domain for several years – but that cannot be the last word on the matter. We also took into account that no drugs were found at Wingate-Pearse’s residence, that nothing else concerning this issue has happened since 2005, as well as the effect of such reporting on the Wingate-Pearse family, especially on their three children.

Given these considerations, it is unfair to Wingate-Pearse and his family to keep on referring to him as a suspected drug smuggler.

But that is not all – Thamm neglected to report his denial, and the fact that there was no trace of evidence linking him to drugs. She should have done so, given the strong possibility that her article might have caused Wingate-Pearse and his family unnecessary harm.

Paid millions of rands in penalties

The panel accepts Thamm’s admission that she erroneously reported that Wingate-Pearse had paid money to SARS.

No verification

The mere happenstance that something has been published does not make it true. It is a dangerous journalistic tactic to rely on other reports without independently attempting to verify the information. A journalist is dutibound to verify information when that information is critical of a subject and may unnecessarily harm that person.

No right of reply

Thamm did not respond to this part of the complaint. The SA Code of Ethics and Conduct is clear – if a person is the subject of critical reportage, as Wingate-Pearse is in the article, it is the media’s duty to seek that person’s views prior to publication.

Dignity, reputation

Given the panel’s belief that it is inaccurate and unfair to label Wingate-Pearse a tax offender, and also unfair to call him a suspected drug dealer (and without stating his denial and the fact that there was no evidence whatsoever to support such a suspicion), it follows that we are also convinced that the DM did not exercise the necessary care and consideration for Wingate-Pearse’s dignity and reputation, as it should have done.                           

Finding

Tax offender

Labeling Wingate-Pearse a tax offender was inaccurate and unfair to him, and in breach of Section 1.1 of the SA Code of Ethics and Conduct, which reads, “The media shall take care to report news truthfully, accurately and fairly.”

Suspected drug smuggler

The statement that Wingate-Pearse was a suspected drug dealer was unfair to him, given the fact that there was no evidence to support such a suspicion, that there was no related incident since the raid in 2005, and the fact that the (only) source of information was a convicted criminal. This was in breach of Section 1.1 of the Code that says, “The media shall take care to report news … fairly.”

Having mentioned that Wingate-Pearse was a suspected drug dealer, it was Thamm’s duty to report his denial, as well as the fact that there was no trace of evidence linking him to drugs. She omitted this information, which was material to the statement in question, and therefore was in breach of Section 1.2 of the Code: “News shall be presented in context and in a balanced manner, without any intentional or negligent departure from the facts whether by … material omissions…”

Paid millions of rands in penalties

The statement that Wingate-Pearse had paid millions of rands in penalties to SARS was inaccurate and in breach of Section 1.1 of the Code: “The media shall take care to report news … accurately…”

No verification

By her own admission, Thamm relied on newspaper reports for her statements about Wingate-Pearse and did not attempt to verify this information, which was critical of him. This was in breach of Section 1.7: “Where there is reason to doubt the accuracy of a report or a source and it is practicable to verify the accuracy thereof, it shall be verified. Where it has not been practicable to verify the accuracy of a report, this shall be stated in such report.”

No right of reply

Thamm neglecting to seek Wingate-Pearse’s opinion prior to publication was in breach of Section 1.8 of the Code: “The media shall seek the views of the subject of critical reportage in advance of publication…”

Dignity, reputation

The article was in breach of Section 3.3 of the Code: “The media shall exercise care and consideration in matters involving dignity and reputation.”

Seriousness of breaches

Under the headline Hierarchy of sanctions, Section 8 of the Complaints Procedures distinguishes between minor breaches (Tier 1), serious breaches (Tier 2) and serious misconduct (Tier 3).                                                                                 

The breaches of the Code of Ethics and Conduct as indicated above are all Tier 2 offences.

Sanction

Daily Maverick is directed to apologise to Wingate-Pearse for:

·         stating, as fact, that he was a tax offender;

·         reporting that he was a suspected drug dealer;

·         neglecting to report that he denied the accusation, and that the (fruitless) raid on his house took place twelve years ago;

·         erroneously stating that he had paid millions of rands in penalties to SARS;

·         not verifying information that was critical of him;

·         neglecting to give him a right of reply prior to publication; and

·         neglecting to exercise the necessary care and consideration in matters involving his dignity and reputation.

The text should:

·         enjoy the same prominence as did the offending article and give effect to Section 1.11 of the Code, which states, “[I]n the event of an apology … the original article may remain, but the publisher must indicate in a prominent manner that it has led to an apology … and should link to both the apology … and the original article”;

  • start with the apology;
  • refer to the complaint that was lodged with this office;
  • end with the sentence, “Visit www.presscouncil.org.za for the full finding”; and
  • be approved by the panel.

The headline should contain the words “apology” or “apologises”, and “Wingate-Pearse”.

Addressing on sanction

Section 5.5 of the Complaints Procedures reads, “At the conclusion of a hearing, and after a Panel has reached a decision, both parties shall be entitled to address the Panel, personally or in writing, on sanctions and where appropriate mitigation.”

This section should not be confused with an appeal – it merely gives each party an opportunity to address the panel on the sanction itself. The opportunity to appeal either the finding or the sanction remains open for the next seven workings days, as outlined below.

Appeal

The Complaints Procedures lay down that within seven working days of receipt of this decision, either party may apply for leave to appeal to the Chairperson of the SA Press Appeals Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be contacted at Khanyim@ombudsman.org.za.

Susan Smuts (press representative on the Panel of Adjudicators)

Philip van der Merwe (public representative on the Panel of Adjudicators)

Johan Retief (press ombud)