Resultant Finance (Pty) Ltd vs. TimesLive


Wed, Mar 6, 2019

Particulars

Lodged by: Ms Candice Hunter-Linde, Senior Litigation Associate, from Mathopo Moshimane

Date of article: 6 November 2018

Headline: At last! Contract that crippled KZN health is dumped – Dodgy deal meant state hospitals haven’t got new life-saving equipment since 2015

Author of article: Tania Broughton

Respondent: Susan Smuts, internal ombud

Complaint                                            

Resultant Finance (RF) complains the journalist:

·         created the misguided and false impression that it had caused the collapse of the health system in KwaZulu-Natal;

·         attempted to manipulate the outcome of a pending appeal and to obstruct justice from being done; and

·         did not adequately attempt to contact its CEO.

It adds that the sub-headline falsely and misleadingly called the contract “dodgy”, and concludes that the reportage was unfair, unbalanced and defamatory.

The text

Broughton reported that a “failed R2.5-billion tender” awarded to RF – which “has caused a chronic shortage of essential medical equipment, including oncology machines, at KwaZulu-Natal’s 300 government hospitals and clinics” – had been set aside.

She wrote Judge Sidwell Mngadi ruled that the contract given in 2015 to RF to oversee the leasing of medical equipment had been awarded unlawfully “as the company did not comply with an important requirement of the tender” (as it had not been registered with the Financial Services Board, the FSB). The judge reportedly said this had rendered the process uncompetitive and unfair to other companies that wanted to bid, but did not.

The story said: “This contract plunged KZN state hospitals into a spiralling crises and resulted in an investigation by the SA Human Rights Commission, which found the province had failed its cancer patients.”

The arguments

In addition to the complaint, RF:

·         asks for proof of the “so-called” emails addressed to the CEO in which requests for comment were allegedly made. It says apart from an email received by its CEO on 2 November 2018 via Linked In (inviting it to make contact with the journalist, but without referring to the reason for this request), the company denies that the publication made any attempt to obtain comment;

·         invites the publication to point out where Mngadi:

o   called the awarding of the tender to it “dodgy” or untoward; and

o   referred to the company as the cause of the collapse of the health system in the province.

SMUTS says the article was based on a court judgment, which the newspaper is entitled to report on.

She adds: “In terms of both court reporting rules and general accepted journalistic practice, we are not obliged to obtain comment from parties to court proceedings. The fact that we nonetheless attempted to obtain comment from Dr Gama was because we wished to hear what his response and communicate this to our readers. We were, however, under no obligation to do so and our failure to reach him does not amount to a breach of the Press Code, nor can it assist Dr Gama in his complaint.”

The internal ombud refers to:

·         paragraph 4 of the judgment, where Judge Mngadi stated that the contract between the Department of Health and Resultant Finance was to lease medical and non-medical equipment – she says his judgment made it clear that from the time the tender was awarded in 2015, no medical equipment had been leased; and

·         some articles that refer generally to the backlog in surgeries in state hospitals in KwaZulu-Natal hospitals. “While none of them refer specifically to the contract between Resultant Finance and the department, it is clear that there is a crisis in hospitals in the province,” she submits. She adds it is clear that the tender was intended to ensure that medical equipment was available in order to facilitate medical treatment. “The non-performance of the contract, regardless of who was at fault, has contributed significantly to the crisis in hospitals insofar as there is a lack of medical equipment,” she argues.

Smuts points out the only parts of the story that were not taken from the judgment are: “…which has caused a chronic shortage of essential medical equipment, including oncology machines, at KwaZulu-Natal’s 300 government hospitals and clinics…”; and “This contract plunged KZN state hospitals into a spiralling crisis and resulted in an investigation by the SA Human Rights Commission, which found the province had failed its cancer patients”.

However, she notes that the complaint does not take issue with these two statements, and argues that they therefore should be accepted as an accurate and fair summary of relevant background information.

In conclusion, Smuts argues that the reference to a “dodgy deal” in the sub-headline was justified, given that the court found the awarding of the tender was unlawful (see paragraph 47 of the ruling), and that the story did mention that RF had been appealing the decision.

In RF’s reply to Smuts’s response to the complaint, HUNTER-LINDE says of course the newspaper was entitled to report on the outcome of court cases – but the article in question “… does not confine itself to facts, gets facts wrong and omits salient facts. It is written in such a way that unfairly casts doubt on the integrity of Resultant Finance … and its management. It uses a court decision that she knows is being appealed in a complex, ongoing and far-from-resolved contract dispute, to lay at the door of Resultant all the problems of the KZN health service falsely claiming that it ‘crippled KZN health’.”

She asserts that the Commission’s report published on 15 June 2017 was not prompted by the contract, but by complaints from patients, and adds it made no reference to the contract or to RF. Instead, she says, the document pointed out that the major challenge for the province was the shortage of oncologists, and concluded that the province failed its cancer patients in a variety of ways.

She also submits the headline set the tone for the article and demonstrated its bias by squarely blaming RF’s contract for all the problems within KZN’s health service. She adds that the province has admitted it has an array of challenges, including staff shortages, lack of medicines and medical supplies and poor administration – not all of which could possibly be caused by one contract. Moreover, she continues, the court judgment did not use the word “dodgy” – that was the journalist’s opinion (while the merits of the contract have not yet been fully tested in court).

RF says the journalist should have checked the facts regarding the decision to appeal with RF, and should not have relied on a claim by the then finance MEC Belinda Scott in this regard. Hunter-Linde adds there is no evidence that the journalist tried to contact Dr Gama. Moreover, the reporter never contacted RF’s attorneys either.

She concludes: “Ms Smuts seeks to justify the negative tone of the article by referring to several newspaper articles outlining the severity of the state hospital situation in KwaZulu-Natal. If anything, the articles make the bias of the Times Live article even more apparent because none of the articles she cites even obliquely refers to the contract being the cause of the KZN situation. The general theme of all the articles is about chronic staff shortages and mismanagement within the Department. None of the articles can be used to justify laying the blame on Resultant.”

SMUTS, in turn, denies the story said that the contract plunged KZN state hospitals into a spiralling crisis and resulted in an investigation by the SAHRC. “We did not state or imply that the SAHRC investigated the contract in question. We said the contract (implicitly the non-performance of it, as the rest of the story makes clear) resulted in the SAHRC investigation. Had the contract been implemented, there would have been no crisis, or at least less of a crisis, and there may have been no need for the HRC investigation. There are no doubt other contributing factors to the crisis, but the non-performance of this contract is a very important part of it. Pointing fingers at other contractors and at the department does not exculpate Resultant’s role,” she argues.

The internal ombud argues the story did not seek to put all the blame on RF, and adds it is self-evident that there are two parties to the contract.

Analysis

Causing the collapse of KZN health system

The crux of the complaint is that the article created the false impression that RF had caused the collapse of the health system in KZN. The question is if this reportage was justified.

Smuts argues that it was not the contract itself that was the problem, but rather the non-performance thereof. However, that is not supported by statements in the article such as: “The contract plunged KZN state hospitals into a spiralling crisis and resulted in an investigation by the SA Human Rights Commission...” Furthermore, the main headline mentioned the “contract” that “crippled” KZN health – not the poor implementation thereof.

Her argument is also not supported by Mngadi’s ruling – he found that RF had not performed adequately, as well as that the awarding of the contract was unlawful.

The statement that the contract stipulated that RF had to deliver services to KZN’s 300 government hospitals and clinics is not in dispute. Based on that, I believe the reporter was justified to conclude that the contract (interpreted in its widest sense: awarded to RF, but unlawfully so, and not properly fulfilled) had “plunged KZN state hospitals into a spiralling crisis”.

Yes, Mngadi did not make such a statement – but, given all the circumstances, I am satisfied that the journalist was justified in coming to the conclusion in question.

Obstructing justice

I cannot take RF’s complaint seriously that the journalist attempted to manipulate the outcome of a pending appeal and to obstruct justice from being done. For such an extreme allegation, I would have to have solid evidence in order to find for a complainant – which is notably absent in this case.

Broughton merely did her job (quite well), and served the public by doing so.

No adequate attempt to contact CEO

Smuts is correct in stating it is not normal journalistic practice to obtain comment from parties to court proceedings.

Sub-headline: ‘dodgy’

Given the fact that Mngadi found the contract was unlawfully awarded, TimesLive was justified in using the word “dodgy” – even though the judge did not use that specific word.

Defamatory

Given my arguments above, it follows I do not believe that TimesLive has unnecessarily tarnished RF’s reputation and dignity.

Other issues

In RF’s reply to Smuts’s response to the complaint Hunter-Linde adds some new complaints to the original one, such as that the article omitted certain findings by Mngadi, as well as the reference to Scott and application for leave to appeal.

I am disregarding these new issues, as these matters are out of time and besides, TimesLive did not have the opportunity to respond to those aspects.

Finding

The complaint is dismissed.

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.

Johan Retief

Press Ombud