Route I · Defamation
Defamation and businesses: who can sue, and the serious harm test
A company can be defamed, but only some companies can sue: Queensland’s Defamation Act gives a corporation a claim only if it was an ‘excluded corporation’ when the matter was published, meaning one formed without the object of financial gain for its members, or one with fewer than 10 employees that is not an associated entity of another corporation, and in either case not a public body. Queensland’s Act gives “associated entity” the meaning in section 50AAA of the Corporations Act. Even then, harm to its reputation counts as serious harm only if it causes, or is likely to cause, serious financial loss to the corporation.
General information about defamation law, not legal advice, and no view on whether anyone should sue. The official places to check are your state or territory’s legal aid service and its Defamation Act.
One scheme, enacted state by state
Defamation is state and territory law. The Model Defamation Provisions were endorsed in 2005; every state and territory then passed legislation of its own to put them into effect.
Amendments approved by the Council of Attorneys-General on 27 July 2020 introduced the serious harm threshold. NSW’s Department of Communities and Justice (DCJ) lists those amendments as commenced in NSW, Victoria, South Australia, Queensland, Tasmania and the ACT. Its page, last updated on 29 August 2024, does not list Western Australia or the Northern Territory. Each rule below is stated for the jurisdiction whose source holds it.
Who can sue, as each source puts it
| Where | What the source says |
|---|---|
| Queensland | Section 9 of the Defamation Act 2005: a corporation has no cause of action unless it was an excluded corporation at the time of publication. That means its objects do not include obtaining financial gain for its members or corporators, or, in the Act’s words, “it has fewer than 10 employees and is not an associated entity of another corporation”; either way, it must not be a public body. |
| South Australia | The Law Handbook says only small or not-for-profit corporations can sue, describing the same two kinds of excluded corporation under section 9(2) of the SA Act. |
| Victoria | Victoria Legal Aid: “Not-for-profits and small businesses with fewer than 10 staff can also sue for defamation.” The uniform section 9, quoted above for Queensland, adds that a company with fewer than 10 employees must not be an associated entity of another corporation, and that neither kind may be a public body. |
The sources on this page do not set out the corporations rule for New South Wales, Tasmania, the ACT, Western Australia or the Northern Territory. Each one’s own Defamation Act is the place to check.
Counting to ten
Queensland’s Act counts part-time employees “as an appropriate fraction of a full-time equivalent.” An employee there includes any individual “(whether or not an independent contractor)” who is engaged in the corporation’s day to day operations other than as a volunteer and subject to its control and direction. The SA Law Handbook describes the same counting rules for South Australia.
The serious harm element
“(1) It is an element (the serious harm element) of a cause of action for defamation that the publication of defamatory matter about a person has caused, or is likely to cause, serious harm to the reputation of the person.
(2) For the purposes of subsection (1), harm to the reputation of an excluded corporation is not serious harm unless it has caused, or is likely to cause, the corporation serious financial loss.”
Defamation Act 2005 (Qld), section 10A, Queensland LegislationThe same section hands the question to the judicial officer, not the jury. The judicial officer may decide it before the trial or during it, and may dismiss the proceedings if satisfied the element is not established.
A company that can sue still claims only for its reputation. The SA Law Handbook says a company can recover for loss of reputation where that harm has caused, or is likely to cause, serious financial loss, but can get nothing for injury to feelings.
The people behind the business
Queensland’s bar on most corporations does not touch the claim of an individual associated with the corporation over matter about that individual, even where the same matter also defames the corporation.
Victoria Legal Aid points out that “you can defame a person without mentioning their name.”
Where defamation does not reach
For those damaged by a publication who cannot sue for defamation, the SA Law Handbook points to injurious falsehood. It says that claim needs a monetary loss, a false statement, and a statement made dishonestly or with intent to cause loss, without lawful justification.
Conduct in trade or commerce can also meet the consumer law’s ban on misleading or deceptive conduct, which has no employee count, as the guide to misleading conduct by a competitor sets out. The steps before any defamation case are in concerns notices and time limits.
Victoria Legal Aid says a person accused of defamation may be able to defend themselves by proving that what they said is true, or by showing they were expressing an honest opinion.