Can Companies Sue for Defamation?

Table of Contents

Share at:

Often cases of defamation  typically relate to someone who feels they have been defamed by another person’s comments. Rebel Wilson’s record payout in 2017 is one of the more notable cases. The basic premise of defamation is that the remarks of one person are seen to negatively impact the reputation of someone else. The persons remarks need to be false and they have to communicate them to another party. 

Legislation

The Defamation Act 2005 (Cth) is the guiding authority on defamation in Australia and replaces the existing laws. This legislation unifies the states to create a set of provisions that apply nation wide. Common law governs the definition of defamation, with the aim to protect personal reputations whilst maintaining the principle of free speech. The test for defining defamation is generally a reflection of community standards at the time.

Company Defamation

The law also addresses cases where individuals defame companies. However, the introduction of the Defamation Act brings with it a change in how company cases are dealt with. Prior to the Act, any company could sue someone for damages due to defamation of its reputation and goodwill (with the exception of those in NSW). Section 9 of the Act no longer allows for this to occur. Rather a group of “excluded corporations” are the only ones who can legally sue. In order to classify as an excluded corporation your company must meet the following conditions.

  1. Corporation employs less than 10 people
  2. Doesn’t relate to another corporation
  3. Is not a public body

Implications

There has been some uncertainty surrounding these conditions, in particular the definition of employees in this context. The case of Born Brands v Nine Network Australia confuses the provision in two seperate rulings. The initial trial judge interprets the provision by counting all persons whose services the company use. Factors relating to whether they were unpaid volunteers for example, are not relevant. However, the court of appeal in this case says that the trial judge’s view was wrong and not correct to follow. They rather see it to be persons who have a contract of employment with the company.

Despite this doubt if you feel your company falls within the excluded corporation criteria, you can proceed with a defamation claim. The onus will fall upon the person you are accusing to prove they did not defame you. If you are on either end of proceedings, it may be useful to seek the advice of a defamation lawyer  on your best options moving forward.

Still unsure? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 1000+ expert lawyers or to get answers to your legal questions.

Share at:

Simplify creating legal documents today

Browse through Lawpath's AI tools which can be used to draft, review and refine legal documents today!

Related Articles

Can Employees Use Paid Sick Leave for Elective or Cosmetic Surgery?

Are employees entitled to take sick leave for elective surgery? Learn how to treat this situation from an employer’s perspective and what entitlements apply.
Exclusivity Clauses

Sham Contracting in Australia: How to Spot It and Protect Yourself (2026)

Sham contracts are a way that employers deny their workers the rights and obligations they're owed. In this article, we break down how you can avoid these.

Do You Have to Pay Annual Leave Loading?

Annual leave loading in Australia is an important entitlement for many, but not all employees. Use our guide to understand who’s entitled to it and how to calculate it.

Director’s Loan to a Company: Tax and Record-Keeping

Understand how to compliantly manage a director’s loan to the company, how repayment terms work, and any tax implications.
Couple reviewing family trust paperwork at home

How to Close a Family Trust in Australia: Step-by-Step Guide (2026)

Trusts are widely used for investment and business purposes and can be complex in nature. Find out here how you can dissolve a trust.
Home office — the changing face of small business in Australia

The changing face of small business in Australia

Australia has 2.8 million trading businesses, and solo operators drove almost all of last year's growth. See which industries and places are leading.