In our recent survey of Not-For-Profit organisations, it became apparent that some organisations were extremely concerned with the reputation of their organisation being affected by matters that go on within the Boardroom. We thought that we would take the opportunity to remind Not-For-Profit organisations that although defamation laws across Australia consistently provide that corporations should not have recourse to defamation law for injury to reputation, (unless it is a corporation with fewer than 10 persons and not related to another corporation), there is an exception available to Not-For-Profit organisations which are companies limited by guarantee.
Section 9(1) of the Defamation Act 2005 (NSW) states that a corporation has no cause of action for defamation in relation to the publication of defamatory matter about the corporation unless it was an excluded corporation at the time of publication. A corporation is an “excluded corporation” if, among other things, the objects for which it is formed do not include obtaining financial gain for its members or corporators (section 9(2)). Companies limited by guarantee should therefore take note.
The Sporting Shooters Association of Australia (Vic) (SSAAV) was a group of sporting shooters who had banded together informally to oppose laws which would have placed restrictions upon gun ownership. The organisation was a company limited by guarantee. Gun Control Australia (GCA) was a body incorporated under the Associations Incorporation Act in Victoria and its president, John Crook, often wrote pamphlets and spoke in public on the gun control issue. GCA produced a modest newsletter called “Update on Gun Control“. In issue number 3 of January 1990, Mr Crook, the editor of the newsletter, wrote that:
“Perhaps worst of all was a statement made by Ted Drane, President of the Sporting Shooters Association. About a year ago Drane made a statement on radio and to The Australian that shooters were law abiding people, but qualified it by noting that shooters don’t have to conform with laws that they find disagreeable to the shooting fraternity.“
In issue number 4 of May 1990, Mr Crook wrote:
“Running against the will of the people is the gun lobby, led by the extremist Sporting Shooters Association, and backed to the hilt by gun traders, under the cunning guise of a gun safety organisation. These pro-violence groups claim of the NCV’s report: ‘much of this document is a clearly biased, unsupported nonsense, unworthy of the paper on which it is printed, let alone government or community support’. That section of the Australian community which supports violence can only gain by this attitude of the Shooting Sports Council of Victoria.“
Naturally, the SSAAV complained about these publications.
Justice Shelton first considered the issue of whether SSAAV was a non-profit organisation capable of suing. The case was heard before the introduction of uniform defamation laws adopted across Australia in 2005. Accordingly, Justice Shelton looked to previous case law, namely The Church of Scientology of California Incorporation v Reader’s Digest  1NSWLR 344 wherein it was decided that companies who are non-trading corporations who maintain a right to acquire property which may be the source of income or revenue have a reputation capable of being protected. SSAAV was the proprietor of properties in Victoria, with its headquarters on land owned at Springvale on which it conducted club rooms and had a dining room from which it obtained revenue and it raised revenue from fees paid by 15,000 members, of approximately $675,000.00 a year. Consequently, Justice Shelton was comfortable stating that SSAAV was capable of suing for defamation.
In the SSAAV case, it was argued that the first publication was not about the SSAAV but about Ted Drane, but Justice Shelton dismissed this view. SSAAV stated that the first publication raised the following defamatory imputations:
- that SSAAV advocated that its members could break the law;
- that SSAAV advocated that shooters do not have to conform with laws they find disagreeable; and
- that SSAAV was irresponsible in advocating its views.
In respect of the second publication, SSAAV said that the following defamatory imputations were raised:
- that the SSAAV was an extremist organisation;
- that SSAAV conducted a deceitful campaign to promote shooting; and
- that SSAAV was a pro-violence group.
Justice Shelton found that the imputations alleged to be made of the first publication were in fact made and were defamatory. However, the GCA was able to rely upon a defence of qualified privilege as they were matters that were published in the course of discussing government and political matters and as such, on the basis of the case of Theophanous, they were protected by qualified privilege.
In relation to the second publication, Justice Shelton stated that the imputations were indeed made and they were indeed defamatory.
Justice Shelton specified that the defence of qualified privilege made in respect of the second imputations could be defeated if SSAAV could establish malice on the part of Gun Control Australia and Mr Crook. However, because Mr Crook had an honest belief in the truth of the first words and the second words, and Justice Shelton was not convinced that Mr Crook was actuated by a dominant motive of personal spite or ill will or some other improper motive in publishing the first words or the second words, he found that the argument of malice was not made out. Justice Shelton decided that Mr Crook’s attitude to gun control had been quite consistent from the mid-1980s to date as demonstrated in his various writings, which suggested no dominant improper motive on his part. He placed little weight on the fact that Mr Crook failed to apologise.
GCA therefore succeed in their defence of qualified privilege in respect of the first publication and the second publication and the defence was not defeated by malice.
Companies limited by guarantee should be aware that this case was determined before the introduction of uniform defamation laws, but that it nevertheless is an example of a non-profit organisation that was found to be capable of suing in defamation, notwithstanding the decision against that Not-For-Profit organisation.