Introduction: The Slater v Ecosol Case
The decision in Slater v Ecosol Pty Ltd [2025] SASCA 78 provides guidance on when defamatory statements are sufficiently connected to an occasion of qualified privilege.
The case involved a dispute over the proposed sale of a stormwater treatment manufacturing business. Mr Slater, a shareholder, opposed the sale to management (through Urban Asset Solutions Pty Ltd) and communicated his concerns to fellow shareholders. In response, the company's chairman, Mr Smith, sent letters to shareholders that included statements Mr Slater claimed were defamatory – including imputations that he had lied to shareholders and was improperly motivated. While the trial judge found the statements were defamatory, the defence of qualified privilege succeeded because the statements were sufficiently connected to the privileged occasion of communicating with shareholders about the proposed transaction.
The Broad Approach to Connection
The law takes a deliberately broad view of what constitutes a sufficient connection to a privileged occasion. As the Court in Slater v Ecosol emphasised, statements need not be central to the topic or contribute positively to the discussion to attract protection. Drawing on the High Court's guidance in Cush v Dillon (2011) 243 CLR 298, the Court confirmed that "no narrow view should be taken of the pursuit of a duty or interest in what was said."
This broad approach reflects the underlying rationale of qualified privilege – that in certain circumstances, a plaintiff's right to protect their reputation must yield to the public interest in free communication on matters of legitimate concern (Roberts v Bass (2002) 212 CLR 1; Stone v Moore (2016) 125 SASR 81).
Key Principles from the Authorities
Relevance and Germaneness
The fundamental test is whether the defamatory matter is "relevant" or "germane" to the privileged occasion. In Adam v Ward [1917] AC 309, various formulations were used:
Matter that is "not relevant and pertinent" to the occasion
Something "beyond what was germane and reasonably appropriate to the occasion"
Matter "quite unconnected with and irrelevant to the main statement"
Matter "not in any reasonable sense germane" to what was being conveyed
As Cush v Dillon clarified, these different formulations should not be read as imposing varying levels of stringency – the key point is that the law does not require a narrow view of relevance.
Errors and Inaccuracies Don't Break the Connection
Importantly, the fact that a statement is wrong, defamatory, or even excessive does not automatically mean it lacks sufficient connection. In Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366, an error in identifying the party subject to court findings did not sever the connection to the privileged occasion. Similarly, in Cush v Dillon, referring to a rumour as fact (when discussing governance concerns) maintained the requisite connection.
The Distinction Between Excessive and Extraneous
There is a crucial distinction between statements that are excessive yet within the privileged occasion, and statements that exceed the occasion by being irrelevant (Marshall v Megna [2013] NSWCA 30). As Stone v Moore explained, the focus is on the topic in respect of which the relevant duty or interest exists, not the precise words spoken. Even strident, incorrect or extravagant language can be protected if it relates to the privileged topic.
Self-Defence and Rebuttal
The authorities recognise that "great latitude" must be allowed to persons defending themselves against attacks (Penton v Calwell (1945) 70 CLR 219; Bass v TCN Channel Nine Pty Ltd (2003) 60 NSWLR 251). This principle was relevant in Slater v Ecosol, where the company's responses to Mr Slater's criticisms were held to be sufficiently connected to the privileged occasion.
Practical Examples: When Connection May Be Lost
Example 1: The Board Meeting Discussion
At a company board meeting convened to discuss the annual budget, a director raises concerns about proposed cost-cutting measures. During the discussion, she states: "The CFO's budget projections are as reliable as his taste in music – I saw him at that terrible boy band concert last week with someone who definitely wasn't his wife."
While criticising the CFO's budget projections would be germane to the occasion, the gratuitous comments about his musical preferences and personal life would likely not be sufficiently connected. These statements are "quite unconnected with and irrelevant" (Adam v Ward) to the budgetary discussion that creates the privileged occasion.
Example 2: The Workplace Safety Report
A workplace safety officer sends a report to management about safety breaches in the warehouse. The report includes: "John Smith has repeatedly operated the forklift at dangerous speeds in the loading bay. This doesn't surprise me given that he was convicted of drink driving last year and his ex-wife told me he's a compulsive gambler who owes money all over town. Someone with such poor judgment in their personal life obviously can't be trusted with workplace safety."
While the observations about John Smith's forklift operation would be germane to the privileged occasion, the gratuitous references to his criminal history and alleged gambling problems bear no reasonable connection to workplace safety concerns. Following Guise v Kouvelis (1947) 74 CLR 102, such comments would be "so foreign to the occasion that they must be held to be extraneous or irrelevant."
The Position of Directors and Fiduciaries
The Slater v Ecosol decision also clarifies that a person's position or duties (such as being a director or fiduciary) does not narrow the scope of privileged occasion or impose additional constraints on what can be said. The Court rejected arguments that directors must confine themselves to statements that "contribute to" or "assist" debate. As long as the statements relate to the privileged topic in the broad sense recognised by the authorities, they remain protected even if they are attacks on character or motivation.
Practical Checklist: Assessing Whether Statements Are Germane
When advising on whether defamatory statements are sufficiently connected to a privileged occasion, practitioners should work through the following comprehensive checklist:
1. Identify the Privileged Occasion
What is the precise nature of the duty or interest that creates the privilege?
Is it a legal duty, moral duty, or social duty?
Is it a public interest or private interest?
Who are the relevant parties to the privileged communication?
What is the scope of the subject matter covered by the privilege?
Define the topic broadly rather than narrowly
Consider all aspects reasonably connected to the main subject
Remember that tangential matters may still be included
2. Analyse the Context of the Communication
What prompted the communication?
Was it in response to an attack or criticism? (Remember the "great latitude" principle)
Was it initiated by the publisher or reactive?
What was the timeline of communications?
What was the publisher's role or position?
While position doesn't narrow the privilege, it provides context
Consider whether the publisher had authority to speak on the matter
Note any special knowledge or expertise relevant to the topic
3. Examine the Defamatory Statements
How do the statements relate to the privileged topic?
Do they directly address the subject matter?
Are they examples or illustrations of points about the topic?
Do they provide context or background to the main issue?
If the statements attack character or motivation:
Is the person's character relevant to their role in the privileged matter?
Do the attacks relate to their conduct concerning the privileged topic?
Are they responding to attacks made by that person?
4. Apply the Legal Tests
The "Adam v Ward" formulations - are the statements:
"Relevant and pertinent" to the discharge of duty or protection of interest?
Within what is "germane and reasonably appropriate to the occasion"?
Not "quite unconnected with and irrelevant to the main statement"?
Not matter that is "not in any reasonable sense germane"?
The "Guise v Kouvelis" test:
Are the words "so foreign to the occasion that they must be held to be extraneous or irrelevant"?
5. Consider Common Scenarios
If the statements contain errors or are false:
Remember this doesn't automatically break the connection (Bashford)
Focus on subject matter, not accuracy
If the statements are excessive or extravagant:
Distinguish between excessive language about the relevant topic (likely protected)
Versus statements about extraneous matters (not protected)
If the statements seem unhelpful or unconstructive:
The law doesn't require statements to advance debate positively
Even counterproductive statements can be germane
6. Red Flags - Factors Suggesting Lack of Connection
Purely personal attacks unrelated to the privileged matter
References to unrelated personal relationships
Attacks on characteristics irrelevant to the topic
Historical grievances with no bearing on current matter
Subject matter from entirely different spheres
Professional criticism veering into unrelated personal life
Business discussions including irrelevant social commentary
Official communications containing private vendettas
Timing disconnects
References to events far removed in time with no logical connection
Dragging in historical matters not relevant to current issue
7. Special Considerations
For company/shareholder communications:
Broad scope for discussing company affairs, transactions, and governance
Criticism of directors/management conduct generally germane
Shareholder activism and opposition typically within scope
For employment references:
Focus on work performance and conduct
Personal life only relevant if impacts work capacity
For public interest communications:
Wider scope for discussion of public figures
Context of public debate allows broader range of comment
8. Document Your Analysis
Create a clear record showing:
The identified privileged occasion and its scope
How each defamatory statement relates to that occasion
Any statements that may fall outside protection
The authorities supporting your conclusions
9. Borderline Cases
When connection is arguable:
Remember the broad approach mandated by Cush v Dillon
Consider whether a reasonable person would see some relationship to the topic
If genuinely borderline, the broad approach suggests inclusion
Mixed communications:
Separate germane from non-germane portions
Privilege protects the connected statements even if others are not protected
10. Final Review Questions
Have I taken too narrow a view of the privileged occasion?
Have I focused on the topic rather than the specific words used?
Would excluding these statements unduly restrict free communication on the privileged matter?
Is there any reasonable argument connecting the statements to the privileged topic?
This checklist should be applied flexibly, remembering that the law favours protection of free communication on matters of legitimate interest. When in doubt, the authorities suggest taking a broad rather than narrow approach to connection.
Conclusion
The sufficient connection test in qualified privilege requires courts to take a broad, practical approach. Defamatory statements will be protected if they are relevant and germane to the privileged occasion, even if they are wrong, excessive, or unhelpful to constructive debate. Only statements that are truly extraneous or irrelevant to the privileged topic will fall outside protection. For practitioners, this means carefully identifying the scope of the privileged occasion and assessing whether impugned statements relate to that topic, however tangentially. The law's broad approach reflects the importance placed on protecting free communication on matters of legitimate interest, even when that communication is robust, mistaken, or defamatory.