Slater v Ecosol Pty Ltd

Case [2025] SASCA 78

SUPREME COURT OF SOUTH AUSTRALIA

(Court of Appeal: Civil)

SLATER v ECOSOL PTY LTD

[2025] SASCA 78

Judgment of the Court of Appeal  

(The Honourable President Livesey, the Honourable Justice S Doyle and the Honourable Auxiliary Justice Hall)

17 July 2025

DEFAMATION - PRIVILEGE - QUALIFIED PRIVILEGE - STATEMENTS MADE IN RESPECT OF A DUTY OR INTEREST

DEFAMATION - PRIVILEGE - QUALIFIED PRIVILEGE - REBUTTAL OF PRIVILEGE BY MALICE

Appeal from a decision dismissing Mr Slater’s claim for defamation against Ecosol Pty Ltd.  The primary judge also dismissed a claim for defamation by Mr Smith, a director of Ecosol, against Mr Slater, which had been brought by way of cross claim.

Ecosol formerly carried on business manufacturing stormwater treatment products.  Mr Slater and Mr Smith are shareholders, and Mr Smith the chairman of directors.  Ecosol entered into a contract to sell its business by way of a management buyout.  The contract was subject to shareholder approval.  Mr Slater sent a number of letters to shareholders opposing the proposed sale.  Mr Smith, on behalf of Ecosol, sent a number of letters to shareholders supporting the sale.

Mr Slater claimed against Ecosol for defamation in respect of various imputations said to arise in five of the letters sent by Mr Smith, and Mr Smith cross claimed for defamation in respect of imputations said to arise in three of Mr Slater’s letters.

In relation to Mr Slater’s claim, the judge found that several defamatory imputations were conveyed, and rejected defences of justification and triviality.  However, the claim was dismissed on the basis that the imputations were conveyed on an occasion of qualified privilege, and the defamatory statements were not actuated by malice.

Mr Slater appealed on grounds distilled as follows:

1.The judge erred in upholding the common law defence of qualified privilege because the defamatory statements were not sufficiently connected to the occasion of privilege.

2.The judge erred in finding that Ecosol, through Mr Smith, was not actuated by malice in making the defamatory statements.

3.The judge failed to appreciate the significance of Mr Smith’s role and obligations as a director and fiduciary in making the defamatory statements relied upon.

4.      The judge erred in finding that Mr Smith was an honest witness.

Per the Court, dismissing the appeal:

1.The impugned statements made by Ecosol, through Mr Smith, even though defamatory and in some respects strident and incorrect, were nevertheless relevant and germane to the occasion of the qualified privilege.

2.      The judge’s findings did not establish that Mr Smith was actuated by malice.

3.Mr Smith’s role and obligations as a director and fiduciary did not provide any basis for impugning the judge’s reasoning and conclusions in relation to either the connection to the privileged occasion or malice.

4.Mr Slater’s procedural and substantive challenges to the judge’s finding that Mr Smith was an honest witness have not been made out.

Adam v Ward [1917] AC 309; Andreyevich v Kosovich (1947) 47 SR (NSW) 357; Bashford v Information Australia (Newsletters) Pty Ltd (2004)…

Continue reading Slater v Ecosol Pty Ltd

Sign in free to access the full text

Details
AGLC
Slater v Ecosol [2025] SASCA 78
Case
[2025] SASCA 78
Decision Date

CaseChat Overview and Summary

This case concerned an appeal by Mr Slater against a decision of a lower court concerning defamation proceedings. The dispute involved publications made by Ecosol Pty Ltd, which Mr Slater alleged were defamatory. Ecosol sought to rely on the defence of qualified privilege.

The primary legal issues before the appellate court were whether the trial judge had erred in finding that the publications were made on an occasion of qualified privilege, and whether the trial judge had adequately considered the credit of Mr Smith, a director of Ecosol, in relation to the rebuttal of qualified privilege by malice. Mr Slater also challenged the trial judge's findings regarding the credit of other witnesses, though these challenges were not fully developed.

The court affirmed the trial judge's findings that the publications were made on an occasion of qualified privilege, applying the principles that such privilege arises when a statement is made in response to a duty or interest, and that this privilege can be rebutted by proof of malice. The court found that the trial judge had properly assessed the evidence, including the credit of Mr Smith, and had not erred in concluding that malice had not been established. The court also noted that the trial judge's detailed findings regarding Mr Smith's evidence, particularly in rejecting allegations of malice and justification, underpinned the general credit findings.

Ultimately, the appeal was dismissed. Mr Slater's challenge to the finding of qualified privilege failed, meaning the court did not need to consider issues relating to statutory qualified privilege, damages, or costs.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Before addressing the matters raised on Mr Slater’s appeal, it is necessary first to set out in some detail the factual background, and the judge’s reasoning. In then addressing the matters raised on appeal, it is convenient to commence by addressing Mr Slater’s challenge to the judge’s reasoning in relation to the connection to the occasion of qualified privilege and malice, before addressing the significance of Mr Smith’s duties as a director and fiduciary, and the judge’s treatment of Mr Smith’s credit.Factual background The judge made detailed findings of fact as to the corporate history and operation of Ecosol, culminating in the sale of its stormwater treatment business to UAS.[2] It is not necessary to recite all of that detail, although these reasons should be read as incorporating reference to those findings. The following is a summary of those findings, including the impugned publications and the judge’s findings as to the imputations they conveyed.[2] Reasons at [5]-[236].The establishment of Ecosol Ecosol was incorporated in 1993, under the name Asahi Glass Pty Ltd. In 1994, Ian Charlton, whose background was in accounting, was appointed a director. By November 1995, Scott Roy had designed and built a prototype of a stormwater filtration system comprising a concrete outer case with stainless steel, aluminium and plastic filters. He and his friend, Richard Versteegh, approached David Bishop, whose background was in the construction and fabrication industry, to manufacture the device. Mr Bishop in turn approached Mr Charlton with a view to investing in a company to manufacture and install the stormwater filtration system. Asahi Glass was acquired for that purpose, and its name was changed to Ecosol. The directors were Jodie Roy (Mr Roy’s wife), Mr Versteegh, Mr Charlton and Mr Bishop. The shares were held by these directors or their nominees. Ecosol commenced carrying on business. Mr Roy was employed full time as Technical Research Director. Mr Charlton was also employed full time. Ecosol maintained a running loan account with Mr Charlton. From time to time, commencing in January 1996, Mr Charlton advanced money to Ecosol, resulting in credits to that loan account. From time to time, Ecosol made repayments of the loan or issued shares to Mr Charlton, resulting in debits to the loan account. The running balance of the loan account was generally in credit. In April 1997, additional shares were issued to each of Ecosol’s shareholders. At around the same time, some shares were also issued to new shareholders, including Mr Smith (a cousin of Mr Charlton). Mr Smith’s background is as an investigator. During 1998 and 1999, further shares were issued, and some shareholders sold their shares to existing or new shareholders. In 1998, Mr Bishop resigned as a director, and Richard Gapper was appointed a director. Andrew Macklin was employed as a sales and marketing person. In around 2000, Mr Macklin became the general manager of Ecosol.

Evidence

Evidence Before The Court

The judge was also satisfied that Mr Slater was a generally reliable witness:[279]In relation to reliability, I take into account the fact that Mr Slater has an obvious self-interest as applicant on his claim and respondent on Mr Smith’s claim. I take into account his personality and characteristics to which I have referred above. I take into account that he was giving evidence generally about events that occurred three or four years previously and in some cases much earlier. I accept that he was generally a reliable witness in relation to his own state of mind at material times. In relation to events, as it transpires, the issues in the case do not generally turn on reliability of Mr Slater’s evidence or his recollection. In the scale of witnesses in cases generally, Mr Slater was not an exceptionally reliable witness nor was he an exceptionally unreliable witness. I regard him as a generally reliable witness, albeit it cannot be said that 100 per cent of his evidence was accurate.Assessment of Mr Smith’s evidence In finding that Mr Smith was an honest and generally reliable witnesses, the judge expressed himself more succinctly:[280]Mr Slater contends that Smith was not a credible witness. However, unlike Ecosol, he does not make detailed submissions in support of that contention.[281]I find that Mr Smith was an honest witness. Although he was on occasions argumentative and evasive, this did not in my assessment reflect on his honesty. Mr Smith was a more concise and straightforward witness than Mr Slater, which reflects personality differences between them.[282]In relation to reliability, I take into account the fact that Mr Smith has an obvious self-interest as applicant on his cross claim and as director of the respondent Ecosol on Mr Slater’s claim. I take into account that he was giving evidence generally about events that occurred three or four years previously and in some cases much earlier. Like in respect of Mr Slater, I accept that Mr Smith was generally a reliable witness in relation to his own state of mind at material times. In relation to events, as it transpires the issues in the case do not generally turn on reliability of Mr Smith’s evidence or his recollection. In the scale of witnesses in cases generally, Mr [Smith] was a reasonably reliable witness, albeit it cannot be said that 100 per cent of his evidence was accurate. One of Mr Slater’s complaints on appeal is that the judge did not adequately address Mr Smith’s credit. In addressing this complaint later in these reasons, reference will be made to some of the more detailed findings made by the judge about Mr Smith’s evidence, both in rejecting Mr Slater’s allegation of malice on the part of Mr Smith, and in rejecting Mr Slater’s defence of justification to various of the defamatory imputations he published about Mr Smith. The detail of the findings in these contexts underpin the credit findings expressed in more general terms at this point in the judge’s reasons.Assessment of the other witnesses

Decision

Reasons for decision

Mr Slater’s submissions on appeal also included a challenge to the credit of other witnesses, including Mr Charlton and Mr Macklin. However, in circumstances where those challenges were not fully developed, and it is not apparent how they would provide a basis for impugning the judge’s ultimate conclusions, we do not consider it necessary to address those challenges. Conclusion Having failed in his challenge to the judge’s conclusion that Ecosol’s defamatory publications were protected by a defence of common law qualified privilege, there is no need or occasion for this Court to address the issues sought to be raised by Mr Slater in relation to the defence of statutory qualified privilege, or in relation to damages. Nor is there any need or occasion to address the issue of costs. For the reasons set out, we dismiss Mr Slater’s appeal.

Ratio Decidendi

Legal Principle Established

In 2001, Mr Gapper resigned as a director of Ecosol, and was replaced by Mr Smith. The directors at the time were thus Mr Charlton (chairman) and Mr Smith. Also in 2001, Mr Roy resigned as an employee of Ecosol.Early consideration of listing Ecosol or a management buyout In 2004, Ecosol obtained advice in relation to the possibility of listing its shares on the Australian Stock Exchange (‘ASX’). In late 2004, Mr Charlton reported to a board meeting that Ecosol would not qualify for listing until its financials improved significantly, and that the cost was prohibitive. In 2005, Mr Charlton reported to a board meeting that he had investigated the possibility of listing on the National Stock Exchange (‘NSX’). Ecosol met the criteria for listing, but it would require a change in its articles which in turn would require a special resolution of shareholders (75 per cent). Mr Charlton reported that Mr Roy had indicated he and his wife would support this if it permitted them to sell some of their shares. It was resolved to engage solicitors to amend Escosol’s articles. There was some subsequent confusion about whether the Roys continued to support this proposal. The judge found that, although the Roys were not in fact opposed to it, Mr Smith mistakenly believed they were opposed to it. In 2006, Mr Charlton advanced $250,000 to Ecosol, and was granted a fixed and floating charge over all of its assets. In 2007, a deed between Ecosol and Mr Charlton was drafted, acknowledging that the former owed the latter just over $350,000 in salary, superannuation and interest. It does not seem that this deed was ever signed. At some point, Ecosol acquired an office unit in O’Riordan Street, Alexandria, referred to as ‘the Sydney property’. In July 2009, Mr Macklin presented a document to the board of directors of Ecosol, and subsequently had discussions with Mr Charlton and Mr Smith, about the possibility of an MBO. Broadly speaking, Mr Macklin’s proposal acknowledged that Mr Charlton was owed about $350,000 on his loan account and $300,000 in unpaid salary; and involved, over a few years, Ecosol repaying the former and converting the latter into shares, and Mr Macklin buying those converted shares and lending further money to Ecosol. After discussing the proposed MBO at a meeting of the directors of Ecosol, Mr Charlton advised Mr Macklin that only a cash offer in the range of $2.30 to $2.50 per share would be acceptable. Mr Macklin said he did not wish to proceed. In 2011, Mr Charlton resigned as a director of Ecosol. Mr Macklin replaced him as a director. Mr Smith became chairman of directors, and Mr Macklin became the managing director. Mr Fair became the general manager. Mr Charlton also resigned as an employee of Ecosol, although he continued to do some part-time work for the company until 2015. From 2011 onwards, Ecosol made repayments against Mr Charlton’s loan account, with the result that it was fully repaid by late 2013. Mr Charlton was a director and employee of his family-owned company, Janic Consulting Pty Ltd (‘Janic’). It provided consulting and training services, and at some point commenced providing services to Ecosol through Mr Charlton.