In strata communities, information moves quickly and disputes can escalate just as fast. When comments cross the line from criticism to defamation, the legal consequences can be significant. Defamation within strata schemes is becoming increasingly common, yet many owners and committee members misunderstand how the law applies. This article explains the essentials of defamation, the unique protections and risks in strata settings and the practical steps needed to avoid costly and unnecessary legal conflict.

What is defamation?

Defamation law developed to protect reputations. It is contained in uniform laws throughout Australia, with Queensland adopting the Defamation Act 2005, and in law made by the Courts (called common law).

A person making a defamation claim must prove that material:

1. was published (ie communicated to a third party orally or in writing);
2. reasonably identifies them (ie by name, by position);
3. carries defamatory meanings (ie meanings that lower estimation, or cause others to shun or avoid);
4. causes (or is likely to cause) serious harm/serious financial loss.

Only certain companies can sue for defamation, so it is important to obtain advice about whether your company is eligible. Alternative claims are available if a company is unable to sue under defamation law.

Defamation is not about hurt feelings. Criticism or insults are not necessarily defamatory.

How does defamation law apply to strata?

Defamation law applies in strata in much the same way as in other contexts. There are, however, added protections and considerations unique to strata.

Protections

Parliament introduced a vaccine into the Body Corporate and Community Management Act (Qld) 1997 to protect committee members from civil liability, including defamation. However, these protections are limited, and committee members must act cautiously to avoid exposure to potentially expensive legal action.

Section 101A gives committee members general protection from civil liability. This section does not extend to protect a committee member from criminal liability and is conditional on committee members acting in good faith and without negligence.

In St Minivers [2017] QBCCMCmr 352, Adjudicator Rosemann stated:

“…a liability claim against individual committee members would need to establish some element beyond a simple error or oversight. Considerations might include, for example, that the committee members were on notice that they were not entitled to approve the spending and acted despite that, that they knew the majority did not approve the scaffolding, that they personally benefited from the decision, that the conduct was objectively unreasonable in the circumstances, and/or that the Body Corporate or other owners suffered specific harm as a consequence of the decision.”

The person making the claim will bear the onus of proving the committee members acted negligently and in bad faith.

Section 111A gives committee members protection from liability for defamation. This protection is limited to when a committee publishes required material for a general meeting of the body corporate and that required material contains defamatory matter.

‘Required material’ is defined to include:

1. a motion (including the substance of a motion) submitted other than by or for the committee for the general meeting;
2. an explanatory note for such a motion that is prepared by the submitter of that motion.

Notably, the protection does not apply to:

1. committee meeting material;
2. general meeting motions submitted by the committee;
3. all material that may be published by a committee, such as an explanatory schedule prepared by the committee and published with the general meeting material.

Section 24 of the Defamation Act (Qld) 2005 provides that a defence under that Act (including under the common law) is additional to any defence or exclusion of liability available to a person under other law. This means that, if defamatory material is published outside of the limited protections offered by section 111A of the body corporate legislation, there may still be a valid defence to a defamation claim.

Insurance

The insurance for a community titles scheme will generally contain a policy covering office bearer’s liability. However, this policy will generally contain an exclusion from protection for defamation. This means that if a defamation claim is made against a committee member, the insurer will generally not provide cover for any costs incurred defending that claim under its standard policy.

Costs

There are statutory restraints regarding how a body corporate may apply its funds. Paying for costs incurred by a committee member defending (or initiating) a defamation claim is not usually considered a cost that falls within the functions of a body corporate.

But, in The Glades-Peninsula [2019] QBCCMCmr 37, Adjudicator Rosemann stated:

“There could conceivably be circumstances where it might be reasonable for a body corporate to pay the legal costs of a committee member arising from actions or omissions taken by them in their capacity as a committee member on behalf of the body corporate. However, I am of the view that such circumstances would be limited. For example, if there was a legal claim relating to actions or omissions that were specifically authorised by the committee or were in accordance with specific statutory obligations, it might be appropriate for a body corporate to indemnify the committee member. However, the mere fact that a person was a committee member at the time that they made comments that another person objected to, or that comments were made in a body corporate meeting, would not be sufficient in my view.”

Republication

A person that publishes defamatory material will be liable for the repetition of the original publication if:

1. he or she expressly or impliedly requested or authorised the repetition of the original publication;
2. he or she intended that the repetition should take place;
3. the repetition is the natural and probable consequence of the original publication; or
4. there is a duty or obligation on the recipient of the original publication to repeat the original publication.

Common occurrences in strata include:

1. at least 25% of owners in a scheme have signed a notice requisitioning an EGM that contains defamatory material, which is then required to be sent to all owners, recorded in minutes and put on body corporate records;
2. a committee instructs a body corporate manager to distribute a document containing defamatory material to some (or all) owners.

Grapevine effect

This principle recognises that defamatory material is rarely confined to those to whom the matter is originally published. Where defamatory matter reaches a much wider audience than the original publication, it can impact the extent of damages awarded to a successful plaintiff. In strata, the grapevine effect is realised through a body corporate’s requirement to maintain records and interested persons being able to access those records (we will discuss more about withholding certain records in the next article).

Social media platforms

The High Court determined that a person who facilitates, encourages, and assists in the posting of comments by others can themselves be considered a publisher of the defamatory material and liable for defamation.

This means that any person that hosts a group social media page for your scheme can be liable if something defamatory is posted to the group or included in a comment to a post by someone else. Tight controls around approving posts and restricting comments to posts should be enacted, particularly with the transient nature of committee members.

What is the effect of an apology?

An apology for an alleged defamatory statement is not an admission of guilt. If a person (or someone acting on their behalf) apologises, that apology cannot be used to prove they were at fault or legally responsible. It also cannot be taken into account when deciding liability. This allows people to apologise or correct statements without automatically exposing themselves to legal consequences, and it can help resolve conflicts early before they escalate.

If a defamation claim goes to court, the defendant is allowed to rely on evidence that they apologised to the person who was defamed. While an apology does not mean the defendant admits fault, it can reduce the amount of damages the court may award.

When must a defamation proceeding be commenced?

A defamation proceeding must be commenced within one year from the date of the publication. Before proceedings are commenced, a concerns notice must be given to the potential defendants. The deadline for commencing proceedings can be extended by up to 56 days depending on the timing of the issuing of a concerns notice.

If you are concerned about possible defamation in your Queensland body corporate community, early advice can make all the difference. Speak with our team on 1300 144 436 for practical, informed advice.

Written by Brendan Pitman, Partner at Grace Lawyers.

The post WHEN WORDS CAUSE DAMAGE: DEFAMATION IN STRATA COMMUNITIES – PART 1 appeared first on Smart Strata | Body Corporate Management.