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Is it defamatory to call someone unfinancial?

By Frank Higginson05 Jun 2019

Click here for the PDF version.


It must be the season for ‘interesting’ defamation proceedings. This one will be of special interest to the strata managers (and perhaps chairpersons) out there who have to declare people unfinancial at general meetings.

A lot owner sued a strata manager for defamation for doing just that. If you want to know how it played out, read on.

The facts are very simple. An owner owed levies. These were paid online the day before a general meeting, but the exact amount paid did not match with what was owing, which meant that the body corporate manager’s system did not pick up the payment.

The body corporate manager went to the meeting believing that the owner had not paid when he actually had. The body corporate manager then declared at the meeting that the lot owner was unfinancial.This was also written into the minutes.

The owner said that the declaration that he was unfinancial imputed that:

  • He was a delinquent payer
  • He could not afford to pay his body corporate levies
  • He had financial difficulties
  • He was insolvent

The owner said these imputations damaged his reputation to the extent of $100,000 and he sued the body corporate manager personally for them.

As always, there are some passages in both the original decision and the appeal decision that are incredibly relevant.

These are from the original decision:

‘What is beyond doubt is that this payment was long overdue and was paid effectively at the last minute. [The Plaintiff] said he had been overseas for some time. It is not surprising that the Body Corporate Manager might not have allocated it to [the Plaintiff]’s account or realized it had been paid

Credibility of the witnesses matters a lot (again):

‘I was not impressed by the Plaintiff as a witness. I find it difficult to accept that even he believed what he said of the significance of the alleged defamation on his reputation compared to the publication of what he said and did in relation to the Body Corporate in the years afterwards.’

But the key thing was whether declaring the lot owner unfinancial meant what the lot owner said it did. In response to that the Magistrate said:

‘Many people (if not all of us) have paid a bill late. The reasons commonly include oversight, lost mail, change of address, absence when the bill arrives, mistakes as to the due date, failure of transfer payments etc. In essence, the Plaintiff asserts that the four imputations arise and that an ordinary person would not imagine the more mundane and clearly non-defamatory possibilities are more likely. It is possible that some people could jump to wild theories but the hypothetical right-thinking person would not have

And this:

‘Even if there is a member of society who has never paid a bill late that person would be aware that they are a rarity and that their friends, family and co-workers are sometimes late and miss a due date. Do people hate or ridicule one another about overdue bills? Do these cause people’s estimations of one another to be lowered where neither the amount, the period they are late or the reason are known? Clearly not. Ordinary people accept that other ordinary people are neither infallible or perfect.’

The Magistrate found that the lot owner had not been defamed, but even if he had been, the matter was trivial and the defence of qualified privilege applied – in that fellow lot owners had an interest in it.

It was also held that there was never any malice on the part of the body corporate manager either. He was just doing his job.

As happens in these things, the Magistrate then went on to disincentivise an appeal by saying that even if he was wrong on the defamation and the defences, that he would have assessed damages at only $1,500.

The owner lost the first round resoundingly - but then appealed.

The appeal reinforced the original decision, and again the passage that matters really is with respect to whether being declared unfinancial was defamatory:

‘In my view, the statements complained of amounted to no more than the assertion, which was no doubt correct (and not suggested before me to be incorrect) that as at the relevant date the records of the body corporate indicated that the levies for the relevant lot were unpaid, that is, that the Plaintiff owed a debt.’

This was not capable of bearing any meaning defamatory of the owner.

The other findings were:

  • Reputational harm could not have occurred because the matter was so trivial.
  • The actions of the body corporate manager were reasonable in giving members of the body corporate information about which they had an interest in receiving.
  • The owner had commenced numerous proceedings against the body corporate and if other owners were poorly disposed towards him, it was more likely to be because of this than anything the body corporate manager did.

The occupational hazards we all face in our day-to-day dealings are sometimes laid bare in disputes of this nature.

Other things you may be interested in

The original decision

The appeal decision

Our recent ‘letterbox’ defamation article

 

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Comments
Errol Anderson w
Posted about 3 weeks ago
The damage the Plaintiff did to the BC Manager's reputation is worthy of considering.
Hynes Legal w
Posted about 3 weeks ago
Very unlikely David.
David Wilson w
Posted about 3 weeks ago
Was this a no win payment case
Doug Jones w
Posted about 3 weeks ago
Thank, Frank. I liked the expression, "poorly disposed towards him." ;-)
Sue Harrison w
Posted about 3 weeks ago
Thank god for a sane decision! The fact that the plaintiff was prepared to pay more for an appeal than the prospective damages would have been worth indicates the person was more interested in confrontation than resolving a problem. Loved the judge's comment that any reputational damage was more likely to be the result of other owners' awareness of his/ her combative nature than of being declared unfinancial.