When living in a body corporate it is easy to become over-involved in internal politics. People tend to get lost in the emotions of a particular issue, and when this happens comments can stop being truthful, and in the interests of the community, and start being hurtful and defamatory.
Hallmarks of defamation include a verbal or written publication of information that is untrue, and consequential damage, or the potential for damage to a person’s reputation or business interests. In management rights, the damaging of relationships with owners, and the consequent loss of units from the rental pool, are the damage that would most often be caused by publishing of defamatory material.
Examples of defamatory material in a management rights context can include:
- the publication of a remedial action / breach notice, which includes allegations of defaults which are false or misleading;
- inflammatory motions submitted to general meetings could also include defamatory material, although the liability for the defamation rests with the submitter of the motion, not the body corporate for publishing it;
- emails or letters written to owners by a committee or other person which contain false allegations that are calculated to harm the management rights business or mental well being of the person named; and
- malicious comments about something that occurred, although the content of the comment can be hard to prove without written evidence.
We are currently acting in two separate defamation proceedings for resident managers. Both include very serious, and unsubstantiated, allegations on the part of certain committee members against the resident manager.
As you would expect, since the commencement of proceedings, the paper warfare that was going on inside the scheme amongst owners has ceased pending the results of the cases. If nothing else, this has brought relief to our clients, and probably most owners.
Legal proceedings for defamation are not to be undertaken lightly. When defamed, most people initially are willing to settle for a public apology published in the same manner as the defamatory material. However, where the defamation has caused financial loss, monetary compensation is the only remedy.
The determination of the amount of damages will depend on the viciousness of the defamatory material, how many people including owners, occupiers or holiday tenants heard or read the material and whether or not the defamer acted intentionally.
A final point to note is that officeholder’s insurance (that all competent committees would have in place) usually does not indemnify committee members for defamation actions. This means that any persons being sued have to fund their defence from their own pocket, not that of the body corporate insurer.