This article is about Defamation in Owners Corporations.
Question: The Strata Manager sent an email to all members of the Strata Committee critical of my performance as a former Chairman and advising the SC that they should block all future emails from me to the SC. Is this defamation? What can I do?
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I am in NSW and would like to know what my options are regarding the Strata Manager sending an email to all members of the Strata Committee critical of my performance as a former Chairman and advising the SC that they should block all future emails from me to the SC.
This provocation has only occurred since I disagreed with his advice to the SC where he advised that the Owners Corporation should pay for the repair of lot property as the amount of money involved was minor despite a bylaw and written undertakings by the affected owner that they would be responsible.
Answer: Depending on the content of the strata manager’s email, the email could be defamatory however the strata manager may have a defence to defamation based on qualified privilege.
This question raises three issues: defamation, communications generally, and an owners corporation spending money outside its authority.
Depending on the content of the strata manager’s email, the email could be defamatory however the strata manager may have a defence to defamation based on qualified privilege. For example, if the strata manager thought you had done something wrong and that the owners corporation needed to know about it to consider taking action against you, then while that communication may be defamatory because the owners corporation has an interest in receiving it, this may be an instance where the strata manager has a defence based on qualified privilege. Depending on the circumstances, the strata manager may have other defences to defamation. And, because the strata manager is the owners corporation’s agent, then arguably the owners corporation is liable for any defamation by the strata manager. If you wished to pursue this further, then you could engage a lawyer familiar with defamation to write to the strata manager and to the owners corporation requesting a retraction and an apology. Ultimately if you can’t reach a resolution of the issue, then you could take legal action in a court for defamation and seek damages from the strata manager and the owners corporation. You would need a lawyer to advise you on whether you had good prospects of winning a defamation case, the amount of damages that could be awarded and the legal costs involved.
The Strata Schemes Management Act 2015 doesn’t require an owners corporation and its strata manager and strata committee to engage in correspondence with lot owners unless the particular type of correspondence is something that is recognised under the legislation as requiring a response, for example a qualified request from owners with at least 25% of unit entitlement for holding a general meeting. Upon receiving a qualified request, the owners corporation must proceed to holding the general meeting. Generally, it is up to the strata manager and strata committee to decide how to handle communications with lot owners and whether to respond to them, and their ability to control communications has at least been recognised in cases in Queensland under Queensland strata legislation. If you are not getting any responses from the strata manager and the strata committee to your correspondence, you can always undertake a strata search to examine the correspondence such as emails passing between the strata manager and the strata committee in response to your correspondence. Tribunal cases such as Walker v The Owners – Strata Plan No 1992 [2020] NSWCATAP 192 and Legge v Network Strata Services Pty Ltd [2013] NSWCTTT 45 indicate that an owners corporation must produce such emails and correspondence as part of a strata search.
Finally, an owners corporation does not have an express statutory power to spend money on another person’s property such as lot property. The owners corporation can only do what is authorised under the Strata Schemes Management Act 2015. If your owners corporation has not yet paid for the lot property repair and has not engaged a contractor to do the repair, you could seek an order from the NSW Civil & Administrative Tribunal to prevent it from paying for the repair. However, if the money has already been spent, it may be hard to get it back because it is the owners corporation who would have to take action to get the money back. The strata manager’s advice to pay for the repair because it is a small amount is not a valid reason for the owners corporation doing something it is not authorised to do.
Carlo Fini
Lawyer (NSW)
Please note: This is not intended to be legal advice. You should seek legal advice specific to your situation.
This post appears in Strata News #444.
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Read next:
- NSW: Taming Keyboard Warriors – How to Deal With Unreasonable Strata Communications
- NSW: Q&A Can We Contact All Owners to Rally for a New Committee?
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The current Committee in our complex successfully had the previous Committee removed on the grounds of Financial Mismangaement. This new Committee is made up entirely of investors with only 2 of the 9 being owner-residents. No full disclosure of Mismanagement was provided to owners, and the information that was, unfortunately, was a misunderstanding of how Progressive Payments of a Loan for Remedial Work is approved – the (new) Treasurer asked the Loan Company who approved the PP, was told it was the Secretary (correct procedure) then advised owners the Loan was approved by the Secretary, not by Owners, which is incorrect. There is also a question of Remedial Work being carried out on an apartment that required bathroom fittings to be removed and (accordingly) replaced. As this apartment is owned by a resident-owner who was also the cleaner/un paid building manager/handyman and Committee Member, this Committee is chalenging that the replacement of the fittings was the Owner’s responsibility not the Owners Corporation – again, a lack of understanding of process and procedure, something members of the previous Committee had been involved in (some) for almost 20 years.
This Committee is now arranging quotes from (2) legal companies to take action against the previous Committee.
At no time prior takeover would the new Committee Members take up the off from the previous Committee Members to sit down and discuss the complex, its issues, processes or procedures – all they wanted was Invoices.
The previous Members – all owner-residents – considered taking legal action for defamation, but the upfront $25K+ fee is prohibitive.
But they also don’t believe this Committee should be going to the owners asking to pay a Special Levy to take legal action that isn’t warranted.
Firstly, thanks to Veronica and Stephen for their commentary.
now for Carlo:
“Finally, an owners corporation does not have an express statutory power to spend money on another person’s property such as lot property.”
A distinction needs to be made between lot property and lot owners property forming lot owners common property such as “common areas requiring work” which form part of the common areas works aggregated to the value of the general building common areas, such as the Building Sum insured Value, in NSW, in terms of the SSMA Act 2015.
I am at odds with this current strata legislation that requires a by-law for such lot owners fixtures, fittings and improvements, because all lot owners fixtures, fittings and improvements, once put in place, remain so and are part of the common areas requiring work for ever, and there is no requirement, in my opinion, if the “maintenance and repair” is not carried out properly by the lot owner as required by the by-law, an insurance provider may refuse to pay for repairs/replacement, so in my view, it is always the responsibility of the OC in approving such improvements that the OC remains liable for future maintenance and repairs, for ever. By-law in such case, would be a waste of resources and a waste of time arguing about the costs for repairs.
Having said that, it is not advisable to make small claims on an insurance policy because that value , amongst others, in the present term of the policy, and value of past claims, adds to issues for the evaluation of the premium in future policies, with whatever policy provider is selected, for ever, and such premium value affects all lot owners
I suggest that small claims are provided for by the OC through the administration fund account under the title “general repairs and maintenance” line item. So the SC treasurer should allow for this type of expenditure in the make-up of the Admin fund budget.
The whole Owners Corporation industry needs an over haul and cleaning up. We recently terminated our managing agent via Committee ballot returning majority vote. The contract was examined by a third party and it was deemed within the terms of the contract. The funny thing is, this Director was quite happy to be appointed at Committee level just via a Committee email vote. He didn’t want to lose our property because the nephew of his staff member is an owner in our complex. He allowed the nephew to vote at an AGM whilst in arrears and to knock down walls and cut through the Owners Corporation roof without any approvals and to hold no responsibly to damage caused to common property during these renovations that went on for many months. They also expected the OC to pay nearly $8,000 for a minor matter that only affects the nephew intermittently, and there was no guarantee that the matter would be resolved. This Director was also not happy that we have our own preferred list of high quality, honest contractors/tradesmen and we know exactly what is quoted on and billed for, and that payments are not approved until the works have been inspected and accepted and to ensure works that have been quoted for are actually done. We have had too many cases of being billed for works not done or paying for private works in apartments and courtyards. He was also a rude aggressive man, and what is so very sad is that he is quite high up in Strata Community Australia, he was reported and they did nothing.
Upon his termination he sent this to all owners, targeting me the Chairperson. The Director knew he would gain the support of his staff member’s nephew and 5 other troublesome owners here. We have conflict here of owners not wanting to maintain the property and they use the conflict to alter and damage the building and common property, basically do what they like without any consideration to other owners and our Special Rules. We were with this company for 20 months and they did nothing…. except state “They are working on it …. all in hand”. One new owner in the complex sold after only around 12 months. She couldn’t believe how rude and aggressive they were. The dodgy brothers she called them.
“I am in receipt of your correspondence that I must say is not unexpected based on your performances to date.
Unfortunately there are so many breaches of the legislation I am unable to accept the Termination of our appointment as the purported “Ballot” is invalid due to it has not been conducted in accordance with the requirements for conducting such action.
I therefore refer you to the Owners Corporation Act 2006 to come to understand the proper procedures required to be followed to ethically reach the inferred termination.
I also refer you to the requirements for a committee member to conduct themselves appropriately and with the interests of the Owners Corporation without prejudice or need for personal gain or that of any favour to any other party.
I feel your reaction to my advice on furthering the maintenance at your property has caused you to take fundamentally flawed actions of retaliation that do not consider the best interests of all owners but simply reflects a response to the fact your attempts to individually control as a dictator the Owners Corporation. At this point the conduct has at times been contrary to the best interests of all parties in your development. Your role as a committee member does not empower you to conduct yourself as has recently been demonstrated around the property and with contractors.
Once you have familiarised yourself with the basic requirements of conduct as a committee member with consideration that it requires agreement from the majority following advice to all owners and then consensus as to how to proceed then progress will be forthcoming. Only after the requirements for issuing of a ballot and associated documentation advising of rights and the closing date of the ballot can the results be deemed to be valid. I also draw your attention to the contents of the Contract of Appointment. Until all requirements have been considered and fulfilled can your claimed termination be valid.
I might suggest at this point it would be best served by convening either an AGM, which when referenced to the end of the financial year being the 31 December 2019, is now due or alternatively a Special General Meeting so as to ensure the general membership are agreed with the continuation of our services or otherwise.
I now place the prospect of convening a General Meeting, either an AGM or SGM, to allow all owners to have an in-put as to the future operation of your Owners Corporation. To facilitate this I invite all owners to respond to this email advising if they wish to request an AGM and include in the agenda the composition of the committee and the maintenance items currently under consideration.
I therefore ask the question;
Do you wish to convene a General Meeting to address the issues at hand.
Please reply YES if you support the convening of a meeting or NO if you are comfortable with the current arrangement.
Responses can be forwarded anonymously to xxxxxxxx only the numbers who have voted will be advised there will not be any names included in the results of the question.
It is a requirement for 25% of owners to partition to convene a meeting, so in the event I receive 5 YES replies our office will immediately issue Notice of Meetings to resolve the issues outstanding as expeditiously as possible.”
He then turned the SGM into an AGM and majority still voted for his termination. He snapped up his books and he and the property manager stormed out of the room.
I find some of the response curious.
It is a function of the secretary to answer correspondence (s 43(e)) and in 2EBR (2 Elizabeth Bay Road case NSWCA) it is eluded to that functions of the office bearers are functions of the owners corporation. So despite the Tank Tower case from Qld which regulated a nuisance amount of correspondence from an owner there seems to be argument that if the secretary is not answering correspondence at all then this is a failure to perform a function by the owners corporation which leads to arguments about compulsory management under s 237.
Additionally we also again see agents not knowing their station. Agents are just that, agents. Subordinate to the principal, the principal being the OC and its assistant the SC (again see 2EBR for a briefing on strata governance [29-30]). Therefore where does an agent get off meddling in the affairs of the principal without the principals’ approval. I doubt there’s any thing in the management agreement that goes along the line that the agent can be critical of an SC member if the member rubs the agent up the wrong way.
As Carlo points out; the advice from the agent, is not ‘valid’.
Perhaps an motion at your next AGM to replace the agent with another agent is in order because your agent appears to be a typical agent; a dud.
Do not for a moment believe agents are capable competent people because ‘the State’ gave them a license. Confidence in ‘the State’ is far more important than the competence of those they license and label professionals. If you ever really look into to it you will discover that the confidence is a facade that hides the incompetence of those the State authorize. It is the norm across so much of our society.
The Property Stack and Agents Regulations say:
Schedule 1 General rules of conduct applying to all licensees and registered persons
1 Knowledge of Act and regulations
An agent must have a knowledge and understanding of the Act and the regulations under the Act, and such other laws relevant to the category of licence or certificate of registration held (including, laws relating to residential tenancy, fair trading, competition and consumer protection, anti-discrimination and privacy) as may be necessary to enable the agent to exercise his or her functions as agent lawfully.
Clearly your agent, as most, fails this.
Agents fail because it is a bar too high. Even NCAT Members struggle with that level of knowledge and understanding; just look at the rate of successful appeals of NCAT decisions.
Such ‘rules’ are about the facade of having confidence in these people.
And before you go thinking there is recourse for a failure to meet the rules I will let you know that any failure needs to be criminal before this ‘requirement’ becomes of significance to Fair Trading who ‘regulate’ the ‘rules’ and those they license.
Agents are in business to make money and compliance with requirements and skill take a back seat all to often because it is a cut throat business where an agent prices themselves out of the market if they do follow the rules.
And isn’t it lovely that any defamation by the agent is suggested to be defamation by the OC. That comes from this section of the ‘Strata Act’.
Section 53 (3) Any act or thing done or suffered by a strata managing agent while acting in the exercise of a delegation under this Division—
(a) has the same effect as if it had been done or suffered by the owners corporation, and
(b) is taken to have been done or suffered by the owners corporation.
Question is, is the agent, when (if) defaming, acting in the exercise of a delegation?
Even though there is a protection for an agent it is likely to not apply in this case because where in the agreement is there ‘license’ to do what the agent has done.
I can hear it now; the agent will say he/she was acting in the best interests of the OC.
It is the standard, rubbish, get out of jail, cliché answer agents give when they go too far.
Love the topic, love the response by the brief.
Excellent thread.