Defame game – when it’s okay to criticise

With all the various defamation trials we’ve seen recently, it’s only natural that anyone who’s going to criticise anyone for anything might be a little concerned.

And before I type another word, I should say that I am not a lawyer and if you are seriously thinking of suing someone or genuinely worried about being sued, you really need to talk to someone who is.

That said, I have recently come across two very different situations where one group of strata people have been overly cautious about the possibility of being sued, while another has been a little bit reckless.

Let’s take the first group; owners in an apartment block where the majority of the strata committee feel badly let down by their strata manager.

Now, it’s coming up to the end of the contract period which is an opportunity to show the strata manager the door and get a new one in without too much hassle. 

However, this requires convincing a majority of the other owners – or at least those who will vote at the AGM – that it’s time for a change.  That would require spelling out how the committee feels they have been let down.

Now, some owners are concerned that they might be sued if they put anything in writing that’s critical of the strata managers. This is especially so if their insurance doesn’t adequately cover legal action.

However, provided their criticism is largely factually correct and is not malicious, they have a lot of leeway to say what they feel. Even their opinions are protected if they are expressed as part of the discourse necessary in running a strata scheme.

In fact, the leeway in strata is huge. Back in 2019, the NSW Appeals Court overturned a District Court finding that a strata building’s chair had been defamed in an email from a tenant. 

The email, copied to everyone in the building in response to criticisms circulated about the tenant, had said he was a “small-minded busybody who wastes the time of fellow residents on petty items concerning the running of the … building” and that he unreasonably harassed and “acted menacingly” by “consistently threatening her by email”.

In the initial case, the District Court judge awarded the chairman $120,000 after finding the meanings were conveyed and that the tenant had not established a defence.

But in November that year, the Appeals Court not only overturned the ruling and cancelled the award but ordered the chair to pay the tenant’s legal costs.

According to a report in the Sydney Morning Herald, a panel of three judges agreed that a defence of “qualified privilege” was available to the tenant.  And even if there had been a finding of defamation, “an award of $120,000 for an email in these terms, addressed to 16 people was … manifestly excessive.”

Qualified privilege in this context basically means that in the cut and thrust of dealings in your strata scheme, you can reasonably criticise others’ actions.

Also, when it comes to your strata manager, developer or any other company, the law says you can’t defame a corporation, albeit with a notable exception to that general rule, namely if your comments displayed malice or were intended to harm the other party’s business.

And that brings us to a case where an angry owner wrote to a service provider and told them that he was so unhappy with them and frustrated at their failure to respond to his complaints, that he was going to expose them publicly in the hope that others would be deterred from hiring them.

Then, as good as his word, he went on a consumer “review” website and set out to trash their reputation.

That could prove problematic. It’s not so much that he had criticised them but that he had said that he intended to do so to harm their business.  Thus, the “absence of malice” defence looks pretty thin, even to this non-lawyer.

Needless to say, the “cease and desist” letters followed soon after, accompanied by a threat to sue for defamation if they were ignored.

Was he wrong to have publicly criticised the company? If what he wrote was provably true, then probably not.  The truth is a defence, up to a point: but that point includes if it can be shown that there was malicious intent behind it.

So what do you do if you are unhappy with a service provider but the nervous nellies on your committee are reluctant to send out an email to other owners, explaining why you want to sack them and get someone else?

Firstly, according to the Court of Appeal, you have a lot of leeway when it comes to negative comments, made in good faith, concerning the running of your strata scheme.

That said, wherever possible, make sure you are criticising the company, rather than individuals. But, if you do feel the need to explain an individual’s shortcomings, make sure you have evidence to back it up.

Finally, keep exaggerations out and emotive language to a minimum and don’t threaten anyone with anything.

As for the owner who ripped into the service provider in a review website, are they in much danger of legal retribution?

Defamation actions are a rich person’s game and, as recent high-profile cases have shown, they can be a double-edged sword; efforts to defend a reputation can have exactly the opposite effect.

If a company airs its dirty linen in public, and that merely exacerbates negative public perceptions – and court reports ARE privileged – they could be shooting themselves in the foot.

Strata committees have a duty to inform their owners about what’s happening in their building and, handled properly, that probably supersedes anyone or any company’s “right” to protect their reputation.

However, once again, if this is an active concern for you, please contact a lawyer.