Strata defamation appeal – $400K lost as court flips decision

Watermark-Manly.jpg

The ongoing saga of the open letterbox outside a strata scheme, the email war it prompted, the defamation case that followed and the award of $120,000 in damages reached a conclusion last week when the NSW Court of Appeal completely overturned the original decision and awarded legal costs against the original plaintiff.

The total cost to the man who won the defamation case but lost the appeal has been estimated at about $400,000, making this surely the most expensive letterbox in Australia … if not the world.

And it re-establishes the principle that any resident of an apartment block is entitled to comment on anything to do with the running of the block, provided it is not malicious and is distributed exclusively within that community (and certainly not on social media).

According to this story in the Sydney Morning Herald, the Appeal Court judges decided that not only did the defendant have “qualified privilege” – meaning the damages should never have been awarded in the first place – the amount awarded was excessive.

Justice Anthony Payne said “an award of $120,000 for an email in these terms addressed to 16 people was … manifestly excessive” adding that even if defamation had been establised damages of “no more than $25,000” would have been appropriate.

Our good friend and property lawyer Tony Cordato takes up the story, estimating the costs of the original appeal and how the final bill could add up to a half million dollar change in fortunes for the chairman concerned.

When tenant Trish [Murray] moved into the Watermark Apartments in Victoria Street, Manly in July 2016, she decided to keep the letterbox unlocked to allow the postman to place small packages into the box which would not fit through the slot.

This drove the strata committee to distraction. One month after she moved in, Trish received an email from Gary [Raynor], the chair of the owners corporation, saying,  “I notice your mailbox has been left unlocked for quite a while?”

Trish continued to leave the letterbox unlocked. She continued to receive emails from Gary to ask her to lock the box, arguing that thieves can use an open letterbox to identify the lock barrel and make a skeleton key to access all letterboxes. She ignored these emails.

On 24 May 2017, Gary sent her an email, which he forwarded to all owners – in which he said that her that her leaving the mailbox open “is the likely cause” of thieves obtaining a skeleton key, that all boxes may have to be re-keyed, and that compensation would be sought from the owner of Unit 9.

The next day, Trish replied by email which she copied in to all owners –

Your assertion/s that a single unlocked letterbox has allowed a criminal milieu to stalk the watermark building, and spend the time necessary to copy barrels/locks in order to then construct a master key is farfetched. Your consistent attempt to shame me publicly is cowardly. It is also offensive, harassing and menacing through use of technology to threaten me. Please stop!

Gary brought a defamation suit based on that email. Earlier this year, he was awarded $120,000 at the trial in the District Court. But on appeal, the NSW Court of Appeal decided to apply a precedent from a 185-year-old case from England to decide that although the comments in the email were defamatory, they were protected by a common law privilege.

As a result, the NSW Court of Appeal dismissed the defamation suit and ordered Gary to pay Trish’s legal fees for both the trial and the appeal which I estimate are at least $200,000. In addition, Gary has to pay his own legal fees which could be at least $200,000.

The total Gary must pay for bringing the letterbox dispute to court is therefore [estimated at] $400,000. And he came away empty handed!

For more information, see The case of the unlocked letterbox.  Tony Cordato is a property, travel and business lawyer and you’ll find his website HERE.

2 Replies to “Strata defamation appeal – $400K lost as court flips decision”

  1. Jimmy-T Jimmy-T says:

    And this late addition from Tony C, in response to our Podcast speculation about an appeal: “The Court of Appeal decision is likely to be the final decision because the only appeal left is to the High Court of Australia. The High Court has to agree to hear an appeal – before it takes it. In this case, the fact that the Court of Appeal decided unanimously (3-0) means that the High Court is unlikely to agree to an appeal.”

  2. Avatar Jimmy-T says:

    This is now being discussed in the Flat Chat Forum

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