Basically, only if it’s approved in advance by the committee or the owners corp at a general meeting.

If they acted alone in seeking the legal advice, they could request costs be awarded in a subsequent action but that probably wouldn’t fly at NCAT.

Put the word “allegedly” before “defamed”, “subject to” and “negligent” and you will get a sense of why using strata funds to pursue legal action is unlikely to be permitted.

For a start, even if the allegations are true, it doesn’t sound like anyone has broken strata laws or by-laws.  The  recent defamation case in Manly was taken by the chair of a building, acting as an individual, against a resident.

The chair took the financial risk of legal action and he reaped the rewards.  Even if you persuaded the committee to finance legal action, the other party could argue that this was an inapproriate use of strata funds.

The only possible exception I can think of is where an individual accused the committee of acting illegally or immorally and those accusations damaged the strata scheme as a whole.  But strata committee member A defaming strata committee member B is likely to be seen as a matter for those two members … unless the strata committee decides to publicly take sides through its meeting minutes or other communications with residents.

The point I was making was that you can’t expect the owners corp to pay for legal advice on a fight between two individuals where defamation has been alleged and not yet proven.

It might – and I stress only might – be appropriate for a strata committee to pay the unrecovered legal costs of a member who has sued someone over an issue related to their management of the strata scheme, and won their case.

But to answer the original question (again) it would be very irresponsible for the committee to take sides in an issue and fund legal action based on allegations of defamation of one owner by another.  It would be different if the committee itself was defamed or accused of defamation.

That said, I recall a case where a resident sued a minority of the strata committee over a note sent out with the unanimous approval of the committee.  The resident clearly hoped that by cherry-picking four of the nine members,  the strata insurance wouldn’t kick in.  But the strata insurer decided this was in fact an attack on the whole strata committee so provided insurance cover.

The resident lost, costing them in excess $300,000, while the winners suffered 18 months of terrible stress as they feared losing their homes.

Despite  costs being awarded against the plaitiff, you would be lucky now to find a strata insurance policy that doesn’t specifically exclude defence of defamation claims.

Right now, if I was told two members of the committee in my building were thinking of using strata funds to pursue and/or defend a case of personal defamation, I’d call an EGM and have them both kicked off the committee, or at least block the use of committee funds.

Come on to this Forum and you’re going to get my opinion whether you want it or not.

But what exactly was the point of your posts?