Sailz Whitsunday [2009] QBCCMCmr 130 (25 March 2009)

Number of Scheme:	16912
Name of Scheme:	Sailz Whitsunday
Address of Scheme:	24 Panadanus Drive CANNONVALE QLD 4802

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

I hereby order that the body corporate for Sailz Whitsunday must, within fourteen days, provide Barrie Robertson (applicant) with a copy of the twenty-one documents that were withheld from him when he inspected the body corporate records earlier this month.

Sailz Whitsunday Community Titles Scheme (Sailz) is a 32 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Accommodation Module Regulation (Accommodation Module).

This application is by Barrie Robertson, an owner of lot 24 (applicant) seeking orders against the body corporate for Sailz (respondent). The applicant is seeking an order to allow him to view all of the body corporate’s records.

Submissions were provided by the secretary, on behalf of the body corporate. These were to the effect that possibly illegal and unsafe structures were built on common property by the past committee, including the applicant. It is submitted that there is a very real chance that legal action will result regarding the actions of the past office bearers.

Due to the claim by the secretary that the body corporate may potentially commence legal action against the applicant, I considered it necessary that the secretary identify any body corporate documents that may be privileged from disclosure. On 11 December 2008 I requested the secretary provide a numbered list of documents claimed to be for anticipated litigation against the applicant and describe any purposes the document could be used for apart from litigation.

On 19 January 2009 this office received a numbered list of 21 documents claimed to be for anticipated litigation. I note that a number of these documents appear to be related to the obtaining of quotations or in relation to financial matters of the body corporate. The remainder of the documents appear to be primarily communications either sent or received by the applicant or by another of the persons the secretary claims the body corporate may wish to take action against.

On 28 January 2009 I made an interim order requiring the body corporate to allow the applicant to inspect the body corporate records but entitling the body corporate to withhold from inspection "any documents that a practising solicitor has certified as being, in his or her opinion, privileged from disclosure to the applicant". I also ordered that "A list describing any documents withheld must be supplied to the applicant at the time of the inspection".

On 6 March 2009 the applicant contacted this office to confirm that he had inspected the body corporate records and that no records were withheld to his knowledge. However, I sought confirmation of this from the body corporate manager. The body corporate manager has since provided this office with a list of document that were "quarantined" from the applicant. Upon request, the body corporate manager has since provided a copy of a letter from a solicitor in respect of this matter. This letter from McKays Solicitors dated 12 March 2009 indicates that the documents in question are not privileged. However, this letter argues that former members of the committee are not permitted access unless the body corporate desires it.

The body corporate must allow an owner of a lot to inspect the body corporate’s records within seven days of a written request accompanied by the prescribed fee (Act 205, Accommodation Module 203).

However, at common law, documents are privileged from disclosure if they are confidential documents prepared for the dominant purpose of obtaining legal advice or to the extent disclosure of the document would reveal confidential communications with a lawyer. The High Court has confirmed that legal professional privilege is a common law immunity that can only be removed by clear and unambiguous statutory provisions.[1]

There is some ambiguity in whether the intention of the legislative provisions in the Act that deal with access to records was to allow the body corporate to continue to rely upon legal professional privilege. Section 202 of the Accommodation Module, relating to access by committee members, specifically excludes access to defamatory material and to records privileged from disclosure. In contrast, section 205 of the Act refers only to withholding of defamatory material with no mention being made of privileged documents.

However, despite this inconsistency in drafting between the two sections, section 205 of the Act cannot be read as clearly and unambiguously removing legal professional privilege. Therefore, the body corporate is not required to disclose confidential documents if litigation is anticipated against the applicant and the documents were prepared for the dominate purpose of obtaining legal advice or would reveal confidential communications between the body corporate and its lawyers.

By the interim order of 28 January 2009 I gave the body corporate an opportunity to claim privilege by having documents certified as being privileged by a practising solicitor and merely providing the applicant with a list of the privileged documents. I am satisfied from further information provided by the body corporate manager that documents were in fact withheld from the applicant without the body corporate obtaining certification the documents were privileged or informing the applicant that those documents were being withheld.

The body corporate has since provided a letter from a solicitor which does not claim any documents to be privileged. To the contrary, this letter indicates that in the event of litigation the documents would certainly be required to be disclosed to the extent they are relevant.

In the circumstances, I propose to order that the body corporate for Sailz Whitsunday must, within fourteen days, provide the applicant with a copy of documents that were improperly withheld when he inspected the body corporate records earlier this month.

I note that the letter from McKay Solicitors argues that former members of the committee are not permitted access to body corporate records unless the body corporate desires. However, I have performed a title search for lot 24 and confirmed that the applicant is an owner within the scheme rather than merely a former committee member. The applicant is therefore entitled to inspect the body corporate records.

[1] The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Sailz Whitsunday [2009] QBCCMCmr 130 (25 March 2009)