No. 9 Port Douglas Road [2010] QBCCMCmr 559 (14 December 2010)

Last Updated: 11 February 2011

REFERENCE: 1041-2010

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	28935
Name of Scheme:	No. 9 Port Douglas Road
Address of Scheme:	9 Port Douglas Rd, Port Douglas, Qld 4877

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Michael and Christina McEvoy, the Owners of Lot 16

I hereby order that, within seven (7) days of the date of this order, the Body Corporate for No. 9 Port Douglas Road shall, at its own expense, provide to Michael and Christine McEvoy a copy of all voting papers for the annual general meeting of the Body Corporate held in January 1999. I further order that, within seven (7) days of a request from Michael and Christine McEvoy, the Body Corporate for No. 9 Port Douglas Road shall provide access at no charge to Michael and Christine McEvoy or their agent to inspect any Body Corporate records relating to meetings held in 1998 and 1999.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 1041-2010

“No. 9 Port Douglas Road” CTS 28935

9 Port Douglas Road community titles scheme 28935 (9 Port Douglas Road) consists of 18 lots and common property. The community management statement (CMS) for No. 9 Port Douglas Road indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module) applies to the scheme. Department of Environment and Resource Management records show the scheme is registered as Building Units Plan 106455.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by Michael and Christina McEvoy, Owners of Lot 16 (applicants) on 10 November 2010. The applicants sought the following order against the Body Corporate for 9 Port Douglas Road (respondent):

I would like access to the Body Corporate records to obtain copies of the voting papers from the AGM in January 1999.

PROCEDURAL MATTERS

Under section 243 of the Act, a copy of the application was provided to the Body Corporate, with an invitation to the Committee to respond to the matters raised by the application. A submission was received from the Chair of the Committee. The applicant declined the opportunity to inspect and respond to the submission received.[1]

A dispute resolution recommendation was made referring the dispute to departmental adjudication. I then investigated the dispute, pursuant to section 271 of the Act, which included reviewing the application and submission.

MATTERS IN DISPUTE

The application relates to the access to Body Corporate records.

The chronology of events is as follows:

­ On 25 October 2010 one of the applicants emailed the Body Corporate Manager (BCM), Daniel Hart of Body Corporate Services, asking to inspect the Body Corporate records for 1999-2000 on 3 November 2010.
­ On 28 October 2010 the BCM responded asking what sort of records were required as the minute books were in their office but correspondence records were kept in Cairns.
­ The applicant emailed back soon after that he was seeking paperwork for the AGM held in 1999 regarding exclusive use and the application for a new CMS in February 1999. He also sought a copy of an engineering report from February or March 2008.
­ The BCM said he could not locate the engineering report but the applicant could arrange a time with the receptionist to inspect the minute book. The applicant then said he wanted the voting papers and the BCM advised that he would need to arrange a time with the Cairns office.
­ On 1 November 2010 the applicant emailed the BCM asking why he was not allowed to access the 1998-1999 records.
­ On 2 November 2010 the BCM responded that the Committee had instructed him to restrict access to the records pursuant to section 202(2) of the Accommodation Module, and that the Committee had determined this position on 29 October 2010.

The applicant says the Body Corporate is restricting access to the records because of a pending court action, but that the records they wish to inspect are prior to that dispute. The outcome sought indicates that it is the voting papers from the Annual General Meeting (AGM) in January 1999 which are sought in particular.

The submission from the Chairperson advised that when the request for access to records was passed onto the Committee their instruction to the BCM was that “...the records were considered privileged evidentiary information in defence of the Body Corporate in QSC 48/08 between the Body Corporate and Famestock Pty Ltd (M.McEvoy, principal).”

JURISDICTION

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[2]

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about:

(a) a claimed or anticipated contravention of the Act or the CMS; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or

(c) a claimed or anticipated contractual matter about -

(i) the engagement of a person as a body corporate manager or service contractor; or

(ii) the authorisation of a person as a letting agent.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order.[3] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[4]

DETERMINATION

The issue for determination is the applicants’ right to access voting papers from the 1999 AGM.

The motive of the applicants in seeking the records is not relevant to the dispute, however I note that it appears the applicants are seeking access to these voting papers as evidence for another dispute resolution application lodged in this Office[5]. That other application relates to the question of whether exclusive use has been allocated to the applicants’ lot and it would seem that the 1999 AGM considered motions relevant to that question. I have noted the contents of the minutes of that meeting, which are included on that related file.

Section 205 of the Act entitles all owners to access body corporate records within seven days of receipt of a written request and the prescribed fee. There is no limit on the scope and content of records that may be accessed, except for material reasonably believed to be defamatory.

Section 202 of the Accommodation Module entitles committee members to be given ‘reasonable access’ to records without a fee. In addition to an exception for defamatory material, this section limits access if legal proceedings between the body corporate and the person has started or is threatened and the records are privileged from disclosure. Although this section (particularly section 202(2)) was cited by the BCM as the Committee’s reason for withholding the records, it is not apparent that either of the applicants is a member of the Committee and as such the section is not relevant. Even if it were applicable, section 202(2) does not say that the body corporate is can prevent access to any record that is relevant to a current or threatened legal action – it only refers to records which are ‘privileged from disclosure’.

Therefore even if section 202 applied to the applicants’ request (and I do not consider it does) the Body Corporate has not justified why the voting papers would be privileged from disclosure.

In addition to the statutory provisions regarding the disclosure of records, there are a range of common law privileges and immunities that could potentially be invoked when information is sought by a compulsory process. These are[6]:

• The privilege against self-incrimination, which permits a witness (not a corporation) to refuse to divulge information that might increase the risk of a successful prosecution against them for a criminal offence or the imposition of a penalty.
• Admissions and concessions made in the course of settlement negotiations.
• The public interest immunity relating to claims, often by government agencies, that disclosure is likely to be contrary to the public interest.
• Legal professional privilege, which covers confidential communications between a lawyer and the client made for the purpose of seeking and providing professional legal advice, and material created for the primary purpose of pending or reasonably contemplated litigation.
  

The Committee have provided no reasons as to why they consider the records are privileged, and I fail to see how voting papers at a meeting could ever conceivably fall within the scope of any of these types of privilege.

The Chairperson’s submission suggests that the voting papers were ”privileged evidentiary information” in defence of a Supreme Court action (reference 48/08) which I understand is a claim for damages brought by the applicants against the Body Corporate in 2008. The mere fact that Body Corporate records are related to the subject matter of a legal proceeding or will be used in evidence in those proceedings is not basis to avoid the prima facie legislative obligation to provide owners with access to records. Although it is not entirely clear, there is some indication that the nature of the privilege claimed is legal professional privilege. Accordingly I will expand on that type of privilege for the information of parties.

The common law doctrine of legal professional privilege would entitle a body corporate to withhold records which genuinely fall within the scope of confidential lawyer and client communications within the context of the legal dispute between the parties. The High Court has said legal professional privilege is an important common law immunity that can only be removed by clear and unambiguous statutory provisions[7]. It is not apparent, therefore, that the body corporate legislation removes this immunity. Legal professional privilege applies in judicial and quasi-judicial proceedings and to statutory forms of compulsory disclosure.[8]

Central to the doctrine of legal professional privilege is the concept that communications or documents made for the ‘dominant purpose’ of obtaining or giving legal advice, and/or conducting actual or contemplated litigation are protected.[9] This test is objective, and the onus of proof is on the party claiming privilege.[10] A party is not obliged to withhold privileged documents and can choose to disclose this information, at which time they cease to be privileged. The disclosure of the privileged documents to a third party, or the disclosure of a summary of the contents, could be seen to be inconsistent with an intention to keep the advice confidential[11].

In my view there can be no possible way in which the voting papers of a meeting in January 1999 could be subject to legal professional privilege.

The voting papers were not communications between the Body Corporate and its legal advisor. There is no reference in the meeting minutes to legal action and so they were very clearly not produced for the ‘dominant purpose’ for obtaining or giving legal advice or for conducting litigation. The meeting in question occurred over nine years before the legal action was commenced which the Chairperson claims privilege and there is no indication that the 2008 claim was in any party’s contemplation at the time of the meeting.

Conclusion

Pursuant to section 205 of the Act, owners (and other defined ‘interested persons’) have a prima facie right to access all body corporate records. The legislative exemptions to this right are not applicable in the current circumstances. The Body Corporate has presented no evidence to support it claim that the particular records sought by the applicants are subject to any type of common law privilege. I can conceive of no basis which could be asserted that these voting papers should be protected by legal professional privilege or any other common law privilege or immunity. There is no question then that the applicants are entitled to these documents.

The applicants have sought ‘access’ to the records (specifically the voting papers from the AGM in January 1999) to enable them to obtain copies. I intend to order that the Body Corporate obtain and provide copies of these documents to the applicants within seven days. However, in the event that the applicants also wish to sight the original documents or other documents related to the meeting (noting that they originally sought access to records in general for that period) I will order that the Body Corporate will provide access to inspect these records within seven days of receiving a request from the applicants’ request. The Body Corporate will not be entitled to charge any fee to applicants for the cost of the copies or accesses referred to in these orders.

In future, the Committee should be cognisant that the requirement of a body corporate to provide records to interested persons under section 205(2) of the Act attracts a penalty which could be pursued in the Magistrates Court.

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[1] See sections 246 and 244 of the Act respectively
[2] See sections 227, 228, 276 and Schedule 5 of the Act
[3] Section 276(2) of the Act
[4] Section 284(1) of the Act
[5] Application reference 0750-2010

[6] Wade, V (Ed.) A Guide to Arbitration Practice in Australia, University of Adelaide & Institute of Arbitrators and Mediators Australia, Adelaide, 2001, p672-3

[7] The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49 (7 November 2002)

[8] Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52

[9] Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; [1999] 201 CLR 49

[10] Commissioner of Taxation v Pratt Holdings Pty Ltd [2003] FCA 178

[11] Mann v Carnell [1999] HCA 66 (21 December 1999)