A recent case (Jack Gale v. HCC No. 61, 2019 ONCAT 46) before the Condominium Authority Tribunal (the “Tribunal”) considered whether a condominium unit owner was entitled to receive copies of the condominium corporation’s legal bills that reference the owner’s unit. The unit owner, had a contentious relationship with the corporation and had made 42 previous requests for records.
This owner was not the only owner making multiple record requests. In a letter dated October 10, 2018, sent to all owners by the board of directors, it was noted that a small group of owners had made 28 record requests during the previous year. In response to those requests, the corporation retained legal counsel to advise as to what records the corporation was required to provide, as the board was concerned that those owners were engaged in fishing expeditions. The corporation incurred legal fees in excess of $17,500 for legal advice relating to those requests, money which the board felt could be put to better uses. All of this was communicated in that letter.
The corporation took the position that it was not obligated to provide copies of the legal bills as they were protected under solicitor-client privilege, as well as litigation privilege, since the owner had threatened to commence legal proceedings against the corporation.
The Tribunal noted that under solicitor-client privilege “a client need not disclose confidential communications between himself and his lawyer, including the advice given and the amount of the invoice for services. This privilege resides in the client . . . and may only be waived by that client. Once waived, it cannot be reasserted. Waiver of part of the communication will be deemed to be waiver of the entire communication.” Litigation privilege “applies to any communication between a lawyer and client, including advice given, if the communication is for the dominant purpose of use in, or in relation to existing or reasonably anticipated legal proceedings.”
The Tribunal concluded that the owner’s communications that he would bring an action before the Tribunal if his records requests were not met could be reasonably construed as threatened litigation. However not all of the records requests were accompanied by litigation threats and communications relating to those requests would not be entitled to litigation privilege. Furthermore, as two previous applications to the Tribunal concerning records were settled, the litigation privilege relating to those requests had been extinguished and did not apply to all of the owner’s requests.
While litigation privilege is temporary and lapses when the litigation ends, the Tribunal noted that solicitor-client privilege is not limited in duration. However, by sending the October 10, 2018 letter the corporation waived its solicitor-client privilege in relation to the specific information that was disclosed in the letter – but solicitor-client privilege continued to apply to the actual advice provided to the corporation by its legal counsel. As a result, any information contained in the bill that disclosed the legal advice given was protected by solicitor-client privilege.
The corporation also tried to rely on the exemption set out in subsection 55(4) of the Condominium Act, 1998 to justify its position that it did not need to deliver the legal bills. That subsection exempts a corporation from providing records relating to actual or contemplated litigation. The exemption differs from litigation privilege in that it does not expire at the end of the litigation. However, the Tribunal concluded that the corporation could not rely on this exemption in relation to information that had already been disclosed in the October letter.
The Tribunal ordered the corporation to provide the legal bills requested to the owner within 30 days after the owner has paid the corporation’s reasonable estimate of the costs of producing the records, but the corporation was entitled to redact the bills to delete information relating to the legal advice given.
This case illustrates that corporations need to be careful when disseminating information to owners relating to the corporation’s legal affairs. The corporation may unintentionally waive either solicitor-client privilege or litigation privilege in its desire to communicate information to owners in a transparent manner.
It is important to note that although solicitor-client privilege and litigation privilege are not specifically provided for in the Condominium Act, the Tribunal confirmed that it would apply in certain circumstances to prevent an owner from seeing records.
