30/09/2020 – Jurisdiction Ontario
Part 72 published on 01/12/2020
Appeal Court confirms CAT decision allowing owner to see redacted legal bills
The Condominium Authority Tribunal (CAT) held that the owner was entitled to see legal bills, subject to appropriate redacting of privileged or confidential information. [See Condo Cases Across Canada, Part 68, December 2019.]
The condominium corporation appealed CAT’s decision to the Divisional Court. The Divisional Court confirmed the decision. The Court held that the condominium corporation had waived privilege in relation to the legal bills, by referring to the legal bills in correspondence sent to all owners (which had essentially identified a small group of owners indicated to be responsible for the legal charges). The Court said:
…when some disclosure of a protected document has occurred, fairness and consistency may require that the remainder of a communication be disclosed.
…
The heading of s. 55(6) (of the Condominium Act, 1998) is “waiver.” It states that the corporation “may disclose” records described in clause 4(b), which are those protected because of being related to actual or contemplated litigation. This amounts to a restatement of the principle that a client is entitled to waive privilege. It should not be read as at the same time displacing the common law principle that fairness and consistency may require full disclosure of a document that has been partially disclosed. Otherwise, the statute would be permitting partial disclosure of records in an unfair manner. As stated by the Adjudicator, condominium corporations would be entitled to selectively disclose privileged documents to the detriment of owners – for example, to cast aspersions on owners without providing the owner with access to the record to provide a defence. Given that the statute is structured such that disclosure is required subject only to limited exceptions, and that the statute is otherwise consistent with the common law understanding of waiver, much clearer language would be required if the legislature’s intention were to displace accompanying principles of fairness. Moreover, contrary to the submission of HCC61, the deference shown to the business judgment of condominium corporations does not apply to the requirement to disclose documents, which is a specific statutory obligation of condominium corporations and corresponding statutory entitlement of owners.