Most [but not all] Strata Legal Advice Isn’t Privileged

Eastmark Holdings Pty Limited v Kabraji (No 3) [2012] NSWSC 1463

GoStrata’s CaseWatch is a short, sharp and easy-to-understand review of important and interesting Court and Tribunal decisions affecting Australian strata title stakeholders.

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Quick Read

This 2012 NSW Supreme Court decision is part of wider case and involves a dispute about legal privilege over a North Sydney strata title building’s lawyers files. The developer owner claimant subpoenaed legal advice to the strata building in relation to a consulting agreement with the chairperson and the strata building claimed privilege over it. So, the key issues where whether legal privilege applied, if the legal advice was confidential and how s 108 about records access operated in relation to it.  After considering the strata laws and comparing the circumstances to trustee and company situations, the Court decided that when strata buildings get legal advice, they do so on behalf of strata owners, so the strata owners have an interest in the advice, it is not confidential and s 108 entitles them to see it.  The decision means that most strata building records, documents and legal advice is not privileged and must be produced to strata owners.  But the decision leaves open strata building claims of privilege against other parties in the litigation even if they are strata owners.

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Implications

The key implications of this strata case are as follows.

• Strata owners’ rights to see records under s 108 are wide and do not have good faith or proper purpose criteria limits.

• S 108 does not eliminate privilege claims, so is subject to them.

• Legal advice privilege is different to legal professional privilege in litigation.

Legal advice applies to advice and documents that are confidential, professional and have the dominant purpose of giving or receiving legal advice.