Young v Body Corporate 85659 [2018] NZHC 150 (15 February 2018)

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UNDER	the Judicial Review Prcedure Act 2016 and Part 30 of the High Court Rules 2016, and section 210 of the Unit Titles Act 2010
BETWEEN	LESLIE YOUNG AND SUZANNE LEE YOUNG Applicants
AND	BODY CORPORATE 85659 _Respondent

Hearing:	On the papers
Counsel:	E J Watt for Applicants A Knowsley for Respondent
_Judgment:	_{15 February 2018}

[1] The applicants are unit owners in the unit development known as Richard Pearse House. They seek judicial review of certain decisions by the respondent regarding proposed window replacement works on floors one and two of Richard Pearse House, and relief under s 210 of the Unit Titles Act 2010 setting aside resolutions of the Body Corporate that relate to those decisions.

[2] Prior to filing these proceedings, the applicants requested information from the respondent under s 206 of the Unit Titles Act 2010 for the purpose of allowing the applicants to assess the lawfulness and reasonableness of the Body Corporate’s

_{decision-making in respect of the proposed works. The Body Corporate
declined to}

provide that information. The applicants therefore brought an application for judicial review of the Body Corporate’s decision declining to provide the information sought (proceedings CIV-2017-485-652, “the documentary request proceedings”).

[3] The parties have agreed to settle the documentary request proceedings. Under the terms of the settlement agreement, the Body Corporate agreed to provide the information sought by the applicants. However, some of the information provided has been heavily redacted, with the respondent claiming it is subject to legal privilege. The parties have requested the court provide a ruling on the claims of privilege and have filed memoranda setting out their respective positions.

(a) the Body Corporate entered into a voluntary agreement to provide the information sought and therefore has no basis to withhold information contained in the documents; and

(b) information has been redacted from the documents that is relevant to the respondent’s decision-making at issue in these proceedings and, even if there were a basis for claiming privilege (which is denied), would not be subject to legal privilege.

[5] The respondent states that the redactions were made to the Body Corporate’s financial statements and commentary documentation provided to the applicants. The respondent submits that the redacted material contained counsel’s legal advice to the Body Corporate, given by way of email and telephone. The emails have been copy/pasted into the financial statements and the telephone conversations recorded by way of file note.

[6] The Body Corporate maintains legal privilege regarding this material and it was therefore redacted from the material provided to the applicants for the

documentary request proceedings. The Body Corporate has not expressly waived legal privilege.

(1) The body corporate must, on request from a unit owner, make copies of the following records and documents available for purchase by the unit owner:

(b) all current insurance policies held by the body corporate or its head body corporate in respect of the buildings and improvements on the base land:

(f) any other documents the owner of a principal unit is required to provide under subpart 14 of Part 2:

(g) any other records or documents if the body corporate thinks it is reasonable in the circumstances to provide those records or documents.

(2) The copies must be made available within a reasonable time, and the body corporate may charge any reasonable costs incurred in providing the records and documents.

[8] The relevant sections regarding privilege of the Evidence Act 2006 (“the Act”)

(1) A person who requests or obtains professional legal services from a legal adviser has a privilege in respect of any communication between the person and the legal adviser if the communication was—

(i) the person requesting or obtaining professional legal services from the legal adviser; or

(1A) The privilege applies to a person who requests professional legal services from a legal adviser whether or not the person actually obtains such services.

(1) Subsection (2) applies to a communication or information only if the communication or information is made, received, compiled, or prepared for the dominant purpose of preparing for a proceeding or an apprehended proceeding (the proceeding).

(2) A person (the party) who is, or on reasonable grounds contemplates becoming, a party to the proceeding has a privilege in respect of—

(d) information compiled or prepared at the request of the party, or the party’s legal adviser, by any other person.

[9] Section 54(1)(a) of the Act only grants privilege if the communication to or from the legal adviser was intended to be confidential. In the case of Gowing & Co Lawyers Ltd v Police, the defendant had written a letter to the complainant which contained some self-incriminating statements.¹This letter was returned to the defendant who then met with his lawyer and gave him the letter. When the Police obtained a search warrant, the lawyer asserted privilege over the letter on behalf of the defendant. A claim for legal adviser privilege was denied by the District Court Judge on the basis that (i) the letter was not intended to be confidential, (ii) it was not created for the purpose of obtaining legal services, and (iii) disclosure of the letter would not reveal the lawyer’s legal advice to the defendant.

_{‘in the course of and for the purpose of... professional legal
services’; and}

thus not in the course of or for the purpose of any other service. That too, in itself, is an intelligible and determinate condition precedent to the privilege.

Right at the periphery of the privilege a number of documents have been withheld, which speak about meetings to take place, for instance, or which transmit documents, and which do not disclose any advice attracting confidentiality. The most obvious examples are those disclosed documents from which small parts have been redacted. Documents in this peripheral category should be disclosed.

[12] Body corporates are required by s 206 of the Unit Titles Act to provide copies of financial statements on request to unit holders. The Youngs, as proprietors of units, were therefore entitled to request copies of the financial statements. These documents, for which privilege is claimed, did not come into being for the purpose of professional legal services as they are financial statements detailing such expenses as servicing of the lift and property management fees. Included amongst these expenses are items relating to legal costs, for example fees incurred in recovery of debt. The inclusion of such items on a list of expenses forming part of a financial statement could not be regarded as coming into being for the purpose of professional legal services, but was rather to detail expenses for the Body Corporate. Furthermore, apart from a few exceptions, which I will detail below, disclosing the redacted portions would not actually reveal any advice as such from the lawyer to the defendant. They are at the

‘periphery of the privilege’. On the facts before us, any information contained in the financial statements could not have been intended to be confidential, it was not created for the purpose of obtaining legal services, and disclosing of the redacted portions would not, for the most part, reveal the lawyer’s legal advice. Therefore, in my view, the redacted portions of the financial statements, apart from those exceptions, do not qualify for privilege under s 54 of the Act.

[13] While the majority of the redacted portions provide details such as fees paid to lawyers and that responses had been drafted, there are some redacted sections which go into greater detail with regards to preparation for the proceedings and others in which emails from the lawyers had been copied and pasted into the financial

[14] The comments provided on pages 147-148 (along with identical comments at pages 170-171 and 196-198) of the financial statements go into detail regarding the advice sought from the lawyer and therefore come under the protection of privilege as provided for under s 56 of the Evidence Act.

[15] The comments provided on page 218 (and at pages 286-288, 317-320 and 364) appear to be direct quotations of advice received from the lawyer, so providing an unredacted copy of these pages would be revealing the lawyer’s legal advice to the defendant. It is my view that these items should remain redacted.

[16] Other than the items referred to at [14] and [15], there is no justification for any further redaction and the material sought should be provided to the plaintiff.

High Court of New Zealand Decisions

Young v Body Corporate 85659 [2018] NZHC 150 (15 February 2018)