Asserting Privilege in the Condominium Context

October 9, 2020

Asserting Privilege in the Condominium Context

The issue of asserting solicitor-client privilege in the condominium context is an interesting one, especially as between the condominium corporation and the individual unit owners. There are no simple answers or bright line rules when it comes to requests by unit owners for access to documents belonging to the corporation, other than what is expressly set out in Alberta’s legislation. For example, a unit owner can make a “section 44 request” to access particular documents, subject to specific exceptions.

An interesting case was decided recently in Ontario that specifically addresses the owners’ right to access the corporation’s redacted legal bills. While the decision is not binding on Alberta condos, it may provide some guidance for corporations here. The case was an appeal to the Ontario Superior Court from a decision of the Ontario Condominium Authority Tribunal (CAT), which had ordered the condo corporation to produce the invoices. You can read the Court’s decision here: Gale v Halton Condominium Corporation No. 61, 2020 ONSC 5896.

The matter arose because of a communication sent by the corporation to unit owners, referencing increased costs incurred as a result of a “small group of owners” as the reason for diverting funds allocated for other projects. Due to a lack of funds, it was suggested that those projects would have to be deferred. The costs attributed to this group of owners were entirely comprised of legal fees, in the amount of over $17,000. Ostensibly, the corporation was required to engage legal counsel in order to respond to multiple communications and requests by these unit owners.

The CAT and the Superior Court confirmed that the communication by the corporation amounted to a waiver of privilege over the legal bills (which can certainly be subject to either solicitor-client privilege or litigation privilege, or both). A waiver of part of a record can be held to be waiver of the entire record, whether the holder of the privilege (the corporation) intended to waive it or not, if the principles of fairness and consistency would require the remainder of the record to be disclosed.

While the corporation argued that the communication did nothing more than provide financial information it was obligated to disclose to the owners, the Court found it actually did far more. It targeted specific individuals by suggesting they acted unreasonably.

The corporation also argued that a provision in Ontario’s condominium legislation permitting disclosure of certain records upon request (similar to section 44 of Alberta’s Condominium Property Act) modified the common law, such that any disclosure cannot amount to a waiver. The Court disagreed, and concluded that the legislation must be read as being consistent with the common law principles of waiver. In support, the Court noted that the heading of the section of the legislation in question is titled “Waiver”.

Ultimately, the corporation was ordered to release the legal accounts to the unit owner that had made the request, but was permitted to redact them insofar as they contained actual legal advice. The corporation was also directed to pay the costs of the appeal to the owner, in the amount of $10,000. For the appellant condominium corporation, this was certainly an expensive lesson.

This case should also be a lesson for condo corporations in Alberta and other jurisdictions on the significance of their communications to unit owners. Always be careful how much detail is included, as these communications may one day be used against the corporation in a legal dispute with a unit owner.

If you have questions about your condo corporation in Alberta, please contact us.


Erin Berney

Erin Berney

Erin Berney possesses extensive experience in all manner of residential and commercial condominiums, from traditional, bare land and phased-style development, to “barely blended”, duplex, mixed use, and rural developments. She has been a condo owner in downtown Edmonton since 2005, and has served on the Board of Directors as Treasurer, Secretary and Chair of the Bylaw Review Committee. This gives her unique insight and invaluable knowledge and experience that she brings to her clients.