Solicitor-Client Privilege Waived by Discussing Bills with Owners

A few weeks ago I spoke as part of a panel at CCI National's Conference. The case that I spoke about was a decision of the Ontario Condominium Authority Tribunal (CAT) about solicitor-client privilege. Given the frequency at which I see clients inadvertently waive solicitor-client privilege, I thought it might be good to review the case in this post.

The Facts

The case was an appeal from a decision of the CAT. The owner requested copies of all legal bills referencing his own unit. He made the request after the condominium wrote a letter to all owners concerning legal expenses that it had incurred. In the letter the condominium suggested that a “small group of owners” was responsible for the increased legal fees. The Tribunal adjudicator found that, given the size of the building, it was reasonable to assume many if not most of the unit owners knew the members of the small group who caused the legal costs to be incurred.

The letter described the board’s efforts to manage the increased legal costs for record requests since the amendments were made in November of 2017. It blamed the small group for trying to micromanage and undermine the efforts of the board by “abusing their right to records”. The letter explained that each of the 28 requests required input from legal counsel and suggested that the condominium had spent $17,698.71 in legal costs to review the records requests that could have been used on other projects. The board acknowledged the right to request records, but strongly objected to fishing expeditions.

Tribunal

The condominium denied the request on the basis of common law solicitor-client and litigation privilege. It also relied upon s.55(4)(b) of the Condominium Act, 1998, which relates to records related to actual or contemplated litigation. The Tribunal concluded that the condominium was required to disclose the requested records because it had waived privilege by sending the letter to all owners. The Tribunal adjudicator ordered the condominium to produce the legal invoices but it could redact any reference to the substance of legal advice.

Appeal

The condominium appealed the decision. The Divisional Court concluded that the CAT adjudicator did not err in law when she determined that the condominium waived privilege to the legal invoices. The appeal was dismissed and the condominium paid the owner $10,000 toward his legal costs.

The Divisional Court decision focuses primarily on waiver of privilege. It reaffirmed basic principles about solicitor-client privilege, such as solicitor-client privilege resides in the client and may only be waived by the client. Waiver of part of a communication may be held to be waiver of the entire communication. Given the scope of information contained in the condominium’s letter to all owners, it was appropriate to conclude that the condominium had waived privilege over the individual bills documenting the legal expenses incurred. By permitting redaction of the legal advice contained in the bills, the adjudicator protected the privileged advice itself.

The Divisional Court also upheld the decision in relation to the Condominium Act, 1998, finding that subsection 55(6) of the Act should be read as consistent to common law principles of waiver. This includes the principle that when some disclosure of a protected document has occurred, fairness and consistency may require that the remainder of a communication be disclosed.

Takeaways

Condominiums must be careful when discussing or disclosing anything related to advice sought from the condominium's lawyer, including invoices or the subject-matter of advice sought. This is especially true where there is ongoing litigation or contemplated litigation.

I still see clients sending entire unredacted invoices to owners when charging the costs back to the owner for non-compliance of some sort. Stop that. Condominiums should either redact the entries that contain the privileged information or ask the lawyer to provide an invoice without any detail (i.e. just the total owing). Once you send that invoice out you will have waived privilege to it and possibly any advice described within the invoice. If you have any doubts about which records and information may be privileged ask the lawyer involved.