Body Corporate for the Rocks Resort v East [2014] QCATA 308

CITATION: Body Corporate for the Rocks Resort CTS 9435 v East [2014] QCATA 308 PARTIES: Body Corporate for the Rocks Resort CTS 9435 (Applicant/Appellant) v Janice East (Respondent) APPLICATION NUMBER: APL368-14 MATTER TYPE: Appeals HEARING DATE: On the papers 23 September 2014 HEARD AT: Brisbane DECISION OF: Senior Member Oliver DELIVERED ON: 6 November 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. The application for a stay is granted. CATCHWORDS: APPLICATION FOR A STAY – BODY CORPORATE AND COMMUNITY TITLE SCHEME – where appeal from a decision of an adjudicator – where order made for the applicant to produce copies of documents to the respondent – whether appeal would be rendered nugatory if stay not granted – whether arguable case – whether balance of convenience favours a stay. Body Corporate and Community Management Act 1997 (Qld), s 205, s 289 Croney v Nand [1999] 2 Qd R 342 Cook's Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453 Chief Executive Officer, Department for Child Protection v S (2007) 98 ALD 329 Kostopoulos v G E Commercial Finance Australia Pty Ltd [2005] QCA 311 Ainsworth v Body Corporate for Viridian Noosa Residences [2014] QCATA 175 Deputy Commissioner Stewart v Kennedy -- 1 of 5 -- 2 [2011] QCATA 254 APPEARANCES: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). REASONS FOR DECISION [1] On 12 August 2014 an Adjudicator from the Office of the Commissioner for Body Corporate and Community Management made an order that the applicant Body Corporate, ‘make the books and records available for inspection by Mr East, agent for the owner of lot 56, within 7 days’ of the order. In Order 2 of the Orders made, the learned Adjudicator set out with some specificity the documents to be made available and they include documents from legal service providers. [2] On 28 August 2014, the Body Corporate filed an application for leave to appeal or appeal the Adjudicator’s decision. The Body Corporate also applied to stay the Adjudicator’s decision until the finalisation of the appeal. The application for the stay was opposed by Janice East. The parties were directed to file submissions in the application for the stay. [3] On 23 September 2014, after considering the application and the submissions of both parties, I ordered that the decision of the Adjudicator be stayed. The respondent has asked for written reasons for that decision. These are those reasons. [4] The Body Corporate’s obligations to produce documents for inspection by a lot owner is contained in s 205 of the Body Corporate and Community Management Act 1997 (Qld) (‘BCCM Act’). It provides Information to be given to interested persons (1) This section provides for the giving of information by the body corporate for a community titles scheme from the body corporate’s records. (2) Within 7 days of receiving a written request from an interested person accompanied by the fee prescribed under the regulation module applying to the scheme, the body corporate must do either or both of the following as requested by the interested person- (a) Permit the person to inspect the body corporate’s records; (b) Give the person a copy of a record kept by the body corporate Maximum penalty – 20 penalty units. (3) However, the body corporate is not required to allow a person to inspect or obtain a copy of a part of a record under subsection (2) if the body corporate reasonably believes the part contains defamatory material. … (6) In this section- -- 2 of 5 -- 3 interested person means- (a) The owner, or a mortgagee, of a lot included in the scheme; or (b) The agent or a person mentioned in paragraph (a), (b) or (c). [5] Appeals from a decision of an Adjudicator are provided for in Chapter 6, Part 11 of the BCCM Act. However, s 289(2) limits the right of appeal to ‘only on a question of law’. [6] The question of whether a stay of the original decision should be granted is usually addressed according to established principles: Is it an appropriate case to grant a stay?1 Does the applicant have an arguable case on appeal?2 Would a refusal of a stay render the appeal nugatory?3 Does the balance of convenience favour granting the stay?4 [7] There were two fundamental reasons why I granted the stay. Firstly, I took the view that the applicant does have an arguable case, and secondly; if the stay was not granted the appeal would have been rendered nugatory because the very point of the appeal is whether the applicant should produce documents over which legal professional privilege is claimed. Obviously once produced any legitimate privilege attaching to the documents would be lost. Therefore, the balance of convenience favoured the granting of a stay. The Arguable Case [8] Section 205(2) of the Act imposes a mandatory obligation on a body corporate to make available for inspection or produce copies of body corporate records. It might seem trite, but the mandatory obligation on the part of the body corporate is subject to conditions precedent to the obligation to produce. Those conditions are that the request must be in writing by an interested person and ‘accompanied by the fee prescribed under the regulation module applying to the scheme’. It is not contested that the prescribed fee, nor any fee, did not accompany the written request. Nor was there any undertaking to pay the fee or a request of what the amount of the fee might be. [9] The legislation obviously contemplates that, although interested persons are entitled to body corporate records, the production of those records is not to be at the expense of the body corporate. In a recent appeal5 from a decision of an adjudicator, the question of the payment of the fee was considered by the Adjudicator. In the reasons for decision, I recited a passage from the Adjudicator’s decision relevant to the payment of the fee for records. In that case, Mr Ainsworth, instead of paying the prescribed fee, gave an undertaking to pay the fee through his solicitors. The Adjudicator did not consider that was sufficient compliance with the 1 Croney v Nand [1999] 2 Qd R 342 at 348. 2 Cook's Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453 at 455. 3 Chief Executive Officer, Department for Child Protection v S (2007) 98 ALD 329 at 331. 4 Kostopoulos v G E Commercial Finance Australia Pty Ltd [2005] QCA 311. 5 Ainsworth v Body Corporate for Viridian Noosa Residences [2014] QCATA 175. -- 3 of 5 -- 4 section and said that, in circumstances, where there was no real dispute about the production of the documents, the body corporate should have advised the interested person the amount of the prescribed fee. An extract from the decision is below. While I agree that the first letter appeared to be conditional request (sic), I consider that the letter of 20 December 2012 clearly indicated the applicant was now making an unconditional written request for records. However I do not consider the applicant was entitled to be given these by 21 December. Rather I consider the Body Corporate should have promptly advised the applicant of the costs of obtaining the requested records and then provided them within seven days of receipt of payment. [10] What follows from this reasoning is that there is no obligation to provide documents unless the prescribed fee is paid, or at the very least, there is some agreement between the interested person and the body corporate about payment of the fee, which might, and I stress might, waive the obligation under the section. [11] With respect to the question of the prescribed fee in this case, the Adjudicator said: Apart from not enclosing the fee prescribed by the legislation, (which may well have already been paid, or was going to be paid when the inspection was scheduled to occur on 28 August 2013), it appears to me to constitute a request properly made under section 205(2) of the Act. The Body Corporate does not claim any deficiency in the request for access itself. [12] Although the point may not have been taken before the Adjudicator, it is taken in the appeal and relied upon in the application for a stay. I should also point out that there is a very large volume of documents over which legal professional privilege is claimed, some 10 boxes spanning 3.5 years.6 [13] The Adjudicator did not refer to any evidence upon which the assumption about the prescribed fee being paid was made but simply seemed to proceed on the basis that the point was not taken by the applicant. Whether to point was taken or not does not perfect a request that does not comply with the section. Also, there is no evidence that the requirement was waived. Therefore, there is substance to the applicant’s submission here that the request was not a valid request and not effective at law. [14] Following on from what was said in Ainsworth, it probably was incumbent on the Body Corporate to give at least an estimate of the prescribed fee, given the volume of documents. However, the applicant’s primary contention is that the documents are privileged and therefore it should not be compelled to produce them. [15] The question of legal professional privilege concerning legal documents held by the Body Corporate is in relation to litigation between it and the caretaking service contractor Peterson Management Services Pty Ltd 6 Adjudicator’s reasons paragraph 32. -- 4 of 5 -- 5 (PMS) is a complex. The applicant is an interested person, an owner or a unit in the complex and the Body Corporate of the community title scheme of which she is a member is spending considerable funds on the litigation. [16] It is not for me, on this interlocutory application for a stay to come to any conclusion about whether the applicant has made out a case of privilege but only to determine if there is an arguable case. Because this matter involves a large volume of documents, the majority of which deal with confidential advice given to the Body Corporate by its lawyers, and if, in fact, the privilege has not been waived, then the claim may be sustainable. [17] Traditionally, where a party is obliged to disclose documents and for some legitimate the disclosure is opposed, the party opposing the disclosure is required to, at the very least; provide a list of the documents over which the privilege is claimed. That way consideration can be given, by an adjudicator, to the documents contained in the list rather than simply order the applicant to produce copies of all documents. These matters can be considered by the Appeal Tribunal. Would the appeal be rendered nugatory? [18] Clearly, the answer to this question must be in the affirmative. Once the copies of the documents are handed over to the respondent, there would be little practical point in the appeal. There might be some academic interest for the future but this would not assist the applicant. This to me is the most compelling reason for the stay although I am also mindful of what the Honourable Member Thomas said in Deputy Commissioner Stewart v Kennedy7 that it is: necessary before granting a stay application that there be a preliminary assessment of the strength of the appellant’s case … However, it is not incumbent on the Court or Tribunal that hears the stay application to undertake a detailed assessment of the prospects of success. In many cases, especially complex ones, it will be impossible to do so; but it should always be possible at least to discern whether the applicant has an arguable case. [19] I am satisfied there is an arguable case, in particular by the operation of s 205 requiring payment of the prescribed fee as a pre-condition to production of documents. I should also say that, on its face, it does see that the order made for disclosure is too wide in the circumstances. [20] Importantly, the very remedy sought in the appeal, to have the order set aside, would have no practical utility if the stay was not granted. I should also say that the balance of convenience favours the applicant in the circumstance because the respondent has demonstrated no prejudice. 7 [2011] QCATA 254 at [14]. -- 5 of 5 --