Silberstein v The Owners - Strata Plan No. 55468

[2022] NSWCATCD 114

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Silberstein v The Owners - Strata Plan No. 55468 [2022] NSWCATCD 114

Hearing dates:

28 June 2022

Date of orders:

15 July 2022

Decision date:

15 July 2022

Jurisdiction:

Consumer and Commercial Division

Before:

G Sarginson, Senior Member

Decision:

(1) The applicant is to file with the Tribunal and serve on the respondents, by person or by post, Amended Points of Claim by 14 days from the date of this decision.

(2) Unless the Tribunal otherwise orders at the hearing of the substantive proceedings, the documents in this decision found to be the subject of legal professional privilege or otherwise not pressed by the applicant may not be adduced as evidence.

(3) The application for interlocutory orders is otherwise dismissed.

(4) The matter is to be listed for a directions hearing at a date to be allocated by the Tribunal Registry before a Principal Member or Senior Member.

Catchwords:

CIVIL PROCEDURE — Legal professional privilege — Waiver — Whether disclosure of documents constitutes waiver

CIVIL PROCEDURE — Pleadings — Whether should be struck out or dismissed in whole or part

CIVIL PROCEDURE — Legal professional privilege — Use of disclosed documents — Whether injunctive orders should be made

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Evidence Act 1995 (NSW)

Strata Schemes Management Act 2015 (NSW)

Cases Cited:

Aardwolf Industries LLC v Tayeh [2020] NSWCA 301

Coscuez International Pty Ltd v The Owners-Strata Plan No 46433 [2022] NSWCATAP 147

EB 9 & 10 Pty Ltd v The Owners SP 934 [2018] NSWSC 464

Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR 303; [2013] HCA 46

Gillies v Downer EDI Ltd [2010] NSWSC 1323

GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266).

Hastie Group Pty Ltd (in liq) v Moore [2016] NSWCA 305

Kennedy v Wallace (2004) 142 FCR 185; [2004] FCAFC 337

LMA Contractors Limited v Changizi [2017] NSWCATAP 145

Mead v Mead (2007) 235 ALR 197; [2007] HCA 25

State of New South Wales v Jackson [2007] NSWCA 279

Steak Plains Olive Farm Pty Limited v Australian Executor Trustees Limited [2015] NSWSC 289

Sunland Group Limited v Gold Coast City Council [2021] FCA 1473

The Owners-Strata Plan No 2000 v Bylinska [2019] NSWCATAP 116

The Owners-Strata Plan No 80412 v Vickery [2021] NSWCATAP 98

Walsh v The Owners Strata Plan No 10349 [2017] NSWCATAP 230

Westpac Banking Corp v 789TEN Pty Ltd (2005) 55 ACSR 519; [2005] NSWCA 321

Texts Cited:

Nil

Category:

Procedural rulings

Parties:

Jessica Silberstein (Applicant)
The Owners - Strata Plan No. 55468 (First Respondent)
Michael Adamo (Second Respondent)
Peter Michael Hans Engelbert (Third Respondent)
William Paul O’Brien (Fourth Respondent)
Terence Matthew Gagen (Fifth Respondent)

Representation:

Counsel:
R Clark (Applicant)
B Ilkovski (Respondents)

Solicitors:
Silberstein & Associates (Applicant)
Gilchrist Connell (Respondents)

File Number(s):

SC 22/05083

Publication restriction:

Nil

REASONS FOR DECISION

1. This is an interlocutory application by the respondents to (a) strike out various paragraphs of the applicant’s “application” and “Points of Claim”; and (b) restrain the applicant from using documents or information obtained, including adducing the documents into evidence.

2. In this decision, Ms Silberstein is referred to as ‘the Lot owner’.

3. Both parties filed and served written submissions prior to the hearing of the interlocutory application.

4. The interlocutory matter was listed for hearing at the Tribunal on 28 June 2022. The hearing was conducted by telephone.

5. Mr Clark of Counsel, instructed by Dr Silberstein, Solicitor, appeared for the Lot owner. Mr Ilkovski of Counsel, instructed by Ms Coleman, appeared for the first to fifth respondents (‘the respondents’).

6. No deponent of an affidavit was required for cross examination.

Background and Procedural History

7. The dispute involves water ingress into Lot 132. The Lot owner alleges that there were water ingress issues for a number of years, leading to a significant “flooding” event in February 2020 after heavy rain. The Lot owner further alleges that water ingress continued, leading to the Lot owner and her family moving out of the Lot in March 2021.

8. The substantive proceedings have an unfortunate procedural history.

9. The application was filed on 4 February 2022. Many of the orders sought are not unusual in a dispute under the Strata Schemes Management Act 2015 (NSW) (‘the SSM Act’).

10. The orders sought include removal of strata committee members under s 238 of the SSM Act; repair of common property under ss 106/232 of the SSM Act; damages under s 106 (5)/232 of the SSM Act (including the cost of the Lot owner moving out whilst rectification works occur); and legal costs.

11. Orders regarding repairs to common property, and the cause of action under s 106 (5) of the SSM Act by a Lot owner against an owners corporation for damages by reason of breach of the owner corporation’s duty under ss 106 (1) and (2) of the SSM Act are the subject of well-established legal principles (see, for example, The Owners-Strata Plan No 80412 v Vickery [2021] NSWCATAP 98).

12. In addition to such orthodox orders; the Lot owner also sought damages in the tort of negligence against the owners corporation; the strata committee members; the strata manager; and the building manager.

13. Such alleged causes of action raise more complex legal issues regarding the jurisdiction of the Tribunal under s 232 of the SSM Act (Coscuez International Pty Ltd v The Owners-Strata Plan No 46433 [2022] NSWCATAP 147 (‘Coscuez’)); and whether, if the Tribunal does have jurisdiction, the elements of the tort (including whether their exists of a duty of care by such persons co-existent or separate to the duty of the owners corporation under s 106 (1) and (2) of the SSM Act; and whether the Lot owner was in a position of vulnerability-see Aardwolf Industries LLC v Tayeh [2020] NSWCA 301 at [55]-[56]) can be established.

14. Two large folders of documents were also filed with, or soon after, the application was filed in February 2022.

15. The applicant owns 3 Lots in the strata scheme. However, the dispute involves Lot 132 and the common property proximate to that Lot arising from water ingress issues.

16. The Lot owner is a Solicitor, and her spouse is also a Solicitor.

17. For reasons that are difficult to comprehend, a document attached to the application (which was not titled “Points of Claim”) comprising of 67 pages was filed, much of which is a narrative of events and documents that the Lot owner regards as relevant to the claim.

18. That form of a prolix ‘pleading’ does not appear to be consistent with the duty of parties and legal practitioners under s 36 (3) of the Civil and Administrative Tribunal Act 2013 (NSW) (‘the NCAT Act’) to assist the Tribunal to achieve the just, quick, cheap, and efficient resolution of the real issues in dispute.

19. As discussed previously, the Lot owner not only commenced proceedings against the owners corporation and strata committee members she sought to be disqualified from office; but also, the strata manager (Strata Choice Pty Ltd –‘Strata Choice’); and the building manager (Heckler Australia Pty Ltd-‘Heckler’). Strata Choice and Heckler were the sixth and seventh respondents.

20. The matter was listed for a directions hearing on 7 March 2022. Procedural directions were made that relevantly included the applicant being directed to file and serve a document that clearly set out the remedies sought against each of the respondents and the basis for those remedies.

21. It was also raised at that directions hearing that the respondents were seeking to (a) dismiss or strike out part or all of the proceedings; and (b) orders regarding non-disclosure of material subject to legal professional privilege. The parties seeking that proceedings be summarily dismissed against them in entirety were Strata Choice and Heckler.

22. The respondents were given until 21 April 2022 to file and serve any application (and evidence and submissions) in respect of a strike out/dismissal/privilege claim.

23. On 29 March 2022 the applicant filed Points of Claim. That document comprised of 23 pages. In respect of claims for damages, it was pleaded that the respondents owed a “duty of care in general law” (i.e., the tort of negligence) and damages were sought on the basis of this asserted cause of action in conjunction or addition to the claim for damages against the owners corporation under s 106 (5) of the SSM Act.

24. The amount of damages sought were not identified; or particularised in detail.

25. It appears the “Points of Claim” are intended to be read in conjunction with the 67-page document attached to the application, forming a type of ‘pleading’ that comprises 90 pages.

26. Again, it is difficult to envisage how such an approach is consistent with the provisions of ss 36 (1); 36 (3); and 38 (4) of the NCAT Act.

27. On 6 May 2022 the first to fifth respondents filed and served an application to strike out paragraphs of the application filed on 4 February 2022; paragraphs of the Points of Claim; and restrain the applicant from using “in any way the information or documents” over which those respondents claimed legal professional privilege.

28. On 6 May 2022 there was also a change of solicitor for the first to fifth respondents from Grace Lawyers to Gilchrist Connell.

29. The application by Strata Choice and Heckler for proceedings against them to be dismissed was set down as a separate interlocutory matter. That application was listed before Member Corley on 20 May 2022.

30. Member Corley dismissed the proceedings against Strata Choice and Heckler; and gave extensive written reasons for doing so. There is an outstanding costs application in respect of that interlocutory matter.

31. The Tribunal understands that there is currently an appeal by the Lot owner from Member Corley’s decision before the Appeal Panel of the Tribunal. That appeal is likely to be listed for hearing in September 2022.

32. In procedural directions on 01-Jun-2022 the Tribunal made clear that at the hearing for the application to strike out/dismiss and restrain the applicant there would also be procedural directions setting the matter down for hearing.

33. It is not consistent with s 36 (1) and (3) of the NCAT Act that a matter filed in early February 2022 still has not been allocated for hearing with directions for the filing and serving of evidence irrespective of the parties seeking to focus upon interlocutory disputes. The Tribunal will return to the issue of appropriate measures for the future management of the proceedings later in this decision.

34. The orders sought by the respondents in their written submissions in chief dated 2 June 2022 are that the Tribunal (a) “strike out and declare inadmissible” various paragraphs of the 67 page application and the 23 page Points of Claim; (b) “strike out and declare inadmissible” multiple pages of the 2 volumes of the applicant’s documents filed with (or soon after) the application was filed; (c) the applicant “is not permitted to use in any way the information or documents in the subject of the paragraphs referred to”; (d) in the alternative, that “the documents and paragraphs listed…be dismissed and/or permanently stayed; and/or declared inadmissible”.

Evidence of the Parties

35. The submissions relied upon by the respondents were filed and served on 2 June 2022 and 24 June 2022 (submissions in reply). The evidence relied upon by the respondents was affidavits of Mr Loveridge (strata manager of the strata scheme) dated 6 May 2022 and 27 June 2022; and affidavit of Mr O’Brien (Chairperson of the strata committee) dated 6 May 2022.

36. Mr Adamo, the Secretary of the owners corporation, did not provide an affidavit to set out relevant factual events or his state of mind when documents were created. Many of the documents in dispute involve Mr Adamo.

37. The submission relied upon by the applicant was filed and served on 22 June 2022. The evidence relied upon by the applicant was (a) email from the building manager to strata committee members dated 14 July 2021 attaching of “Scope of Works Report & Project Management-Assessment of Balcony Unit 2202 of Landlay Remedial Consultancy; (b) email of the (then) Solicitor for the owners corporation dated 9 August 2021 attaching a Scope of Works of Landlay for “Remedial Building Works-Unit 2202 Balcony Re-Waterproofing”; and (c) an affidavit of the Lot owner dated 21 June 2022 (which, with annexures, comprised 291 pages).

38. In its submissions, respondents assert that “the remedial work orders sought will likely fall away by the time of the final hearing as the first respondent and its contractors has been conducting waterproofing works in Lot 132 since about October 2021”. If that is accurate, the real issues in dispute in the proceedings will be for (a) removal of strata committee members; and (b) damages. The Lot owner has not sought an order for compulsory appointment of a strata manager under s 237 of the SSM Act.

39. The respondents’ submissions of 2 June 2022 contain a chronology of events. Those events are detailed in the affidavits of Mr Loveridge and Mr O’Brien.

40. Relevantly, on 22 March 2021 the Lot owner informed the owners corporation in a lengthy email to the strata manager that there were significant “water and mould issues” in Lot 132; that an insurance claim should be lodged; and that she would be seeking “full reimbursement of costs to date and ongoing” including the cost of relocating her family to alternative accommodation.

41. The email was sent under the letterhead of the firm of Solicitors for which the Lot owner is Practice Manager, and her husband is a Partner. A further email was sent on 27 March 2021.

42. According to Mr O’Brien, the strata committee “had discussions” and thought it was likely the Lot owner would commence litigation. At least one member of the strata committee is, or was, a lawyer.

43. In April 2021 members of the strata committee were orally told by Mr Loveridge that the Lot owner was likely to pursue litigation. The strata committee, before appointing external lawyers “relied on internal legal advice and guidance”. From the documents in dispute, it appears that Mr Adamo is the person who gave that purported “advice and guidance”.

44. In June 2021 the owners corporation engaged Grace Lawyers to provide legal advice. By that stage, the Lot owner had a firm of Solicitors acting for her (McLachlan Thorpe Partners Lawyers). Various negotiations and correspondence about the dispute occurred after June 2021. On 6 July 2021 the Lot owner’s Solicitors wrote to Grace Lawyers seeking, among other matters, that certain records of the owners corporation be produced.

45. On 31 August 2021 Mr Loveridge sought instructions to provide the Lot owner access to documents.

46. According to Mr O’Brien, the strata committee gave instructions to Mr Loveridge that documents should be provided in accordance with the obligations under the SSM Act, but not to documents covered by legal professional privilege.

47. On 3 September 2021 a general meeting of the owners corporation passed a Resolution confirming the decision of the strata committee to appoint Grace Lawyers to advise and represent the owners corporation in the dispute with the Lot owner.

48. In October 2021, the Lot owner obtained access to all documents held by the owners corporation that were electronically stored on a portal under the control of the strata manager Strata Choice. According to Mr Loveridge and Mr O’Brien, they were not aware this had occurred. According to the Lot owner, she had made a “formal written request” for access to documents under s 182 of the SSM Act by email to the strata manager Mr Loveridge on 26 August 2021 and followed this up on a number of occasions (set out in paras [23]-[29] of her affidavit dated 21 June 2022).

49. The Lot owner asserts that because she had not received a response from Mr Loveridge, she “escalated” the request to Mr Linders, the Group Managing Director of Strata Choice.

50. On 7 October 2021 the Lot owner spoke with Ms Lovie, Associate Director of Strata Choice. She was sent by Ms Lovie an email with login details to access the Strata Inspection Portal (‘the Portal’); and there was an email exchange and text message exchange between the Lot owner and Ms Lovie between 7 October 2021 and 11 October 2021, including Ms Lovie providing a copy of the “key documents” the Lot owner had been requesting.

51. In any event, it is clear that the Lot owner accessed the Portal; viewed documents; and downloaded documents that have had a bearing on what was referred to in the application and the Points of Claim.

52. In her submissions, the Lot owner has filed a “Index to Bundle” with a table of documents that are “not pressed” and the paragraphs of the Points of Claim to which those documents refer to.

Submissions of the Parties

53. The submissions of the parties are summarised as follows:

Respondents

1. The documents to which the Lot owner accessed that are referred to in the application and paragraphs of the Points of Claim to which the respondents take issue are covered by both legal advice privilege and litigation privilege under s 128 of the Evidence Act 1995 (NSW).

2. Access to the documents was given by “inadvertently” and “mistakenly” by Strata Choice, without the prior knowledge or consent of the strata committee and Mr Loveridge in circumstances where the strata committee had given specific instructions to Mr Loveridge not to disclose confidential and legally privileged documents.

3. Legal professional privilege was not waived by the applicant being given access to the Strata Inspection Portal.

4. The Lot owner, as a Solicitor, was obliged not to consider material that was disclosed in error and was obviously the subject of legal professional privilege under Rule 31 of the Australian Solicitors Conduct Rules. The Lot owner was further obliged under those Rules to notify the owners corporation that she had inspected documents and immediately return documents inspected subject to legal professional privilege to the owners corporation.

5. In respect of the powers to make the orders sought, the respondents identified ss 29; 55 and 64 of the NCAT Act.

Lot Owner

54. The Lot owner submitted:

1. The Tribunal did not have the power to make the orders sought under ss 29, 55, 64 and/or 67 of the NCAT Act. In any event, the orders sought were so extensive that even if there was a power to make the orders sought, no orders should be made. Other than on the issue of waiver of legal professional privilege, no authorities had been referred to by the respondents to support the orders sought.

2. The respondents had not identified with any precision what documents were allegedly subject to “advice privilege” under s 118 of the Evidence Act 1995 (NSW); and what documents were subject to “litigation privilege” under s 119 of the Evidence Act 1995. The onus is on the respondents to establish that documents are privileged; not the applicant to establish they are not privileged.

3. Even if the documents were subject to legal professional privilege, it had been waived by Strata Choice giving access to documents and by the owners corporation failing to assert a claim for privilege before access was given.

Respondents’ Reply Submissions

55. The respondents reply submissions are summarised as follows:

1. The Tribunal has the power to make the orders sought by reason of the power to make interlocutory decisions under s 29 of the NCAT Act.

2. It was in the interests of justice that the orders sought be made to protect the owners corporation from misuse of confidential and legal professional privileged information that the Lot owner had the benefit of improperly obtaining.

CONSIDERATION

Did the Lot Owner Have the Legal Right to Access Documents In The Manner She Did?

56. Under s 182 (1) of the SSM Act, a Lot owner may request an owners corporation to allow an inspection of documents. Under s 182 (2) the form of the request is to be by written notice given to the owners corporation and accompanied by a fee prescribed by the regulations. Section 182 (3) of the SSM Act sets out the documents that “must” be made available for inspection. The categories of documents are broad and include “any other record or document in the custody or under the control of the owners corporation”.

57. Section 183 of the SSM Act sets out the manner in which documents are to be inspected. Under s 183 (1), inspection is to be in the manner agreed by the parties, or if there is no agreement, in the manner fixed by the owners corporation. Section 183 (2) states that if no agreement is reached regarding the manner of inspection and the owners corporation determines the manner of inspection, it must give the Lot owner a written notice containing details of the manner of inspection (including time, date, and place) with a minimum notice period. Section 183 (3) states that the means for inspecting the documents may be in person; by electronic means; or any other means agreed on or fixed under the section. Section 183 (4) states that a person inspecting documents may take a copy of a document or copy of an extract of a document; but is not entitled to remove documents from the custody of the owners corporation without consent.

58. Section 188 of the SSM Act empowers the Tribunal to hear and determine disputes about access to documents under ss 182 and 183 of the SSM Act.

59. Nothing in the respondents’ evidence of submissions raised an issue that the Lot owner had not made a proper request for access to documents of the owners corporation under s 182 of the SSM Act. Further, the email exchange between the Lot owner and Mr Loveridge between 30 August 2021 and 6 October 2021 contained in her affidavit make abundantly clear that her request for documents included: “all correspondence and documents evidencing actions taken and decisions made the strata committee in relation to the works on the balconies adjacent to my apartment, including, without limitation, all exchanges between members of the strata committee regarding same”.

60. The emails of the Lot owner made clear that the request was under s 182 of the SSM Act; and referred to the penalty provision for non-compliance under s 182. In an email of 6 October 2021 to Mr Loveridge, the Lot owner complained, despite an email by Mr Loveridge on 30 August 2021 that she would be contacted by “a member of his admin team” regarding access to documents, no such contact had been made.

61. Under these circumstances, there was nothing inappropriate in the Lot owner making direct contact with Mr Loveridge’s superiors to seek access to documents to which she was entitled to access under ss 182 and 183 of the SSM Act.

62. Although Mr Loveridge was (and remains) the employee of Strata Choice with day to day conduct of management of the strata scheme, the strata management company with whom the owners corporation had a contract of strata management was Strata Choice. Nothing was raised in the evidence or submissions of the respondents that Strata Choice were acting in a manner inconsistent with their contractual obligations under the strata managing agency agreement; or in a manner inconsistent with Part 4 Divisions 1 and 2 of the SSM Act.

63. Under s 53 (1) of the SSM Act, powers delegated to a strata manager by the owners corporation, are exercised from time to time in accordance with the delegation. No issue has been raised by the respondents that holding documents and managing documents of the owners corporation by Strata Choice through the Portal was inconsistent with the delegated powers of the strata manager under the strata managing agency agreement or the SSM Act.

64. Further, there is nothing to indicate that Strata Choice were acting in a manner inconsistent with the strata managing agency agreement or the SSM Act when they gave access to the Portal to the Lot owner.

65. Rather, such a course of action is consistent with complying with the obligations imposed under ss 182 and 183 of the SSM Act. The fact that Mr Loveridge asserts in his affidavit of 27 June 2022 that he was not made aware on 7 October 2022 that access had been given to the Portal; and believed when he received an email on 8 October 2022 from his superior Ms Lovie that only the previously identified “key documents” had been provided to the Lot owner is reflective of his mistaken belief; not the legal right of the Lot owner to inspect documents.

The Claim for Privilege and the Powers of the Tribunal to Restrict the Use of Information

66. By reason of s 29 of the NCAT Act, the Tribunal only has jurisdiction where legislation gives it power. It’s powers include the power to make interlocutory and ancillary decisions in Tribunal proceedings.

67. Section 67 of the NCAT Act refers to certain types of privilege under the Evidence Act 1995 (NSW) that are inapplicable to the circumstances of this dispute. Under s 64 of the NCAT Act, the Tribunal has power to prohibit or restrict publication of disclosure of certain “confidential” information. Those powers include the prohibiting or restricting the “publication” of evidence in Tribunal proceedings and the contents of documents “lodged with the Tribunal”; and the disclosure to “some or all of the parties to the proceedings” of evidence in Tribunal proceedings or the contents of a document lodged with the Tribunal”.

68. The powers of the Tribunal under s 64 of the NCAT Act to restrict disclosure to parties of contents of documents clearly empower the Tribunal to restrict access to documents produced under Summons by reason of the documents being the subject of legal professional privilege; and adducing documentary evidence filed with the Tribunal at a hearing. However, that is not the only issue the Tribunal is dealing with in this application. The substance of the dispute in this application is an application to restrict the use of documents and information that were obtained by a party to proceedings before litigation commenced.

69. Under s 38 (1) of the NCAT Act, the Tribunal may determine its own procedure in relation to any matter for which the or the procedural rules do not otherwise make provision. Under s 38 (2) of the NCAT Act, the Tribunal is not bound by rules of evidence and may enquire into and inform itself of any matter on which it thinks fit, subject to rules of natural justice (other than in matters set out in s 38 (3), which are inapplicable to this dispute). Under s 38 (4) of the NCAT Act the Tribunal is to act with as little formality as the circumstances of the case permit, and according to equity, good conscience, and the substantial merits of the case without regard to technicalities or legal forms.

70. The power of the Tribunal to dismiss proceedings comes from s 55 (1) of the NCAT Act and Schedule 4 Clause 10 of the NCAT Act. Proceedings can be dismissed if they are frivolous; vexatious; or otherwise misconceived or lacking in substance (s 55 (1) (b) NCAT Act). Under Clause 10 of Schedule 4 of the NCAT Act, the Tribunal may dismiss or strike out proceedings in whole or part if a party is conducting the proceedings in such a way that unreasonably disadvantages another party by any conduct.

71. The “enabling” legislation under s 29 of the NCAT Act involving the substantive proceedings is the SSM Act. The Tribunal has power to make certain remedial orders if there is a “complaint” or “dispute” about a matter set out in s 232 (1) of the SSM Act. Such remedial orders include ordering persons to do or refrain from doing acts under s 241 of the SSM Act; but s 241 is to be read in conjunction with s 232.

72. However, the jurisdiction of the Tribunal under the SSM Act is not unlimited, and the ambit of its jurisdiction was the subject of detailed discussion in Coscuez International Pty Ltd v The Owners-Strata Plan No 46433 [2022] NSWCATAP 147 at [117]-[134]).

73. The Tribunal has no power to make declarations under the SSM Act (EB 9 & 10 Pty Ltd v The Owners SP 934 [2018] NSWSC 464; Walsh v The Owners Strata Plan No 10349 [2017] NSWCATAP 230); nor does it have the power to determine purely equitable causes of action (it does have the power to determine equitable defences-Steak Plains Olive Farm Pty Limited v Australian Executor Trustees Limited [2015] NSWSC 289 at [62]-[82] ). The Tribunal also has the power to make interim orders under s 231 of the SSM Act, but only if there are urgent considerations established on reasonable grounds; and only for a limited period of time.

74. Although rules of evidence do not strictly apply in the Tribunal, common law principles pertaining to legal professional privilege apply to disputes between Lot owners and the owners corporation (The Owners-Strata Plan No 2000 v Bylinska [2019] NSWCATAP 116 at [35]-[38]). There is no relevant inconsistency between common law principles and the relevant provisions of the Evidence Act 1995 (ss 118; 119; and 122 of the Evidence Act 1995 (NSW)).

75. For there to be legal professional privilege which prevents evidence from being “adduced” on objection by a client, the following principles are applicable:

1. The document or communication was confidential. Confidentiality exists where there was an express or implied obligation on the parties to the communication or document not to disclose its contents to others (State of New South Wales v Jackson [2007] NSWCA 279) .

2. It was between a client and a lawyer; or between two or more lawyers acting for a client; or was a confidential document prepared by the client, lawyer, or another person, for the dominant purpose of providing legal advice to the client (the ‘advice privilege-s 118 Evidence Act 1995 (NSW));

3. If not “advice privilege”; the confidential document or communication was made for the dominant purpose of a lawyer providing professional legal services to the client relating to existing or contemplated litigation (the ‘litigation privilege’-s 119 Evidence Act 1995 (NSW));

4. If legal professional privilege exists, it has not been waived. Waiver occurs where the client or the lawyer who is asserting privilege has acted in manner which is plainly inconsistent with the maintenance of the confidentiality that privilege is intended to protect (Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR 303; [2013] HCA 46 (‘Expense Reduction’). Waiver will not occur if the disclosure was merely “inadvertent” or “clearly mistaken” and it was clearly communicated within a reasonable period after disclosure that privilege was not waived.

5. However, the issue of waiver depends on all the relevant circumstances and is evaluative. The test is one of inconsistency between the privilege holder’s conduct and the maintenance of the privilege, not one of general fairness or relevance to an issue in the proceedings (GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266).

6. It is for the client who asserts privilege and that documents and communications not be adduced that bears the onus of proving on the balance of probabilities that legal professional privilege exists. It is insufficient for there to be a mere assertion that there is privilege. Relevant evidence will include the person who created the document or communication; or the document or communication itself may be self-evidently privileged by reason of its contents. Each matter depends on its own fact and circumstances (Kennedy v Wallace (2004) 142 FCR 185; [2004] FCAFC 337; Hastie Group Pty Ltd (in liq) v Moore [2016] NSWCA 305).

7. A “dominant purpose” is one that predominates over other purposes, being the prevailing or paramount purpose. Assessment of purpose is at the time the document or communication was created. A relevant question is whether the document or communication would have been prepared even if the suggested dominant purpose not existed (Westpac Banking Corp v 789TEN Pty Ltd (2005) 55 ACSR 519; [2005] NSWCA 321).

76. In this matter, the scope of the original dispute has been narrowed by the applicant “not relying” on many documents. The scope of the matters in dispute is set out in the Index to Applicant’s Bundle-First Respondent’s Amended Application for Strike Out and Exclusion of Privilege Material” folder of documents filed on 28 June 2022.

77. That folder sets out 17 documents that were in issue, and the paragraphs of the application and Points of Claim that the documents relate to. There are 6 documents where the applicant still seeks to rely on the document in its application and in evidence (documents at Tabs 4; 6; 7; 8; 9; and 17). There is one document where part of the document is not pressed (document 12).

78. The respondents submissions in reply assert that any concession by the Lot owner is “belated” and is critical of this purported late concession.

79. The Tribunal does not intend to make findings on the documents that the Lot owner does not press. The Tribunal regards the position of the applicant as a representation to the Tribunal that it will not refer to the documents “not pressed” in its pleadings; and not seek to tender such documents in evidence. Legal professional privilege is about documents not being adduced into evidence; it does not prevent the drawing, from events and circumstances about the knowledge of a party or witness, even if the probable source of such knowledge is a privileged communication (Mead v Mead (2007) 235 ALR 197; [2007] HCA 25 at [10]).

80. The representation made by the applicant is binding by reason of the applicant’s obligation under s 36 (3) of the NCAT Act (which such obligation extending to the applicant’s legal representatives). If the applicant seeks to depart from that position at the hearing, it will require leave of the Tribunal to do so. However, that is a matter to be appropriately dealt with at the hearing if the situation arises.

81. Further, the scope orders sought by the respondents beyond the striking out or dismissing of parts of ‘pleadings’; or that evidence not be adduced because it is the subject of legal professional privileged, is beyond jurisdiction and, even if it was within jurisdiction, is exceedingly wide and inappropriate.

82. The Tribunal has no power to impose an injunction on the applicant not to disclose information that she has become aware of; or return documents. Such orders are not “interlocutory” or “ancillary” orders under s 29 of the NCAT Act. The application by the respondents may be an interlocutory application, but what is sought is a permanent injunction. That is not an interlocutory or ancillary order. It is also not an order that falls within the ambit of ss 231; 232 and 241 of the SSM Act, because what is sought is in substance an equitable injunction about the use of documents and information rather than a “complaint” or “dispute” about a matter within s 232 (1) of the SSM Act.

83. Even if the Tribunal did have the power to make an order that a Lot owner who received information by being provided with access to documents in the Portal that was the subject of legal professional privilege not disclose the information and/or return documents; and/or never be able to use the information, the terms of such an injunctive order would be so broad; indeterminate and onerous that the Tribunal would not consider it appropriate to grant such an injunction.

84. The powers of the Tribunal in this interlocutory dispute are limited to determining whether parts of ‘pleadings’ should be struck out; and whether documents and/or confidential communications should be able to be adduced as evidence in the proceedings. However, the Tribunal points out that reference to a matter or a document in a pleading (or application) does not mean that it forms part of the evidence in the proceedings.

85. The Tribunal now deals with the documents over which are disputed. As both parties have seen the documents and referred to them in their submissions, the Tribunal will describe the relevant documents in more detail than it would have described them had the Tribunal been dealing with a legal professional privilege claim for documents produced under Summons which one party had not viewed.

Email of Mr Adamo Dated 12 July 2021 (Tab 4; p 775 of bundle)

86. As discussed, Mr Adamo is the Secretary of the strata committee of the owners corporation. He did not provide an affidavit in the proceedings explaining the circumstances in which he created documents or his state of mind when doing so. It is clear from the documents that Mr Adamo was very active in expressing his views about the Lot owner; the issues in dispute; and how the owners corporation should manage the dispute.

87. The email is addressed to Ms Bates of Grace Lawyers and is copied to the strata manager. It refers to an upcoming meeting of the strata committee; and makes comments about the Lot owner and her husband. The email does not make any reference to legal advice or anticipated litigation.

88. The Tribunal is not satisfied that the respondents have established that this document was a confidential communication created for the dominant purpose of providing legal advice or anticipated litigation. The mere fact it was sent to the owners corporation’s (then) lawyer is insufficient to establish legal professional privilege.

Emails of 20 July 2021 (Tab 6; pp 821-826 of bundle)

89. This is a series of emails regarding the owners corporation engaging Landlay Consultants to inspect Lot 132 and common property affected by water ingress and prepare a scope of works. The emails are primarily between Mr Adamo and Ms Bates, with one email from Mr Loveridge.

90. Irrespective of any dispute with the Lot owner, the owners corporation has a duty to keep and maintain common property in a reasonable state of repair under s 106 (1) and (2) of the SSM Act. An important issue is whether some of the documents have been created not for the dominant purpose of providing legal advice or anticipated litigation; but for the purpose of a strata committee taking the measures it is obliged to take under the SSM Act to ensure that the owners corporation complies with its duty under s 106 of the SSM Act. Compliance with such a duty includes engaging suitable experts to inspect common property (including, if necessary, accessing Lot property) and provide a scope of works for repairs.

91. Of the documents at Tab 6, the Tribunal is satisfied that an email of Ms Bates, Solicitor to Mr Adamo and Mr Loveridge sent at 11.50 am on 20 July 2021 (p 827 of the bundle) was created for the dominant purpose of giving legal advice, because the substance of the email clearly contains legal advice. However, the Tribunal is not satisfied that an email of Ms Bates sent to Mr Loveridge at 1.55 pm on 20 July 2021 (p 823 of the bundle) was created for the dominant purpose of providing legal advice or the dominant purpose of anticipated litigation as it does not contain any legal advice; makes no reference to anticipated litigation; and is in substance simply a comment upon the issues of water penetration and engaging Landlay to conduct an inspection.

92. The email of Mr Adamo to Mr Loveridge and Ms Bates dated 20 July 2021 sent at 7.10 pm contains comments about the owners corporation’s potential liability and makes a comment about Landlay being “formally instructed” by Grace Lawyers under the misapprehension that by doing so it would automatically cloak any reports and correspondence involving Landlay with legal professional privilege. The Tribunal is satisfied that this document was created for the dominant purpose of anticipated litigation, because the substance of the document refers to such an issue.

93. Other than the two emails at pp 821 and 827 of the bundle, the Tribunal is not satisfied that the documents contained in Tab 6 were confidential communications created for the dominant purpose of providing legal advice; or the dominant purpose of anticipated litigation.

Email of Mr Adamo dated 20 July 2021 (Tab 7; p 830 of bundle)

94. This is an email of Mr Adamo to Ms Bates and Mr Loveridge; with the email copied to strata committee members. The substance of the email is about Ms Bates responding to the Lot owners lawyers about an inspection by Landlay; and makes gratuitous comments about the “risk” of engaging Landlay expeditiously.

95. That document is not; on its face, created for the dominant purpose of providing legal advice. However, the Tribunal is satisfied that it is a confidential communication created for the dominant purpose of anticipated litigation, because it clearly refers to issues pertaining to the expectation by Mr Adamo that the legally represented Lot owner would commence litigation against the owners corporation.

Email of Ms Bates Dated 1 August 2021 (Tab 8; pp 831-833 of bundle)

96. This is an email of Ms Bates to Mr Adamo, copied to Mr Loveridge. The content of the email refers to discussions between Ms Bates and Mr Corak from Landlay; and then “next steps” to be taken by the owners corporation.

97. The Tribunal is satisfied that the document is a confidential communication created for the dominant purpose of providing legal advice. The discussion between the Solicitor engaged by the owners corporation and an expert which was then extrapolated into advice from the Solicitor to the owners corporation is clearly subject to legal professional privilege at this stage. If an expert report is served by the owners corporation of Landlay, this situation may change as discussed below.

Emails Between Mr Adamo and Ms Bates on 1 and 2 August 2021 (Tab 9; pp 834-839).

98. The email from Ms Bates dated 1 August 2021 at pp 837-839 is the same email as was contained at pp 831-833. The Tribunal has dealt with that issue.

99. At p 834 there is an email from Mr Adamo to Ms Bates with a copy to Mr Loveridge. That email makes a number of comments about “the outcome of the Landlay inspection”. Relevantly, it refers to the “liability situation” and again makes a comment about Ms Bates engaging Landlay “separately”.

100. The Tribunal is satisfied that this document was created for the dominant purpose of anticipated litigation as it is addressed to the Solicitor for the owners corporation and makes reference to anticipated litigation.

101. At p 835, there is an email from Ms Bates to Mr Adamo dated 2 August 2021, copied to Mr Loveridge. That email is brief and refers to confirming with Landlay they are sending a draft scope of works; and confirming when their final scope of works will be completed. The email asks for information regarding the “plan” of the owners corporation to engage a builder and enter into a contract with a builder.

102. The Tribunal is not satisfied that the email was created for the dominant purpose of providing legal advice to the owners corporation, as the contents of the email does not contain advice.

103. The Tribunal is not satisfied that the email was created for the dominant purpose of anticipated litigation. Its contents are consistent with a Solicitor obtaining information from a client about matters that pertain to the duty of the owners corporation under s 106 of the SSM Act, rather than any anticipated litigation of the Lot owner.

Email of Mr Loveridge to Strata Committee Members dated 20 August 2021 (Tab 12-pp 964-965 of bundle).

104. Ms Bates is not included in the email, and the contents of the email is Mr Loveridge providing information to the strata committee relevant to an upcoming meeting of the strata committee.

105. The only dispute regarding privilege is two sentences after the heading “Next Steps). The first sentence refers to Ms Bates offering to assist on certain matters.

106. The Tribunal is not satisfied those two sentences are for the dominant purpose of providing legal advice; nor for the dominant purpose of anticipated litigation. The Tribunal is not satisfied that they disclose any material that is the subject of legal professional privilege.

Email from Mr Croak (Landlay) to Ms Bates Dated 22 October 2021 (Tab 17; pp 1207-1208 of bundle)

107. This is an email from Mr Croak to Ms Bates and copied to Mr Adamo; Mr Loveridge; and the building manger. The contents of the document are what Landlay does to perform investigations and prepare a report. The email also sets out the likely cost of performing the investigations and preparing a report.

108. The mere fact the email is addressed to the Solicitor of the owners corporation is insufficient to establish legal professional privilege. The contents of the document do not satisfy the Tribunal it was a confidential communication prepared for the dominant purpose of a lawyer proving legal advice to a client; or for the dominant purpose of anticipated litigation.

Waiver of Privilege

109. Of the documents in dispute, the Tribunal has found some of the documents are subject to legal professional privilege and some documents are not.

110. Of the documents subject to legal professional privilege, the next issue is whether privilege has been waived.

111. The principles applicable to waiver of privilege have been recently and comprehensively discussed in Sunland Group Limited v Gold Coast City Council [2021] FCA 1473 at [63]-[90]. The key issue is whether the actions of the party that has a right to legal professional privilege are clearly inconsistent with the maintenance of that right. The mere fact that a documents or communications that are privileged are disclose is not, of itself, sufficient to demonstrate waiver.

112. The submissions of both parties focus on whether the facts of this matter are materially different to the circumstances of “inadvertence” or “mistake” in Expense Reduction. However, the authorities make clear that each dispute depends on its own facts.

113. The Tribunal is satisfied that the conduct of the owners corporation was not clearly inconsistent with the maintenance of legal professional privilege. The affidavit of Mr O’Brien makes clear that the owners corporation did not intend to waive any claim for legal professional privilege. The Tribunal also accepts that the senior executives of Strata Choice that the Lot owner communicated with on around 7 October 2021 (Mr Linders and Ms Lovie) did not seek instructions from the owners corporation regarding whether any documents or communications may be subject to a claim for legal professional privilege were contained in the Portal before giving access to the Lot owner.

114. The Tribunal accepts that Mr Loveridge had the opportunity to seek instructions from the owners corporation prior to access to the Portal being given; and that it would have been appropriate to put the Lot owner on notice that the owners corporation was claiming privilege over document contained in the Portal prior to inspection. Had that occurred, an application could have been made to the Tribunal under s 188 of the SSM Act.

115. There was also clearly a lack of communication between the relevant employees of Strata Choice in the immediate period prior to the link to the Portal being provided to the Lot owner.

116. As discussed earlier in this decision, there is no criticism of the Lot owner for seeking an inspection of documents under ss 182 and 183 of the SSM Act.

117. However, although Strata Choice is the strata manager of the owners corporation, the Tribunal does not adopt the view that the provision of unfettered access to the Portal by Strata Choice constitutes a waiver of privilege by the owners corporation.

118. The Lot owner asserts that the owners corporation took “5 months” to raise the issue of privilege. However, it was not until proceedings were commenced in the Tribunal and the Lot owner made reference in its application to documents that were (or arguably were) subject to legal professional privilege that it clearly became aware the Lot owner had inspected such documents. The Tribunal accepts that the owners corporation raised the issue of asserting a claim for privilege at a sufficiently early time that there was no unreasonable delay.

119. In all the relevant circumstances, the owners corporation has not waived its right to assert legal professional privilege.

120. The Tribunal makes no findings on the issue of whether the Lot owner was in breach of the Solicitors Rules. The Tribunal has no jurisdiction in respect of that issue; not does it affect the decision the Tribunal has made on the issue of legal professional privilege.

121. Finally, the Tribunal points out that its findings on documents the subject of legal professional privilege may change in the future depending upon whether any of the documents have been provided to an expert witness and form part of the material taken into account by the expert in the preparation of the expert’s report (Gillies v Downer EDI Ltd [2010] NSWSC 1323).

122. For that reason, it is possible that there will be a further dispute about whether a document currently subject to legal professional privilege be admitted into evidence. Any such dispute is appropriately dealt with at the hearing of the substantive proceedings, rather than by way of a further interlocutory dispute.

123. In addition to the provisions of s 36 (3) of the NCAT Act, the parties should also bear in mind, if they seek to participate in further interlocutory applications, the critical comments of the High Court in Expense Reduction (at [66]-[67]) about parties and legal representatives engaging in unnecessary and expensive interlocutory applications.

Conclusion

124. The Tribunal has the power under ss 38 (1) and 64 (1) (d) of the NCAT Act to rule that documents subject to legal professional privilege not be admitted into evidence at the hearing.

125. The Tribunal’s earlier reasons set out the documents which are subject to legal professional privilege and are not to be admitted into evidence.

126. No orders are made in respect of the other documents that the Lot owner has represented it does not seek to adduce in evidence.

127. For reasons set out earlier, the Tribunal does not make any injunctive orders that the Lot owner return documents or is restrained from using documents that were accessed in the Portal.

128. In respect of paragraphs in the application and the Points of Claim, the Tribunal also has the power under s 38 (1) of the NCAT Act to order that such paragraphs be struck out in whole or part to the extent that they specifically make reference to material that is subject to legal professional privilege. It does not have to be satisfied of the matters under s 55 of the NCAT Act, nor that the use of such material causes unreasonable disadvantage under Clause 10 of Schedule 4 of the NCAT Act. However, reference to material in a 67-page narrative to the application and Points of Claim arguably falls within Clause 10 of Schedule 4 of the NCAT Act in any event.

129. Rather than ordering that parts of the application and Points of Claim be struck out, the Tribunal is of the view that the appropriate course of action is for the Tribunal to order that the applicant file and serve Amended Points of Claim.

130. The Tribunal is of the view that the manner in which the applicant has set out a 67 page narrative application and an additional 23 page Points of Claim setting out the remedies sought is not consistent with the just, quick and cheap resolution of the real issues in dispute; nor does it accord with the duty of the Tribunal under s 38 (4) of the NCAT Act to conduct proceedings with as little formality as the circumstances of the case permit, and according to equity, good conscience, and without regard to technicalities or legal forms.

131. The Tribunal acknowledges that there was a previous direction of the Tribunal by Robertson SM for the applicant to file and serve a document identifying the remedies sought. However, it is appropriate in the circumstances that a single Amended Points of Claim be filed and served that sets out both the cause of action relied upon and the remedies in a single concise document.

132. The Tribunal is satisfied that the appropriate order is for the applicant to file and serve Amended Points of Claim that sets out in a concise manner:

1. The material facts asserted.

2. The causes of action relied upon (including the relevant provisions of the SSM Act relied upon).

3. Gives particulars of the alleged breaches.

4. Identifies the remedies sought.

5. Particularises any claim for damages (including either quantifying what damages are sought or indicating when that will be quantified

6. Does not make reference to documents or communications that have been determined in this decision to be the subject of legal professional privilege or which the applicant has represented in this interlocutory application that it does not rely on.

133. The Amended Points of Claim are to be filed with the Tribunal and served on the other parties, in person or by post, by 14 days from the date of this decision.

134. As discussed previously, at the interlocutory hearing on 28 June 2022 the Tribunal indicated it would make procedural directions setting the matter down for hearing. On reflection, it is more efficient for the matter to be listed for a further directions hearing at a date to be allocated by the Tribunal Registry. That directions hearing is to be before a Principal Member or Senior Member of the Tribunal.

135. At that directions hearing, the parties are to anticipate that the Tribunal will likely:

1. Make procedural directions including the filing and serving of Points of Defence; and lay and expert evidence.

2. Set the matter down for a final hearing.

3. If any party asserts that the appeal from Member Corley’s decision should delay the matter being set down for final hearing, they can raise this at the directions hearing.

136. A further matter for consideration at the directions hearing is whether an order should be made under s 37 of the NCAT Act directing the parties to attend a mediation, or other form of alternative dispute resolution.

The Issue of Costs

137. Both parties have had success on various issues in this interlocutory application. No costs orders are made at this stage. Any costs application arising from this interlocutory application may be raised and will be considered at the conclusion of the substantive proceedings.

138. In respect of the costs application arsing from the decision of Member Corley, that is a matter that needs to be dealt with irrespective of whether the decision is on appeal (LMA Contractors Limited v Changizi [2017] NSWCATAP 145 at [17]-[20]). That costs application is to be referred to Member Corley in accordance with the orders of 24 May 2022.

ORDERS

1. The applicant is to file with the Tribunal and serve on the respondents, by person or by post, Amended Points of Claim by 14 days from the date of this decision.

2. Unless the Tribunal otherwise orders at the hearing of the substantive proceedings, the documents in this decision found to be the subject of legal professional privilege or otherwise not pressed by the applicant may not be adduced as evidence.

3. The application for interlocutory orders is otherwise dismissed.

4. The matter is to be listed for a directions hearing at a date to be allocated by the Tribunal Registry before a Principal Member or Senior Member.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 30 August 2022