When can a body corporate withhold access to records?
30 Jan 2019
This article first appeared on the Smart Strata website.
Section 205 of the Body Corporate and Community Management Act 1997 (the Act) requires a body corporate to provide body corporate’s records within seven days after receiving:
- a written request from an ‘interested person’; and
- the fee prescribed under the regulation module applying to the scheme.
An ‘interested person’ includes an owner, buyer or their agent, or anyone else with a proper interest in the information.
Similarly, the regulation modules provide for committee members to have ‘reasonable access’ to body corporate records without the payment of a fee.
The only legislative restrictions on the requirements to provide access to records (to those that are entitled to it) include:
- defamatory material; and
- relate to legal professional privilege.
Section 205(3) of the Act provides that the body corporate is not required to allow a person to see records if the body corporate ‘reasonably believes’ the record contains defamatory material.
Defamatory material is something that will injure another person’s reputation or brings them into hatred, contempt, or ridicule.
If the withholding of material is disputed, the body corporate would need to demonstrate the reasonable belief that it is defamatory by:
- specifically identifying which material or documents it believes to be defamatory; and
- providing some evidence (such as legal advice or other expert evidence) to support their ‘reasonable belief’ that the particular material is defamatory.
Legal professional privilege
The principle of ‘legal professional privilege’ is that the client of a lawyer should be able to withhold access to documents which are confidential lawyer-client communications.
Although an individual owner will, through their levies, contribute to the cost of legal advice obtained by the body corporate, individual owners are not a client of the solicitor in their own right. A body corporate is a legal entity that is separate and distinct from the owners.
For this reason, a body corporate has the same right to privilege as any other legal client and is entitled under common law (judge-made law) to withhold records that are subject to ‘legal professional privilege’ even from owners in the body corporate.
Legal professional privilege applies to lawyer-client communications and documents that are created for the dominant purpose of obtaining or providing legal advice or conducting actual or contemplated litigation.
A body corporate is not required to withhold privileged documents and can choose to disclose the information. Usually it is a decision for the committee and their legal counsel whether it is appropriate to claim privilege.
In summary, when considering any records request, the body corporate should consider:
- does the person have a right to access the information – is this a potential buyer, tenant, lot owner, committee member?
- has the person has made a written request – a request from a non-committee member must be in writing.
- has the person paid the required fee – a request from a non-committee member must be accompanied by the prescribed fee.
- is the information sought a body corporate record – this really does extend to anything the body corporate has received or sent?
- does the record contain defamatory material (for example, false statements criticising a person)?
- is the record is protected by legal professional privilege (for example, confidential communications between a body corporate and a legal adviser).
Ideally, the body corporate (usually by their manager) should have in place a system to categorise material when it arrives to confirm whether any of it could be privileged or defamatory and, if it is, that it is not simply openly placed in the body corporate records.
If you find yourself stuck on any of the above points, give us a call and we can help.