MINISTER OF EDUCATION v H CONSTRUCTION NORTH ISLAND LIMITED (formerly known as HAWKINS CONSTRUCTION NORTH ISLAND LIMITED) [2018] NZHC 20

MINISTER OF EDUCATION v H CONSTRUCTION NORTH ISLAND LIMITED (formerly known asHAWKINS CONSTRUCTION NORTH ISLAND LIMITED) [2018] NZHC 20 [26 January 2018]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2013-404-1504[2018] NZHC 20IN THE MATTER OF the Botany Downs Secondary CollegeBETWEEN MINISTER OF EDUCATIONFirst PlaintiffSECRETARY OF EDUCATION'Second PlaintiffBOARD OF TRUSTEES OF THEBOTANY DOWNS SECONDARYCOLLEGEThird PlaintiffAND H CONSTRUCTION NORTH ISLANDLIMITED (formerly known as HAWKINSCONSTRUCTION NORTH ISLANDLIMITED)DefendantHearing: 14 December 2017Appearances: M Davies and W Potter for the PlaintiffsA Skelton and M Broad for the DefendantJudgment: 26 January 2018JUDGMENT OF ASSOCIATE JUDGE R M BELLThis judgment was delivered by me on 2017 at am/pmpursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors: Meredith Connell, Auckland, for the plaintiffsKensington Swan, Auckland and Wellington, for the DefendantCounsel: Andrew Skelton, Wellington for the Defendant[1] This judgment is on the defendant's application heard on 14 December 2017for further discovery and challenging privilege claimed by the plaintiff. On20 December 2017 I gave a minute giving the results but without reasons. I now givereasons. That comes with a qualification. In some cases on further consideration Ican no longer support the results. Rather than give bad reasons or no reasons, I havechanged my decision.[2] The defendant's application of 31 October 2017 sought these orders:(a) further discovery by the plaintiffs;(b) setting aside the plaintiffs' claim for privilege in some discovereddocuments;(c) requiring the plaintiffs to file an amended reply to the statement ofdefence; and(d) leave to file and serve a counterclaim.[3] The first hearing was on 24 November 2017.1 At the parties' request, I did notdeal with the application for further discovery or the defendant's challenge to privilegeclaimed for a report by Babbage Consultants Ltd dated 18 December 2009. I directedthe hearing of 14 December to deal with the matters not addressed on 24 November2017. The scope of the defendant's application for further discovery has narrowed. Ithas also added to the documents for which it challenges privilege. The plaintiffs filedtwo further affidavits in opposition.Discovery so far[4] In May 2015 the parties agreed on standard discovery. Since then no-one hasapplied for discovery on a different basis. The plaintiffs filed their first affidavit ofdocuments on 1 December 2015. It runs for 99 pages and lists about 1,700 documents.1 I gave a decision on 15 December 2017: Minister of Education v H Construction North Island Ltd[2017] NZHC 3147.They filed a supplementary affidavit in September 2016 listing about 60 documents.They filed a second supplementary affidavit of documents on 9 November 2017. It is72 pages long, and lists a further 1,100 documents. Some of those documents onlybecame discoverable because of fresh affirmative defences recently pleaded by thedefendant. The plaintiffs filed a third supplementary affidavit of documents on1 December 2017. It is about 16 pages long and lists about another 150 documents.It was intended to address at least some of the matters the defendant raised in itsapplication of 31 October. For good measure the plaintiffs filed a fourthsupplementary affidavit of documents on 21 December with about 120 moredocuments.The application for further discovery[5] The defendant applies under r 8.19 of the High Court Rules. In Assa AbloyNew Zealand Ltd v Allegion (New Zealand) Ltd, Asher J stated a four-stage approachfor r 8.19 applications:2(a) Are the documents sought relevant? And if so, how important will theybe?(b) Are there grounds for belief that the documents sought exist? This willoften be a matter of inference. How strong is that evidence?(c) Is discovery proportionate, assessing proportionality in accordancewith part 1 of the discovery checklist in the High Court Rules?(d) Weighing and balancing these matters, in the court's discretionapplying r 8.19, is an order appropriate?Asher J's test helpfully identifies the issues in an application under r 8.19 but for thiscase it is not necessary to work through each stage.2 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760 at [14].[6] A party required to make discovery is required to disclose documents only ifthey are relevant to an issue in the proceeding. The pleadings set the bounds ofdiscovery. In assessing relevance, the case of the party seeking discovery is assumedto be true, not the case of the party required to make discovery. Under standarddiscovery, documents are to be disclosed if they or the information in them are capableof being used in evidence, either because they support the case of the party makingdiscovery or of any other party, or because they are adverse to the case of thediscovering party or any other party. That does not mean that the documents will bebound to be used in the hearing. Under the standard discovery test it is not necessaryto disclose documents which are only part of the background nor documents whichmay lead to a train of inquiry enabling a party to advance his own case or to damagethat of his opponent. Generally, documents which are to be used only to attack thecredibility of another party's witnesses are not ordered to be disclosed.[7] The further discovery sought in the application of 31 October 2017 fell intofour general groups:(a) Maintenance documents;(b) contract documents;(c) building reports; and(d) documents about proposed remedial work.[8] The defendant now says that the plaintiffs have not made complete discoveryof documents under these heads in its application:A documents relating to the maintenance and upkeep of Botany DownsSecondary College;B the ministry's policies and procedures in relation to maintenance of thiscollege and schools generally and any reviews of such policies andprocedures of this school or schools generally; andG documents referred to by the ministry's head of infrastructure servicereported in an article in the New Zealand Herald.[9] The basis for seeking discovery of maintenance documents is the defendant'scontributory negligence defence. Its statement of defence of 16 October 2017 says:119. To the extent that there are defects and the plaintiffs have suffereddamage and loss (which is denied), then the defendant relies on s 3 ofthe Contributory Negligence Act 1947 and says that such damage andloss has been suffered by the plaintiffs as a result of partly the fault ofone or more of the plaintiffs as is set out I the following paragraphs:Maintenance120. The plaintiffs needed to undertake the maintenance obligations set outin schedule 2.121. The first and second plaintiffs have not implemented an effectivepolicy or régime or funding for ensuring that such maintenance wasimplemented.122. The plaintiffs, and in particular the third plaintiff, have notimplemented the maintenance obligations set out in Schedule 2.124. Any damages recoverable by the plaintiffs should be reduced to suchextent that the court thinks just and equitable having regard to theplaintiffs' share in the responsibility for the damage.[10] Schedule 2 of the statement of defence lists some of the defects alleged by theplaintiffs, states the alleged cause, sets out standard maintenance required for that partof a building and adds other comments. As an example, one defect is "Poorly formedroof to tilt-slab junctions". The cause is "inadequate flashing construction and poorapplication of sealant". The standard maintenance is:Inspect joints a minimum of annually:Check sealants and flashings for bond to adjacent surfaces and/ordeterioration;Arrange for any defective sealants to be replaced[11] For documents under A, the defendant says that the plaintiffs, especially theschool, have not disclosed any condition assessment reports apart from one dated 1May 2013, any annual reviews of ten-year property plans, any documents as to theprocurement of a project manager, including any review of the performance of aproject manager, and no records of work carried out by the school's caretaker.[12] Condition assessment reports are said to be required under the Ministry ofEducation's property occupancy document, under which the ministry sets terms andconditions for state schools to occupy school properties and buildings.3 Among theterms the school board is responsible for maintenance. The board must engage aproperty manager to carry out, or review and certify, a condition assessment of theschool buildings and facilities before preparing, or reviewing and certifying, a ten-year property plan. The condition assessment report must be updated every five years.The defendant also refers to a statement of evidence of a ministry official that ten-yearproperty plans, which include all maintenance and capital property planningrequirements for a school over ten years, must be reviewed annually. It also refers toanother part of the property occupancy document that requires the school board toappoint a project manager for all work on school buildings and to follow a contestableprocurement process in appointing the manager.[13] The plaintiffs' answer is simple and unsurprising. They have checked againfor these documents but have not found any. They accept that at trial the defendantmay criticise their performance of their maintenance responsibilities because of thisapparent lack of paper work, but they cannot now produce those documents. In thecircumstances where the plaintiffs have clearly gone to many efforts to finddocuments, I accept that they do not have them and therefore cannot order them todisclose what they do not have.[14] But there is another aspect. I query the relevance of the documents. They areremote from the matters to be proved for the contributory negligence defence. Thedefendant has pleaded that damage arising from some defects is attributable also topoor maintenance by the school. It has pleaded objective maintenance standards thatare independent of any obligations a school has to meet under the education legislationand any requirements imposed by the ministry. Its case will be that any school wouldlook after its buildings according to those objective standards, and that the damage3 The statutory basis is the Education Act 1989, s 70 (now repealed by the Education (Update)Amendment Act 2017, s 45).alleged would not have occurred or would be reduced if the school had followed themaintenance standards it contends for. No doubt it will try to prove its case bycircumstantial evidence.4 It will not be able to prove the school did not follow themaintenance standards directly but will say that it can be inferred from the nature andextent of the damage. Its case is likely to focus on the actual damage alleged, thecauses of the damage and proving its maintenance standards.[15] Given that case, it will not have to try very hard to show that a school isrequired to maintain its buildings. The point is probably self-evident, but the plaintiffsalready accept it and documents such as the property occupancy document recogniseit anyway, as does a statement of evidence of a ministry official. Because they arepublic bodies the ministry and the school take bureaucratic measures – policies,directives, guidelines, reviews, audits and reports – to document and review theirperformance, including in property maintenance. While those are desirable for theself-management of schools and departmental oversight of education, completedisclosure of all the paperwork associated with property maintenance adds little ifanything to what must be considered for the contributory negligence defence. Supposethat the school and the ministry kept immaculate records of condition assessmentreports and annual reviews, whatever the content of those reports (showing no mattersfor attention or otherwise), it would make no difference to the defendant's case oncircumstantial evidence. Likewise scanty records will not doom the plaintiffs if thedefendant cannot make out its case for inferred negligence.[16] In the hearing I asked why the defendant had not disclosed all its paperworkfor quality assurance and avoiding building defects - awareness of water ingress risks,staff training, contractor selection and monitoring, and the like - if it was arguing theplaintiffs should make comparable disclosure. The response was that the plaintiffs'pleadings had not put the defendant's quality assurance measures in issue. The pointhere is that like most plaintiffs in building defects cases, the plaintiffs here have notbothered going down these rabbit holes. They intend to prove their case withoutexhaustively examining the defendant's paperwork on quality assurance. They willrely on proof of defects caused by the defendant during construction. Just as plaintiffs4 See Helicopter Finance Ltd v Tokoeka Properties Ltd [2012] NZHC 686 at [21]-[22] for the useof circumstantial evidence to prove negligence.do not need to pursue defendants' paperwork on quality assurance, defendants runninga contributory negligence defence based on poor maintenance do not need to inspecthigh-level documents about property management. The absurdity of the defendant'squest became clear when it sought disclosure of documents about the appointment ofproject managers. Any inquiry into the processes used to select a project manager isa waste of time. Aside from accepting that the plaintiffs do not have the documentssought by the defendant, I reject the request as being no more than "line of inquiry"relevant under the Peruvian Guano test, or, if there were some greater relevance, asdisproportionate.[17] The defendant says that the school has not disclosed a caretaker's log or recordof maintenance work. It notes from its search of the ministry's website that there is astandard maintenance assessment form and caretaker checklist. It also refers to anemail of March 2011 by a property manager at the school which refers to addinginformation to "Tasktracker".[18] The ministry's project manager has followed up on this. The property manageris no longer with the school. The school no longer uses the software system,Tasktracker, and has no record of it. She has contacted the property manager and askedher to access any historical documents regarding the school, but she is not confidentthat the manager would be able to do so over the summer break. In an earlier affidavitof 14 November 2017 she said all documents recording maintenance in the control ofthe school and the ministry had been disclosed.[19] Records of actual maintenance work by the school are relevant to thecontributory negligence defence. I accept the plaintiffs' case that while searches andinquiries have been made, there are no more documents to be disclosed under thishead. I also accept that a template for a caretaking checklist on the ministry websitedoes not give cause to disbelieve the plaintiffs that the school has not used that form.Therefore I make no order for a further affidavit as to this class of documents. At thesame time I note that at trial the defendant may be able to submit that inferences maybe drawn from the absence of such documents.[20] Documents under B are the Ministry's policies and procedures in relation tomaintenance of this college and schools generally and any reviews of such policiesand procedures of this school or schools generally. The defendant relies on paragraph121 of its statement of defence for the relevance of these documents. It says that theministry has discovered some general policy documents and checklists, but no internalor external reviews on the adequacy of the policies. The ministry's project managersays that the property occupancy document sets out the ministry's policy onmaintenance requirements and has been discovered. She does not specifically say thatthe ministry does not have further documents about school maintenance in its control.I assume that there may be.[21] Even so, I do not order further discovery under this head. The propertyoccupancy document makes it clear that the school, not the ministry, is responsible forproperty maintenance. The school funds maintenance from its operations grantprovided by the ministry, along with other expenditure to run the school. The ministrydoes not carry out maintenance. Given that the contributory negligence defence isabout lack of maintenance by the school causing or exacerbating damage in relationto specific defects, ministry policy documents are peripheral. They are not relevantunder the adverse documents test and it would in any event be disproportionate torequire them to be disclosed. Paragraph 121 of the statement of defence does not makethem relevant because that pleading is misguided. It is disproportionate to requirediscovery for pleaded issues that can never succeed at trial.[22] For documents under G, the defendant refers to an article in the New ZealandHerald of 17 August 2017 headed, "Repair plans for leaky school buildings cut backdramatically." The article reports that the ministry estimates that just over 1,000school buildings have leaks that need attention and that many can be fixed withcheaper, targeted repairs instead of a full reclad. The head of the educationinfrastructure service is quoted as saying that a comprehensive review of workcompleted over the past six years showed that in many cases most of the building workand associated spending was not well targeted. Any defendant in a leaky building casefaced with a huge claim based on full costs of a reclad will always be interested indocuments in the control of a plaintiff which might weaken the case for the scope ofremedial work. This defendant is suspicious that the plaintiffs do not intend to goahead with the remedial work, the basis for the greater part of their damages claim.[23] In response the ministry's project manager says that the review in the articlewas a pilot project that excluded any buildings that are the subject of legal proceedings,including Botany Downs Secondary College. She refers to a weathertightnessbulletin, discovered in the third supplementary affidavit of documents, which explainsthat schools involved in litigation are treated on a case by case basis. The plaintiffsalso note that the defendant has not pursued another part of its discovery application(F) under which it sought disclosure all documents relating to proposed remedial work(including budgets, planning for the works, engagement of consultants, ten-yearproperty plans). The plaintiffs have apparently not disclosed such documents and thedefendant no longer contends that there are documents under this head to be inspected.[24] The review documents referred to in the Herald article are not relevant underthe adverse documents test. They are high level documents that do not dealspecifically with this school. While the scope of remedial work is properly in issue,that will turn on evidence from qualified witnesses as to what is required for thisschool. Those experts can be expected to be familiar with any technical literature onrepairing distressed leaky buildings. The review documents are not part of thattechnical literature. While they might have come in under a line of inquiry test, suchpolicy documents will not assist in deciding the scope of repair in this case.[25] For the reasons given, I am satisfied that no orders for further discovery arerequired. The plaintiffs are not required to file another affidavit of documents.The continuation of the application under r 8.25[26] In my decision of 15 December 2017 I gave privilege rulings on documentsdating from September 2012 to July 2014. I found that they were subject to litigationprivilege, which had not been waived. There were no other privilege claims. Thistime the documents are in two periods: August 2008 to January 2010, and January2012 to October 2012. In the first period settlement negotiations privilege is also inissue. Litigation privilege is in issue in both periods. As before, I was provided withcopies of the documents for inspection. The defendant already had some, havingreceived them on a without prejudice basis. Where the defendant has receiveddocuments already, the question is not whether the defendant can inspect them butwhether it can use them at the hearing. All the documents in this part of the decisiondeal with Stage 1 buildings, the gym and performing arts centre.The first period[27] The first period came to an end long before the start of this proceeding in March2013. The plaintiffs had not instructed their lawyers. They knew that there weredefects in the buildings in Stage 1. They tried to resolve the problems by instructingexperts, Babbage Consultants Ltd, to investigate the defects and by negotiating withthe defendant and with the architect. This can be seen in minutes of four meetingsprepared by Babbage dated 21 January 2009, 19 February 2009, 9 September 2009and 13 January 2010. While officials from the ministry did not attend the meetings,they were on the distribution lists for the minutes. Babbage represented the ministry'sinterests in the discussions with the defendant and the architect.[28] The defendant accepts that the first two meetings are subject to settlementnegotiation privilege under s 57 of the Evidence Act 2006. It could hardly dootherwise. The minutes identify them as without prejudice meetings. Their purposewas to agree causes and settle on a way forward. Legal proceedings were referred toas an alternative to a negotiated solution in the meeting of 21 January 2009. Thesecond meeting discussed defects. Its purpose was to "agree on what we can agreeand present further information collated since the last meeting and the site inspection".The minutes record discussion of defects, with varying acceptance of responsibilityby the architect and the defendant.[29] The defendant does not however accept that settlement negotiation privilegeapplies to the minutes of 9 September 2009 and 13 January 2010. The minutes are notsaid to be without prejudice. That of course is not determinative.5 Communications5 NZ Institute of Chartered Accountants v Clarke [2009] 3 NZLR 264 (HC) at [45], citing SouthShropshire District Council v Amos [1986] 1 WLR 1271 (CA), Buckinghamshire County Councilv Moran [1990] Ch 623 9CA), Telecom New Zealand Ltd v Sintel-Com Ltd [2007] NZCA 499,[2008] 1 NZLR 780.that start on a without prejudice basis may continue as such even if each is not solabelled. The content of the minutes is consistent with earlier discussions – to exploredefects further and share information with a view to reviewing potential solutions. Ifind the third and fourth meetings were part of a settlement process, which did notinvolve lawyers but which sought to resolve disputes as to building and design defectsby investigation, reporting and looking for agreed remedial steps. They were intendedto be confidential.[30] Both sides have copies of these minutes. It is unlikely that the minutes wouldbe used in evidence. The last two minutes do not show any admissions by thedefendant that the plaintiffs might wish to use in evidence against it. Instead thefinding of settlement negotiation privilege for communications between the partiesduring the first period sets the context for considering privilege claims for otherdocuments.[31] The plaintiffs claim litigation privilege for documents prepared in this period.Litigation privilege applies when the dominant purpose in making a document ispreparing for a proceeding. The defendant relevantly cited Guardian Royal ExchangeAssurance of New Zealand Ltd v Stuart.6 The minutes of the first meeting show thatthe ministry's representatives did have legal proceedings in mind as a possible courseif a satisfactory outcome could not be negotiated. But that prospect had second placeto the settlement process. The purpose of investigating defects and reporting on themwith a view to working out agreed solutions was primary. In some cases reports ofinvestigations of defects may have an inseparable duality of purpose – both settlementand litigation.7 But when the ministry had not instructed its lawyers and went througha separate process of gathering evidence for this proceeding in 2012, it is harder forthe plaintiffs to say that litigation was the dominant purpose of documents in the firstperiod.[32] Now for the documents.6 Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart [1985] 1 NZLR 596 (CA).7 Just as I found such duality of purpose in my decision of 15 December 2017, Minister of Educationv H Construction North Island Ltd [2017] NZHC 3147 at [18].BDS.SUPP.05.003 Babbage engagement letter of 28 August 2008[33] This is a letter from Babbage Consultants Ltd to a ministry official setting outits terms of engagement, including scope of services, which were to include workingwith original contractors and design teams. Babbage was to meet relevant parties,assess documentation, make intrusive inspections, take samples and arrange analysis,prepare an assessment report, which would include a liability assessment. The letter isno more than background to Babbage becoming involved in the settlement process.Under the adverse documents test it is not relevant to any of the substantive issues. Aparty's contractual arrangements with its consultants are peripheral. The document isnot relevant and did not need to be disclosed. For another case where the ministryneedlessly disclosed irrelevant documents in a leaky school proceeding, see Ministerof Education v IT Architects Ltd.8 The argument came up only because the plaintiffsclaimed privilege for the letter. In my minute of 20 December I said that litigationprivilege applied. On further reflection the letter can be seen as part of the engagementfor the settlement process with litigation a more distant prospect. All the same, theletter does not need to be disclosed.Babbage minutes of meetings of 21 January 2009, 19 February 2009, 9 September2009 and 13 January 2010[34] All the minutes are subject to settlement negotiation privilege under s 57 of theEvidence Act. That is for the reasons given above. The third and fourth minutes donot seem relevant under the adverse documents test for any substantive issue.BDS.01.1621 – report by Babbage Consultants Ltd dated 20 July 2009[35] This is called a defect diagnosis report. The front page of the report says,"Legally privileged". The stated reason for the report is to verify potentialresponsibility for defective materials, design and workmanship. It was produced onlyfor the use of the ministry, the school board and their lawyers. It includes a table ofdefects, associated damage and relevant breaches of the Building Code. Another table8 Minister of Education v IT Architects Ltd [2014] NZHC 1541.lists parties likely responsible at different stages – design, construction, practicalcompletion and remedial works. The defendant has not seen the report.[36] In my minute of 20 December 2017 I said that the report was not subject tolitigation or settlement negotiation privilege. I confirm my finding as to litigationprivilege, as court proceedings were not the dominant purpose of the report. Theywere secondary only. Instead the report was prepared for the settlement process.Babbage prepared the report after the "without prejudice" meetings of early 2009 andbefore the meeting at the end of the year. It dealt with matters in dispute with thearchitect and the defendant. It was intended to inform the ministry and the school ofdefects and those responsible for them to assist in negotiating a settlement. The reportwas confidential – its circulation was restricted to the ministry, the school and legaladvisers. The defendant did not receive a copy.[37] My rejection of settlement negotiation privilege was mistaken. I overlooked s57(2) of the Evidence Act:A person who is a party to a dispute of a kind for which relief may be given ina civil proceeding has a privilege in respect of a confidential document thatthe person has prepared, or caused to be prepared, in connection with anattempt to mediate the dispute or to negotiate a settlement of the dispute.The report clearly comes within the section and is therefore subject to that privilege.[38] The defendant runs a waiver argument based on the minutes of the meeting of9 September 2009, which include this:DC (a Babbage representative) confirmed that the non-intrusive inspectionreport would be supplied for those who request a copy for review with priorapproval of the MOE.[39] That is not a waiver of privilege for these reasons:(a) Any supply of the report was subject to the approval of the ministry,but there is no evidence that it consented to disclosure;(b) The time for any disclosure of the report was during the settlementprocess. As that failed, the defendant can hardly ask for documentsafterwards, when it did not request them when the parties wereexploring out of court resolution. It can no longer say that it is entitledto the report for the purpose for which it was prepared.BDS.SUPP.0056 – Babbage Consultants report of December 2009[40] This is also called a defect diagnosis report and is said to be legally privileged.It is much longer than the July report. It was made after intrusive investigations. Itwas forecast in the minutes of 9 September 2009. The purpose of that meeting was to"explore and agree ways forward in relation to investigation and furthering anintrusive understanding of the defects cause and effect." It goes through defects andmakes recommendations as to the scope of remedial work. It suggests that many ofthe deficiencies were systematic rather than isolated. The defendant has a copy,received in the settlement process.[41] As with the July report I find that the document is not subject to litigationprivilege because the dominant purpose test is not satisfied. The defendant says thatthe report is not subject to settlement negotiation privilege because it says that by late2009 when it received the report the parties were no longer discussing settlement. Ido not accept that for the reasons given above as to the settlement process continuinginto 2010. Privilege under s 57 applies. While the defendant received the report, thatwas on a "without prejudice" basis which bars it from using it in evidence at thehearing.The second periodBOT.01.003 – Sinclair Knight Merz report of 26 January 2012[42] In the period January 2012 to October 2012 the plaintiffs claim only litigationprivilege. In my decision of 15 December 2017 I found that the ministry apprehendedlitigation at least from September 2012.9 Here it is necessary to consider the start of2012. Sinclair Knight Merz, consulting engineers, reported to ministry officials on aninvestigation of water intrusion into the school's gym and performing arts centre9 Minister of Education v H Construction North Island Ltd [2017] NZHC 3147 at [14].during rain. The report found that Building Code requirements had not been met andrecommended remedial work with estimated costs. By way of disclaimer, it noted thatAlexander & Co had been commissioned to carry out a water tightness survey of thegym but the report does not allow for comments that come from Alexander & Co'sinvestigation. The report does not state expressly that it is prepared for legalproceedings or is legally privileged.[43] The defendant puts the plaintiffs to proof on litigation privilege. It has notadduced any evidence of its own. The two main questions under s 56 of the EvidenceAct are dominant purpose and apprehension of a proceeding. Because of the evidenceof the ministry's project manager I find that both are satisfied. She says that she tookover responsibility for the school's claim in early 2012. While there had beennegotiations with the defendant, they had stalled. She considered that there waspotentially a substantial legal claim against the defendant. She instructed Alexander& Co to give reports on the Stage 1 buildings to provide information to prepareproceedings. I have already held that the Alexander & Co reports are subject tolitigation privilege. The Sinclair Knight Merz report shows that Alexander & Co hadalready been instructed by January 2012. Accordingly the plaintiffs apprehendedlitigation at least from then.[44] As to the purpose of the Sinclair Knight Merz report, this is one of those dualityof purpose cases, similar to Re High Grade Traders10 and Carter Holt Harvey Ltd vGenesis Power Ltd.11 While both Alexander & Co and Sinclair Knight Merz reportsidentified defects and dealt with remedial works, that advice was required for theplanned proceeding. That satisfies the purpose test. It would be odd to say thatlitigation privilege applies to the Alexander & Co reports but not to the Sinclair KnightMerz report when they were commissioned at the same time and for the same purpose.[45] The remaining documents are from October 2012, when litigation wasapprehended. They all have something to do with preparing for the proceeding startedin March 2013, but not all of them are relevant under the adverse documents test.10 Re High Grade Traders [1984] BCLC 151 (CA) at 173- 174.11 Carter Holt Harvey Ltd v Genesis Power Ltd (No.7) HC Auckland CIV-2001-404-1974, 6 May2008 at [29].BDS.01.1629 – email from Ministry to the school of 10 October 2012[46] In this email a ministry official tries to set up a meeting with Mr Leach at theschool to discuss information he may be able to give. Records of steps taken to obtainevidence are not relevant under the adverse documents test.BDS.01.1634[47] This shows two emails dated 5 October and 11 October 2012 between theministry and Mr Leach asking for information. It is similarly not relevant.BDS.01.1631 email chain of October 2012[48] This email chain shows some of the emails in BDS.01.1634 but includes twofurther emails. One of them is an email dated 11 October 2012 from Mr Ian Marshall(no longer with the school) giving information as to the defendant's performancewhich could be used in evidence. It is part of the evidence-gathering for thisproceeding and is subject to litigation privilege. The other emails are irrelevant.BDS.01.1630 – email chain of 11 October 2012[49] This chain of three emails between the ministry and the school deals withgathering information for the proceeding, but the content of the emails and the emailsthemselves could not be used in evidence. They are not relevant.BDS.01.1635 – email of 11 October 2012[50] The issue here is whether the plaintiffs have waived privilege. The email fromMr Marshall to the school dated 11 October 2012 has information that could be usedin evidence. It is part of the plaintiffs' evidence gathering for the proceeding. It wouldordinarily be subject to litigation privilege. The defendant however says that theplaintiffs have waived privilege because the same document was included in the opensection of an affidavit of documents as BDS.01.1633. The plaintiffs say that was amistake.[51] Section 65(4) of the Evidence Act says:A person who has a privilege in respect of a communication, information,opinion, or document that has been disclosed to another person does not waivethe privilege if the disclosure occurred involuntarily or mistakenly orotherwise without the consent of the person who has the privilege.In Body Corporate 191561 v Argent House Ltd Asher J discussed the subsection:12Involuntary disclosure[38] The word "involuntarily" is not defined in the Act. The concept ofsomething being involuntary arises when the act is other than aconscious act of will. Thus if a document is disclosed by itaccidentally falling out of a suitcase and being found by the otherparty, or if it is inadvertently left attached to a non-privilegeddocument there will be no waiver. The disclosure will be involuntary.Mistakenly[39] In the Act "mistakenly" is not defined. The New Zealand OxfordDictionary defines a mistake as "an incorrect idea or opinion; a thingincorrectly done or thought , mistaken is wrong in opinion orjudgment". Mistaken is defined as "wrong in opinion or judgment".[42] I conclude that the mistake must be a mistake as to the act ofdisclosure itself rather than the implications of it. Thus, a mistake inthe handing over of a group of documents which were thought tocontain all non-privileged material, but which unbeknownst to thediscloser contained privileged material, would be the sort of mistakeenvisaged. It would be a voluntary but mistaken act. It would beunintentional. However, if the mistake was a deliberate handing overof a document without a consideration that it was privileged, orforgetting that it was privileged, that would not be the sort of mistakecovered by the section.[52] The plaintiffs have the burden of proving that any disclosure of privilegedmaterial was mistaken in the sense explained by Asher J. They have not given anyevidence to support their assertion of mistake. In the absence of that evidence I cannotfind mistake. Privilege has been waived and the document may be used.12 Body Corporate 191561 v Argent House Ltd (2008) 19 PRNZ 500 (HC).BDS.01.1632 – Marshall email of 11 October 2012[53] This email from Mr Marshall to the school has information that may be usedin evidence and was given as part of the evidence gathering for the proceeding. It issubject to litigation privilege. There is no question of waiver.[54] The outcome of the defendant's challenge to privilege claimed by the plaintiffsis:(a) The minutes of meetings in 2009 and 2010 and documentsBDS.01.1621 and BDS.SUPP.0056 are subject to settlementnegotiation privilege and cannot be used at the hearing.These documents are not relevant, whether or not they are subject toprivilege: BDS.SUPP.05.003, BDS.01.1629, BDS.01.1634,BDS.01.1631 (except for the Marshall email of 11 October 2012),BDS.01.1630. They did not need to be included in the affidavits ofdocuments and do not need to be inspected or used at the hearing.(b) These documents are subject to litigation privilege: BOT.01.003,BDS.01.1632 and the Marshall email in BDS.01.1631. They cannot beinspected or used in evidence.(c) Privilege has been waived for BDS.01.1635. It may be used inevidence.No further discovery[55] In the hearing I discussed imposing a cut-off date for further discovery.Notwithstanding the close of pleadings date, each side filed further affidavits ofdocuments, mainly because of complaints of inadequate disclosure by the other. Thereneeds to be finality in discovery so that each side can prepare for the hearing knowingthat the other side will not disclose further documents. From the date of this decisionno further affidavits of documents are to be filed by any party. That is subject to thetrial judge's discretion under r 8.31 to allow an undiscovered document to be used atthe hearing. No party should assume that leave will be granted as a matter of course.Costs[56] The plaintiffs have been mainly successful and are entitled to costs on thehearing. I allow for second counsel. Notwithstanding that, I reserve costs to await theoutcome of the substantive hearing. That is because the parties now need to useavailable time to prepare for trial instead of dealing with costs. That does not stand inthe way of the parties resolving costs themselves. If they do not, costs may be decidedafter the substantive hearing by the trial judge or myself..Associate Judge R M Bell