The Minister of Education v James Hardie New Zealand [2019] NZHC 245

The Minister of Education v James Hardie New Zealand [2019] NZHC 245 [25 February 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2013-404-1899[2019] NZHC 245UNDER The Consumer Guarantees Act 1993, the FairTrading Act 1986, the Building Act 1991 andthe Building Act 2004BETWEEN THE MINISTER OF EDUCATION andOthersFirst to Fourth PlaintiffsAND JAMES HARDIE NEW ZEALANDFirst DefendantSTUDORP LIMITEDSecond DefendantCARTER HOLT HARVEYThird Defendant.../continuedHearing: 4 and 5 December 2018Counsel: JA Farmer QC, NF Flanagan and J Carlyon for plaintiffsJG Miles QC, M Heard and ED Nilsson for third defendantTC Weston QC and JRJ Knight for third partiesJudgment: 25 February 2019JUDGMENT OF FITZGERALD J[As to discovery/admissibility of evidence]This judgment was delivered by me on 25 February 2019 at 4 pm, pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy Registrar. Date.Solicitors: Meredith Connell, AucklandLeeSalmonLong, AucklandSimpson Grierson, AucklandDefendants continuedCSR BUILDING PRODUCTS (NZ)LIMITEDFourth DefendantAND AUCKLAND COUNCIL AND OTHERTERRITORIAL AUTHORITIES LISTEDIN SCHEDULE 1 TO THE FIRSTAMENDED STATEMENT OF CLAIM BYTHIRD DEFENDANT AGAINST FIRSTTO FIFTIETH THIRD PARTIESFirst to Fiftieth Third PartiesCONTENTSIntroduction and summary of issues [1]Admissibility of disputed evidenceNature of the evidence to be called – more detail [11]Carter Holt's submissions on why the disputed evidence is relevant and admissible [14]The Ministry's submissions on why the disputed evidence is irrelevant andinadmissible [21]Approach to determining admissibility [25]Discussion [31]Disputed discovery categoriesIntroduction and approach [45]Discovery sought from the MinistryCategory 1 - contracts [56]Category 2(a) – policies regarding procurement [70]Category 2(b) – policies regarding approach to construction costs [75]Category 2(c) – records of purchase of Shadowclad products on school buildings [80]Category 2(d) – documents relating to management of construction or remediation ofschool buildings [84]Category 2(e) – all records regarding construction works, relocation, remediation ordemolition of school buildings [96]Category 2(f) – reasons for buildings having been removed from the claim [104]Category 3(a) – Ministerial briefing papers regarding weathertightness issues [108]Category 3(b) – Documents produced by or submitted to Property ManagementGroup [114]Category 3(c) – documents relating to the Auckland and National surveys [118]Category 3(d) – reports and other documents generally concerning the failure ofschool buildings [123]Category 3(e) – reports etc regarding direct fix buildings not included in claim [126]Category 3(f) – documents relating to claims/court proceedings against non-partiesregarding weathertightness issues in school buildings featuring Shadowclad [129]Category 3(g) – all reports by or to the Ministry's Building Improvement Programme [132]Category 3(h) – the Ministry of Education's Property Management GroupCompliance Audit [136]Category 3(i) – documents relating to the remediation policy explained in theMinistry's "Weathertightness Bulletin" [139]Categories 3(j) and (k) – materials concerning maintenance [143]Category 3(l) – documents provided to the Auditor-General [151]Category 3(m) – operational or similar manuals relating to each School Building [154]Discovery sought from Carter Holt [158]Category 1 – marketing materials [159]Category 3 – durability of Shadowclad [168]Category 4 – audits, appraisals etc regarding Shadowclad [173]Category 5 – documents relating to whether and how Shadowclad complies with theBuilding Code and/or Recognised Building Standards [176]Category 6 – testing and test results [181]Category 7 – documents relating to the Specifications [184]Result and orders [188]Introduction and summary of issues[1] The plaintiffs (the Ministry) sue the third defendant (Carter Holt) in relation toCarter Holt's cladding product "Shadowclad". The Ministry's claim relates toapproximately 833 school buildings clad in whole or in part with Shadowclad.1[2] The Ministry says Shadowclad is inherently defective and not fit for purpose.It says Shadowclad, when directly fixed to school buildings, routinely causes or willcause the buildings to leak and thus fail to achieve compliance with RecognisedBuilding Standards,2 the weathertightness aspects of the Building Code and relatedprovisions of the Building Acts.3[3] Carter Holt denies Shadowclad is inherently defective and says it is entirely fitfor purpose. It says the reason school buildings are leaking is because of faultyinstallation of Shadowclad, poor maintenance and construction and/or design defects.Carter Holt has joined 54 territorial authorities to the claim, seeking contribution toany loss for which it may be liable to the Ministry.4[4] As I have said in an earlier judgment in these proceedings, the proceedings areextremely large, probably the largest claim currently before the High Court.5 Trialstaging is accordingly necessary and has been ordered. In my earlier judgment (theSeparate Question Judgment), I directed that three key issues be determined at aStage 1 trial:(a) First, whether the Shadowclad product is defective in fact (in the sensealleged by the Ministry);1 The claim relates to school buildings where Shadowclad has been directly fixed to the buildingstructure. The claim does not include buildings where Shadowclad has been installed with acavity.2 As defined in the claim.3 Both the Building Act 1991 and Building Act 2004, as applicable to any given school building.4 A number of the territorial authorities have in turn joined further parties, such as architects,builders and the like.5 Minister of Education v James Hardie Ltd [2018] NZHC 1481 at [4] [Separate QuestionJudgment].(b) Second, whether Carter Holt owes the Ministry a tortious duty of careto design, manufacture and supply the product for use on the schoolbuildings that complied with Recognised Building Standards, theBuilding Code and the Building Acts; and(c) Third, if Carter Holt does owe the Ministry such a duty of care, whetherit breached that duty by designing, manufacturing and/or supplying theproduct for installation on the school buildings.6[5] These issues are common across all buildings in the claim. If Carter Holt issuccessful on any one or more of them, the Ministry's claim against it will fail.[6] Issues of causation, damage and loss are specific to individual buildings andwill need to be determined on a building-by-building basis. These issues will bedetermined (assuming the Ministry is successful at the Stage 1 trial) in later stages ofthe proceedings.[7] The Stage 1 trial has been allocated a six-month fixture commencing in April2020.7 The parties are presently embarking on the discovery process, and have alreadycommenced briefing their evidence. An issue has arisen as to the relevance andtherefore admissibility of certain evidence Carter Holt proposes to call at the Stage 1trial. At a high level, this is evidence in relation to individual school buildings andwhat Carter Holt says is really causing the buildings to leak, namely poor installationof Shadowclad and/or the buildings' design, construction and maintenance. I will referto this evidence as the "disputed evidence". The Ministry says the disputed evidenceis irrelevant to the central question of whether Shadowclad is inherently defective (orto any of the other issues to be determined at the Stage 1 trial) and is thereforeinadmissible. The parties accordingly seek a ruling on its admissibility.6 The parties are in the process of agreeing a more detailed list of "sub-issues" to be determined atthe Stage 1 trial. Good progress is being made in this regard, though the list is not yet finalised.Any remaining areas of disagreement do not alter or otherwise affect the findings made in thisjudgment.7 The duration of six months is somewhat nominal at this stage. The hearing time may reduce asthe parties further refine the issues and have a clearer view of the nature and extent of evidence tobe led.[8] The parties recognise it is unusual to seek a ruling on admissibility in advanceof the evidence being available for the Court to review. Indeed, in civil proceedings,the High Court Rules envisage objections to the admissibility of evidence being raisedafter the briefs of evidence have been served.8 But given the type and nature of thedisputed evidence is tolerably clear, and given the scope of these proceedings andtherefore the likely volume of evidence to be adduced, both parties consider it wouldassist if the Court were to give a ruling now on the question of admissibility.[9] As to discovery, the parties have agreed a number of tailored discoverycategories, but some remain in dispute. Rulings are therefore required. Some of thediscovery disputes relate to the same questions of relevance which arise in respect ofthe disputed evidence. The remaining areas in dispute concern the scope andproportionality of the discovery sought.[10] I deal first with the question of the admissibility of evidence and then thedisputed discovery categories.Admissibility of disputed evidenceNature of the evidence to be called – more detail[11] Carter Holt proposes to call evidence to directly rebut the Ministry's evidencethat Shadowclad is inherently defective. It also proposes to call building specificevidence drawn from detailed visual and invasive inspections of school buildings byexpert building surveyors. Carter Holt says that it intends to lead evidence of thesurveyors' findings in two different formats:(a) First, general conclusions drawn from the inspections, including theprevalence of various types of installation defects and associateddamage.(b) Second, more detailed evidence relating to individual buildings,considering the specific causes of damage or deterioration, and whether8 High Court Rules 2016, r 9.11.those include any of the alleged inherent defects pleaded by theMinistry.[12] In relation to (b) above, Carter Holt proposes to lead evidence as follows:(a) In relation to each of the pleaded defects in Shadowclad:(i) Whether the pleaded defect has manifested in fact on thebuildings in question;(ii) The likely reasons for and extent of water ingress; and(iii) The extent to which Shadowclad and other building elementswere installed or maintained, as the case may be, in accordancewith Carter Holt's installation guides, industry literature andgood building practices.(b) In relation to the Ministry's allegation that the pleaded defects inShadowclad result in buildings routinely failing to comply with thefunctionality and performance requirements of the Building Code:(i) Whether the alleged defects have been encountered on schoolsites;(ii) Whether they have caused the buildings to fail to meet theperformance requirements of the Building Code; and(iii) Whether any such failures support a finding that the defectresults in "routine" failure.[13] The Ministry does not object to Carter Holt leading evidence in relation tospecific buildings per se. I also made it clear that my Separate Question Judgmentdoes not prevent such evidence being led.9 The Ministry does not object therefore, to9 Minute in these proceedings dated 23 August 2018 at [3].Carter Holt leading evidence of the type set out at [12](b) above. It objects, however,to Carter Holt's proposed evidence set out at [12](a)(ii) and (iii) above, being thedisputed evidence.10Carter Holt's submissions on why the disputed evidence is relevant and admissible[14] Carter Holt says that the question of whether Shadowclad is inherentlydefective will involve addressing whether:(a) It is inherently prone to excessive moisture absorption, above levelsthat the preservative treatment can cope with;(b) It has a number of design flaws that cause (or will cause) water ingressand resulting damage;(c) The Shadowclad literature is defective and either lacks sufficient detailto allow competent builders to install the product in a weathertightmanner, or includes details which, if followed, create pathways forproblematic water ingress;(d) It is too difficult for competent builders to install in real worldconditions;(e) It has to be maintained to a frequency or standard that is impractical;and(f) It has defects which, individually or collectively, cause (or will cause)buildings to routinely fail to comply with applicable standards, beingthe requirements of the Building Code, the Building Acts andRecognised Building Standards.[15] Carter Holt says answering these questions will require evidence of real-worldperformance of Shadowclad as installed, and whether the alleged defects or other10 The Ministry accepts evidence directed to [12](a)(i) is relevant. It is, in effect, incorporated intothe evidence summarised at [12](b).issues have caused some buildings clad in the product to fail. Carter Holt says thatany approach to the above questions which does not include this type of evidence willbe artificial and would fail to engage with the real question for the Stage 1 hearing,namely whether the product works.[16] Carter Holt emphasises the performance-based nature of the Building Code. Itsays that a suggested defect in a building material or product is only a "defect" if itcauses non-compliance with the Code's requirements when installed on otherwisecompliant buildings. Carter Holt refers to the manner in which many of the allegedinherent defects have been framed as leading to an assessment of performance inaccordance with the Building Code's weathertightness requirements.[17] Carter Holt accordingly submits that evidence that specific buildings havefailed to comply with the Code requirements not because of characteristics ofShadowclad, but as a result of issues relating to design, construction and/orShadowclad's installation, will have a "tendency to disprove" the Ministry'sallegations that the pleaded defects in Shadowclad exist and result in routine non-compliance. To put it another way, Carter Holt says that determining whether thealleged defect in Shadowclad has led to water ingress "necessarily includes assessingwhether there are other sources of water ingress at the relevant location, so that theycan either be confirmed or eliminated as the source of unacceptable moisture ingress".It says the disputed evidence will be directed at specific locations where thecharacteristic which is said to be an inherent defect exists.[18] Carter Holt also points to the type of "real world" evidence the Ministry intendsto lead (i.e. in addition to laboratory-style evidence), and says its experts must bepermitted to respond fully to it. It notes that the Ministry intends to lead "real world"evidence in relation to four school buildings, but the Ministry suggests Carter Holt'sbuilding specific evidence should be limited to those four buildings. Carter Holt saysthere is no principled basis for its evidence being limited in that way, particularly giventhe Ministry's claim is not limited to those four buildings.[19] Carter Holt cannot say at this stage how many buildings will be the subject ofits "building specific" evidence. However, the following points emerged from itssubmissions:(a) The evidence will not necessarily be limited to buildings which are thesubject of the Ministry's claim. It is likely to call some evidence ofShadowclad's performance on other buildings, given the Ministry'sallegation that the product is inherently defective "from the moment itleaves the factory". It says evidence of Shadowclad performingsatisfactorily on other buildings will tend to disprove the Ministry'sallegation of inherent defects.(b) As noted above, it will not be limited to the four buildings in respect ofwhich the Ministry's experts will give evidence.(c) It will not however, be as extensive as 167, being the number ofbuildings which Carter Holt's experts considered would need to beexamined to provide statistically sound findings in relation to all833 buildings in the claim.(d) As Mr Miles QC, senior counsel for Carter Holt, put it at the hearing,"whether it is in relation to four or 40 (but not 167) buildings", theevidence will be whatever is considered necessary by Carter Holt'sexperts to be able to express a clear view about what is really causingthe problems in the buildings.[20] Finally, in his oral submissions at the hearing, Mr Miles characterised thedisputed evidence as "supporting" type evidence. He referred to Carter Holt's experts'"primary evidence" as their view that they have not seen any evidence of Shadowcladitself, when properly installed and maintained, causing undue water ingress. Insupport of that primary evidence, Mr Miles says the experts will point to a range ofother matters causing the water ingress, which will support their conclusion that thereis no inherent problem with the product itself.The Ministry's submissions on why the disputed evidence is irrelevant andinadmissible[21] Mr Farmer QC, senior counsel for the Ministry, confirmed there is no disputethat performance is an ingredient of the Ministry's claim; namely that Shadowclad isinherently defective and therefore will routinely cause buildings to fail to meetperformance standards provided by the Building Code. Mr Farmer also confirmedthere is no dispute Carter Holt can lead evidence of specific buildings clad inShadowclad for many years but which do not show any or undue water ingress. CarterHolt will presumably argue this is persuasive evidence that the product works.[22] At the heart of the Ministry's objection to the disputed evidence is that itextends beyond evidence about whether Shadowclad is causing or will cause buildingsto fail, given it will seek to demonstrate that particular buildings have failed for causesother than Shadowclad. The Ministry says the evidence summarised at [12](a)(ii) and(iii) above is therefore conceptually different to that summarised at [12](b).[23] Mr Farmer emphasises that the Ministry does not dispute that water ingress insome buildings has been caused by reasons other than the alleged inherent defects inShadowclad. He submits, however, that there is a fundamental non sequitur in CarterHolt's approach to the disputed evidence. The fact Carter Holt might be able to showthat water ingress in some school buildings has been caused by Shadowclad's faultyinstallation (or some other external cause) does not disprove that Shadowclad isdefective on the same buildings or other buildings. In other words, it does not followthat because water ingress on any particular building might have been caused by, say,faulty installation, Shadowclad as a product works. The Ministry's position is thatShadowclad causes or will cause buildings to fail irrespective of whether other causesof failure also exist in those buildings.[24] Mr Farmer further says that even if the disputed evidence has some probativevalue, it is outweighed by the very real risk of detracting from the required focus onthe Ministry's product liability claim and will needlessly prolong the Stage 1 hearingas a result.Approach to determining admissibility[25] It is common ground that ss 7 and 8 of the Evidence Act 2006 are the startingpoint for analysis of the admissibility of evidence. Section 7 states:7 Fundamental principle that relevant evidence admissible(1) All relevant evidence is admissible in a proceeding except evidencethat is—(a) inadmissible under this Act or any other Act; or(b) excluded under this Act or any other Act.(2) Evidence that is not relevant is not admissible in a proceeding.(3) Evidence is relevant in a proceeding if it has a tendency to prove ordisprove anything that is of consequence to the determination of theproceeding.[26] The test for relevance accordingly involves two limbs:11(a) First, probative value: whether the evidence has a logical tendency toprove or disprove the proposition for which it is offered; and(b) Second, materiality: whether the evidence offered is about a matter offact at issue in the case.[27] The threshold for relevance is relatively low, being evidence which "has atendency, if only a slight tendency, to prove something of consequence to thedetermination of the proceedings".12[28] Assuming the evidence is relevant for the purposes of s 7, admissibility thenturns on an assessment of the evidence under s 8 of the Act. Section 8 provides:8 General exclusion(1) In any proceeding, the Judge must exclude evidence if its probativevalue is outweighed by the risk that the evidence will—(a) have an unfairly prejudicial effect on the proceeding; or11 Elisabeth McDonald and Scott Optican (eds) Mahoney on Evidence: Act and Analysis (4th edition,Brookers, Wellington, 2018) at [EV7.02].12 Wi v R [2010] 2 NZLR 11 (SC) at [19].(b) needlessly prolong the proceeding.(2) In determining whether the probative value of evidence is outweighedby the risk that the evidence will have an unfairly prejudicial effect ona criminal proceeding, the Judge must take into account the right ofthe defendant to offer an effective defence.[29] The primary issue in the present case under s 8 is whether the probative valueof the disputed evidence (if relevant for the purposes of s 7), is outweighed by the riskthat it will "needlessly prolong" the proceedings.[30] It is also uncontroversial that relevance and thus admissibility falls to bedetermined by the issues requiring determination, in this case at the Stage 1 trial.13Relevance cannot be determined in a vacuum. The issues for determination at theStage 1 trial are set out at [4] above. The cause (or causes) of particular water ingressand any consequent damage to any given building is not to be determined at theStage 1 trial.Discussion[31] A core theme of Carter Holt's argument is that the pleaded inherent defects (oras it would frame them, the pleaded "characteristics") are only "defects" to the extentthey routinely cause or will cause performance failure in the context of the BuildingCode and Building Acts. Carter Holt says evidence the alleged performance failure isbeing caused by factors other than Shadowclad will therefore be relevant at the Stage1 trial.[32] I accept that whether any given "characteristic" of a product renders theproduct defective cannot be considered in a vacuum. Whether a characteristic rendersthe product defective will depend on the purpose for which the product is producedand is to be ordinarily used. Taking an unrelated example, a car tyre with a specialisedtread suitable only for dry weather conditions will be unfit for purpose if it is marketedfor use (and is used) as an all-weather tyre, when in wet conditions it routinely causesthe vehicle to lose traction and control. It would be fit for purpose, however, ifmarketed and sold for the sole purpose of use in dry weather conditions when road13 O v R [2018] NZCA 434 at [10], Williams v R [2017] NZCA 329 at [40].traction and control can routinely be maintained. Or to take the example of a productsubject to considerable product liability litigation in North America, silicone breastimplants.14 In one sense, the obvious purpose of such a product is breast augmentation.But the purpose must be to achieve breast augmentation in a manner which does notpose serious risks to health. An implant which is capable of routinely posing serioushealth risks from its ordinary use is not fit for purpose and is therefore defective.[33] While Carter Holt speaks of "characteristics" rather than "defects", theMinistry's framing of the issue is not in fact dissimilar. The pleaded inherent defectsare said to be "defects" given they render Shadowclad unfit for purpose, in the sensethat when directly fixed on "Light Buildings" they routinely:(a) cause (or will cause) the buildings to fail to comply with RecognisedBuilding Standards and the weathertightness aspects of the BuildingCode and Building Acts; and(b) interfere with staff and students' health and safety, as a result of mouldspore build up.15[34] As I found in my Separate Question Judgment, whether a product such asShadowclad is defective in fact can and in this case ought to be determined separatelyfrom the question of the cause of damage to any particular school building. As I alsonoted in my Separate Question Judgment, this approach has been adopted in largescale product liability litigation in North America. For example, Huddart JA stated inHarrington v Dow Corning Corp that:16At the risk of over-simplifying a complex decision path, I venture to suggestthat the first step in every product liability case alleging negligent design,14 Harrington v Dow Corning Corp (2000) 193 DLR (4th) 67 (BCCA).15 The Ministry's claim has been framed as Shadowclad not being "fit for purpose" in this way inearlier judgments in these proceedings: see, for example, Carter Holt Harvey Ltd v Minister ofEducation [2015] NZCA 321 at [27], [42] and [50] [CA strike-out judgment]; and Carter HoltHarvey Ltd v Minister of Education [2016] NZSC 95, [2017] 1 NZLR 78 at [15], [67] [SC strike-out judgment]. In its submissions for this hearing, the Ministry framed this aspect of the Stage 1issues as "whether Shadowclad has the pleaded inherent defects and, if so, whether those defectsroutinely cause buildings to fail."16 Harrington v Dow Corning Corp, above n 14, at [42] per Huddart JA, with whom Rowles andRyan JJA concurred. (Finch and Esson JJA dissented.) The issues of whether the product causedthe injuries to the individual plaintiffs and the assessment of the damages sought were describedas the last issues for determination.manufacture, or marketing is the determination of whether the product isdefective under ordinary use or, if non-defective, has a propensity to injure.Some American authorities referred to this step as "general causation",whether a product is capable of causing the harm alleged in its ordinary use.[35] In a similar vein, it is inherent in the High Court and Court of Appeal'sjudgments in Cridge that the question of whether the cladding product in that case isinherently defective could be determined without reference to the individual issue ofcausation.17[36] As noted, the Ministry does not dispute that Carter Holt is entitled to leadevidence in relation to particular school buildings. To the extent the Ministry says,however, that evidence relating to particular buildings must be limited to the schoolbuildings about which it will give evidence (see [18] above), I disagree. As a matterof trial fairness, so long as the evidence Carter Holt proposes to adduce is relevant andotherwise admissible, it cannot be constrained by the Ministry's evidence.18[37] Is, therefore, the disputed evidence relevant and otherwise admissible? In asimple way, relevance can be tested by applying the following sequence of logic:19(a) Some school buildings have already suffered undue water ingress;(b) Factors such as faulty design, construction and/or poor installation ofShadowclad are causing the undue water ingress; therefore(c) Shadowclad is not a defective product in the sense alleged by theMinistry.[38] I accept Mr Farmer's submission that there is a non sequitur in the abovereasoning. Ultimately, I understood Mr Miles to accept this, acknowledging thatevidence to the effect that other factors are causing undue water ingress would "begthe question" of whether Shadowclad was also a reason for that outcome.17 Cridge v Studorp Ltd [2016] NZHC 2451 and Cridge v Studorp Ltd [2017] NZCA 376.18 I do not understand the Ministry to in fact dispute this as a matter of principle.19 McDonald and Optican, above n 11, at [EV7.02].[39] That must be right. For example, evidence that Shadowclad has beenimproperly installed on dozens of buildings causing undue water ingress does not, inand of itself, say anything about whether Shadowclad as a product is contributing tothe water ingress, or will in the future cause water ingress. All it demonstrates is thatan allegedly faulty product has also been installed in a faulty manner and the latter iscausing undue water ingress. Or using the car tyre and silicone breast implantexamples referred to above, evidence that a faulty braking system is routinely causingsome vehicles to lose road traction in wet conditions does not, in and of itself, sayanything about whether the tyre on the same vehicle is also contributing to thoseeffects, or even once the braking system is fixed, it will routinely have such effects.Nor does evidence that other external factors are causing serious health issues in awoman who has silicone breast implants mean the silicone breast implants are not alsocausing or contributing to (or will in due course cause or contribute to) the same healthissues.[40] I do not agree with the Ministry, however, that the evidence Carter Holtproposes to lead is wholly irrelevant. The purpose for which it is to be led is in myview important. As noted above, Mr Miles says Carter Holt's experts' primaryevidence will be that they have seen nothing to suggest any observed undue wateringress is the result of Shadowclad's alleged inherent defects (at least when properlyinstalled and maintained). In support of that primary evidence, Carter Holt's expertswish to also be able to say, in effect, that the Court can have confidence in their viewthat Shadowclad performs as intended because they can explain the observed wateringress by pointing to other factors. In this way, and as I understood Carter Holt tohave advanced its argument, the disputed evidence is only to be deployed in the contextof and for the purpose of supporting its experts' primary evidence that the pleadeddefects in Shadowclad do not routinely, or will not routinely, lead to undue wateringress in buildings to which it is affixed.[41] Ultimately, and subject to any objection it might raise on the basis of s 8 of theEvidence Act once it sees the disputed evidence, the Ministry accepts that evidence ofthe type described at [12](b) above is relevant at the Stage 1 trial, including whetherthe pleaded inherent defects have caused buildings to fail to meet the performancerequirements of the Building Code. To bolster its primary evidence that the pleadedinherent defects have not caused the buildings to fail, Carter Holt ought to be permittedto adduce supporting or corroborative evidence which suggests the failures are beingcaused wholly by other factors. I therefore accept that in a general sense, the disputedevidence, at least when deployed in the manner discussed, has some probative valuein the context of the issues to be determined at the Stage 1 trial.[42] The Ministry is right, however, to be concerned that such evidence might seekto bring the issue of individual causation back into the Stage 1 trial. The Stage 1 trialis not concerned with detailed consideration of, or the making of findings on, thevarious causes of water ingress in particular school buildings. Detailed evidence ofother causes of water ingress in a large number of individual buildings risks divertingattention from what will be a key question at the Stage 1 trial and the most probativeevidence in relation to it – namely evidence directed to whether Shadowclad as aproduct is fit for its intended purpose.[43] Given my observations at [40] above, I decline to rule the disputed evidenceinadmissible. I am not prepared, however, to make any formal rulings at this stage onits admissibility, other than to record I am satisfied as a matter of principle that theevidence (when adduced for the purpose outlined at [40] to [41] above) has some,albeit reasonably limited, probative value for the purposes of s 7 of the Evidence Act.Beyond this, I do not consider it appropriate or even possible to engage on the s 8issues without visibility of the scope and volume of the evidence concerned. That willneed to await any challenge the Ministry might choose to bring pursuant to r 9.11 onceCarter Holt's briefs of evidence have been served.20 The s 8 analysis will also dependon whether any risk that the disputed evidence needlessly prolongs the proceedingscan be managed in other ways, such as requiring expert caucusing prior to and at thehearing itself.[44] I consider the key issue on which the Court can and must rule at this stage ishow the dispute over relevance flows through and into the disputed discoverycategories, to which I now turn.20 High Court Rules 2016, r 9.11.Disputed discovery categoriesIntroduction and approach[45] The parties agreed that tailored discovery is appropriate. The parties haveengaged (to a certain extent at least) on the document categories and have agreed someof them. As noted, however, a number remain in dispute and rulings are required. Theparties' respective positions on the disputed categories are set out in Schedule 1(discovery by the Ministry) and Schedule 2 (discovery by Carter Holt) to thisjudgment.[46] In Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd, Asher J set outa four-step analysis in discovery disputes:21(a) Are the documents sought relevant, and if so how important will theybe?(b) Are there grounds for belief that the documents sought exist? Thiswill often 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?[47] The Court should also consider whether the disputed issue could be provedmore simply, cheaply and expeditiously by other means (for example, by notices toadmit facts or answers to interrogatories).22[48] The issues in relation to the disputed categories in this case are varied, suchthat it is necessary to address them on a category-by-category basis. An overridingobservation on proportionality is, however, appropriate.[49] In a case of this kind, it is possible for discovery to become oppressive andultimately overwhelming. The need for close attention in this proceeding to casemanagement, including in the context of the production of documents, was recognised21 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR600 at [14].22 Reeder v Reeder [2013] NZHC 646 at [44].by the Court of Appeal in its strike-out judgment in these proceedings.23 Asher J alsomade a number of observations in Commerce Commission v Cathay Pacific onproportionality in large scale discovery, which I have found helpful and with which Irespectfully agree.24[50] His Honour's observations can be summarised as follows:(a) The concept of proportionality is central to tailored discovery.25(b) The starting point for tailored discovery is an assessment of the issuesfor determination (which will be determined by the pleadings).26(c) An assessment of proportionality will need to take into account thechances of finding relevant documents and "their degree of relevance",which must then be balanced against the cost (and I would add, otherlogistical implications) of carrying out the discovery process.27(d) Broader considerations such as the amounts in issue, the parties'respective resources and delay to the proceedings may also be relevant,but as in many very large scale commercial proceedings, these factorsare unlikely to be determinative.28(e) Where there is no specific evidence of the potential cost (or, I wouldadd, other practical implications) involved in giving the discoverysought, Judges may take into account their own experience andunderstanding of what is practical without detailed affidavit evidence.29(f) In any complex tailored discovery exercise, there must always be ameasure of "give and take" between the parties.3023 CA strike-out judgment, above n 15, at [179]-[180].24 Commerce Commission v Cathay Pacific Airways Ltd [2012] NZHC 726.25 At [12].26 At [13].27 At [18].28 At [18].29 At [27].30 At [32].[51] A final overriding point is that, perhaps in recognition that some of its proposedcategories for discovery by the Ministry are framed in broad terms, Carter Holtsuggested an "iterative" approach to discovery on some categories. While not rulingthat out where required and appropriate (particularly in a proceeding of this kind), Iconsider it important the parties have as much certainty as possible now in relation tothe documents to be discovered for the Stage 1 trial. Leaving a large range ofcategories open to an iterative approach may give rise to considerable uncertainty overthe scope and types of searches to be carried out. If searches have to be carried outagain or revisited if a further "iteration" of a document category is ordered, this willlead to unnecessary cost and delay to the discovery process.[52] Accordingly, to the extent possible, I have sought to make final orders on thediscovery categories which remain in dispute. Either party could then apply for furtherdiscovery, if it could demonstrate relevance and proportionality, in light of what isproduced pursuant to the agreed and ordered discovery.[53] In relation to some categories however, it was clear to me that the parties hadnot completed their discussions and engagement on the content and scope of theproposed discovery. For this reason, I have not made discovery orders in relation tosome of the categories, but instead offered views on relevance and proportionality anddirected the parties to continue their engagement on these matters. In this context, Iremind the parties of their obligations under r 8.2 to cooperate in the discovery process(which is crucial in a proceeding of this kind), including by facilitating agreement onpractical matters. There is also an expectation in the Schedule 9 discovery checklistthat the parties will confer and seek to agree matters such as the scope of searches, themanner in which searches will be carried out, and so on.[54] To the extent any further rulings are required on the disputed categories, Ienvisage a "round table" type conference with the parties and their solicitors to reacha concluded position.[55] I start by examining the disputed document categories for discovery by theMinistry.31Discovery sought from the MinistryCategory 1 - contracts[56] The parties' respective positions are set out in Schedule 1. There is no disputethe contractual arrangements are relevant and ought to be discovered. Indeed, thecontractual "chain" assumed a key focus of the argument (and Carter Holt's argumentin particular) on the existence of a duty of care on Carter Holt's strike-outapplication.32[57] The contractual chain is said by Carter Holt to involve a head contract betweenthe Ministry and a head contractor for the construction of the school; and that headcontractor's (or a sub-contractor's) contractual arrangements for the supply of variousbuilding materials, including Shadowclad, from either a merchant or directly fromCarter Holt. In the case of Carter Holt's supply to a merchant, there will also be acontractual arrangement between those two parties.33[58] The disagreement between the parties is whether every contractualarrangement for every school building in the claim must be discovered, including thoseunrelated to Shadowclad (Carter Holt's position), or whether the contractualarrangements ought to be limited to contracts concerning the supply of Shadowcladand some form of sampling approach is sufficient (the Ministry's position).[59] Carter Holt says the Supreme Court envisaged the former when commentingon the contractual matrix arguments in its strike-out judgment,34 and that a sampling31 I should emphasise that I have only briefly summarised the parties' respective submissions on eachcategory (including the categories of documents sought from Carter Holt). I have carefullyconsidered the competing submissions however, and mean no disrespect to the helpfulsubmissions by summarising them in such a truncated form.32 Minister of Education v Carter Holt Harvey Ltd [2014] NZHC 681 at [25]; CA strike-outjudgment, above n 15, at [27]-[29]; SC strike-out judgment, above n 15, at [20].33 SC strike-out judgment, above n 15, at [20]. Presumably only the head contract between theMinistry and the head contractor will be in the Ministry's possession, power or control for thepurposes of discovery.34 At [23], [26] and [61].approach is not appropriate given the lack of evidence on what would be sufficient fora properly representative sample.[60] The Ministry, on the other hand, says that whether a duty of care exists betweenCarter Holt and the Ministry: is to be assessed at a general level, having regard to the plaintiffs as a classand the general relationship between the parties. That does not require ananalysis and discovery of each individual contract.[61] The Ministry further says there were four main types of contracts by whichschool buildings were constructed, and a sample of each of those types of contractshas already been provided to Carter Holt.[62] As a preliminary point, the Supreme Court's comments about consideringlikely plaintiffs "as a class" were made in the context of assessing vulnerability (beingone aspect of the proximity analysis) and not the examination of the contractual matrix(being another aspect of the proximity assessment). I agree with Carter Holt that boththe Court of Appeal and Supreme Court envisaged a much more complete picture ofthe contractual matrix being available at trial in order to inform the duty of carequestion.35[63] But I do not read the Supreme Court's comments in particular as mandatingdiscovery of every contract in relation to every school within the claim. Plainly theSupreme Court was not considering matters of case management, discovery andproportionality. Rather, the Court at trial will need to be satisfied it is in possessionof sufficient material to provide it with a clear and robust picture of the overallcontractual picture in relation to the schools that make up the claim. Certainly whenspecifically considering case management issues, the Court of Appeal envisaged thepossibility of identifying categories of contractual documents to be disclosed.36 In asimilar context, the High Court in Cridge was of the view that in the context of theproximity and policy analysis, variations between the individual claimants wouldunlikely be material to the existence or otherwise of a duty of care.37 Similar35 At [23], [26] and [61]; CA strike-out judgment, above n 15, at [56]-[60].36 CA strike-out judgment, above n 15, at [180].37 Cridge v Studorp Ltd, above n 17, at [62].observations were made by the Court of Appeal in Cridge.38 The contractual matrixis also only one of a range of factors to be considered when conducting the proximityanalysis.[64] Given the matters addressed in the preceding paragraph, a sampling orcategorisation approach is in my view appropriate, at least in the first instance. Thisis particularly so when proportionality is added to the mix. Discovery of everycontract for the construction or remediation of each school building in the claim couldpotentially require disclosure of thousands of contractual documents.39 A robustsampling or categorisation approach ought to inform the parties and the Court whetherthe contractual position in this case was, as envisaged by the Court of Appeal from the(limited) materials before it, "diffuse and decentralised", or more akin to the short andclosely negotiated arrangements in cases such as Rolls Royce.40[65] I do not propose to make final orders as to the detail of the approach to beadopted. There was no evidence before me as to the potential range of contractsinvolved or how a robust sample might be ascertained. To the extent the Ministrysuggests that one example of the four main types of contracts involved is sufficient, Idisagree. That strikes me as extremely limited in a case of this kind, and potentiallyeven more limited than the materials before the courts on the strike-out application.[66] I would expect sophisticated parties such as these, complying with theirobligation under the High Court Rules to cooperate on matters concerning discovery,will be able to agree suitable sampling arrangements. If they cannot, then with furtherdetail before me as to the competing approaches, I will make formal orders. I havealready made it clear that the four-contract approach suggested by the Ministry isinsufficient. I do not envisage, however, a sample of contracts for literally hundredsof individual school buildings.[67] I accept the contractual arrangements are an important aspect of the materialthat will need to be before the Court when assessing duty of care. Accordingly, once38 Cridge v Studorp Ltd, above n 17, at [28]-[31].39 There being 833 buildings in the cliam and there potentially being multiple contracts per buildingfalling within the scope of the proposed discovery category.40 Rolls-Royce New Zealand Ltd v Carter Holt Harvey Ltd [2005] 1 NZLR 324 (CA).a robust sample of the contracts involved has been discovered, and if it is apparentthat, for example, there is a very significant variation in the types and styles ofcontracts involved, I do not rule out that further discovery of contractual materialsmight be required. This is therefore a category where a staged approach may beappropriate.41[68] In terms of the second aspect of dispute over this category, I accept theMinistry's position that the contracts involved should be those which resulted in theinstallation of Shadowclad. The contractual matrix is to be considered in the contextof a proximity analysis, which focuses on the closeness between the parties and thesalient features of their relationship.42 Thus, the contractual arrangements for theconstruction, alteration or remediation of schools within the claim are only relevant inthe context of a contractual chain leading to Carter Holt – and thus the supply ofShadowclad for installation on the school buildings. For example, contracts for anaddition to a school building to be built from brick, or the remediation of a school roofwill not inform the contractual matrix analysis.[69] There will therefore be a discovery order in the terms proposed by theMinistry for this category, subject to the above observations on the sampling approachto be adopted.Category 2(a) – policies regarding procurement[70] This category concerns the approach to procurement, design and constructionof school buildings involving Shadowclad. The category is largely agreed, save thatCarter Holt seeks discovery of not only any relevant policies, manuals, guidelines orsimilar documents, but also "the advice underpinning those policies".[71] The Ministry is concerned Carter Holt seeks such documents on a building-by-building basis. I do not understand that to be Carter Holt's position. But I do not agreethe Ministry ought to search for and discover any "advice" which underpins any"policies, manuals, guidelines, or similar documents" falling within this category.41 See the discovery checklist in the High Court Rules 2016, sch 9, cl (3)(1)(b)(ii).42 See, for example, CA strike-out judgment, above n 15, at [45].What might be relevant in the duty of care analysis is the overall policy or approachto procurement of school buildings involving Shadowclad, rather than underlyingdocuments which might have in some way informed the policy actually adopted.[72] Carter Holt also seeks policies and other similar documents relating to thepurchase of cladding generally for use on school buildings, i.e. irrespective of whetherthe documents concern Shadowclad.[73] The Ministry accepts that to the extent the documents concern Shadowclad,they must be searched for and discovered, and would expect that many suchdocuments will also comment on other cladding products (which it would not proposeto redact). But it objects to specifically searching for documents which do not relateto or otherwise discuss Shadowclad.[74] I accept the Ministry's approach as an appropriate balance between degrees ofrelevance and proportionality. Policies and the like relating to the purchase of claddinggenerally for use on school buildings and which do not discuss Shadowclad areunlikely to shed any material light on the various proximity and policy factors to beconsidered at the Stage 1 trial. There is accordingly a tailored discovery order forcategory 2(a) in accordance with the Ministry's formulation in Schedule 1.Category 2(b) – policies regarding approach to construction costs[75] Again, the Ministry is concerned Carter Holt seeks such documents on abuilding-by-building basis. It says that to the extent the reports, policies, guidelinesor investigations or similar documents are looked at a more generic or high level, thenthey will be produced under Category 2(a). The Ministry further says that to the extentthese documents are said to be relevant to vulnerability, rather than Carter Holt'saffirmative defence of lack of maintenance, then it is not necessary or proportionateto separately search for the documents.[76] Carter Holt says that documents falling within this category are directlyrelevant to the question of the plaintiffs' vulnerability, which will be a key issue at theStage 1 trial. It says that:Their level of knowledge of how alternative approaches to procurement, suchas a focus on lowest cost, may impact the risks involved.[77] The Supreme Court was clear, however, that vulnerability is not to be assessedby reference to the plaintiffs involved in any given claim, but by reference to the"likely plaintiffs as a class".43 In this context, Carter Holt will argue that the plaintiffsin this case, essentially the Crown, are "in a class of their own". While Carter Holt isof course entitled to pursue such an argument, it is not clear how documents sought incategory 2(b), at least as a separate and specific category, will be relevant in anymaterial sense to that issue. The point remains, as the Court of Appeal in Cridgeobserved with reference to the Supreme Court's judgment in these proceedings, thatthe key proximity and policy considerations are of a general nature and not particularto the individual parties.44[78] I accordingly accept that to the extent documents falling within Carter Holt'sproposed category 2(b) are located when searching for documents falling withincategory 2(a), they ought to be discovered. But I do not consider it proportionate torequire the Ministry to separately search for them.[79] There is accordingly an order that to the extent documents responsive to CarterHolt's proposed category 2(b) are located during the search for documents responsiveto category 2(a), they are to be discovered. But the Ministry is not required toseparately search for category 2(b) documents.Category 2(c) – records of purchase of Shadowclad products on school buildings[80] This category relates to evidence of direct purchase of Shadowclad by theMinistry.[81] While the framing of this category is not in dispute, the Ministry again says itshould not be required to separately search for such documents. It accepts, however,that to the extent it discovers evidence of direct purchase when looking for otherdocuments, it will be discovered.43 SC strike-out judgment, above n 15, at [54].44 Cridge v Studorp Ltd, above n 17, at [29]-[30].[82] The Ministry says the issue is one of proportionality. Ms Carlyon, whopresented the Ministry's submissions on discovery, provided me with a copy of anearlier affidavit in these proceedings filed by Carter Holt, which suggests a search forany "direct supply" documents is unlikely to yield any particular results other thanperhaps a handful of examples.45 She also took me to paragraph 31(c) of Carter Holt'sstatement of defence, in which Carter Holt acknowledges the Ministry's case is one ofindirect supply.[83] Given the available evidence suggests there were very limited instances ofdirect supply, and the Ministry's case is one of indirect supply, I agree a handful ofexamples of direct supply is highly unlikely to alter the duty of care analysis. Giventhe low degree of relevance, I accept that, while any such documents located whensearching for other categories ought to be discovered, separate searches are notrequired. There will be an order to that effect.Category 2(d) – documents relating to management of construction or remediation ofschool buildings[84] Carter Holt seeks all manuals, guidelines or the like, and all "records" relatingto the management of construction or remediation of the school buildings, and alladvice underpinning those policies.[85] The Ministry again says it should not have to search for such documents as aseparate category. It says that to the extent manuals, guidelines or similar documentsconcerning the management of construction of school buildings involving Shadowcladexist, they will be discovered under category 2(a). The Ministry's real concern is thedocuments sought relating to remediation. The Ministry asks, rhetorically, what canpolicies, manuals or guidelines concerning remediation tell you about the Shadowcladproduct itself and whether it is inherently defective?[86] Mr Miles produced a document at the hearing, the Ministry of Education's"Weathertightness Remediation and Regulatory Strategy". Mr Miles noted a number45 The affidavit, sworn by Carter Holt's general counsel, details searches Carter Holt has made fordocuments in relation to direct supply of Shadowclad to schools (other than supplies of less than10 sheets, which are presumed to have been purchased for minor repairs). Only three instances ofsupply involving more than 10 sheets were located.of matters in relation to the document. He first pointed to various statements in thedocument to the effect that "no one can be required to achieve performance criteriathat are additional to, or more restrictive than, the performance criteria prescribed inthe Building Code in relation to that work". Mr Miles says this is inconsistent withany suggestion by the Ministry that liability in respect of Shadowclad can extendbeyond ensuring compliance with the Code. Mr Miles accordingly submits that theseaspects of the Weathertightness Remediation and Regulatory Strategy documentcorroborate Carter Holt's position that if a party complies with an acceptable solutionunder the Building Code, it cannot face additional liability in relation to its product. Iview these matters, however, as being directed to legal argument for development atthe Stage 1 trial, rather than relating to discovery.[87] Mr Miles pointed to further extracts in the document more directly related tothe discovery argument, including the statement that:A significant finding from the completed remediation work to date was that ahigh proportion of the building work and associated expenditure was directedtowards building elements that had not actually failed.[88] The document goes on to explain that as a result "the Ministry has revised thefocus of the remedial work to addressing actual and proven weathertightness failure".On the basis of these and similar statements in the document, Mr Miles says documentsrelating to remediation will be relevant at the Stage 1 trial. That is because thedocument suggests the Ministry's position that all schools clad in Shadowclad mustbe remediated (given Shadowclad is inherently defective) is wrong, therebyundermining the proposition that Shadowclad suffers from inherent defects in the firstplace. To further support the proposition that documents concerning remediation arerelevant to the Stage 1 trial, Mr Miles gave the hypothetical example of a documentor report stating, in effect, "the cladding does not need to be remediated because it isnot as bad as we thought", submitting that such a document would plainly be relevantand discoverable.[89] Mr Farmer objected to Carter Holt's reliance at the hearing on theWeathertightness Remediation and Regulatory Strategy document, which had not beenheralded and which meant he and his instructing solicitors had not taken instructionson it or provided evidence as to its context and effect. However, having reviewed thedocument and taken instructions overnight, Mr Farmer submitted the document saysnothing of any relevance to the Stage 1 trial in any event. He pointed to theintroductory section of the document, which explains that:The Ministry has decided that factors that might lead to futureweathertightness failure of building elements will not be included in the scopeof remedial work, unless the factor is likely to cause imminent failure of abuilding element and supporting observational and photographic evidence isprovided.[90] Mr Farmer says this and other similar extracts make it clear that there has beena policy change to remediation driven by budgetary constraints, namely that buildingsshowing actual weathertightness failures will be remediated first, followed thoseshowing imminent failure. Mr Farmer submits this says nothing at all about whetherthe alleged inherent defects in Shadowclad exist per se and routinely cause, or willcause, school buildings to fail. Rather, the document confirms a policy change as tothe order in which buildings with weathertightness issues will be fixed.[91] Mr Farmer also noted that to the extent the document refers to causes ofweathertightness failure other than the alleged inherent defects in Shadowclad, thenthe Ministry's position has always been that many school buildings suffer from a rangeof defects which cause weathertightness issues, including Shadowclad. He pointed tothe document's summary of contributing factors leading to weathertightness failures,which are said to include "material selections that were not fit for purpose".[92] Having reviewed the Weathertightness Remediation and Regulatory Strategydocument, I am not satisfied it provides a sound foundation for requiring discovery ofall records or advice concerning the management of remediation of school buildings.I accept Mr Farmer's submission that, on its face, the document appears to reflect apolicy change around remediation, rather than an acknowledgment that Shadowcladis not inherently defective as alleged. I also accept and record the Ministry'sacknowledgement that documents of the type given in Mr Miles' hypothetical examplewould be discoverable by the Ministry under categories 3(a), 3(b) and 3(c) in anyevent.[93] Carter Holt further submits that documents concerning remediation will "tendto demonstrate what was remediated and why, which goes to the question of whetherthere were inherent defects as alleged". In this context, however, documents wouldbe required on a building-by-building basis (i.e. rather than documents regarding the"management" of remedial works) and would presumably involve a process of"reverse engineering" the remedial works carried out back to the alleged defect beingremedied.[94] In the context of the matters discussed in the preceding paragraphs, I do notconsider a broad category seeking "all advice" and "all records" relating to themanagement of remediation of school buildings generally will lead to discovery ofdocuments with any significant relevance to the issues to be determined at the Stage 1trial. In the broad manner in which it is framed, the category is more akin to a fishingexpedition. Further, to the extent Carter Holt seeks such documents to support andbolster its experts' primary evidence that Shadowclad does not routinely causebuildings to fail (by pointing to other causes which explain the water ingress), thosedocuments are more appropriately discovered in response to other, more focussedcategories (such as categories 3(a), 3(b) and 3(c) discussed below).[95] I accordingly decline to make a discovery order in terms of Carter Holt'sproposed category 2(d).Category 2(e) – all records regarding construction works, relocation, remediation ordemolition of school buildings[96] This is an extremely broad category. Carter Holt seeks discovery of:All records relating to the construction works that involved the installation ofShadowclad products on the School Buildings (including construction anddesign contracts, building consent documentation, and all other records ofconstruction), as well as records concerning the relocation, remediation ordemolition of any building included in the claim at any time, whether held bythe plaintiffs or the relevant Boards of Trustees.[97] Contractual documents are already the subject of category 1 discussed above.The Ministry has also provided Carter Holt with the school building consent files,though I note Carter Holt's position that some of the files are incomplete. To the extentthe consent files are within the Ministry's possession, however, my understanding isthat everything has been provided.46[98] In relation to the balance of this category, Carter Holt effectively seeksdiscovery of all records concerning the construction, relocation or remediation of eachbuilding in the claim. Carter Holt says such documents are relevant on the same basisit said the disputed evidence is relevant.[99] Given my observations on the relevance of the disputed evidence, I do notagree the Ministry ought to be required to give discovery of the documents sought inthis category. Ultimately, how any particular school building was constructed,remediated, relocated or demolished does not tend to prove or disprove thatShadowclad suffers from the inherent defects as pleaded, or whether those defects (ifthey exist) routinely cause or will cause buildings to fail. And to the extent documentsfalling within this category have any degree of relevance, that relevance is welloutweighed in my view by the proportionality of requiring discovery of such a broadand unconstrained body of material.[100] Carter Holt says proportionality is not the issue which the Ministry makes itout to be, given each separate Board of Trustees has discovery obligations. CarterHolt therefore says that to require each school Board to search for all construction andother related records is not an overly onerous task, particularly in a claim of thismagnitude.[101] Construction and related materials can extend to very large numbers ofdocuments, and I have no doubt that would be the case even in respect of relativelymodest school buildings. There must also be control and oversight of the searchescarried out, collation of any documents located, all documents reviewed for relevance,privilege and so on, and listing and preparing the documents for discovery andinspection. Accordingly, while I accept that some searches can be "spread" over theschool Boards, proportionality issues still exist in a category of this type, particularlygiven what I consider to be the documents' limited relevance to the Stage 1 issues.46 I was informed at the hearing that Carter Holt is sourcing missing consent documents directlyfrom the relevant territorial authorities.[102] Again, to the extent Carter Holt seeks documents which will support andbolster its experts' evidence that Shadowclad does not routinely cause buildings to fail(by pointing to other causes which explain the water ingress), then more focuseddocument categories are appropriate. Again, and as noted at [94] above, more targeteddocument categories such as 3(a), 3(b) and 3(c) are likely to capture relevantdocuments in a more managed and proportionate way.[103] I accordingly decline to make a discovery order in the terms proposed by CarterHolt as category 2(e).Category 2(f) – reasons for buildings having been removed from the claim[104] Carter Holt seeks discovery of all documents evidencing the reasons forremoving school buildings from the claim, as well as all advice underpinning thatremoval. It says such documents are relevant to the Ministry's position thatShadowclad is defective "when it leaves the factory" and will inevitably or routinelyfail. If that is correct, Carter Holt says the alleged defects and resulting water ingressought to be present in every building clad in Shadowclad. If that is the case,documents indicating why buildings clad in Shadowclad have been removed from theclaim will be relevant to whether the alleged inherent defects exist.[105] The Ministry says there is no suggestion buildings have been removed fromthe claim for reasons relevant to issues to be determined at the Stage 1 trial. It saysthat if they had been, there would be no issue that the documents would bediscoverable in response to the other document categories which the Ministry mustdiscover. The Ministry also notes that its pleaded claim is limited to Shadowclad beingunfit for purpose when installed without a cavity on "Light Buildings".47[106] I do not consider the Ministry ought to be required to discover documentsresponsive to a separate category in the terms set out in proposed category 2(f). Tothe extent any such reasons are relevant to the discovery categories agreed or orderedin this judgment, then they must be discovered. The Ministry says there are no suchrelevant documents. Carter Holt says it wishes to test this. But in the context of47 Sixth Amended Statement of Claim, at [40].discovery, and in the absence of material which suggests relevant documents exist buthave not been discovered, the other party, and the Court, must, at least in the firstinstance, rely on the disclosing party and its solicitors' views on relevance.48[107] Further, to the extent documents are sought relating to other causes of wateringress, as flagged earlier in this judgment, such documents are properly discoveredin response to categories targeted to those materials, particularly given my conclusionthat such documents are likely to have a reasonably limited degree of relevance to thematters to be determined at the Stage 1 trial.49Category 3(a) – Ministerial briefing papers regarding weathertightness issues[108] By way of category 3, Carter Holt seeks discovery of "documents relating tothe identification of weathertightness issues in school buildings by the plaintiffs orrelevant Boards of Trustees, and the cause of those issues, namely.", and thenproceeds to list 13 sub-categories.50[109] Sub-category 3(a) seeks discovery of Ministerial briefing papers andassociated advice regarding weathertightness issues in school buildings and the extentand cause of such issues. The Ministry agrees with the proposed category, other thanit ought to be qualified by the words "in so far as they concern cladding materials".[110] For the reasons outlined in the first part of this judgment on the disputedevidence, I do not consider evidence – and thus documents – concerning other causesof weathertightness issues in schools to be wholly irrelevant, though the evidence –and thus documents – have limited probative value to the Stage 1 issues. This requirescareful management of the discovery of such documents (taking into account thosematters set out at paragraphs (a), (c) and (d) from Assa Abloy set out at [46] above).48 A process of "self-assessment" which is not disturbed without reason being shown. SeeMcGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR8.15.04] citing BNZInvestments Ltd v Commissioner of Inland Revenue [2008] 1 NZLR 598 (CA) at [28].49 See above at [94], [102] and below at [108] for the discussion of categories 3(a), (b) and (c).50 Given the reference in the opening words of category 3 to "namely", the documents sought byCarter Holt are to be defined by the text of the 13 sub-categories, and not by the broad scope ofthe opening words to category 3. Those opening words would include documents concerningweathertightness issues in schools generally, i.e. not limited to those clad in Shadowclad.[111] Category 3(a) is relatively confined, given it is limited to Ministerial briefingpapers and related advice. Given the Ministry's position in relation to Shadowclad (atleast when used in a direct fix manner), it seems likely that many briefings and advicedocuments will discuss cladding materials. Ms Carlyon confirmed that if the categoryis qualified as suggested by the Ministry, it would not seek to redact those aspects ofresponsive documents which discuss other causes of weathertightness issues.[112] On balance, and given the confined nature of this category, I am not persuadedit needs to be qualified as the Ministry suggests. I have already set out why expertevidence as to other causes of water ingress (when used in the manner and for thepurpose outlined at [40] above) has some, albeit limited, probative value to the Stage 1issues. For example, and accepting it is a somewhat extreme example, if none of theMinisterial briefings or related advice discuss cladding giving rise to weathertightnessissues, that would have some relevance to whether, for example, the alleged defects inShadowclad have been encountered on school sites. Given the targeted nature ofcategory 3(a), I also do not consider proportionality issues arise in the same sensediscussed in relation to earlier categories.[113] There will accordingly be an order for tailored discovery by the Ministry in theform of Carter Holt's proposed category 3(a).Category 3(b) – Documents produced by or submitted to Property Management Group[114] The competing proposals in this category are set out in Schedule 1 to thisjudgment. Again, the issue is whether the category should be restricted to documentsrelating to cladding.[115] For the same reasons given in relation to category 3(a), I do not considercategory 3(b) as a whole ought to be qualified by being limited to cladding. Thecategory is framed in a more targeted manner than some of the categories discussedearlier. But some constraints are, in my view, necessary, given the broader scope ofthis category compared to category 3(a); it seeks discovery of "all documents producedby or submitted to the Property Management Group", which would include all emailsand other such informal documents, irrespective of whether they relate to buildingsclad in Shadowclad or are included in the Ministry's claim.[116] I consider an appropriate balance is to reframe the category to relate to "reportsor similar types of other formal documents produced by or submitted to the PropertyManagement Group.", with any other "documents produced by or submitted to theProperty Management Group" being confined to documents relating to cladding asproposed by the Ministry.[117] There will accordingly be an order for tailored discovery by the Ministry in theform set out at [116] above.Category 3(c) – documents relating to the Auckland and National surveys[118] The reference to the "Auckland and National Surveys" is a reference to wide-ranging surveys carried out in response to weathertightness concerns in schoolbuildings. Affidavit material filed in these proceedings describes the Auckland surveyas comprising a visual survey of 1,074 school buildings at 199 schools in the Aucklandarea, and the National survey as a visual survey of 6,130 school buildings at 1,592schools across New Zealand.[119] Given the very broad terms in which this category is framed,51 the breadth ofthe Auckland and National surveys, and that they were not limited to buildings clad inShadowclad, I consider the category ought to be more refined than as proposed byCarter Holt. Ultimately I understood Mr Miles to accept that the category as presentlyframed was too wide, when suggesting that an "iterative" approach to it might bewarranted.[120] Subject to some specific observations in the following paragraphs, I considerit appropriate to frame at least the broader aspects of this category by reference todocuments relating to cladding.52 I accept Carter Holt's position that the category alsoought to include reports of findings from individual buildings surveyed, but onlyinsofar as they relate to buildings now included in the Ministry's claim. By definition,those reports ought to relate to cladding, given the buildings have been included in the51 For example, by reference to all "documents" and "correspondence", which would include formalreports, but also informal letters, emails and the like.52 Again, Ms Carlyon confirmed at the hearing that if a document relates to cladding as an identifiedcause of weathertightness issues, the Ministry would not redact any discussion in that documentof other causes of weathertightness issues.claim. And while the Ministry objects to discovery of such documents on a "building-by-building" basis, the reports are likely to be relevant to, for example, the questionof whether the alleged defects have been encountered on school sites, evidence whichthe Ministry accepts is relevant for the Stage 1 trial. The individual building reportsare also a defined sub-category of documents which, while no doubt voluminous,simply reflects the sheer number of buildings included in the Ministry's claim.[121] To the extent a document responds to this category solely on the basis that it"records the terms of reference", I do not consider such a document relevant, or tohave a sufficient degree of relevance to warrant discovery, given the terms of referencethemselves are to be discovered.[122] There will accordingly be an order for discovery by the Ministry of category3(c) documents in the following terms:Documents relating to the Auckland and National Surveys, namely:(a) the terms of reference;(b) correspondence between Prendos or Hampton Jones and the plaintiffsregarding the surveys and the identified causes of building failures;53(c) internal Ministry documents and correspondence concerning theresults of the surveys and identified causes of building failures;(d) internal Ministry documents and correspondence relating to follow upactions taken or contemplated in light of the surveys; and(e) reports of findings from surveys of individual buildings which remainthe subject of the Ministry's claim,save that in the case of sub-categories (c) and (d) above, only documentswhich relate to cladding are to be discovered.Category 3(d) – reports and other documents generally concerning the failure of schoolbuildings[123] Carter Holt seeks discovery of:Reports and other documents concerning the failure of school buildings(including buildings not included in the claim) and the reasons for such failure(including documents prepared for the purposes of the Ministry's ongoingremediation programme).53 It is expected that this will be a fairly confined set of documents.[124] Given my observations on the limited probative value of evidence of othercauses of weathertightness issues in school buildings (at the Stage 1 trial), thiscategory is overly broad and disproportionate. As framed, category 3(d) is not limitedto buildings included in the Ministry's claim or even clad in Shadowclad. The framingof the category by reference to "other documents" also exacerbates its breadth. To theextent documents are sought regarding remediation, I refer to my earlier observationsat [92] and [94] above in relation to Carter Holt's reliance on the WeathertightnessRemediation and Regulatory Strategy document.[125] I accordingly decline to make a tailored discovery order in terms of proposedcategory 3(d).Category 3(e) – reports etc regarding direct fix buildings not included in claim[126] Carter Holt seeks discovery of "all reports, construction records and otherdocuments relating to the performance of school buildings clad in direct fixShadowclad but never included in the claim."[127] Ms Carlyon did not suggest such documents have no relevance whatsoever. Iaccept that, given the Ministry's claim is that Shadowclad, when installed by way ofdirect fix on a "Light Building" is inherently defective and unfit for purpose, evidenceof its performance on such buildings which are not included in the claim will berelevant to the Stage 1 issues. Ms Carlyon raised, however, a proportionality issue,particularly in relation to "construction records" and "other documents", which couldlead to very large numbers of documents. Ms Carlyon also noted that the Ministrydoes not have a centralised record of buildings clad in Shadowclad, which presumablygives rise to issues as to how to go about searching for documents responsive to thiscategory.[128] I consider an appropriate approach is to limit this category of document in thefirst instance to "all reports" relating to the performance of school buildings clad indirect fix Shadowclad that were never included in the claim. There is an order to thateffect. Given there was no evidence before me, however, as to the difficulties orparticular steps required by the Ministry to search for such documents, I do not makeany further orders or observations on those issues in this judgment. I remind theparties of their obligation of cooperation, including in relation to practical matters suchas the scope and manner of searches for documents. If agreement cannot be reachedon the extent and nature of searches to be carried out by the Ministry to respond to thiscategory, then the parties may bring the matter back to me for formal orders.Category 3(f) – documents relating to claims/court proceedings against non-partiesregarding weathertightness issues in school buildings featuring Shadowclad[129] I am not persuaded that such documents have any material degree of relevancewhen balanced against proportionality issues involved. The Court can take judicialnotice of the fact that weathertightness claims and proceedings typically lead to verysignificant amounts of documents. Carter Holt did not point to any particular claimsor proceedings it had in mind and why it says they might be relevant to whetherShadowclad has the inherent defects as pleaded. The category is also not limited toclaims involving buildings which are the subject of these proceedings, or whereShadowclad has been installed in a direct fix way. And as noted, the Ministry doesnot dispute that many school buildings clad in Shadowclad also suffer from otherdefects.[130] As matters presently stand, therefore, I consider category 3(f) to be more akinto a fishing expedition and disproportionate in any event. This is particularly so givenI have ordered discovery of documents relating to other identified failures in schoolbuildings through more targeted categories, including individual survey reports fromthe National and Auckland surveys relation to the buildings the subject of this claim.[131] I accordingly decline to make a discovery order in terms of category 3(f).Category 3(g) – all reports by or to the Ministry's Building Improvement Programme[132] The dispute between the parties is whether this category should be qualified bythe reports relating to cladding, or whether it extends to reports relating to "otherweathertightness issues".[133] Ms Carlyon said that as the Ministry's Building Improvement Programme wasalmost exclusively addressed to weathertightness issues, the proposed category wouldeffectively capture every report relating to that programme. That would includeweathertightness issues in buildings not clad in Shadowclad (for example clad in fibrecement, brick etc) and not limited to buildings the subject of this claim. Carter Holt,on the other hand, raises the same points raised in a number of other categories, to theeffect that its case is that it is not Shadowclad which is causing school buildings tofail, but other matters.[134] I accept the Ministry's position that, as framed by Carter Holt, category 3(g) istoo broad when considering the degree of relevance of documents responsive to it,particularly given it is not limited to buildings clad in Shadowclad or falling withinthe claim. I accept that reports, insofar as they relate to cladding, may have somerelevance to the issues for determination at the Stage 1 trial and provides anappropriate qualification.[135] There is accordingly an order for discovery by the Ministry in terms of theMinistry's formulation of this category. This order is predicated on the confirmationgiven at the hearing that to the extent reports discuss weathertightness issues otherthan cladding, that material will not be redacted.Category 3(h) – the Ministry of Education's Property Management Group ComplianceAudit[136] Carter Holt seeks discovery of the Ministry's Property Management GroupCompliance Audit and related summary, as well as "all documents underpinning theaudit".[137] The Ministry objects to this category, noting the Audit is publicly available.The Ministry further says the audit relates to the Ministry's management of propertygenerally, including matters such as whether the existing property supports modernteaching and learning practices and how property fits within the Ministry's widerobjectives. The Ministry says these issues are not relevant to any stages of thisproceeding, let alone Stage 1, and any "documents underpinning" the audit whichmight be relevant will be captured by other appropriately targeted discoverycategories.[138] On that basis, Carter Holt confirmed it does not pursue this category at thistime. I accordingly make no orders in relation to it.Category 3(i) – documents relating to the remediation policy explained in theMinistry's "Weathertightness Bulletin"[139] Carter Holt seeks copies of:Expert reports, briefing papers and similar documents underpinning thepromulgation of the policy for weathertightness remediation explained in theMinistry's "Weathertightness Bulletin" Issue 1, January 2017 and recorded inthe Ministry's "Weathertightness Remediation and Regulatory Strategy".[140] This category gives rise to the same issues discussed in relation to theWeathertightness Remediation and Regulatory Strategy document, and Carter Holt'ssubmission that "all advice" and "all records" relating to the management ofremediation of school buildings generally will be relevant to the Stage 1 issues.[141] Again, I am not persuaded that expert reports, briefing papers and similardocuments underpinning the remediation policy are relevant, or sufficiently relevant,that a category of this nature is proportionate for discovery. As noted above, thecontents of the strategy document indicate an ordered approach to remediation givenbudgetary constraints, and the Weathertightness Bulletin states that buildings thesubject of litigation are excluded from the policy in any event. Further, to the extentthe Weathertightness Remediation and Regulatory Strategy document states thatcommon causes of water ingress in school buildings include poor workmanship andinstallation of building materials, then that is not disputed by the Ministry. It does not,however, say anything about whether Shadowclad as a product is fit for purpose andis or will contribute to such issues. And as noted, other categories (such as 3(a), (b),(c) and (g)) provide more targeted categories for the discovery of documents touchingon other causes of water ingress in buildings the subject of this claim.[142] I accordingly decline to make an order for discovery in terms of category 3(i).Categories 3(j) and (k) – materials concerning maintenance[143] In category 3(j), Carter Holt seeks discovery of "maintenance manuals relatingto each School Building (including buildings removed from the claim)" and incategory 3(k), "maintenance records for the painting, external cleaning, and anyexternal repairs on each School Building (including buildings removed from theclaim)".[144] Carter Holt did not make any particular submissions on why these categoriesare relevant, other than to note that whether Shadowclad's maintenance requirementsin the Specifications are too onerous is a Stage 1 issue, and thus documents assessingthe reasons for failure to comply with those maintenance requirements are relevant.[145] Poor maintenance is an affirmative defence pleaded by Carter Holt. But issuesconcerning alleged poor maintenance, and the extent to which it might havecontributed to a building's weathertightness issues, are not to be determined at theStage 1 trial.[146] While it is correct that whether the Specifications are defective is a Stage 1issue, given the nature of the sub-issues arising under that issue, I am not satisfied thevery broad range of documents sought by Carter Holt in this category will be relevantto those issues. For example, on the basis of the current draft of issues fordetermination, a question for determination at the Stage 1 trial will be:Does Shadowclad have to be maintained to a standard and frequency that isimpractical, and if so is that a defect?(i) Is the requirement to annually inspect joints, corners, jointers,flashing and sealants impractical, and if so is that a defect?(ii) Is the requirement as to maintenance of paint coatingsimpractical and if so is that a defect?[147] These types of issues will no doubt be informed by expert evidence as to thenature of the maintenance requirements and whether they are realistic and feasible.How any given school building has actually been maintained will not inform thedetermination of these issues. Further, even if actual building maintenance (on abuilding-by-building basis) sheds any light on whether the maintenance requirementsin the Specifications are defective, the sub-categories in their present form are overlybroad and disproportionate. For example, records of "any external repairs on eachSchool Building (including buildings removed from the claim)" could capturedocuments concerning minor repairs to broken glass or gutters and the like, which areirrelevant to whether Shadowclad's maintenance requirements are onerous.[148] The one exception to the above is maintenance manuals for school buildings.For example, if a Ministry-wide maintenance manual included requirements forinspection and maintenance of cladding similar to those contained in the ShadowcladSpecifications, such documents could inform whether the Specifications are indeed"onerous". I therefore view maintenance manuals in a different category to documentsrelating to actual maintenance.[149] Carter Holt seeks maintenance manuals relating to each school building(including buildings removed from the claim). No information was before me as tothe proportionality or otherwise of such a request, or whether, for example, there maybe "generic" or centralised manuals. As matters currently stand, and what I presentlyperceive to be a relatively low "degree of relevance" of such materials, a robust sampleof maintenance manuals, to the extent they are not "generic," is likely to beappropriate.[150] I do not propose to make formal orders at this stage on the precise formulationof a category regarding maintenance manuals. Having regard to their obligation ofcooperation, the parties are to discuss the proposed category in light of myobservations and seek to agree appropriate parameters. To the extent they are unableto do so, either party may bring this matter back before me for formal orders.Category 3(l) – documents provided to the Auditor-General[151] Carter Holt seeks discovery of "all documents provided by the plaintiffs to theOffice of the Auditor-General for the purposes of the compilation of the report'Managing the school property portfolio' dated 21 July 2017".[152] Neither party made any substantive submissions to me as to what the"Managing the school property portfolio" report relates to (other than that it in someway relates to maintenance of school buildings), or its relevance to the Stage 1 issues.[153] In light of the above, I am not in a position to make any formal orders on thisproposed category. If, in light of the discovery orders and other observations made inthis judgment, the parties cannot reach agreement on this category, then again, Ireserve leave for either party to bring this category back before me to fully considerwhat orders, if any, should be made in relation to it.Category 3(m) – operational or similar manuals relating to each School Building[154] Carter Holt seeks discovery of "operational or similar manuals in relation toeach school building (including buildings removed from the claim) specifying anyinternal or external moisture management measures".[155] Again, neither party made substantive submissions before me on the relevanceand proportionality of this category, other than Carter Holt's statement that suchdocuments are "relevant to the capabilities of the State as a plaintiff seeking impositionof a duty of care". It is presumed this suggests the documents are relevant to anassessment of vulnerability as part of the proximity analysis.[156] Absent further information from the parties on this proposed category, I am notpersuaded that operational or other manuals in relation to individual school buildingswill be relevant to the question of vulnerability. As noted at [77] above, that questionis not to be determined by reference to the actual parties to the proceedings, but byreference to likely plaintiffs as a class. Further and in any event, it is not clear to me,at least on the basis of the materials currently before the Court, how manualsspecifying internal or external moisture management measures would differ frommaintenance manuals in general.[157] For these reasons, I decline to make any orders at this time on proposedcategory 3(m).Discovery sought from Carter Holt[158] The remaining areas of dispute in relation to discovery to be given by CarterHolt are more limited.Category 1 – marketing materials[159] The Ministry seeks discovery of the following marketing related materials:Documents relating to the marketing of Shadowclad, including:(a) Marketing strategy papers;(b) Advice from external agencies regarding the marketing ofShadowclad;(c) Marketing material directed at architects, builders and/or developers,including training or instruction manuals provided by Carter Holt;(d) Marketing materials directed at trade supplies stores;(e) Sales data and/or reports, but excluding data of a day to day nature;(f) Any analysis of sales data.[160] The Ministry confirms that only marketing materials used in New Zealand aresought.[161] Carter Holt accepts that some marketing materials may be relevant to thequestions of duty and breach. That must be right. For example, many of the factorspleaded by the Ministry as providing the basis for a duty of care relate to Carter Holt'spromotion and marketing of Shadowclad.[162] In its written submissions filed prior to the hearing, Carter Holt said "it was inthe process of reviewing historic marketing practices with the view to updating theplaintiffs and the Court on proposed categories of documents in due course." At thehearing, and by reference to Schedule 2, Carter Holt says that a sampling approach ofactual marketing materials is appropriate, given the period over which Shadowcladhas been marketed in New Zealand (namely from 1989 to 2013). It further says it isnot aware of marketing strategy papers during the relevant period, and does not acceptthey are relevant in any event.[163] I accept that a sample approach is appropriate in relation to actual marketingmaterials (such as advertisements, brochures, campaigns in trade publications and thelike), given the very lengthy period over which the marketing has taken place.However, I do not accept the category should be limited to marketing materialsdirected to the two sets of persons or entities Carter Holt suggests. Carter Holt'sproposal is that discovery of a sample of marketing materials is limited to thosedirected to architects and trade supply stores, but also says that it "primarily marketsthe product to suppliers and builders through limited campaigns in trade publications".[164] Like the proposed sample of contractual materials, I do not intend to makeformal orders in this judgment as to the sampling approach to be adopted. Again, andcomplying with their duty of cooperation, I would expect sophisticated parties such asthese, and their respective legal advisers, to be able to reach agreement on theparameters of the sampling approach to be adopted. If they cannot, and withinformation as to the competing proposals, the matter would need to be brought backbefore me for orders.[165] For similar reasons why marketing materials themselves are relevant, I alsoconsider documents relating to any overarching marketing strategy or approachadopted by Carter Holt to be relevant. I accept Mr Miles' submission that where thesole issue is whether marketing material is misleading, an objective approach isadopted and internal marketing strategy papers are unlikely to assist. But the issue ofduty of care is different. For example, Carter Holt's knowledge of its likely customerbase and whether that might include end users such as schools is in issue.54 Further,Carter Holt's approach or strategy in relation to marketing Shadowclad, i.e. rather thansimply the actual marketing materials, may inform what Carter Holt understoodpurchasers and end-consumers of Shadowclad wanted from the product, and whattypes of buildings it was to be used on. Such matters will be relevant to questions offoreseeability and proximity.[166] I note Carter Holt's submission that as far as it is presently aware, there are nomarketing strategy or similar papers existing within the relevant period. That may54 Sixth amended statement of claim, at [33] and [52]; see also CA strike-out judgment, above n 15,at [48]; SC strike-out judgment, above n 15, at [18]-[19].well be the case and therefore there is nothing for Carter Holt to discover in responseto this category. But that does not mean there ought not to be such a category in thefirst place. The nature and extent of searches Carter Holt has carried out to date is notclear from the materials before the Court. The same observation applies to any higherlevel sales data55 and/or reports in respect of Shadowclad, and any analysis by CarterHolt of that data.[167] There will accordingly be an order for discovery in the terms of the Ministry'sformulation of category 1, save that:(a) The category should expressly confine the materials to marketing inNew Zealand, as Ms Carlyon confirmed at the hearing;(b) From the parties' materials, it appears the category is intended to relateto a particular time period only, which should be reflected in thecategory;(c) The opening words ought to end with "namely" rather than "including"(as otherwise the category is in fact unconstrained in the types ofmarketing materials that will be responsive to it); and(d) Sub-paragraphs (c) and (d) will need to reflect the sampling approachdiscussed at [163] above.Category 3 – durability of Shadowclad[168] Carter Holt accepts that documents relating to the durability of Shadowclad arerelevant, but says this category is overly broad and unworkable. It says any relevantdocuments will be responsive to categories 4 or 7 in any event.55 Ms Carlyon confirmed that the Ministry does not seek documents along the lines of "10,000 sheetsof Shadowclad being sold to Carters in New Plymouth". Rather, the sales data materials are morehigh level materials, if they exist within Carter Holt, demonstrating which consumers are usingthe Shadowclad product; for example, whether schools are a big user, which the Ministry willsubmit will be informative of the duty of care question.[169] The Ministry says that Shadowclad's durability is a key issue for determinationat the Stage 1 trial. For example, in the pleaded schedule of defects to the Ministry'sclaim, defect 4 relates solely to durability. Ms Carlyon also noted that the concept of"durability" emanates from Carter Holt itself, as reflected in certain marketingmaterials referenced in the statement of claim.[170] Documents concerning Shadowclad's durability are clearly relevant. It is alsonot immediately apparent that all such documents would be responsive to category 4and/or category 7. Category 4 relates to specific types of documents, namely internaland external audit processes; BRANZ appraisals; testing of Shadowclad; andShadowclad operations manuals. While it is correct that many such documents mightrefer to or discuss Shadowclad's durability, other documents concerning durabilitymay nevertheless exist outside those particular classes of documents. Similarobservations apply to category 7. That category concerns documents relating toShadowclad's specifications, their development, revision and any concerns in relationto them. This may not capture more general papers or documents concerningShadowclad's durability.[171] Given documents relating to durability are relevant, the issue is one ofproportionality. As noted, Carter Holt says this is an unworkable category, thoughdoes not elaborate why. As with all other categories, the parties are expected to worktogether to agree matters as word search terms, scope of searches and so on to ensuresearching for documents responsive to categories either ordered or agreed isproportionate.[172] There is accordingly a discovery order in terms of category 3 as proposed bythe Ministry, but subject to the observations above that the steps to be taken by CarterHolt to search for documents responsive to this category are yet to be finalised.Category 4 – audits, appraisals etc regarding Shadowclad[173] This category is largely agreed. The Ministry proposes to add to the end ofsub-category 4(c)(ii) the words "including documents relating to instances wheretesting requirements were not met". Carter Holt confirmed that any such documentswould be responsive to sub-category (c)(ii) without the additional words. I agree. Theadditional words are not required.[174] Carter Holt proposes to add to the text of sub-category (e)(i) the qualifier"relevant to the alleged inherent defects as pleaded by the plaintiffs". Ms Carlyonaccepted as a matter of principle that the complaints must be relevant to the allegeddefects. But she said that a document on its face may not appear to relate to theinherent defects and given Carter Holt says in affidavit material that the level ofcomplaints is low, discovery of all complaints will not be onerous.[175] I do not consider that approach is appropriate. Ultimately the documents mustbe relevant. Whether a document is relevant on its face is something reviewingsolicitors will regularly confront in any discovery exercise. Given enquiries orcomplaints about Shadowclad which are unrelated to the pleaded inherent defects willbe irrelevant, I agree it is appropriate to add the words proposed by Carter Holt. Thereis an order to that effect.Category 5 – documents relating to whether and how Shadowclad complies with theBuilding Code and/or Recognised Building Standards[176] Carter Holt says this is an unworkable category and that relevant documentswill be discovered in response to other categories in any event. It also says that no "inservice history analysis" has been carried out (as referenced at sub-category (a) of theMinistry's proposed category).[177] Having considered the parties' submissions, I am not satisfied I am in receiptof sufficient material to make a ruling on this category. As a preliminary observation,however, I have some sympathy with Carter Holt's position that the category issomewhat unworkable, given it is framed by way of a conclusory statement in itsopening words, to which all technical, specification and other similar documentswould respond. It may be that the documents sought by the Ministry could moreappropriately be framed along the lines of "documents discussing or commenting onwhether and how Shadowclad complied with the Building Code and/or RecognisedBuilding Standards". As a matter of principle, documents responsive to a category ofthat type would in my view be relevant, in the context of the Court's consideration ofwhether Shadowclad is defective in fact and whether Carter Holt breached any dutyof care owed by it.[178] In addition, sub-category (d) in its present form is more akin to a legal questionor conclusion. Again, it may be that what the Ministry seeks is "documents discussingor commenting on the relationship between NZS3604 and the Shadowcladspecifications". If that were the case, the Ministry would need to explain the relevanceof any subjective views or comments by or within Carter Holt in that regard.[179] Other aspects of the category are, in my view, framed in an overly broad way,such as sub-category (e), "documents relating to Carter Holt's involvement in theCladding Institute of New Zealand (now the Building Enclosure Council NewZealand) including". While no doubt not sought by the Ministry, documents suchas membership applications or meeting requests could potentially be captured by thissub-category.[180] I am therefore not prepared to make a formal discovery order in the termsproposed by the Ministry at category 5. Taking into account, however, my observationthat documents discussing or commenting on whether and how Shadowclad complieswith the Building Code and/or Recognised Building Standards are likely to be relevant(and may not be responsive to categories 4 and 7), the parties are to re-consider a moreappropriately framed category 5. Leave is again reserved to the parties to bring thematter back before me for further orders.Category 6 – testing and test results[181] In relation to sub-category (c), Ms Carlyon confirmed the Ministry is content,in principle at least, to receive a sample of documents evidencing the results ofShadowclad compliance testing.[182] In terms of the remaining area of dispute, being the Ministry's proposed sub-category (e), documents discussing actual non-compliance with treatment results, andconcerns expressed about the adequacy or effectiveness of preservative treatment, arein my view relevant (both to whether Shadowclad is defective in fact and the questionof breach), and will not necessarily be captured by other categories for discovery byCarter Holt.56[183] Again, given the parties' incomplete discussions on these categories, I do notpropose to make formal discovery orders. In the event that, despite furtherengagement, this category cannot be resolved, it may be brought back before me for afinal ruling.Category 7 – documents relating to the Specifications[184] This category is also largely agreed.57 Carter Holt objects, however, to itextending to the reasons for any actual or contemplated revisions to the Specifications.[185] The Ministry says that instances where changes to the Specifications werecontemplated but not implemented will have been for a reason, which will be relevantto the assessment of whether Shadowclad is defective in fact. As I understand CarterHolt's position, it does not object in principle to the relevance of such material, butsays this aspect of the category is not clearly defined and so not capable of targetedsearching.[186] I accept that in principle the concept of "contemplated" changes toSpecifications could be relevant. I have, however, some sympathy with Carter Holt'sposition that as presently framed, this aspect of the category is too vague. Forexample, a change simply "contemplated" by one person and noted in writing, withnothing further being done about it, will be of little or no relevance to the Stage 1issues. That may not be so, however, in the case of formal and defined changesproposed but which were not implemented for particular reasons. I also accept CarterHolt's position that only proposed changes which relate to the pleaded defects will berelevant.56 I agree with Carter Holt that documents "evidencing" non-compliance would be captured by thecategory concerning actual test results.57 The Ministry accepts that the reference to "advice" in sub-category (b) should be qualified by"non-legal" advice.[187] Again, the parties' engagement on these matters is incomplete and they areencouraged to work to finalise the terms of this aspect of the category. As a matter ofprinciple however, I accept the Ministry's position on relevance. The category couldperhaps be clarified to make it clear that, if my understanding of what the Ministryseeks is correct, only "formal" or similar proposed changes to the Specifications areto be captured, and only those which relate to the pleaded defects in any event.Result and orders[188] On the admissibility of the disputed evidence:(a) I decline to rule the disputed evidence inadmissible as a matter ofprinciple. The evidence has some, albeit limited, probative value forthe purposes of s 7 of the Evidence Act.(b) Whether the disputed evidence is inadmissible under s 8 of the Actcannot be determined at this time. This will depend on the nature, scopeand volume of the evidence Carter Holt proposes to call. Any rulingsin that regard will need to await the service of Carter Holt's briefs ofevidence.[189] On discovery:(a) There are orders relating to the tailored discovery categories as set outat [69], [74], [79], [83], [113], [117], [122], [128], [135], [167], [172]and [175] above.(b) I decline to make orders for discovery of documents by the Ministryand Carter Holt as set out at [95], [103], [106], [125], [131], [138],[142] and [157] above.(c) As noted at [128], [150], [153], [180], [183] and [187] above, severalcategories of documents require further discussion and refinement bythe parties. In relation to those categories, the parties are to file a jointmemorandum within 20 working days of this judgment indicatingwhether agreement has been reached on the outstanding categories. Inthe event any further orders are required, I envisage holding a "roundtable" case management conference with the parties and their solicitorsto finalise the terms of any remaining categories in dispute.[190] On costs:(a) The parties are encouraged to seek to agree costs of the admissibilityand discovery applications. A preliminary and strictly non-bindingview is that given there has been a measure of success and failure byboth parties, an appropriate outcome may be that costs lie where theyfall.(b) If the parties cannot agree costs:(i) Any party seeking costs may file a memorandum to that effectwithin 15 working days of this judgment; and(ii) Any memorandum in response is to be filed within a further fiveworking days.(iii) I will thereafter determine costs on the papers. On the materialscurrently before the Court, I see no basis for increased orindemnity costs.[191] In terms of next steps more generally, the parties are to confer on appropriatetimetabling and any other appropriate orders in the lead up to the April 2020 hearing.The Registry is directed to schedule a two-hour face-to-face case managementconference before me on the first available date after 11 March 2019. Counsel shouldnotify the Registry as soon as possible of any dates on which they will not be available.The parties are to file case management memoranda at least two working days inadvance of the conference. In addition to the "standard" steps to be taken in the leadup to the Stage 1 trial, the parties are also to consider and discuss what steps orprocesses might be put in place for expert caucusing both prior to and during the trial.____________________Fitzgerald J