The Minister of Education v James Hardie New Zealand [2019] NZHC 3487

The Minister of Education v James Hardie New Zealand [2019] NZHC 3487 [20 December 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2013-404-1899[2019] NZHC 3487UNDER Consumers Guarantees Act 1993, the FairTrading Act 1986, the Building Act 2004BETWEEN THE MINISTER OF EDUCATION ANDOTHERSFirst to Fourth PlaintiffsAND JAMES HARDIE NEW ZEALANDFirst DefendantSTUDORP LIMITEDSecond DefendantCARTER HOLT HARVEY LIMITEDThird DefendantCSR BUILDING PRODUCTS (NZ)LIMITEDFourth DefendantHearing: 13 and 15 November 2019Counsel: NF Flanagan, J Carlyon and MM Moon for plaintiffsDM Salmon and M Heard for third defendantJudgment: 20 December 2019JUDGMENT (No. 5) OF FITZGERALD J[Challenge to privilege claims]This judgment was delivered by me on 20 December 2019 at 2:30 pm, pursuant to Rule 11.5 of the High CourtRules.Registrar/Deputy Registrar . Date.Solicitors: Meredith Connell, AucklandLeeSalmonLong, AucklandAND AUCKLAND COUNCIL AND OTHERTERRITORIAL AUTHORITIES LISTEDIN SCHEDULE 1 TO THE FIRSTAMENDED STATEMENT OF CLAIM BYTHIRD DEFENDANT AGAINST FIRSTTO FIFTIETH THIRD PARTIESFirst to Fiftieth Third PartiesIntroduction[1] The background to this litigation is set out in a number of my previousjudgments and will not be repeated here.[2] The parties have completed a significant discovery in these proceedings. Eachhas since filed an application challenging the other party's claims to privilege overdiscovered documents on the basis of privilege for preparatory materials forproceedings (litigation privilege).1 By way of summary:(a) The Ministry challenges Carter Holt's claim of litigation privilege inrelation to documents and communications concerning complaintsmade to Carter Holt about Shadowclad. A small number of suchdocuments were inadvertently included in documents made availableby Carter Holt to the Ministry for inspection. By agreement, they wereprovided to me to review, though obviously without Carter Holtwaiving its claim of privilege. The Ministry says the discloseddocuments cannot be the subject of litigation privilege, not beingprepared in the context of apprehended proceedings, nor prepared forthe dominant purpose of such proceedings in any event. The Ministrysays the fact Carter Holt has claimed privilege in relation to them callsinto question its privilege claims over a large number of similardocuments.(b) Carter Holt challenges the Ministry's claim of litigation privilege inrelation to various expert reports prepared for the Ministry in thecontext of its building improvement programme for leaking schools.Carter Holt says the reports were not prepared in the context of actualor apprehended proceedings, nor was their dominant purpose forpreparing for such proceedings in any event. Rather, Carter Holt saysthe dominant purpose of the reports was to inform the Ministry on thescope and requirements for remediating leaking school buildings. Tothe extent the reports gathered information for any apprehended1 Evidence Act 2006, s 56.proceedings, Carter Holt says this was very much a secondary purposeonly.[3] Each party's challenge (potentially) relates to a large number of documents (inexcess of 1,400 reports in the case of Carter Holt's challenge to the Ministry's privilegeclaims, and over 1,000 documents in the context of the Ministry's challenge to CarterHolt's privilege claims). Whether privilege attaches to a document is a document-by-document inquiry. I accordingly cannot make rulings on individual documents, otherthan the small number of inadvertently disclosed documents which are the subject ofthe Ministry's application. The parties accordingly acknowledged that the outcome ofthis judgment is likely to be findings which inform any necessary re-review of relateddocuments over which each party has claimed litigation privilege.[4] Before turning to the applications themselves, I first set out an overview of theprinciples applying to litigation privilege. I then address the Ministry's challenge toCarter Holt's privilege claims, before turning to Carter Holt's challenge to theMinistry's privilege claims. At the conclusion of this judgment, I provide some briefobservations on residual issues arising on the applications which, given the findings Ihave made, do not require formal determination.Litigation privilege — overview[5] Section 56 of the Evidence Act 2006 (the Act) relevantly provides:56 Privilege for preparatory materials for proceedings(1) Subsection (2) applies to a communication or information only if thecommunication or information is made, received, compiled, or prepared forthe dominant purpose of preparing for a proceeding or an apprehendedproceeding (the "proceeding").(2) A person (the "party") who is, or on reasonable grounds contemplatesbecoming, a party to the proceeding has a privilege in respect of—(a) a communication between the party and any other person:(b) a communication between the party's legal adviser and anyother person:(c) information compiled or prepared by the party or the party'slegal adviser:(d) information compiled or prepared at the request of the party,or the party's legal adviser, by any other person.[6] It is common ground that a claim for privilege under the section accordinglyrequires:(a) that at the date the document was prepared, litigation was reasonablyapprehended; and(b) that the document was prepared for the dominant purpose of preparingfor litigation.[7] Whether litigation is reasonably apprehended is a question of fact. Theapplicable test is an objective one of "whether a reasonable person in the position ofthe party in question, and possessed of the same information at that time, would haveregarded the future commencement of litigation as probable"2 There must be a "reallikelihood" of litigation.3 A "mere possibility" or "vague apprehension" that litigationcould occur in the future is insufficient.4[8] Given issues which arise on the Ministry's opposition to Carter Holt'sapplication, it is necessary to discuss the dominant purpose aspect of the test in a littlemore detail, and to track through the key cases upon which the Ministry relies.[9] I first refer to the English Court of Appeal's decision in Re Highgrade TradersLtd.5 In that case, the premises and stock of a family company had been destroyed byfire. The insurance company which insured the company's premises and stock wassuspicious of the circumstances surrounding the fire and suspecting arson, had twopreliminary reports prepared by its loss assessors as to the cause of the fire. The2 E Sport Yachting Ventures Ltd v Southern Spars Ltd HC Auckland CIV-2008-404-1120, 29 July2011 at [21], citing Commerce Commission v Caltex New Zealand Ltd HC Auckland CL33/97, 10December 1998 at 3; Public Trust v Hotchilly Ltd HC Wellington CIV-2009-485-704, 31 March2010 at [20]; Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart [1985] 1 NZLR596 (CA) at 606 and Laurenson v Wellington City Corporation [1927] NZLR 510 at 511.3 Financial Markets Authority v Hotchin [2014] NZHC 2732 at [46], citing United States of Americav Phillip Morris Inc [2004] EWCA Civ 330.4 Pernod Ricard New Zealand Ltd v Lion-Beer, Spirits & Wine (NZ) Ltd [2012] NZHC 2801 at [30]-[33]; Financial Markets Authority v Hotchin, above n 3, at [46]; United States of America v PhillipMorris Inc, above n 3, E Sport Yachting Ventures Ltd v Southern Spars Ltd, above n 2, at [21].5 Re Highgrade Traders Ltd [1984] BCLC 151 (CA).insurer subsequently consulted its solicitors. Correspondence from the solicitors atthe time noted that litigation was likely to ensue and advised that a "fully detailedreport and detailed witness statements" should be obtained from the loss adjusters andforwarded to the solicitors. A detailed report was duly prepared by the loss adjusters,which formed part of the materials put before the solicitors. A report was also obtainedfrom a firm of accountants as to the financial status of the company prior to the fire.A further report from forensic experts was also sought on the cause of the fire. Thesolicitors then formally advised that the company's claim should be denied. Thereports the subject of the privilege challenge were the detailed loss adjuster's report;the accountants' report as to the financial status of the company, and the expert forensicreport.[10] In considering whether litigation privilege attached to those reports, there wasno real dispute that at the times they had been prepared, litigation was (at least)reasonably apprehended. The focus of the Court's decision was on whether thedominant purpose of the preparation of those reports was to prepare for the litigation.Oliver LJ said the following:6What, then, was the purpose of the reports? The learned Judge found a dualityof purpose because, he said, the insurers wanted not only to obtain the adviceof their solicitors, but also wanted to ascertain the cause of the fire. Now formy part, I find these two quite inseparable. The insurers were not seeking thecause of the fire as a matter of academic interest in spontaneous combustion.Their purpose in instigating the inquiries can only be determined by askingwhy the needed to find out the cause of the fire. And the only reason that canbe ascribed to them is that of ascertaining whether, as they suspected, it hadbeen fraudulently started by the insured. It was entirely clear that, if the claimwas persisted in and if it was resisted, litigation would inevitably follow. Theclaim had been made and there was no indication that it was not going to bepressed, particularly after Mr MR's acquittal. It is, as it seems to me, entirelyunrealistic to attribute to the insurers an intention to make up their minds,independently of the advice which they received from their solicitors, that theclaim should or should not be resisted. Whether they paid or not depended onthe legal advice which they received, and the reports were prepared in orderfor that advice to be given. The advice given would necessarily determinetheir decision and would also necessarily determine whether the anticipatedlitigation would or would not take place.[The High Court Judge] seems here, as I read his judgment, at this point tohave been of the opinion that Waugh's case established that it was only if the6 At 173-174.documents were brought into existence for the dominant purposes of actuallybeing used as evidence in anticipated proceedings that privilege could attachand that the purpose of taking advice on whether or not to litigate (whichis, in substance) what the decision to resist the claim amounted to) wassome separate purpose which did not qualify for privilege. That, in myjudgment, is to confine litigation privilege within too narrow bounds Nodoubt the purpose was 'dual' in the sense that the documents might well serveboth to inform the solicitors and as proofs of evidence if the proceedingsmaterialised. But, in my judgment, the learned judge failed to appreciate thatthe former purpose was itself one which would cause the privilege to attach.There was no purpose for bringing the documents into being other thanthat of obtaining the professional legal advice which would lead to adecision whether or not to litigate. That, in my judgment, was a sufficientpurpose on its own to entitle them to privilege quite apart from anysubsidiary purpose which they might serve in any litigation which mightensue as a result of the decision.[Emphasis added][11] I have recited the facts and decision in Re Highgrade Traders in some detail,given the Ministry's reliance on more recent decisions in this jurisdiction which citethat decision for the proposition that an "inseparable duality of purpose" can give riseto litigation privilege.7 But I do not read the decision in Re Highgrade Traders in thatway. Rather, it confirms the need for a dominant purpose, and it is clear that OliverLJ's conclusion was that the only purpose for which the reports came into being wasto enable the insurers' solicitors to advise on whether or not to litigate. Indeed, OliverLJ concluded that what the High Court had found to be the dominant purpose, namelyestablishing the cause of the fire, did not in fact exist as a purpose in its own right.Further, Oliver LJ was clear that a secondary purpose was the reports' use in thelitigation.[12] Re Highgrade Traders was decided shortly before the New Zealand Court ofAppeal's decision in Guardian Royal Exchange, still considered to be a leadingdecision in this jurisdiction on litigation privilege.8 In Guardian Royal Exchange, aninsurance claim had been lodged after a house fire. The insurer was suspicious ofarson from the outset, but pending further investigations, had not committed itself toa definite attitude to the claim.7 See the discussion below at [28]-[29].8 Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart, above n 2.[13] The insurer formed the view it would need legal advice on whether to acceptor reject the claim. Assessors were therefore instructed to prepare a report addressedto the insurer's solicitors. Further reports were obtained (some of which were alsoaddressed to the insurer's solicitors) directed to the question of what evidence wasavailable to support the claim of arson. Cooke J (as he was then) observed that theevidence fell short of suggesting that at that time, the claim was likely to be rejected.His Honour stated:9But the important fact for present purposes is that, during the period coveredby the documents, none of the writers was able to express the opinion thatinvestigations had reached a stage when the defendant should deny liability.[14] As to the purpose for which the reports had been prepared, his Honour stated:10 it is evident that they have been prepared for mixed purposes. Theirimmediate purpose was to enable the defendant to decide whether or not toaccept liability. No doubt this decision would be made after taking legaladvice; indeed some of the reports were actually made to the defendant'ssolicitors. But that does not mean that, to adopt one of Scarrett CJ's phrasesin Laurenson v Wellington City Council [1927] NZLR 510, they werecompiled "in a bone fide belief that litigation will probably ensue." Litigationwas no more than a possibility.Primarily they were to enable the defendant and its legal advisers to make uptheir minds to whether or not to contest the claim. Secondly they were for theuse of the advisers in defending an action if it were decided to deny liability.[15] And later:11 I do not think that they should be characterised as having been brought intoexistence for the dominant purpose of submission to legal advisers inconnection with litigation.[16] As to whether New Zealand courts should adopt the (English) dominantpurpose test, or some lesser "appreciable" purpose test, Cooke J concluded:12 I would propose as the New Zealand rule that, when litigation is in progressor reasonably apprehended, a report or other document obtained by a party oras legal adviser should be privileged from inspection or production inevidence if the dominant purpose of its preparation is to enable the legaladviser to conduct or advise regarding the litigation.9 At 599.10 At 599.11 At 600.12 At 602.[17] The question of litigation privilege in the context of insurance claims was stillvexing the senior courts in 1987. In General Accident Fire & Life AssuranceCorporation Ltd v Elite Apparel Ltd, McMullin J, writing for the Court of Appeal,summarised the approach in Re Highgrade Traders and Guardian Royal Exchange asfollows:13In the Highgrade case it was accepted that privilege, called "litigationprivilege" attached to any document which the party asserting the privilegecould show had been prepared for the dominant purpose of obtaininginformation to be submitted to the client's professional legal advisers for thepurposes of obtaining advice on pending or anticipated litigation, and that theprivilege extends to documents brought into being for the purpose of beinglaid before a solicitor in order to obtain his advice with regard to contemplatedlitigation. A similar view was the basis of the decision of this Court inGuardian Royal Exchange...[18] Importantly for the purposes of the discussion later in this judgment, McMullinJ recorded Oliver LJ's approach to be that where a duality of purpose is discerned, theCourt must determine what is the dominant purpose.14[19] Lest there be any lingering doubt as to whether dual purposes might satisfy thetest for litigation privilege, the need for a dominant purpose was made clear inDinsdale v Commissioner of Inland Revenue.15[20] In that case, ANZ Bank Group had been threatened with prosecution by theInland Revenue Department for failing to produce relevant documents in response tostatutory notices issued by the Department. In response, the bank put in place aprocess to search for relevant documents, which included interviews with bankemployees. The search and interviews were carried out by an accounting firm, havingbeen instructed by ANZ's solicitors "to assist us in this matter in relation to athreatened prosecution of our client". The solicitors' letter to the accountants recordedthat all communications would be subject to litigation privilege.[21] A partner from the firm of solicitors sat in on the interviews. The InlandRevenue Department later sought copies of the interview notes, over which litigation13 General Accident Fire & Life Assurance Corporation Ltd v Elite Apparel Ltd [1987] 1 NZLR 129at 133.14 At 133.15 Dinsdale v Commissioner of Inland Revenue (1997) 11 PRNZ 325 (CA).privilege was claimed. Proceedings were later commenced seeking declarations as tothe interview notes' privileged status.[22] In considering the approach to litigation privilege, Blanchard J, writing for theCourt, stated:16 the central feature of litigation privilege "is that it represents the fruits ofthe effort on the part of the litigants in preparing for the case". The evidencemay have been gathered by the lawyer, the client or an agent for either of them,but the work must have been carried out with the dominant purpose ofconducting or advising on reasonably anticipated litigationIf litigation is but one of two or more equally important purposes, it is not thedominant purpose. It is a question of fact what is the dominant purpose.[23] That proceedings were reasonably apprehended by the bank was accepted.Applying the dominant purpose test, Blanchard J stated:17[The bank's solicitor] may have attended when the interviews took place witha view to seeing if there was any information to be gathered from theinterviewees which might be helpful in the defence of the threatenedprosecution or might be used to influence the department, but in our view thatwas at best an equal, not a dominant, purpose of the interviewing process.[24] Finally, there is also no dispute that the fact that a document is ultimately usedfor the purposes of litigation does not itself mean that it was prepared for the dominantpurpose of that litigation, where the original purpose behind the creation of thedocument was different.18[25] Turning to the more recent decisions on litigation privilege of relevance to theissues arising in this case, in Carter Holt Harvey Ltd v Genesis Power, Randerson Jcommenced by noting that there was no reason to conclude that s 56 of the Act wasintended to depart in any material respect from the Court of Appeal's decisions inGeneral Accident, Fire and Life Assurance Corporation Ltd v Elite Apparel Ltd andGuardian Royal Exchange.19 That point now appears to be well accepted. The reportsin issue in Carter Holt Harvey Ltd v Genesis Power were expert reports prepared16 At 325.17 At 331.18 Jupiter Air Ltd (in liq) v Australian Aviation Underwriting Pool Pty Ltd HC Auckland, CP 71/01,13 October 2003.19 Carter Holt Harvey Ltd v Genesis Power Ltd (No 7) HC Auckland CIV-2001-404-1974, 6 May2008, at [14].shortly before the relevant proceedings had been issued, as well as some prepared afterthe proceedings had been commenced. The context for the reports' preparation wasexplained in evidence as follows:The No 8 primary boiler has never performed to its contract specifications.An improvement programme was initiated in November 2000. Experts fromvarious companies including Thermal Energy Systems, Amec-Symons,Sanwell, and Kvaerner were retained to analyse the performance andreliability problems and propose solutions.As a result of work carried out according to the advice received, the boiler andplant performance have already substantially improved.[26] On the challenge to litigation privilege, Randerson J stated the following:20Advice received in respect of remedial work on the allegedly non-performingplant is potentially relevant to the litigation in several ways. First, Carter Holthad a duty to take reasonable steps to mitigate its losses. Secondly, the costof undertaking any remedial work is an essential part of Carter Holt's damagesclaim. Thirdly, to the extent that the study revealed the nature and cause ofdefects in the plant, it would be relevant to the issue of the liability of thedefendants for those defects.Of course, as Mr Gault properly accepted, Carter Holt is obliged to disclosethe documents relating to the remediation work actually carried out and thecost of that work. But in my view, Carter Holt is not obliged to disclose theadvice it receives from its expert advisers as to the remedial steps proposedand their efficacy. This advice could include a range of options, reasons foror against the selection of an option, comparative costs and advice as to theanticipated outcomes. Advice of this kind is critical to the conduct of thelitigation and is obtained so the plaintiff is able properly to assess theoptions available and obtain advice from legal counsel as to the stepsnecessary to fulfil the plaintiff's duty to mitigate. Advice of this naturecannot sensibly be differentiated between advice in connection with thelitigation and advice on the remedial work required. The two are inextricablylinked.[Emphasis added][27] I do not read the Judge's comments to endorse the suggestion of two equalpurposes effectively becoming one dominant purpose. That would be contrary to theCourt of Appeal's observations in Guardian Royal Exchange and Dinsdale. Rather,having endorsed the need for a single dominant purpose, Randerson J concluded thaton the facts of that case, the reports' dominant purpose was to enable advice to betaken as to the steps necessary to fulfil the plaintiff's duty to mitigate in the context ofapprehended (and then actual) proceedings. Had the (mixed) purposes of the reports20 At [28]-[29].have been to advise on remedial steps (outside the context of litigation) and to preparefor apprehended proceedings, then the latter could not have been said to be thedominant purpose.[28] In Minister of Education v H Construction North Island Ltd, Associate JudgeBell considered claims to litigation privilege in circumstances not dissimilar to thepresent case.21 He observed that "in some cases, the courts have found that purposesare inseparable and it is impossible to distinguish between dominant and secondary.An example is Re Highgrade Traders Ltd".22 But in light of the above discussion, Ido not consider that decision stands for the proposition that dominant and secondarypurposes may "merge" to become one dominant purpose. Rather, Oliver LJ had foundthat the only reason the reports had been prepared in that case was to obtain advicefrom solicitors on apprehended litigation.23 In effect, the suggested other purpose, toascertain the cause of the fire, was not a free-standing purpose at all.[29] In a later judgment involving the same parties, Associate Judge Bell referredagain to reports potentially having an "inseparable duality of purpose – both settlementand litigation".24 For the same reasons given in the preceding paragraph, I would againcaution against the suggestion that "inseparable dual purposes" are sufficient to giverise to litigation privilege – unless it can be said that the dominant purpose is in factpreparation for apprehended proceedings.2521 Minister of Education v H Construction North Island Ltd [2017] NZHC 3147.22 At [8].23 See that extract of the decision in Re Highgrade Traders, above n 5, set out at [10] above.24 Minister of Education v H Construction North Island Ltd [2018] NZHC 20 at [31].25 A similar cautionary note applies to comments made in Miah v AMP Life Ltd [2018] NZHC 1964,in which Associate Judge Bell states at [33] that "to claim privilege National Mutual needs to showeither that the preparation for litigation was inextricably connected with that purpose (so that therewas a single purpose) or that preparation for litigation was the dominant purpose" (emphasisadded). For the reasons already elaborated on, the latter inquiry is the only proper inquiry.Researches have not disclosed further authorities addressing a "duality of purpose" approach,other than it being referred to as "the troublesome issue of possible duality of purpose" in KupeGroup Ltd v Ariadne Australia Ltd (1991) 4 PRNZ 135 (HC) at 138; and in Mudgway v NewZealand Insurance Co Ltd [1988] 2 NZLR 283 (HC), Chilwell J referring to the "inseparable"purposes of advising on a claim and the conduct of apprehended litigation, thus the dominantpurpose test being satisfied. I note that in Carlton Cranes Ltd v Consolidated Hotels Ltd [1988]2 NZLR 555 at 560-561, Tompkins J disagreed with observations by Chilwell J in Mudgway thatthe Court of Appeal in General Accident, Fire and Life Assurance Corporation Ltd v Elite ApparelLtd, above n 13, adopting Highgrade Traders, had taken a different approach to the Court inGuardian Royal Exchange, above n 2, on the test for litigation privilege. I respectfully agree withTompkins J.[30] With these principles in mind, I now turn to the applications.Ministry's challenge to Carter Holt's privilege claimsIntroduction[31] The Ministry applies for an order setting aside Carter Holt's claim of litigationprivilege in relation to some 25 documents relating to Carter Holt's process for dealingwith complaints about Shadowclad. Those 25 documents were inadvertently disclosedby Carter Holt on inspection.26 As discussed at the hearing, were I to set aside theprivilege claims in relation to the 25 documents, this may require Carter Holt toconduct a document-by-document review of other similar documents over which ithas claimed privilege.The Carter Holt complaints process[32] A Carter Holt "Shadowclad inquiry process summary" document datedOctober 2017 was produced in evidence. It notes that Carter Holt can receive inquiriesin relation to cladding from multiple avenues, being:(a) an 0800 inquiry;(b) a website inquiry; and(c) a merchant inquiry.[33] The process summary document states:Typically we contact the person who has made the inquiry within 24 hours toacknowledge their inquiry and to gather further information. Thisacknowledgement is generally by way of a phone call if they have provided aphone number and then by a follow-up email as below.[34] The template draft email inquiry sets out various questions to be asked of theuser, being relevant information required prior to a site visit. The document states:It tells us what to be looking for based on the specification of the day,26 The Ministry is responsibly treating those documents as confidential pending resolution of theprivilege issue; the documents have not yet been disclosed to the Ministry by its solicitors.It provides us some understanding of what we may need to look closer at whenonsite also allows us to load into the OMS System accurately what we knowat this point in timePrepares us for what we may be about to view and whether a CHH Rep canassist in gathering information or whether we need to send someone moresenior to investigate in the first instance[35] The document goes on to explain that the next step would be a site visit. Underthe heading "Technical Team Engagement", it says:Where a site inspection identifies a complex site, scenario or issue this is thenreferred to our technical team to take over the investigation and resolve theenquiry.The Technical Team investigation further — investigation that is requiredis dependent on the specific nature of the enquiry, the complexity of thebuild, the installation methods used and a number of other factors. In someinstances the technical team will do a second site visit or seek third partyassistance to better understand the nature of the enquiry or issue at hand.This can take some time to work through.The Technical Team review each enquiry on its merits and post the reviewwill identify an appropriate outcome to complete the enquiry.Every enquiry in relation to claims is judged on its own merits and facts,there is no text book response that can be used as each enquiry is differentin some form.The methods the CHHWP Technical Team use for making decisions are• What did the building code require?• What did the specification of the day require?• Is this a manufacturing fault?• Is this an installation error?• Is this fair and reasonable from the business and clientsperspective?• Are we acting as a responsible company?[36] Ms Lang-Siu, legal counsel employed by Carter Holt, swore an affidavit insupport of Carter Holt's opposition to the application, and also addressed thecomplaints process. It is appropriate to set out the key aspects of her evidence in full:[27] I confirm that the process document annexed to Mr O'Sullivan'saffidavit reflects the general enquiry process adopted by CHH whenqueries are received. The process is straightforward, and involvestaking steps to gather information as needed to take steps in relationto complaints.[28] The process document does not determine whether or not litigationis contemplated. That depends on a number of factors, includingthe nature and circumstances of the complaint; how serious the subjectmatter is perceived to be; and whether litigation is expresslythreatened or on foot.[29] I note that:(a) Most complaints received by CHH originated from buildingsupply merchants or from its website, where it maintains anonline enquiry form.(b) In the majority of cases, complaints are not major and arereadily resolved. Common complaints include late delivery;incorrect stock, and damage to product during freight, one-offmanufacturing flaws and minor appearance defects withproduct sold. CHH has authorised its sales representatives toaddress such issues using their discretion up to a cost of$5,000, and most issues are readily resolved by a refund, storecredit or replacement in this way. The threshold waspreviously $1,500, up until October 2018. Despite this, themost common, routine and ordinary complaints have almostbeen excluded from discovery because they are not relevantto the pleaded defects and therefore not discoverable.(c) Where complaints are more serious, likely to involvelitigation, or involve claims or costs of more than the abovethreshold, sales representatives are instructed to escalate themto CHH's senior complaints team. CHH carries out regulartraining at least once a year with its sales representatives toensure this occurs. The training is currently led by CHH'slegal counsel and senior complaints team. Non-routinecomplaints and any particularly significant complaintsrelating to Shadowclad and weathertightness issues which arerelevant to this proceeding are almost invariably escalated inthis way.[30] Where complaints concerning weathertightness or durability issuesare received, CHH perceives that unless the complaint is able to beresolved amicably litigation is a likely outcome. In general it isexpected that homeowners with issues on their buildings will besufficiently motivated to pursue claims. CHH treats allweathertightness related complaints as serious and as thoughlitigation is likely to occur.[31] When such complaints are received:(a) CHH typically carries out an on-site investigation of theproperty. At this investigation, a senior technical teammember, or externally engaged building surveyor will discussthe complaint with the homeowner, and review the property,Shadowclad, and any damage and take photographs and notesof the general condition of the property and issue. Thisinvolves gathering information for defending potentiallitigation claims. That information .is also used for advancingnegotiations.(b) In many cases, CHH may engage with without prejudicecorrespondence with the complainant in an attempt to resolvethe dispute and avoid litigation, but a settlement is not aguaranteed outcome. Such discussions and settlementnegotiations with homeowners are conducted on aconfidential and without prejudice basis.(c) If a settlement is reached, that is documented in writing. CHHhas discovered settlement agreements and correspondenceabout implementing settlement on relevant complaints asopen.(d) If CHH does not consider itself responsible, CHH may writeto the homeowner explaining why it does not consider itselfat fault. Such correspondence has been discovered as openwhere it does not form part of ongoing settlementnegotiations.[32] As the above occurs, the relevant information gathered from any siteinvestigation and key correspondence about the complaint is usuallysaved to the complaints system and a folder relating to the complaint.[Emphasis added]The nature of the documents[37] Turning to the documents themselves, they broadly fall into the followingcategories:(a) a standard form email inquiry form recording a user's complaint orquery, which appears to be automatically forwarded to a shared mailbox (titled "Wood Products");27(b) a similar SAP system generated document, being a standard form emailsummarising the complaint or query;2827 For example document CAR.002.00002642.28 As in document CAR.002.00003423.(c) internal emails between members of the technical team forwarding acomplaint and engaging in some initial discussion of it (i.e. pre-sitevisit);(d) further internal emails between the technical team, post-visit, oftenattaching photographs of the cladding concerned;(e) documents which further discuss the complaint and set out a basis forresolution, or enclose a draft letter to the user or merchant concerned.29[38] The email correspondence referred to at (c) and (d) above, and in particular(d), discusses the possible cause(s) of the issue that has been raised by a Shadowcladuser.Discussion[39] Having reviewed the documents themselves, and dealing with them generallyat this stage, I not persuaded that litigation privilege applies. First, Ms Lang-Siu statesthat "CHH treats all weathertightness related complaints as serious as though litigationis likely to occur". But that does not mean litigation in relation to each complaint isreasonably apprehended. At the time a complaint or query is first received, it cannotbe said that litigation is reasonably apprehended, as nothing is known about thecomplaint or what Carter Holt's response might be to it. That continues to be theposition prior to any investigation of the matter, given those discussing the complaintin the internal emails have no basis upon which to assess the complaint, other than asnoted in the complainant's original communication.[40] Even after a site visit, I doubt it can be said that litigation would be reasonablyapprehended. From the documents reviewed, the technical team are clearly still at aninvestigatory phase as to the nature of the complaint and the possible causes of theissue that has been raised. So while Ms Lang-Sui states that "CHH perceives thatunless the complaint is able to be resolved amicably, litigation is a likely outcome",the documents do not disclose a view being reached that the matter will be unable to29 As in documents CAR.002.00001714 and CAR.002.00001964.be resolved amicably. This is analogous with cases such as Guardian Royal Exchange,where preliminary investigations are being carried out as to the cause of the event inquestion, without a view having been taken on acceptance or declinature of the claim(and thus the likelihood of litigation ensuing).[41] Further, Carter Holt cannot effectively "pull itself up by its boot straps" bytreating all weathertightness-related complaints as serious and as though litigation islikely to occur. This is inconsistent with Ms Lang-Siu's own observations that whetheror not litigation is contemplated will depend on a number of factors, including thenature and circumstances of the complaint; how serious the subject-matter is perceivedto be; and whether litigation is expressly threatened or on foot. Treating allweathertightness complaints "as though" litigation is likely to occur is alsoinconsistent with the 2017 inquiry process summary, which emphasises that "everyinquiry in relation to claims is judged on its own merits and facts, there is no textbookresponse that can be used as each inquiry is different in some form".[42] Carter Holt points to the fact that it was subject to a claim in the WeathertightHomes Resolution Service in 2006, and that all the documents in question post-datethat time. I do not consider that alters the position. That certainly demonstrates thatlitigation, or at least proceedings in that forum, are a possibility. But in any complaintresolution system, some form of litigation or involvement in external processes toresolve the complaint will always be a possibility. It cannot be right that, simply onthe basis of one matter progressing to a formal process, proceedings were reasonablyapprehended at the time of preparing all later documents concerning the investigationand response to complaints, including at all stages of dealing with those complaints.[43] But even putting aside whether proceedings were reasonably apprehended, Ido not consider the documents I have reviewed were prepared for the dominantpurpose of preparing for apprehended proceedings in any event. Rather, the dominantpurpose is clearly to carry out investigations in order to assess the complaint or query,and ascertain what Carter Holt's response to it might be. In this context, I note thatCarter Holt states in its own submissions that the documents in question "have all beencreated for the sole purpose of investigating and responding to those claims"(emphasis added). The fact that the information gathered might, later down the track,be used in connection with any proceedings which might ensue does not elevate thatpurpose to a dominant purpose.[44] Attached to Ms Lang-Siu's affidavit is a schedule in which she says sheexplains the basis for litigation privilege on a document-by-document basis. However,the comments in relation to individual documents do not address or deal with thepoints I have referred to above. Rather, the "comments" column instead makesconclusory-type statements in relation to the general description of each document andthat it was prepared when litigation was anticipated. A selection of these commentsillustrates the point:The top document in this email is privileged as it relates to steps taken toinvestigate a complaint where litigation was anticipated.This email includes an internal report of on-site investigations and evidencegathered by CHH in respect of a complaint where litigation was anticipated.This is a report of on-site investigations and evidence gathered by CHH inrespect of a complaint about Shadowclad where litigation was anticipated.This email is between CHH staff only and relates to steps being taken toinvestigate a complaint where litigation was anticipated.[45] None of the statements explains why or what litigation was reasonablyapprehended at the time of each of the individual documents was prepared, nor whythe dominant purpose of each individual document was for the preparation of thoseproceedings or apprehended proceedings.[46] Carter Holt bears the burden of satisfying me that the privilege claim is madeout. It has not done so. Accordingly, the privilege claims by Carter Holt in relation tothe following documents (by reference to the last four digits of the documentidentification number) are set aside – 2642; 3423; 0571; 1797; 2266; 2502; 2516;0216; 0220; 0543; 0921; 1639; 2272; 2381; 2416; 2436; 2880; 3012; 3434; 0218;0903; and 4639.[47] Given the above and/or to the extent a blanket type approach has been taken todocuments of this nature, Carter Holt will need to re-review the complaint relateddocuments and its associated privilege claims.Without prejudice privilege[48] Carter Holt claims privilege for settlement negotiations (without prejudiceprivilege)30 in relation to four of the documents provided to me for review.[49] Section 57 of the Act provides as follows:57 Privilege for settlement negotiations, mediation, or pleadiscussions(1) A person who is a party to, or a mediator in, a dispute of a kind forwhich relief may be given in a civil proceeding has a privilege in respect ofany communication between that person and any other person who is a partyto the dispute if the communication—(a) was intended to be confidential; and(b) was made in connection with an attempt to settle or mediate thedispute between the persons.(2) A person who is a party to a dispute of a kind for which relief may begiven in a civil proceeding has a privilege in respect of a confidentialdocument that the person has prepared, or caused to be prepared, in connectionwith an attempt to mediate the dispute or to negotiate a settlement of thedispute.[50] In this case, the challenge to Carter Holt's privilege claim turns largely onwhether the Shadowclad user and Carter Holt could be said to be in a "dispute".[51] The term "dispute" is not defined in the Act. The Court of Appeal consideredits meaning in Morgan v Whanganui College Board of Trustees and said thefollowing:31The word "dispute" is not a term of art; its use was not meant to be exclusive.And, as noted, "negotiations" or the broader term "difference" will suffice.None of these phrases warrant a narrow construction where something hasarisen between the parties which must be resolved and they have expresslyagreed their communications should be protected for that purpose.30 Evidence Act 2006, s 57.31 Morgan v Whanganui College Board of Trustees [2014] NZCA 340, [2014] 3 NZLR 713, at [17].[52] The Court said that whether the parties are in dispute or a state of negotiationsis a fact-specific question.32[53] Adopting these principles, I make the following findings in relation to thedocuments over which Carter Holt claims without prejudice privilege:(a) Document CAR.002.00003012 – I am not satisfied the claim to withoutprejudice privilege is made out. This is an automatically generatedemail from a SAP system, which appears to record actions taken inrelation to a query or complaint. Ms Lang-Sui's schedule states itincludes reference to ongoing steps to reach settlement of a complaint.But the document itself simply records that there has been sitereplacement for rotting Shadowclad. There is no suggestion of a"dispute" between any relevant parties in connection with the contentsof the email.(b) Document CAR.002.00001964 – I am satisfied the two emails in thisdocument email chain are privileged on a without prejudice basis. Inraising an issue regarding Shadowclad, the relevant user has not raisedthat issue simply for Carter Holt's information or edification; rather, theuser wants something to be done about it. The two internal emailswhich make up this chain discuss the issue raised and propose apotential resolution. I am satisfied that as between the user and CarterHolt, there is a dispute (in the sense of a "difference" or "negotiations"),and that the internal emails were prepared in connection with an attemptto settle that "dispute". I am also satisfied the emails were intended tobe confidential; in other words, the authors of the emails would nothave anticipated the contents of those emails being disclosed morebroadly, including to the end-user concerned.(c) Documents CAR.002.00001713 and 1714 – For the same reasons setout at (b) above, I am satisfied these documents are subject to withoutprejudice privilege. The first is an email circulating a draft letter to a32 At [19].wholesaler in which a proposal to resolve a complaint is set out. Thesecond document is a draft of the letter concerned. As between CarterHolt and the underlying end-user, there is "dispute" for the reasonsnoted above. Further, both the email and the draft letter were made inconnection with an attempt to settle that dispute. The Ministry queriedwhether the privilege could attach given the draft correspondence wasto an intermediary party, namely the relevant wholesaler. I do notconsider that alters the analysis. It does not alter the fact that there is a"dispute" between Carter Holt and the end-user (and potentially thewholesaler also). I am also satisfied the communications were intendedto be confidential, despite the involvement of the wholesaler.Ultimately, the presence of the wholesaler is simply the "conduit"through which the complaint is being made. Had Carter Holt's offer toresolve the issue not been accepted, it would still have been reasonablefor Carter Holt to expect that its offer would not be disclosed in anyproceedings concern the issue, despite its offer being made "via" thewholesaler.[54] The Ministry says that if the claims to without prejudice privilege were madeout, it would be in the interests of justice to set aside the privilege on the basis that theneed for the communication or document to be disclosed outweighs the need for theprivilege.33[55] I cannot see any reason why the interests of justice would require setting asidethe without prejudice privilege in this case. There is nothing particular or special aboutthese proceedings, other than, of course, their sheer size, which would warrant that.Without prejudice privilege carries with it significant benefits, as recognised ins 57(3)(d) itself, which requires the Court to consider whether setting aside theprivilege would be in the interests of justice "taking into account the particular natureand benefit of the settlement negotiations or mediation". To set aside privilege in thiscase, where no particular or special circumstances exist, would in my view33 Evidence Act 2006, s 57(3)(d).significantly undermine the benefits and very purpose of without prejudicenegotiations.[56] For these reasons the Ministry's application to set aside privilege in relation tothe above four documents is declined.Carter Holt's challenge to Ministry's privilege claimsIntroduction[57] Carter Holt seeks orders setting aside the Ministry's claim of privilege over anumber of destructive testing and visual inspection reports relating to school buildingsclad in Shadowclad. More specifically, the challenge relates to 1,472 such reportsdating from 24 September 2008.[58] As a preliminary point, given the sheer number of documents involved, I havenot requested to review each of the reports, which would be a very significant task inits own right. Rather, I have considered the principled basis upon which the Ministryhas claimed privilege over the reports. I have set out at [92]-[96] below myconclusions as to whether certain reports prepared in certain circumstances would orcould attract litigation privilege. As noted at the outset of this judgment, and asdiscussed with the parties at the hearing, rather than being in a position to givedocument-by-document rulings (which is presently impossible), the broad findingsmade in this part of my judgment may require the Ministry to re-review somedocuments and privilege claims, to ensure that privilege is only claimed in accordancewith those findings.[59] In order to understand the basis of the privilege claimed by the Ministry andmy findings in relation to it, it is necessary to set out in some detail the background toand context in which the various reports have been prepared. The discussion in thefollowing section of this judgment is largely drawn from internal, contemporaneousMinistry documents produced in evidence on Carter Holt's application, as well as thecontents of affidavits sworn in support of the Ministry's opposition.Background/context to reports[60] Ms Halpin, for the Ministry, says in her affidavit that prior to 2008,weathertightness was not considered to be a significant issue for school buildings.This is consistent with internal documents explaining the history of how the Ministryhas responded to and managed "leaky" schools. Ms Halpin goes on to say that priorto about 2010, the Ministry gave relatively little consideration to weathertightnessissues and the causes and extent of such issues or cladding.[61] The contemporaneous documents explain that prior to 2008, schools tended toaddress weathertightness issues themselves in an ad hoc manner. An internal email ofJuly 2008 identified the need for a more coordinated approach, "to drive resolution ofthese issues with urgency". It noted that the deliverables of the intended project wouldbe:- Compilation of a current schedule of schools with leaky buildings.- Procurement process for sourcing people to undertake both theinvestigations and remedial works required, i.e. should we set up nationalany national [sic] contracts?- Funding requirements to complete the required investigation work.- Finding requirements to address the leaky building issues in the currentschedule of schools.- Confirmation of the ongoing process for managing leaky building issuesin schools.[62] This led to the development of what became known as the "BuildingImprovement Programme" (BIP). Various internal documents record the BIP ashaving three "work streams":(a) Remediation – identification and repair of the defective buildings;(b) Prevention – specification of guidelines and policy that determines howschool buildings should be designed and repaired or built; and(c) Recovery – recovery of costs from contractors responsible for defectiveworks.[63] A "Project Mandate" document dated February 2009 for the "Defective/LeakySchool Buildings Project"34 noted health and safety issues for the occupants of leakyschool buildings, and that "structural frame decay ultimately poses a real and presentdanger to occupants of the buildings for which the Ministry of Education would beheld liable". The document noted that to that point in time, 60 schools had beenidentified as requiring investigation for possible defects, but that until a nationalsurvey was carried out, the "Ministry was reliant on the vigilance of schools to reportcases of defective buildings".[64] The document went on to state that objectives of the Defective/Leaky SchoolBuildings project were to:..identify defective school buildings that are owned by the Ministry ofEducation and have them repaired to a high quality standard so that their lifeis extended and they require the minimum maintenance in the future. TheMinistry will collect evidence against the three main causal effects and wherepossible the Ministry will take a civil claim to court against the projectmanager, architect or designer and builders and contractors responsible andrecover the costs of remediation of the buildings.[65] In a similar vein, the deliverables of the project were stated to be:to identify the schools that have defective buildings, ensure that thebuildings are repaired to a high quality standard which will ensure futuremaintenance and repairs will be held to a minimum. And to prepare a claimof civil action through the courts to recover as much of the remediation costsas possible.[66] As can be seen, these statement of the project objectives and deliverables hasshades of the three work streams of the BIP as referenced in a number of otherdocuments, namely remediation, prevention and recovery.[67] The mandate document further stated:If the initial survey finds issues with the design or construction of the buildingthe surveyor will indicate that a full destructive test should be carried out.The Ministry, school Board representatives and surveyor will discuss theresult of the survey once complete. This discussion will inform the board of34 Prepared by a Mr David Bos (who was appointed at the BIP Programme Manager in November2009).the likely remediation process required to fix the building. In some cases, therepairs will be minor and may not require the further involvement of thesurveyor.[68] The document also noted that it would be extremely important at that stage ofthe process for the surveyor to advise if there were any issues that required urgentattention, and in particular, that the Ministry would need advice on health and safetyrisk.35[69] The Ministry's approval was accordingly sought for:(a) The proposed process for fixing school buildings;(b) Funding to fix the affected buildings;(c) Making available the necessary resources to manage the process offixing affected buildings; and(d) Making available the funding and resources necessary to initiate legalaction where it was viable to recover the expenses of fixing schoolbuildings that have failed.[70] A report of 20 April 2009 to the Minister of Education summarised the workthen being undertaken to manage the "nation-wide problem" of leaking schools. Thereport:(a) Highlighted the health and safety risk to occupants of the affectedbuildings from mould and fungi spores, as well as structural damagewhich leaves buildings unsafe (and that the Ministry, as building owner,could be held liable for any serious injury or death due to structuralfailure);(b) Advised that a national project manager has been appointed to: organise the remedial work on school buildings that haveweather tightness issues. The priority in each case is to assess the35 I note that surrounding paragraphs of this aspect of the document are redacted for privilege.potential health and safety risks and put measures in place toremove any urgent risk to the occupants of the school. The focusis then to have the buildings repaired to a high quality standard sotheir life is extended and they require the minimum maintenancein the future.The Ministry gathers evidence from the three main causal effectsand where possible takes civil action to recover the costs of therepairs.(c) Advised that a national survey is planned for 2010 to inform thedevelopment of "a national remediation programme".[71] Internal documents describe the early life of the BIP as somewhat "reactive".Four firms of surveyors were engaged in April 2009 to assist the BIP. Individualschools would identify potential issues with leaking buildings; they were advised ofthe contact details for the four surveyors; the school chose which surveyor was to beused; and engaged them to provide an "initial test". As noted in the extracts set outfrom the mandate document above, if the initial test showed the building had issues:36the Ministry reimbursed the school and engaged the same surveyingcompany to undertake further testing (Destructive Testing) and if required, toundertake the remediation design and manage the physical works.[72] Subsequently, the BIP developed a "proactive remediation programme". Thiscommenced by the commissioning of the "Auckland Survey", which comprised avisual survey of 1,074 school buildings randomly selected from 199 AucklandSchools. This was completed on 14 April 2010.[73] This in turn led to what was known as the National Survey, which wasultimately to survey 6,130 school buildings at 1,592 schools nationwide. It appears,however, that this survey took some further time to plan and procure. In the interim,initial and then destructive testing (and the resulting reports) continued to be carriedout at schools around the country. For example, a 2 February 2010 "Project HighlightReport" stated that over the following two months, assessments would be made of anyinitial reports received, and once destructive reports had been received, "a planformulated for remedial works". The report also noted that "civil cases in place willbe progressed. Further work will be done to assess other potential viable cases."36 Internal Ministry email dated 8 May 2013 summarising the history of the BIP.[74] Ms Haplin also confirms in her affidavit that destructive testing (and resultingreports) was carried out pursuant to the BIP and prior to the National Survey. She saysthat in relation to such destructive testing reports:Because the BIP programme was always concerned with legal recovery,testing reports were prepared for both the purpose of identifying any issueswith the building and remediation requirements and for the purpose of a legalclaim.Once completed, a report would be reviewed by the Ministry and its legal teamto determine whether a legal claim was viable.[75] Where a claim was considered viable, Ms Halpin explains that the Ministrywould then seek to engage with the parties involved with the building concerned andseek a resolution and if that was not possible (or limitation periods were looming),proceedings would be commenced. Ms Halpin notes that by 2010, the Ministry hadapproximately six court proceedings on foot for weathertightness claims. She alsoexplains that the destructive testing reports captured:Details [which] were required in order for the Ministry and its legal advisersto consider and, if appropriate, issue, legal proceedings or negotiatesettlements with relevant parties. The reports contain more detail than isrequired for remediation purposes and were prepared with sufficient detail toprepare legal proceedings.There were some exceptions to that, such as if a building was very clearly outof time for a legal claim or the remediation made any legal claimuneconomical. In those cases, the relevant surveying company would notifythe Ministry and, subject to the Ministry's approval, would prepare a muchless detailed report that focussed solely on identifying any issues andnecessary repairs. This practice of providing less detailed reports (or"condensed reports") started well after 2010. Any such reports are notprivileged and, if relevant, have been provided.[76] I interpolate to note that Ms Halpin's acceptance that the condensed reports arenot subject to litigation privilege must be correct, given that proceedings in respect ofbuildings then considered to be outside the relevant limitation period could not havebeen actually (or reasonably) apprehended by the Ministry.[77] A (draft) January 2011 report to the Ministers of Finance and Education notedtwo issues then identified with the "defective buildings remediation programme". Thefirst was the distraction the project was causing for school principals, and therefore aproposal that the Ministry, rather than school boards, be party to the remediationcontracts. The second issue was a future funding risk, given the anticipatedidentification of significantly more priority buildings through the forthcomingNational Survey. A more detailed (draft) paper attached to the report discussed thoseissues in more detail. A section headed "Legal Redress" has been fully redacted forprivilege.[78] Planning for the National Survey continued in 2011. A project brief ofFebruary 2011 seeking approval for the National Survey stated:The primary objective of the survey is to ascertain the extent of weather-tightness issues in schools. This will assist with the Ministry's budgetplanning and enable a proactive prioritised remediation programme ofdefective buildings to be developed.[79] The brief went on to note that the project would be completed by June 2012,which would "enable a prioritised remediation programme to be developed."[80] The National Survey was completed in May 2012. It identified 1,233 buildingsas a priority for further testing.[81] Ms Halpin also addresses destructive testing reports prepared as a result of theNational Survey. Rather than the report being prepared and then assessed to determineif a legal claim were viable, Ms Halpin states that legal recovery was considered inadvance. She explains that following the National Survey, a triage process wasconducted to identify those buildings likely to be the subject of a legal claim. Thisinvolved an assessment of the limitation period, the relevant parties and the likelyextent of damage.[82] A "Scope of Services" document issued to the four contracted surveyors dated13 November 2012 addressed the nature of the further destructive testing to be carriedout following the National Survey results. The document stated that:The Ministry wishes to appoint building surveyors to undertake destructivetesting (DT) on the first tranche of these priority buildings in order to identifyany weather-tightness issues and required remediation.The purpose of the DTs is to provide the Ministry with technical advice on thediagnoses of weather-tight defects, recommendation on remediation and thescope and cost estimate of remediation work.[83] In a breakdown of the scope of services to be provided, the document stated:6.8 Comprehensive reports should be provided for any block identified bythe Ministry to be in time for a legal claim. A reduced report should beprovided for any block identified by the Ministry to be out of time for a legalclaim.[84] By 21 December 2012, the four survey firms had been formally engaged bythe BIP Programme Manager, for and on behalf of the Ministry, for the purpose ofcarrying out destructive testing. Mr Salmon for Carter Holt notes that there is noreference in the engagement letters to the purpose of the engagement being to preparefor apprehended proceedings.Reports prepared after 2012[85] These proceedings against Carter Holt (and others) were commenced on 12April 2013.37 Ms Haplin explains that once the litigation was apprehended (she doesnot actually state when this occurred), the Ministry worked with its external solicitors,Meredith Connell to create what is known as the "PLC Handbook". The PLCHandbook (over which the Ministry claims privilege) provides a template of the issuesto be identified by the surveyors when carrying out testing. She explains that theMinistry worked with the surveyors and Meredith Connell to determine the priorityfor carrying out the further testing of buildings. Ms Halpin states that the claim was a"critical part of the prioritisation process," with buildings in the claim being prioritisedover those that were not relevant to the claim. Ms Halpin says that other factorsconsidered in assessing priority "included the building's initial risk assessment fromthe National Survey and whether the building was affected by limitation issues."[86] Ms Halpin notes that following that process, the surveyors tested those prioritybuildings in accordance with the PLC Handbook. She states that "reports producedusing the PLC Handbook template were for the purpose of obtaining and collatinginformation relevant to this claim". Ms Halpin goes on to state that:37 The Ministry has resolved the proceedings against other defendants. It now proceeds againstCarter Holt only.All testing reports created after 2012 were created in this way and were createdfor the purposes of this claim. Copies of the reports were provided to MeredithConnell and the Ministry and were included in the KPMG database that wascreated for the purposes of this claim. Because the basis for the privilegeclaimed is the same for all these reports, I have not separately listed orprovided further detail of those reports in this affidavit.The basis for the Ministry's claim of privilege[87] The Ministry says that for destructive testing reports prepared after 2012 (sofrom 2013 onwards), the position is straightforward, given the context in which thereports were prepared and outlined at [83] and [85] above. In relation to reportsprepared before 2013, the Ministry says that it was clear that the BIP was alwaysconcerned with legal recovery. Destructive testing reports prepared during this timeperiod were therefore prepared for "both the purpose of identifying building issuesand remediation, and for the purposes of a legal claim" (emphasis in the Ministry'ssubmissions). Relying on Associate Judge Bell's approach in Ministry of Education vH Construction North Island Ltd, the Ministry says that the destructive testing reportsin this case therefore have the same "inseparable duality of purpose", which satisfiesthe dominant purpose test.38Discussion[88] For the reasons set out in the legal principles section of this judgment, I do notconsider that if a document has "inseparable dual purposes" it can be concluded thatlitigation privilege applies. That is not, after all, the test set out in the string of Courtof Appeal decisions referred to earlier, nor that carried into s 57 of the Act itself.Rather, the inquiry must always be, is the dominant purpose of the document to preparefor apprehended proceedings?[89] In this case, and given the factual basis upon which the various reports wereprepared, the following conclusions can be drawn.[90] I am prepared to accept that from the point at which destructive testing reportswere being prepared as part of the BIP, legal proceedings, at least in a general sense,were reasonably apprehended. It seems clear from the documentary record examined,38 Minister of Education v H Construction North Island Ltd, above n 24.and Ms Halpin's evidence, that in all cases considered appropriate, legal proceedingsto recover the costs of remediation would be pursued. As such, it was not a case ofsuch proceedings being a mere possibility or a "vague" apprehension.[91] In my view, the key issue in relation to the reports is whether it can be said theywere prepared for the dominant purpose of apprehended proceedings. While this canonly be considered on a report-by-report basis, the following principles can be drawn(subject of course, to any factors pointing otherwise from the circumstances pertainingto a particular report).[92] First, any "initial reports" prepared pursuant to the BIP could not properly besubject to litigation privilege. It seems plain that the dominant purpose of such reportswas not to prepare for apprehended proceedings, but rather to ascertain what buildingsshould be prioritised for further destructive testing.[93] Second, any condensed or reduced report prepared prior to the process put inplace after the National Survey is not, without more, subject to litigation privilege. Aswell as proceedings actively not apprehended in relation to the relevant buildings,those reports cannot have been prepared for the dominant purpose of proceedings.[94] Third, I do not consider that comprehensive reports (i.e. not being "reduced"or "condensed" reports) prepared before the process put in place following theNational Survey (and explained at [85] above) would, without more, attract litigationprivilege. I say this for the following reasons:(a) It is correct the BIP was always concerned with legal recovery. That isclear from the documents reviewed. But that does not mean reportswere thereby prepared for that dominant purpose. Rather, the clear andindeed prevailing purpose was remediation of buildings. This reflectedthe Ministry's real concern at the health and safety issues arising fromleaking buildings. To put the point another way, irrespective of whetherlegal proceedings might follow, a priority building would be subject todestructive testing to inform remediation and the costs of doing so. Inthat way, and unlike in Re Highgrade Traders, the reports had anindependent "life" other than for the purposes of preparingapprehended litigation.(b) Nor do I consider the fact a comprehensive rather than condensed orreduced report was prepared alters the position. That is because at thattime, and prior to any assessment of legal recovery, the only pointwhich can be drawn from the distinction between comprehensive andreduced reports is that buildings the subject of reduced reports were"out" so far as legal proceedings were concerned. In the case ofcomprehensive reports, the position remained unknown until after thereport had been prepared and reviewed to establish whether a legalclaim was viable. As such, the dominant purpose of these reportscannot have been to prepare for apprehended legal proceedings.Rather, that remained to inform a remediation process; or at best, withequal purposes of remediation and putting information before a lawyerto assess the viability of legal proceedings. In that case, the latter couldnot be the dominant purpose.[95] Fourth, I am satisfied, however, the position changed as a result of the processput in place after the National Survey. From that point, the question of legal recoverywas considered in advance. Importantly, that "up front" consideration drove thedecision whether a comprehensive or reduced report would be prepared. Unlike in theearlier stages of the BIP, therefore, the very fact a comprehensive report was prepared,rather than a reduced report, was because that form of document was being producedto prepare for apprehended proceedings. To put the point another way, a document inthe form of a comprehensive report would not have come into existence unless toprepare for apprehended proceedings. As such, and of course subject to the positionbeing considered on a document-by-document basis, comprehensive reports preparedas a result of the December 2012 engagements of the four survey companies arecapable of attracting litigation privilege.[96] Finally, condensed or reduced reports prepared after the National Surveywould also not attract litigation privilege (absent particular circumstances applying toany given report).Next steps[97] Given the manner in which Carter Holt's application proceeded, i.e. not tied toany particular documents, it is not possible to make orders setting aside or confirmingclaims to privilege made by the Ministry. As discussed with counsel at the hearing,the outcome is instead a set of findings as to the ability to claim litigation privilege asa matter of principle, subject to individual circumstances pertaining to particulardocuments.[98] I anticipate the findings made in this section of my judgment will require theMinistry to review a number of claims to litigation privilege over destructive testingreports which pre-date 2013. It is not possible to determine this on the basis of theinformation set out in Schedule 6 to Ms Haplin's affidavit which, like the Scheduleattached to Ms Lang-Sui's affidavit, largely consists of conclusory statements as to thenature of a particular document, and a statement that it is privileged. Clearly, the factthat a document is addressed to a legal adviser, Ms Halpin, or said to be for the purposeof legal advisers, is not determinative, or in many cases, likely to be particularlyrelevant. That is clear from the discussion in authorities concerning insurance reports,where reports are often addressed to the insurer's solicitors. In addition, the fact thereport gathers information relevant to legal proceedings (such as a building'scompliance with aspects of the Building Code) is not determinative of the dominantpurpose of the report's preparation. Further, it seems that there remains a number ofcondensed or reduced reports in Schedule 6 for which litigation privilege is claimed.It may be, although it is unclear from the commentary to such documents, that thereare particular facts pertaining to the report in question which cloak it in privilege,despite Ms Halpin's acceptance that such documents do not attract litigation privilege.[99] It strikes me that, subject to any contrary approach suggested by the parties,the Ministry ought to re-review those reports making up Schedule 6 in light of thefindings made in this judgment, to assess whether any privilege claims should beremoved. The document pool is relatively small, so I would be confident this can beattended to fairly swiftly in the New Year. If, having undertaken that exercise, thereremains issues as to the basis upon which claims to litigation privilege have beenmade, I will need to review the particular documents involved in order to make formalorders.Residual privilege issues arising on the applications[100] Given the findings I have made on both applications, it is not necessary todetermine alternative bases that were advanced (particularly on the Ministry'sapplication) for orders setting aside privilege, namely waiver of privilege and thatlitigation privilege has come to an end. I accordingly make some brief observationsonly.Waiver[101] The Ministry suggested that Carter Holt had waived privilege over alldocuments concerning the complaints process given a (very brief) comment in anaffidavit sworn by Carter Holt's general counsel in an earlier interlocutory hearing inthis proceeding, in which he said that "where weathertightness has been at issue, it hasbeen apparent from CHH's investigations that the failures have been attributable toinstallation, or design defects or maintenance." The Ministry said this is inconsistentwith what it has seen in some of the complaints documents to date. It says that byputting in issue the findings made when dealing with complaints, Carter Holt waivedprivilege over documents setting out those findings.[102] I simply record that, had it been necessary to determine the question ofwaiver, I have considerable doubt that the relatively brief reference in Mr Simpson'saffidavit relied on by the Ministry has the effect of waiving privilege over a very largenumber of privileged documents. It is unlikely that Mr Simpson has acted to put "the"privileged communications or information in issue for the purposes of s 65(3)(a) ofthe Act. I do not consider that stating something that is merely inconsistent with aprivileged document constitutes waiver. That could often arise, for example, inrelation to information contained in without prejudice communications. Nor is"inconsistency" the test under s 65 in any event.Litigation privilege ceasing on conclusion of the proceedings[103] Nor do the findings I have made require me to determine what the Court ofAppeal has described as the "interesting question" of whether courts in this jurisdictionshould follow the approach adopted in the Supreme Court of Canada's decision inBlank v Canada (the Minister of Justice).39 In Blank, the Supreme Court of Canadafound that, unlike privilege for communications with legal advisers,40 which are "onceprivileged always privileged", litigation privilege ceases at the conclusion of theproceedings in connection with which the documents were prepared.[104] The Court's reasoning in Blank was that litigation privilege is designed to givea "zone of privacy" around legal proceedings, and the rational for that "zone ofprivacy" ceases with the proceedings.41 An exception to this is that the privilegeretains its purpose and therefore its effect where "related litigation" remains pendingor may reasonably be apprehended, or in connection with proceedings that "raiseissues common to the initial action and share its essential purpose". (I will refer tothese sorts of proceedings collectively as "related proceedings".)[105] There is some conflict in High Court decisions in this jurisdiction as to whetherBlank should be adopted here, and the point has not yet arisen for consideration by theCourt of Appeal or Supreme Court.42 While not having had the matter fully arguedbefore me, I nevertheless have some sympathy with the views expressed by Peters Jin NZH Ltd v Ramspecs Ltd, in which her Honour queried whether the conclusionreached in Blank is available in the context of the Act.43 Her Honour noted that mostsections conferring privilege on certain communications or information (ss 54, 55, 57,58, 59 and 60) provide that a party "has" a privilege in relation to the communicationor information, and that s 53 of the Act, which provides for enforcement of privilege,does not suggest that litigation privilege ceases earlier than the other privileges.39 A v Attorney-General [2009] NZCA 490 at [27], referring to Blank v Canada (Minister of Justice)[2006] 2 SCR 319.40 In this jurisdiction, Evidence Act 2006, s 54.41 Blank v Canada (Minister of Justice), above n 39, at [32]-[34].42 Snorkel Elevating Work Platforms Ltd v Thompson [2007] NZAR 504; A v Attorney-General,above n 39; Reid v New Zealand Fire Service Commission [2010] NZCA 133, (2010) 19 PRNZ923 at [21]; Houghton v Saunders [2013] NZHC 1824; Osborne v Worksafe New Zealand [2015]NZHC 264, [2015] NZAR 293 at [21]-[23]; NZH Ltd v Ramspecs Ltd [2015] NZHC 2396; Hoylev Hoyle [2015] NZHC 3001 at [39]-[40]; Williams v Craig [2016] NZHC 1453.43 NZH Ltd v Ramspecs Ltd, above n 42, at [32].[106] In my view, the proper interpretation and application of s 53 to this issue islikely to be key. That section does not appear to contemplate litigation privilegeceasing at the conclusion of the proceedings in relation which the relevant documentshad been prepared. Rather, s 53(1) expressly provides that a person who has aprivilege conferred by any of ss 54 to 59 "has the right to refuse" to disclose thedocument or communication "in a proceeding " (emphasis added). Accordingly,s 53(1) does not distinguish between any of the different forms of privilege for thepurposes of the duration of that privilege. Nor is the type of proceeding in which aprivilege-holder has the "right" to refuse to disclose a privileged document limited, atleast in the case of litigation privilege, to the related proceedings contemplated inBlank.[107] I also have some concern as to how the Blank approach might operate inpractice. What if the original proceedings had ended, no further or related litigationwas either pending or reasonably apprehended at that time (such that the privilegeceases), but some years later, a proceeding meeting the definition of Blank's relatedproceeding was commenced? Would the privilege "re-attach" to the documentsconcerned? And what if in the intervening period, other proceedings had beencommenced which did not meet the definition of Blank's "related proceedings", inwhich the documents, having lost their privileged status, had been disclosed? Havingbeen so disclosed, the documents would have lost their confidentiality (despite therestraints on what use might be made of documents discovered in proceedings; theymight, after all, be referred to in open court). Losing confidentiality would then beinconsistent with "regaining" their privileged status for later related proceedings. Atleast at first blush, it strikes me that difficulties could arise if documents moved "inand out" of a privileged state.[108] There may be simple and principled answers to issues such as this when the"interesting question" arising from Blank is fully considered in a case in which it arisesfor determination. I merely offer these thoughts as matters for consideration in such acase.ResultThe Ministry's application[109] The Ministry's application to set aside Carter Holt's claims of litigationprivilege is successful in respect of those documents listed at [46] above. It isunsuccessful in setting aside claims to without prejudice privilege in relation to thosedocuments set out at [53](b)-(c) above.Carter Holt's application[110] Carter Holt's claim to set aside the Ministry's claims of litigation privilege inrelation to destructive testing reports is successful, insofar as those findings made at[92] to [96] are likely to require certain privilege claims made to date by the Ministryto be reviewed. It is not possible on the material presently before the Court to dealwith the Ministry's claims to litigation privilege on a document-by-document basis.But if, despite the Ministry having completed any re-review process, disputes remainin relation to particular documents, I will inspect the documents concerned and makerulings on a document-by-document basis.____________________Fitzgerald J