McLanahan v Studio of Pacific Architecture Limited
[2017] NZHC 3174
•15 December 2017
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2014-085-738 [2017] NZHC 3174
UNDER sections 7-9 of the Contractual Remedies
Act 1979; sections 29–39 of the Consumer Guarantees Act 1993; and sections 9, 11 and 43 of the Fair Trading Act 1986
BETWEEN
JEREMIAH MCLANAHAN AND E-LYN TAN
Plaintiffs
AND
STUDIO OF PACIFIC ARCHITECTURE LIMITED
Defendant
On thePapers: Counsel:
H N McIntosh for Plaintiffs
J Morrison for DefendantJudgment:
15 December 2017
JUDGMENT OF CLARK J
Introduction
[1] In November 2012 the plaintiffs contracted with the defendant, Studio of Pacific Architecture, to provide architectural services in respect of the intended construction of two new dwellings (House A and House B) at McFarlane Street in
Mt Victoria, Wellington.
[2] The plaintiffs have since cancelled their contract with the defendant and engaged Novak+Middleton. The plaintiffs sue the defendant for breach of contract. The statement of claim pleads that in failing to adhere to budget, making material
errors, engaging in misleading conduct and invoicing for work not done or that should
MCLANAHAN AND TAN v STUDIO OF PACIFIC ARCHITECTURE LIMITED [2017] NZHC 3174 [15 December 2017]
not have been invoiced the defendant failed to provide the services for which the parties contracted. Additional causes of action include misrepresentation and breaches of the Consumer Guarantees Act 1993 and Fair Trading Act 1986.
[3] The defendant sought further and better discovery and on 21 September 2016, by consent, Mallon J ordered discovery of the following:
a) an unredacted (save as to fees) copy of the Novak & Middleton letter dated
18 November 2013;
b) documents up to 31 July 2014 (being the date of filing of the Novak & Middleton resource consent application) relating to:
a.specific room sizes, placement and orientation (per McDougall, paras 11-13);
b.horizontal banding produced by terraces (per McDougall, para 14);
c. roof designs (per McDougall, para 14); and
d.the cladding used in the Novak & Middleton design (to show that that was not “exactly the same cladding materials” as in the [Studio of Pacific Architecture] design (per McDougall, para 14) (unless that information is not already publicly in the Building Consent);
c) email (and other records of) communications between the plaintiffs and
Novak & Middleton between November 2013 and February 2014.
[4] Of the 159 documents provided to the defendant 21 contain redactions. Nineteen contain redactions on the basis of irrelevance. Two have had privileged information redacted.
[5] The parties could not agree the validity of the redactions. The dispute came before Simon France J on 24 April 2017. In accordance with a process suggested by the parties for resolution of their disagreement Simon France J directed:
(a) the defendant to file and serve copies of the redacted documents and submissions in respect of the redactions it disputed; and
(b)the plaintiffs to provide to the Court unredacted copies of the documents and to file and serve submissions in support of the redactions.
[6] The parties have filed their submissions and the unredacted documents have been supplied to the Court. The file has been passed to me for my determination of the question whether those parts of the documents that have been rendered unreadable have been permissibly redacted.
Issues arising from the pleadings
[7] The plaintiffs claim $123,723 “wasted” invoiced costs paid to the defendant for architectural services which, the plaintiffs claim, the defendant failed to provide.
[8] On the basis the plaintiffs claim no value can be attributed to the invoiced services, the defendant denies any such loss.
[9] The defendant’s position is that, typically, architects engaged on a project will work sequentially through work stages described as: pre-design; concept design; preliminary design; developed design; detailed design and documentation; contractor procurement; and contract administration and observation. The fees charged by the defendant included work for the first four stages. In denying the plaintiffs’ alleged loss the defendant contends the plaintiffs did receive benefit and value from the defendant’s services. The defendant refers particularly to:
(a) the continuation of the projects through the services of
Novak+Middleton;
(b)the extent to which Houses A and B are markedly similar to those designed by the defendant; and
(c) the extent to which the defendant’s design and details were carried over into, or adopted by, or were otherwise utilised in the subsequent design and development of Houses A and B.
[10] The defendant submits the extent to which the defendant’s design was carried over and utilised in the Novak+Middleton project will be apparent from the scope of Novak+Middleton’s engagement and whether they were engaged to provide any services in respect of the first four design phases set out above, namely, pre-design, concept design, preliminary design and developed design.1
[11] Thus, says the defendant, the brief to Novak+Middleton and the architectural design work it contracted to undertake, are directly relevant to these aspects of the defendant’s defence to the claim. The defendant acknowledges the commercial sensitivity of information about fees. It does not claim an entitlement to this information but, the defendant submits, the plaintiff cannot rely on that concession for its extensive redactions when the extent of the redactions is to prejudice the plaintiffs’ entitlement to discovery of relevant documents.
[12] The plaintiffs directed their submissions to three categories of redacted documents reflecting, it seems, the plaintiffs’ understanding of the nature of the defendant’s objections and arguments. I propose to adopt that structure.
First category: Document P 6
[13] Document P 6 has been referred to in submissions as the “NMA fee letter”. It is a letter dated 18 November 2013 from Novak+Middleton to the plaintiffs. Mallon J ordered discovery of this letter “unredacted save as to fees”. It is heavily redacted. Two and a half of its six pages are excised.
[14] The defendant submits the effect of the redactions is to obliterate the narrative under the heading “Detailed scope of our work and fees” and this detail is likely to disclose the extent to which, if at all, Novak+Middleton was engaged to provide architectural services directly relevant to aspects of the claim and defence. The plaintiffs justify the redaction on the basis the section concerns “commercial matters”. Further, the plaintiffs say, the defendant’s grounds are shifting. The basis now put forward for complete disclosure of this document is different from that proposed
before Mallon J and if the plaintiffs had been on notice of the arguments about the
1 Referred to from this point as the “four design phases”.
work phases they would have proceeded to argue the application instead of consenting to the orders made.
[15] The redacted detail under the “Preliminary Design” heading includes information about the preliminary design stage and the relationship of the work to that done by the defendant. It is relevant that no charge is to be made for this phase which the NMA fee letter records “has been completed by your previous architect and will form the basis of the brief for moving forward with the project”.
[16] It is not necessary to recite the remainder of the redacted content. The detail under each of the headings “Preliminary Design”, “Value Engineering”, “Developed Design” and “Resource Consent” are relevant to the defence because the detail includes discussion or references to aspects of the defendant’s work. It should all be disclosed save the fee information. To be clear the document should be disclosed save for the following information which is properly redacted:
(a) estimated sums of money
(b) the monetary value of disbursements
(c) percentage fees proposed.
[17] There is no commercial confidentiality in the estimated hours at each stage. This outcome does no more than reflect Mallon J’s orders.
Documents P7, P 20, P 67, P 68
[18] The defendant makes a global submission that insofar as the redactions in all four documents change the nature and extent of Novak+Middleton’s engagement, or lack thereof on the four design phases the information should be disclosed.
[19] I am satisfied the redacted information is properly redacted as irrelevant.
(a) P 7: the first redaction relates only to Novak+Middleton’s insurance level for the project.
(b)P 20: the redacted information relates to reports of hours for budget purposes.
(c) P 67: the first of the two redactions is irrelevant to any issue in the proceeding. It relates to the engagement of a third party consultant. The second redaction refers to receipt of legal advice.
(d)P 68: the redacted information is irrelevant and also references legal advice.
[20] The second redaction in P 7 refers to clarifications in the NMA fee letter. It is potentially relevant and is to be disclosed.
Other documents (P 91 – P 144)
[21] As the plaintiffs observe, the defendant advances no particular argument to support its challenge to the redactions in these documents. The documents in this group have been discovered in compliance with order 1(b) of Mallon J’s orders. The plaintiffs have redacted information that does not fall within the scope of the orders.
[22] It is convenient to set out, once more, the relevant order:
… the plaintiffs [to] give further discovery as follows:
(a) specific room size, placement and orientation (per McDougall, paras
11-13);
(b) horizontal banding produced by terraces (per McDougall, para 14);
(c) roof designs (per McDougall, para 14); and
(d) the cladding used in the Novak & Middleton design (to show that that was not “exactly the same cladding materials” as in the [Studio of Pacific Architecture] design (per McDougall, para 14);
[23] Paragraph 14 of the affidavit of Stephen McDougall (to which Mallon J
specifically ties order (b)) reads:
External Form and Appearance of the Building:
Examination of the comparative photo-realistic renders and elevations in Appendix 6 show the [Studio of Pacific Architecture] design and the newer [Novak+Middleton] design have a remarkable level of similarity. This is because the overall size, scale, composition of spaces, formal horizontal banding produced largely by the terraces and the roofing concepts are all similar. In both cases, House A is arranged into 3 vertical volumes and House B is arranged with one vertical volume. This was in order to suit the
Mt Victoria grain of buildings.
The new composition is exactly the same even though there are some differences in the matter of detail – in window size and placement, and the roof mono-pitch angle has been reversed – but the overall impression is that the design strategy for the new design, including the use of exactly the same external cladding materials, is a continuation of that created by [Studio of Pacific Architecture] in the first place.
[24] The information in the following documents is properly redacted because the information is irrelevant:
(a) P 91: redacted information concerns presentation plans to prospective buyers;
(b)P 101: redacted information concerns third party consultants and scheduling;
(c) P 102: redacted information concerns to the plaintiffs; holiday plans and future scheduling;
(d)P 103: redacted information concerns structural engineer’s proposals, fee arrangements and visits;
(e) P 104: redacted information concerns to the plaintiffs’ urban planning agent;
(f) P 109: redacted information contains a greeting;
(g) P 112: redacted information contains greetings and scheduling;
(h) P 120: redacted information contains greetings and concerns
scheduling;
(i)P 122; redacted information concerns personal comment and scheduling;
(j)P 134: redacted information contains observations relating to moving the project forward;
(k) P 144: redacted comment relates to information for purchasers.
[25] P 116 is an email discussing proposed changes to the design. Placement of structural walls has potential relevance to room size. I consider the second redaction which is paragraph number “2” falls within the scope of order 2(a) and should be disclosed. The remainder of the email discusses landscaping, garbage disposal, gutters, downpipes and risers do not fall within Mallon J’s orders. Window placement was touched upon in Mr McDougall’s affidavit at [14] but was not a topic falling within Mallon J’s further and better discovery orders.
[26] P 117 is an email that discusses a third party’s assessment of the urban design merit of the proposed development by reference to relevant design guidelines. I consider this communication has potential relevance to that aspect of the defence bearing upon the value of the defendant’s work. The document should be disclosed without redactions.
[27] P 119 is a report from Novak+Middleton covering a range of topics including a change in consultants and consequent new design for the building. Except for the section of information under the subheading “Frontage and Streetscape”, I consider the discussion of the design, its approach and its intended effect under the heading “Design Response” is relevant, potentially to distinguish between the defendant’s and Novak+Middleton’s design. Likewise the redacted observations under the “Summary of Project History” heading are relevant and are to be disclosed. The text under the heading “Relevant District Plan Design Guides” is also potentially relevant to the value of the defendant’s work and should be disclosed.
[28] The first and fourth redacted paragraphs of document P 132 discuss scheduling and choice of builders, neither of which is relevant. However, the third paragraph discusses glazing, louvres and cladding which is relevant to the order for disclosure at
2(d). Except for the last sentence, redaction of this paragraph is not in compliance with Mallon J’s orders.
Result
[29] Within 15 working days of this judgment the plaintiffs are to provide to the defendant copies of documents that contain only those redactions which have been determined to be permissible.
[30] Because each side has had a measure of success I consider it is appropriate that any issue as to costs be considered at the conclusion of the litigation.
Karen Clark J
Solicitors:
Gibson Sheat, Wellington for Plaintiffs
Rainey Collins, Wellington for Defendant
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