052 The Multi-Million Dollar Filing Error: Lessons from Daisley v Whangārei with Andrea Mcintosh

What happens when a government agency insists a document doesn’t exist—only to find it in their own basement years later? In this episode, we are joined by Andrea McIntosh to deconstruct one of New Zealand’s most significant records management failures: Daisley v Whangārei District Council.

This isn't just a legal case; it’s a cautionary tale about what happens when "corporate memory" fails and legacy paper files are treated as "invisible." We explore how a missing 1988 resource consent led to the financial ruin of a landowner and a multi-million dollar negligence penalty for the Council.

Official Case Synopsis (Courts of NZ): Whangārei District Council v Malcolm James Daisley [2024] NZSC 123

• This is the most readable summary of the background, the $4.75m High Court award, and the subsequent appeals regarding negligence and misfeasance.

The Court of Appeal Decision [2024] NZCA 161: Read the full judgment via NZLII

Legal Analysis: Franks Ogilvie: Case Brief on Daisley v WDC

Transcript

SPEAKER_01 0:04

Hello and welcome to today's show. I'm Dr. Stockholm Leadership Through Data. I inspire and motivate information leaders across the world.

SPEAKER_03 0:13

Hello and welcome to today's show. I'm thrilled to introduce Andrea McIntosh. She is Leadership Through Data's general manager for global operations and specializes in navigating the high-stakes world of information management and business analysis. Whether it's managing complex vendor relationships or fixing broken organizational processes, Andrea has a reputation for bridging the gap between technical IT and real-world business strategy. She's here today to help us deconstruct the day-list case and explain why boring record keeping is actually a frontline defense for any organization. Andrea, it's absolutely great to have you here. So, Andrea, in this case, the council actually had the document, but it was effectively invisible. How does a record that physically exists become legally non-existent in the eyes of a council?

SPEAKER_00 1:11

Yeah, so Jackie, great to be here. And um, yeah, I'm quite excited to share this story about uh what became quite a front page headline case um and records management at the forefront. So the the c the record was there, it was a physical record. Um and it's just a case of there was a misfile at some point. So there was a misfile of the document that was critical to the case, and when digitization occurred, um the document was obviously picked up in the missfile and then digitized, so it became quite open and available to the organization.

SPEAKER_03 1:51

Lovely. So we often think of record keeping as filing papers, but this failure costs millions of dollars and years of stress for a landowner. Information management from an information management perspective, where does the clinical error and the negligent negligence?

SPEAKER_00 2:11

So I don't I don't think that it was negligence as such. Um, you know, there was certainly no intent to hide the information. Um I think, you know, what would have occurred is that digitization, we know that as a project digitization does what it needs to do, right? So it picks up all these historic legacy records that are in paper format, digitizes them, and does things like OCRing, so then they become more discoverable. That's the key to this is that you know the record wasn't hidden intentionally, but what happened was the OCRing and the digitization of the records just made it more visible. So in terms of the you know, that the outcome of that, the original problem, I guess, was that the con consent existed but was poorly stored, um, archived or indexed. So that's a you know, a failure in the records management storage of that physical record. So it wasn't missing, it was just effectively invisible.

SPEAKER_03 3:11

Oh amazing. And you and I are talking about that we know the case, but the listeners here might not know the case. Could you give a sort of overview of what the case is that we're discussing here today?

SPEAKER_00 3:21

Yeah, sure. So um what what happened in this case at a very high level is that a landowner brought a piece of land that he could use as a quarry. There was some, you know, there was some mix-up with the consents, and the outcome of that was that it was perceived that there was no consent issued on the land. So the quarry I think had to cease operations. And you can imagine, you know, for somebody who's bought a piece of land, effectively a business, and then being told that they can't do what they wanted to do, you know, that would be quite distressing for the landover. So years later, after the digitisation project occurred, another another request was put through to find this information, and you know, due to the digitization it was then available. So it's not just a legal case, it's sort of a textbook records management um, you know, records management problem with real-world consequences.

SPEAKER_03 4:17

So is it a case that listeners could go and find the case out and then be able to utilize this case as evidence to put forward f if they're in a similar situation or when it's solely around consent as you describe?

SPEAKER_00 4:31

Yeah, of course. So this case is very much in the public arena. Um, there's lots of articles about it, so the listeners can go and look that up, um, Daisley versus WDC. Um and there's there's a lot of commentary, so you know, both sides, as is the case, right, with local government issues. A lot of people weighed in with what they're wanting to talk about or what they perceive the issues were. For me personally, it was a really incredible experience. You know, having to be suited and booted and standing in a high court in a dock effectively, um, and being being asked to defend my teams and myself, business processes and project processes. Lots of learnings, Jackie, lots of learnings.

SPEAKER_03 5:14

I love that, I love that, thank you. And you weren't obviously in the role with leadership through data at that time. So you're an information manager, weren't you?

SPEAKER_00 5:22

Yeah, correct, and also the project manager for the digitization project.

SPEAKER_03 5:27

Brilliant. Um, just want to bring you back to the consent issue because you've spoken about the case with that it's around consent. So the consent dated back to 1988, where um why are legacy records, those created decades ago, often the landmines of modern local government now?

SPEAKER_00 5:49

Yeah, so I think everybody, I know here in New Zealand that there's a lot of people still um navigating digitisation projects. And we have, you know, local government, it's it's not just one business, right? So in local government, you know, it's like an entity that has a multitude of business units involved within it. So, you know, the business processes of the day, one of the most important things that I'd say as an outcome of this, is you know, use that tacit knowledge in the organization as you're doing pieces of work like this and tap into that tacit knowledge of those who were working in the organization when those business processes were in place. Because, you know, we didn't, you know, back in the 90s we didn't really document a lot of those business processes well. And if we had had those business processes documented, you know, we quite could quite easily trace back and brought that into the digitization project as well. The other thing is data, data, data. So, you know, don't just approach it as a digitization, pick this up, scan it, save it. You know, think about all the supporting data that surrounds it. So the you know, the the systems that are managing land information, the actual logging of consents, so that is actually painting a picture as well, and use that data in your digitization piece of work to add metadata to the digitized assets as they come through. So matching up that physical system with that digital system is part of the process.

SPEAKER_03 7:21

Nice. So let's talk about search versus research. The court found that the council didn't conduct adequate searches in the digital age. We assume search is a button we click in a profession in an information management context. What doesn't an adequate search actually look like?

SPEAKER_00 7:43

So, you know, to me, adequate searching is doing the best duty of care that you can. But adequate searching relies on on adequate saving, so adequate indexing, so that you know you you save to find. So we want to make sure that you know it's not just about the searching out the other side, it's around what can we do up front to make sure that we have got checks and balances in place to do that adequate searching moving forward. It's less about the searching itself, but more about a process um process issue or an indexing issue that came through. The other thing is that you know, don't forget the power of what happens when you pick up all these digital records is you know it's it's not a navigate to a box in an archive location and know where that box is or know where that file is. Suddenly all this information is digital, and so you've got you know the velocity of search coming through that just serves it up so quickly.

SPEAKER_03 8:46

So let's talk about the land information memorandum. So it's supposed to be the single source of truth, right? So when LIM is wrong because the records are poorly indexed, who is ultimately responsible? The person who did the search or the person who designed the actual filing system?

SPEAKER_00 9:06

Oh, that's a really good question. It's both. I think it's both. So, you know, when we're when we're designing information systems, you know, we we want to make sure that all our stakeholders are can engaged in that design, and that's the core part of information architecture, right? Is getting our our stakeholders engaged because we don't do their job. So we actually don't know how they're gonna be searching, we don't know what the triggers are for that search. But then on the flip side of that, you know, the the stakeholders you know, document your processes, document your processes for search, document your processes for that end-to-end business process as well, because as an information architect or records manager, you know, I'm gonna be relying on that so that I can do the best for you in in terms of making that information available.

SPEAKER_03 9:56

So corporate memory, let's talk about corporate memory. So you've mentioned corporate knowledge versus corporate action. How can a council know something as an organization while it's staff simultaneously not know it on the ground?

SPEAKER_00 10:15

So I guess this comes down to the fact that um records management isn't passive, you know, it's not just a back office passive function. Records management it directly shapes the decisions and the rights and and in this case livelihoods of people that are impacted by it. Corporate knowledge. I often, when I'm talking to my executive sponsor of the day, I talk to him about corporate amnesia. We need to avoid that corporate amnesia. So making sure that that memory isn't lost. So doing all that we can, and that's at times going to take a big investment. So cases like this are a good case study to say this investment is worth it, and we need to make sure that we're not just passively filing things away, we're wrapping around it all the things that we need to preserve that corporate memory or preserve that business process memory and the memory for our customers who rely on that information.

SPEAKER_03 11:11

And that's brilliant because that was one of the questions earlier about how they can utilize this case going forward. So I think that's a really good example there. So the duty of care. So this case establishes a clear duty of care for councils to maintain accessible records. Does this ruling change the standard of care for records managers across New Zealand and the world?

SPEAKER_00 11:33

I don't I don't think it changes it fundamentally because the you know records management professional they have a really strong duty of care. And that's why we're so passionate, right? Because we really do care about what we're doing. I think the the changes are around you know, bringing that paper world into the digital world and what the consequences are of that are. And you know, if we if we are not wrapping good metadata around it and not aligning that metadata to our systems of the day, then we're always going to have problems like this. So we just need to make sure when we're digitizing that we're bringing all of that corporate knowledge in and then wrapping that around the assets.

SPEAKER_03 12:18

So let's talk about risk and records management. So we often view records management as a back office support function. Well, I don't because I always think it's the forefront of the of uh of a business process. But how does this case provide prove that I am is actually a core risk management strategy?

SPEAKER_00 12:38

I think the numbers speak for themselves in this case. We're talking millions of dollars here, but I think it comes down to more than that as well. You know, it's around the importance of records management in terms of it's not just about archiving, it's not just about because we have to under the Public Records Act. It's around, you know, keeping that information for future actions and preserving it for future action. So thinking about the way that it shapes decisions and the reliance on it moving forward. But also, you know, there's that defensible disposal that comes into play here as well. So making sure that we are doing disposal well means that we can, you know, hand on heart say the information's not here, it was disposed under this, you know, disposal authority, job done. So it's not just about saving records, it's managing them through that life cycle. And also preserving them. So, you know, we're talking about the 80s here. So it's very easy to preserve paper. We just box it up and store it well and you know, keep it all nice and tidy in the archives, but we're dealing with more and more digital information and often third-party systems. So thinking about preservation up front and exit strategies from those systems as well.

SPEAKER_03 14:02

So let's talk about one thing that we all like to talk about is deleting. So people often think that if they can't find a record, it's gone. So, what does this case teach us about the permanence of legal obligations regardless of how messy our filing is?

SPEAKER_00 14:19

Think about it up front. Yeah, we need to, you know, and one of the things that I would take away from this is, you know, doing little mini audits of your archives if you're still holding a lot of paper records. Just go through and walk through the business process and see if you can find the things that you need to be finding. And, you know, by doing that, you're doing sort of a quality assurance program within your records management program, the same as we do in a digitisation piece of work. We're actually going to go through and test that we can find the things that we need to find relying on the indexes that we created. Yeah, just walking through it and making sure that we can can find things. I mean, in this case, screams like just because it's not there doesn't mean it's not there, right? So you know, think about how can we avoid things like this happening in the future. So, how can we avoid missed files? Barcoding might be a good way to do that. So having some form of barcoding system on your Lunders in your archives area to you know scan scan the shelf and then just make sure that the connection is true between the shelf and the box in the file.

SPEAKER_03 15:34

And if people are using Microsoft 365, what other things in that environment could you add to that?

SPEAKER_00 15:42

So, um, yeah, so Microsoft 365 obviously we're dealing with digital assets here, and we're gonna be wrapping it around with a lot of metadata, and again, we're gonna bring through that third-party metadata if we need to. So utilizing the APIs to do things like update the term store with specific code so that we can stamp against the information. So, one of one of the things that we could do is bring through the property number and use that and have that available across the whole environment so that every time a piece of information is added, we can actually stamp that record with that property number to make it discoverable later on.

SPEAKER_03 16:24

Nice. So if there's one single lesson that every CEO or council lead should take away from this case, what would it be?

SPEAKER_00 16:33

Yeah, so I would say that um in this particular case the record wasn't lost, right? So the record wasn't lost, it was perceived as not there. Um and then digitization made it available. I think the key thing here is that trust in the system was lost. And that's the real cost of poor information management, and we see it all the time. So when people lose trust in the system, they lose trust in the organization, they lose trust in business processes, and they do things outside of those business processes to protect you know, protect their own way of working, protect their own values, I guess. So yeah, it's it's around building in the trust and then you know, showing examples of how we can trust that system. So, you know, user acceptance testing or reporting out of Microsoft 365 would be the way to go there.

SPEAKER_03 17:25

And do you think that comes out of an organization's culture? So all that you've just described, what do you think the fundamental problem is? Is it culture or is it something else?

SPEAKER_00 17:35

I think culture comes into play quite a bit, and you know, I've seen this time and time again as I've been doing my consulting work, is that culture has a huge part to play in how information architectures are deployed and then used really well. So if you've got a very siloed culture, the kind of culture that, you know, you you email and they say, actually that's not our job, you need to email these people, and then they say that's not our job, you need to email these people. So, you know, breaking down that siloed culture. And and that's gonna need to come from the top. And when we're building an information architecture in Microsoft 365, one of the things that we talk about is that open by default, closed where it needs to be. So the more open you can have your organization in terms of records, um, in terms of that knowledge building, the easier you're gonna break down those silos in an organization because those silos are a killer.

SPEAKER_03 18:33

And how do they break down those silos?

SPEAKER_00 18:39

Yeah, so it needs to come from the top. So I think you know, even in the executive level, there is an element of a siloed culture in some organizations. So, you know, the the execs are really tight on what they what they work within. But we need to encourage that cross-collaboration between teams. So, you know, a a little bit more of a matrix organization, I guess, where you know, you you've got your hierarchy, it's there for line management and it's there for HR reasons. But in terms of being on the ground and how the organization works, everyone is working on different things together because then we get the best of everybody's knowledge. So, you know, it's it's we're not trying to work in those silos.

SPEAKER_03 19:24

Thank you so much. Andrea, how can listeners reach out to you if they want to know more?

SPEAKER_00 19:29

Yeah, sure. So I'm on LinkedIn. You can look me up on LinkedIn or contact me through the Leadership Through Data website.

SPEAKER_03 19:36

Amazing. Thank you so much for your time today.

unknown 19:39

Thank you.

SPEAKER_02 19:40

Thank you for listening to the journals of the information entrepreneur with me, Jacqueline Stockwell. I hope you found this episode inspiring and helpful and have some takeaway tips that can be useful to you. If you liked this episode, please like, review, and share it with your friends. Your support helps us reach more information leaders to stay inspired and listen to great content. You can find the scorecard at the end of the description of this podcast. Thank you for a new podcast every Thursday. And remember to be out, be quite and be beautiful.