Document retention and destruction

What is a document?

For the purpose of this note, the term ‘documents’ means any record of information, irrespective of the medium on which the information is stored. This includes hard copy documents, electronic documents, emails, images, labels, audio or visual recordings and any other recordings of information. A document will, therefore, include anything:

• on which there is writing
• on which there are marks, figures or symbols
• from which sounds, images or writings can be reproduced
• such as a map, plan, drawing or photograph.

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What should be retained?

The documents that should be kept are those that form part of the architect's engagement, including sketches and preliminary drawings. These would usually include (but are not limited to):

• CAD drawings
• originals and copies of drawings and schedules
• specifications
• bills of quantity
• documents submitted and stamped for building approval, or other statutory approval or consent
• construction contract documents
• signed contract documents
• 'as built' drawings
• correspondence in the form of emails and records of telephone calls
• administration records
• file notes and minutes of meetings.

Where documents are relevant to a dispute or to actual or reasonably anticipated litigation, it is important that the documents be retained until the conclusion of the litigation. There may be serious consequences for destroying potentially relevant documents. These include:

• the court drawing adverse inferences from the unavailability of a document
• an inability to support a claim or defence in the litigation
• exposure to criminal liability.

Some documents may be the property of the client and these should not be destroyed without the client’s consent (preferably in writing) or alternatively, return them to the client when no longer required. These documents generally include any documents brought into existence where the architect is acting as an agent, including drawings, specifications, agreements, contracts and instructions. They would not include documents prepared for the independent professional activities of the architect, such as correspondence with a contractor not directly related to client instructions, or draft plans or sketches of the architect. If you do hand over documents to the client, you should also retain your own copies (see Acumen note Electronic document management).

The Institute's Client Architect Agreement (CAA2019), clearly establishes that all documents created by the architect remain the property of the architect. However, other contracts, particularly those generated by a client, may establish otherwise. It is therefore important to check the contract terms with regards to ownership of any documents produced (and any copyright subsisting in those documents). 

Email records

Email is a common form of business communication, including for architectural practices. While email is a convenient and expedient form of communication, caution must be exercised to ensure that email records are treated in the same way that other important, more formal documents and project records are treated.

Emails frequently constitute project records and as such they should be archived and retained along with other relevant project records.

Heritage issues

As a matter of principle, architects should carefully consider the potential heritage value of all drawings and other records before they are destroyed (see Acumen note Records – storage and conservation).

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Copyright

Unless you own the copyright in a document or have the copyright owner's permission to use the document, any reproduction, distribution or copying of all or part of the document may breach copyright of the document. See Acumen notes Copyright and Architects and copyright. It is generally not a breach of copyright to keep a copy of a document solely for record retention purposes.

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Confidential documentation

Often client details, project details, records, drawings, design concepts and financial information relating to a project will be confidential. Ensure that you have policies and procedures in place for the security of confidential documents retained in storage and for their destruction at the appropriate time. Your own, or someone else's, information may be confidential under contract or common law. In some cases, failure to maintain the confidentiality of someone else's information could expose you to a lawsuit for damages or other court order. It is important to read the terms of any confidentiality agreements (or other agreements that include confidentiality obligations) which are signed to ensure that you are complying with, or able to comply with, any conditions set out in the confidentiality agreement with regards to storage and destruction of documents.

The secure retention and destruction of documents and records are important steps in the document retention process. Where possible, store information digitally and ensure proper cybersecurity measures are in place.

Any method for storing documents should also consider whether personal information contained in those documents should be de-identified to comply with the Privacy Act 1988 (Cth). Refer Acumen note Privacy legislation - coverage and exemptions.

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Periods of retention

The period for which documents must be retained depends on the type of document. There are various legislative regimes in Australia (at the Commonwealth, state and territory levels) which prescribe specific timeframes for document retention and destruction.

For documents that may be required for current or anticipated legal proceedings, various time limits are imposed for certain types of proceedings (known as ‘statutory limitation periods’), which set out the maximum period of time which can elapse from the time of a cause of action arising until the commencement of court proceedings pertaining to that cause of action. All Australian states and territories have specific pieces of legislation which deal with limitation periods across a wide range of areas, with no limitation period that applies across the board.

For example, in relation to legal proceedings where there is a claim for a breach of a simple contract or agreement, the time limit for bringing the claim is generally six years calculated from the point of breach. With deeds, a longer period applies (12 to 20 years depending on the jurisdiction). Limitation periods for criminal charges also vary, and for serious crimes there is often no limitation period.

However, these statutory limitation periods are only useful to indicate a minimum retention period for documents involved in the proceedings. Such documents should be retained for as long as proceedings are current or anticipated.

Where there are no clear legislative guidelines as to the applicable retention period, the general rule of thumb is that documents should be preserved for seven years. However, the obligation to retain documents will vary depending on the jurisdiction in which it was created, the industry in which the business operates and the type of document that has been created.

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Legislation

This note does not attempt to include all legislation. Set out below are some of the commonly applicable legislative regimes governing document retention.

Where different legislation refers to the retention of the same or similar documents, you must consider adhering to the most stringent of the legislative requirements.

Commonwealth law

The Income Tax Assessment Act 1936 (Cth) requires records to be kept to enable income tax liability to be ascertained. The records may be kept as printed hard copy documents or in electronic format, and generally must be kept for at least five years after they were prepared or after the relevant transaction.

Similar rules apply to capital gains tax. The owner or former owner must retain the records for the duration of ownership of the asset, plus five years from the end of the accounting period in which disposal of the asset occurred. The records should include the date of purchase or sale, the cost base and the price paid or received.

The Corporations Act 2001 (Cth) contains various document retention requirements depending on the type of document. For instance, companies are required to retain ‘financial records’ (defined very broadly under the Act) so that true and fair financial accounts can be prepared and audited. These records must be kept for at least seven years from the end of the transactions to which the documents relate (not seven years from when the document was created).

In relation to certain company records, including minutes of members’ or directors’ meetings, resolutions passed at those meetings and registers of the company’s members, charges and option holders, these must be retained for at least five years.

Employment records are regulated under various acts, including the Fair Work Act 2009 (Cth). These records include those relating to terms and conditions of employment, hours worked, salary/wages, taxation details and entitlements, training, discipline, performance, conduct, leave, superannuation, resignation or termination. Each such record must be kept for seven years from the end of the financial year in which the relevant document was created.

State and territory laws

The retention of certain documents is also required by state and territory laws relating to (among others) work (occupational) health and safety matters, workers' compensation, payroll tax, and insurance and competition matters, which may differ across jurisdictions and depend on the subject matter of the relevant record.

It is important to be familiar with the requirements of the relevant state or territory in which you practice regarding the retention of records, particularly where these requirements exceed the requirements of Commonwealth laws or those of other authorities.

Evidence

The Evidence Act 1995 (Cth) generally permits proof of the contents of a document to be given as a hard copy in court proceedings. However, the Act only applies to federal courts. Similar legilsation has been enacted in some states and territories, but the position varies and it is not always permissible to use copies or certain forms of copy as evidence.

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How long should architects keep their records?

Architects face the prospect that an action may be brought many years after a project is completed. It is, therefore, desirable that project records are kept for longer periods than some other business records. When considering how long to retain your documents, take into account the fact that claims arising from construction projects often occur many months or even years after construction has been completed. Because the various limitation laws are not entirely comprehensive, there is still a possibility (albeit increasingly small) of claims being made against you ten, twenty or even fifty years after completion. The longer you retain your project documentation, the better the position you are likely to be in to defend any claims that may arise.

It is therefore recommended to keep your documents for at least ten years, and longer if possible.

It may be appropriate for records to be insured against loss or damage and advice should be sought from an insurance broker, including in relation to the type and amount of insurance cover required.

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Document destruction

In addition to various legislative retention periods, there are additional common law and legislative duties in relation to document destruction. For example, section 254 of the Crimes Act 1958 (Vic) creates an offence of the destruction of evidence which ‘….is, or is reasonably likely to be, required in evidence in a legal proceeding’.

The Privacy Act 1988 (Cth) also impacts an entity’s document retention and destruction policies. An entity that is subject to the National Privacy Principles, must destroy or permanently de-identify records containing personal information if the entity no longer needs the personal information for the purposes for which it was collected, or for any purpose for which it may be used or disclosed.

Generally, the National Privacy Principles will apply to a business that has a turnover of more than $3 million. If your business has an annual turnover of $3 million or less, it may still be required to comply with the Privacy Act depending on your business type and what you do within your business. For more information on whether you need to comply, see the Office of the Australian Information Commissioner website.

It is recommended that any hard copy documents containing confidential, personal or financial information should be securely shredded, and electronic files permanently and securely deleted, when they are no longer needed or when retention requirements expire.

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Conclusion

Knowing how, why and for how long to keep your documents and records before deleting is crucial to protecting your practice’s interests and is a sound risk management strategy. Having good document retention practices in place can protect your business from legal problems, unnecessary stress and costs. It helps with efficiency, cost savings, regulatory compliance and document protection.

The information above provides a high-level overview and is intended to give you guidance on the matters that you should consider when making such decisions and does not constitute legal advice. Generally, this guidance can be summarised as follows:

• Retain practice financial and non-project business records for at least seven years.

• It is recommended that you retain project records that relate to what was built (drawings, instructions, variations, specifications, etc), why things were done the way they were (briefs, minutes of meetings, site inspection reports, memos etc) and how things were done (site meeting records, resolution of details with contractors, etc) for at least ten years. Due to risks and liabilities in the architecture industry, the longer you retain your project documentation, the better the position you are likely to be in to defend any claims that may arise.

• Wherever possible retain originals – if only a copy is available, ensure it is the best copy obtainable and that it is durable (if there is an unmarked original and an annotated copy, bear in mind that the best evidence in court is often original documents) or professionally digitally archived.

• Some original documents, such as agreements and title certificates, should be kept indefinitely, while taking into account the matters discussed above and provided that the copyright and confidentiality issues are considered.

• A business should safely convert its other hard-copy documents into a more convenient form of storage provided there is a continuing means of retrieval and adequate cybersecurity measures are in place.