Forgetfulness and the Clean Slate – Collisions in the Digital Paradigm IX

Introduction

The law of obligations, in a most general sense, is the subject of civil disputes that arise between individuals or corporate bodies. Obligations may arise from the common law or from statute. But apart from providing a forum for the resolution of these disputes – the Courts – the State plays little or no active role.

The situation is different with offences created by statute for which a penalty is provided. In a most general sense these are described as crimes but from a purely literalist perspective, crimes are only those offences created by the Crimes Act 1961. Of course offences like dealing in or importing Class A drugs, offences against the Misuse of Drugs Act carry with them penalties as severe as those prescribed under the Crimes Act.

In essence what underlies an offence is that the behaviour prohibited falls below the bottom line of acceptable behaviour in a society, and which society deems should be the subject of prosecution by the State on behalf of the community. The penalties imposed by law following upon a conviction reflect the odium with which society views the behaviour.

The gravity of the behaviour is often measured by the nature of the penalty imposed and the way in which offences may be classified. Crimes as set out in the Crimes Act 1961 involve offences where the penalty of 1 year’s imprisonment or more may be imposed. Offences under the Summary Offence Act 1981, dealing with matters such as disorderly behaviour or low level assault or threatening behaviour carry penalties of a fine or a short term of imprisonment – up to 3 months for most although 6 months imprisonment is the maximum for Summary Offences assault.

The Land Transport Act also has offences involving the use of motor vehicles which carry penalties of fines, imprisonment and disqualification from driving. There is a graduated scale of penalties of potential imprisonment and disqualification for repeat drink drive or driving while disqualified offenders.

And it must be noted that with certain very limited exceptions a penalty cannot be imposed without a conviction being entered. The entry of a conviction of itself carries a certain stigma. Overseas travellers will be familiar with immigration documents that ask whether or not the traveller has been convicted of an offence and different countries have different policies about who they will let in who have been convicted a certain offences. Convictions for offences may also affect an individual’s job prospects, or how and to what extent he or she may engage in community activities. The presence of a conviction carries its own stigma.

By the same token a conviction sends a message about an individual. A person who has repeat offences for dishonesty demonstrates a tendency towards dishonest behaviour. Would that particular fox be placed in the henhouse of a banking job or a position where an accounting for money was required. On the other hand, youthful indiscretions – disorderly behaviour by a group of students celebrating their graduation – may be the only blot upon an otherwise clean copybook. Should a person who leads an exemplary life for years after some stupid low level misbehaviour that amounts to an offence, carry that mariner’s albatross for the rest of his or her life.

The Clean Slate Act

The Criminal Records (Clean Slate) Act 2004 sets up a clean slate scheme. Under the clean slate scheme an eligible individual

(a) is deemed to have no criminal record for the purposes of any question asked of him or her about his or her criminal record; and

(b) has the right to have his or her criminal record concealed by government departments and law enforcement agencies that hold or have access to his or her criminal record.

The Act is not that easy to understand but eligibility is the key component. Eligibility is acquired under section 7 and requires a number of boxes to be ticked. Shortly summarised these are

  • There must be the completion of a rehabilitation period and
  • No custodial sentence has ever been imposed; and
  • No orders have been made under legislation dealing with mental competence issues and criminal liability and
  • The person has not been convicted of a specified offence set out in section 4 of the Clean Slate Act; and
  • Where a fine or reparation has been imposed, those amounts have been paid; and
  • In the case of an order for compensation, that amount has been paid or remitted and
  • No order for indefinite disqualification has been imposed.

Perhaps the most critical aspect of the above criteria if the definition of a rehabilitation period. In relation to an individual, that means any period of not less than 7 consecutive years after the date on which the individual was last sentenced, or a specified order was last made, in which the individual has not been convicted of an offence. Thus a rehabilitation period is 7 consecutive years without reoffending.

Interestingly enough the Act is silent on what offences qualify for clean slate protection. It is NOT silent on the offences which do not qualify and those specified offences involve a range of sexual and indecency offences. Thus it is possible that a person who is convicted of burglary and who fulfils all the criteria list above could claim clean slate protection. What is difficult for many is where a custodial offence has been imposed, not necessarily for the particular offence but for any offence, or where an order for indefinite disqualification has been imposed. To qualify for clean slate protection a person must fulfil each of the seven criteria.

The Effect of the Clean Slate

Section 14 provides in detail the effect of the Cleans Slate.

  • If an individual is an eligible individual, he or she is deemed to have no criminal record for the purposes of any question asked of him or her about his or her criminal record.
  • An eligible individual may answer a question asked of him or her about his or her criminal record by stating that he or she has no criminal record.
  • Nothing in subsection 1 or 2 above—
  • prevents an eligible individual stating that he or she has a criminal record, disclosing his or her criminal record, or consenting to the disclosure of his or her criminal record; or
  • authorises an individual to answer a question asked of him or her about his or her criminal record by stating that he or she has no criminal record if the question is asked—
  • under the jurisdiction of the law of a foreign country while an eligible individual is outside New Zealand; or
  • while he or she is in New Zealand but relates to a matter dealt with by the law of a foreign country (for example, a question asked on an application form by the immigration or customs agency of a foreign country).

It will be noted particularly that the Clean Slate provisions really only are effective in New Zealand. A person cannot invoke the Clean Slate provisions if they are entering a foreign country where a question is asked about previous convictions. In those circumstances, convictions must be disclosed.

It should also be noted that section 19 sets out specific exceptions to the applicability of the Clean Slate regime.

Publication and the Clean Slate

The Clean Slate Act – sections 9 and 10 – allows individuals to apply to the Court for exemption from the rehabilitation period or that a conviction be disregarded in certain circumstances. Section 13 of the Act prima facie prohibits publication of the name of an applicant for such exemptions or any particulars leading to the identification of the applicant. However these details may be published in certain limited circumstances.

If a person has access to criminal records and discloses the criminal record of an eligible person a finable offence is committed.

If the person requires or requests that an individual—

  • disregard the effect of the clean slate scheme when answering a question about his or her criminal record; or
  • disregard the effect of the clean slate scheme and disclose, or give consent to the disclosure of, his or her criminal record

then a finable offence is committed.

The Right to be Forgotten

When the applicability of the European concept of the right to be forgotten is discussed in the context of New Zealand, the Clean Slate Act is advanced as an example. However, the Clean Slate Act in some ways goes further than the Google Spain decision. Remember, Google Spain was about deindexing Mr Costeja-Gonzales name from associations with a public notice that appeared in the La Vanguardia newspaper. It did not eliminate the article – the primary information – itself.

The Clean Slate Act goes well beyond that. It effectively gives a right to be forgotten in the sense that the eligible individual does not have to disclose a previous conviction if it falls within the Act, can effectively deny such conviction exists although the power of disclosure remains with the individual. This means that the Act allows the eligible individual to redefine him or herself in respect of facts of earlier criminal conviction.

As the law stands at the moment, the power lies with the individual to disclose or not disclose. In that respect the eligible individual controls the right to be forgotten. However, the disclosure of the criminal conviction of an eligible individual amounts to an offence only if it is made by a person who has access to criminal records and a criminal record is defined as a record kept by or on behalf of the Crown. Information acquired by newspapers in the course of Court reporters, bloggers or website hosts who publish cases, naming an individual who has been convicted, and who subsequently becomes eligible, commit no offence.

Publicists in that case commit no offence by publishing the name of a person appearing before the Court contemporaneously with the event. The problem has now become (and was on the horizon in 2004 when the legislation was enacted) associated with the preservative power of digital technologies and the concept of the document or information that does not die. A Google search may reveal the name of an eligible person and hyperlink to the blog, website or online newspaper. So should there be deindexing of the names of eligible persons where the linked to sites contain information about previous convictions? Or should the source information be taken down?

There are a number of thorny issues surrounding this including freedom of the press, the neutrality of Internet based searches along with the underlying integrity of the Clean Slate Act. And this problem has come to the attention of the Privacy Commissioner.

Privacy Concerns

The concerns of the Privacy Commission are expressed in the following way:

A number of newspapers in New Zealand have a practice of publishing the names and conviction details of everyone prosecuted in the local court. This includes those convictions covered by the Clean Slate Act.

This effectively nullifies the intended effect of the Act for these people, as most newspapers are now online as well as in print. A quick Google search for someone’s name can unearth details that were suppressed by the Clean Slate Act.

Further, the newspapers that publish the details of petty crime tend to be in smaller towns, as it’s impractical for larger metropolitan newspapers to print the details of every conviction. So the Clean Slate Act effectively increases the consequences of relatively minor offences for people who live in small towns. This does not seem fair, particularly in the context of the economic opportunity gap between urban and rural New Zealand.

This issue is one of the loose collection of issues covered by the still-developing idea of the “right to be forgotten,” which we wrote about in 2014.  That is, the idea that some public information might become private after a certain amount of time has passed.

The Clean Slate Act was one of New Zealand’s first “right to be forgotten” laws. Perhaps it is time to look at what responsibility media have to let people move on. If a quick Google search is all it takes to find someone’s past transgressions, then in practical terms, their slate isn’t very clean at all.

 Concluding Thoughts

This post is not a critique about the policies behind the Clean Slate Act nor is it part of a newly heralded debate about a review of that legislation. Rather my purpose is to raise a few issues that need to be considered.

The first is this. Removing information from the Internet is at best an inadequate solution. The information may be located in a number of places and the disseminatory qualities of digital technologies mean that the information may be removed from an online news site, but it may still be available on social media platforms, possibly YouTube or on any one of a number of blog sites. So the effectiveness of the proposal is an issue that must be considered.

The second issue is whether or not the obscurity that is sought by removal of online content will achieve its objective. Newspaper archives and hard copy retains the information, albeit in a form more difficult to access than that placed on the Internet.

The third issue is one to which I have already referred. Freedom of the press and the associated right of the public to know the business of the Courts as an arm of Government per medium the newspaper as proxy is a jealously guarded right and one which will not be easily yielded by the news media. Newspapers provide an important record of community activities from an historical and social point of view in addition to their role as public surrogates. The information that they contain is of continuing interest. And it must be remembered that the Clean Slate Act vests the right of invocation in the hands of the eligible individual. It does not prohibit enquiry by a third party into a person’s past of sources other than the eligible person.

And that gives rise to a fourth issue and it is that a freedom of expression – the right guaranteed under the New Zealand Bill of Rights Act to impart and receive information. Care  must be exercised if interference with that right is contemplated.

So what is a person to do – someone who is eligible to invoke Clean Slate but whose previous conviction is on a newspaper website and who, as a consequence, is finding it difficult to get a job. If the circumstances are such that the person is caused harm – serious emotional distress – as a result of continued frustration in finding a job – the provisions of the Harmful Digital Communications Act could be available and, if all the criteria are satisfied may beinvoked. Truth is not a defence to a takedown order under that Act and it may well be that the initial intercession by the Approved Agency will arrive at a satisfactory result.

Whatever follows from this interesting but controversial proposal will be an interesting debate and one which once again will match existing social policy with the realities of the Digital Paradigm

Further Obscurity on the Internet – Collisions in the Digital Paradigm VIII

 

Introduction

Yet again a Court of law has made an order against Google, requiring it to deindex search results in a particular case. This example does not deal with the so-called “right to be forgotten” but with issues surrounding efforts by one company to infringe the intellectual property rights of another. But Google’s involvement in this case as not as a party to the action. They were not involved. No wrongdoing by them was alleged. All they did was provide index links via their automated processes. These links were to the infringers. An injunction was sought to compel de-indexing not just in the country where the case was heard but world wide.

Equustek v Jack

Equustek v Jack came before the British Columbia Supreme Court in 2014. The circumstances of the case were these.

Equustek manufactured electronic networking devices for industrial use.  A company named Datalink created a competing product. Equustek claimed that one of its former employees conspired with Datalink, and the competing product used Equustek’s trade secrets and trademarks.

Equustek commenced proceedings against Datalink and a number of individual defendants.  The Datalink defendants did not play any part in the litigation and their defences were struck out but they continued to sell products from a number of websites.

Pending trial the Supreme Court made a number of interlocutory orders against the defendants including an  order prohibiting the defendants from dealing with Equustek’s intellectual property. Even the issue of a criminal arrest warrant against one of the defendants did not stop the sale of the disputed products on the web from undisclosed locations.

So far the case is procedurally unremarkable. But what happened next is quite extraordinary. Equustek turned to Google and asked it to stop indexing the defendant’s websites worldwide. Google voluntarily removed 345 URLs from search results on Google.ca. But the problem remained. Almost all the infringing material was still available online. So Equustek took the matter a step further.

Remember, Google was not a party to the original suit. They had not been involved in the allegations of intellectual property infringement . Google’s response to Equustek’s approach was a co-operative one. They did not have to comply with Equustek’s request.

Equustek sought an order from the Court restraining Google from  displaying any part of the websites with which it was concerned on any search results worldwide. The order was in the nature of an interlocutory injunction. The grounds for the application were that Google’s search engine facilitated the defendants’ ongoing breach of court orders.

Google argued that the court did not have jurisdiction over Google or should decline jurisdiction, In any event it should not issue the requested injunction. The Court observed that the application raised  novel questions about the Court’s authority to make such an order against a global internet service provider.

The court held that it had jurisdiction over Google because Google, through its search engine and advertising business, carried on business in British Columbia. This in itself is not remarkable. It is consistent with the theory of connection with the forum jurisdiction and the concept of the grounding of activities in the forum state that gives rise to  a Court’s jurisdictional competence. Cases abound arising from e-commerce and Internet based business activities.

The court considered that Google’s search engine websites were not passive information sites, but rather were interactive and displayed targeted advertisements. The court noted that this rationale might give every state in the world jurisdiction over Google’s search services, but noted that was a consequence of a multinational doing business on a global scale rather than from a flaw in the territorial competence analysis.

Again this is a reality of jurisdictional theory. In the Australian defamation case of Dow Jones v Gutnick it was observed that a cause of action might lie in every country where publication of the defamatory article had taken place. Mr Gutnick undertook to commence only in Australia because that is where his reputation lay and needed to be vindicated.

The court also refused to decline jurisdiction over Google, because Google failed to establish that another jurisdiction (California) was a more appropriate forum and the court could effectively enforce its order against Google outside Canada. This is what is called a forum conveniens argument – it will arise in the context not of whether or not a court has jurisdiction but where jurisdiction may lie in two states (in this case British Columbia, Canada and California, United States of America) which court should properly hear the case.

The Court found that it had authority to grant an injunction with extra-territorial effect against a non-party resident in a foreign jurisdiction if it is just or convenient to do so.

The judge observed that new circumstances require adaptation of existing remedies  – an aspect of the reality of e-commerce with its potential for abuse. This would be especially so if there was to be any credibility and integrity of Court orders.

The court then considered the test for ordering an injunction against a third party. The standard test was modified.

 (1) a good arguable case or fair question to be tried (which relates to the plaintiff’s claim against defendant); and

 (2) a balancing of the interests (irreparable harm and convenience) of the plaintiff and the non-party to whom the injunction would apply.

The court identified a number of relevant considerations, including

  1. whether the third party is somehow involved in the defendant’s wrongful acts;
  2. whether the order against the third party is the only practicable means to obtain the relief sought;
  3. whether the third party can be indemnified for the costs to which it will be exposed by the order;
  4. whether the interests of justice favour the granting of the order; and
  5. the degree to which the interests of persons other than the applicant and the non-party could be affected.

The court granted the injunction against Google requiring Google to block the defendants’ websites (identified in the court order) from Google’s search engine results worldwide finding that Google was unwittingly facilitating the defendants’ ongoing breaches of court orders, and there was no other practical way to stop the defendants.

Google appealed to the British Columbia Court of Appeal who upheld the order issued at first instance.

Equustek v Google

The Court of Appeal observed that it is unusual for courts to grant remedies against persons who are not parties to an action. The reasons for this are obvious – most civil claims are concerned with the vindication of a right, and the remedial focus will be on that right. Further, notions of justice demand that procedural protections be afforded to a person against whom a remedy is sought. The usual method of providing such protections is to require the claimant to bring an action against the respondent, giving the respondent the rights of a party.

However, this does not mean that the Courts are powerless to issue orders against non-parties. What is known as a Norwich Pharmcal order was cited as an example. There are, in fact, many types of orders that are routinely made against non-parties – subpoenas to witnesses, summonses for jury duty and garnishing orders are common examples. Many of these orders have a statutory basis or are purely procedural, but others derive from the inherent powers of the court or are more substantive in nature.

The Appeal Court observed that Canadian courts have jurisdiction to grant injunctions in cases where there is a justiciable right, even if the court is not, itself, the forum where the right will be determined. Canadian courts have also long recognized that injunctions aimed at maintaining order need not be directed solely to the parties to the litigation.

Google argued that the Court should not grant an injunction with extraterritorial effect. It submitted

As a matter of law, the court is not competent to regulate the activities of non-residents in foreign jurisdictions. This competence-limiting rule is dictated both by judicial pragmatism and considerations of comity. The pragmatic consideration is that the court should not make an order that it cannot enforce. The comity consideration is that the court refrains from purporting to direct the activities of persons in other jurisdictions and expects courts in other jurisdictions to reciprocate.

The Court did not accept that the case law establishes the broad proposition that the court is not competent to regulate the activities of non-residents in foreign jurisdictions.

The Court noted that the case exhibited a sufficient real and substantial connection to British Columbia to be properly within the jurisdiction of the Province’s courts.

From a comity perspective, the question must be whether, in taking jurisdiction over the matter, British Columbia courts have failed to pay due respect to the right of other courts or nations. The only comity concern that was articulated in this case was the concern that the order made by the trial judge could interfere with freedom of expression in other countries. For that reason, there had to be considerable caution in making orders that might place limits on expression in another country. The Court stated that where there is a realistic possibility that an order with extraterritorial effect may offend another state’s core values, the order should not be made.

In considering the issue of freedom of expression the Court noted that there was no realistic assertion that the judge’s order would offend the sensibilities of any other nation.

It was not suggested that the order prohibiting the defendants from advertising wares that violate the intellectual property rights of the plaintiffs offended the core values of any nation. The Court noted that the order made against Google is a very limited ancillary order designed to ensure that the plaintiffs’ core rights are respected.

The Court also noted that there were a number of cases where orders had been made with international implications. Cases such as APC v. Auchan Telecom, 11/60013, Judgment (28 November 2013) (Tribunal de Grand Instance de Paris); McKeogh v. Doe (Irish High Court, case no. 20121254P); Mosley v. Google, 11/07970, Judgment (6 November 2013) (Tribunal de Grand Instance de Paris); Max Mosley v. Google (see “Case Law, Hamburg District Court: Max Mosley v. Google Inc. online: Inform’s Blog Moserly v Crossley – Hamburg) and ECJ Google Spain SL, Google Inc. v. Agencia Española de Protecciób de Datos, Mario Costeja González, C-131/12 [2014], CURIA are well known to Internet lawyers.

Some of the cases involving extraterritorial implications have been controversial, such as La Ligue contre le racisme et l’antisémitisme c. La Société YAHOO!Inc., Tribunal de Grande Instance de Paris (May 22, 2000 and November 20, 2000), Court File No. 00/05308 and YAHOO! INC. v. La Ligue contre le racisme et l’antisémitisme, 169 F.Supp. 2d 1181 (N. Dist. Cal., 2001) rev’d 379 F.3d 1120 (9th Cir., 2004) and 433 F.3d 1199 (9th Cir. en banc, 2006)).

This extensive case law does indicates that courts in other countries do not see extraterritorial orders as being unnecessarily intrusive or contrary to the interests of comity.

Commentary

Google appealed to the Supreme Court of Canada and leave to appeal has been granted. Thus, there is one more act to this drama to be played out.

One issue that will need to be resolved is whether the order that was made can be even be granted against a third party not involved in any wrongful activity. If so, the test to obtain such an order will need to be determined, as well as its geographic and temporal scope.

What about the issue of access to justice? In many areas of law, courts have expressed concern that effective remedies should not be limited to individuals or companies with deep pockets. The type of order granted against Google is certainly an effective additional remedy from a plaintiff’s perspective. But are only large corporates expected to be the sole parties in cases such as these simply because they are large corporates with a high profile. Only Google seems to be a party in this case – no other search engine features.

Furthermore what are the boundaries of a Canadian court’s territorial jurisdiction. May a Canadian court order a search engine company in California to prevent users in other countries from viewing entire websites? It is also expected that Google will raise constitutional issues, specifically whether blocking search results limits access to information or freedom of expression on the Internet.

But there is more to the case than this. It involves the ability to locate Internet based information that is facilitated by search engines. This case has the same impact on the Internet as Google Spain  – its consequence is de-indexing of information.

The decision is unremarkable for its application of conflict of laws theory. But having said that, the issue of extraterritorialty is a complex one, and because other jurisdictions and Courts have made extraterritorial orders that may or may not be enforceable does not mean that such an order is correct of justified in law. The anti-Nazi organisations LICRA and UEJEF found this out when Yahoo, having had extraterritorial orders made against it in France came to the US Courts seeking a declaration that they were unenforceable. Would Google be on less firm ground if it adopts a similar course of action against Equustek – assuming that a US Court has jurisdiction?

Throttling the Web

The development of the World Wide Web was, in the vision of Tim Berners-Lee, to assist in making information available and, creating a method of accessing stored information and sharing it.  Yet it had already become clear, even pre-Web, that locating information was a problem and the solution lay in developing search engines of means of locating a specific piece or pieces of information. Search engines such as Gopher provided a form of a solution in the pre-graphical interface, pre-Web environment, and there were a number of search engines such as Altavista, Lycos, Find-What, GoTo, Excite, Infoseek, RankDex, WebCrawler Yahoo, Hotbot, Inktomi and AskJeeves that provided assistance in locating elusive content. However, the entry of Google into the marketplace, and the development of innovative search algorithms meant that Google became the default source for locating information.

What must be remembered is that Google is a search and indexing engine. It does not store the source information, other than in cached form. Using some advanced mathematics, founders Larry Page and Sergey Brin developed a method for measuring the links across websites by ranking a website more highly when other sites linked to it. Putting it very simply, the algorithm measured the popularity of a webpage. Utilising the hypertext link of Berners-Lee, Google locates content and enables a user to access it.

As a lawyer\technologist, I see Equustek v Google in the same way as I saw Google Spain – as a clog on progress that may slow the development and promise of information systems that depend upon a reliable search facility to locate information on the greatest central source of information that the world has ever known. The propositions that underlie Google Spain and Equustek and the application of law in this area amounts to a real and significant collision in the Digital Paradigm. Perhaps it is time for the Courts to understand that an automated indexing system that is completely content neutral and involves no human input into the way that it identifies and indexes should be seen as simply an intermediary and no more. Google is able to monetise its search engine  but to suggest that its search engine is not a passive information system, but rather is interactive and displays targeted advertisements in and of itself is, in my respectful view, insufficient justification to require a de-indexing of search results.

Kids, Privacy and Social Media

In mid-December 2002 Mrs Marie Hosking, recently separated from her broadcaster husband, was photographed walking her children down a street in Newmarket, a suburb in Auckland. The photographer in question was one Simon Runting who had been commissioned by a woman’s magazine to take the photos for a proposed article. Both Mr and Mrs Hosking were very protective of the privacy of their children. They were entitled to their privacy. So Mr and Mrs Hosking commenced proceedings.

First they had to establish that there was a cause of action – a tort or civil wrong based around a right to privacy.

Secondly, if such a cause of action was available, did the circumstances of the case fall within it which would allow the Court to provide a remedy.

A full Bench of the New Zealand Court of Appeal agreed that New Zealand law recognised a tort of invasion of privacy. Tipping J expressed the tort in summary as follows:

I would therefore summarise the broad content of the tort of invasion of privacy in these terms. It is actionable as a tort to publish information or material in respect of which the plaintiff has a reasonable expectation of privacy, unless that information or material constitutes a matter of legitimate public concern justifying publication in the public interest. Whether the plaintiff has a reasonable expectation of privacy depends largely on whether publication of the information or material about the plaintiff’s private life would in the particular circumstances cause substantial offence to a reasonable person. Whether there is sufficient public concern about the information or material to justify the publication will depend on whether in the circumstances those to whom the publication is made can reasonably be said to have a right to be informed about it. (Hosking v Runting [2005] 1 NZLR 1 at para [259]

However, although the Hoskings were successful in establishing that there was a right to privacy which could be invaded, the Court held that in this case there was no expectation of privacy and they failed to establish a breach of privacy. As Tipping J succinctly put it

I am of the view that neither Mr and Mrs Hosking, nor the children themselves, had a reasonable expectation of privacy in the photographs in question. They were taken in a public place. There is no evidence which satisfies me that publication would be harmful to the children, either physically or emotionally. There is, in my view, no greater risk to the safety of the children than would apply to a photograph of any member of society taken and published in a similar way. Any other conclusion would be based on speculation rather than reasonable inference from evidence. I doubt whether many members of society would regard the Hoskings as having expectations of privacy in current circumstances in respect of their children. I cannot accept that any such expectation as might be held would be reasonable in all the circumstances. I cannot see how it can reasonably be said that publication of these photographs should be regarded as likely to cause substantial offence or other harm to a person of reasonable sensibility. (Hosking v Runting [2005] 1 NZLR 1 at para [260]

The facts of Hosking’s case were clear and not in dispute and involved a claim against another actor for privacy infringement – the photographer was a person who was entering what Hosking claimed was a zone of privacy for the children and intended, by publication of the photos, to extend that zone to a wider audience. The case fell upon the fact that in a public place – a street – there is no expectation of privacy.

The Internet and Social Media present a set of circumstances which challenge the use and control of personal information.

One phenomenon that has attracted some publicity is that of parents who place details of their family life on-line and especially include photographs of their children. Now this seems to run entirely counter to the approach of the protagonists in Hosking v Runting who wanted to keep their children OUT of the public eye.

Two recent articles highlight the issue.  One – “The Rise of the Instamums”  is about a number of individuals who place carefully selected and curated photos of their children online and who manage to make a bit of money in the process with endorsements and product placement. The other, from Australia – “How Roxy Jacenko Inadvertently Became a Pin-Up Girl for Oversharing on Social Media” – demonstrates the dangers that may arise.

Like anything that is posted on social media, once it is there, it is there – the concept of the document that does not die.

The other issue is that once content has been posted, one loses control of it, so that it may be modified and doctored, as was the case with images of Ms Jacenko’s daughter Pixie.

Ms Jacenko, a PR consultant, has been criticised for commercialising her child, but apart from that there seem to be a number of other issues which arise particularly in the context of privacy which need to be considered.

Control and privacy is particularly relevant. Privacy is all about what information or aspects of one’s personal life one is prepared to disclose or share with others. There may be a number of reasons for disclosing such information, much of it to do with self-image, definition, how one wants to be viewed in society and the like. Social media may interfere with that significantly. Images of children, posted for the purposes of pride or as a form of journal of a child’s progress  may be hi-jacked for nefarious purposes (or worse). They may serve to identify a child and possibly provide associated information that may help to locate a child who may be of interest to one who, shall we say, has other than the best interests of the child at heart.  And then the photos can be used for revenge or harassment or abuse.

One hesitates to draw an analogy between the on-line and the real word – they are so different – but it has been observed that posting pictures of children online is the same as walking down a street passing out those pictures to complete strangers. When viewed in that light the posting of photos of children online takes on a different and indeed somewhat sinister dimension.

A propos of the “document that does not die” life for all of us goes on. The carefully curated photos of a child posted by a proud parent may, in a few year’s time, become a considerable source of embarrassment as the child grows into maturity. The photos could become the source of taunts, shaming or cyberbullying. It is doubtful that the target of such behaviour would relish the presence of his or her pictures on-line.

Given the ability to search out information within this everlasting informational context, it may well be that New Zealand law will have to develop a “Right to be Forgotten” to enable these kids as adults to attend to their own self-definition.

Privacy for children is something about which  Mr and Mrs Hosking were concerned. The Court held that there was no expectation of privacy in a public street. Likewise, there is no expectation of privacy on a social media site. Perhaps kids should have that private space within which to grow and develop. And then they can make the choice about whether photos of them remain in the family album at home or online.

Tailored Discovery in the Family Court?

The case of Fisher v Fisher [2015] NZHC 2693 was a case which came to the High Court on appeal from the Family Court. One of the applications associated with the appeal was for a stay of execution of orders for discovery.

The Judge, Nation J, pointed out that pursuant to the Family Court Rules, the Judge has a discretion as to whether to make discovery orders.

Although the rules require an order for discovery to be in a certain form, a Family Court Judge could, in his or her discretion, give directions as to the particular discovery required to enable the Court and the parties to more speedily and economically resolve the actual issues which are before the Court. (See Rules 141(3) and 16. Dixon v Kingsley [2015] NZHC 2044.)

The Judge observed that a good deal of discovery had been made both formally and informally by the parties before the wife applied to the Family Court for an order that the husband make discovery. Even although both parties had cooperated to some extent in enabling an accountant engaged for Mr Fisher to have relevant documents and to obtain documents from banks and Mr Fisher’s counsel had made it clear that those documents were available for inspection, nevertheless there was considerable mutual distrust between the parties.

One the matters that the husband wished to address was the setting aside of a settlement agreement partially on the basis he was not adequately informed as to the true nature and extent of the property at issue. It was thus understandable that the Judge required Mr Fisher to verify, by way of affidavit, what documents he held personally and particularly what documents he had in his possession at the time the settlement agreement was entered into.

Mrs Fisher claimed that Mr Fisher had been responsible for removing a considerable collection of relevant business documents from where they were normally kept, while later in the proceedings she had found relevant documents. There was no evidence as to the particular circumstances in which that had happened.

On this basis the Family Court Judge had decided to make full Peruvian Guano discovery (See Compagnie Financière et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55, (CA).   However, since that order had been made counsel for the parties had the benefit of considering the decision of Kos J in Dixon v Kingsley [2015] NZHC 2044. In that case His Honour noted that the Peruvian Guano approach to discovery had been “shovelled out the door in 2012”, as far as the High Court was concerned. While there had not been a change to the Family Court Rules to reflect the discovery regime in the High Court and the District Court, given the discretion that the Family Court had to make discovery orders, a tailored approach was permissible and desirable.

Counsel had recognised that some discovery would be appropriate but on a much more tailored basis than the original Family Court orders. Counsel had not settled the way in which discovery should be made but it was agreed that the appeal about discovery should be allowed.

The Judge made orders for both parties to provide discovery as to particular documents held by them in terms to be agreed between counsel. Within 21 days of this judgment, counsel were required to file a memorandum setting out the scope of discovery which is required and a timetable for inspection of those documents. Leave was reserved to either party to seek further directions as to discovery if that becomes necessary.

It is clear from this decision that the themes of reasonableness and proportionality that underpin the High Court Rules on discovery have been adopted by the Judges in considering discovery in the context of relationship property. The measured and relevance based approach of tailored discovery means that discovery in relationship property cases, where often there is an inequality of financial ability to fund extensive discovery, is more focussed and relevant. It is encouraging to see that the High Court in two cases has delineated the approach to discovery in relationship property cases. What is also significant is that the parties recognised their responsibilities in this regard and the Court was content to allow counsel to agree upon the scope of discovery.

What augurs well for the future is that a tailored approach to discovery in relationship property cases will be considered in the event that there are e-discovery issues to be addressed. While it is unlikely that large datasets of documents will be at issue that require a TAR approach, nevertheless the ground rules are set. And this can only be for the benefit of the parties in these fraught and often highly charged cases.

DIXON v R –Game Over for Digital Property? I Think Not.

 

On 20 October 2015, the Supreme Court of New Zealand delivered its decision in the matter of an appeal by Jonathan Dixon against a conviction on a charge of accessing a computer for a dishonest purpose pursuant to s 249 Crimes Act[1].  It was alleged that Mr Dixon had accessed a computer system and dishonestly and without claim of right obtained any property.  In short, what Mr Dixon had done was to copy some digital footage from a CCTV security system operated by a bar in Queenstown.  Mr Dixon obtained the footage from a receptionist for the company and transferred the files onto a USB stick, deleting them from a desktop computer where they resided.

The Judge at first instance considered that the digital CCTV files were property within the meaning of the definition of that word in s 2 Crimes Act.  When the matter went before the Court of Appeal, the Court disagreed[2].  It concluded that digital information or a data file did not fall within the definition of property.

The Court of Appeal’s decision was the subject of considerable critical comment.  It was even suggested that the provisions of s 249 Crimes Act were “unfit for the purpose”.  Yet the decision should not have come as any surprise for there is a substantial body of authority, primarily in the civil arena, that supports the Court’s conclusion.  Subsequently the Court made  similar finding was reached in the case of Watchorn v R[3].

What the Court of Appeal did in Dixon however, was to substitute another charge which could have been proffered against Mr Dixon – that he accessed a computer and dishonestly and without claim of right obtained a benefit.  In its decision the Court of Appeal went to some pains to consider the nature of a benefit and substitute it at charge.

Mr Dixon appealed against that conclusion to the Supreme Court of New Zealand.  In its decision, the Supreme Court concluded that the Court of Appeal’s conclusion that a digital file did not amount to property was wrong.  It quashed Mr Dixon’s conviction for obtaining a benefit contrary to s 249(1)(a) and it reinstated his original conviction for obtaining property by accessing a computer system for a dishonest purpose. Phyrric victory does not adequately describe the outcome from Mr. Dixon’s point of view.

The Court started by considering the provisions of s 249(1) of the Crimes Act.

249 Accessing computer system for dishonest purpose

(1)        Every one is liable to imprisonment for a term not exceeding 7 years who, directly or indirectly, accesses any computer system and thereby, dishonestly or by deception, and without claim of right,—

(a)          obtains any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or

(b)          causes loss to any other person.

 

It then went on to consider the definitions of “access” and “computer system” contained in s 248 Crimes Act.  The Court observed that a relevant feature of the definitions was that “computer system” included “stored data” and “access” included receiving data from a computer system. The Court later observed that the definition of a computer system included “software” of which more later.

The Court then went on to consider the definition of “property” contained in s 2 of the Crimes Act.

property includes real and personal property, and any estate or interest in any real or personal property, money, electricity, and any debt, and any thing in action, and any other right or interest

Arnold J, writing for the Court, noted that the definition is:

(a)        inclusive rather than exclusive;

(b)        circular in that the property is defined as including real and personal property; and

(c)        in wide terms and, in particular, includes tangible and intangible property.

The Court went on to observe that within the broader statutory context the term “goods” in the Commerce Act 1986, the Consumer Guarantees Act 1993, the Fair Trading Act 1986 and the Sale of Goods Act 1908 is defined, to avoid doubt, to include computer software. It observed that, when considering the inclusion of software in consumer legislation the Commerce Committee stated:

The interest in the software the consumer receives does not differ significantly from other goods involving the transfer as an interest in intellectual property, and for which the guarantees and remedies relating to goods are more relevant and applicable to the guarantees and remedies related to services.  We recommend that computer software be added to the definition of goods for the avoidance of doubt.[4]

 

In reading the decision in a linear fashion, it was not immediately apparent at this stage of the Court’s reasoning what relevance software as goods might have to the issue of whether data was property but the issue becomes clear later in the Supreme Court’s decision.

The Court went on to consider the Judge’s finding that the definition of “property” in the Crimes Act was wide and, indeed, sufficiently wide to cover a digital file.  It then went on to consider the decision of the Court of Appeal.  The Court of Appeal’s starting point was that digital files were not property within the meaning of the definition of the Crimes Act because they were pure information.  The Court of Appeal had adopted what it described as an “orthodox” view that information, whether confidential or not, was not property.  It observed that the medium upon which information could be stored would be property but the information upon it would not.  Therefore, the digital footing could not be distinguished from information on this basis. The Court of Appeal observed that it was problematic to treat computer data as being analogous to information recorded in physical form.  It observed that a Microsoft Word document may appear to be the same as a visible sheet of paper containing text but in fact was simply a stored sequence of bytes.

The Court of Appeal considered whether or not it should depart from this orthodox view, observing that the distinction drawn between information which was not property and the medium upon which it was contained had been criticised as illogical and unprincipled.  The Court of Appeal’s view was that there were certain policy reasons militating against the recognition of information as property particularly in that such a decision could impact detrimentally upon the free flow of information and the freedom of speech.

The Court noted that when it enacted the computer crime sections of the Crimes Act there were also amendments to the definition of “property” but that these were limited.  The taking of confidential information or trade secrets was encompassed by s 230 Crimes Act. It considered that the provisions in s 249 relating to property were aimed at situations where a person accessed a computer and used, for example, a false or purloined credit card details to obtain goods unlawfully.

Before the Supreme Court counsel for the Crown stepped away from arguing that pure information was property.  Rather, the argument was focused upon the fact that digital files were property because they could be owned and dealt with in the same way as other items of personal property.  Thus the Court was able to sidestep dealing with the major finding of the Court of Appeal and could approach the problem from a different angle.

Another reason for the Court not considering the “pure information as property” issue was that Mr Dixon had dismissed his lawyer prior to the hearing and, accordingly, the point was not fully argued, and therefore it was considered that it was not an appropriate occasion to reconsider what the Court of Appeal had referred to as the orthodox view.

The Supreme Court started with considering the issue of context and observed that the meaning of the word “property” varies with its context.  It referred to comment made by Gummow and Hayne JJ in Kennon v Spry [5]where they stated:

The term “property” is not a term …with one specific and precise meaning.  It is always necessary to pay close attention to any statutory context in which the term is used.

The Court then went on to observe that within the context of s 249(1)(a) and in light of the definition of “property” in s 2, there was no doubt that the digital files at issue were property and not simply information.  The Court considered that digital files are identifiable, have a value and are capable of being transferred to others.  They also have a physical presence although that cannot be detected by means of the unaided senses.  It may be that they could be classified as tangible or intangible but nevertheless the Court concluded that digital files were property for the purposes of s 249(1)(a). However, the Court omitted to discuss inconvenient issue of the necessity of exclusive possession as an element of property

 

The rationale for such a finding started with a consideration of the history of the amendments made to the Crimes Act in 2003.  In crafting a new suite of changes to modernise the criminal law in relation to crimes against rights and property, focus was upon the concept of being “deprived of property” rather than the concept of “things that were capable of being stolen”, for it was that latter concept that underpinned property crimes in the 1961 Crimes Act prior to its amendment in 2003.

When the amending bill was first proposed, there was a specific definition of “property” for the purposes of a new Part 10 relating to crimes against property.  That new definition arose as a result of the 1999 decision of the Court of Appeal in R v Wilkinson[6] where the Court held that the concept of things capable of being stolen did not cover intangible property.

The new definition for the purposes of Part 10 proposed:

Property includes real and personal property, and all things, animate or inanimate, to which any person has any interest or over which any person has any claim; and also includes money, things in action and electricity.

The Supreme Court considered that had this definition remained, digital files would have been included on the basis that they are things in which a person has an interest.

However, when the bill was reported back by the Law and Order Select Committee, it was observed that the definition of “property” and for the purposes of Part 10, differed from the definition of “property” in s 2 and concluded that there should be one definition for the Act as a whole.  The Law and Order Select Committee recommended that the definition be removed from Part 10 and the definition of “property” in s 2 be amended.  The problem is that the definition of “property” in s 2 is not as widely stated as the proposed definition for Part 10.

The Court then went on to consider the nature of a document which had an extended definition for the purposes of Part 10.  Quite clearly from the definition of a document material held in electronic form falls within such a definition and the Court of Appeal reached a similar conclusion in R v Misic[7] which was decided before the extended definition was enacted.

Anderson J, writing for the Court in Misic, said:

… we have no difficulty accepting that the computer program and computer disk in question are each a document for the purposes of s 229A. Essentially, a document is a thing which provides evidence or information or serves as a record. The fact that developments in technology may improve the way in which evidence or information is provided or a record is kept does not change the fundamental purpose of that technology, nor a conceptual appreciation of that function. Legislation must be interpreted with that in mind. …

 

He went on to say:

It is unarguable that a piece of papyrus containing information, a page of parchment with the same information, a copper plate or a tablet of clay, are all documents. Nor would they be otherwise if the method of notation were English, Morse code, or binary symbols. In every case there is a document because there is a material record of information. This feature, rather than the medium, is definitive.

The Supreme Court then turned to consider the provisions of ss 249-252 Crimes Act dealing with computer crimes and considered, contrary to the view of the Court of Appeal, that the word “property” included in s 249(1)(a) was included for a purpose that was broader than the mere use of credit card details used in conjunction with computer to unlawfully obtain goods.

The Court considered that the broader purpose could be justified by starting with the definition of a computer system which included items such as “software” and “stored data”, which is also referred to in s 250 which deals with damaging or interfering with a computer system.  The Court observed that there was no doubt that Parliament had stored data in mind when those provisions were drafted.  Similarly, “access” is defined to include receiving data from a computer and is received even although it is copied rather than permanently removed.

The Court observed[8]

Given that Parliament contemplated situations where a person copied stored data from a computer, which of the offences might apply where the person taking the data did so without authority?  There are three possibilities – ss 249, 250 and 252.  It is not obvious that s 250 would apply.  If someone simply took a copy of existing data, but did not damage, delete or modify it, could it be said that the person “interfered with” or “impaired” the data?  We rather doubt that it could.  Section 252 could apply.  It creates an offence of intentionally accessing the computer system without authority and provides for a maximum penalty of two years’ imprisonment.  However that offence focuses on unauthorised access implicit, it does not address the issue of dishonest purpose.  Where the access if for dishonest purpose, s 249 applies and there are significantly higher maximum penalties.

 

The Court then discussed the situation where a person without authority located, copied and dealt with valuable digital files contrary to the interests of the file’s owner.  The inclusion of that conduct is consistent with the features of the legislation to which reference had been made.

Looking at the issue conceptually, of those concepts identified in s 249(1)(a) – property, privilege, service, pecuniary advantage, benefit or valuable consideration – property seemed most apt to capture what was obtained by Mr Dixon as the result of the unauthorised access.  Thus from a conceptual view of what it was that the accused did and what he took, the word “property” seemed the most suitable word to encompass the situation.

 

The Supreme Court then referred to the fundamental characteristics of property as being something that was capable of being owned and transferred.  It observed that the digital files which were downloaded onto his USB stick and then deleted from the computer upon which they were stored, were a compilation of sequenced images.  This file had an economic value and was capable of being sold.  Although the files remained on the CCTV system, the compilation contained what was valuable in the full files.  The compilation had a material presence.  It altered the physical state of the medium upon which it was stored – the computer disk or USB stick – illustrated by the fact that electronic storage space can be fully utilised.

This aspect of material presence led to a discussion of some American cases where a different approach to computer files as property has been adopted.  The Court referred to the case of South Central Bell Telephone Company v Barthelemy[9] where the physical processes and characteristics of software were examined.  The response to the suggestion that software was merely knowledge or intelligence – perhaps another way of stating information – the Court observed that the software was knowledge recorded in a physical form which had a physical existence and which took up space on a tape, disk or hard drive and made physical things happen which could be perceived by the senses.  The software was ultimately recorded and stored in the physical form on a physical object.

The Court also referred to a number of other American cases, although noted that the US Courts had not been consistent on the point with some holding that software is intangible property. The decision of Ronald Young J in Erris Promotions Limited v CIR[10] where the argument was whether or not software code was tangible property.  The Judge held that it was intangible rather than tangible. The issue of tangibility or intangibility is something of a red herring, having regard to the fact that property can be tangible or intangible according to the definition of property in s.2 of the Crimes Act 1961

In considering the Court of Appeal’s approach in Dixon where it was noted that it was problematic to treat computer data as being analogous to information recorded in physical form, the Supreme Court made two comments.  It firstly observed that the definition of “document” of was broad enough to include electronic documents or files.  In this regard I observe that the word “document” is used probably for two reasons.  The first is the file extension .doc which infers that the file created is a document.  The second is that a word processing program is designed to create a file of information which resembles a paper document but which in reality is quite different, being in electronic form.  We use the word “document” because it is a word with which we are familiar.  Perhaps a better word would be “file” although the definition of “document” is really directed towards the result of a technological process.

In the United States, electronic records and databases had been treated as property capable of being converted although they were intangible.  The case of Thyroff v Nationwide Mutual Insurance Co[11] considered whether the tort of conversion could apply to the misappropriation of electronic records and data.  The Court’s approach was consistent with the overall view of computer or electronic files in the US – that being that there is an economic value to electronic information which should receive the protection of law.

The Court observed that the position in England was different, although the cases in England involved civil aspects of electronic information as property.  It observed that the case of Your Response Limited v Datateam Business Media Limited[12] concluded that it was not possible to exercise a common law possessory liens over an electronic database on the basis that it was not tangible property of a kind capable of forming subject matter of torts that are concerned with interference and with possession.  The Court in Your Response Limited followed the decision of OBG Limited v Allan[13].  What should be observed in those cases, and a matter which the Supreme Court seems to have sidestepped, is that possessory liens and some other torts involving interference with property are premised upon the concept of exclusivity of possession.  In the electronic environment it is capable for a person to obtain a copy of a data file by dishonestly accessing a computer, but by leaving the “original” upon the target computer.  In Dixon’s case, although the digital file that he took was a compilation of a larger CCTV record, nevertheless the original CCTV record remained in the possession of the “owner”.  Thus, two people had possession or control of the same data and the element of exclusivity was absent.

The issue of tangibility or intangibility of an electronic file is, as observed above, resolved by the provisions of s 2 Crimes Act which includes both tangible or intangible property.  The Court then went on to say that what emerged from the brief discussion of the US authorities is that although they differ as to whether software is tangible or intangible, there is general agreement that software is property.  The Court then encompassed data files as property by observing, “There seems no reason to treat data files differently from software in this respect”.

From a technological point of view, software files are operating instructions for a computer.  Data files are raw information which may be processed by a software program.  A .doc file created by the utilisation of the software Microsoft Word is rendered readable by the software.  Software does something within the computer environment.  Data is something that software manipulates.  This is recognised by the separation of “software” from “stored data” in the definition of a computer system in s. 248 of the Crimes Act 1961. The Supreme Court chose not to address this functional difference between software and data.  Although the Court had discussed the nature of software as goods, that merely heightens the distinction between software and data.  There can be no doubt that data can have a value, although it must be associated with some form of processing software to be rendered comprehensible.  But data is not protected by the Consumer Guarantees Act or other consumer protection legislation.

Finally, the Court made some observations about the decision in Watchorn, observing that the digital files that Mr Watchorn obtained were property for the purposes of s 249(1)(a) and that he should have been convicted.

In considering the Supreme Court’s decision, the first thing that should be noted is that the Court went to some pains to state that its definition of “property” was within the context of the legislation and particularly within the context of s 249(1) Crimes Act.  Given that limitation, it could well be argued that its holding that a digital file amounts to property is limited in application.

However, it may well be if the decision is utilised in a broader sense, that there will be certain unintended consequences and one comes to mind.  It involves the person who accesses a computer system dishonestly and without claim of right, and obtains a digital file containing embarrassing or damaging information.  That information, if published, could have significant consequences.  The “hacker” for so he is, puts the information onto a USB stick.  The information is delivered to a third party.  There are no criminal implications in the hacker giving the third party the USB stick.  Property in the USB stick itself and as a medium is validly transferred.  What of the digital file on the USB stick?  The third party is aware that it was obtained dishonestly and by unauthorised access to a computer system.  The question which may need to be asked and answered is whether or not the receipt of the digital file on the USB stick would be sufficient to constitute the offence of receiving by the third party.

What to do?  Clearly the information as property issue needs to be addressed and it may well be that the answer lies in considering adopting the American approach together with clarifying the fact that digital data to exist must be associated with a medium be it a hard drive, a USB drive or stored in the Cloud.  It is this aspect of a digital file that gives it its tangibility albeit limited.

The issue of virtual property remains an open question and must depend upon the nature of the terms and conditions that exist between the provider and the customer.  It may be that legislation will address this problem in the future, recognising that in a paradigm of continuing disruptive change, changes to perception of whether what may fall within the category of intangibles may have value needs to be recognised along with a further recognition that existing remedies under “traditional” fields of law, such as intellectual property and breach of confidence, may be too limited to accord sufficient protection.  The concept of no property in pure information could remain;  information that is not associated with a medium could remain as intangible and without property implications.  But the digital file associated with a medium could have a level of tangibility sufficient to attract the protection of the civil and criminal law.

But wait! There’s more! What proprietary interests does a subscriber have to that piece of virtual real estate in Second Life? And if it is “property” acquired during the course of a relationship, may it attract the attention of the Property (Relationships) Act 1976? What about that “amped up” magic sword that the player uses in Word of Warcraft. The game is not over. In fact, it has only just begun.

____________________________________________________

[1] [2015] NZSC 147

[2] [2014] 3 NZLR 504

[3] [2014] NZCA 493

[4] Consumer Protection (Definitions of Goods and Services) Bill 2001 (154–2) (select committee report) at 4.

[5] [2008] HCA 56, [2008] CLR 366 at [89]

[6] [1999] 1 NZLR 403 (CA).

[7] [2001] 3 NZLR 1 (CA).

[8] Above n 1 at [36]

[9] 643 So 2d 1240 (Lou 1994).

[10] [2004] 1 NZLR 811 (HC).

[11] 8 NY 3d 283 (NY 2007).

[12] [2014] EWCA Civ 281, [2015] QB 41.

[13] [2007] UKHL 21, [2008] AC 1.

Relationship Property and Discovery in the New Zealand Family Court

The discovery regime in the Family Court is governed by r 141(1) Family Courts Rules.  Rule 141 provides as follows:

141    Order for discovery after proceedings commenced

(1)     If a notice of defence or a notice of intention to appear has been filed, a party may apply to the court for an order for discovery of documents—

(a)        that are, or have been, in the possession of another party to the proceedings; and

(b)        that relate to a matter in question in the proceedings.

(2)     An application under subclause (1) must be accompanied by an affidavit specifying—

(a)        the extent of the discovery required; and

(b)        the reasons for the discovery.

(2A)   On receipt of an application made in accordance with subclauses (1) and (2), the court may order the party referred to in subclause (1)(a) to file an affidavit stating—

(a)        whether certain documents or classes of documents are or have been in that party’s possession, custody, or power; and

(b)        if the party had the documents or classes of documents but has now parted with the documents or classes of documents, when the party did so and what became of the documents or classes of documents.

(3)     An order for discovery—

(a)        must be in form G 15 (order for discovery of documents); and

(b)        must be served by the applicant on the party against whom the order is made.

(4)     A party against whom an order for discovery is made must, within 10 working days after the service of the order or any further time the court may allow on an interlocutory application for the purpose,—

(a)        file an affidavit of documents in form G 16 (affidavit of documents); and

(b)        serve a copy of the affidavit of documents on every other party to the proceeding who has filed an address for service.

(5)     If the proceedings are under the Child Support Act 1991, nothing in this rule limits the application of the secrecy provisions of that Act or the Tax Administration Act 1994.

Because of the way in which the rule is structured, discovery in the Family Court is something of an anomaly when compared with discovery in the High Court or in the District Court.  To put it simply, the Peruvian Guano approach is still applicable and the rule gives statutory validity to the Peruvian Guano “train of enquiry rule”.  Essentially, the “train of enquiry rule” is that documents must be discovered which may directly or indirectly enable a party to advance his or her own case or to damage the case for his or her adversary.  The Peruvian Guano case was decided in 1882 and the rule developed and has remained in place, at least as far as the Family Court is concerned, notwithstanding the development of electronic communications and copying and the digital transmission and retention of material that may be of marginal relevance.

The continued existence of the Peruvian Guano approach allows for potential abuses in the course of proceedings to take place.  Relationship property cases often involve efforts by a wealthier or better informed spouse to confine access to information by the poorer or more poorly informed spouse.  Wide ranging discovery obligations with associated opportunities for interlocutory proceedings and appeals may create a risk of injustice by precluding or limiting the prompt disposition of the substantive issue before the Court.  Discovery applications can be used by a “deep pockets” litigant to disadvantage one who is financially stretched, using a strategy of litigation by attrition. In addition, Peruvian Guano type obligations may be additionally onerous where the assets available are limited.

The Peruvian Guano approach, therefore, runs head to head with the discovery reforms that were incorporated into the High Court rules and subsequently into the District Court rules in 2012 and 2014 respectively.

These rules basically provide that initial disclosure must be given alongside pleadings.  Counsel must attempt to agree an appropriate discovery order prior to a first case management conference.  Cooperation between counsel is the order of the day.  The old tactic of holding one’s cards close to one’s chest are now over.  Two forms of discovery order may be made: standard or tailored.  A standard order for discover is narrower than the previous Peruvian Guano test.  The scope of disclosure is confined to documents which:

(1)        Are relied on by the party;

(2)        Adversely affect that party’s case;

(3)        Adversely affect another party’s case – which may be covered by the first category; or

(4)        Support another party’s case.

It is described as an “adverse documents” rule rather than a more wide ranging “relevance based” rule.

Tailored to discovery involves making specific or bespoke orders for discovery which may be wider or narrower than standard discovery.  There is a presumption in favour of tailored discovery in cases:

(1)        Involving allegations of fraud or dishonesty;

(2)        Where the total value of assets or sums in issue exceeds $2.5 million; or

(3)        If the cost of standard discovery would be disproportionately high in comparison to matters at issue in the proceeding.

The 2012 High Court Rules amounted to an overall reform of the entire discovery process.  Although the rules refer to the use of technology and there are provisions in the High Court rules relating to technology use and the definition of the various means by which technology assisted review may take place, the rules reform the entire approach to discovery.  In some jurisdictions discovery reforms, particularly in the field of electronic discovery, are governed by Court devised protocols or practice notes.  Discovery regimes in Australia, Singapore and Hong Kong provide examples.  Rule based changes to discovery regimes are present in England and Canada.

In a Dixon v Kingsley [2015] NZHC 2044 (27 August 2015), Kos J addressed the Family Court discovery regime.  He observed that the reforms provided in the High Court Rules have passed the Family Court by.  He observed that the Peruvian Guano approach “still holds court” under the Family Court Rules.  However, he did observe that the breadth of r 141(1) and the discretion imported by r 141(2A) allows for closer inquiry by the Family Court into the scope of discovery that should be ordered.  He focused upon the words “the Court may order”.  He then considered that because of this it does not follow that a broad relevance based Peruvian Guano type discovery should be ordered and that a tailored approach is permissible and desirable.

He then went on to observe that in the case of J v P [2013] NZHC 557 three qualifying principles for discovery in relationship property cases were identified:

(a)        Relevance to the issue in the proceeding;

(b)        Reasonable discovery;

(c)        That discovery should not be unduly onerous.

Taking these general principles and utilising the wide discretion contained in r 141, Kos J articulated some essential principles governing discovery in relationship property litigation:

(1)        He considered that a robust approach should be taken to discovery consistent with the purposes and principles of the Act.  Those purposes and principles include the need for a just decision but, importantly, require an inexpensive and efficient access to justice.

(2)        That discovery should not be unduly onerous.

(3)        That discovery should be reasonably necessary at the time sought.

(4)        That the scope of discovery should be tailored to the need of the Court to disclose, justly and efficiently, of relationship property issues under the Act.

(5)        More substantial discovery may well be ordered by the Court where it has reason to believe that a party has concealed information or otherwise sought to mislead either the other party or the Court as to the scope of relationship property.  But even in such a case scope of discovery should be limited only to what is required for the Court to fairly and justly determine relationship property rights.

Although the Judge did not specifically state that the principles of reasonableness and proportionality together with counsel cooperation that underpin the 2012 High Court Rules changes, it is clear that he was of the view that at least the spirit of those rules may apply in modified form in relationship property discovery cases.  Although the discovery process involving the development of a discovery plan prior to a case management conference and the utilisation of checklists is neither provided nor stated it seems, at least to this commentator, that such an approach would not be amiss if informally adopted by counsel.  It is recognised that difficulties could well arise given much of the emotional heat and adversarialism that accompanies relationship property cases.  The absence of a specific rule structure for discovery, such as is present in the High Court rules, would make it difficult for counsel to advise or persuade aggressive or contentious clients that a cooperative approach should be adopted, but the decision of Kos J does seem to dilute the potential difficulties accompanying what may appear to be at first glance a very wide and potentially oppressive Peruvian Guano approach.

In the case before him, Kos J had four classes of documents in respect of which discovery was sought.  In one class he made a tailored discovery order, limiting the nature of discovery sought to documents of specific relevance.  In the other cases what was sought were too wide or amounted to non-party discovery by stealth and in one case it was considered, because of difficulties underlying the pleadings, that it was not ripe to make a discovery order.

The decision is particularly helpful because it demonstrates the utilisation of discretionary powers to import a modern approach to discovery involving relevance, reasonableness and proportionality to override the wide scope of discovery that would otherwise be applicable arising from the Peruvian Guano rule.  The case, in the view of this commentator, will be an essential tool available in the Family Court to prevent the oppressive use of discovery in relationship property cases. What will be interesting in future will be the approach of the Court in cases where discovery of large amounts of electronic information is sought and whether Kos J’s “tailored order” approach will be modified to deal with relationship property e-discovery.

17 October 2015

Collisions in the Digital Paradigm VII – Answering the Internet

When the TV News show Campbell Live came to an end there was a tremendous amount of angst that condemned the network and saw this as another nail in the coffin of TV News. I wrote a piece about the demise of the show and the reaction, but didn’t push “Publish” and I still haven’t . I wasn’t satisfied with the piece. It didn’t properly capture what I wanted to say. So I left it. Until now. Some recent reading has caused me to revisit the piece and place it within a larger context.

A few weeks ago I came across a book by Ken Auletta entitled “Googled: The End of the World as We Know It. “ First written in 2009 and updated in 2010, despite the dystopian title, it is an interesting history of the Google within the context of other Silicon Valley Startups – and it doesn’t really live up to its title. Buit it does have some very interesting things to say about news media – especially print media – in a time of paradigmatic and disruptive change.

The second book was by Jon Ronson and is entitled “So You’ve Been Publicly Shamed” which looks at shaming, what drives it, how the Internet enhances it and what you can do about it – not using legal tools but “reputation management” facilities. The book is an interesting one because some of the situations it describes arise within the context of a “hivemind” that develops with social media applications. That means that often there is not just one bully, but a whole horde of them. And this poses some interesting issues for a legal tool like the Civil Enforcement regime of the Harmful Digital Communications Act 2015.

The third book is by Andrew Keen and is entitled “The Internet is Not the Answer”. If I were to critique this piece of work fully I would need as much space as the book itself and would find myself fisking every paragraph, and I am not going to do that. Rather I want to look at some of the themes present in Keen’s book and address them and then turn to the TV News theme about which I wrote before.

Lets look at the title. Is he critical of the Internet?  No he is not. He is critical of the way in which entrepreneurs have taken advantage of the quality of permissionless innovation that allows them to bolt applications on to the backbone that is the Internet. Because the Internet is merely the transport layer. It is content neutral. Keen’s critique is directed to those who have exploited permissionless innovation to develop applications, put them on the Internet and make large amounts of money in doing so.

One of his major criticisms is that there is an illusion that underlies the apparent “free” nature of these applications. Google, Facebook, Instagram, Uber all monetise our presence and by gathering data associated with our use of their services. Keen criticises this as “without our permission”. The way in which advertising also funds the apparent “free” nature of these applications is a striking theme in Auletta’s book and one to which he devotes a considerable amount of print.

But is this an “Internet” problem? Does the seat of the problem lie within the transport layer? Of course it doesn’t. But to characterise the Internet as the problem makes for a catchy title, and who is going to let a technical fact get in the way of a good line.

One of the stories that Ronson recounts in his book about shaming is the treatment handed out to Jonah Lehrer, a successful writer of “self-help” books and a drawcard on the speaking circuit. In one of his books Lehrer attributed a quote to Bob Dylan that to a journalist who was a Dylan fan didn’t ring true. And it wasn’t. The uncovering led to further investigations and discoveries that certain facts didn’t stack up. A similar thing happened to Mike Daisey who, shall we say, embellished or transplanted some facts to enhance his one-man show “The Agony and Ecstasy of Steve Jobs.”

Keen is not immune to a bit of misstatement of fact himself. There can be no doubt that Apple outsourced the manufacturing of its products to a Foxconn factory in Shenzen and that the use of unsafe products and unsafe work practices were appalling. Keen himself interviewed Daisey . In his book he cites that interview but overlooks the fact that Daisey manipulated the facts and he was exposed for doing so by Ira Glass on This American Life on 16 March 2012. Keen does not qualify his reference to Daisey. There is no doubt that other investigations revealed that the Shenzen plant was dreadful. I think Keen could have cited a more reliable source than an exposed fact manipulator who excused himself by suggesting that “we have different worldviews on some of these things”.

Another factual problem occurs when Keen, who was once in the Internet music business himself with a startup called Audiocafe, discusses the demise of the recorded music business which was part of his life when he lived in Soho in the 1980’s. He refers particularly to Kim Dotcom whom he describes as New Zealand based. I’m not sure I can excuse him the hyperbole of describing Dotcom as a criminal when he has not yet been convicted of criminal copyright infringement, but he does make the statement that Dotcom’s Megaupload platform generated the legal revenue to enable him to buy is 15 million pound Downton Abbey-style mansion in New Zealand. Clearly Keen is no connoisseur of architecture because there is little resemblance between the Chrisco mansion in Coatesville and Highclere Castle in Hampshire. But the suggestion that Dotcom purchased the house is completely wrong. He rents it.

The third factual problem with which I have some difficulty – but I am prepared to give Keen the benefit of the doubt – lies in his assertion about the demise of the HMV record retail outlet on Oxford St which he suggests closed down in 2014. I assume he means the one located at 363 Oxford St which in fact closed in 2013 but reopened later that year. But if that store did close in 2014 he is incorrect to suggest that an HMV music store is not on Oxford St because there is one at 150 Oxford St nearby to the Oxford Circus tube station. I know. I was there in September last year and made some purchases.

I guess that the problem that I have with three examples of factual spin, misuse or misinterpretation is – how many other errors are there. One is left with an uncomfortable feeling about the veracity of the book.

But it is not just a question of fact checking. If the title doesn’t give the away author’s perspective the first few pages do, and the further one reads, the clearer it becomes that this is not a true objective analysis but something of an hysterical polemic that harks back to a mythical Golden Age. Keen is very quick to use perjorative language to indicate his disapproval. For example, it is clear that he actively dislikes Travis Kalanick, the founder of Uber whom he describes as a “hard-core libertarian” who “paced relentlessly around the Failcon stage as if he’d just strode out of an Ayn Rand novel.” The whole book is critical of what he calls disruptive libertarianism and he even takes John Perry Barlow and the Declaration of Independence of Cyberspace as symptomatic of the problem. He says:

“According to Stanford University historian Fred Turner, the Internet borderless idealism, and its ahistorical disdain for hierarchy and authority, especially the tradition role of government, were inherited from the countercultural ideas of Internet pioneers like WELL founder Stewart Brand and the “Declaration of Independence of Cyberspace” author, John Perry Barlow.”

He decries what he calls the “winner take all” approach to the development of Internet startups, is highly critical of the way in which those who, having developed and managed startups to a successful outcome, use the money that they have made through their creativity, entrepreneurship and most of all risk. He overlooks those realities of business. They made it. They took the risk – a risk I might not have been prepared to take in similar circumstances. Surely they can spend it as they wish. For myself, I am unfamiliar with a sense of envy of a person who is better off that I am, nor do I resent them for it, nor seek to acquire that wealth or part of it by some form of “Robin Hood” wealth redistribution process.

Keen uses the demise of Rochester, New York and its once prime employer Kodak as a metaphor for the demise of traditional manufacturing and employment models and lays much of the blame at the feet of on-line startups like Instagram. According to Keen, Kevin Systrom, who had a deep interest in photography, thought about whether there could be an application that enabled users to manipulate photos by the application of filters to give the pictures a warm fuzzy glow or a sepia tinge.

“He spent the rest of the day lying on a hammock, a bottle of Modelo beer sweating by his side, as he typed away on his laptop researching and designing the first Instagram filter.

And so Instagram and its photos – what Systrom, shamelessly appropriating Kodack’s phrase, calls “Instagram moments – were born”

And so Systrom became what Keen prejoratively describes as “a star of the winner takes all economy.”

There are two major themes that underlie Keen’s book. One is that once upon a time – which is how all good fairy stories start – there was a “good time” when everyone was doing well, people were socially responsible, and where people made and sold tangible products like records and clothes and other things. In this golden age there were no great disparities between rich and poor, there was a certain egalitarianism and a relatively even distribution of wealth. He cites the music industry and photography as examples. Indeed when he speaks of Kodak his nostalgic yearning hearkens back to Kodachrome and the song by Paul Simon, but even before the digital era Kodachrome was falling away in the face of colour prints.

The decline of Kodak is probably far too complex to go into here, and I do not think that it was as simple as Keen would like to imagine. In a nutshell, Kodak did not forsee the way in which the digital camera would supplant film. And this is very strange because Kodak in fact invented the first digital camera. But it did not change its business model and by the time it realised what was happening, it was too late.

Keen expresses not concern but loathing for what he describes as the privileged few who are beginning to isolate and cocoon themselves and their communities in unusual buildings and workspaces and who have used their economic power to exclude others from neighbourhoods or beaches. Given his disparagement of the works of Ayn Rand I am surprised he didn’t draw the comparison with John Galt’s impenetrable and hidden mountain community in Atlas Shrugged.

The second theme lies in the solutions Keen proposes. As I have said the book is a polemic but it is not just directed towards the development of Internet based business models like Google, Uber, Instagram, Facebook and the like. Rather it is directed at free enterprise capitalism, successful entrepreneurship and innovation. By the time I was three-quarters of the way through the book I thought I was reading about America in the time of the Rail Barons, Leland Stanford and J.P. Morgan or the oil tycoons like Getty and Rockefeller and the steel magnates like Andrew Carnegie. Indeed, Keen refers to the lessons of history and these very examples. And the solution he poses?  Let the government do something about it. Government approaches are already happening, he says, in the EU with the development of the Right to be Forgotten and examining some of the consequences behind Uber and AirBnB although to be fair I hardly think that a person’s failure to pay tax on the income from a rented room can be laid at the feet of AirBnB.

The answer, he says, is to use the law and regulation to force the Internet out of its prolonged adolescence. He cites examples like the ECHR decision on the responsibility of website owners to police users’ comments, revenge porn laws in England and California and Piketty’s call for a global tax on plutocrats like Mark Zuckerberg or Larry Page. He then goes on to suggest that there are other methods available that do not involve government – in the form of self-regulatory steps like the decision by credit card companies to work with the Police to stop payment to websites that distribute stolen content as well as steps to cut off the flow of advertising revenue to websites profiting from illegal content. No wonder he doesn’t like Ayn Rand. His proposals are the stuff of a libertarian nightmare.

The funny thing is that Keen believes that external controls on the Internet will not undermine innovation, but suggests that future innovation will require partnering with government in areas such as education and healthcare. But the one of the strengths of the digital paradigm has been the quality of permissionless innovation. You don’t need regulatory approval to bolt an application on to the Internet and see if it attracts an audience. Once regulators step in, red tape inevitably follows.

The final theme that Keen develops, and one that he notes has been lacking since Netscape burst on to the scene as the first of many subsequent “killer apps”, is that of social responsibility – another issue with which he runs head to head with the libertarians. The digital elite has to become accountable for the most traumatic socioeconomic disruption since the industrial revolution. Really? That sounds very much like Dr Floyd Ferris, Dr Robert Stadler and Wesley Mouch from Atlas Shrugged.

I have written elsewhere about the issue of paradigm shifts especially in the area of communications technologies but the theory applies in other fields. Disruption is a fact of life. All new technologies have a disruptive effect. Generally their introduction has been a little more gradual than the pace of change that the digital paradigm allows. Who could have forseen urban sprawl, enabled by the motorcar, in the days when cars were “horseless carriages.” What Keen, and to an extent Nicholas Carr who is also something of an Internet dystopianist, fail to understand is the meaning of a quote that he frequently cites. We shape our buildings and thereafter our buildings shape us. Marshall McLuhan modified it a bit – we shape our tools and thereafter our tools shape us. What Keen wants is for the law to run interference on the way that either tools are shaped or the way in which they are going to shape us. Keen also quotes the famous “the medium is the message” but completely fails to undestand what it means – but I won’t go into that here.

I don’t have a quibble with Keen’s values, although they may be based to a large extent on nostalgia. He is quite entitled to hold them, and good luck to him. What I do quibble with is his unwillingness to understand that paradigmatic change is just that. The change will be revolutionary and although it won’t turn the whole world or society upside down it will change it significantly and the change will be dramatic and at times uncomfortable. Keen may seek comfort in his older past and the communitarian values that were formed within the technological context of those times. But change is inevitable and with those changes are going to come changes in behaviours and ultimately in values that underpin our society.

And this brings me to our understanding of broadcasting and TV news and a reflection of attitudes which, while not so expressed with such vitriol as those of Andrew Keen, nevertheless indicate a lack of understanding of paradigmatic change.

An interesting article appeared in the Sunday Star Times on 7 June 2015 entitled “The War on Seriousness” and posed the question “Was the death of Campbell Live the last nail in the coffin of prime time current affairs TV? Or are we on the brink of brave new ways of telling the stories that matter?” The article is an interesting if somewhat nostalgic piece, longing for the heyday or what it calls “serious” television news which has given way to “fluff over substance” observing  “for a decade the internet has been chewing away at the foundations, gobbling up the advertising revenues that sustain New Zealand’s commercial media, and now the foundations seem to be crumbling. ” As Auletta points out, advertising on the Internet is cheaper than on primetime and it can be more targetted too.

The article seems to have ignored the fact first of the plethora of new communications systems and secondly that public expectations of content have changed as a result of these media changes. It may well be that serious journalism is suffering as a result of this, but serious journalism developed in an entirely different paradigm – that of print – and as new methods of communication of information came along – broadcast radio and radio-with-pictures (TV) so too did journalism adapt.

The common feature between newspapers, radio and TV is that they are based on a monolithic one-to-many distribution system that is seriously challenged by the nature of the distributed many-to-many model that underlies the Internet. Even although TV has an impact that cannot be matched by other mainstream media like radio or newspapers I wonder if it is going a bit far to say that it is unmatched by the information distribution system enabled by the Internet. The immediacy in the living room, the ability to see the “whites of the eyes” (a phrase used by Justice Harrison in Aeromotive v Page when commenting on the value of face-to-face cross-examination) is easily available in content other than a main stream TV broadcast and although it is suggested by Paula Penfold of TV3 that TV is accessible, especially free-to-air, especially in primetime, especially on a major channel, such a statement relies on the assumption that in the twenty-first century people actually want to engage with appointment based news transmissions when other methods of acquiring news content at a time that is convenient are available. As Lord Neuberger said when announcing the UK Supreme Court “video on demand” service on 5 May 2015  “Now justice can be seen to be done at a time which suits you.”The same could apply to the consumption of news content.

Peter Thompson, a lecturer in media studies at Victoria University, is quoted in the article as saying:

“There’s a social contract between the state and the public, and it needs to be mediated. We need a fourth estate that holds these people to account. If the news media aren’t able to reflect the society that we live in such that we can identify our issues, moral concerns, political policies, economic policies, we’re impoverished.”

That may be so with a State broadcaster. But I wonder if the proposition overlooks the nature of commercial television, particularly if the channel is other than publicly owned. Thompson goes on to suggest that the government consider a levy on commercial broadcasters (a sort of “polluter pays” principle), a levy on telecom services such as cell phone and broadband fees, a good old-fashioned public licence fee, or other more complex overseas revenue models. Back to the future with a vengeance!! When all else fails bring in the law and the regulators. Andrew Keen would definitely approve.

Some of us remember the bad old days of compulsory licence fees if one owned a television. Given the dire nature of much of the content on free-to-air TV one wonders whether such a fee would be value for money. Perhaps an argument could be mounted that the state has an obligation to fund a free and independent news service under s. 14 of the New Zealand Bill of Rights Act although such an argument might be a bit of a stretch.

I think the problem seems to be how the Fourth Estate should undertake promulgation of information in the public interest in a new paradigm. To mourn the passage of lack of depth in current affairs and the like is to engage in an unhelpful, rear view mirror exercise in nostalgia. There is no entitlement by mainstream news media to a particular model of news dissemination but complaints by media pundits would suggest that it is so. Rather, news media should look for new opportunities that new communications technologies present. There can be no place for sclerotic communications systems in the face of continuing dynamic, disruptive and transformative change. One should recall (and I don’t want to sound like a determinist but it is hard not to) in this time of revolution and evolution of communications systems, the comment of the Borg –  “resistance is futile”.