Supreme Court judgement – computer files can be property

The Supreme Court has released a judgement that says that copied computer files can be considered property.

Mr Dixon was charged with accessing a computer system for a dishonest purpose under s 249(1)(a) of the Crimes Act 1961. Section 249(1)(a) provides that a person commits an offence if he or she “directly or indirectly, accesses any computer system and thereby, dishonestly or by deception, and without claim of right … obtains any property, privilege, service, pecuniary advantage, benefit, or valuable consideration.” The Crown case was that the digital footage that Mr Dixon had obtained was “property”.

At trial in the District Court, Judge Phillips accepted that the footage was “property” and directed the jury accordingly. Mr Dixon was found guilty, and sentenced to four months’ community detention and 300 hours of community work.

Mr Dixon appealed to the Court of Appeal against both conviction and sentence. The main ground of the conviction appeal was that Judge Phillips had erred in finding that the digital files were “property” under s 249(1)(a). After the hearing, Mr Dixon also raised complaints about his trial counsel and about the Judge’s summing up. The Court of Appeal accepted that the files were not property within the meaning in the Crimes Act because they were simply “pure information”, the orthodox view being that information is not property.

The Supreme Court granted Mr Dixon leave to appeal on the question whether the Court of Appeal erred in dismissing his appeal.

The Supreme Court has unanimously dismissed Mr Dixon’s appeal. The Court has held that Judge Phillips was right to find that the digital files which Mr Dixon acquired were “property” for the purposes of s 249(1)(a), and that the Court of Appeal was wrong to quash Mr Dixon’s conviction for obtaining “property” and substitute a conviction on the basis he obtained a “benefit”. The Court has reached this conclusion taking account of the fact that the word “property” does not have a fixed, technical meaning but must be interpreted in context. Here, “property” was defined broadly, to include both tangible and intangible property. Considering both statutory purpose and context, “property” in s 249(1)(a) included the data files at issue. Those data files were identifiable, were capable of being owned and transferred and had an economic value; they fell within both the popular and legal meanings of “property”. The Court was satisfied that it is a more natural interpretation of s 249(1)(a) to say Mr Dixon took “property” when he acquired the digital files, than it is to say that he acquired a “benefit”.

(Edited, full press summary below)

This could have implications in ongoing investigations Nicky Hager for having data from the Rawshark hack.

Am wondering what implications the Supreme Court decision in Dixon, could have for Nicky Hager’s receipt of computer files from Rawshark.

My understanding is Police initially looked at Nicky as a suspect, but Dixon/Watchorn meant they stopped doing that & changed to witness.

Now the Supreme Court says the Court of Appeal got Dixon and Watchorn wrong, and computer files can be property…

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And it could also figure in the dispute over a hard disk in the defamation Blomfield versus Slater.

But if someone (like Hager) does something that he believes complies with the application of the law at the time is it fair to then investigate him based on a new and different ruling?

I’m not a lawyer so don’t know what this will turn out meaning and changing.

The full press summary on the ruling:

DIXON v R (SC 82/2014) [2015] NZSC 147

PRESS SUMMARY

This summary is provided to assist in the understanding of the Court’s judgment. It does not comprise part of the reasons for that judgment. The full judgment with reasons is the only authoritative document. The full text of the judgment and reasons can be found at Judicial Decisions of Public Interest http://www.courtsofnz.govt.nz

The appellant, Jonathan Dixon, worked for a company which provided security services to a bar in Queenstown. During the 2011 Rugby World Cup, members of the English rugby squad visited the bar, including the vice-captain Mike Tindall. Mr Tindall was seen socialising, then leaving, with a female patron. This was recorded on the bar’s closed circuit television (CCTV) system. Mr Dixon obtained a compilation of the relevant CCTV footage and attempted, unsuccessfully, to sell it to overseas media interests. He eventually posted it on a video-sharing site, where it was picked up by various media outlets.

Mr Dixon was charged with accessing a computer system for a dishonest purpose under s 249(1)(a) of the Crimes Act 1961. Section 249(1)(a) provides that a person commits an offence if he or she “directly or indirectly, accesses any computer system and thereby, dishonestly or by deception, and without claim of right … obtains any property, privilege, service, pecuniary advantage, benefit, or valuable consideration.” The Crown case was that the digital footage that Mr Dixon had obtained was “property”. At trial in the District Court, Judge Phillips accepted that the footage was “property” and directed the jury accordingly. Mr Dixon was found guilty, and sentenced to four months’ community detention and 300 hours of community work.

Mr Dixon appealed to the Court of Appeal against both conviction and sentence. The main ground of the conviction appeal was that Judge Phillips had erred in finding that the digital files were “property” under s 249(1)(a). After the hearing, Mr Dixon also raised complaints about his trial counsel and about the Judge’s summing up. The Court of Appeal accepted that the files were not property within the meaning in the Crimes Act because they were simply “pure information”, the orthodox view being that information is not property. However, the Court considered that Mr Dixon was guilty of accessing a computer to obtain a benefit, which is also an offence under s 249(1)(a). Exercising its power to substitute a verdict under s 386(2) of the Crimes Act, the Court of Appeal quashed Mr Dixon’s conviction and substituted a conviction for obtaining a benefit. The Court was satisfied that none of the other matters raised by Mr Dixon justified quashing his conviction. The Court also dismissed Mr Dixon’s sentence appeal.

The Supreme Court granted Mr Dixon leave to appeal on the question whether the Court of Appeal erred in dismissing his appeal.

Prior to the hearing in this Court, Mr Dixon dismissed his counsel and presented submissions for himself.Those submissions focussed on errors which he argued had been made by the trial Judge, resulting in a miscarriage of justice. Written submissions filed on his behalf by counsel before they were dismissed supported the Court of Appeal’s finding that the digital files were not “property” but argued that the Court of Appeal was wrong to exercise its power to substitute a conviction.

The Crown argued that the digital files were not “pure information” but were “property” within the meaning of the legislation as they were things which could be owned and dealt with in the same way as other items of personal property.

The Supreme Court has unanimously dismissed Mr Dixon’s appeal. The Court has held that Judge Phillips was right to find that the digital files which Mr Dixon acquired were “property” for the purposes of s 249(1)(a), and that the Court of Appeal was wrong to quash Mr Dixon’s conviction for obtaining “property” and substitute a conviction on the basis he obtained a “benefit”.

The Court has reached this conclusion taking account of the fact that the word “property” does not have a fixed, technical meaning but must be interpreted in context. Here, “property” was defined broadly, to include both tangible and intangible property. Considering both statutory purpose and context, “property” in s 249(1)(a) included the data files at issue. Those data files were identifiable, were capable of being owned and transferred and had an economic value; they fell within both the popular and legal meanings of “property”. The Court was satisfied that it is a more natural interpretation of s 249(1)(a) to say Mr Dixon took “property” when he acquired the digital files, than it is to say that he acquired a “benefit”.

The Court also considered whether Mr Dixon’s trial miscarried. The Court has found that Mr Dixon had the opportunity to put his explanation for his conduct before the jury and there is no risk of a miscarriage of justice resulting from the way the case was left to the jury by trial counsel or the trial Judge.

Accordingly, the Court has reinstated Mr Dixon’s original conviction for obtaining property contrary to s 249(1)(a) and has quashed the Court of Appeal’s decision quashing that conviction and substituting a conviction for obtaining a benefit contrary to section 249(1)(a).

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16 Comments

  1. Pete Kane

     /  20th October 2015

    “This could have implications in on going investigations Nicky Hager for having data from the Rawshark hack.”
    That was my first thought when you mentioned this finding in a comment on your Bloomfield article. Hope this time we get the proper MSM and public debate we should have had many years ago. We had a go at it in a particular cyber sense after the Nicholas case (04 or 05) but it quickly went in the too hard basket.

    Reply
    • DaveG

       /  20th October 2015

      I very good finding, and this could result in night sweats for little Nicky, and justifies the rumours Rawshark left NZ shores some time ago. (NB: I cant confirm that as Rawshark remains unknown) My belief with the Blomfield case, is the complication is the files were all stored on company hard drives etc, not the personal drives of MB, and were likely the records of Hell Pizza and other entities. If I am correct, that is where the difference was with the Hager case, he had access to knowingly Stolen info, and the owner was WO and Cameron Slater. One obviously had the right to lay a complaint his personal info, and company info was stolen from the WO’s computer systems, whereas MB’s files would have been the property of Hell Pizza, and MB cannot complain the files of Hell were stolen. A lot would come down to the employment agreement, and ownership of computer and digital files. Most firms i have worked for have a catch all clause in the agreement stating everything on the company computers, laptops, done in their time, etc etc becomes their records.

      Reply
  2. John W

     /  20th October 2015

    My understanding is that as the statute itself hasn’t changed then the Supreme Court interpretation is the correct one for all cases.
    So even if someone has taken an action under an old (incorrect) interpretation of the statute they can still be charged and convicted under the correct interpretation.

    Of course this assumes the police will revisit the matter.

    I couldn’t find the court’s judgement but my understanding of Hagar’s situation is that this will screw him. His only legal argument now would be that the conversion of the data from its format online (gmail, facebook, etc) to however it arrived on his desk was a sufficient change that it was not the same property. I think its a very slim argument. (His public good argument is destined for legal failure.

    Reply
    • I wonder if the Police might have been biding their time with Hager to see how this judgement came out.

      Reply
      • Mike C

         /  20th October 2015

        @George

        If Hager is done for receiving stolen property from “Rawshark” … then that seems fair to me.

        And if Slater gets done for receiving stolen property from Blomfields Associates … then that seems very fair as well 🙂

        Reply
        • Pete Kane

           /  20th October 2015

          Burt where might this fit in terms of ‘whistle-blower’? I mean that must be part of the public debate I would have thought.

          Reply
    • DaveG

       /  20th October 2015

      @JohnW I agree its a slim argument, Hager published emails and excerpts from stolen emails etc, so the message and content remained unchanged. If Hager claims he changed the message, well, the book is a fraud ……. I think he could be screwed.

      Reply
    • Jeeves

       /  20th October 2015

      Will have little or no impact on Hager.
      He did not steal anything.
      He did not unlawfully take anything…
      He ‘received’something.
      It is not yet against any law to be in mere possession of “property”, ‘stolen” or otherwise. There must be prior knowledge of it being stolen, and now (uniquely) Hager has a firm argument that he could not possibly have had knowledge that it was ‘stolen’, as the original precedent in law describing information digitally captured as ‘property’ was not established until two years after he received the ‘unlawfully taken’emails. If Hager is guilty of anything, then we all are….no? At least anyone who read any of the emails is- by your reckoning.
      In law, at least.

      So it will come to nothing.

      And the suggestion that the book is now fraudulent, is based upon a laughably thin premise.
      The book is real, truthful, and has had profound effect on our society, some of it for the better.

      Reply
      • John W

         /  20th October 2015

        Jeeves,

        He will be charged with receiving property.

        A defense of “I didn’t think it was property under the law” is a crappy legal argument. A judgement like Dixon only clarifies the law. It’s not new law, or changing anything, and what it means is any future court case will use this law, even if the action before the courts predates the test.

        If parliament had passed a new law he’d be in the clear (assuming it wasn’t retroactive ) but precedent case law like this is different. The Supreme Court has ruled that electronic data is property in certain circumstances particularly when it’s clear who owns them and an economic benefit can be derived from them. This means electronic data that matches these features is property under the crimes act 1961. Recieving is s246 of that act.
        I can’t see any reason as to why Dixon’s rules relating to property under s249 wouldn’t apply to interpreting s249.

        The crime of recieving is “Every one is guilty of receiving who receives any property stolen or obtained by any other imprisonable offence, knowing that property to have been stolen or so obtained, or being reckless as to whether or not the property had been stolen or so obtained.”

        Hager knew they were obtained by a third party without permission.
        After Dixon it’s clear they are property.
        So the features of a receiving charge are there.

        Reply
    • Jeeves

       /  20th October 2015

      A rock solid argument- if someone steals a photograph and takes a photograph of it- and gives it to you……. what was the theft again?? What did you receive again?

      A photo of a diamond ring?
      A facsimile of a letter?
      A copy of CopyofCopyCopyofSlatertheFilth.doc ?

      Reply
  3. This reinforces the argument that Hagar received stolen goods. But there’s also the mens rea issue i.e. in order to make a guilty charge stick the defendant has to have committed the act and also knew what he was doing. In “Dirty Politics” Hagar claims the usb stick fell onto his lap which could be a defence against a receiving stolen property charge.

    For the record though I think Hagar is full of you know what and I think he knowingly received the usb stick. But that’s up to the cops to prove.

    Reply
  4. Jeeves

     /  21st October 2015

    From Dixon v.R:
    [58]
    “Claim of right” is defined in s 2 of the Crimes Act as meaning a belief at the time of the act that the act is lawful although that belief may be based on ignorance or mistake of fact or of any matter of law other than the enactment against which the offence is alleged to have been committed. The definition [of] “claim of right” requires that the accused believe that the act is lawful. It is not therefore enough for an accused to believe that the action may be held lawful, that it ought to be held lawful or to hope or expect it will be held lawful. There must be a belief that if prosecuted the accused would be acquitted.

    In a nutshell- the decision means nothing for Hager.

    Reply
  1. Was downloading Rawshark data dump illegal? | Your NZ

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