The Supreme Court has this week made a small dent in the proposition, upheld by the Courts of Appeal in New Zealand and England last year, that digital data is not property for the purposes of the law. 

The Supreme Court held digital data is property for the purposes of the criminal law.  But civil reliance on property rights will not suffice to protect electronic information – at least for now.

Background

We commented last year on the appeal by Jonathan Dixon, the Queenstown bouncer who accessed CCTV footage of the England Rugby Captain in a bar during the 2011 Rugby World Cup. 

Mr Dixon was appealing his conviction, for dishonestly obtaining property by accessing a computer system, on the basis digital data did not come under the definition of ‘property’ in the Crimes Act.  The Court of Appeal agreed (but substituted his conviction with one of dishonestly obtaining a benefit).

Supreme Court judgment

On Mr Dixon’s further appeal, the Supreme Court has now overturned the Court of Appeal, and reinstated the original conviction, holding the Crimes Act definition of ‘property’ was intended to extend to digital data.  Mr Dixon is now ordered to complete his original sentence

The Supreme Court noted the newly created offences were expressly intended by Parliament “to modernise the criminal law in relation to crimes against rights of property, particularly by taking better account of the increasing role of computers in society”.

The Court interpreted the legislative history to mean that Parliament had in mind a wider definition of ‘property’ than arguably existed at common law.  Accordingly, the Court of Appeal was wrong.

However the Supreme Court declined to reconsider “the orthodox view that information, even confidential information, is not property”, as held by the Court of Appeal.  This was because the Crown argued only that the Court of Appeal was mistaken in characterising digital files as simply information, and Mr Dixon was not represented in the Supreme Court. 

Nonetheless the Supreme Court noted a divergence between US and UK authorities.  In some US courts, electronic data is accepted as ‘property’ capable of supporting a claim of its conversion.  In England, the Court of Appeal (whose judgment was also the subject of our earlier Brief Counsel, although apparently not cited to our Court of Appeal) rejected such an analysis, because electronic data could not be possessed. 

Comment

This was not the occasion to choose sides, although the Supreme Court noted all jurisdictions agreed information could be property in particular circumstances.  There is a strong suggestion in the Supreme Court’s judgment that, if it had been required to choose, it would have preferred the American analysis:

[T]he digital files can be identified, have a value and are capable of being transferred to others.  They also have a physical presence, albeit one that cannot be detected by means of the unaided senses.

Consequences

While the Supreme Court’s judgment does not in itself enhance property interests in electronic data (so businesses reliant on the security of their information still must take special steps to protect it), it increases the risk faced by people improperly dealing with electronic data. 

One such – a Mr Watchorn, whose conviction the Crown conceded was wrong in light of the Court of Appeal’s Dixonjudgment – may be thought fortunate in having his convictions quashed. 

There are other current notorious dealings in electronic data which may now find themselves on the wrong side of the criminal law.