IN THE COURT OF APPEAL OF NEW ZEALAND
CA518/2013
[2014] NZCA 329
BETWEEN
JONATHAN DIXON
Appellant
AND
THE QUEEN
Respondent
Hearing:
27 February 2014 (further submissions received 13 March
2014)
Court:
Harrison, Wild and French JJ
Counsel:
D J More and A J More for Appellant
S B Edwards for Respondent
Judgment:
17 July 2014 at 10.00 am
JUDGMENT OF THE COURT
A
The conviction is quashed and replaced with a conviction under
s 249(1)(a) of the Crimes Act 1961 on the following terms:
That Jonathan Dixon on the 13th day of September 2011 at Queenstown
accessed a computer system and thereby dishonestly and without claim
of right obtained a benefit.
B
The appeal against sentence is dismissed. Mr Dixon must report to the
Community Probation Service by 10.00 am on 21 July 2014 to resume his
community work sentence. The sentence of community detention will
also resume on 21 July 2014.
____________________________________________________________________
REASONS OF THE COURT
(Given by French J)
DIXON v R CA518/2013 [2014] NZCA 329 [17 July 2014]
Introduction
[1]
Following trial, a District Court jury found Mr Dixon guilty of accessing a
computer system for a dishonest purpose contrary to s 249(1)(a) of the Crimes
Act 1961.
He was convicted and sentenced by Judge Phillips to four months’
community detention and 300 hours’ community work.1
[2]
Mr Dixon now appeals both his conviction and his sentence.
[3]
The key issues raised by the appeal are:
(a)
Does digital footage fall within the statutory definition of “property”
contained in s 2 of the Crimes Act?
(b)
If digital footage does not fall within the statutory definition of
“property”, should Mr Dixon’s conviction for obtaining property
under s 249(1)(a) be quashed and replaced with a conviction for
obtaining a benefit?
(c)
Did the Judge overstate the seriousness of the offending and as a
result impose a sentence that was manifestly excessive?
Factual background
[4]
Mr Dixon was employed by a Queenstown security firm as a bouncer. One
of the firm’s clients was Base Ltd, which operates Altitude Bar in Queenstown. Base
had installed a closed circuit television (CCTV) in the bar.
[5]
In September 2011, the English rugby team was touring New Zealand as part
of the Rugby World Cup. The captain of the team was Mr Tindall. Mr Tindall had
recently married the Queen’s granddaughter. On 11 September, Mr Tindall and
several other team members visited Altitude Bar. During the evening there was an
incident involving Mr Tindall and a female patron, which was recorded on Base’s
CCTV.
1
R v Dixon DC Invercargill CRI-2011-059-1122, 2 August 2013.
[6]
Mr Dixon found out about the existence of the footage of Mr Tindall and
asked one of Base’s receptionists to download it onto the computer she used at work.
She agreed, being under the impression that Mr Dixon required it for legitimate work
purposes.
The receptionist located the footage and saved it onto her desktop
computer in the reception area. Mr Dixon subsequently accessed that computer,
located the relevant file and transferred it onto a USB stick belonging to him.
[7]
Mr Dixon attempted to sell the footage but when that proved unsuccessful he
posted it on a video-sharing site, resulting in a storm of publicity both in New
Zealand and in the United Kingdom. Judge Phillips found that Mr Dixon had done
this out of spite and to ensure that no one else would have the opportunity to make
any money from the footage.2
[8]
Base complained to the police about Mr Dixon’s actions and Mr Dixon was
charged under s 249(1)(a) of the Crimes Act.
Is digital footage stored on a computer “property” as defined in the Crimes
Act?
[9]
Section 249(1)(a) states:
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,
advantage, benefit, or valuable consideration; or
pecuniary
...
[10]
The indictment against Mr Dixon alleged that he had “accessed a computer
system and thereby dishonestly and without claim of right obtained property”.
[11]
At the conclusion of the Crown case at trial, Mr Dixon’s counsel applied for a
discharge under s 347 of the Crimes Act. Counsel argued that the prosecution could
2
R v Dixon, above n 1, at [11].
not prove Mr Dixon had obtained property because the footage he had copied and
transferred was not property as defined under the Crimes Act.
[12]
Judge Phillips rejected that submission.3
He held that the footage was
property and directed the jury accordingly.
[13]
On appeal, Mr More submitted that this ruling and the consequent jury
direction were wrong in law and that the conviction should be set aside. This was
the sole ground of the appeal against conviction raised by Mr More.
Statutory definition
[14]
The offence created by s 249(1)(a) was inserted into the Crimes Act by the
Crimes Amendment Act 2003. It was one of a number of provisions designed to
modernise the Crimes Act by taking account of computer-related crime and by
updating traditional property offences in light of technological advances and
developments in case law.4 In addition to creating new computer-related offences,
the Amendment Act also modified the key terms underlying property offences,
including the words “property” and “document”.5
[15]
The term “property” is now defined in s 2 of the Crimes Act as follows:
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
[16]
The words “money, electricity” were added by the Amendment Act. It is
unclear whether they were included out of caution or whether they were considered
to be outside the previous definition.
3
4
5
R v Dixon DC Invercargill CRI-2011-059-1122, 17 April 2013.
Of particular concern was the “yawning gap in the criminal law” that had been exposed by this
Court in R v Wilkinson [1999] 1 NZLR 403 (CA). The Court held that credit extended by a bank
was not capable of being stolen because the definition of things capable of being stolen was
limited to moveable, tangible things.
The Crown sought to rely in this case on the fact the definition of “document” was extended to
include electronic files. However, the word “document” does not appear in the definition of
“property” and in our view is not relevant for present purposes.
[17]
Originally, the Amendment Bill had included a separate definition of
“property” specifically for the new computer-related crimes. The definition was in
cl 19 of the original Bill, and was as follows:
Property includes real and personal property, and all things, animate or
inanimate, in which any person has any interest or over which any person
has any claim; and also includes money, things in action, and electricity.
That definition was discarded by the Select Committee, which rejected the notion of
having different definitions of property for different offences.
[18]
This case appears to be the first time the courts have been asked to consider
the definition of property under s 2 in the context of electronically-stored footage or
images. There is a High Court decision holding that internet usage (the consumption
of megabytes in the transmission of electronic data) is “property”. 6 However the
Judge in that case expressly distinguished internet usage from the information
contained in the data, and was not required to consider the status of the latter.7
District Court decision
[19]
In holding that the footage fell within the definition of “property”, Judge
Phillips had this to say:8
[13]
… the definition of property in the Crimes Act is wide; in my view
clearly is sufficiently wide to cover here the situation. I have regard to the
overall position relating to what we are talking about here. I see that what a
computer does is receives, digests and analyses data. I consider that data can
include anything that is capable of being stored on a computer system, being
a word document or a programme file or script, that enables the operator to
do something quickly for example and can clearly include picture files and
the like.
[14]
What the receptionist did, under the instructions of the accused on
the evidence, was retrieve data from a CCTV camera and store it on the
desktop. At that point in time, of course, nothing at all had happened other
than there had been the creation of a separate file, being a picture file
containing this video. At that point in time the property remained in the
possession of Base. The accused arrives, then physically himself moves that
picture file from the desktop onto his USB stick and then deletes the picture
file. I refer back to the definition of property. In my view we have in fact
clear property, being the picture file, which is data from a computer taken
6
7
8
Davies v Police [2008] 1 NZLR 638 (HC).
The information was not the subject of the charge.
R v Dixon, above n 3.
into the possession of the accused on the Crown’s case. Quite clearly the
management/owners/directors or whatever of Base would be able to say that
they had that document (the picture file) under the company’s control and
thus could make a claim to possession of it. It was taken from the desktop,
onto the USB stick and the company’s document was then deleted.
[20]
It seems the Judge was influenced by the breadth of the statutory definition,
its inclusion of intangible things and the fact that the footage appeared to have all the
normal attributes of personal property. It had a value and was capable of being sold.
Although the Judge did not expressly address the issue, he must presumably have
considered that it did not matter that at all times Base retained its footage. It never
lost the images. What it lost was the right to exclusive possession and control of
them.
[21]
The Judge’s view is understandable and we venture to suggest is likely to be
shared by many. It reflects an intuitive response that in the modern computer age
digital data must be property.
[22]
However, the legal position is not quite so straightforward. After close
analysis, we have come to the view that the Judge’s decision is fraught with
insuperable legal difficulties and is wrong. Our conclusion is that digital files are not
property within the meaning of s 2 and therefore Mr Dixon did not obtain property.
For reasons we shall explain, we further conclude that the problems have arisen in
this case because Mr Dixon was charged under the wrong part of s 249(1)(a). He
should have been charged not with obtaining property but with obtaining a benefit.
Analysis
[23]
In his submissions Mr More relied on the English case of Oxford v Moss.9 In
that case, a university student was charged with theft in circumstances where he had
unlawfully acquired an examination paper, read its contents and then returned it.
The Court held that the student could not be guilty of theft. What he had obtained
was the information contained on the paper. The information was confidential but it
was not property, unlike the physical piece of paper on which it was written. To put
9
Oxford v Moss (1979) 68 Cr App R 183.
it another way, the Court considered that information, even confidential information,
was not something capable of being owned in law.
[24]
While Oxford v Moss was a theft case, it turned on concepts of “property”
and has obvious similarities to the present case. Mr More argued that application of
Oxford v Moss here would necessarily lead us to the conclusion that Mr Dixon did
not obtain any property.
[25]
Oxford v Moss was not a closely reasoned decision. However, it remains
good law in England and has been followed elsewhere, notably by the Supreme
Court of Canada.10
[26]
In this country, Oxford v Moss has been cited in two decisions. One is a
decision of the High Court, Money Managers Ltd v Foxbridge Trading Ltd, where
Hammond J noted that traditionally the common law has refused to regard
information as property, a view he favoured.11 The second is a decision of the
Taxation Review Authority.12 The Authority was required to determine, among other
things, whether computer programs and software constituted goods for the purpose
of the Goods and Services Tax Act 1985. Judge Barber drew a distinction between
the physical items on which the information was stored (such as computer discs) and
the information itself. He held, following a number of authorities including Oxford v
Moss, that there was no property in the information.
[27]
Oxford v Moss is also consistent with the general approach taken at common
law. The prevailing view is that at least for the purposes of the civil law, confidential
information is not property. The House of Lords so held in the context of a trust
case,13 as did this Court and the High Court of Australia when examining the
doctrinal basis for the action for breach of confidence.14
10
11
12
13
14
Stewart v R [1988] 1 SCR 963.
Money Managers Ltd v Foxbridge Trading Ltd HC Hamilton CP67/93, 15 December 1993.
Taxation Review Authority 25 [1997] TRNZ 129.
Boardman v Phipps [1967] 2 AC 46 (HL).
Hunt v A [2007] NZCA 332, [2008] 1 NZLR 368; and Farah Constructions Pty Ltd v Say-Dee
Pty Ltd [2007] HCA 22. Compare, however, the United States cases: for example, Carpenter v
United States 484 US 19 (1987); People v Kwok 63 Cal App (4th) 1236 (1998); and People v
Kozlowski 96 Cal App (4th) 853 (2002).
[28]
The issue of whether confidential information is property was also the subject
of extensive discussion by the Federal Court of Australia in TS & B Retail Systems
Pty Ltd v 3Fold Resources Pty Ltd (No 3).15 Justice Finkelstein stated:16
Confidential information … is not property “in any normal sense”:
Boardman v Phipps [1967] 2 AC 46, 128. Indeed it is not property at all.
Confidential information is protected by equity by “the notion of an
obligation of conscience arising from the circumstances in or through which
the information was communicated or obtained”: Moorgate Tobacco Co
Limited v Philip Morris Limited (No 2) (1984) 156 CLR 414, 438. A court
of equity will protect information only if it is truly confidential and the
confidence is worth preserving.
[29]
We are satisfied that the orthodox position is that confidential information (or
indeed information in general) is not property, as was held in Oxford v Moss. As
stated by Finkelstein J, the traditional approach has been to rely on the equitable
cause of action for breach of confidence to provide sufficient protection.
[30]
We have considered whether digital footage may be distinguishable from
confidential information. As noted above, there is a distinction in the case law
between confidential information itself and any medium on which it is contained.
For example, a computer disc containing information is property but the information
itself is not. It seems possible, therefore, that digital footage itself may be property
while the information it contains is not. A digital file arguably does have a physical
existence in a way that information (in non-physical form) does not.17
[31]
After careful consideration, however, we have reached the view that
electronic footage stored on a computer is indistinguishable in principle from pure
information.
It is problematic to treat computer data as being analogous to
information recorded in physical form. A computer file is essentially just a stored
sequence of bytes that is available to a computer program or operating system.
Those bytes cannot meaningfully be distinguished from pure information.
A
Microsoft Word document, for example, may appear to us to be the same as a
physical sheet of paper containing text, but in fact is simply a stored sequence of
15
16
17
TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) [2007] FCA 151.
At [74].
See R v Cox (2004) 21 CRNZ 1 (CA) at [49].
bytes used by the Microsoft Word software to present the image that appears on the
monitor.
[32]
Accordingly, we consider that if confidential information is not property
digital footage also cannot be.
[33]
That leaves the question of whether we should depart from the orthodoxy that
confidential information cannot be property.
It is true that the confidential
information cases have attracted some criticism.18
In particular, the distinction
drawn between the information itself (not property) and the medium on which it is
contained (property) has been said to be illogical and unprincipled.19
[34]
However, the courts have essentially taken the view that any illogicality is
outweighed by the strong policy reasons that militate against recognition of
information (whether confidential or otherwise) as property. The concern is that if
the law were to recognise confidential information as property and so afford it the
full protection of property law, that would be likely to have a damaging effect on the
free flow of information and freedom of speech.
[35]
We accept that legal concepts of property are constantly evolving to reflect
societal changes and new developments. We acknowledge too that at the same time
as it created new computer-related offences (including the one with which Mr Dixon
was charged), the New Zealand Parliament amended the definition of property.
However, as noted above, the amendment was limited. It consisted only of the
addition of money and electricity. Parliament must be taken to be aware of the large
body of authority regarding the status of information and in our view had it intended
to change the legal position, it would have expressly said so by including a specific
reference to computer-stored data.20
18
19
20
See, for example, Dennis J Baker Glanville Williams: Textbook of Criminal Law (3rd ed, Sweet
& Maxwell, 2012) at 987–992.
See, for example, JC Smith “Theft: Oxford v Moss” [1979] Crim LR 119 at 120. It is worth
noting, however, that the distinction is an inevitable consequence of the finding that confidential
information itself cannot be property.
We note here that the Law Commission’s 1999 report Computer Misuse, which led to the Crimes
Amendment Act 2003, expressly refers to the possibility of “redefinition of information as a
property right”: Law Commission Computer Misuse (NZLC R54, 1999) at [36] (emphasis
added). Parliament presumably decided not to enact such a change.
[36]
In light of the absence of any specific reference to digital files in the statutory
definition, the significant body of case law (which, as mentioned, includes decisions
at the highest level in other Commonwealth jurisdictions) and the important policy
factors underlying those decisions, we consider that this Court should not depart
from the orthodox approach. We therefore hold that information, including digital
data (whether confidential or not), is not property for the purposes of s 2 of the
Crimes Act.21
[37]
We are reinforced in that conclusion by the existence of s 230 of the Crimes
Act. Section 230 specifically criminalises the taking, obtaining or copying of trade
secrets. If confidential information were property within the meaning of s 2, then
s 230 would be unnecessary.
[38]
We have considered whether in creating a crime of accessing a computer in
order to obtain property, Parliament should be taken to have intended that digital
files must be property. To put it another way, is it still possible to access a computer
and obtain property if digital files do not qualify as property? What other types of
property could be obtained? In our view, excluding digital files as property does not
render the provision meaningless. We consider that the offence is aimed at situations
such as where a defendant accesses a computer and uses, for example, credit card
details to unlawfully obtain goods.
[39]
Finally, it is important to note that our conclusion does not in any way
frustrate Parliament’s decision to criminalise the misuse of computers. As Mr More
acknowledged, at least in his written submissions, Mr Dixon was simply charged
under the wrong part of s 249(1)(a).
Instead of being charged with obtaining
property, he should have been charged with “obtaining a benefit”, the benefit being
the opportunity to sell the footage.
21
We note that this is contrary to the position in Bruce Robertson (ed) Adams on Criminal Law
(online looseleaf ed, Brookers) at [CA2.29.01]. However, the learned authors of that text do not
discuss the relevant case law.
Substituted verdict?
[40]
The Crown submitted that if we were to find the footage was outside the
definition of property, that did not mean the appeal against conviction should be
allowed. It was submitted that instead we should invoke our powers under s 386(2)
of the Crimes Act and convict Mr Dixon of accessing a computer system to obtain a
benefit.22
[41]
Mr More was opposed to that course of action. He contended that had Judge
Phillips ruled the footage was not property, the prosecution would have been obliged
to apply to amend the indictment after its case had closed. Mr More (who was not
trial counsel) suggested that Mr Dixon may well have successfully opposed that
application and sought a new trial on the grounds that his cross-examination of the
prosecution witnesses would have been different had he known he was facing a
different charge. Mr More further submitted that the jury were directed on the basis
that the footage was property and were never directed to consider the issue of
benefit.
[42]
In Mr More’s submission, the appropriate course of action is for us to allow
the appeal, quash the conviction and order a new trial.
[43]
We disagree.
[44]
Section 386(2) states:
(2)
22
Where an appellant has been convicted of an offence and the jury
could on the indictment have found him guilty of some other
offence, and on the finding of the jury it appears to the Court of
Appeal or Supreme Court that the jury must have been satisfied of
facts which proved him guilty of that other offence, the Court may,
instead of allowing or dismissing the appeal, substitute for the
verdict found by the jury a verdict of guilty of that other offence, and
pass such sentence in substitution for the sentence passed as may be
warranted in law for that other offence, not being a sentence of
greater severity.
The Crown also sought to invoke s 335(1) of the Crimes Act 1961, but while s 355(1) empowers
this Court to amend an indictment on appeal, it does not permit the Court to enter a conviction
on a substituted count: see R v Morland CA148/99, 6 September 1999.
[45]
Under s 386(2), this Court may only substitute a conviction where the
substituted offence is one that was open on the indictment. The central issue is
whether the Court can be certain that the jury were satisfied as to the elements of the
offence sought to be substituted.
[46]
The power under s 386(2) is to be exercised sparingly. However, in this case
we are confident that the jury were satisfied as to the elements of the substituted
offence proposed by the Crown. Mr Dixon never disputed that he obtained the
footage. The footage, although not property, is something of value that is capable of
being sold. While Mr Dixon ultimately did not sell the footage (whether because he
chose not to or because negotiations fell through), he certainly had the opportunity to
do so. Mr Dixon clearly obtained a benefit as envisaged by s 249(1)(a).
[47]
In our view, in those circumstances, this is an entirely appropriate case for the
Court to exercise its powers under s 386(2).
[48]
In coming to this conclusion, we have not overlooked that the wording of
s 386(2) refers to substitution of the offence charged with some “other offence”.
Strictly speaking, the proposed substitution in this case is of the same offence under
s 249(1)(a) and not another offence. However, it would be an absurd result if this
were to prevent the Court from exercising its power under s 386(2). Substituting a
different form of the same offence is obviously a less radical departure from the
original indictment than substituting an entirely different offence. We are satisfied
that the greater must include the lesser and that the phrase “other offence” includes a
different form of the same offence.
[49]
We therefore quash Mr Dixon’s conviction and replace it with a conviction
under s 249(1)(a) of the Crimes Act on the following terms:
That Jonathan Dixon on the 13th day of September 2011 at Queenstown
accessed a computer system and thereby dishonestly and without claim of
right obtained a benefit.
Appeal against sentence
[50]
In sentencing Mr Dixon, the Judge identified the aggravating factors of the
offending as being: the harm and damage caused by Mr Dixon’s “greed”; the abuse
of trust, which the Judge said he considered to be major; the vulnerability of
Mr Tindall and his family; and the fact the offending was premeditated. 23 Relying
on those factors and the decision of R v Hayes, the Judge said he considered the
appropriate starting point to be 12 months’ imprisonment.24
[51]
The Judge then went on to say that although his sentence had to be a “strong”
one, providing for denunciation and accountability, he was persuaded to step back
from a custodial sentence principally on account of the fact Mr Dixon had no
relevant previous convictions.25
[52]
The Judge then sentenced Mr Dixon to four months’ community detention
and 300 hours’ community work.
[53]
In Mr More’s submission the Judge, perhaps overwhelmed by all the
publicity, grossly overstated the seriousness of the offending, the breach of trust and
the impact on the victims. Mr More contended that unlike the defendant in Hayes,
Mr Dixon did not hack into a computer or act fraudulently. Further, the evidence
established that Mr Dixon had permission to access Base’s computer for the
purposes of his job and that Base itself did sometimes download CCTV footage of
people in the bar not for security reasons but for the amusement of staff. Base did
not lose the footage and indeed had tried to benefit from the notoriety Mr Dixon’s
actions had given the bar by using the incident in promotional material.
[54]
In Mr More’s submission, the appropriate sentence for Mr Dixon was a fine.
[55]
We do not accept that submission. In our view there was a significant breach
of trust notwithstanding that this was not a case of hacking, as indeed Judge Phillips
23
24
25
R v Dixon, above n 1, at [9].
R v Hayes (2006) 23 CRNZ 547 (CA).
At [13].
expressly acknowledged.26 The CCTV footage was there for the specific purpose of
protecting patrons of the bar; Mr Dixon’s use of the footage was for the opposite
purpose of exploiting one of the patrons. As a result of his employment, Mr Dixon
knew of the footage’s existence and was entrusted with access to it. He misled the
receptionist27 and dishonestly accessed the footage for an unauthorised purpose. He
did so at the expense of his employer’s reputation and that of the bar. As a result of
his actions, his employer’s contract with Base was put in jeopardy.
[56]
We are satisfied that the sentence imposed was within range and confirm that
is so whether the offence was one of obtaining a benefit or property.
[57]
The appeal against sentence is accordingly dismissed. Mr Dixon must report
to the Community Probation Service by 10.00 am on 21 July 2014 to resume his
community work sentence. The sentence of community detention will also resume
on 21 July 2014.
Postscript
[58]
At the conclusion of the hearing before us, Mr More advised that Mr Dixon
wished to listen for himself to the audio recording of the Judge’s summing-up.
Earlier, Mr Dixon had raised concerns that the Judge had made an unfair and highly
prejudicial comment to the jury which had been omitted from the written transcript.
Registry staff in this Court had listened to the relevant sections of the audio tape and
advised that the transcript was complete and accurate.
[59]
In response to Mr More’s request, we issued a minute directing that
Mr Dixon was allowed seven days to listen to the audio tape. The minute further
directed that in the event Mr Dixon wished to advance further argument based on the
summing-up, he might do so only through his counsel. Leave was reserved to
Mr More to file a supplementary memorandum for that purpose within a further
seven days.
26
27
At [5].
Mr Dixon said in evidence that he told the receptionist Mr Tindall had been in a fight.
[60]
On 13 March 2014, Mr More filed a memorandum. It advised that Mr Dixon
had now listened to the audio recording and had sent Mr More a booklet of
documents comprising an outline of submissions prepared by Mr Dixon and related
additional materials. Mr More attached Mr Dixon’s submissions and additional
materials to his memorandum “without comment”.
[61]
The new submissions do not contain any reference to comments omitted from
the transcript or anything arising from the audio recording. Instead, the submissions
raise allegations against trial counsel and alleged flaws in the summing-up as
recorded in the written transcript. They are therefore outside the scope of the leave
granted and for that reason alone are rejected. In any event, we are satisfied that
none of the matters raised, whether viewed individually or collectively, would justify
quashing the conviction.
Solicitors:
Crown Law Office, Wellington for Respondent