There's a legal saying that hard cases make bad law. But sometimes the opposite can be true - an apparently easy case can lead a Court into some pretty swampy terrain.

The story of Jonathan Dixon doesn't raise much sympathy. He was a bouncer at a Queenstown bar back in 2011. While working there, he observed the English rugby player Mike Tindall - who had just married the Queen's granddaughter Zara Phillips - "cavorting" with a woman on the dance floor. So Dixon went into the bar's computer system, copied a file containing the video footage of Tindall's escapades (which he then deleted from the bar's computer) and tried to shop it to the UK tabloids (who, in an unexpected fit of ethics, refused to pay him). He then got caught and the police charged him with breaching the Crimes Act 1961:

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

This case then managed to wend its way up to the Supreme Court on a seemingly narrow point of law; did Dixon "obtain[] any property" when he copied the file containing footage of Tindall from his employer's computer system? Sure, Dixon had some other gripes about how his trial was conducted, but it's pretty safe to say that absent this question of law the Supreme Court wouldn't have been interested in the case at all.

Certainly what Dixon did looks a lot like the sort of thing we think of as being "theft". He "broke in" to his employer's computer, he "took something" out of it (and then deleted the file, so his employer no longer had it), then tried to sell that something to a third party. So how is this morally any different to (say) a burglary or other form of theft?

And, in a nutshell, that's what the Supreme Court thinks about the matter (judgment available here). The digital file that Dixon took was something that his employer wanted, that his employer didn't want Tindall to have, and which had an economic value. If something looks like property, sounds like property and gets treated like property, it should be considered property.

Or, as the Court said (at para [39]):

The digital files which Mr Dixon downloaded to his USB stick and then deleted from the reception’s computer were a compilation of sequenced images from the bar’s CCTV system. That compilation of digital files had an economic value and was capable of being sold. While the files from which the compilation was constructed remained on the CCTV system, the compilation contained what was valuable in the full files. Moreover, the compilation had a material presence and altered the physical state of whatever medium it was stored on (eg, computer, disc or USB stick), as is illustrated by the fact that electronic storage space can become fully utilised.

And so the Supreme Court overturned the Court of Appeal's previous decision that the files weren't "property" - although this actually made no practical difference to Dixon, as the Court of Appeal instead had convicted him of breaching s.249(1)(a) on the basis that he obtained a "benefit" when he took the files from his employer's system!

If this were all there was to Dixon's case - exchanging the basis for his conviction from obtaining a "benefit" to obtaining "property" - then it would hardly be worth a mention. But the Supreme Court's decision raises some pretty thorny future questions. I note that the Court tries to be careful about not trying to answer them through this judgment - it emphasises that "the meaning of the word 'property' varies with context" and "in the present case we are concerned with the dishonest acquisition of property from a computer system under s 249(1)(a)" (at para [25]). Nevertheless, the thrust of its judgment means these questions really cannot be avoided.

(Before getting into them, let me also acknowledge that these thoughts were worked out over the course of a day emailing back and forth with Graeme Edgeler ... who may or may not agree with none, some or all of the following and so holds no responsibility for any of it.)

Remember what the Court is saying in Dixon (at least, in relation to s.249(1)(a)). A digital file - the "stored sequence of bytes" - constitutes "property". So if you make a copy of that stored system of bytes in order to remove it from someone's computer system, then you obtain that property. Meaning there are now two instances of the same property - the original file and the copied file, as both contain the same "stored sequence of bytes".

The thing with property is that various things can be done with it, whether obtained lawfully or not. And the Crimes Act has something to say about those who deal with "property" that is obtained unlawfully;

246 Receiving

(1) 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.

Under Dixon's reasoning, the files taken from the employer's computer were "property" obtained by an imprisonable offence (by breaching s. 249(1)(a)). The critical question then is, does the same meaning of "property" apply when we turn to s.246(1) and those who "receive" the digital files? Because if it does, then anyone that Dixon gives, sells or otherwise transfers the copied files to is guilty of breaching s.246(1) - as long as they know or are reckless as to how Dixon got them.

Well, maybe that's not really a problem. After all, let's say Dixon stole some printed still photos from the bar's video camera and offered them for sale to the newspapers. There would be no issue with anyone who buys the photos off him being charged under s.246(1), right? So why should his passing over a digital file containing the photos be any different?

But now let's try another thought experiment. Let's imagine that instead of offering the files for sale, Dixon puts them up on a website for others to download (along with an account of how he came by them). And a whole lot of people flock to the site and download the file. By doing so, have each and every one of those individuals now received "property ... obtained by any ... imprisonable offence, knowing that property to have ... so obtained" - thus making them liable to (at least) 3 months imprisonment? Because, remember, under the Dixon approach, making a copy of a digital file - the "stored sequence of bytes" - constitutes obtaining property.

Whereas, if Dixon were to have taken printed still photos from the bar's video camera, scanned them into electronic form and put them up on the internet, it would not be a breach of s.246(1) for anyone to view, print, download or otherwise access them. Why not? Because you would not be receiving the stolen property - the printed still photos - but rather a copy of them that contains the same information. And the Supreme Court is very careful to say that "information, even confidential information, is not property" (at paras [23]-[24]).

Now let's step matters up a notch. Let's say some white hatted hacker gets hold of a whole lot of digital files showing that the Government or some large corporate enterprise - hell, let's even make it a union! - is up to no good. And she passes those files on to Wikileaks to disseminate for the public good. And Wikileaks makes them available on its website for anyone to download. If you go to the Wikileaks website and do so, have you breached s.246(1) by receiving a copy of the "stored sequence of bytes" that make up the original digital file ... which is, according to the Dixon approach, a form of "property"?

As compared with a situation where the white hatter takes the digital file to a newspaper, which prints it all verbatim for its readers to see in print. The newspaper (or, rather the journalists who get the digital files) may be vulnerable under s.246(1), but you as a reader can rest easy as your copy of the paper does not contain any property obtained by an imprisonable offence. Because on the Dixon approach the information contained in the digital files is not property ... just the files themselves.

Which then gets us into other tricky areas. Let's say the white hatter takes the digital files to the newspaper. How can it hold onto those files without potentially breaching s.246(1) by receiving property obtained by an imprisonable offence? If the files were in a physical form - paper documents or the like - then the answer is easy. The newspaper can photocopy them, because it is only the original paper document that is the relevant property; remember, "information, even confidential information, is not property". But digital files? If the paper copies the digital files, then it ends up with the same "stored sequence of bytes" ... which according to the Dixon approach is still property obtained by an imprisonable offence!

That's without even getting into the question of copyright infringement ... because note s.246(2):

For the purposes of this section, property that was obtained by any act committed outside New Zealand that, if it had been committed in New Zealand, would have constituted an imprisonable offence is ... to be regarded as having been obtained by an imprisonable offence.

And then consider this provision in the Copyright Act 1994:

131 Criminal liability for making or dealing with infringing objects

(1) Every person commits an offence against this section who, other than pursuant to a copyright licence,—

(a) makes for sale or hire...

an object that is, and that the person knows is, an infringing copy of a copyright work.

While noting that a breach of this provision can attract a jail sentence of up to 5 years.

Now think on this. You (or a hypothetical you) go to an offshore based website and buy a digital copy of a recently released Hollywood movie that you know (or, at least, are reckless about) has been made in breach of copyright. On the Dixon approach, by doing so have you not just received "property" - a copy of a "stored sequence of bytes" - that was obtained by an imprisonable offence? Making you liable to a 3 month long prison sentence ... or longer, if you happen to build up a bit of a library of such files over time?

I really don't know how any of these questions will be answered. And as I say, the Supreme Court doesn't claim to be answering them in Dixon - it says it is only talking about what "property" means in terms of s.249(1)(a). But now the really big question is, does that definition of "property" carry over into other sections of the Crimes Act - and with what consequences? Or, if it doesn't, why not?

Lawyers, start your engines.

Comments (16)

by Kyle Matthews on October 21, 2015
Kyle Matthews

Andrew, I am glad to see that the Supreme Court got the correct year for the 2011 Rugby World Cup, and did not misspell "bytes" :)

by Richard on October 21, 2015
Richard

So, if it is the precise sequence of stored bytes that is the issue (rather than the information) what happens if you obtain, say, a zip file of the data. That would be a different sequence of bytes that the same information could be extracted from.

by Andrew Geddis on October 21, 2015
Andrew Geddis

@Kyle,

Oops!

Mistook sentencing year for the year the offence occurred. And ... byte me, computer boy!

by Andrew Geddis on October 21, 2015
Andrew Geddis

@Richard,

We don't know! By analogy, would that be the same as taking a photo of a document, or handwriting the information on a notepad ... in which case, you are not "stealing" the document (which is "property")?

These are the sorts of issues that Dixon doesn't resolve, meaning that lawyers are now going to have a field day over them!

by Rich on October 21, 2015
Rich

As a computer scientist, I don't see how you can make a distinction between a "computer file" and "information". 

All practical forms of persistent storage media (disks, USB sticks, tapes, etc) are artefacts with "state". A blank one has (I simplify) a state of all zeroes. When you write information to the media its state changes. The act of copying (including copying to read) the media involves (generally) using a computer to determine all or part of the state of the source media and altering the state of the target media to match.

That is, IMHO, a transfer of information. An exact copy of a video file obviously has the information in more detail than a lower resolution version, a transcript or a brief summary of the events in the film, but all are information. 

(Accountants, of course, regard information as property all the time - it gets owned, depreciated, traded and taxed. I'd assume company and tax law, something I try to avoid delving into, has its own explicit or accepted definitions of "property").

There is a fundamental difference between computer files or any other kind of "information property" - it's hard to physically deprive the owner of them (except of course when the owner has no backup and the offender deletes the file, as in Dixon - but was that considered material?). Which makes a charge of theft difficult. I'd further suggest that the offence of "receiving" is historically coupled with theft (along with fraud, menaces and other ways to permanently deprive the owner of an item of property).

[ One can't be charged with receiving if the goods are only converted rather than stolen, right? If I borrow Bob's lawnmower and lend it to you, then you give it back and I return it to Bob, as I always intended, that's conversion, not theft/receiving? ]

Incidentally, can appeal courts take expert evidence/advice of a general nature in these cases (such as on how computer storage works)? I think they should have, if only to get the generally accepted meaning of "computer software" right.

by Ian MacKay on October 21, 2015
Ian MacKay

information, even confidential information, is not property"


I bet Nicky Hager is interested in that definition. The question about digital property was floated at the time of Dirty Tricks. If it wasn't property then it wasn't stolen?

by Andrew Geddis on October 21, 2015
Andrew Geddis

@ Rich,

I am sympathetic to what you say! On your particular question:

Incidentally, can appeal courts take expert evidence/advice of a general nature in these cases (such as on how computer storage works)? I think they should have, if only to get the generally accepted meaning of "computer software" right.

There is this interesting tidbit from the judgment (para [24]): "since Mr Dixon chose to dismiss his counsel shortly before the hearing and did not address this aspect of the case at all in his oral or written submissions, this would not be an appropriate occasion on which to reconsider the orthodox view [that confidential information is not property]". In other words, the Court's decision was reached with the Crown arguing hard that digital files are property and Mr Dixon (not a trained lawyer) arguing they weren't ... without any other counsel involved to discuss the possible implications of the decision. 

That's a questionable basis for a pretty major shift in legal thinking!

@ Ian,

I've deliberately steered away from discussion of Hager's situation ... but obviously the outcome of Dixon may have implications not only for how Dirty Tricks came to be written, but his profession generally.

by Felix Geiringer on October 21, 2015
Felix Geiringer

[Disclosure: I have been acting for Nicky Hager.]

Great piece, it reflects many of my concerns with the case.

I think the point about lack of argument is important.  One can view the transcript of the hearing here.  You can see that argument on the property point against the Crown position is non-existent.

That is particularly important as this decision is a departure from a long line of common law cases.  That does not come across clearly in the judgment.  It is a departure from the position in Australia as well as the UK.  There are important cases that analyse the reasons for the information is not property rule that do not get a mention in this decision.  

The description of the circumstances that mean it should be considered property in this case are also concerning in that they suggest that the Court did not have good evidence of what is actually occurring in the computer systems.  People are speculating on Twitter about whether this decision means it is not property if you encode it differently.  You can see how one would get there from the decision.  Except that any transmission of data, even writing data to a new medium, involves a variety of intermediate codings. 

This discussion also highlights another absurdity in the decision.  What is the policy justification for determining whether something is property based on the way the information is coded?

I think you could also put together more compelling examples of how easy it is to commit the offence of receiving depending on how this decision is applied.  YouTube is full of Channels that distributing old music videos without copyright and collect the advertising revenue. And New Zealand is full of people who get a craving to hear an old tune from their childhood, search for it on Google, and play the first YouTube version that comes up in the search. 

by Rick Shera on October 21, 2015
Rick Shera

Very interesting. I've written before that the CA's rigid view of "property" as only really being capable of describing a physical object is at odds with the huge importance and value of digitally stored and transmitted information.  The subsequent Watchorn result is a good example of that (albeit that the Crown seems to have dropped the ball in that case by not arguing that the taking of the digital material was the obtaining of a "benefit").

I must admit however that I did not traverse the other provisions of the Crimes Act.

A few thoughts though:

- Doesn't the requirement for exclusivity in section 246(3) mean that the offence of receiving cannot be made out where someone downloads from a site that has no restriction on access (like YouTube or Wikileaks)?

- I can understand your drawing a distinction between copying the exact digital file vs copying a printed work since that is how the SC deals with it, which then allows the SC to hold that information itself is not property.  But isn't this an artificial distinction? Why should the method by which the ultimate digital file is derived and the technology involved in creating it be determinative of whether that digital file is property or not?  Shouldn't we just byte the bullet and recognise that information is property ... but

- emphasize that actual knowledge of criminality is required to shift something from a civil breach of confidence/copyright infringement to a criminal offence and perhaps increase the penalty for offences of this nature where the original owner is also deprived of "property" (as in Dixon where he deleted the files).  It seems to me that that would bring us back to the original concept of theft, whilst removing what seems to me to still be an artificial distinction between physical and digital objects.

And yes, I appreciate that what I am suggesting is a fairly radical reform but I can't see how the sort of halfway house that we now have can subsist without getting the random results that you highlight (and I'm sure there will be others).  

 

by Andrew Geddis on October 21, 2015
Andrew Geddis

Hi Rick,

You've no doubt thought about these issues a whole lot more than me, so forgive me if my thoughts are a bit undeveloped! Also, I am much better with questions than answers.

I think the basic problem is that a definition of "property" that works fine in relation to one bit of the Crimes Act (s.249) - and I really have no problem with someone like Dixon or Watchorn getting criminal punishment for their actions - gets trickier when you start trying to apply it in relation to other provisions that manifestly weren't written with the computer age in mind. Receiving is a classic example, as it clearly has in mind a desire to prevent a market in stolen/unlawfully obtained physical goods.  

On your particular points:

- I think the point of s.264(3) is to defeat the argument "I haven't 'received' the stolen property because someone else also possesses or controls it". So, for instance, if a burglar brings a stolen plasma TV into his flat and all his flatmates start using it (knowing it was stolen) then they can't escape liability by claiming it was the "flat's TV" and not "theirs". How this then maps on to someone who downloads a file from a website (while the file remains available for anyone else to download) is difficult to assess - but wouldn't the downloader's possession/control of the file (the "property") be enough to establish liability irrespective of how many others may also have possession/control over it?

- I simply haven't thought enough about (and probably don't know enough to think about it properly) the question of whether information simplicita should be "property". That strikes me as something Parliament probably should be called on to decide, not least because trying to make the change by way of court decisions (which always are limited/coloured by their factual circumstances) cannot make the necessary multiple changes to our legislative frameworks that would be required.

by Rick Shera on October 21, 2015
Rick Shera

I agree, it needs to be looked at by Parliament. The historical focus on the physical might have worked when we were just talking about the actual media on which a digital file rests, but it simply does not cope with ubiquitous, distributed, big data, cloud, streaming etc. Imagine then what it will be like when the data is someone's electrical brain impulses or health data derived from an embedded nanotech storage application.  We need to get away from the medium and focus on the message - information - since that is where the value is and that is what "property" rights are about. 

And this problem is not just a Crimes Act issue.  I've looked at it in the context of how the law deals with digital objects after we die (spoiler: it doesn't). Even the Copyright Act, which you'd think would have it nailed, still talks about "objects" in contradistinction to "works".

by Moz on October 21, 2015
Moz

when the data is someone's electrical brain impulses or health data

Both of those are terrifying prospects, but both are entirely plausible and arguably possible right now.

If transformed data is still stolen then it seems obvious to me that transforming it by moving it inside my head is not physically different from, say, copying it from a hard disk to a USB storage device. Of course, the laws of physics aren't particularly influential on the legal system, so we may end up with further confusion of representational systems.

Until the BRCA patent was overturned there were some interesting questions about medical information being generated in terms of who owned it and who was allowed to know it (and IIRC some of those weighed on the decision that the patent was invalid). That also might apply only in Australia... in the US I expect that knowing you have those genes without having paid for the test is an offence.

Rick, if information can be copyrighted, and particular representations of that information are property, then arguably the property should have no defined limit on how long it remains property, or how often it can be copied and still remain property. I fear that perpetual copyright enthusiasts will take this judgement and see if they can use it accordingly.

by Siena Denton on October 28, 2015
Siena Denton

Kiaora

evidential material 

Define "material"?

Bits of tattered rags or heinous bitflags perhaps.

For the purposes of the law, is there any property interest in evidential bits of tattered rags and/or bitflags?

Does the New Zealand Courts recognise that information i.e. tattered rags/bitflags and digital "pictograms" is not property at all?

by Draco T Bastard on October 29, 2015
Draco T Bastard

So if you make a copy of that stored system of bytes in order to remove it from someone's computer system, then you obtain that property. Meaning there are now two instances of the same property - the original file and the copied file, as both contain the same "stored sequence of bytes".

If the information is removed from the original computer system after copying then there would only be one copy available and that to the person who made the copy. If this is not the people who were authorised access to the original computer then it could be said that the information has been stolen. If there were two copies and the original access was still intact then we have a copy but no theft.

This seems, IMO, to be how the Supreme Court has found.

by Draco T Bastard on October 29, 2015
Draco T Bastard

moving what seems to me to still be an artificial distinction between physical and digital objects.

Ah, but the artificial bit is the definition of property and ownership in the first place. Sure, it's been around awhile (Mostly from Ancient Rome and Greece) but it's still a social construct.

Making information itself property becomes a serious problem. Nobody but the owners would be allowed to be able to read or write and do maths. Discoveries would be owned by the discoverers instead of being generally available. If you're the first person to discover a new nova would it then be right for you to own that? Should everyone else then have to pay you a small amount just to look up in the night sky?

No, you cannot make information property. In fact, IMO, there's quite a bit that we regard as property that we shouldn't. Land for one as what people do on land affects others as our farmers with their ongoing pollution continue to prove.

by Andrew Geddis on October 30, 2015
Andrew Geddis

@Draco,

If the information is removed from the original computer system after copying then there would only be one copy available and that to the person who made the copy.

Possibly - but at no point does the Supreme Court expressly say that Dixon's action in deleting the file was key to their finding that the file was "property". They instead focused on the nature of the file taken (that it altered the state of the storage device, had potential commercial value, etc). Also, on your analysis, does it then matter how total the deletion is - if the file can be recovered from a hard drive by a technician, does that mean it is not "property"?

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