Kaukau v Health Support Systems Limited
[2025] NZHC 720
•1 April 2025
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2024-419-63
[2025] NZHC 720
BETWEEN RANGITIONGA KAUKAU as trustee of the TE WHARE HAUORA O RAUNGAITI
TRUST
PlaintiffAND
HEALTH SUPPORT SYSTEMS LIMITED
Defendant
Hearing: 12 September 2024 with further submissions and evidence filed on 27 September 2024, 11 October 2024 and 21 October 2024 Appearances:
SVA East and SL Cahill for the Plaintiff W Hofer and Mr McGill for the Defendant
Judgment:
1 April 2025
JUDGMENT OF ASSOCIATE JUDGE SUSSOCK
This judgment was delivered by me on 1 April 2025 at 10 am pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
Bell Gully, Auckland Tompkins Wake, Auckland
RANGITIONGA KAUKAU v HEALTH SUPPORT SYSTEMS LIMITED [2025] NZHC 720 [1 April 2025]
Introduction
[1] The plaintiff is the trustee of a Māori charitable Trust, Te Whare Hauora O Raungaiti Trust, which provides healthcare services to the community in Waharoa. For simplicity I refer to the plaintiff as the Trust in this judgment.
[2] In June 2021, the Trust entered into an agreement for Health Support Systems Limited (HSS) to provide a practice management system for the Trust's medical practice known as “indiciTM”. The Trust gave notice of termination in late 2021. The termination itself is not in issue in these proceedings. The Trust says it brings this action as a last resort after failed negotiations with HSS for a copy of the database that rightfully belongs to the Trust in the form in which the Trust says HSS is contractually obliged to return it.
[3] Two causes of action are pleaded, the first for breach of contract for not promptly providing an electronic copy of all “Licensee Information” to the Trust as Licensee following termination.
[4] Initially, the relief sought was a declaration that the contract required “a copy or clone” of the data to be provided and specific performance of that requirement. At the hearing counsel advised that to simplify matters the word “clone” could be deleted from the orders sought. I raised a concern that if the Court’s orders simply said HSS was to provide an “electronic copy”, mirroring the words of the contract, the parties would be no further advanced as there is a dispute as to what the word “copy” means. The Trust therefore amended what it is seeking to “an electronic copy of all data belonging to the Trust in its native format without transformation or modification”.
[5] The Trust has also pleaded a second cause of action for breach of s 9 of the Fair Trading Act 1986 but only seeks summary judgment in respect of the first cause of action, confirming it will not proceed with the second cause of action if it is successful on the first.
[6] The Trust submits that the matter is straightforward and suitable for summary judgment as the application relates to the narrow question of what form the contract requires the data to be returned in. Twenty three affidavits have been filed including
from experts but counsel for the Trust submits that the Court is not required to make a finding as to the industry standard, instead submitting that it is plain on the terms of the contract what is required to be provided.
[7] The Trust contends that HSS has sought to obfuscate matters by suggesting that HSS has a suitable alternative method for returning the data and that it is reliant on another party, Valentia Technologies (NZ) Limited (Valentia). In the Trust’s submission:
(a)the alternative offered by HSS is fraught with risk and would not meet the contractual standard because it would not return all of the Trust’s data; and
(b)to the extent that HSS suggests it cannot provide a copy as formulated by the Trust, this is based solely on contractual obligations it says it has to Valentia when these are irrelevant, particularly where HSS has not provided its contract with Valentia or any evidence that it has attempted to persuade Valentia to agree to provision of a copy as required.
[8] HSS opposes summary judgment submitting it has strong defences on the following grounds:
(a)HSS is willing and able to provide the Trust with an electronic copy of the Trust’s Licensee Information held in indiciTM and has proposed an exit management plan in accordance with its obligations under clause
14.4 of the EULA.
(b)This dispute is not suitable for summary judgment. There are material conflicts of evidence that cannot be said to be “inherently lacking in credibility” or “inherently improbable”.1 The Trust’s evidence also paints a picture that is at odds with “without prejudice” negotiations (the privilege having now been waived), raising questions of credibility.
1 Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162 at [26].
(c)Specific performance should not be ordered against HSS because HSS cannot itself provide the data in the form sought by the Trust in this claim. Only Valentia can.
[9] HSS submits a further reason why the dispute is not suitable for summary judgment is because Medtech Limited, the new PMS provider for the Trust, is a direct competitor of Valentia. Medtech has issued separate proceedings against Valentia alleging breaches of copyright, interference with contractual relations, breach of confidence, breach of a 2020 settlement of earlier litigation, and misleading conduct under the Fair Trading Act 1986.
[10] HSS says the Trust's claim against HSS is driven by a wider litigation strategy by Medtech against Valentia and that by seeking to obtain a clone, Medtech may be endeavouring to gather information for its claim against Valentia. HSS points to the fact that three senior Medtech staff members have given affidavit evidence in support of the Trust's summary judgment application. HSS submits that a claim with such a context is plainly unsuitable for summary judgment as HSS is deprived of the right to discovery and to cross-examine the Trust’s witnesses, including the Medtech employees. HSS says that caution ought therefore to be exercised when considering this matter on a summary basis.
[11] Further evidence and submissions were directed to be filed following the hearing, explaining the exact format of the data that HSS was prepared to provide. The Trust then had an opportunity to respond, including to explain why the format proposed would not comply with the clause 14.4 obligation to provide “an electronic copy of all Licensee Information to the Licensee”.
Issues
[12] The overarching issue to be determined is whether the Trust has established that HSS has no defence to a claim for a declaration and specific performance requiring provision of an electronic copy of all data belonging to the Trust in its native format without any transformation or modification. This issue requires the following questions to be determined:
(a)What does clause 14.4 of the agreement require?
(b)Does what HSS is prepared to provide comply with clause 14.4?
(c)Is a defence of impossibility arguably available to prevent summary judgment for specific performance being entered?
Summary judgment principles
[13]Rule 12.2(1) of the High Court Rules 2016 provides:
The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
[14] The principles applying to a plaintiff’s application for summary judgment were set out by the Court of Appeal in Krukziener v Hanover Finance Ltd and are well established.2
[15] The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried.3
[16] The court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated.4
[17] The court will not normally resolve material conflicts of evidence or assess the credibility of deponents. However, it need not accept uncritically evidence that is inherently lacking in credibility — for example, where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable.5
2 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26]–[27].
3 Pemberton v Chappell [1987] 1 NZLR 1 (CA) at 3.
4 MacLean v Stewart (1997) 11 PRNZ 66 (CA).
5 Eng Mee Yong v Letchumanan [1980] AC 331 (PC) at 341.
[18] In the end, the court’s assessment of the evidence is a matter of judgment. The court may take a robust and realistic approach where the facts warrant it.6
[19] A defendant is under an obligation to lay a proper foundation for their defence in the affidavits filed in support of the notice of opposition.7
[20] I accept, as the Trust submits, that even where there is conflicting evidence on factual matters, the Court may grant summary judgment where it is satisfied that resolution of the factual matters in dispute is not necessary to provide the Court with the contextual background necessary to resolve the claim, relying on Jowada Holdings Ltd v Cullen Investments Ltd.8
What does clause 14.4 of the EULA require?
[21] The agreement entered into in June 2021 between the Trust and HSS is an End User Licence Agreement (EULA) under which HSS granted the Trust a limited right to access and use indiciTM as “Licensee”.
[22]Clause 14 of the EULA provides for termination and at 14.4 records:
14.4 Termination Assistance
Within thirty (30) days of the expiration or termination of this Agreement, or upon the Licensee's request at any time, HSS will, subject to payment by the Licensee of HSS charges at its then standard rates, continue to provide electronic access to Licensee Information and/or promptly provide an electronic copy of all Licensee Information to the Licensee. Concurrently with the expiration or any termination of this Agreement, HSS will provide such termination assistance as detailed in an exit management plan (including associated charges) to be agreed, in writing, between the Parties. The provision of Licensee Information by HSS will be subject to payment by the Licensee of HSS charges for effort expended by HSS in providing the licensee Information, such charges to be calculated according to the then-prevailing SS standard rates.
[23] The issue for determination is what the phrase in italics requires: “promptly provide an electronic copy of all Licensee Information to the Licensee”.
6 Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).
7 Middleditch v New Zealand Hotel Investments Ltd (1992) 5 PRNZ 392 (CA) at 394.
8 Jowada Holdings Ltd v Cullen Investments Ltd CA248/02, 5 June 2003 at [28]-[29].
[24] There is no dispute between the parties as to the principles of contractual interpretation.
Contractual interpretation
[25]It is settled that the process is objective with the aim being to:9
[ascertain] the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
[26] The above reflects the fact that “contractual language, like all language, must be interpreted within its overall context, broadly viewed.”10 Factual matrix evidence is relevant (and sometimes critical) to contractual interpretation and so it may not be possible for questions of contractual interpretation to be adequately addressed in a summary judgment context.11
[27] The Court must commence any exercise in contractual interpretation having regard to the plain meaning of the words in the context of the document as a whole — as this accords with the policy reasoning of providing commercial certainty.12
Background
[28] Before considering the words of clause 14.4 themselves I set out the background to what HSS is prepared to provide and some useful discussions in the evidence filed to assist in understanding the dispute.
[29] The original expert evidence for the Trust discussed why a system of data transfer referred to as GP2GP was not adequate. By the time of the hearing, however, this was not the system that was being proposed by HSS. It is accepted by all parties that GP2GP transfer is too laborious and not practical for the transfer of a whole
9 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 (HL) at 912 cited with approval in Firm PI 1 Ltd v Zurich Australian Insurance Ltd [2014] NZSC 147, [2015] 1 NZLR 432 at [60].
10 Firm PI 1 Ltd v Zurich Australian Insurance Ltd, above n 9, at [61].
11 Ferrer-Aza v NZONE Race Management Ltd [2016] NZHC 885 at [44].
12 Bathurst Resources Ltd v L&M Coal Holdings Ltd [2021] NZSC 85; [2021] 1 NZLR 696 at [46].
practice. However, HSS’s evidence is that this was offered as a no extra cost solution but that HSS also offered from the beginning to explore an alternative agreed basis.
[30] Mr Butcher, the chief executive of Pinnacle Incorporated and its associated group of entities which includes HSS, annexed to his affidavit a copy of the exit management plan (EMP) which sets out the format in which HSS is prepared to provide HSS’s information (March 2024 EMP). Broadly speaking, the March 2024 EMP proposes providing the data in pipe delimited text format with certain data provided instead in either its original format or as excel files or screenshots to assist in recreating a database. The March 2024 EMP proposes a process whereby the Trust reviews the Initial Data Set provided and notifies HSS in writing if there is insufficient, incomplete or inaccurate information or data. During this phase HSS is to continue providing support, updated data and access to indiciTM to assist in verifying the data for the periods defined in the EMP.
[31] The Trust rejected the data transfer as proposed in the March 2024 EMP, recording that it was not in accordance with either the industry or the contractual standard because it did not capture all of the data required by clause 14.4 of the EULA. In its response, the Trust stated that under the EMP transformed files as well as spreadsheets and screenshots were to be provided and that is different from transferring the underlying data itself as the Trust said clause 14.4 requires. The Trust’s lawyers said providing anything less than a clone presented unacceptable risk.
[32] An expert for HSS, Dr Michael Rillstone, explains in his evidence the difference between data and the database and says when talking about “cloning” or “copying”, the terms can ambiguously apply to either duplicating the data or replicating the database system including its structure and the data within. Dr Rillstone explains:
19.Due to the nature of health data, the data to be transferred will likely be a mix of relatively unstructured records, such as images, PDF documents, scanned handwritten records, financial records, as well as structured core patient health care information. As a consequence, migrating data to a new system is often complex and requires a detailed agreed plan between vendors and practices. The draft exit management plan provided in the End User Licensing Agreement between the Trust and HSS [JB-2] is an example of such an arrangement.
20.Most data transfer methods follow a sequence of six key steps. The data being transferred is:
(a)Step 1: defined,
(b)Step 2: mapped,
(c)Step 3: extracted,
(d)Step 4: validated and transformed where required,
(e)Step 5: loaded using the appropriate structure and format for the new system, and
(f)Step 6: tested to ensure a successful transfer to the new system.
21.It is worth noting that step 3 (extracting the data) does have multiple options that vary in approach and complexity, with each approach having its pros and cons. In my opinion, this is the difference between the competing methods of data transfer put forward by each of the Trust and HSS in this proceeding.
[33] Dr Rillstone’s evidence is that risks still attach to providing a clone as well as data extracted from a database and transformed into an appropriate format for the new system. I record that one of the witnesses for the Trust, Geoffrey Sayer, the Chief Executive officer of Medtech, questions Dr Rillstone’s expertise as to how PMS providers to general practices approach data transfer given his roles have involved hospitals rather than general practices. I refer to Dr Rillstone’s explanation as Ms Patterson in her affidavit in reply for the Trust agrees with Dr Rillstone’s distinction between data and database. Ms Patterson goes on to say however:
What the Trust is asking for, and what Medtech requires in order to transfer the Trust’s data into our own PMS, is a clone of the data in its original native database format. In other words, the Trust’s data would come to us in the structure it sits within the indici database, so that we can see relationships between the data and its organisational framework. That is how clones are commonly provided as between PMS providers.
(italics in original)
[34] Ms Patterson points to the risks of anything but a clone and says PMS vendors receive clones of databases from practices so that the data is received in a structured format within the database and can be processed using specifically built data import tools which are the responsibility of the new vendor to produce relevant to their system.
[35] However, HSS has filed an affidavit from Dr Ahmad Javad, the owner of Valentia, who deposes that Valentia has never provided a clone of its data. On this basis, HSS submits Ms Patterson cannot know how a clone will be able to be managed by Medtech in any event.
[36] One of the experts for the Trust, Dr Andrew Bond, disagrees with Dr Javad’s evidence that providing a clone would be very challenging saying:
(a)There seems to be some mixing of the concepts of cloning a "database" and cloning "data".
(b)While cloning the database might not be easily achieved (given the possibility of the receiving system not understanding that particular database representation), cloning the data is another issue.
(c)In a PMS system, data is organised into multiple related tables, each for a specific purpose and optimised for efficient use, through a process known as data normalisation. The data is organised in a specific way, to ensure that the records are accurate and consistent.
(d)The Trust is asking HSS to extract the underlying database tables, along with definitions of the table attributes. This ought not to be practically challenging.
[37] In terms of an industry standard, Dr Bond deposes in response to Dr Javad’s evidence that there is currently no industry standard:
…While it is true that there is not one health data standard for transfer of data between PMSs, there are many health and IT standards that could and should be adopted for the transfer purpose required where a health care provider is switching PMS providers, for example IETF RFC4180 Common Format and MIME Type for Comma-Separated Values (CSV) Files (RFC4180).
[38] Furthermore, Dr Bond agrees with the evidence of Dr Javad that there are some technological and architectural differences between cloud based and traditional legacy PMS systems. Doctor Bond, however, says “that these should not prevent transfer of data in its close to native form” (my emphasis).
[39]Doctor Bond goes on to say however:
23. I do not agree with Mr Javad that these differences mean that established practices for data migration among PMS vendors cannot be directly applied or translated to a cloud-based system or that a clone of data is not a realistic option for data migration from a cloud-based system to a legacy PMS.
[40]Dr Bond explains:
27. As data is transferred between organisations or clinical system providers, there is huge opportunity for accuracy to be lost and mappings / interpretations to become disconnected from the original source. To maximise retention of accuracy and completeness, data should be provided in as close to the original context as possible. Typically, this is by reproducing the same database table structure with well-defined attribute meanings. Any pre- migration mapping or de-normalisation of the data will make the data transfer less accurate and less complete from the very start.
[41] In further evidence filed on behalf of the Trust following the hearing, Dr Bond addresses why the format proposed by HSS, pipe-delimited text file format (with some exceptions), would not provide all of the Trust’s data explaining:
When data is put into a pipe-delimited text file, the data is "flattened" into a series of rows and columns. An export of a database into a series of "flattened" text files must drop the additional data type, validation, accuracy constraints, indexing, and relationship information in what is referred to as a "lossful" (as opposed to a "lossless") transformation. The original structure and relationships between different pieces of information are lost or simplified in order to represent them as plain text.
In order to reconstruct the data into a form equivalent to the original database, these other qualities must be recreated. To reconstruct the transformed data with the same accuracy, intent, and relationships as the original database, you must know what that original database structure was and the rules that it enforced. Without this additional data, you are left with a collection of data elements without a map to reconstruct the original collection. While one may hope that each table resulted in one "pipedelimited file", this is almost never the case as the "native" database structure intentionally deconstructs data across tables so that they are efficient to store, efficient to modify, and efficiently support the variety of indexed searches that the system must support. This original native form does not equate to a set of files optimised for human consumption.
[42] Ms Patterson, in her affidavit for the Trust filed following the hearing, agrees with Dr Bond saying:
4. I have also read in draft the second affidavit of Dr Andrew Murray Bond. I agree with points that Dr Bond makes. One of those points is that data does not sit in isolation in a PMS system, but rather is connected to a whole lot of other data and those inter-relationships are very important. A piece of data about a particular medication, for example, is linked to a patient identifier, to a patient's Doctor, to notes from that patient's Doctor, to a patient condition or diagnosis, to an allergy warning alert, to a medication profile and many other pieces of data.
5. I have annexed and marked"CP-1", an Entity Relationship (ER) diagram for the patient medication data in the Medtech PMS system. An ER diagram
33507909 is a visual representation of a database schema that illustrates how "entities," such as database tables, objects, or columns, relate to each other within a system. The one I have annexed is a sub-set of the entire Medtech PMS database schema and contains 66 tables. It gives a visual representation of how many tables and relationships there are within the PMS system relating to a patient medication record. The complete and full data schema for the Medtech PMS system contains 491 tables all interconnected in the same manner.
6. By taking a line of data and putting it into a pipe-delimited file you modify the data and lose the connectivity and relationships between the tables. Although the Trust was willing at one point to accept the EMP with this option, this was always a compromise that the Trust and Medtech were unhappy with, but we were told by HSS that they could not practically provide a copy of the data in its native format. The Trust was on the verge of accepting the EMP compromise, without prejudice to the fact that the correct way to return the data is a copy in native format without transformation or modification so that these relationships can be seen. In any event, the EMP was never agreed. Medtech and the Trust now understand that there is no practical obstacle to a complete unmodified copy being provided, it is just that Valentia will not apparently do it.
[43] The question for the Court is not however whether it will be possible to provide a clone or the data in its native format without transformation or modification as the plaintiff now seeks. HSS and Valentia do not resist summary judgment on that basis. The question is what clause 14.4 of the EULA requires HSS to provide. The interpretation of clause 14.4 may be informed by what it is possible to provide but the question of possibility will not determine interpretation on its own.
Interpretation of clause 14.4
[44] Considering the words of clause 14.4 themselves, HSS is required to provide “an electronic copy of all Licensee Information.” Licensee Information is defined in clause 1 of the EULA as:
information that the Licensee or the Workforce input or upload to indici™, including Licensee Personal Information and Patient Information.
[45] As referred to above, the Licensee is the Trust. Workforce is defined as employees, contractors, partners, associates, trainees and other persons whose conduct in the performance of work for the Trust is under the control of the Trust, whether or not they are paid by them.
[46] The first part of the definition refers therefore to information that the Trust or those working under its control “input or upload to indiciTM”.
[47] The definition then refers to “Licensee Information” as including “Licensee Personal Information” and “Personal Information”. “Licensee Personal Information” is defined as meaning “Personal Information that the Licensee or the Workforce enter or upload into indici™ about the Workforce and/or the patient” with Personal Information defined as:
…information that includes an individual’s name, contact information, government identifiers, or includes identifiers that could reasonably be anticipated to identify an individual personally by an anticipated recipient.
[48]Patient Information is defined as:
… Health Information about a patient of the Licensee stored in indici™ including that the Licensee or the Workforce input or upload to indici™, or receive from (i) Patients of the Licensee; (ii) Authorised Users; or (iii) agreed third parties, all via the Services.
[49]And Health Information is defined:
…as any identifiable information about an individual patient's health or about health services provided to an individual patient irrespective of how that information is stored.
[50] One issue that arises in respect of the meaning of “Licensee Information” is whether it only includes information “input or uploaded to indici™”, as HSS submits it does, or whether it includes all information available on indici™, as the Trust submits. Although the definition of Licensee Information refers expressly to information input or uploaded, it is defined to include “Patient Information”, the definition of which appears to include Health Information that is “stored in indici™”. There may be an argument therefore that Licensee Information is wider than just information input or uploaded to indici™ so as perhaps to include information that arises through relationships between the data that appear after the information is input or uploaded.
[51] However Patient Information still only includes data about a patient held in indici™ and so it arguably does not include indici™ data itself. This is especially the
case given the apparent protection of the indici™ software provided in the EULA, as evidenced by the preamble and the early clauses.
[52]After setting out the parties, the preamble to the EULA records:
This Agreement relates to the indici™ Practice Management System (“indici™”) made available by HSS to the Licensee as part of the Services for the purposes of providing services to patients.
indici™ was developed and is owned by [Valentia], which has granted HSS the right to sub-licence health providers to use indici™ in their practices on agreed terms.
HSS does not own or hold Health Information and/or Patient Information stored in indici™. All data is stored and backed up to the appropriate standards on servers controlled and owned by [Valentia].
[53]“Services” are defined in clause 1.1 of the EULA as:
Services means the electronic health record services (as they relate to patients and treatment provided), including electronic medical record services, relevant Patient Portal services, practice management services, patient administration services, claim management services and other operations workflow solutions through indici™, remote support via Helpdesk and other services provided by HSS to the Licensee by way of a managed application service.
[54] The grant of the right to use the Services in clause 2.1 is for a “non-exclusive, personal, non-transferable (except as expressly permitted in clause 26.1), limited right to access and use the Services and a non-exclusive, personal, non-transferable, limited licence to use any computer software or data furnished by HSS” for access etcetera to the Services for the permitted uses specified in the Registration Form during the Term, subject to the Licensee’s full compliance with the terms and conditions set forth in the EULA.
[55] Those terms and conditions include at clause 2.2 restrictions on the Trust, including that they shall not:
…
(c)copy, reverse engineer, decompile or disassemble the Services. in whole or in part, or otherwise attempt to discover the source code to the software (including indici™) used by the Services;
(d)modify, combine, integrate, render interoperable, or otherwise access for purposes of automating data conversion or transfer, the Services or associated software (including indici™) with any other software or services not provided or approved by HSS;
…
(f) obtain any Intellectual Property Rights in the Services and/or indici™ except for the limited rights expressly granted by this Agreement.
[56] Clause 8 of the EULA provides for intellectual property rights and records at clause 8.4 that the Trust shall have no ownership and/or Intellectual Property Rights, howsoever arising, in the Services and/or indici™.
[57] “Intellectual Property Rights” are defined in clause 1 of the EULA broadly as meaning:
…any and all rights and interests in any intellectual property or like rights. It includes but is not limited to patents, rights to inventions, copyright and related rights, moral rights, trade marks, business names and domain names, rights in get-up, goodwill and the right to sue for passing off, rights in designs, rights in computer software, database rights, rights to use, and protect the confidentiality of, Confidential Information (including know-how) and all other intellectual property rights, in each case whether registered or unregistered and including all applications and rights to apply for and be granted, renewals or extensions of, and rights to claim priority from, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world.
[58] There was very little discussion or submission on the contractual provisions in the EULA other than clause 14.4 so I do not discuss these further. However, these clauses emphasise why it is important that the interpretation of clause 14.4 is undertaken in its overall context.
[59] This is particularly the case where counsel for the Trust accepted that what it is asking for, the data in its native format without transformation or modification, may include proprietary information of Valentia (adding that the Trust and MedTech could provide undertakings as had already been proposed).
Jowada Holdings Ltd v Cullen Investments Ltd
[60] The Trust relies on Jowada Holdings Ltd v Cullen Investments Ltd as well as a number of other cases as examples of similar disputes as to the interpretation of a
contract where the Court was prepared to enter summary judgment.13 It is useful to consider Jowada as it makes clear when a contract can be interpreted in the summary judgment context.
[61] The applicant in Jowada alleged that the agreement in issue bound the first respondent to pay an advisory fee. The application was opposed on the basis that there was no liability under the contract to make any payment as the letter which formed the contract and provided for the fee applied only to an original amalgamation proposal. In the High Court, Master Faire declined summary judgment on the basis that an examination of the background material available at the time of the contract was necessary to ascertain the view a reasonable person would take as to whether the contract covered a transaction such as that entered into.
[62] The Court of Appeal allowed the appeal as it found that the contextual evidence which the respondent said was available was incapable of supporting the narrow view for which the respondents contended given the terms of the contract and the background circumstances that were apparent from the evidence. After setting out the letter in full, the Court of Appeal concluded:14
The factual matters relied on by the respondents do not indicate that the 29 March agreement is reasonably and objectively capable of having a meaning that is more narrow than the ordinary meaning of the document read as a whole. The Court would not be assisted by a trial of the questions of fact in dispute. We are satisfied that it can only mean that the parties agreed that the fee would be payable if a takeover of Bendon by the first respondent proceeded in any manner which resulted in an acquisition of more than 51% of the shares. The first respondent bound itself to pay the stipulated fee if a takeover transaction proceeded whether in the specific form the appellant had devised or otherwise. We accordingly proceed to the second issue.
[63] If the same approach is taken here, considering the terms of the EULA itself, I do not consider the plaintiff can establish, without further examination of the questions of fact in dispute, that clause 14.4 requires HSS to provide an electronic copy of all of the Trust’s information in its native format without any transformation or modification.
13 Jowada Holdings Ltd v Cullen Investments Ltd, above n 8.
14 At [42].
[64] Starting with the words of clause 14.4, the interpretation that the Trust submits is plain, a copy in its native format without transformation or modification, requires additional words to be read in to supplement “electronic copy”. The Trust submits that can be done without relying on the expert evidence as to what a copy is understood to be. I do not agree. If the expert evidence had clearly supported the Trust’s interpretation, then summary judgment might be able to be considered but it does not.
[65] The expert evidence filed makes it clear that there is nothing straight forward about the data transfer and that there is a dispute between the parties as to whether there is an industry standard. This dispute cannot be resolved in the Trust’s favour in the context of this summary judgment.
[66] In any event, even if there were an industry standard, the wording of clause 14.4 would still have to be carefully considered in its overall context and that is also not possible in the context of this summary judgment application.
Subsequent conduct
[67] HSS relies on the fact that following notice of termination, the Trust agreed an EMP pursuant to which HSS was to provide the data in pipe delimited format in combination with other formats, submitting in reliance on the Supreme Court’s decision in Bathurst Resources Ltd v L&M Coal Holdings Limited that this evidence of subsequent conduct is relevant to interpretation of the contract.15
[68] The Trust submits that this evidence does not assist as, at that stage, the Trust understood that a copy in its native format could not be provided and that this represented a compromised solution.
[69] In Bathurst, the Court commented that conduct that occurs post dispute is very unlikely to be admissible.16 I do not rely on this evidence in reaching a view in this summary judgment application because I accept it was the position reached after the dispute had arisen and following mediation and so may represent a compromise rather than evidence of the Trust’s understanding of the meaning of the contract.
15 Bathurst Resources Ltd v L&M Coal Holdings Ltd, above n 12, at [89].
16 At [90].
Conclusion
[70] As is clear from the above, interpretation of clause 14.4 is not in my view possible without a full hearing to consider the overall context in which clause 14.4 of the EULA was entered into. This needs to include a consideration of the terms surrounding clause 14.4 to ascertain the meaning clause 14.4 would have conveyed to a reasonable person having all the background knowledge available to the parties in the situation they were in at the time, as is required to properly interpret the contract.
[71] Given the view I have reached as to whether the requirements of clause 14.4 can be determined, I do not go on to discuss whether what HSS is prepared to provide complies with clause 14.4 or whether a defence of impossibility is available. Neither of these issues are able to be discussed in advance of settling on the interpretation of what clause 14.4 requires. These will both therefore be questions for the full trial.
Result
[72] The application by the trustee of the Te Whare Hauora O Raungaiti Trust for summary judgment of its claim against Health Support Systems Limited is declined.
Costs
[73] The usual position in respect of plaintiff’s summary judgment is for costs to be reserved until determination of the substantive proceedings for the reasons set out in NZI v Philpott.17
[74] I did not hear from the parties on costs, however, and so I ask the parties to confer and only if the respondent considers costs ought to be fixed and payable now for memoranda to be filed, on behalf of the respondent by 17 April 2025 and by the applicant by 2 May 2025.
17 NZI Bank v Philpott [1990] 2 NZLR 403 (CA).
Further directions
[75] In terms of progressing the proceeding, the defendant has already filed a statement of defence. However, in some of the correspondence the plaintiff indicates it intends to amend its statement of claim. The parties are therefore to file a joint memorandum by 6 May 2025 addressing the matters required by r 7.3 of the High Court Rules 2016 including whether amended pleadings are to be filed. Further directions will then be made on the papers unless a conference is required.
Associate Judge Sussock
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