SCC (NZ) Limited v Samsung Electronics New Zealand Limited
[2017] NZHC 2094
•30 August 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2014-404-002552 [2017] NZHC 2094
BETWEEN SCC (NZ) LIMITED
Plaintiff
AND
SAMSUNG ELECTRONICS NEW ZEALAND LIMITED
Defendant
Hearing: 6 March 2017 Appearances
R M Dillon/T A Hwang for the Plaintiff
M Kersey/J Edwards for the DefendantJudgment:
30 August 2017
JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN
This judgment was delivered by me on
30.08.17 at 3:30pm, pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
SCC (NZ) LIMITED v SAMSUNG ELECTRONICS NEW ZEALAND LIMITED [2017] NZHC 2094 [30
August 2017]
[1] The issue before the court concerns whether the defendant company, (SENZ) has complied with its discovery obligations or whether the court should order that further discovery be provided by SENZ to the plaintiff (SCC).
[2] Tailored discovery and inspection was ordered by the court’s minute dated
15 December 2015. SCC then applied for further and better discovery on 10 July
2016. On 6 March 2017 the court heard that application. The matter was then adjourned because there appeared to be willingness by each party to agree about how issues ought to be addressed and to allow further time to refine relevant processes in that regard.
[3] Since then, the court has received and reviewed a number of affidavits regarding efforts to achieve agreement. Eventually it became clear that no agreement can be reached. Further submissions received identify each party’s position. This judgment determines the outcome of those differences.
Background
[4] The application concerns a number of databases/programmes accessed by
SENZ. These include:
(a) MySingle Portal;
(b) Avaya CMS and AVAYA NICE;
(c) G-CIC and G-SPN;
(d) ERMS; and
(e) NASCA.
[5] Mr Ramsay, an assistant manager of the management of information services branch at SENZ, swore an affidavit on 25 October 2016 which provided a helpful
outline of each of these systems. He provided an updating affidavit on 8 May 2017. The court will briefly outline the characteristics of each of those and how they were accessed/used by SENZ.
MySingle Portal
[6] This is a cloud based storage system which SENZ uses as an intranet. Emails and documents are sent via it and stored on it. As Mr Ramsay deposes, emails and documents sent via the MySingle Portal are deleted every 28 days, due to the amount of information Samsung processes globally.
[7] Mr Ramsay initially stated that backups of these emails are stored by SENZ’s ultimate holding company, Samsung Electronics Co Ltd (Samsung HQ) in South Korea. These were said to be stored along with emails and documents of other worldwide Samsung subsidiaries; naturally, SENZ’s data forms only a small portion of the total amount of data stored.
[8] Since, and following clarification from Samsung HQ, Mr Ramsay stated that once documents are deleted from the MySingle system, they cannot be recovered. Emails are backed up for a limited period of time, but due to the volume it is not possible to search through backups unless search systems are highly tailored and searches are made within a specific time period, such as a specific hour within a certain day.
G-CIC and G-SPN Systems
[9] These systems are portals which SENZ uses to log repair jobs. They have two key component parts: they are an interface through which repair jobs are logged, and an information repository storing information which is entered into each system.
[10] The ERMS system is connected to the G-CIC system; it is a web based interface which allows customers to send emails and enquiries through SENZ’s website to SENZ. When the enquiries relate to a repair job, they enter the G-CIC system. The G-CIC system records each job. SCC uses the G-CIC system.
[11] The G-SPN system is linked to the G-CIC system. SENZ repair agents use it to deal with repair jobs which are dispatched to them. They use it to update and close off jobs they are working on. They can also use it to log repair job requests. These requests are logged with the repair agents by retailers and Samsung phone carriers.
[12] Because both the G-CIC and G- SPN systems relate to repair jobs, they operate on a shared database: SCC, using the G-CIC system, and repair agents, using the G- SPN system, can see what is happening with each other’s systems.
AVAYA CMS and AVAYA NICE systems
[13] The Avaya CMS system is a system for call centre reporting. It provides live statistics for SCC’s calls. It is what SCC used to provide call centre statistics to SENZ. Data is deleted after six months.
[14] The AVAYA NICE system is for call centre recording. It is a database of audio file recordings of phone calls made by SCC.
[15] These are both SENZ databases. They were created by Pyrios, which is a communications technology company.
NASCA
[16] Finally, NASCA is SENZ’s security system. It prevented decryption of a number of documents SENZ provided to SCC.
Recent developments
[17] By an affidavit dated 4 May 2017, Mr Peacocke provided an update on SENZ’s compliance with discovery obligations. He deposed SENZ had since updated its list of discovered documents to include a bulk listing of the G-CIC, G-SPN, ERMS and AVAYA CMS systems. Documents which were previously encrypted due to NASCA were also decrypted.
[18] By affidavit of 8 May 2017, Mr Barbosa of Pyrios provided further information about the AVAYA systems. He confirmed AVAYA CMS data is stored for 13 months, after which it is automatically overwritten by more recent data. Once this has happened, it cannot be retrieved by Pyrios.
By my minute of 12 June 2017 I made a ruling that SENZ had gone as far as it needed to in complying with discovery obligations. However and by further minute dated 16
June 2017 a further opportunity was afforded to the parties to comment on the application. The following reports on the further information received from the parties in the outcome. Only the data held in the G-CIC, G-SPN and ERMS systems remains at issue.
[19] SCC, by counsel’s memorandum dated 30 June 2017, submits SENZ, as part of its discovery obligations, ought to extract from its G-CIC, G-SPN and ERMS databases (the systems) bulk data in accordance with SCC’s search terms. Currently, SENZ has provided SCC with Mr Peacocke’s login information to access the data and search through itself. SCC’s position is:
(a) The bulk data is squarely within SENZ’s discovery obligations, as data under its power, possession and control.
(b) SENZ has the ability to complete bulk extraction “within minutes”.
SCC has provided affidavit evidence which it says supports this assertion.
(c) SENZ has not acted in good faith, first by denying the bulk data was under its possession, then in providing SCC with Mr Peacocke’s login details (which it says are low clearance), and finally by denying it can access the bulk data within minutes.
[20] Mr Yoon of SCC has provided an affidavit dated 30 June 2017 in support of these points.
[21] SENZ contests these claims. It says:
(a) SENZ has never denied the existence of the bulk data, and confirmed its existence via Mr Peacocke’s minute of 4 May 2017.
(b)SCC’s understanding that SENZ can extract the bulk data within minutes is incorrect and based on false assertions, assumptions and misunderstandings.
(c) The creation of new documents stored on the systems falls outside the scope of SENZ’s discovery obligations. While the data which would ultimately form part of the documents SCC seeks is available, the documents are not and must be created.
(d) SENZ has not acted in bad faith.
[22] Mr Ramsay has provided a further affidavit in support of this position, dated
14 July 2017 by which he supports the position adopted by SENZ.
Considerations
[23] There are two questions for resolution:
(a) that about credibility and whether the evidence of Mr Ramsay or Mr Yoon is to be preferred regarding SENZ’s ability to access the bulk data “within minutes”; and
(b)whether the creation of the new documents is part of discovery or inspection.
Credibility
[24] Mr Yoon states in evidence SENZ is capable of accessing and producing documents with the bulk data within minutes, and that SENZ is deliberately avoiding doing so. Mr Ramsay, in reply, has provided an explanation of these matters. He states that Mr Yoon misunderstands the SENZ systems, that the systems have since been updated, and that any documents Mr Yoon has seen were manually produced.
[25] Mr Ramsay’s position is confirmed by two further affidavits of senior colleagues at SENZ.
[26] On balance the court opts to prefer the evidence of Mr Ramsay for while Mr Yoon may have experience with SENZ systems, he has never been employed by SENZ. His understanding of SENZ’s database capabilities is inevitably drawn from less proximate experience.
[27] SCC’s position is that SENZ has persistently acted in bad faith. This view however does not appear to be well supported by the evidence. Also SENZ has provided SCC with an opportunity to inspect its databases, and broadly its position on what data is and is not available has been corroborated, by the affidavit of Mr Barbosa and the correspondence with Samsung HQ. Also, the court considers claims of dishonesty are serious and should be particularised and well-supported by evidence – which is not sufficiently apparent in this case.
[28] For these reasons, the court is prepared to accept the explanation of Mr
Ramsay, and that he has satisfactorily responded to the claims made by Mr Yoon.
Discovery or inspection
[29] Previously by the court’s minute dated 12 June 2016, it was considered the creation of new documents using search terms was a matter beyond SENZ’s discovery obligations. The court’s view was that this was part of SCC’s inspection process of the data discovered by SENZ, and which SENZ provided SCC with access to.
[30] At that time the court summarised the task at issue as follows:
…SCC requested that SENZ undertake extensive searches of the systems and to create a number of new documents and as part of this request SCC required a document be created by searching every ERMS booking number and generating customised reports from it. SCC estimated this would include searching over 10,000 job entries.
[31] It is SCC’s position that because the bulk data is within the power, possession and control of SENZ, SENZ is obliged to produce documents from it in accordance with its search terms. SENZ responds to this as a mischaracterisation of the documents
SCC seeks, because the documents do not currently exist, only the data from which they would be generated.
[32] Standard discovery requires disclosure of documents as follows:
8.7 Standard discovery
Standard discovery requires each party to disclose the documents that are or have been in that party’s control and that are—
(a) documents on which the party relies; or
(b) documents that adversely affect that party’s own case; or (c) documents that adversely affect another party’s case; or (d) documents that support another party’s case.
[33] Because it has not otherwise been pleaded, it is presumed that but for the issue of “discovery or inspection”, the material at issue falls within the tailored discovery categories and would be discoverable.
[34] The question therefore is whether the documents SCC wants generated are a “document” capable of discovery. Rule 1.3 of the High Court Rules 2016 defines “document” broadly, as follows:
document means—
(a) any material, whether or not it is signed or otherwise authenticated, that bears symbols (including words and figures), images, or sounds, or from which such symbols, images, or sounds can be derived, and includes—
(i) a label, marking, or other writing that identifies or describes a thing of which it forms part, or to which it is attached:
(ii) a book, map, plan, graph, or drawing: (iii) a photograph, film, or negative; and
(b) information electronically recorded or stored, and information derived from that information.
(emphasis added)
[35] Crucially, documents means, among other things, information derived from information which is electronically stored.
[36] This definition is expanded upon in Part 3 of Schedule 9 of the High Court
Rules, which contains a Discovery checklist and the listing and exchange protocol:
document has the meaning set out in rule 1.3 of the High Court Rules and includes all ESI
…
electronically stored information (ESI) means any information stored electronically. It includes, for example, email and other electronic communications such as SMS and voicemail, word processed documents and databases, and documents stored on portable devices such as memory sticks and mobile phones. In addition to documents that are readily accessible from computer systems and other electronic devices and media disks, it includes documents that are stored on servers and back-up systems and electronic documents that have been deleted. It also includes metadata and embedded data
(emphasis added)
[37] These definitions are broad in their scope. “Document”, for the purposes of discovery in the High Court Rules, plainly holds a meaning wider than its ordinary meaning. While SENZ may literally be right that the documents SCC seeks must be created from existing data, the definition of “document” includes information derived from information which is electronically stored on servers and back-up systems, such as the bulk data from the G-CIC, G-SPN and ERMS systems. Clearly the definition of “document” is very broad.1
[38] By their memorandum of 14 July 2017, counsel for SENZ suggests by analogy that what SCC seeks is akin to “requiring SENZ to create a new form of spreadsheet listing all emails and details of the emails (such as metadata)”. However, even metadata is at times discoverable. As Part 3 of Schedule 9 provides:
metadata means data about data. In the case of an electronic document, metadata is typically embedded information about the document that is not readily accessible once the native electronic document has been converted into an electronic image or paper document, for example, the date on which the document was last printed or amended. Metadata may be created automatically by a computer system (system metadata) or may be created manually by a user (application metadata). Depending on the circumstances of the case, metadata may be discoverable.
1 Z Energy Ltd v Oceana Gold (New Zealand) Ltd [2013] NZHC 249 at [9]. See also McGechan on
Procedure (online looseleaft ed, Thomson Reuters) at [HR8.7.02(1)].
Ruling
[39] The court considers that the creation of the documents from the systems is properly part of SENZ’s discovery obligations, and not SCC’s inspection, as they are “information derived from [the bulk data in SENZ’s possession].”
[40] Counsel for SENZ have advanced the notion that such an order would be contrary to the High Court Rules. The court disagrees. In its view it appears the Rules are relatively clear that the creation of documents in the manner SCC seeks is a part of a party’s ordinary discovery obligations.
[41] In the circumstances the court directs SCC to review and then provide all details of the further discovery sought.
[42] The court will assume that the only issues thereafter remaining for SENZ would concern the time needed to meet compliance with those further discovery requests.
[43] Counsel are invited to provide written submissions in support of any application for costs. The first of those is to be filed and served:
(a) On behalf of SCC within 10 working days from date of issue of this judgment; and
(b) On behalf of SENZ within 10 working days thereafter, in response.
Associate Judge Christiansen
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