YGP IP Limited v Yellowbook.Com.AU Pty Ltd HC Auckland CIV 2007-404-2839
[2010] NZHC 1283
•28 July 2010
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2007-404-2839
UNDER The Copyright Act 1994, The Fair Trading
Act 1986 and Te Trade Marks Act 2002
BETWEEN YPG IP LIMITED First Plaintiff
ANDYELLOW PAGES GROUP LIMITED Second Plaintiff
ANDYELLOWBOOK.COM.AU PTY LTD First Defendant
ANDDAVID KHOURY Second Defendant
ANDROBERT G COLES Third Defendant
Hearing: 17 May 2010
Appearances: M C Hayes for Plaintiffs
C L Elliott for First and Second Defendants
Judgment: 28 July 2010
JUDGMENT OF COOPER J
ON PLAINTIFFS’ INTERLOCUTORY APPLICATIONS
This judgment was delivered by Justice Cooper on
28 July 2010 at 3.00 p.m., pursuant to r 11.5 of the High Court Rules
Solicitors:
A J Park, PO Box 565, Auckland
Registrar/Deputy Registrar
Date:
Ellis Terry, PO Box 10932, The Terrace, Wellington 6011
Copy to:
Clive Elliott, PO Box 4338, Auckland 1140
YPG IP LIMITED AND ANOR V YELLOWBOOK.COM.AU PTY LTD AND ORS HC AK CIV-2007-404-
2839 28 July 2010
Introduction
[1] The plaintiffs have applied for orders facilitating inspection of documents, for further and better discovery, for further particulars, and that the first defendant’s director, Emmanuel Khoury, provide answers to interrogatories.
[2] In a judgment delivered on 31 May 2010[1] I dealt with interlocutory applications that had been made by the first and second defendants. In the introduction to that judgment I gave a brief summary of the claim at [1] to [4] which can also serve for present purposes:
[1] YPG IP Limited And Anor v Yellowbook.com.au Pty Ltd And Ors HC Auckland CIV-2007-404-
2839, 31 May 2010
[1] The plaintiffs in this proceeding assert intellectual property rights in respect of the business directory known as the Yellow Pages that has been published in a printed form since 1959 and in an electronic form on the internet since 1997. The first plaintiff claims to be the owner of the goodwill and reputation in the name YELLOW PAGES, trade marks for the name YELLOW PAGES and the colour yellow trade mark as used exclusively in relation to business directory services in New Zealand. The first plaintiff maintains that it licenses this claimed intellectual property to the second plaintiff. The second plaintiff claims to be the owner of copyright arising from the creation of the printed and online Yellow Pages directories.
[2] The second plaintiff alleges that the first and second defendants have breached copyright by reproducing the second plaintiff’s “Copyright Works” in a material form, publishing and making available in New Zealand the YELLOW BOOK Directory of New Zealand businesses and/or the YELLOW DUCK Directory of New Zealand businesses. It seeks a declaration that those directories infringe the Copyright Works, injunctions, an order requiring the first and second defendants to deliver up or destroy the defendant’s directories on oath, damages or an account of profits, additional damages under s 121(2) of the Copyright Act 1994, interest and costs.
[3] The Copyright Works are described in paragraph 15.1 of the second amended statement of claim, which states:
The Second Plaintiff’s Copyright Works comprise, inter alia:
(a) an ontology of business classifications used to describe goods or services provided by businesses listed in both the printed and online YELLOW PAGES Directories which are set in a hierarchy;
(b) a list of geographical classifications used to describe the location of businesses listed in the online YELLOW PAGES Directory which is set in a hierarchy; and
(c) a database of business listings, detailing the businesses names and contact details including addresses, telephone numbers and/or email addresses, where the ontology of business classifications and list of geographical classifications have been applied to each individual business listing listed in the online YELLOW PAGES Directory.
[4] Other causes of action are pleaded against the first and second defendants alleging trade mark infringement, and breach of the Fair Trading Act 1986. Similar claims are advanced against the third defendant who has taken no part in the present argument. …
[3] The orders now sought by the plaintiffs all relate to the second plaintiff’s claims of copyright infringement against the first defendant.
[4] Some of the orders sought are able to be made by consent. In relation to the particulars sought and interrogatories, the first defendant’s stance is that it will meet the requests to the best of its ability. The matters that remain in dispute are set out in schedules to this judgment, which I have adopted from Mr Hayes’ submissions. Essentially, the schedules are edited versions of schedules that were attached to the plaintiff’s application, excluding the matters that have been agreed.
Schedule 1 – production for inspection
[5] The plaintiffs seek an order that the first defendant provide for inspection electronic copies of the discovered documents listed in Schedule 1. The order is sought under r 8.34 which provides that a Judge may make any order thought to be appropriate to facilitate the efficient inspection of documents.
[6] If reference is made to the items in Schedule 1 attached to this judgment, documents are identified in each item. In each case the document specifically identified is a physical copy of an electronic document that is in, or must previously have been in the first defendant’s control, that the first defendant has previously been able to print out and make available to the plaintiffs.
[7] Item 1.1 in Schedule 1 refers to a “full and complete copy of document
3.001”. Document 3.001 is an alphabetical list of 33 “geographical regions” in New
Zealand, beginning with Auckland and ending with Whakatane. In respect of this
item, Mr Elliott relied on an affidavit sworn by Mr Emmanuel Khoury on 19 April
2010. He is the first defendant’s managing director. In paragraph 1 of his affidavit he said:
1. In relation to 1.1, Document 3.001 is the geographical regions. This information exists electronically within Document 3.002. The information was originally extracted from Document 3.002. The electronic file of 3.002 was inspected on 5 July 2008 (see exhibit B of E Khoury affidavit of 1
August 2008). The document has therefore been provided to the plaintiffs in electronic form, to the extent that we are able to do so.
[8] Consequently, it was the first defendant’s stance that an electronic copy of the document had already been provided.
[9] The plaintiffs rely on the evidence of Mr Shane Mahoney, a computer forensic expert employed by Price WaterhouseCoopers. In an affidavit sworn on
7 May 2010, Mr Mahoney referred to a comparison he had made of documents 3.001 and 3.002, and expressed his conclusion that document 3.001 had not been generated from document 3.002. He explained his reasoning at paragraphs 47 to 49 of his affidavit as follows:
47. To assist the Court, I have generated two lists of states from discovery document 3.002. They are:
(a)a list of states generated by state name which is annexed to my affidavit and marked SM-23; and
(b) a list of states generated by using the CAT_ and STATE_
fields which is annexed to my affidavit and marked SM-24.
48.A comparison of both lists with discovery document 3.001 shows that:
(a)discovery document 3.001 does not contain the additional state field of Mataura which is found in the lists annexed as SM-23 AND SM-24;
(b)the states New Plymouth and Stewart Island are correctly spelt in discovery document 3.001, but they are incorrectly spelt as New Placeymouth and Streetewart Island in the lists annexed as SM-23 and SM-24; and
(c) there is a field called COUNTRY in discovery document
3.001, and each state has the country reference NZ, but there is no country field in discovery document 3.002. For the
Court’s reference, a full list of all fields in discovery
document 3.002 is annexed and marked SM-25.
49.If, as Emmanuel Khoury claims, discovery document 3.001 was created from discovery document 3.002, then I would expect:
(a)the additional state and spelling errors to be repeated in discovery document 3.001; and
(b) there to be a COUNTRY field in discovery document 3.002.
[10] Document 3.002 was described in the first and second defendants’ affidavit of documents as “Database of last backup-YB Database”. According to Mr Campbell McKenzie, who is another computer forensic expert employed by Price WaterhouseCoopers who has given evidence for the plaintiffs, it was not a full database backup. At paragraphs 15 to 18 of his affidavit of 18 February 2010, Mr McKenzie said:
15.Document 3.002 is described in the first and second defendants’ affidavit of documents as “Database of last backup-YB Database”. I have reviewed the electronic copy of this document and from my review, this document does not appear to be a full database backup.
16.The document contains a data set that includes business listings and various information about each business including name, address, telephone numbers, and email addresses. It appears that business classifications have been applied to each business listing using a numerical code in the first two columns of the list, being the fields
‘CAT_’ and ‘SUB_’. This information appears to have been copied from a separate source into a Microsoft Access 2007 database file.
17.In my view, document 3.002 is more appropriately described as a data set of business listings rather than a copy of the first defendant’s database.
18.A full back up of the database is a complete and accurate point-in- time capture of the database. The list of business listings copied into Microsoft Access and discovered as document 3.002 is not a full back up of the database.
[11] In an affidavit that he swore on 23 February 2010, Emmanuel Khoury did not directly rebut those statements. However, he stated that document 3.002 was the only available database in the defendants’ possession.
[12] I consider that Mr Mahoney’s reasoning on this issue is compelling, and there has not been any effective counter to it in the evidence filed by the defendants. I will order provision for inspection of item 1.1 of Schedule 1 accordingly.
[13] Item 1.2 of Schedule 1 seeks a full and complete electronic copy of document
3.001 in which the numerical code applied to each business listing in document
3.002 is applied to the geographical classifications in document 3.001.
[14] Mr Elliott again relied on Mr Emmanuel Khoury’s affidavit of 19 April 2010. At paragraph 2 of that affidavit, Mr Khoury said:
In relation to 1.2, this document was provided on 5 July 2007. This is provided within Document 3.002 under the “CAT_” field. This contains the geographical number and “STATE_” has the name of the geographical region. For example, when referring to Document 3.001, Auckland has a “CAT_” number of 1 and Christchurch has a “CAT_” of 11. The document has therefore been provided to the plaintiffs in electronic form, to the extent that we are able to do so.
[15] Mr Mahoney accepted that the “CAT_” field contained the numerical code applied to each state and that the “STATE_” field contained the name of each region. However, it was also his evidence that the numerical codes used in the “CAT_” field were not unique to a single state contained in document 3.002. In fact, a number of the numerical codes applied to each state in document 3.002 had been applied to more than one state. Thus, Auckland and Waikato had both been allocated the number “1”, Auckland and Christchurch had both been allocated the number “11”, Christchurch and Dunedin were both allocated “947”, Hawkes Bay and Nelson were both allocated “15”, Bay of Islands and Bay of Plenty were both allocated “29” and Matarua and Southland were allocated “30”.
[16] Further, it was Mr Mahoney’s evidence that a number of states had more than one numerical code applied to them: Auckland had been allocated “1” and “11”; Christchurch had been allocated “11” and “947”; Dunedin had been allocated the numbers “12” and “947”; Hawkes Bay had been allocated the numbers “15” and “34” and Bay of Islands the numbers “2” and “29”.
[17] If Mr Mahoney’s evidence is accepted then, contrary to the assertion made by Mr Khoury in paragraph 2 of his affidavit of 19 April, the electronic document requested by the plaintiffs has not been provided. I intend to order that it be provided or that Mr Khoury explain why it cannot be provided.
[18] The next item in Schedule 1, item 1.6, seeks “a full and complete electronic copy of the file referenced as “ ‘newNZ.xls’ ” in document 3.004. In respect of this item the defendants rely on evidence of both Mr David Khoury and Mr Emmanuel Khoury. The former is the second defendant and describes himself as a “programmer”. In his affidavit of 19 April Mr Emmanuel Khoury stated that the electronic file in question is classified as an “input/output file”. In his affidavit of
16 April 2010 Mr David Khoury said at paragraphs 34-36:
Input/Output and temporary files
34. During the process of collecting raw data, I used Microsoft Excel files. I will refer to them as “output files”.
35. These output files stored data as temporary files. Once data was finalized in a file, all data was transferred and entered into a Microsoft Access file and the output file was then deleted.
36. The reason for the routine deletion of output files was to minimize any risk of confusion of using the same data file twice. Hundreds of output files were created over the period of time when we were collecting data.
[19] Mr Emmanual Khoury stated that the file was both created and deleted at some time between 2005 and 2007.
[20] There is no basis on the evidence to go behind what Mr Emmanuel Khoury has said, which means that it would be pointless to order production of this file.
[21] I mention next item 1.10, which refers to document 3.020. Mr Khoury recorded the first defendants’ opposition to discovery of this document on the basis that it contains commercial and sensitive information about how the first defendant operates, but also on the basis that it is not relevant to the proceeding. Mr Elliott relied on that evidence while noting that Mr Khoury had agreed to provide in printed form four pages for each month of the log files contained in the document. There is no basis on which I can reject Mr Khoury’s assertion as to relevance and this part of the application cannot succeed.
[22] Item 1.14 requests a full and complete electronic copy of exhibit “W” annexed to Mr Khoury’s affidavit of 1 August 2008. Exhibit “W” was part of the explanation that Mr Khoury gave in that affidavit as to how the defendants had
collected data for its own database. Annexure “V” to the affidavit consisted of four screen shots of the data when it was sorted in the form of an Excel spreadsheet. At paragraph 29 of his affidavit, Mr Khoury said:
As can be seen in Excel spreadsheet, it picked up within the Meta tags the Title, however, description and keywords are missing. Attached as Annexure W is a query we[sic] that can be run to collect both Meta keywords and description. Once that is created, we have to create another query to merge the new data of Meta keywords and description into 1 spreadsheet. Just in this scenario, we can see that those two websites do not contain Meta keywords or description.
[23] In his affidavit of 19 April, Mr Khoury further stated that the script in exhibit “W” was the same as that in document 3.004, except for two differences that he mentioned. He said that the file in exhibit “W” was in his possession until around July 2008, but is no longer. He explained:
14.In relation to 1.14, the script found in Exhibit W is the same script as Document 3.004, except in Exhibit W, the “dim iNumberOfRows” and “dimsX1sName” are different. The file in Exhibit W was in my possession in around July 2008. It does not exist anymore because I had computer laptop issue regarding overheating which resulted in the motherboard being replaced in or about mid-2009. When I received the computer back, I formatted the hard drive back to the manufacturer’s settings. This means that all programs and documents were deleted and brought back to the same settings when the laptop was first purchased. It was given to my younger brother in or about mid-2009 and he has used it for personal use including his school work. I am also aware that he has had to format the hard drive because of difficulties he has had with the laptop.
[24] Mr Hayes complained on the basis of this and other evidence that the first defendant had not taken appropriate steps to preserve relevant data stored on its computer hardware after the commencement of proceedings on 17 May 2007. However, there is no basis on the evidence as it stands on which I could grant the plaintiffs’ application in respect of this item.
[25] In addition to these items that were in dispute, Schedule 1 of the plaintiffs’ application contained various other items that the defendants have agreed to provide. Those items (which have not been reproduced in the schedule attached) were numbered 1.5, 1.7, 1.11 and 1.16. I will order provision of electronic copies of those documents accordingly.
Schedule 2 – further and better discovery
[26] In this schedule, the plaintiffs list documents that they consider must exist or must previously have existed, but have not been discovered to date. In his submissions, Mr Hayes outlined a number of concerns arising out of differences between the parties as to the existence of relevant documents, based on the evidence of Mr McKenzie and Mr Mahoney.
[27] The plaintiffs focus in particular on document 3.002. They are of the opinion that over 130,000 business listings have not been discovered. In an e-mail sent by Mr Emmanuel Khoury to Yahoo! On 26 March 2007, Mr Khoury claimed that there were 276,034 unique listings in the YELLOWBOOK Directory. According to Mr David Khoury, he effectively inflated the figures in the directory for the purposes of negotiations that were underway with Yahoo!. At paragraphs 18 and 19 of his affidavit of 16 April 2010, he said:
18. In February 2007, I met someone from yahoo in Sydney. I told him about our directories in both Australia and New Zealand and he was interested in discussing a potential partnership or a buyout at that time. That is why Emmanuel went to Sydney in March 2007. Around the time when I met the representative from Yahoo, I wanted to make the directories look more attractive financially to the first defendant so I increased the amount of listings in the database. This will be explained below.
19. In or around February, I took the existing database of listings and more than doubled the amount of listings to just over 276,000 total listings. In strict terms, it had fewer than 130,000 listing[sic] during the period of February 2007. All duplicated listings were transferred into the new geographical location I had created – “Other Locations”.
[28] He attached printouts showing that there were over 137,000 entries in the field “Other Locations” in early March 2007. It was this that had resulted in the total of listings climbing to 276,016. He then explained:
21. As soon as YPG contacted us on 29 March 2007 alleging copyright infringement, the first thing that was discussed between Emmanuel and I was our existing negotiations with Yahoo. We came to the view that Yahoo would not be interested at all when YPG were alleging copyright infringement so I deleted the listings appearing in the geographical region, “Other Locations”. Looking at the Way Back Machine, this appears to have occurred from April 2007.
[29] It was his evidence that subsequently, in April 2007, mass listings had been deleted from fields other than “Other Locations”, so as to reduce their number to
69,468, giving a total number of listings of 199,893.
[30] Mr Khoury’s evidence also drew a distinction between total listings and unique listings. He gave his opinion that Mr Emmanuel Khoury must have written to Yahoo! referring to the total number of business listings entered into the database at the time. Mr Mahoney, in his affidavit of 7 May 2010 set out his view that the relevant data field incrementally recorded the number of entries added to the database; it increased when more entries are added but it did not decrease when an entry was subsequently deleted.
[31] Mr Mahoney said he had reviewed two printouts from the YELLOWBOOK Directory discovered as documents 12.0033 and 12.0041, dated respectively 20 and
24 April 2007. From his analysis of these documents, he concluded that the numbers appearing in respect of the state field “Auckland” were in fact the number of “unique” business listings appearing in the YELLOWBOOK Directory, not the “complete” listings as asserted by Mr David Khoury.
[32] Mr Mahoney also gave evidence of a comparison between printouts for the state “Auckland” from the YELLOWBOOK Directory dated 16 March, 24 April and
10 May 2007 that were attached to evidence given by Ms Miller (the second plaintiffs’ Content Manager), in her affidavit dated 17 May 2007. As at 16 March, the figure given beside “Auckland” was 65,030. On 24 April 2007, the lesser figure of 65,019 was given. However, on 10 May, the number had increased to 70,093. He concluded that given the pattern of decrease and increase, the numbers quoted were likely to be the number of “unique” business listings appearing in the directory, not the number of “complete” listings.
[33] Mr Mahoney also rebutted Mr David Khoury’s evidence (paragraph 19 of the affidavit of 16 April 2010, quoted above) that the directory had fewer than 130,000 listings during the period of February 2007. Mr Mahoney’s evidence in his affidavit of 7 May was that, according to document 3.002, as at 1 February 2007 there were
136,485 business listings, by 28 February 2007 the number had increased to 138,960 and there had been increases on every day between 14 June 2005 and 17 May 2007.
[34] Mr Mahoney countered Mr David Khoury’s evidence that he had transferred duplicate listings into the new geographical location which he created and called “other locations”. Contrary to Mr Khoury’s claim that he had created it in March
2007, it was Mr Mahoney’s evidence based on printouts from the YELLOWBOOK Directory in 2006 and 2007, that the state “other locations” was present in the directory, from at least 3 July 2006, Further, and contrary to Mr Khoury’s evidence that the listings in “other locations” had been deleted in April 2007, Mr Mahoney referred to evidence that the “other locations” state had continued in the directory to
10 May 2007. Notwithstanding that, “other locations” did not exist in discovery document 3.002, allegedly a backup of the first defendant’s database from 17 May
2007. Nor did it exist in a printout, dated 3 June 2007, attached to Mr David Khoury’s affidavit of 5 June. Mr Mahoney made other criticisms of Mr David Khoury’s calculations, and overall his evidence raises a significant issue as to the correctness of the first defendant’s claim that the number appearing by the “states” do not represent the number of unique listings appearing in the YELLOWBOOK Directory.
[35] The plaintiffs also complain that the first defendant has not identified or discovered a copy of the business classifications used in the YELLOWBOOK Directory as at 17 May 2007, when the proceeding was commenced and also allegedly failed to identify or discover a copy of the geographical classifications used in the Directory as at that date.
[36] Against that background I turn now to the specific items in Schedule 2, beginning with item 2.5. Relying on the evidence of Mr Emmanuel Khoury, Mr Elliott submitted that the documents sought did not exist. Mr Khoury, in circumstances that he explained in his affidavit of 23 February 2010, claimed to have deleted the relevant database by accident in 2007. This was allegedly in response to the plaintiffs’ requests for the website run by the first defendant to be taken off line. He had intended to delete the domain name of the website, but the methodology he used resulted in deletion of the entire database from the server. In the result, the only
back-up database in the possession, power and control of the defendants was that provided as document 3.002.
[37] Notwithstanding the concerns raised by the plaintiffs, there is no proper basis on which I can order further and better discovery in respect of item 2.5, having regard to Mr Khoury’s evidence.
[38] In relation to item 2.6, the defendants say that the requested information has been provided, and exists within document 3.002 under the “CAT_ field in the database. At paragraph 22 of his affidavit of 19 April 2010, Mr Emmanuel Khoury said:
In relation to 2.6, this information has been provided. Document 3.002 contains a reference to a geographical classification in the “CAT_”. There are 33 “states” (regions) in Document 3.001 and 3.002. As “CAT_” is the references number, “STATE_” is the actual name of the geographical region. For example, when referring to “CAT_” 1, the “STATE_” value is Auckland.
[39] However, the plaintiffs rely here on the matters summarised at [15] – [17] above, in relation to item 1.2 of Schedule 1. Having regard to the way I intend to resolve that part of the plaintiff’s application, I consider it will be appropriate in the case of item 2.6 as well to order that the requested documents be discovered or Mr Khoury must swear an affidavit stating why that cannot occur.
[40] In relation to item 2.18, Mr Khoury stated in his affidavit of 19 April 2010 that the requested documents would be discovered. Mr Elliott’s written submission simply stated that “invoices will be discovered”. The issue was not focused on at the hearing. I will order that the documents sought in item 2.18 be provided.
[41] As to item 2.19, Mr Khoury stated at paragraph 33 of his 19 April 2010 affidavit that he would have to make inquiries to “OZ Servers”. Mr Elliott said that reasonable inquiries had been made, but if required, further inquiries will be undertaken. Mr Khoury’s evidence and Mr Elliott’s submissions were the same in relation to item 2.20. I propose to order that these items be discovered. If they cannot be, Mr Khoury should explain why that is the case.
[42] In addition to the disputed matters, there were some items in Schedule 2 to the plaintiffs’ application that the first defendant agreed to provide. As with the agreed items in Schedule 1, these items have been omitted from the Schedule attached to this judgment but, as agreed, I will order discovery of items 2.20, 2.36 and 2.37.
Schedule 3
[43] The order sought in relation to Schedule 3 was amended at the hearing. As amended, the relevant paragraph of the application, which is paragraph C, seeks an order:
C. That, within 21 days, the first defendant makes all the computer hardware identified in Schedules 2 and 3 available to a qualified independent Forensic Computer Expert to be agreed to by the parties, for forensic copies to be made of the data stored on that hardware, under the supervision of the plaintiffs’ forensic services provider, PwC, and the first defendant’s expert, Nathan Ward.
[44] There was originally an item in Schedule 2 equivalent to what is now sought in Schedule 3.
[45] The plaintiffs submit that forensic copying of the first defendant’s computer hardware is necessary to resolve the issues raised in the affidavits of Messrs McKenzie and Mahoney calling into question explanations given by the Khourys for why they have been unable to produce documents requested by the plaintiffs. The relevant issues have already been canvassed in the discussion above in respect of items in Schedule 1 and Schedule 2. Various explanations have been proffered by the first and second defendants as to why the requested electronic documents cannot be provided, while the plaintiffs’ experts have raised concerns about the legitimacy of those explanations.
[46] Mr Elliott resisted this part of the application on a number of grounds. First, he submitted that the defendants are not in possession, power or control of any computers or servers relating to data previously stored that are relevant to the litigation. In advancing that submission he referred to evidence in the affidavit of
Mr Emmanual Khoury, sworn on 23 February 2010 that the first defendant often upgraded its hardware because of the speed with which computer components become outdated, as well as evidence by Mr David Khoury at paragraph 8 of his affidavit of 16 April 2010:
In regards to paragraph 20 of the Mahoney affidavit, the servers, computers and hardware are no longer in the first and second defendant’s possession, power or control. The reason is that the company always acquires new computers and hardware for the line of work we do and throws all outdated computers and hardware. We regularly upgrade our servers for the purpose of having the latest technology. In paragraphs 8 to 13 of my affidavit of 26
March 2010, I attempted to get either an existing backup or the actual hard drive used in 2007 from our previous server company, Oz Servers.
Unfortunately, Oz Servers clearly stated to me that the hard drive does not
exist.
I infer that the word “out” has been omitted in line 4. What Mr Khoury said in paragraph 8 was responding to evidence given at paragraph 20 of Mr Mahoney’s affidavit of 23 March 2010. Mr Mahoney had stated that although there was evidence from Mr Emmanuel Khoury that the first defendant upgraded its computers at least once a year, he had not said that the computers or computer hardware previously in use were no longer in the first defendant’s possession, power or control, or that the hardware had been lost or destroyed.
[47] The defendants also relied on evidence from Mr Nathan Ward, an information technology consultant who swore an affidavit on 19 April 2010. He said that based on his experience the long-term archival of temporary data was considered by many organisations to be wasteful and unnecessary. Further, it is common practice for companies to regularly replace computers which are often leased or upgraded to meet new demands.
[48] Mr Elliott next noted that the possibility of obtaining forensic copies from the defendants’ computers had been raised in 2007 shortly after commencement of the proceeding. He pointed out that in a memorandum to the Court dated 12 June 2007 the plaintiffs had adopted the stance that cost estimates they had received meant inspection of the defendants’ computers and server would be prohibitively expensive. Mr Elliott submitted that it was unreasonable to require the defendants to undergo such a process now when that step had not previously been taken.
[49] He submitted further that the Khourys had gone into sufficient detail to explain the major issue raised concerning the number of business listings discovered. He contended that Mr David Khoury’s explanation was plausible and that the situation was not one which could or should be resolved on the papers. He submitted that Mr Mahoney had essentially misunderstood the evidence given by the Khourys about ID numbers, “complete listings” and “unique listings” and that the true position was as set out in Mr Emmanual Khoury’s affidavit of 23 February 2010 at paragraph 20. It should be for the trial Judge to assess the evidence and make appropriate factual findings; it would be inappropriate to endeavour to resolve heavily contested factual issues at the interlocutory stage.
[50] Mr Elliott also emphasised the highly invasive nature of forensic copying, submitting that it would be unjustified where it was unlikely to discover anything useful on existing and recently acquired computers. He argued that this was a step that should only be required if the Court were of the view that the defendants had acted inappropriately and if relevant documents had been withheld.
[51] As the discussion of the items sought in Schedules 1 and 2 indicates, there are a number of respects in which explanations proffered by the first defendant for its inability to provide electronic copies of documents have been subject to criticisms by Mr McKenzie and Mr Mahoney which at least in some respects seem to be justified. In particular, as the evidence currently stands, there is no proper explanation of why item 1.2 in Schedule 1 cannot be provided and there does seem to be real doubt that the first defendant has discovered all of the business listings in the YELLOWBOOK Directory. In other cases, files have been deleted (items 1.6, 1.14 and 2.5). Consequently, were there a real prospect of ascertaining relevant material by means of the forensic copying sought by the plaintiffs, I would have been minded to make an order as sought, notwithstanding the potentially invasive nature of that process. However, I do not consider that there is any real likelihood of relevant information being obtained as a result of such an order.
[52] I say that principally because of what Mr Khoury said at paragraph 8 of his affidavit of 16 April 2010 that I have quoted above. As already explained, that evidence was a response to evidence that Mr Mahoney had given, who was in turn
responding to Mr Emmanuel Khoury’s affidavit of 23 February 2010. In that affidavit Mr Emmanuel Khoury was himself responding to evidence that had been given by Mr McKenzie in his affidavit of 18 February 2010. In that affidavit Mr McKenzie had stated that where litigation involved electronic databases, he would normally expect it to be provided with forensic copies of the application server (which would contain logs regarding software used, such as website capture software); the database server (which would contain the complete contents of the database along with associated log files that would show the history of the data stored in the database); and the web database server (which would maintain copies of the active page and site programming codes, which could be used to identify changes made in the data between the database and the presented web page).
[53] In his affidavit of 23 February 2010 Mr Emmanuel Khoury said that the information did not exist, giving as reasons that the hardware and software was upgraded at least once a year, the first defendant did not own the server but used the services of a web hosting company and that after an “attack” on the web site in May
2007, the company’s operation had been transferred to a new dedicated server.
[54] If that evidence is accepted together with that of Mr David Khoury, there would be little point in making the order sought in respect of item 3.1. Essentially Mr Hayes invites the Court to take a sceptical approach because of the issues that have been raised by Messrs McKenzie and Mahoney. However, I am not persuaded that I would be justified in making what would be essentially adverse findings as to the credibility of the Khourys at an interlocutory stage, in a reasonably complex and in some respects technical factual setting, when there has been no cross-examination.
[55] I am also mindful of the fact that the first defendant has agreed to answer the interrogatories that were set out in Schedule 5 to the plaintiffs’ application. The interrogatories are very extensive, comprised in 127 questions, some of which have a significant number of parts within them. Many of them relate to issues that have been discussed in this judgment. I agree with Mr Elliott’s submission that there would be a significant degree of overkill were the interrogatories to be ordered as well as requiring the forensic copying process which the plaintiffs sought.
[56] For these reasons, I do not propose to make an order requiring forensic copying.
Other orders sought
[57] As noted at the outset the plaintiffs also seek orders that the first defendant provide further particulars. The particulars sought were set out in Schedule 4 to the application dated 29 March 2010. The defendants agree to provide the particulars sought.
[58] Further, as just mentioned the defendants agree to answer the interrogatories that were detailed in Schedule 5 to the plaintiffs’ application. In the notice of opposition the defendant stated that Mr Emmanuel Khoury would answer all of the questions “to the extent that he is able and understands the questions”. I am unsure whether those words were intended to qualify the normal obligations of a person answering interrogatories to comply with r 8.6. The substance of the interrogatory must be answered without evasion, and I propose to make the orders as sought.
Result
[59] In accordance with the discussion above I now make the following orders:
a) The first defendant is to provide within 21 days an electronic copy of the discovered documents identified in Schedule 1 to the plaintiffs’ application dated 29 March 2010 as:
(i)Items 1.1 and 1.2, provided that if the document identified in item 1.2 cannot be provided Mr Emmanuel Khoury is to provide an affidavit fully explaining the reasons why that is so.
(ii) Items 1.5, 1.7, 1.11 and 1.16.
b)The first defendant is to provide within 21 days, by way of a supplementary affidavit, and provide copies of any documents in existence for inspection by the plaintiffs’ counsel and expert subject to the existing confidentiality undertakings the documents identified in Schedule 2 to the plaintiffs’ application dated 29 March 2010 as:
(i)Items 2.6, 2.19 and 2.20 provided that if the documents cannot be provided Mr Emmanuel Khoury is to provide an affidavit fully explaining the reasons why that is so.
(ii) Items 2.18, 2.20, 2.36 and 2.37.
c) The first defendant is to provide within 21 days an amended statement of defence providing further particulars of the matters set out in Schedule 4 of the plaintiffs’ application dated 29 March 2010.
d) The first defendant’s director, Emmanuel Khoury is to provide within
21 days an affidavit answering the interrogatories set out in Schedule
5 to the plaintiffs’ application dated 29 March 2010.
[60] The plaintiffs have been partly successful and partly unsuccessful in their application. My tentative view is that costs should lie where they fall, but if either party is of a different view memoranda may be filed within ten working days.
Schedule 1 – production for inspection
1.1 A full and complete electronic copy of document 3.001.
1.2A full and complete electronic copy of discovery document 3.001, where the numerical code applied to each business listing in the file referenced as “database2.accdb” identified as discovery document 3.002, under the column headed CAT_ in document 3.002, is applied to each geographical classification appearing in document 3.001.
1.6A full and complete electronic copy of the file references as “newNZxls” in document 3.004.
1.10 A full and complete electronic copy of document 3.020.
1.14 A full and complete electronic copy of Exhibit W annexed to Emmanuel
Khoury’s affidavit of 1 August 2008.
Schedule 2 – further and better discovery
2.5Full and complete copies of any and all documentation whether printed or electronic that identifies the numerical code applied to only those business classifications used in New Zealand YELLOW BOOK directory, and applied to each business listing in the columns headed SUB_ in the electronic copy of document 3.002 on or before 17 May 2007, or in the alternative, the earliest available copy of those classifications.
2.6Full and complete copies of any and all documentation whether printed or electronic that identifies the numerical code applied to the geographical classifications used in the New Zealand YELLOW BOOK Directory, and applied to each geographical classifications in the column headed CAT_ in the electronic copy of document 3.002.
2.18Full and complete electronic and physical copies of any or all contracts between the first defendant and OZ Servers Pty Ltd (OZ Servers), or any other third party server or web hosting provider, and all related documentation including invoices and correspondence for services provided by OZ Servers, or any other third party server or web hosting provider relating to services provided in relation to the New Zealand YELLOW BOOK Directory.
2.19Full and complete electronic and physical copies of all correspondence exchanged between the first defendant and OZ Servers, or any other third party server or web hosting provider, since the date or dates on which OZ Servers, or any other third party server or web hosting provider, was retained to provide the first defendant with services relating to the New Zealand YELLOW BOOK Directory, including all correspondence relating to the alleged SQL injection on 29 May 2007.
2.20Full and complete electronic and physical copies of any file(s) held by OZ Servers, or any other third party server or web hosting provider, relating to all services provided by OZ Servers, or any other third party server or web hosting provider, to the first defendant in relation to the New Zealand YELLOW BOOK directory.
Schedule 3 – forensic copies
3.1All computer hardware in the first defendant’s possession, power, or control on which any information relating to this litigation is, or has previously, been stored.
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