Bloggers beware – the EQC injunction explained

The High Court has issued an interim injunction preventing an unknown blogger from disclosing confidential information relating to EQC claims made by property owners in Canterbury following the earthquakes (Earthquake Commission v Unknown Defendants [2013] NZHC 708).

This case has important ramifications for would-be anonymous bloggers,whistleblowers, and publishers of leaked information, as not only were the unknown defendants prevented from publishing the information, they were also ordered to file affidavits disclosing their sources and other information. No orders were made to prevent the identity of the defendants becoming public knowledge.

Background

The Earthquake Commission (EQC) is a statutory body responsible for the administration of insurance against damage caused by natural disasters.

On 22 March 2013 an EQC employee inadvertently emailed a spreadsheet to a contractor, Mr Staples. The spreadsheet contained details of 83,000 residential property claims arising from the Canterbury earthquakes.

Although Mr Staples advised the Court that he deleted the email and attachment soon after receiving it, the same information became available from the website eqctruths.wordpress.com shortly afterwards. The EQC Truths website was established in November 2012 and features a blog written by an anonymous author under the tagline “What Really Happens at EQC from an ex-EQC Employee”.

The author of the EQC Truths blog posted on 4 April 2013 to say that he or she had received the same spreadsheet as Mr Staples from a disgruntled employee of EQC and indicated that the material would be made available to the public in the near future.

Interim injunction application by EQC

EQC applied for an interim injunction to prevent the disclosure of the spreadsheet or its contents.

Because the defendant could not be identified, and given the urgency in light of the threatened disclosure of the material, the EQC applied for an interimin junction on a “without notice” basis. The courts are wary of granting orders without hearing from a defendant, and so the order was only granted on a temporary basis, on Monday 8 April. A further interim injunction hearing was convened the next day, on 9 April, to determine whether those interim orders should continue. Counsel for Mr Staples appeared at that hearing by telephone link.

The Court proceeded on the basis that the material at issue had been deliberately leaked to the website’s author by an unknown employee of EQC. The claim was based on breach of confidence or misuse of confidential information,although the Court noted that there could also be issues under the Privacy Act 1993.

What the High Court found

The Court applied the well-established test (from Klissers Farmhouse Bakeries Limited v Harvest Bakeries Limited [1985]2 NZLR 129 (CA)) in determining whether or not an interim injunction should beissued, namely:

1. Is there a serious question to be tried?

2. Does the balance of convenience favour granting the interim injunction?

3. Does the overall justice of the matter favour the granting of the interim injunction?

The High Court held that there was a serious question to be tried, in that the information was likely to be confidential. This is unsurprising as there is little apparent explanation as to why the conduct would not amount to breach of confidence. Even if the information had been provided directly by someone from EQC, it was clearly unauthorised and the blogger should not have had access to it.

The Court also found that the balance of convenience (i.e. the consequences for the parties of granting or not granting the injunction) favoured granting the injunction. Again this was fairly uncontroversial,although the judgment did not set out expressly the usual reasoning under this part of the claim, namely that the plaintiff would suffer irreparable loss or harm if the injunction was not granted.

Finally, the Court considered that the overall justice of the case also favoured granting the injunction.

What the Court ordered

Restriction on disclosure of confidential information

The Court granted an injunction preventing the author of the EQC Truths site from disclosing “any information obtained directly or indirectly from EQC about identifiable individuals”.

The orders also applied to the person(s) from whom the blogger received the information, and to any person to whom the blogger had disclosed the material.

Service

In addition, the Court required a copy of the proceeding (including the judgment) to be served on a particular email address said to be associated with the EQC Truths site, and that email account holder was then obliged to forward the proceedings to his or her sources and those to whom he or she had provided the information.

Affidavits setting out sources and recipients

The most controversial aspect of the decision is that the blogger, the person who provided the information to the blogger, and any other subsequent recipients were also ordered to provide affidavits by 19 April 2013 specifying whether or not each of them:

(a) has or has had in his or her possession any information obtained directly or indirectly from EQC about identifiable individuals other than him or herself; and

(b) if so, whether and to whom he/she had provided that information.

Next steps

The Court has convened a further telephone call for 26 April, with a view to holding a final hearing on 6 May.

Comment

The Court’s decision is notable for two key points.

Unidentified defendants

The defendants who were alleged to have infringed the plaintiff’s rights were not identified by the plaintiff.

The Court referred to Tony Blain Pty Limited v Splain [1993] 3 NZLR 185 as being authority for an action against an unidentified defendant, although that case concerned quite a different factual situation.

In that case, the defendants were those who would be selling counterfeit or unauthorised merchandise at Metallica and Paul McCartney concerts in Auckland. The infringements had not yet taken place, but the defendants would be known by their acts of infringement in due course.

In the EQC case, the defendants were said to have already carried out certain infringing acts but their identities were still unknown.

This is more like the situation in Brashv Doe (2006), where the High Court held that it could issue an injunction to prevent an unknown defendant from publishing emails sent to or from Don Brash.

Although it seems reasonable that the Court ought to be able to intervene in such circumstances, it should be recognised that both this case and Brash v Doe represent an extension of the rule in Tony Blain v Splain rather than a straight forward application of it.

Disclosure of sources

Perhaps the most striking aspect of this case is that the unknown defendants, who have been at pains to keep their identities and sources concealed – not only for the purposes of this litigation and the information it concerns but more generally – have been directed to file affidavits disclosing the source of the information and those to whom it has been disclosed.Requiring this positive act might be taking matters too far, bearing in the privilege against self-incrimination and the fact that this could (conceivably) involve issues around media sources.

Those may be orders which could be made following a full hearing but they arguably should not have been made in the context of an interim injunction hearing where not all of the affected parties were represented.

Conclusion

There will be further developments in the case. In particular it seems likely that issues of jurisdiction will arise, if (as has been suggested in media reports) the blogger and the confidential material are located overseas.

It is possible that third parties may also wish to intervene, given the important matters of principle at stake. As the online publishing of leaked material and anonymous blog postings and other material becomes more common, so too may legal proceedings of this nature.

Kevin Glover practises as a barrister from Shortland Chambers in Auckland. He works in the area of commercial disputes and has specialist expertise in intellectual property matters including interim injunction applications.

His website is www.iplawyer.co.nz 

Contact Us
Phone 09 303 5270
Fax 09 309 3726
Email reception@adls.org.nz