Earthquake Commission v Krieger

• Jurisdiction: New Zealand
• Judge: Collins J
• Judgment Date: 27 November 2013
• Neutral Citation: [2013] NZHC 3140
• Docket Number: CIV-2013-485-000530
• Court: High Court
• Date: 27 November 2013

Between

Earthquake Commission

Plaintiff

and

Marc Allen Krieger

First Defendant

Unknown Defendants

Second Defendant

[2013] NZHC 3140

Collins J

CIV-2013-485-000530

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

Claim by Earthquake Commission (“EQC”) for a declaration that the first defendant and unknown second defendants had disclosed information in circumstances that constituted a breach of confidence — application for injunctions prohibiting any further disclosure of the information in question — first defendant was published information about individual claims that were administered by EQC and inadvertently disclosed by an EQC employee — whether breach of confidence established — whether EQC, because of its role within government and because of the nature of the information it wished to protect, needed to establish that disclosure of the information in question was not in the public interest — whether first defendant had public interest defence.

Counsel:

P R Jagose and R M Dixon for Plaintiff

No appearance for First Defendant

JUDGMENT OF Collins J

Collins J

Introduction

1 The two principal questions raised by this proceeding are:

• (1) Is the Earthquake Commission (EQC) entitled to a declaration that Mr Krieger disclosed information in circumstances that constituted a breach of confidence; and

• (2) Should I issue permanent orders prohibiting any further disclosure of the information in question by anyone other than EQC.

2 I shall address these questions by explaining:

• (1) The context in which the questions arise.

• (2) Mr Krieger's role in the litigation.

• (3) The principles that govern the law of breach of confidence.

• (4) The application of the law to the facts of this case.

• (5) Whether relief is necessary.

• (6) My conclusions.

Context

3 EQC is a statutory body established by the Earthquake Commission Act 1993 (the Act). EQC administers insurance against damage caused by natural disasters.

4 Those who have fire insurance for residential buildings and personal property are deemed to be insured under the Act against damage that is caused by natural disasters to residential buildings, 1 residential land, 2 and personal property. 3 There are limitations and exceptions to the insurance cover provided under the Act but they are not relevant to the questions I have to consider.

5 Premiums are paid to EQC by insurance companies, which provide fire insurance in relation to residential buildings and personal property. The premiums are set by regulations and become a debt due to the insurance company by the insured person. 4 The commercial sensitivity of EQC's business is illustrated by the fact that all information about the premiums which insurers pay to EQC is subject to strict secrecy provisions, set out in s 25 of the Act.

6 On 4 September 2010 and 22 February 2011 Christchurch and its surrounding areas were devastated by powerful earthquakes. The second of those earthquakes caused the deaths of 185 people. Thousands of aftershocks accompanied both earthquakes which were New Zealand's most expensive natural disasters and amongst the most costliest natural disasters to insurers world-wide.

7 By September 2012 Fletcher EQR, an EQC contractor, had collated information relating to approximately 83,000 claims. This information was condensed by EQC into a spreadsheet which contained 30 “fields” of information about each claim. For present purposes, it is convenient to describe those fields under three headings:

• (1) Information about individual claims. This information includes information that could easily lead to the identification of individuals. It includes a claimant's suburb, street name and street number and it includes information about each individual insurance claim, including the estimated value of those claims and the progress that was being made to remedy the damage suffered by each claimant.

• (2) Information of a commercial nature. This information includes confidential information relating to the costs of repairing damage suffered by claimants, including assessments of the damage, and the amount quoted to repair the damage.

• (3) Administrative information. This information relates to EQC's administrative processes and the systems put in place to administer each claim.

8 On 22 March 2013 an EQC employee included the spreadsheet as an attachment to an email and inadvertently sent the spreadsheet to an earthquake repair contractor (the contractor) in Christchurch. EQC took steps to secure the information that had been accidentally sent to the contractor.

9 On 4 April 2013 an article appeared on a website called “EQC Truths” (the website). In that article the author 5 said that he had received “an email … from a ‘disgruntled EQC employee’ containing what appears to be the same spreadsheet” that had been sent to the contractor on 22 March 2013. The article said the author was discussing with his lawyers “… how to get [the] information [in the spreadsheet] into the public domain whilst complying with all legal requirements”. The author also said that he had:

… no compunction about releasing the information because [he believed] that each customer [of EQC was] entitled to know the value that EQC had assigned to their claim, which in many cases [was] an inaccurate figure.

10 On 6 April 2013 the author of the website published instructions on the website about how EQC claimants could access information contained in the spreadsheet. The author explained that he was enabling individual EQC claimants to access their EQC records so as to enable claimants to understand the value EQC had assigned to their claim. The author said the system he had put in place was designed to protect individuals' privacy and “to prevent information from potentially falling into the wrong hands”. The author also said:

I do not want to release information indiscriminately because of the Privacy Act, and more importantly, common decency. It would be hypocritical for me as a blogger who anonymously does good work to compromise the privacy of other people.

11 EQC is subject to the Official Information Act 1982. Claimants could therefore apply to EQC for information held by EQC in relation to their claim. 6 Claimants who were dissatisfied with any response from EQC to a request for information could ask the Ombudsman to review EQC's decision. 7 This course was followed when in 2012 the Chief Ombudsman ruled that EQC was not required to provide a claimant with information relating to the estimated cost of repairing the claimant's property. The Ombudsman decided that EQC could withhold that information in order to enable it to discharge its functions in a commercially prudent manner. 8

12 On 8 April 2013 I issued orders prohibiting disclosure of the spreadsheet pending the hearing on 9 April 2013 of an application for an interim injunction sought by EQC. Later on 8 April 2013 an article appeared on the website in which the author said that he became aware of my orders through a news website. 9 The author said that he “… steadfastly [b]elieved in the principle that upholding the law is sacrosanct and that [he would] abide by the High Court ruling” even though it was “personally disagreeable” to the author.

13 On 9 April 2013 I heard EQC's application for an interim injunction. At the end of the hearing I issued interim orders prohibiting:

Later, on 9 April 2013, the author of the website said he rejected my interim orders and he urged me to lift the interim injunction to give him sufficient time to prepare “a proper legal defence”. However, the author did not file any applications at that time and no lawyer has ever advised the Court that they have received instructions to act for the author.

• (1) recipients of the information in the spreadsheet from disclosing it to any other person; and

• (2) the author of the website from disclosing information about identifiable EQC claimants to others.

14 Instead, the author of the website published articles on the website with hyperlinks to five different websites which contained the spreadsheets. As at 22 October 2013 the spreadsheet could still be found on three of those websites.

15 The steps taken by the author of the website enabled anyone to access information about individual claims that were administered by EQC. An example of the unfortunate consequences of the author's actions can be found in the messages on the website which include:

Anonymous April 11

Whoops. Addresses included. My asshole neighbour got ripped off! Lol 10

However, it is also appropriate to acknowledge that almost all of the messages posted on the website supported the author's actions.

16 EQC's investigations led it to discover Mr Krieger was the author of the website. However, the person or persons who supplied the spreadsheet to Mr Krieger and others who assisted him have not been identified and therefore remain “unknown second defendants”.

17 The Solicitor-General has now informed the Court that he has brought contempt proceedings in relation to Mr Krieger's disclosures of the spreadsheet. As a consequence, EQC has elected to no longer seek damages from Mr Krieger. 11

Mr Krieger's role in the litigation

18 On 16 May 2013 EQC filed an amended statement of claim in which it named Mr Krieger as the first defendant and alleged that he was the person who had disclosed the information in the spreadsheet.

19 On 22 May 2013 EQC sought and obtained directions requiring Mr Krieger to serve on those from whom he had obtained the spreadsheet the same documents which EQC had served on him. Mr Krieger was also required to file an affidavit specifying, amongst other things, who had provided him with the spreadsheet.

20 On 25 June 2013 Mr Krieger filed an affidavit in which he said, amongst other things, that he had provided the documents served on him to an unnamed second defendant and that he had received...