Canada: Just Who Owns That E-Mail?

Last Updated: August 14 2013
Article by Neil Guthrie

Most Read Contributor in Canada, September 2016

Adkins was the CEO of Fairstar Heavy Transport, but not its employee: he worked for a personal holding company which was under contract to Fairstar to provide management services. Fairstar was in financial trouble, and a dispute with Adkins ensued over the wisdom of certain dealings on the company's behalf. The company was subsequently sold and Adkins terminated by its new owners. In a dispute over Adkins's dealings towards the end of his time with Fairstar, the latter made a proprietary claim for Adkins's e-mails. (For jurisdictional reasons, no claim was advanced on the basis of ownership of the medium of transmission or any paper copy of the e-mails, or on the basis of copyright or confidentiality.) E-mail addressed to Adkins at his Fairstar address while he was still CEO were automatically forwarded to a personal account; Fairstar claimed that they were also automatically deleted from Fairstar's server at the same time. Adkins sent e-mail only from his personal account, so unless a Fairstar address had been cc'd, the company had no record of Adkins's outgoing correspondence.

But who owned the e-mails? After reviewing the case law and commentary, Edwards-Stuart J of the English Technology and Construction Court concluded that the weight of authority pointed strongly against there being any proprietary right in the content of information, including an e-mail: Fairstar Heavy Transport NV v Adkins, [2012] EWHC 2952 (TCC). If there is ownership in the content of an e-mail message (a point the judge did not concede but was prepared to entertain for the sake of argument), five possibilities arise: (1) title to the content remains with its creator, (2) title to the content is transferred to the recipient, once the e-mail is sent, (3) the recipient is granted a licence for legitimate use of the content, but title remains with the creator, (4) title to the content passes to the recipient, but the creator has a licence to retain and use it for any legitimate purpose, and (5) creator and recipient share title (and with any subsequent recipient). Option (1) seemed to the judge to be unworkable, in that it would allow the creator to require any recipient of a much-forwarded e-mail to deliver it up; option (2) presents similar difficulties in giving the recipient the right to require the sender (or any sender) to delete the e-mail, making its last recipient the only person entitled to it but making the situation 'hopelessly confused' to the extent there are multiple recipients. Options (3) and (4), while 'perfectly workable', would have the effect of depriving the proprietary interest in an e-mail's content of any value whatsoever and would involve difficult questions about what amounted to 'legitimate' use. Option (5) is equally unrealistic: it would permit a sender to require every recipient to help it restore a lost database, and parties which had since fallen out to have access to each other's servers. In the end, there was for the judge 'no practical basis for holding that there should be a property interest in the content of an e-mail', although this was not a result he viewed 'with any enthusiasm in the circumstances of this particular case'. Fairstar's proper remedies lay in equity (for breach of confidence) or copyright law.

The English Court of Appeal has allowed Fairstar's appeal: [2013] EWCA Civ 886. Mummery LJ stated that the case was not about ownership of Adkins's computer or documents in hard or electronic format, ownership of confidential information or intellectual property contained in his e-mails, or breach of any contractual or fiduciary duty; it was solely about whether Fairstar had 'an enforceable right, described by it as "proprietary", to the content of the business emails sent and received by Mr Adkins while Fairstar's CEO and stored by him on his personal computer.' Fairstar pursued a new line of argument on appeal: the nature of the prior legal relationship between the parties was one of principal and agent, and that under well-established agency principles Fairstar was entitled to production or delivery of 'books and documents' prepared by its agent for the purposes of the agency relationship upon its termination. Justice Mummery agreed; if Fairstar had no enforceable right to this kind of information, this would have 'far-reaching consequences for principals and employers' in a world 'in near-universal electronic communication'. In the lord justice's view, the whole business about 'proprietary' rights was 'an unnecessary complication' and 'a distraction'. There was no need to explore the property issues (interesting as that might have been).

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