On learning Health New Zealand wanted to store existing records using new software, US-based Capex Discovery refused assistance for data migration to a new platform, blocked access to stored data and sued for increased licence fees alleging nearly 190,000 health workers were accessing data while Health New Zealand was paying for only 5000 licences.
Capex offers secure storage for sensitive business records, promising fast search capabilities for authorised users.
The High Court was told Capex came to control digital storage of, and access to, New Zealand health data when Hewlett Packard spun off its global software business in 2017.
Justice Tahana ruled Health New Zealand’s contract remained with Hewlett Packard post-2017, with Capex providing storage on Hewlett Packard’s behalf.
It was an implied term of the Hewlett Packard contract that data could not be held to ransom; assistance had to be provided for data transfer to a new platform.
Capex’ claim that Health New Zealand owed USD 5.1 million for licences was dismissed.
Evidence was given of a longstanding commercial relationship between Health New Zealand and Hewlett Packard for electronic storage, management, and access to, health sector data.
Regular software upgrades saw multiple iterations of this data being transferred by Hewlett Packard across to new platforms.
Health New Zealand’s current dispute with Capex followed Hewlett Packard’s decisions in 2017 to restructure and then sell off its data management business.
Capex agreed with Hewlett Packard to take over its Health New Zealand contract. This involved storage of, and access to, staff emails. Some emails included patient data.
Health New Zealand was sent several letters, asking for a signed acknowledgement that Capex was now the contracting party.
In legal jargon this was an attempted novation; have the Hewlett Packard/Health New Zealand contract replaced on the same terms by a Capex/Health New Zealand contract.
Health New Zealand never signed. Its rights against Hewlett Packard remained.
The subsequent legal dispute was whether Capex could block data migration as leverage in its commercial dispute over licence fees.
The Hewlett Packard contract did not specifically spell out rights to data migration.
Justice Tahana ruled contract terms had to be interpreted in light of the long-standing relationship between Hewlett Packard and Health New Zealand. Their past working relationship coupled with knowledge on both sides that only Hewlett Packard held keys to unlock encrypted data for migration created an implied term that data migration could not be blocked, she ruled.
The contract did allow Hewlett Packard to charge commercial rates for assistance with data migration, she said.
This ruling was not directed specifically against Capex. Health New Zealand’s contract is with Hewlett Packard. It is for Hewlett Packard to ensure Capex releases Health New Zealand’s data.
HealthAlliance NZ Ltd v. Hewlett-Packard New Zealand – High Court (20.09.24)
24.230