Supreme Court decision: Google ordered to give trustee access to e-mail accounts

THE PARTICULARS OF THE CASE

In connection with the bankruptcy proceedings, the trustee noted that a debtor with personal liability had used six Gmail accounts as part of the debtor’s business activities, both before and after the bankruptcy order was issued. It was therefore the trustee's opinion that the content of the Gmail accounts would be crucial to the bankruptcy proceedings and that the trustee should have access to the accounts. 

The debtor refused to cooperate and did not respond to the trustee's inquiries. The trustee therefore requested the bankruptcy court to issue a third-party disclosure order against Google pursuant to section 299(1) of the Danish Administration of Justice Act, cf. section 240 of the Danish Bankruptcy Act by analogy. The application was filed against Google Ireland Limited, Google's European lead company with headquarters registered in Ireland. 

The question in this connection was in particular whether the bankruptcy court had jurisdiction over Google Ireland Limited, which was domiciled abroad. It was also in dispute whether the trustee's access to the respective e-mail accounts was in breach of international conventions and EU law.

THE HIGH COURT’S DECISION: NO ACCESS

The bankruptcy court ruled in favour of the bankruptcy estate, whereupon Google was ordered to give the bankruptcy estate access to the Gmail accounts. 

However, Google appealed the bankruptcy court's decision to the Eastern High Court, which cancelled the bankruptcy court's disclosure order. The High Court reasoned that the Danish courts did not have jurisdiction to uphold the disclosure order, as Google was not domiciled in Denmark.

Due to the importance of the principle involved, the bankruptcy estate requested permission from the Appeals Permission Board to appeal the case to the Supreme Court, which was granted.

SUPREME COURT DECISION: FULL ACCESS

The Supreme Court found that, pursuant to the rules of the Bankruptcy Act, the bankruptcy court has the power to issue orders against natural or legal persons for whom there is no jurisdiction in Denmark. However, the Supreme Court also stated that it is a prerequisite that the person against whom the order is directed has had the opportunity to present their views to the bankruptcy court. If questions arise about the enforcement of the order, for example if it is not complied with voluntarily, enforcement must take place before the proper forum abroad. 

The Supreme Court further stated that digital assets or digital business material must be considered to be in the debtor's possession if the assets or material is available and thereby accessible to the debtor. Where the digital asset or digital business material is in the debtor's possession, the bankruptcy court may grant the trustee possession of the asset or material under the authority of section 112(1), second sentence of the Bankruptcy Act. This may be done by issuing an order against the person with whom the digital asset or digital business material is stored. 

Based on the information available in the case, the Supreme Court found that the debtor used the six Gmail accounts in the context of its business activities. The debtor was therefore deemed to be in possession of the accounts referred to and the assets and business material held therein. 

The Supreme Court held that, pursuant to section 112(1), second sentence of the Bankruptcy Act, the trustee has the right to obtain access, with the assistance of the bankruptcy court, to the mentioned Gmail accounts in order to acquire possession of the estate's assets and business material.

The Supreme Court further held that such access for the trustee is not contrary to section 7 of the Danish Telecommunications Act, Article 5 of the ePrivacy Directive, cf. Article 15, Article 8 of the Convention on Human Rights on the right to privacy or Articles 7 and 8 of the EU Charter of Fundamental Rights. The Supreme Court reasoned that the trustee's access to assets and business material relevant to the administration of the estate is authorised under section 112 of the Bankruptcy Act and is necessary to safeguard the creditors' interests. Moreover, the trustee has a duty of confidentiality, and the trustee's processing of the content of the Gmail accounts must be done in accordance with the data protection rules.

COMMENT

In its decision, the Supreme Court holds that the bankruptcy court is competent to issue an order against natural or legal persons for whom there is no jurisdiction in Denmark. The decision thus cements the trustee's access to data, even when hosted by extraterritorial natural or legal persons. However, enforcement issues must, if necessary, be processed before the proper forum abroad.

The Supreme Court further holds that, pursuant to section 112 of the Bankruptcy Act, digital assets or digital business material is considered to be in the debtor's possession if the assets or material is accessible to the debtor. The bankruptcy court may therefore grant the trustee possession thereof by, among other things, issuing an order.

This is a landmark decision and it represents an important development in bankruptcy law, as it has now been established that the bankruptcy court is competent to order extraterritorial natural or legal persons to ensure that the trustee has access to material that may be of crucial importance to the bankruptcy estate. We expect that the decision will have a significant impact on other cases where Gmail accounts have been used, or where the trustee otherwise wishes to obtain material hosted by extraterritorial natural or legal persons.