Fujitsu NZ has reported a $1.4 million loss for 2023 as it faces civil allegations of misrepresentation, breaches of the Fair Trading Act and warranty.
Fujitsu NZ is being sued by the Department of Corrections and is in turn suing its subcontractor, Dassault Systémes Australia, on the basis that it relied on Dassault to provide rostering software which would meet Corrections’ needs.
A trial of those issues is scheduled to start 11 September and is expected to take four weeks.
In July, Fujitsu NZ failed in an applicaton to strike out Dassault’s defence after alleging the French giant had not taken all reasonable steps to preserve documents that were likely to be discoverable in the proceedings.
In particular, Fujitsu NZ alleged Dassault failed to ensure the email communications of its staff were not deleted in accordance with normal business procedures, particularly when staff left Dassault’s employment.
"It is important to reiterate that the obligation not to destroy evidence relevant to an anticipated proceeding is an important one," Justice Cooke wrote in his judgement while also noting there had been no adequate explanation of the reasons for Dassault’s "ongoing failures".
Dassault made attempts to recover some of the deleted material and that was possible when the information had been saved on local servers and computers. Some emails were also available from other parties to the email exchanges.
"I accept that Dassault has been making efforts to remedy the situation, and that further information has been provided as a consequence," Justice Cooke wrote. "Nonetheless, it seems likely that relevant documents will have been destroyed and are not recoverable."
The breaches were "significant, and serious," the judgement concluded but there was no deliberate attempt to destroy evidence and it was not possible for the court to conclude that a fair trial was not possible.
Corrections confirmed it was involved in litigation with Fujitsu NZ regarding the original procurement of rostering technology for its "Making Shifts Work" project. The department subsequently selected another provider who completed the work required, a spokesperson said.
It is understood the new platform is Kronos.
Making Shifts Work introduced new shift patterns into prisons to better meet the needs of operational delivery while aiming to provide staff with higher levels of work-life balance and improve their safety by helping them to avoid fatigue.
The project was rolled out to 11 sites and approximately 4000 full-time rostered custodial staff between July 2019 and June 2022.
Corrections said as the matter was now before the courts it was unable to comment further. Fujitsu and Dassault, through its lawyer, also declined to comment on the case.
Fujitsu NZ reported $155.6 million in revenue for the year, down from $156.4 million and a net profit of $1.9 million in 2022.
A directors' note attached to the company's accounts noted the result was due to the loss of a major customer and poor sales performance.
However, the accounts also show employee and subcontractor costs spiked by $6.3 million during the year.
Fujitsu NZ country manager Rob Purdy said while the company did lose a large customer it had since replaced the lost revenue through a change in sales focus pushing towards platform capability and security underpinned by the recent purchase of InPhySec in New Zealand.
"Fujitsu NZ generated positive operating cash flow for the year ended 31 March 2023," Purdy said. "Over the year we continued to invest in local capability outside the Fujitsu purchase on InPhySec, hiring practice leads for data and AI and ServiceNow aligned to the Oceania purchases of Versor and Enable.
"Separately the capability of the purchase of Oobe has been well received by customers bringing expertise around macro signing and cloud security including Azure and Office 365."
As a Japanese company, Fujitsu looked very long term to provide services to customers as markets changed, Purdy said.
The focus continued to be on customer outcomes through digital and cloud transformation as well as platforms such as SAP and Dynamics 365.
"Inflation and the challenges of acquiring local talent has placed pressure on margins within the business in highly competitive areas," Purdy said.
"To help alleviate the pressures we continue to work with TupuToa to take on interns to address the persistent inequalities facing our communities.
"Our focus remains on utilising small numbers of contractors to service our customers ensuring that Fujitsu builds strong, long term relationships with its customers."