Chief Executive of the Department of Internal Affairs v Mansfield

• Jurisdiction: New Zealand
• Judge: Wylie J
• Judgment Date: 14 August 2013
• Neutral Citation: [2013] NZHC 2064
• Docket Number: CIV 2012-404-001899
• Court: High Court
• Date: 14 August 2013

Under the Unsolicited Electronic Messages Act 2007

Between

Chief Executive of the Department of Internal Affairs

Plaintiff

and

Wayne Robert Mansfield

Defendant

[2013] NZHC 2064

CIV 2012-404-001899

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

Application for the imposition of a civil pecuniary penalty against the respondent under s45 Unsolicited Electronic Messages Act 2007 (“UEMA”) (pecuniary penalties for civil liability event) — respondent was an Australian citizen and resided in Perth — he ran business seminars in New Zealand, initially through a NZ company and later on his own — pecuniary penalty sought in relation to unsolicited commercial electronic messages in breach of s9(1) UEMA (must not send, or cause to be sent, an unsolicited commercial electronic message with a NZ link) — sought pecuniary penalty of $100,000, along with costs and disbursements — plaintiff had served defendant in Australia who had not taken any steps in the proceedings — matter had proceeded by way of a formal proof hearing — whether the Court had jurisdiction over the respondent as an Australian citizen ordinarily resident in that country — whether the Court could impose a civil pecuniary penalty under the UEMA by way of a formal proof hearing — whether the proceeding was properly served on the defendant under r6.27 High Court Rules (when allowed without leave) — whether defendant had breached s9 UEMA or had consent to send the messages.

Appearances:

B Hamlin for the Chief Executive

No Appearance for the Defendant

[RESERVED] JUDGMENT OF Wylie J

Introduction

1 The plaintiff, the Chief Executive of the Department of Internal Affairs (the Department) seeks the imposition of a civil pecuniary penalty against the respondent, Mr Mansfield, under s 45 of the Unsolicited Electronic Messages Act 2007 (the Act).

2 Mr Mansfield is an Australia citizen, ordinarily resident in Perth. He ran business seminars in New Zealand, initially through a company, Business Seminars NZ Limited, and later on his own account. The pecuniary penalty is sought in relation to what the Department says are unsolicited commercial electronic messages (colloquially known as “spam”) promoting the seminars, said to have been sent by Mr Mansfield to persons and organisations resident in New Zealand. It says that this breaches s 9(1) of the Act. The Department also says that Mr Mansfield has been served in Australia, and that he has taken no steps in the proceedings. The matter has proceeded by way of a formal proof hearing. The Department has filed affidavits in support of its assertions. It seeks a pecuniary penalty of $100,000, along with costs of $8,460 and disbursements of $1,806.54.

3 There are a number of issues which require resolution. I list them as follows:

• (a) Does the Court have jurisdiction to make the orders sought? In particular,

  • (i) does the Court have jurisdiction over Mr Mansfield, as an Australia citizen ordinarily resident in that country?;

  • (ii) can the Court impose a civil pecuniary penalty under the Act by way of a formal proof hearing?; and

  • (iii) was the proceeding properly served on Mr Mansfield under the provisions of r 6.27?

• (b) Has Mr Mansfield breached s 9(1) of the Act?

• (c) Were the messages unsolicited, or did Mr Mansfield have the consent of the recipients?; and

• (d) If the Court has jurisdiction, if Mr Mansfield has reached s 9(1), and if the messages were unsolicited, what is the appropriate pecuniary penalty to impose?

The Act

4 Unsolicited electronic messages have become an increasing problem in recent years. The then Minister for Information Technology, the Honourable David Cunliffe, in introducing the Act, noted as follows: 1

In just a few years, unsolicited commercial email, generally known as spam, has gone from being a minor nuisance to becoming a significant social and economic issue. It is also a drain on the business and personal productivity of New Zealanders. Spam impedes the effective use of email and other communication technologies for personal and business communications. It threatens the growth and acceptance of legitimate e-commerce. Spam technology is also increasingly being used as the delivery mechanism for computer viruses, phishing, and identity theft.

The negative effects of spam are significant and far reaching. A Departmental deponent, a Mr Anthony Grasso, records research indicating that it is estimated that around 120 billion spam email messages are sent every day. Such messages clog up the internet, disrupt email delivery, reduce business productivity, raise internet access fees, irritate recipients, and erode people's confidence in using email and other forms of electronic communications.

5 The Act was introduced in an endeavour to combat the difficulties caused by spam. It came into force on 5 September 2007. Inter alia, it prohibits the sending of unsolicited commercial electronic messages that have a New Zealand link. Further, commercial messages must contain accurate information about the sender and they must have a functional “unsubscribe” facility. The Act also provides that persons must not use address-harvesting software or harvested address lists in connection with the sending of unsolicited commercial electronic messages. 2

6 Persons must not aid, abet or counsel a breach of the Act or be in any way, directly or indirectly, knowingly concerned in, or a party to, a breach of its provision. 3

7 The key prohibitions contained in the Act are backed up by a series of comprehensive definitions, for example, of the words “electronic message”, 4 “commercial electronic message”, 5 “unsolicited commercial electronic message”, 6 and “civil liability event”. 7

8 Section 9(3) provides that a person who contends that a recipient consented to receiving a commercial electronic message has the onus of proof in that regard. Similarly, a party relying on other defences available under the Act has the onus of proving them. 8

9 The Court can order a person to pay a pecuniary penalty if it is satisfied that the person has committed a civil liability event. 9 If the perpetrator is an individual, the pecuniary penalty must not exceed $200,000. If the perpetrator is an organisation, the maximum penalty is $500,000. 10 The Court can also order the payment of compensation and/or damages. 11

10 Enforcement is undertaken by the Department, being the Department of State that, with the authority of the Prime Minister, is responsible for exercising the enforcement provisions contained in Part 3 of the Act.

The Background Facts

11 Between 5 April 2010 and 27 September 2010, the Department received 53 complaints from members of the public. Each complainant had received an

unsolicited electronic message marketing and promoting the goods and services of an entity known as Business Seminars NZ

12 The complaints were investigated. They appeared to be part of a number of separate email marketing campaigns where many emails were sent out to a large number of email addresses over a short period of time. Mr Grasso prepared a schedule of the campaigns which he identified from the complaints received. It is as follows:

He also prepared a much larger schedule showing the times and dates the messages received, the complainant's name, who the message was sent to, and who the message was sent by.

	Date	Subject line	From Email address
1	07/04/10	An Evening With A Marketing and Business Legend	info@businessseminars.net.nz
2	07/04/10	Social Media Marketing… Auckland and Christchurch in August 2010	info@businessseminars.net.nz
3	18/05/10	Social Media Marketing… Auckland and Christchurch in August 2010	info@businessseminars.net.nz
4	30/05/10	[Recipient's Name] everything you need to know to be A Social Media Marketing Expert	info@businessseminars.net.nz
5	06/06/10	Someone is waiting for your call — don't be a Cold Calling Scaredy Cat	info@businessseminars.net.nz
6	06/06/10	Social Media Marketing… Auckland and Christchurch in August 2010	info@businessseminars.net.nz
7	09/06/10	Share the best new customer acquistion techniques with a master Auck ChCH Aug 2010	info@businessseminars.net.nz
8	13/06/10	Add POWER to your selling with PowerSell August 2010	info@businessseminars.net.nz
9	16/06/10	PowerSell Seminars in Auckland and Chirstchurh Aug 2010	info@businessseminars.net.nz
10	20/06/10	All you need to know about Social Media Marketing Auck CHCH Aug 2010	info@businessseminars.net.nz
11	04/07/10	NegotiationPOWER seminar highlights skills to do better business	info@businessseminars.net.nz
12	05/07/10	Become more effective — learn the magic of TimeSHIFTING	info@businessseminars.net.nz
13	20/07/10	Everything You Need to Know About Social Media Marketing Aug 24Auck Aug 26 Chch	info@businessseminars.net.nz
14	27/07/10	Cold Calling For Scaredy Cats — Build your business with NEW clients	info@businessseminars.net.nz
15	09/09/10	NegotiationPOWER — Six Deadly Sins of Negotiation Seminar Sept 2010	info@businessseminars.net.nz
16	12/09/10	TimeShifting getting more out of your busy day — Christchurch — Auckland Seminar Seminar Series Sept	info@businessseminars.net.nz

13 Mr Grasso contacted a number of the complainants to obtain further information from them. He obtained witness statements from them, copies of which have been made available to the Court. In each case, the complainant indicated that he or she had received an email message or messages from “Business Seminars NZ”, but had not consented to receiving the email(s).

14 Each email purported to come from an entity described as “Business Seminars NZ”. Contact details were...