ROKSO Home  |  ROKSO FAQs & Policies  |  About Spamhaus  |  FAQs
ROKSO
The Register of Known Spam Operations
Brendan Battles / IMG Online / World-Services

Evidence Menu:

Brendan Battles / IMG Online / World-Services Index


Country: United States
State: Michigan
In and out of the spamming business for over a dozen years. Moved from Florida, USA to New Zealand. Has been caught spamming there. Back in Florida, USA reports say.

2015 - found in Michigan, and spamming yet again.


Brendan Battles / IMG Online / World-Services SBL Listings History
Current SBL Listings
Archived SBL Listings

LEGAL: Internal Affairs v Image Marketing Group Ltd (court decision 2014)


http://www.dia.govt.nz/diawebsite.nsf/Files/Anti-Spam-Judgement/$file/Internal-Affairs-v-Image-Marketing-Group-Ltd.pdf


IN THE
HIGH
COURT
OF
N
EW ZEALAND
AUCKLAND
REGISTRY
CIV
-
2011
-
404
-
627
CIV
-
2011
-
404
-
628
CIV
-
2011
-
404
-
3944
CIV
-
2011
-
404
-
3947
[2014]
NZHC
139
BETWEEN
CHIEF EXECUTI
VE OF THE
DEPARTMENT OF INTERNAL
AFFAIRS
Plaintiff
AND
IMAGE MARKETING GROUP
LIMITED
First Defendant
AND
BRENDAN PAUL BATTLES
Second Defendant (excluding CIV
-
2011
-
404
-
3947)
Hearing:
10 February 2014
Appearances:
J B Hamlin for Plaintiff
T J Herbert for Defendants
Judgment:
12 February 2014
JUDGMENT OF
PETERS
J
This judgment was delivered by Justice Peters on
12 February 2014
at
4.30
pm
pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date: ...................................
Solicitors:
Meredith Conne
ll, Crown Solicitor, Auckland
Counsel:
T J Herbert, Auckland
Introduction
[1]
The Plaintiff (“Department”) applies for an order for payment
of
a pecuniary
penalty
pursuant to
s
45 of
the Unsolicited Electronic Messages Act 2007 (“Act”).
[2]
The
Depart
ment’s
proceedings arise from breaches of the Act committed
b
etween the end of February 2009 and
December 2010
.
The
breaches led to
complaints to the
Department and
,
in turn
,
to
the
se
proceedings.
[3]
Mr Battles, the Second Defendant in three of the proceed
ings, is the sole
director of the First Defendant. The parties have agreed that the Department should
discontinue its proceedings against Mr Battles. Given that, references below to “the
Defendant” are references to the First Defendant.
[4]
The
Department
and the Defendant have now resolved the
proceedings on
terms which include
, amongst other things, the
Defendant acknowledg
ing various
breaches
of the Act
and
paying a
pecuniary penalty. The
parties
have
agreed
on a
penalty of $120,000,
subject to the Cour
t’s approval.
[5]
I accept the De
partment
’s submission
that the Court’s
task in
assessing
a
penalty
agreed by the parties
is
that taken
in
Commerce Commission v Al
stom
Holdings SA
.
1
F
or the reasons
that
Rodney
Hansen J
gave
, the Court should approve
the penal
ty if
it is within the proper range.
[6]
I also accept
the submission of C
ounsel
for the Department
that
the proper
range
is to
be assessed by adopting
an approach consistent with
the

Taueki

methodology
,
that is
by
establish
ing
a starting point
or penalty
, w
ith
that
starting
point
to be adjusted
as necessary
to
reflect
any
aggravating and/or mitigatin
g
factors
relating to the
defendant
.
2
Wylie J adopted this approach in
another case under the
Act
,
Chief Executive of the Department of Internal Affairs v Mansf
ield
,
3
and I do
likewise.
1
Commerce Commission v Alstom Holdings SA
[2009] NZCCLR 22 (HC).
2
R v Taueki
[2005]
3
NZLR 372.
3
Chief Executive of the Department of Internal Affairs v Mansfield
[2013] NZHC 2064 at [64].
Unsolicited Electronic Messages Act
2007
[7]
I adopt
the
following
summary of the purpose and
framework of the
Act
which appears in
Mansfield
:
[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:
In just a few years, unsolicited commercial email, generally
known as spam, has gone from being a minor nuisance to
becoming a significant s
ocial 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 acc
eptance 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 An
thony 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 re
cipients, 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.
...
[6]
...
[7]
The key prohibiti
ons contained in the Act are backed up by a series
of comprehensive definitions, for example, of the words “electronic
message”,
“commercial electronic message”,
“unsolicited commercial
electronic message”,
and “civil liability event”.
[8]
...
[9]
The Co
urt can order a person to pay a pecuniary penalty if it is
satisfied that the person has committed a civil liability event.
If the
perpetrator is an individual, the pecuniary penalty must not exceed $200,000.
If the perpetrator is an organisation, the maxi
mum penalty is $500,000.
The
Court can also order the payment of compensation and/or damages.
(Footnotes omitted)
Background
[8]
The
parties have
filed a statement of agreed facts. From this it is apparent
that the Defendant breached the Act on four separate
occasions, the last such breach
being a course of conduct that continued over a period of nine months in 2010. The
details are as follows.
February/March 2009
[9]
B
etween the end of February
2009
and the end of March 2009, the Defendant
sent
or caused to be
sent
no fewer than
44,824
text messages
(“text messages”)
to
mobile
tele
phones
connected to networks
operated
in New
Zealand
by Telecom New
Zealand Limited and Vodafone New
Zealand Limited
.
T
he 2009 text messages
sought
to promote the sale of a product kn
own as an “Antenna Booster”.
The
Department received ni
ne complaints in respect of th
e
text messages
.
[10]
The
Defendant has acknowledged that
,
at least in respect of the text messages
sent to those who complained
,
it breached ss
9, 10 and 11 of the Act.
[11]
S
ection
9 of the Act provides
:
9
Unsolicited commercial electronic messages must not be sent
(1)
A person must not send, or cause to be sent, an unsolicited
commercial electronic message that has a New Zealand link.
[12]
It is common ground that the text messag
es were “commercial electronic
messages that [had] a New Zealand link”. It is also now common ground that the
text messages, at least in
respect of
those recipients who complained, were
“unsolicited
” in that the recipient had not

consented to receiving

them, as that
phrase is defined in s
4(1) of the Act.
[13]
This is not the sole
breach of s
9
that
the Defendant has
now acknowledged.
F
rom the
statement of agreed facts
it appears that the
Defendant
(
wrongly
)
believed
that all recipients had consented to the
receipt of the messages, so that they were not
“unsolicited”.
This may be why counsel for the Defendant described the breaches as
“technical” in his submissions. I accept the breach may not have been deliberate. I
do not, however, consider
it
“technical
”.
[14]
Other important features of t
he text messages
w
ere that they did not
include
accurate sender information and did not
include
an

unsubscribe

facility
, those two
omissions constituting breaches
of
ss
10 and 11 of the Act. Those
breaches were
committed
in respect of every text message
,
not only t
hose which were
“unsolicited”.
September 2009
[15]
On or about 9
September 2009, the Defendant sold
a database containing
approximately 50,000 email addresses
to
a third party, Mr
Dean
Letfus
.
Mr
Letfus
paid $1,000
t
o the Defendant
for the
purchase
of the database
.
[16]
On 15 and 16 September 2009
Mr
Letfus
sent
messages
to the email
addresses in the database,
marketing and promoting goods
and services.
Mr
Letfus
subsequently
received approximately 400 complaints from
re
cipients of his email.
[17]
Mr
Letfus

s
conduct
was in breach of s
9 and
place
d
the Defenda
nt in breach
of s
15 of the Act, which provides:
15
Third party breaches of Act
A person must not

(a)
...
(b)
...
(c)
be in any way, directly or indirectly, knowingly
concerned in, or
party to, a breach of any of sections
9
to
11
and
13
; or
(d)
...
14 and 15 December 2009
[18]
B
etween 14
and 15 December 2009, the Defendant sent
or caused to be sent
email messages
(“2009 messages”)
to
computers connected to
the internet and
located in New
Zealand.
[19]
The
Defendant operated an account with Ezymsg Pty Li
mited (“Ezymsg”), an
Australian web
-
based marketing and database management service.
Between 14 and
15 December 2009,
Mr
Battles
logged into the
Defendant’s Ezymsg account and sent
the
2009
messages.
The Department received 4
3
complaints in respect of
th
e 2009
messages
.
Enquiries of Ezymsg indicate that 519,545
such messages
were sent.
[20]
The Defendant acknowledges that
the sending of the 2009 messages,
at least
to
those who complained
, constituted a breach of s
9 of the Act
.
16 March
2010
and 9 December
2010
[21]
Between 16
March 2010 and 9 December 2010 t
he Defendant sent, or caused
to be sent,
further email messages to computers connected to the internet and located
in New Zealand
(“2010 messages”)
.
These messages were sent as part of
2
1 email
advertising c
ampaigns
conducted by the Defendant
.
The
Department
received
69
complaints in respect
of
the 2010 messages.
The precise number of recipients
of
the 2010 messages
is unknown
.
[22]
The Defendant acknowledges that
it
breached s
9 of the Act by sending or
causing
the 2010
messages to be sent
, at least in
respect of
those who complained.
Profit
[23]
Aside from the $1,000 paid by Mr Letfus, there is
little
information
available
as to the extent to which the Defend
ant profited from its conduct.
The agreed
statement of f
acts
is to the effect that profit was “modest
but material
” or “limited”.
Counsel for the Department acknowledged, however, that the Department did not
know
what profit was made.
Discussion
[24]
A
breach
any of
s
s
9
, 10, 11
or 15
constitutes a “civil liability
event”
for the
purposes of the Act
.
4
The Court may
order a person
to pay a pecuniary penalty in
4
Unsolicited Electronic Messages Act 2007, s
18.
accordance with s
45 of the Act if it is
satisfied that a person has committed a
civil
liability event
.
[25]
Section 45 provides:
45
Pecuniary penalties for civil
liability event
(1)
On the application of the enforcement department, the Court may
order a person (the “perpetrator”) to pay a pecuniary penalty to the
Crown, or any other person specified by the Court, if the Court is
satisfied that the perpetrator has
committed a civil liability event.
(2)
Subject to the limits in subsections (3) and (4), the pecuniary penalty
that the Court orders the perpetrator to pay must be an amount which
the Court considers appropriate taking into account all relevant
circumstanc
es, including

(a)
the number of commercial electronic messages sent:
(b)
the number of electronic addresses to which a commercial
electronic message was sent:
(c)
whether or not the perpetrator has committed prior civil
liability events.
(3)
If the per
petrator is an individual, the Court may order the
perpetrator to pay a pecuniary penalty not exceeding $200,000 in
respect of the civil liability events that are the subject of the
enforcement department's application.
(4)
If the perpetrator is an organis
ation, the Court may order the
perpetrator to pay a pecuniary penalty not exceeding $500,000 in
respect of the civil liability events that are the subject of the
enforcement department's application.
[26]
In determining the amount of the pecuniary penalty
to be
imposed
, s
45(2) of
the Act
requires the Court to take into account all relevant circumstances, including
in particular those
matters
referred to in s
45(2)(a), (b) and (c
).
On a “
Taueki

approach, s
s
45(2)
(a) and
45(2)
(b)
would be
material
to
the starti
ng point and
s
45(2)(c)
to the end sentence.
[27]
The Defendant has not committed a prior civil liability event. Although it is
an organisation for the purposes of s
45(4) of the Act
, its sole employees are
Mr
Battles and a sales representative.
[28]
Of particula
r relevance
in sentencing
will be
the need to deter a defendant,
and anyone else, from
breaching
the Act.
The
effects of
“spam” on the
efficiency of
the
internet
,
an essential means of communication
,
must
be borne
in mind. As s
45
states
, the number of c
ommercial electronic messages sent and the number of
addresses
affected
is highly material and goes to the gravity of the offending
. The
extent to which a defendant’s breach was deliberate,
parit
y of treatment and
principles of totality will also be mater
ial.
[29]
Counsel
referred me to a list of general principles considered pertinent to the
assessment of penalties under trade practices legislation, as appears in
Australian
Communications and Media Authority v Mobile
gate Ltd
and Others (No 4)
.
5
I agree
that
s
ome or
all of those matters may be relevant in any given case
.
Starting point
[30]
Counsel advised me that the parties had agreed a starting point of $30,000 to
$50,000
in respect of the text messages,
$100,000 to $140,000 in respect of the email
breaches, a
nd in each case had taken the mid
-
p
oint of the identified ranges, giving a
starting point for all the offending of $160,000.
Other authorities
[31]
I have considered
two
other
cases
in which the Court imposed a pecuniary
penalty.
These are
Chief Executive Dep
artment of Internal Affairs v Atkinson
and
Chief Executive of the Department of Internal Affairs v Mansfield
.
6
Mansfield
[32]
In
Mansfield
, the
Department
likewise sought the imposition of a civil
pecuniary penalty pursuant to s
45 of the Act. Mr
Mansfield
t
ook no steps in the
5
Australian Communications and Media Authority v Mobile
gate Ltd and Others (No 4)
[2009] FCA
1225, (2009) 180 FCR 467.
6
Chief Executive Department of Internal Affairs v
Atkinson
HC Christchurch CIV
-
2008
-
409
-
2391, 19
December 2008;
Chief Executive Department of Internal Affairs v
Atkinson
HC Christchurch CIV
-
2008
-
409
-
2391, 27 October 2009; and
Chief Executive of the Department of Internal Affairs v
Mansfield
, above n 2.
proceedings and
t
he case proceeded by way of a formal proof hearing. The
Department sought a pecuniary penalty of $100,000.
[33]
The events giving rise to the proceedings occurred between early April 2010
and late September 2010. During t
his time the Department received 53 complaints
from recipients of
emails
promoting “Business Seminars NZ”.
It appeared these
emails were sent as part of separate email marketing campaigns.
Wylie J
determined
that Mr
Mansfield had breached s
9 of the Act.
7
[34]
In fixing the starting point, Wylie J took into account that hundreds of
thousands of messages had been sent, that some recipients
had
received more than
one message, that Mr Mansfield had profited and that he had acted deliberately or
recklessly
. The J
udge allowed a reduction o
f $5,000 on account of early
co
-
operation, giving an end penalty of $95,000.
Atkinson
[35]
The Department’s proceedings in
Atkinson
were brought against Shane and
Lance Atkinson and Roland Smits. The proceedings
concerned
the sendi
ng of more
than 2 million unsolicited electronic messages to computers l
ocated in New Zealand
,
between September 2007 and
December 2007.
[36]
Lance Atkinson had agreed with a third party to market products on the
internet
.
In the period to which I have ref
erred
he received
payments in the order of
$1.6 million
,
an unspecified amount of which
he
paid to
others he had recruited to
assist him.
[37]
The emails were sent in breach of ss
9, 10 and 11 of the Act. All defendants
were knowingly concerned in those breach
es and therefore breached s
15 of the Act.
[38]
In respect of Lance
and Shane Atkinson,
French J considered that a starting
point

at the top of the available range

was warranted. The top of the available
range for an individual is $200,000. French J als
o accepted, however, that
each
defend
ant was
entitled to a substantial discount because
the
conduct was not illegal
7
Chief Executive of the Department of
Internal Affairs v Mansfield
, above n 2
at [59].
when it commenced,
for
an
undertaking
as to future compliance
and
for
their
co
-
operation. French J confirmed the
proposed
penalties
of $100
,000
for each of the
Atkinson
defendants and $50,000 in respect of Mr
Smits, who was less culpable.
[39]
I consider
that
the
starting point,
$160,000
,
that
the parties have agreed in this
case
to be
within
the proper range
although at the lower end of that range.
This is
because of
the
need for deterrence, the
number of breaches
, the period of time over
which they were committed and
the number of messages sent.
Although t
here is no
evidence as to how many 2010 messages were sent and to how many electronic
address
es
,
I
infer
both numbers were substantial, there being
21
separate
campaigns.
In addition to those matters, as an organisation, the Defendant is
subject to a higher
maximum penalty.
Matters relating to the Defendant
[40]
I accept t
he Department
’s submission
that
there are
no
aggravating
features
that require
an increase to the starting point
.
[41]
I also
agree
that
the starting point should be
reduc
ed
to reflect
the
Defendant’s
co
-
operation and acknowledgement
of liability
.
The
acknowledgement
of liability avo
id
s
the
very substantial
costs
the
taxpayer
would incur
if a
trial
were
required, that
trial
being
estimated to take seven days.
[42]
The parties submitted that
a
25 per cent reduction was
appropriate
.
I agree
t
hat
discount
is within the proper range and
tha
t
the
end penalty
of
$120,000
is
within the proper range.
[43]
I add that Counsel for the Department advised me from the Bar that, despite
requests, the Defendant had not supplied information as to how many messages were
sent in 2010 and to how many addresses.
There is no evidence of any such request.
In a future case,
however,
evidence of a refusal to supply such information might
affect the
extent of any
discount
to be given on account of
a defendant’s
co
-
operation.
Result
[44]
P
ursuant to s 45(1) of the Act
I
order
the First Defendant
to pay a pecuniary
penalty
of $120,000
to the Crown
in respect of the
civil liability
events referred to in
this judgment
.
[45]
The
re are no
submissions
before me as to
costs.
From that I assume that no
orders as to costs
are sought
but
c
ounsel may make submissions if they wish.
................................
................................
..
M Peters J


The Register of Known Spam Operations (ROKSO) collates information and evidence on entities with a history of spamming or providing spam services, and entities affiliated or otherwise connected with them, for the purpose of assisting ISP Abuse Desks and Law Enforcement Agencies.
The address of this ROKSO record is: https://www.spamhaus.org/rokso/evidence/ROK10473/

The above consists of information in the public domain. The Spamhaus Project makes every effort to avoid errors in information in the ROKSO database, and will correct any errors as soon as it is able to verify the correction, but accepts no responsibility or liability for any errors or omissions, or liability for any loss or damage, consequential or otherwise, incurred in reliance on the material in these pages. The Spamhaus Project makes no warranties or representations as to the accuracy of the Information in ROKSO records. The information in the ROKSO database is for information purposes only and is not intended as legal advice of any kind.

For information on contacting the ROKSO Team regarding any factual errors in this record, see the ROKSO FAQs.
© 1998-2016 The Spamhaus Project Ltd. All rights reserved.
Legal  |  Privacy