Chief Executive of the Ministry of Business, Innovation and Employment v Swastik Solution Limited

[2015] NZHC 1913

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2015-485-000597 [2015] NZHC 1913

BETWEEN

CHIEF EXECUTIVE OF THE

MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT Applicant

AND

SWASTIK SOLUTION LIMITED First Respondent

DOMAIN NAME COMMISSION LIMITED

Second Respondent

Hearing:	12 August 2015
Counsel:	R S May and R Georgiou for Applicant No appearance for Respondents
Judgment:	12 August 2015

INTERIM JUDGMENT OF COLLINS J

Introduction

[1]      I  am  granting  two  applications  brought  by  the  Chief  Executive  of  the Ministry of Business, Innovation and Employment (MBIE) on behalf of Immigration New Zealand, a division of MBIE. Those applications seek:

(1)       Leave to commence this proceeding by originating application. (2)    Urgent without notice interim injunctions.

[2]      The interim injunctions are issued under s 41 of the Fair Trading Act 1986

(the Fair Trading Act) and s 120 of the Copyright Act 1994 (the Copyright Act).

CHIEF EXECUTIVE OF THE MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT v SWASTIK SOLUTION LIMITED [2015] NZHC 1913 [12 August 2015]

[3]      The interim injunctions issued under the Fair Trading Act restrain Swastik Solution Ltd (Swastik) from using its domain name   (the Domain Name) and from using, publishing or continuing to publish, any of the material on the website that is accessed through the Domain Name.

[4]      The interim injunctions issued under the Fair Trading Act also require the Domain  Name  Commission  Ltd  (the  Commission)  to  remove  and/or  lock  the Domain Name for 180 days or until further order of the High Court (period of removal).

[5]      The interim injunctions under the Copyright Act are in the same terms as those that I have issued in relation to the Fair Trading Act, save for one distinction. The interim injunctions under the Copyright Act do not restrain Swastik from using the Domain Name.

[6]      A copy of the terms of the injunctions are annexed to this judgment.

Context

[7]      The Immigration New Zealand website is  The only distinction between the Domain Name and the Immigration New Zealand website is the replacement of a full stop between “immigration” and “govt” with a hyphen in the Domain Name.

[8]      A screen shot of Swastik’s company’s website has been presented to me as an exhibit.   Swastik is described as being “a leading Delhi based website designer company”.  Swastik is the registrant of the Domain Name.

[9]      The  Commission  is  responsible  for  the  registration  and  management  of New Zealand domain names and can authorise the removal and/or locking of domain names within its jurisdiction, including all domain names ending “.nz”.

[10]     On 23 July 2015, Immigration New Zealand was informed that the Domain

Name  existed  and  appeared  to  have  been  designed  to  lead  those  who  access

Swastik’s  website  through  the  Domain  Name  to  believe  that  it  is  the  genuine

Immigration New Zealand website.

[11]     The information gathered by Immigration New Zealand strongly suggests that the purpose of the website is to facilitate the sale of fake New Zealand visas.

[12]     Swastik’s enterprise appears to work in the following way:

(1)An immigration or travel agent engaged in selling false New Zealand visas instructs its customers to go to Swastik’s website to “confirm” that they have genuine visas before asking for payment.

(2)The  customer  visits  Swastik’s   website  via  the  Domain  Name believing it to be an official Immigration New Zealand website and is directed to that part of the website that requires the customer to “confirm” that the visa is valid.

(3)Once the customer enters in the details provided by the agent, the customer receives a message “confirming” the visa is valid and then pays the agent.

[13]     Immigration New Zealand has made attempts to contact Swastik in relation to the website.   Those attempts have not been successful.   As at today’s date, the Domain Name remains active and there is an obvious ongoing concern that visitors to the website will be deceived into paying for fake New Zealand visas.

Procedure

[14]     Leave  has  been  sought  to  commence  this  proceeding  by  originating application under r 19.5 of the High Court Rules.

[15]     In determining that leave should be granted to commence the proceeding under r 19.5, I have given paramount consideration to what procedure will best

secure the “just, speedy and inexpensive determination of this proceeding”.1   In my assessment, a proceeding under r 19.5 is the appropriate vehicle in this case to ensure the proper determination of the issues.

Interim injunctions

Serious question to be tried

[16]     I am satisfied MBIE’s case passes the “serious question to be tried”2 and also passes the prima facie case threshold which some authorities have suggested may be appropriate in passing off cases.3    I have reached this conclusion because there is strong evidence Swastik has engaged in misleading or deceptive conduct in breach of s 9 of the Fair Trading Act by registering the Domain Name and creating a website that is almost identical to the official domain name and website of Immigration  New  Zealand.    I  am  also  satisfied  that  there  is  strong  evidence Swastik’s intention was to mislead visitors to its website into believing its website is

the  Immigration  New  Zealand  website  so  as  to  facilitate  the  sale  of  fake

New Zealand visas.

[17]     Section 3(1) of the Fair Trading Act extends the provisions of the Act to conduct that takes place outside of New Zealand by any person resident or carrying on business in New Zealand to the extent that such conduct relates to the supply of goods or services within New Zealand.

[18]     Although  both  Swastik  and  many  of  the  intended  victims  of  Swastik’s enterprise are based out of New Zealand, the High Court has jurisdiction to grant the relief sought for the following three reasons.

[19]     First, the Domain Name was registered in New Zealand on a New Zealand based register operated by the Commission.   Communications sent from overseas

persons to a New Zealand website can constitute conduct in New Zealand for the

1      Fisk v X [2014] NZHC 2797 at [14].

2      American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL).

3      Meat Services Ltd v Moses (1983) 1 TCLR 94; Maison Design Ltd v Acquamaison [1985] 5

EIPR D-88.

purposes of s 3(1) of the Fair Trading Act.4     In any event, if a material part of misleading or deceptive conduct occurred within New Zealand, the Fair Trading Act applies.5

[20]     Second, although the content of the website may have been created in Delhi, it nevertheless falls within the extra territorial provisions of s 3(1) of the Fair Trading Act because the content relates to the supply of goods and services by Immigration New Zealand.  The website purports to provide Immigration New Zealand’s services to customers of Swastik’s website.

[21]     Third, the interim injunctions I am issuing constitute a restraint on Swastik’s future conduct.   Under s 41(3) of the Fair Trading Act, the Court may grant an injunction restraining any person from engaging in conduct that is contrary to the Fair Trading Act if the Court is satisfied the defendant has engaged in that conduct or if, in the opinion of the Court, it is desirable to do so.  (Emphasis added)

[22]     I am also satisfied there is a strong case the contents of the Immigration New Zealand website is a literary work as defined in s 2 of the Copyright Act and that MBIE holds that copyright.

[23]     I am also satisfied there is a strong case that the Domain Name is sufficiently similar to the copyright work, that there is a causal connection between the copyright work and the Domain Name and that the Domain Name must have been derived from the copyright work.  I am therefore satisfied there is a strong basis to MBIE’s claim that Swastik has breached s 16 of the Copyright Act.

Balance of convenience

[24]     I am in no doubt the balance of convenience6 weighs very heavily in favour of granting the interim injunctions.

4      Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd [2010] NZCA 502, [2011] 1 NZLR 754 at

[103]-[106].

5      Douglas  Pharmaceuticals  Ltd  v  Nutripharm  New  Zealand  Ltd  HC  Auckland  CP515/97,

23 December 1997 at 11-12.

6      Eng Mee Yong v Letchumanan [1980] AC 331 (PC) at 337.

[25]     Swastik’s enterprise risks obvious loss to those who are lulled into purchasing fake visas as well as to the reputation of Immigration New Zealand and the integrity of the New Zealand government generally.

Overall interests of justice

[26]     It is in the overall interests of justice that potential victims of  Swastik’s enterprise and the integrity of the New Zealand immigration system are protected to the extent that is possible by issuing the interim injunctions.  This is not a case in which damages would ultimately be an adequate remedy for MBIE.

[27]     The overall interests of justice weigh very heavily in favour of granting the interim injunctions.

Conclusion

[28]     Interim injunctions are issued on the terms annexed to this judgment.  The interim injunctions remain in force for 180 days from today’s date or until further order of the High Court.

[29]     MBIE is entitled to costs against Swastik on a scale 2B basis in relation to the orders that I have made.

D B Collins J

Solicitors:

Luke Cunningham & Clere, Wellington for Appellant

TERMS OF THE INJUNCTIONS

Interim injunctions under section 41 of the Fair Trading Act 1986:

(1)restraining the first respondent by its officers, agents or servants or otherwise from using the domain name govt.nz (Domain Name) until the determination of the Final Orders Application; and

(2)restraining the first respondent by its officers, agents or servants or otherwise from making available the website content currently hosted at the Domain Name to the public of New Zealand in any manner or form, until the determination of the Final Orders Application; and

(3)       requiring the second respondent to:

(i)remove  the  Domain  Name  from  the  zone  file  until  the expiration of 180 days, or earlier if the Final Orders Application is decided against the applicant, with the effect that the Domain Name will not resolve to a web page, and email directed to it will not be delivered, during the period of its removal from the zone file;  and

(ii)lock all information relating to the Domain Name for 180 days,  or  earlier  if  the  Final  Orders Application  is  decided against the applicant, thereby preventing the registrant from making transfers, registrar changes, name server modifications and domain name cancellation during the period of the lock.

Interim injunctions under section 120 of the Copyright Act 1994 in the same terms as those made under paragraphs (2) and (3) above.