Marsich v Commerce Commission
[2017] NZHC 1589
•11 July 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI 2017-404-077 [2017] NZHC 1589
BETWEEN GAVIN JOHN MARSICH
Appellant
AND
COMMERCE COMMISSION Respondent
Hearing: 10 July 2017 Counsel:
G J Marsich, in person, Appellant
A M McClintock and T C Clark for RespondentJudgment:
11 July 2017
JUDGMENT OF HEATH J
This judgment was delivered by me on 11 July 2017 at 11.00am pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
Meredith Connell, Auckland
Copy to:G J Marsich, Appellant
MARSICH v COMMERCE COMMISSION [2017] NZHC 1589 [11 July 2017]
The appeal
[1] Mr Gavin John Marsich appeals against conviction on 16 charges involving breaches of the Commerce Act 1986, the Fair Trading Act 1986 and the Credit Contracts and Consumer Finance Act 2003. He also appeals against the sentence imposed upon him. His appeal is brought on jurisdictional grounds only.
Background
[2] Twenty Fifty Club Ltd (Twenty Fifty) and Mr Marsich were each charged with 17 offences which were based on contravention of particular provisions of the three Acts to which I have referred. The Commerce Commission (the Commission) alleged that Twenty Fifty was the principal offender with Mr Marsich, as its sole director, a party. In broad terms, the charges fell into three categories:
(a) Those alleging that Twenty Fifty and Mr Marsich failed, without reasonable excuse, to comply with a notice issued under s 98(a) and (c) of the Commerce Act 1986;
(b)Those alleging that Twenty Fifty and Mr Marsich failed to comply without reasonable excuse with a notice issued under s 47G of the Fair Trading Act 1986; and
(c) Those alleging Twenty Fifty and Mr Marsich engaged in conduct prohibited by the Credit Contract and Consumer Finance Act 2003.
[3] In a judgment given on 3 June 2016, following a trial in the District Court at
Manukau in April 2016, Judge Moses found Twenty Fifty and Mr Marsich guilty of
16 of those charges.1 The remaining charge had been brought in the alternative and did not require determination. Although, having unsuccessfully protested the jurisdiction of the Court, Mr Marsich did not participate in the defended hearing, the
Court did have the assistance of amicus curiae.
1 Commerce Commission v Twenty Fifty Club Ltd [2016] NZDC 7242.
[4] Twenty Fifty and Mr Marsich were sentenced on 24 November 2016. The Judge set out briefly the background to the prosecution and the purposes of the various statutes under which the charges were laid. Having identified aggravating and mitigating factors concerning the offending, Judge Moses imposed fines totalling $38,000 on both Twenty Fifty and Mr Marsich.2
[5] The Judge went on to consider whether ancillary orders should be made under s 94 of the Credit Contracts and Consumer Finance Act.3 He made various declarations to which I do not need to refer, as well as reparation orders.4 The Judge also made an order disqualifying Mr Marsich from being a party to entering into various types of consumer credit contracts5 indefinitely.6 A question is whether an indefinite ban is a proportionate response to the offending.
[6] I heard from Mr Marsich on the jurisdictional point. He indicated that if I were to rule against him on that issue he did not wish to be heard on the merits of his appeal. Having told Mr Marsich that I had jurisdiction and would consider the appeal, with my permission he elected to leave the courtroom. I said that I would give reasons in writing for my rulings on both the jurisdictional point and the appeal itself.
Jurisdiction
[7] Mr Marsich has a firmly and genuinely-held view that courts in this country should not enforce any law that is inconsistent with the scriptures. He presented his submissions in a form styled “Asseveration”. The act of asseverating is defined by the Oxford English Dictionary as making a “solemn affirmation”, an “emphatic assertion”, a “positive declaration” or an “avouchment”. Those words all reflect the nature of Mr Marsich’s deeply-held beliefs and the means by which he articulated
them.
2 Commerce Commission v Twenty Fifty Club Ltd [2016] NZDC 23919 at paras [35] and [36].
3 Ibid, at paras [39]–[41].
4 Ibid, at paras [37] and [38].
5 Credit Contracts and Consumer Finance Act 2003, s 108(2).
6 Commerce Commission v Twenty Fifty Club Ltd [2016] NZDC 23919 at para [41].
[8] Mr Marsich referred to the 613 Commandments that he takes from the scriptures and asserted that it was not open to Parliament (or any other body or person) to add to or diminish from God’s words. He cited passages from Deuteronomy, Revelations and Acts to support this assertion. As a result, Mr Marsich contends that the courts do not have jurisdiction to hear and determine cases of the type brought by the Commission against him.
[9] With specific reference to the charges brought by the Commission, Mr Marsich submitted that the laws alleged to have been infringed, unless accompanied by passages from the scriptures that support them, are void. Mr Marsich presented his submissions on the basis that he had been commanded by Christ to do so, and was the true descendant of the Lion of Judah.
[10] Ms McClintock, for the Commission, opposed the challenge to jurisdiction. She contended that the District Court had properly embarked upon a consideration of the merits of the charges and, in the absence of a successful appeal, the convictions and other orders entered should be preserved.
[11] As I told Mr Marsich, there is a consistent line of authority by which this Court is bound that holds that there is jurisdiction for charges of the type brought against him to be heard and determined by the Court. At the highest level of our judiciary, the Supreme Court has held that objections to the jurisdiction of trial courts in New Zealand on grounds analogous to those advanced by Mr Marsich are “plainly unsound legally”.7 In R v Mason,8 I reviewed a number of authorities in holding that:
[32] … Courts derive their authority to hear and determine criminal cases from the exercise of Parliament’s legislative powers. Once a statute has conferred jurisdiction on a Court to hear and determine a criminal cause, it is impermissible for any other institution or tribunal to attempt to replicate those powers.
[12] Those comments were made in the context of a submission that a Maori accused should be tried in accordance with tikanga Maori; hence the reference to
other institutions or tribunals. While it may fairly be said that each person will be
7 Wallace v R [2011] NZSC 10 at para [2].
8 R v Mason [2012] NZHC 1361, [2012] 2 NZLR 695 at paras [32]–[37].
judged for their actions by their maker, whether that is true does not affect the obligation of the Courts to enforce the laws of this country.
[13] For those reasons, Mr Marsich’s challenge to the jurisdiction of the District Court and this Court to deal with the merits of the charges brought by the Commission against him must fail. As a result, I proceed to consider the appeal.
The appeal
[14] Twenty Fifty was engaged in providing short term finance to customers, many of whom were vulnerable due to the low incomes they received. Those seeking to borrow funds from Twenty Fifty generally required money urgently and had no or little access to alternative credit facilities. The nature of the business gave rise to the terminology by which this type of lending is known: “pay day lending”.
[15] The Judge was satisfied that Twenty Fifty engaged in lending practices of that type, and that Mr Marsich, as a director of Twenty Fifty, was a party to the offending proved. In making findings on the charges involving breach of the Credit Contracts and Consumer Finance Act, Judge Moses said:9
[12] I am satisfied on the evidence presented at trial, that at all material times Mr Marsich was a director of Twenty Fifty, having been appointed a director on 8 August 2013. From 27 December 2013, Mr Marsich was the sole director and shareholder of the company. Furthermore, I am satisfied on the evidence given, and on the basis of the exhibits produced, that Mr Marsich was the person who had dealings with prospective customers, including each of those who gave evidence before me. He was the person who had dealings with the Commission and its investigation as the representative of the company. Each of the loan documents produced, whether they be described as promissory notes, members promissory notes, or membership and grant documents, each have Mr Marsich’s name on the pre-printed forms as a witness to the documents. Those documents, the text messages sent and received from Mr Marsic’'s telephone which have been produced along with Mr Marsich’s ASB bank records, all confirm that Mr Marsich was responsible for the day-to-day activities of Twenty Fifty, and that he was directly involved in receiving, processing and enforcing loans made by Twenty Fifty.
[16] I have reviewed the judgment given by Judge Moses in which he found Mr
Marsich guilty of the offences with which he had been charged. I am satisfied that
9 Commerce Commission v Twenty Fifty Club Ltd [2016] NZDC 7242 at para [12].
there was sufficient proof for the Judge to find Mr Marsich guilty, in his capacity as a director of Twenty Fifty. The issue of his “directorship” was raised faintly in some of the submissions put before me by Mr Marsich. In the absence of new evidence, I hold that the Judge was entitled to find that Mr Marsich was the director and guiding mind of Twenty Fifty. In those circumstances, the conviction appeal will be dismissed.
[17] I have also reviewed the sentencing remarks made by Judge Moses. In my view, the Judge correctly identified relevant sentencing purposes and principles and applied them correctly. The overall sentence imposed cannot be regarded as manifestly excessive, or in any other way as inappropriate. The sentence appeal will also be dismissed.
The ancillary orders
[18] The Judge acceded to the Commission’s submission that a series of ancillary orders be made under s 94 of the Credit Contracts and Consumer Finance Act. They consisted of declarations about certain fees included in the consumer credit contracts that were unlawful. I am satisfied those orders were justified.
[19] The one issue that has caused me some concern involves the Judge’s order that Mr Marsich be prohibited from entering into certain types of consumer credit contracts indefinitely. Judge Moses based his decision on s 108 of the Credit Contracts and Consumer Finance Act 2003. Relevantly, it states:
108Power to order certain persons not to act as creditors, lessors, transferees, or buy-back promoters
(1) The District Court may make an order prohibiting or restricting a person from doing all or any of the matters set out in subsection (2) if—
(a) the person—
(i) has been convicted of an offence against this Act, or of a crime involving dishonesty (as defined in section 2(1) of the Crimes Act 1961); or
(ii) is, or has been, a creditor under a credit contract that has been reopened under the Credit Contracts Act
1981; or
(iii) is, or has been, a creditor under a credit contract, a lessor under a consumer lease, or a transferee under a buy-back transaction that has been reopened under section 120; or
(iv) is, or has been, a buy-back promoter in connection with a buy-back transaction that has been reopened under section 120; or
(v) has failed, more than once, to comply with any of the provisions of this Act (including, to avoid doubt, the lender responsibility principles (see section
9C(2)); or
(vi) was a director or principal officer of a body corporate at the time the body corporate acted in the manner referred to in subparagraphs (i) to (v); and
(b) in the opinion of the District Court, the person is not a fit and proper person to—
(i) enter into consumer credit contracts as a creditor; or
(ii) enter into consumer leases as a lessor; or
(iii) enter into buy-back transactions as a transferee; or
(iv) act as a buy-back promoter in connection with a buy-back transaction.
…
(2) The matters are—
(a) providing credit under consumer credit contracts, leasing goods under consumer leases, purchasing land under buy- back transactions, or acting as a buy-back promoter in connection with a buy-back transaction either alone or in partnership with any person and whether or not through agents:
(b) acting as a director or taking part directly or indirectly in the management or control of any company or business that provides credit under consumer credit contracts, leases goods under consumer leases, purchases land under buy- back transactions, or acts as a buy-back promoter in connection with a buy-back transaction:
(c) being in the employ, or acting as an agent, of a creditor, a lessor, a transferee, or a buy-back promoter in any capacity that allows the person to take any part in the negotiation of—
(i) consumer credit contracts involving the provision of credit by the creditor; or
(ii) consumer leases involving the leasing of goods by the lessor;
or
(iii) buy-back transactions.
[20] In making his orders, Judge Moses said:10
[41] Finally, the Commission seeks a banning order under s 108(1) Credit Contracts and Consumer Finance Act 2003. Under the Act, I may make an order prohibiting a person from doing any of the matters set out under s 108(2) where a person has been convicted of an offence against the Act, or has failed more than once to comply with any of the provisions of the Act, if in the opinion of the District Court the person is not a fit and proper person to enter into consume a credit contract as a creditor, or enter into consumer leases as a lessor or enter into buy back transactions as a transferee or act as a buy back promoter in connection with a buy back transaction.
[42] I agree entirely with the submissions made by the Commission that Mr Marsich’s actions indicate a wholesale disregard for his statutory responsibilities and as such, I am of the view that this is an appropriate case for such an order to be made.
[43] Mr Marsich’s conduct which gives me grounds for forming that view includes amongst other things, that he does not accept that the Credit Contracts, Fair Trading or Commerce Act or in fact any legislation enacted by Parliament applies to him. Secondly, he does not accept that the Commission has any authority to investigate his business practices. Thirdly, he failed to register as a financial services provider. I could add that he does not accept that this Court has any control over his actions.
[44] In these circumstances and in the circumstances of this case, I am of a view that a banning order is necessary to protect the public, and to deter and set a standard for other creditors, and that it is appropriate that the ban be for an indefinite duration.
[21] I expressed some concern about whether it was appropriate, in the circumstances of this case, for the Judge to impose an indefinite ban of that type. I raised with Ms McClintock whether some further thought ought to be given to the length of any ban, having regard to the gravity of Mr Marsich’s offending and the dangers he poses to vulnerable borrowers. I referred to the way in which similar
questions involving prohibitions on bankrupts or directors are assessed.11
10 Commerce Commission v Twenty Fifty Club Ltd [2016] NZDC 23919, at paras [41]–[44].
11 Generally, see Jim Guest “Introduction: Personal Insolvency” in Heath and Whale (eds) Insolvency Law in New Zealand (2nd ed, LexisNexis, Wellington, 2014) at para 9.22, in relation to prohibitions on bankrupts from acting as directors or otherwise participating (directly or indirectly) in the management of a company.
[22] Ms McClintock properly relied on the findings made by Judge Moses about Mr Marsich’s role in the transactions under review.12 Having heard from her, I am hesitant to revisit the Judge’s order, especially in circumstances where there is no contradictor to assist on the appropriate approach to apply. I intend to leave the order intact on the basis that Mr Marsich has not expressly challenged it, the Judge made findings that justified (at least) a lengthy ban, and there is no public interest
concern that would provide a reason why I should review it on the basis of the information before me. However, I urge the Commission to give consideration to the approach it should take when banning orders are sought, so that courts that are asked to make such orders have the benefit of full submissions on the point.
Result
[23] For those reasons, the appeal against conviction and sentence is dismissed.
P R Heath J
Delivered at 11.00am on 11 July 2017
12 See para [20] above.
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