Internet trader jailed for contempt

7 February 2003

The Federal Court has jailed Internet trader Mr Neal Arthur Lyster after his failure to comply with conditions of the suspended sentence that followed on from action by the Australian Competition and Consumer Commission over misleading and deceptive conduct through an Internet site promoting Purple Harmony Plates.

Mr Lyster was previously found guilty of contempt of court and the Federal Court issued warrants of committal for a term of imprisonment for one month, suspended on condition that he take all steps necessary to transfer his domain name ‘’ to the ACCC and file in the Federal Court an affidavit of his assets.

On that occasion, Justice Goldberg rejected submissions from Mr Lyster that previous decisions of the Court were null and void. Justice Goldberg said: "Mr Lyster is labouring under a delusion that he is the head of a non-existent state and that his conduct is beyond the reach of the laws of Australia. Mr Lyster should realise he is quite wrong in this respect".

Mr Lyster continued to defy the Court maintaining his belief that he had seceded from the Commonwealth of Australia and was not subject to the Court's jurisdiction. Justice Goldberg again rejected these submissions noting that Mr Lyster had ignored a number of Court decisions, orders and directions.

Previously, the Federal Court imposed a $20,000 fine on Purple Harmony Plates Pty Ltd and $10,000 fines on the company directors. The fines, for contempt, were imposed because the respondents failed to implement court orders following a decision last year that they were in breach of the Trade Practices Act 1974. That earlier decision related to the making of unsubstantiated health and other claims for products promoted on the Internet.

The misleading claims included that the Purple Harmony Plates:

  • lowered body stress and fatigue levels;
  • helped strengthen the immune system;
  • accelerated healing;
  • increased general health;
  • reduced less severe aches and pains or niggly coughs and colds;
  • protected against electromagnetic radiation from computers, televisions, mobile telephones etc;
  • energised water and freed it from odour and chlorine;
  • grouped together heavy metals and other impurities [in water] into larger molecules so that they could not be absorbed by the body;
  • improve plant growth; and
  • ionised car fuel to allow a more complete fuel burn.

The original Federal Court orders included a direction to publish a corrective notice on the company's website within 14 days. The corrective notice should have been displayed immediately upon accessing the website’s homepage and order form. A United States based Registrar of domain names acknowledged the recent Federal Court orders and has transferred the domain name to the ACCC. The website now displays a notice alerting consumers to the misleading nature of representations previously displayed at that website.

On 23 December 2002 Justice Weinberg directed Mr Lyster to undertake an assessment for the purpose of preparing a pre-sentence report. Mr Lyster was also given a further opportunity to file material in answer to allegations of his failure to comply with earlier Court Orders. No such material was forthcoming and Mr Lyster failed to attend the pre sentence assessment arranged by the Federal Court.

"The jail term now imposed on Mr Lyster demonstrates that the ACCC is serious about its legal actions", ACCC Chairman, Professor Allan Fels, said. "The ACCC relies on parties to obey court orders and when they do not, it will vigorously pursue the matter. This decision again sends a very strong message to the community that the courts will not tolerate their orders being ignored.

"Enforcement of the law is a high priority as consumers must be fully and truthfully informed. Businesses cannot hide behind the Internet and use it as an excuse to ignore obligations arising under the Act. Irrespective of the medium, conduct in trade or commerce in Australia is subject to the Act and the jurisdiction of the Australian Court".

Release number: 
MR 020/03
ACCC Infocentre: 

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