Commerce Commission v Ace Marketing Limited - [2021] NZHC 3312

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-869

[2021] NZHC 3312

UNDER Parts 1A and 4 of the Credit Contracts and Consumer Finance Act 2003, and Parts 4A and 5 of the Fair Trading Act 1986

BETWEEN

COMMERCE COMMISSION

Plaintiff

AND

ACE MARKETING LIMITED

Defendant

Hearing: 3 December 2021

Appearances:

J Dixon QC, J Barry and N Herewini for the Plaintiff No appearance for the Defendant

Judgment:

6 December 2021

Reissued:

8 December 2021

RESULTS JUDGMENT OF ROBINSON J

This judgment was delivered by me on 6 December 2021 at 2:00 pm pursuant to Rule 11.5 of the High Court Rules

…………………………………………………………………… Registrar/Deputy Registrar

Solicitors/Counsel:
Meredith Connell, Auckland Russell McVeagh, Auckland

COMMERCE COMMISSION v ACE MARKETING LIMITED [2021] NZHC 3312 [6 December 2021]

[1] On 3 December 2021 I heard the plaintiff’s (Commission) application for declaratory and injunctive relief. The matter proceeded by way formal proof,1 the defendant’s (ACE) statement of defence having been struck-out by Muir J on 30 September 2021,2 because ACE failed to comply with an “unless order” made by Fitzgerald J in respect of ACE’s discovery obligations.3

[2] The Commission brought evidence and made submissions only in pursuit of the relief sought in its first, second and fourth causes of action. The Commission withdrew its third, fifth and sixth causes of action.

[3]This is a results judgment. The reasons will follow shortly.

First cause of action

[4]In respect of the first cause of action I:

(a)declare that by its conduct pleaded at paragraphs 4.2 - 4.11 of the statement of claim dated 12 June 2020 ACE breached s 9C(1) via ss 9C(2)(b) and 9C(3)(b)(ii) of the Credit Contracts and Consumer Finance Act 2003;

(b)direct that ACE is not to provide credit under the Contracts described at paragraphs 3.4 and 3.5 of the Statement of Claim or otherwise unless and until it amends its Contract in such away as to comply with s 9C(3)(b)(ii) of the Credit Contracts and Consumer Finance Act 2003.

Second cause of action

[5]In respect of the second cause of action I:

(a)declare that by its conduct pleaded at paragraphs 4.2 – 4.11 of the Statement of Claim, ACE breached s 9C(1) via ss 9C(2)(b) and

1 High Court Rules 2016, r 15.9.
2 Minute of Muir J, dated 30 September 2021 at [2].
3 Minute of Fitzgerald J, dated 26 August 2021 para [5].

9C(3)(b)(iii) of the Credit Contracts and Consumer Finance Act 2003; and

(b)direct that ACE is not to provide credit under the Contracts described at paragraphs 3.4 and 3.5 of the Statement of Claim or otherwise unless and until it complies with s 9C(3)(b)(iii) of the Credit Contracts and Consumer Finance Act 2003.

Fourth cause of action

[6]In respect of the fourth cause of action I declare as follow:

(a)ACE Marketing Limited, entered into standard form consumer contracts on deferred payment terms (ACE's Contract) between 1 April 2016 and 31 August 2018 (Claim Period);

(b)ACE's customers signed up…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NZHC 3312
Decision Date: 6 December 2021

CaseChat Overview and Summary

The High Court of New Zealand considered a case brought by the Commerce Commission against Ace Marketing Limited, seeking declaratory and injunctive relief under various statutes. Ace Marketing Limited, which had failed to comply with discovery obligations, did not appear at the hearing. The Commission sought relief on three causes of action, withdrawing three others. The court found that Ace Marketing Limited had breached specific sections of the Credit Contracts and Consumer Finance Act 2003 and the Fair Trading Act 1986 by including unfair contract terms in its standard form consumer contracts. Specifically, the court held that Ace Marketing Limited's delayed delivery provisions, which extended the delivery time based on missed payments, were unfair as they created a significant imbalance in the parties' rights and obligations, were not necessary to protect Ace Marketing Limited's legitimate interests, and would cause detriment to customers.

The court declared that Ace Marketing Limited had breached the specified sections of the relevant acts and issued an injunction preventing Ace Marketing Limited from providing credit unless and until it amended its contracts to comply with the statutory requirements. Additionally, the court found that Ace Marketing Limited's delayed delivery provisions amounted to an unfair contract term under the Fair Trading Act 1986, and accordingly, Ace Marketing Limited was prohibited from including or relying on these provisions in its standard form contracts. The court granted the Commerce Commission costs on a 2B basis. The judgment was reissued to correct minor typographical errors.

Orders