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Commerce Commission v Enviro Waste Services Ltd

Commerce Commission v Enviro Waste Services Ltd

Case [2015] NZHC 2936 13 November 2015

Breach of Contract

Unconscionable Conduct

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REDACTED VERSION TO PROTECT COMMERCIALLY SENSITIVE INFORMATION. JUDGMENT MAY BE PUBLISHED IN THIS FORM.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
COMMERCIAL LIST

CIV 2015-404-2245 [2015] NZHC 2936

UNDER
Sections 27 and 30 of the Commerce Act

1986

BETWEEN

COMMERCE COMMISSION Plaintiff

AND

ENVIRO WASTE SERVICES LTD First Defendant

DARRELL ASKEW Second Defendant

Hearing: 13 November 2015

Counsel:

J C L Dixon and K C Francis for Plaintiff
L O'Gorman for Defendants

Judgment:

13 November 2015

Reasons:

24 November 2015

REASONS FOR JUDGMENT OF HEATH J

Solicitors:
Meredith Connell, Auckland Buddle Findlay, Auckland Counsel:
J C L Dixon, Auckland

COMMERCE COMMISSION v ENVIRO WASTE SERVICES LTD [2015] NZHC 2936 [13 November 2015]

Introduction

[1] The combined effect of ss 27 and 30 of the Commerce Act 1986 (the Act) is to render of no effect any “contract, arrangement, or understanding” that has the purpose, or the likely effect, of substantially lessening competition in a market. Those who engage (or attempt to engage) in conduct in contravention of those provisions may become liable to pay pecuniary penalties.1 If the relevant anti- competitive behaviour were proved, this Court may order the person to pay to the Crown such sum as it determines to be appropriate, having regard to the available maximum penalties.2

[2] Enviro Waste Services Ltd (Enviro Waste) and the manager of its Nelson branch, Mr Darrell Askew, have each admitted allegations made by the Commerce Commission (the Commission) that they attempted to engage in conduct, contrary to ss 27 and 30 of the Act. Following those admissions, the Commission and Enviro Waste have recommended agreed pecuniary penalties: a penalty of $425,000 to respond to Enviro Waste’s conduct, and one of $5000 to mark Mr Askew’s. If those recommendations were approved, the parties agree that the costs of the proceeding will lie where they fall. In any event, Enviro Waste will contribute $25,000 towards the Commission’s investigation costs.

[3] On 13 November 2015, after hearing argument, I approved the penalties with reasons to follow.3 These are my reasons for doing so.

Agreed facts

[4] In August/September 2012, Enviro Waste was competing in a market for the collection of waste oil (including waste tallow) from businesses located in the upper South Island. At material times, Mr Askew was the manager of its Nelson branch, known as its “Bens Oil” Division.

[5] Waste oil collectors process, treat, and on-sell or dispose of such oil. The three main providers of those services in the relevant period, were Enviro Waste,

1      Commerce Act 1986, s 80(1).
2      Ibid, s 80(2B), set out at para [29] below.
3      Commerce Commission v Enviro Waste Services Ltd [2015] NZHC 2829.

Transpacific Industries Group Ltd (Transapacific) and Fulton Hogan Ltd. [Redacted information about market share].

[6] The Commission accepts that neither Transpacific nor Fulton Hogan engaged in…

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.

Continue reading Commerce Commission v Enviro Waste Services Ltd

Details

AGLC: Commerce Commission v Enviro Waste Services Ltd [2015] NZHC 2936
Case: [2015] NZHC 2936
Decision Date: 13 November 2015

CaseChat Overview and Summary

The case involved Enviro Waste Services Ltd and its manager, Darrell Askew, who admitted to attempting to engage in conduct that contravened sections 27 and 30 of the Commerce Act 1986. These sections prohibit contracts, arrangements, or understandings that substantially lessen competition in a market. The Commerce Commission sought pecuniary penalties against Enviro Waste and Mr. Askew for their conduct. The court had to determine whether to approve the recommended penalties of $425,000 for Enviro Waste and $5,000 for Mr. Askew.

The court assessed the appropriateness of the penalties by considering the maximum penalties available under the Act, the culpability of the parties, and various mitigating factors. For Enviro Waste, the court acknowledged the maximum penalty of $10 million and applied a credit of 30-35% for mitigating factors such as prompt admission of responsibility and lack of knowledge by senior management. The resulting penalty of $425,000 was deemed appropriate. For Mr. Askew, the court considered his personal circumstances and impulsive nature, and applied a credit of 45-55%. The penalty of $5,000 was deemed appropriate and would be paid in three installments.

The court approved the recommended penalties and ordered Enviro Waste to pay a penalty of $425,000 and Mr. Askew to pay a penalty of $5,000 in three installments. No order as to costs was made.

Orders