[1] This proceeding concerns an understanding reached between Amcor Ltd and its competitor Visy Board (NZ) Ltd and Visy Board Pty Ltd in contravention of the
Commerce Act 1986 (the Over-arching Understanding).1 All the claims have been

resolved except that against the sixth defendant, James George Hodgson.2

He is the

former Group General Manager of Amcor Fibre Packaging Australasia (AFPA), an Amcor subsidiary. Mr Hodgson is alleged to have been involved in both the Over- arching Understanding and in a specific understanding relating to Fonterra
Cooperative Group (the Fonterra Understanding).

[2] Mr Hodgson has taken no steps in the proceedings. The Commission is seeking judgment against him by formal proof on the 7th and 44th causes of action pleaded in the first amended statement of claim. In respect of those causes of action it seeks a pecuniary penalty of $70,000 together with costs of $38,352 and disbursements of $3,071.54. The remaining causes of action against Mr Hodgson
are not pursued.

[3] It appears that proceedings for a civil pecuniary penalty under the Commerce Act 1986 have not previously proceeded by way of formal proof. Mr Hamlin, however, referred me to Wylie J’s decision in Department of Internal Affairs v Mansfield in which a civil pecuniary penalty under the Unsolicited Electronic
Messages Act 2007 was imposed following a formal proof hearing.3 I respectfully
agree with Wylie J that there is no reason that a claim for pecuniary penalties should not proceed in the same way, there being no alternative procedure available.

1      The Over-arching Understanding was discovered by Amcor during unrelated litigation in Australia. Amcor approached the Australian Competition and Consumer Commission (ACCC) seeking leniency. Judgments have since been entered in both New Zealand and Australia (under the Australia Trade Practices Act 1974) against both the companies and individual executives responsible for the understanding.
2      Commerce Commission v Visy Board (NZ) Ltd & Ors [2013] NZHC 2097.
3      Department of Internal Affairs v Mansfield [2013] NZHC 2064.

Section 80 of the Commerce Act 1986

[4] By entering into the Over-arching Understanding and the Fonterra Understanding, Amcor contravened Part 2 of the Commerce Act, s 27(1) and (2) of which provides:

(1) No person shall enter into a contract or arrangement, or arrive at an understanding, containing a provision that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.

(2) No…

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 Hodgson

Details

AGLC: Commerce Commission v Hodgson [2014] NZHC 649
Case: [2014] NZHC 649
Decision Date: 2 April 2014

CaseChat Overview and Summary

In the case of Commerce Commission v Hodgson, the Commerce Commission sought a pecuniary penalty against James George Hodgson for his involvement in an anti-competitive arrangement with Visy Board (NZ) Ltd and Visy Board Pty Ltd, in contravention of the Commerce Act 1986. The proceedings concern two understandings, the Over-arching Understanding and the Fonterra Understanding, both of which had the effect of substantially lessening competition in the market for corrugated fibreboard packaging. The court was required to determine whether Mr Hodgson was directly or indirectly knowingly concerned in or party to the contravention by Amcor and whether a pecuniary penalty should be imposed.

The court found that Mr Hodgson was indeed involved in both the Over-arching Understanding and the Fonterra Understanding. Evidence from various Amcor executives, including admissions made by Mr Hodgson himself, established his knowledge and involvement in the arrangements. The court also concluded that the Commission had jurisdiction over Mr Hodgson, as his communications by phone and email constituted acts done in New Zealand.

In determining the appropriate penalty, the court considered various factors, including the nature and seriousness of the contravening conduct, the seniority of the defendant, and the extent of any benefit derived from the conduct. The court found Mr Hodgson's conduct to be serious, as he was the senior Amcor executive responsible for the New Zealand operation and facilitated the application of the Over-arching Understanding to the Fonterra tender. The court imposed a pecuniary penalty of $60,000, along with costs of $38,352 and disbursements of $3,071.54.

In conclusion, the court found James George Hodgson to be directly involved in the contravention of the Commerce Act and imposed a pecuniary penalty, costs, and disbursements against him. The decision serves as a deterrent and reinforces the importance of compliance with competition laws.

Orders