Commerce Commission v PGG Wrightson Limited - [2017] NZHC 2584

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-001750 [2017] NZHC 2584

UNDER
Section 27, 30 and 80 of the Commerce

Act 1986

BETWEEN

COMMERCE COMMISSION Plaintiff

AND

PGG WRIGHTSON LIMITED First Defendant (discontinued)

ELDERS RURAL HOLDINGS LIMITED Second Defendant

Hearing: 13 October 2017

Appearances:

L Farmer and J Carlyon for Plaintiff
M Anderson for Second Defendant

Judgment:

24 October 2017

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 24 October 2017 at 11.00 am
pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date……………………….

COMMERCE COMMISSION v PGG WRIGHTSON LTD & OR [2017] NZHC 2584 [24 October 2017]

Introduction

[1] Elders Rural Holdings Ltd (Elders) admits breaches of s 27, via s 30, of the Commerce Act 1986 in relation to anti-competitive agreements between competing stock and station agents and saleyard owners. The other defendants in the proceeding (including Stuart Chapman, the Managing Director of Elders) also admitted breaches. They have had pecuniary penalties imposed on them.1 However, the Commerce Commission seeks only a declaration as to Elders’ contravening conduct. This is because Elders has been sold to Australian interests, is heavily indebted with no significant assets and is no longer trading in New Zealand.

[2] The matter comes before the Court on an agreed basis, with Elders supporting the making of the declaration sought. Whilst it is for the Court, ultimately, to determine what orders are appropriate, the Court recognises and accepts the assistance provided by agreed facts and legal submissions that support the relief sought.2

[3] The contravening conduct occurred in the context of the passage of National

Animal Identification Tracing Act 2012 (NAIT Act) through Parliament in the period

2010 – 2012. The purpose of the NAIT Act was to establish a scheme to track the movements of stock throughout New Zealand. It imposed new obligations on saleyard owners and stock and station agents. These obligations would come at a cost and it was three agreements regarding those costs that are the subject of this proceeding:

(a) The tagging fee agreement, under which owners and those with an interest in saleyards agreed to charge farmers a minimum fee of $25 for cattle and $10 for calves presented to any saleyard without the tag
required by the NAIT Act;

1 Commerce Commission v PGG Wrightson Ltd [2015] NZHC 3360; Commerce Commission v PGG Wrightson Ltd [2016] NZHC 2921; Commerce Commission v Rural Livestock Ltd [2015] NZHC 3361.
2 Commerce Commission v New Zealand Milk Corp Ltd [1994] 2 NZLR 730 (HC) at 733 and
Commerce Commission v Alstom Holdings SA HCAuckland, CIV-2007-404-2165, 22 December
2008, [2009] NZCCLR 22 (HC) at [18].

(b)The RFID3 fee agreement, under which stock and station agents agreed to charge farmers an administration fee of $1.50 per head of cattle split equally between vendor and purchaser to register saleyard- based cattle movements and, ostensibly, to defray the costs of the RFIDs required…

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 PGG Wrightson Limited

Details

AGLC: Commerce Commission v PGG Wrightson Limited [2017] NZHC 2584
Case: [2017] NZHC 2584
Decision Date: 24 October 2017

CaseChat Overview and Summary

In this case, Elders Rural Holdings Ltd admitted to breaching sections 27 and 30 of the Commerce Act 1986 by entering into anti-competitive agreements with other stock and station agents and saleyard owners. The breaches related to agreements on tagging fees, RFID fees, and yard fees that were implemented to cover costs associated with the National Animal Identification Tracing Act 2012. The Commerce Commission sought a declaration that Elders' conduct was unlawful, as Elders has no significant assets and is no longer trading in New Zealand. The court was required to determine whether a declaration was appropriate in these circumstances, considering factors such as the public interest, deterrence, and consistency with other defendants.

The court found that a declaration was appropriate in this case, as it would serve the purposes of deterrence and assist the Commission in its educative function. The court noted that the contravening conduct occurred openly in the context of an industry body working towards the implementation of a new regulatory regime, and that none of the individuals involved seemed to realize the potential implications of their conduct. The court also considered the practical utility of issuing a declaration and the fact that no penalty was sought due to Elders' current financial position.

The court made a declaration that between April 2011 and July 2014, Elders Rural Holdings Ltd entered into and gave effect to three anti-competitive agreements and, by that conduct, breached sections 27 and 30 of the Commerce Act 1986. The parties agreed that the costs of the proceedings should lie where they fall, and the court did not make any order as to costs.

This case highlights the importance of understanding the potential implications of anti-competitive agreements, even in the context of implementing new regulatory regimes. It also demonstrates the court's willingness to exercise its discretion in making a declaration where it is in the public interest and serves the purposes of deterrence and education.

Orders