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Commerce Commission v PGG Wrightson Ltd

Commerce Commission v PGG Wrightson Ltd

Case [2015] NZHC 3360 22 December 2015

Breach of Contract

Unconscionable Conduct

Compensatory Damages

Judicial Review

Competition Law

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-001750 [2015] NZHC 3360

UNDER
Sections 27, 30 and 80 of the Commerce

Act 1986

BETWEEN

COMMERCE COMMISSION Plaintiff

AND

PGG WRIGHTSON LIMITED Defendant

Hearing: 11 December 2015

Counsel:

J C L Dixon and L C A Farmer for Plaintiff
P R Jagose and J Daly for Defendant

Judgment:

22 December 2015

JUDGMENT OF ASHER J

This judgment was delivered by me on Tuesday, 22 December 2015 at 11 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Meredith Connell, Auckland.
Chapman Tripp, Wellington. J Daly, Christchurch.

COMMERCE COMMISSION v PGG WRIGHTSON LTD [2015] NZHC 3360 [22 December 2015]

Introduction

[1] Following the introduction of the National Animal Identification and Tracing Act 2012, PGG Wrightson Ltd (PGW) took a leading role in implementing the regulatory changes required by the Act. In doing so PGW was involved in implementing industry-wide fee agreements that it now admits constituted price fixing under the Commerce Act 1986.

[2] The purpose of this judgment is to declare that PGW contravened the Commerce Act and to impose a penalty for those breaches. The assessment of penalty is on the basis of a detailed statement of facts agreed between the Commerce Commission (the Commission) and PGW for the purposes of this hearing. The Commission and PGW have agreed the appropriate quantum of penalty is in the range of $2,700,000, and have filed submissions in support.

[3] One other defendant, Rural Livestock Ltd has also pleaded guilty, and I have issued a penalty decision today in respect to it.1 I heard Rural’s case directly after hearing PGW’s. Given that the background to the infringements is the same and the agreed statement of facts contains identical material, much of what I have said in each decision is the same, and I follow the same structure. However, there are significant differences between the position of each and the penalties imposed.

Background

The party to this proceeding

[4] PGW is a New Zealand limited liability company, and is listed on the New Zealand Stock Exchange. It is a leading New Zealand firm operating in the agricultural sector in New Zealand, Australia and South America and offers a range of products and services. These include rural supplies, wool broking and handling, livestock agency and export services, insurance, water and irrigation, and real estate. PGW acts as an agent for farmers, selling and purchasing livestock at saleyards. It
also has ownership or leasehold interests in 51 of the 68 saleyards transacting cattle

1 Commerce Commission v Rural Livestock Ltd [2015] NZHC 3361.

sales in New Zealand. PGW had a total operating revenue of $1,200,000,000 with an EBITDA of $69,500,000. Revenue from the livestock business was $86,700,000.

[5] PGW is one of the defendants to this proceeding, the majority of whom deny the allegations made by the Commission. The liability of the other defendants is not in issue in these proceedings.

The livestock industry

[6] The principal methods of trading…

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 Ltd

Details

AGLC: Commerce Commission v PGG Wrightson Ltd [2015] NZHC 3360
Case: [2015] NZHC 3360
Decision Date: 22 December 2015

CaseChat Overview and Summary

PGG Wrightson Ltd (PGW) was involved in implementing industry-wide fee agreements that constituted price fixing under the Commerce Act 1986. The Commerce Commission (the Commission) brought proceedings against PGW to declare that it contravened the Act and to impose a penalty for those breaches. The court was required to decide on the appropriate penalty for PGW’s breaches of the Commerce Act. The court considered the nature and extent of the commercial gain, the deliberateness of PGW’s conduct, its duration, the harm to the market, and comparable case law. The court accepted the starting point parameters agreed by the parties of $3,400,000 to $4,300,000 as appropriate. The court imposed a pecuniary penalty of $2,700,000 for PGW’s contravening the Commerce Act and declared that there would be no order as to costs.

Orders