Legal Research
Cases
Commerce Commission v Ronovation Ltd

Commerce Commission v Ronovation Ltd

Case [2019] NZHC 2303 13 September 2019

No judgment structure available for this case.

Type to search within this case.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1353

[2019] NZHC 2303

UNDER
Sections 27, 30 and 80 of the Commerce Act

1986 (conduct before 15 May 2018)

AND UNDER

Sections 30 and 80 of the Commerce Act 1986 (conduct on or after 15 May 2018)

BETWEEN

COMMERCE COMMISSION

Plaintiff

AND

RONOVATION LIMITED

Defendant

Hearing: 6 September 2019

Counsel:

J Dixon QC and J M Phillips for plaintiff

M N Dunning QC and D A K Blacktop for defendant

Judgment:

13 September 2019

JUDGMENT OF KATZ J

This judgment was delivered by me on 13 September 2019 at 3:30pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors: Meredith Connell, Auckland

Blacktop Lawyers, Auckland

Counsel: J Dixon QC, Barrister, Auckland
M N Dunning QC, Barrister, Auckland

COMMERCE COMMISSION v RONOVATION LIMITED [2019] NZHC 2303 [13 September 2019]

Table of Contents

Introduction.......................................................................................................... [1]

Ronovation’s anticompetitive conduct............................................................... [6]

Origins of the Agreement [7]

Entry into and giving effect to the Agreement [12]

Relevant law....................................................................................................... [16] Ronovation’s admissions................................................................................... [20]

The Court’s approach to recommended penalties.......................................... [23]

The framework for penalty assessment........................................................... [27]

The maximum penalty....................................................................................... [29]

The starting point.............................................................................................. [31]

Relevant factors [31]

The nature and seriousness of the contravening conduct [33]

Importance and type of market [41]

Whether the conduct was deliberate or not  [43] The duration of the conduct/potential harm from the conduct  [47] Ronovation’s role in the contravening conduct  [54]
Potential commercial gain to Ronovation  [55] The market share/degree of market power held by the defendant  [57] Assessment of relevant case law  [58]
Conclusion on starting point  [61]

Adjustment for defendant-specific factors...................................................... [63]

Previous contraventions [64]

The nature, size and resources of the defendant [65]

Engagement with the Commission/admissions of liability [67]

Discount [71]

Conclusion.......................................................................................................... [73]

Result.................................................................................................................. [75]

Introduction

[1] Ronovation Limited (“Ronovation”) is a company owned by the family of Ronald Ng Hoy Fong. Mr Hoy Fong was also the director of the company at the relevant times.

[2] Ronovation (which traded as RonovatioNZ) provided advisory services to clients (referred to as “members” or “students”) who wanted to acquire residential real estate in the Auckland area, for investment purposes. Ronovation’s advice included information about what to look for in a property; how to negotiate with the vendor or bid at auction; how to renovate the property after acquisition; and how to find and manage tenants. Ronovation operated a Facebook page, accessible only to members, for the sharing and exchanging of information about property investments.

[3] In August/September 2011, Mr Hoy Fong implemented rules (“the Priority Rules”) to avoid members competing against each other to purchase properties. In essence, the first member to notify the group of their interest in a property had priority over other members, who were not permitted to negotiate or bid for that property in competition with the member who had priority. The Priority Rules were posted on Ronovation’s Facebook page on or about 10 September 2011 and agreed to by members (“the Agreement”). The…

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 Ronovation Ltd

Details

AGLC: Commerce Commission v Ronovation Ltd [2019] NZHC 2303
Case: [2019] NZHC 2303
Decision Date: 13 September 2019

CaseChat Overview and Summary

Ronovation Limited, a company that provided advisory services to clients interested in investing in Auckland residential property, implemented a set of rules known as the "Priority Rules" in September 2011. These rules prioritised members who had expressed interest in a property, preventing other members from competing to purchase the same property. The Commerce Commission brought proceedings against Ronovation for breaching the Commerce Act 1986. Ronovation admitted the Commission's claims and agreed that a penalty of $400,000 would be appropriate. Katz J accepted this recommendation, taking into account the nature and seriousness of the contravening conduct, the importance and type of market, whether the conduct was deliberate, the duration of the conduct and potential harm, Ronovation's role in the contravening conduct, potential commercial gain to Ronovation, the market share and degree of market power held by Ronovation, and relevant case law. Katz J also considered defendant-specific factors such as previous contraventions, the nature, size, and resources of the defendant, engagement with the Commission and admissions of liability. Katz J concluded that a penalty of $400,000 was appropriate and would achieve the objectives of specific and general deterrence.

The Court made a declaration that Ronovation's conduct contravened the Commerce Act 1986 and ordered Ronovation to pay a pecuniary penalty of $400,000. The Court made no order as to costs as the Commission did not seek costs.

Orders