Commerce Commission v Telecom Mobile Ltd

Telecom Mobile Limited appealed against the Court of Appeal's decision that it should engage in a corrective advertising exercise, including a statement that moneys paid by consumers were recoverable under s 12(2) of the Door to Door Sales Act 1967. The Court of Appeal had found that Telecom's conduct in marketing mobile telephones had the purpose or effect of preventing the operation of the Door to Door Sales Act, and that s 12(2) applied. The critical question in this Court was whether s 12(2) applied in the circumstances of this case. The Court concluded that s 12(2) was an anti-avoidance provision which applied only when an agreement was structured in a manner which took it outside the operation of the Act and thereby prevented the Act from operating when it would otherwise have done so. Because the provisions of Telecom's contracts which did not comply with the Act were rendered ineffective by s 12(1), s 12(2) did not apply. The order for corrective advertising envisaging a statement that moneys paid by consumers were recoverable under s 12(2) should not have been made. The appeal was allowed and the order of the Court of Appeal was set aside. The matter was remitted to the High Court for consideration of the formal orders which should now be made, including an order for costs. The costs award in the Court of Appeal would remain as it reflected the success of the Commission on issues other than relief. Costs in this Court would lie where they fell.