Harmoney Limited v Commerce Commission

Case [2019] NZCA 355

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA
 CA322/2018
 [2019] NZCA 355
BETWEEN

HARMONEY LIMITED
Appellant

AND

COMMERCE COMMISSION
Respondent
Hearing:

26 March 2019

Court:

French, Miller and Williams JJ

Counsel:

A R Galbraith QC, A M Callinan and S A Comber for Appellant
S J Mills QC and J D Cairney for Respondent

Judgment:

7 August 2019 at 11.30 am

JUDGMENT OF THE COURT

AThe application for strike-out is dismissed.

BThe respondent must pay costs to the appellant for a standard appeal on        a Band A basis with usual disbursements.  We certify for second counsel.

____________________________________________________________________

REASONS OF THE COURT

(Given by Miller J)

  1. This judgment answers a preliminary question in an appeal brought by Harmoney Ltd.[1]  The question is whether we have jurisdiction to entertain the appeal. 

    [1]The preliminary hearing was ordered in a minute issued on 10 July 2018.

  2. The decision appealed from was an opinion of the High Court on a case stated under s 100A of the Commerce Act 1986, which provides:

    100A   Commission may state case for opinion of High Court

    (1)       The Commission may at any time state a case for the opinion of the court on any question of law arising in any matter before it.

    (2)       The court may order the removal into the Court of Appeal of any case      stated for the opinion of the court under this section.

    (3)       The court or the Court of Appeal, as the case may be, shall hear and       determine the question, and shall remit the case with its opinion to      the Commission.

  3. The Commerce Commission says that no right of appeal lies from the High Court’s opinion, either under the Commerce Act or under this Court’s general appellate jurisdiction.  Harmoney responds that an appeal lies in this case, because it was a party below and the decision appealed from had a practical effect on its rights sufficient to sustain a right of appeal.

Narrative

  1. Harmoney is a peer-to-peer lender which matches borrowers with investors on a web-based platform.  It is licensed by the Financial Markets Authority under the Financial Markets Conduct Act 2013. 

  2. Harmoney charges borrowers a “platform fee”.  It says the fee is for a service akin to brokerage.  The Commission says the fee is an “establishment fee” as defined under the Credit Contracts and Consumer Finance Act 2003 (CCCFA).[2]  If the Commission is correct the fee must be set at a level that is reasonable, gauged by reference to the costs incurred in establishing and administering the loan.[3]  It is plausible that a fee set as a percentage of the loan, as Harmoney’s is, may sometimes exceed these costs.

    [2]Section 5.  An establishment fee is a “credit fee” for purposes of s 41 of the Act, which prohibits unreasonable credit or default fees.

  3. The Commission…

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AGLC
Harmoney Limited v Commerce Commission [2019] NZCA 355
Case
[2019] NZCA 355
Decision Date

CaseChat Overview and Summary

Harmoney Limited sought to appeal a decision made by the Commerce Commission in relation to the Commission's regulatory functions under the Commerce Act 1986 and Fair Trading Act 1986. The High Court had previously dismissed Harmoney's appeal against the Commission's decision, and Harmoney now appealed to the Court of Appeal seeking to overturn that decision. The primary legal issue before the Court of Appeal was whether the Court had jurisdiction to hear an appeal against the Commission's decision. The Court considered whether the Commission's decision constituted a 'judgment, decree or order' of the High Court, which would confer the Court of Appeal with jurisdiction to hear the appeal. The Court of Appeal found that the Commission's decision did not constitute a 'judgment, decree or order' of the High Court, and therefore did not confer the Court of Appeal with jurisdiction to hear the appeal. The Court of Appeal held that the Commission's decision was not a final determination of a contentious issue between parties, nor did it affect Harmoney's rights or obligations in law or practical terms. The Court of Appeal also found that the Commission's decision was not sought in consultation prior to a final decision, but rather was sought to assess the correctness of that final decision. The Court of Appeal dismissed Harmoney's appeal.

The Court of Appeal found that the Commission's decision did not confer the Court of Appeal with jurisdiction to hear the appeal. The Court held that the Commission's decision was not a final determination of a contentious issue between parties, nor did it affect Harmoney's rights or obligations in law or practical terms. The Court also found that the Commission's decision was not sought in consultation prior to a final decision, but rather was sought to assess the correctness of that final decision. The Court of Appeal held that the Commission's decision did not constitute a 'judgment, decree or order' of the High Court, and therefore did not confer the Court of Appeal with jurisdiction to hear the appeal. The Court of Appeal dismissed Harmoney's appeal, upholding the decision of the High Court.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

This Court’s general jurisdiction is found in s 66 of the Judicature Act 1908 (which applies as the proceeding commenced before the Senior Courts Act 2016 came into force):66Court may hear appeals from judgments and orders of the High CourtThe Court of Appeal shall have jurisdiction and power to hear and determine appeals from any judgment, decree, or order save as hereinafter mentioned, of the High Court, subject to the provisions of this Act and to such rules and orders for regulating the terms and conditions on which such appeals shall be allowed as may be made pursuant to this Act. The question whether an appeal lies from the opinion of a lower court or tribunal has arisen from time to time in a variety of settings. The answer always turns on the context. Generally, the appellate court inquires whether the legislation from which the lower court’s jurisdiction to give an opinion is derived confers or excludes a right of appeal. Where empowering legislation does not clearly confer or exclude a right of appeal, attention turns to the nature of the lower court’s decision; specifically, whether it is a judgment, decree or order. The overlapping indicia that emerge from the cases are:(a)whether the decision fully and finally determines a contentious issue between parties;[21](b)whether the decision affects a party’s rights or obligations:(i)in law (in the sense that it is binding or final);[22] or(ii)in practical terms;[23](c)whether the lower court is answering a case stated on an abstract point of law divorced from any attempt to administer that law;[24] and(d)whether the court’s opinion was sought in consultation prior to a final decision, or to assess the correctness of that final decision (only the latter being appealable).[25] We begin with a short overview of the Commission’s functions and powers. The Commission’s objective is that of enhancing competition in New Zealand markets with an ultimate aim of protecting consumers.[26] Its powers are statutory, stemming from the Commerce Act 1986 and the Fair Trading Act 1986, which operate through other regulatory legislation such as the CCCFA,[27] the Dairy Industry Restructuring Act 2001,[28] and, formerly, the Electricity Industry Reform Act 1998.[29] The Commission plays five key roles under these Acts. First, it acts as a ‘watchdog’ to monitor trade practices and anti-competitive behaviour.[30] It can also make recommendations for the regulation of goods and services to stimulate competition,[31] as has occurred with utility and airport services, and dairy trade.[32] Second, it enforces obligations under specified Acts through prosecution and civil proceedings.[33] Third, it authorises and gives clearance for restrictive trade practices, mergers, and takeovers, and the variation of price-controlled goods.[34] These determinations are quasi-judicial in nature. Fourth, it investigates possible infringements of the Acts.[35] Finally, it disseminates information to promote adherence to those Acts.[36] [26]Commerce Act 1986, s 1A; Fair Trading Act 1986, s 1A; and Credit Contracts and Consumer Finance Act 2003 [CCCFA], s 3.[27]Section 113.[28]Sections 145 and 150V.[29]Sections 58 and 82.[30]Commerce Act, pt 3A; CCCFA, s 111(2)(a); and Telecommunications Act 2001, s 9A(1).[31]Commerce Act, pt 4.[32]Commerce Act, ss 54−57CA; Telecommunications Act, sch 3; and Dairy Industry Restructuring Act 2001. [33]Commerce Act, ss 75−97; Fair Trading Act, ss 40−46M (in conjunction with the Financial Markets Authority); and CCCFA, s 111(2)(b) and (c). The Commission could also adjudicate under the Electricity Industry Reform Act 1998 (now repealed), pt 3. It did not retain this power under the replacement Electricity Industry Act 2010.[34]Commerce Act, ss 58, 66, and 67.[35]Commerce Act, ss 98−100; Fair Trading Act, ss 47−47L; Dairy Industry Restructuring Act, ss 145 and 150V; CCCFA, ss 111(1)(ab) and (ac); and Telecommunications Act, ss 16, 25 and 35.[36]Commerce Act, s 25; Fair Trading Act, s 6; and CCCFA, s 111(2)(d).

Ratio Decidendi

Legal Principle Established

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