Major Electricity Users' Group Inc v Commerce Commission - [2014] NZHC 1765

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-485-268

CIV-2011-485-269 [2014] NZHC 1765

UNDER

IN THE MATTER

the Commerce Act 1986

of an intended appeal to the Court of Appeal under s 52Z(6) and s 97(1) of the Act

BETWEEN

THE MAJOR ELECTRICITY USERS’

GROUP INC Applicant

AND

COMMERCE COMMISSION, VECTOR LIMITED, POWERCO LIMITED, TRANSPOWER NEW ZEALAND LIMITED and WELLINGTON ELECTRICITY LINES LIMITED Respondents

Hearing:
Court:

6 June 2014

Clifford J, Mr R Davey (lay member) and Mr R Shogren (lay member)

Counsel:

N Pender and S Franks for The Major Electricity Users’ Group

Inc.

V Casey and D Laurenson for the Commerce Commission

A Butler, C Marks and N Lambie for Vector Limited V L Heine and B A Davies for Powerco Limited and Transpower New Zealand Limited

No appearance for Wellington Electricity Lines Limited

(appearance excused)

Judgment:

28 July 2014

JUDGMENT OF THE COURT

THE MAJOR ELECTRICITY USERS’ GROUP INC v COMMERCE COMMISSION [2014] NZHC 1765 [28
July 2014]

Introduction

[1] This is an application by the Major Electricity Users’ Group Inc (MEUG) for leave to appeal against the decision of this Court in Wellington International Airport Ltd v Commerce Commission (WIAL v Commerce Commission).1 This Court, amongst other things, dismissed MEUG’s appeal pursuant to s 52Z of the Commerce Act 1986 against the decision of the Commerce Commission (the Commission) that the cost of capital input methodologies (IMs) for the electricity distribution businesses (EDBs)2 and Transpower Limited (Transpower)3 should be determined by
reference to the Commission’s 75th percentile estimate of the weighted average cost

of capital (WACC) range. MEUG’s argument that the 50th percentile estimate should be used, or alternatively that the 75th percentile should be applied only to new investment was not accepted.

[2] MEUG also asks this Court to make an order under s 97(3) of the Commerce Act that, if leave to appeal is granted and MEUG is unsuccessful, costs in the Court of Appeal should only be awarded against MEUG if it pursues its appeal unreasonably.

[3] The respondents, Vector Limited (Vector), Powerco Limited (Powerco) and Transpower oppose us granting MEUG leave to appeal. They also oppose the costs order MEUG seeks. Wellington Electricity Lines Limited (WELL) does not actively oppose MEUG’s leave application but wishes to preserve its position as a respondent if MEUG’s application is granted.

[4] Vector applied for leave to cross-appeal. In circumstances to which we refer later, Vector confirmed that it no longer pursued that application.

[5] A question of the formal status of Vector, Powerco, Transpower and WELL is raised. MEUG originally cited only the Commerce Commission as the respondent to
its intended appeal. Vector, Powerco, Transpower and WELL subsequently applied

1      Wellington International Airport Ltd v Commerce Commission [2013] NZHC 3289.
2      Commerce Act (Electricity Distribution Services Input Methodologies) Determination 2010
Decision 710, 22 December 2010.
3      Commerce Act (Transpower Input Methodologies)   Determination 2010 Decision 713,
22 December 2010.

to be joined as respondents, rather than as interested parties on…

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.

Keep reading for free

Create a free CaseChat account to read Major Electricity Users' Group Inc v Commerce Commission and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2014] NZHC 1765
Decision Date: 28 July 2014

CaseChat Overview and Summary

The Major Electricity Users' Group Inc (MEUG) sought leave to appeal against the decision of the High Court in Wellington International Airport Ltd v Commerce Commission, which dismissed MEUG's appeal against the Commerce Commission's determination that the cost of capital input methodologies (IMs) for electricity distribution businesses (EDBs) and Transpower Limited should be determined by reference to the Commission's 75th percentile estimate of the weighted average cost of capital (WACC) range. MEUG argued that the 50th percentile estimate should be used, or alternatively that the 75th percentile should be applied only to new investment. The High Court held that MEUG's application for leave to appeal should be declined. The Court found that MEUG misconstrued the substance of the Court's decision on its appeal against the EDBs' and Transpower's cost of capital IMs and that it sought to create an error of law where, in the Court's view, no point of law was involved. The Court also concluded that MEUG's argument that the Court had misunderstood its role under s 52Z appeals, in particular by failing to be proactive, was not seriously arguable. The Court found that the closed record provisions of s 52Z and the menu of determination options set out in s 52Z(3) precluded the interpretation argued for by MEUG. The Court noted that the substantive points of concern to MEUG were now being reviewed by the Commission in its consultation on the cost of capital IMs, which was an appropriate process. The Court also declined MEUG's application for a costs order under s 97(3) of the Commerce Act and dismissed Vector's application for leave to cross-appeal.

Orders