Premium Alpaca Limited v Commerce Commission - [2014] NZHC 1836

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CRI-2013-463-000070
CRI-2013-463-000071

CRI-2013-463-000072 [2014] NZHC 1836

BETWEEN
PREMIUM ALPACA LIMITED First Appellant

YUN DUK JUNG Second Appellant

BO SUN YOO Third Appellant

AND

COMMERCE COMMISSION Respondent

Continued over

Hearing: 15 April 2014

Counsel:

W Lawson for Appellants
A M McClintock for Respondents

Judgment:

6 August 2014

JUDGMENT OF DUFFY J

This judgment was delivered by Justice Duffy on 6 August 2014 at 2.00 pm, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Solicitors: Lance Lawson, Rotorua
Meredith Connell, Auckland

PREMIUM ALPACA LTD v COMMERCE COMMISSION [2014] NZHC 1836 [6 August 2014]

CRI-2013-463-000073

CRI-2013-463-000074

BETWEEN HYEON COMPANY LIMITED First Appellant

HAN YOUNG CHAE Second Appellant

ANDCOMMERCE COMMISSION Respondent

CRI-2013-463-000075
CRI-2013-463-000076

BETWEEN JM WOOL LIMITED First Appellant

JONG MYUNG LEE Second Appellant

ANDCOMMERCE COMMISSION Respondent

CRI-2013-463-000077

BETWEEN DUVET 2000 LIMITED Appellant
ANDCOMMERCE COMMISSION Respondent

[1] The appellants are four companies and four individuals who are directors of those companies. They all pleaded guilty in the District Court at Rotorua to charges laid against them under s 10 of the Fair Trading Act 1986 (“the Act”) and in the case of one of them, JM Wool Limited (“JM Wool”), charges under s 13 of that Act as well. They now appeal against the sentences imposed on them in that Court. The appeals were heard together.

[2] The respondent (“the Commission”) opposes the appeals.

Facts

[3] Hyeon Company Limited (“Hyeon”) and Premium Alpaca New Zealand Limited (“Premium Alpaca”) were importers and suppliers of alpaca rugs. Duvet 2000 Limited (“Duvet 2000”) and JM Wool were retailers of alpaca rugs and manufacturers and retailers of duvets. Han Young Chae was a director of Hyeon and of Duvet 2000. Yun Duk Jung and Bo Sun Yoo were directors of Premium Alpaca. Jong Myung Lee was a director of JM Wool.

[4] Tourist groups from Asia often travel around New Zealand with In-bound Tour Operators (“ITOs”). Some of the ITOs are licensed by Tourism New Zealand, but many, including the one that brought the tourists to the retailers involved in this case, are not. The ITOs then organise the travel and sightseeing of the tour groups and direct the tourists to certain retail souvenir outlets. In return, the retailers pay a commission to the ITOs. In this case, tours typically began with a trip to Rotorua’s Agrodome, where tourists saw and interacted with live alpacas as part of a farm tour. Groups were then taken to individual retail premises where they received a welcome and an introduction speech from the host. They were then taken to a showroom and sales staff promoted the products and their quality. The appellants’ offending was discovered as a result of an investigation by the Commission into allegations of misleading representations by importers and retailers of alpaca rugs, and manufacturers and retailers of alpaca duvets, merino duvets and Southdown wool duvets. The conduct under investigation involved sales of thousands of mislabelled rugs and duvets, valued at millions of dollars,…

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.

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Details

Case: [2014] NZHC 1836
Decision Date: 6 August 2014

CaseChat Overview and Summary

Premium Alpaca Limited and other companies and individuals appeal against sentences imposed by the District Court for charges under the Fair Trading Act 1986. The charges related to the sale of mislabelled alpaca rugs and duvets. The appellants pleaded guilty in the District Court and now appeal against the sentences imposed on them. The respondent opposed the appeals. The appellants argued that the District Court Judge erred in assessing the criminality of their offending, applying the 30 per cent discount for guilty pleas and cooperation, considering their mitigating factors separately from other offenders, and considering their financial circumstances in sentencing. The appellants also argued that the Judge erred in setting starting points for their offending. The High Court found that there was no error in the District Court Judge’s approach to sentencing. The starting points were within the available range. The discount for mitigating factors was also appropriate. The Judge did not err in considering revenue instead of profit in sentencing. The Judge was not bound by the decision in Commerce Commission v Chen in applying the 30 per cent discount. The Judge’s approach to sentencing was not erroneous. The appeals were dismissed.

Orders