“Fruit of the poisonous tree”? Remedying NZBORA breaches

Relying on courts’ obligation to give effect to NZBORA under its s 3, the Supreme Court held the exclusionary remedy could be said to have arisen “under” NZBORA

As evidence obtained by arguable police impropriety again hits the headlines (police use breath-testing checkpoint to obtain information on attendees at an Exit International euthanasia meeting), the Supreme Court has explained the Evidence Act 2006’s fundamental principle – all relevant evidence is admissible unless inadmissible or excluded “under” any statute – permits exclusion of such evidence in civil proceedings, if necessary to remedy New Zealand Bill of Rights Act impropriety. Continue reading ““Fruit of the poisonous tree”? Remedying NZBORA breaches”

Judicial review

Going beyond its “proper sphere”?

A shifting majority (a ‘mobile plurality’?) of Supreme Court judges enabled both sides to claim some success in Ririnui v Landcorp Farming Ltd [2016] NZSC 62 (9/6/16), and enhanced the scope for judicial review of the Crown’s commercial and policy decisions, at least where vitiated by material errors, as unlawful exercises of public power. Continue reading “Judicial review”

Consumer protection and the rule of law

“… a citizen, before committing himself to any course of action, should be able to know in advance what are the legal consequences that will flow from it”

None should think the Supreme Court’s dismissal last week, of credit providers’ appeals against findings their fees were unreasonable, is a ringing endorsement of the Credit Contracts and Consumer Finance Act 2003’s (CCCFA) regulation of credit and default fees charged by financiers to consumers under consumer credit contracts. Continue reading “Consumer protection and the rule of law”

Vexing litigants – can courts do this?

The Supreme Court this week directed its Registrar to refuse to accept any applications challenging specified Court of Appeal and Supreme Court decisions, including any challenging that refusal. How far may courts go in regulating abuse of their processes? Does the contemporary rise of persistent litigants justify their outright prohibition?

In Creser v Creser [2016] NZSC 34, Mr Creser filed a third recall application consequent on dismissals of each his application for leave to appeal against a Court of Appeal judgment, and his two subsequent recall applications. Finding Mr Creser’s conduct to be an abuse of process, the Supreme Court directed its Registrar to refuse to accept any applications involving challenges to those decisions, its present judgment, and “any future decision of the Registrar refusing to accept such applications”. Continue reading “Vexing litigants – can courts do this?”

Hotchin v NZGT: own goals for litigator and litigation?

Contribution is available to a defendant from another liable for the same damage alone, without any requirement that liability arises from some obligation had in common with the defendant.

Background: judgments below require ‘coordinate liability’

In Hotchin v The New Zealand Guardian Trust Company Limited [2016] NZSC 24, Mr Hotchin had sought NZGT’s contribution to any liability he may have under compensation claims brought by the FMA against him as a director of the Hanover Group. Section 17(1)(c) of the Law Reform Act 1936 permits one tortfeasor to obtain a contribution to its liability from another “liable in respect of the same damage”. Continue reading “Hotchin v NZGT: own goals for litigator and litigation?”

Waiting on the Supremes

Will forthcoming judgments restate or extend legal understanding?

There is a number of reserved Supreme Court judgments, possibly occupying the judges over their summer vacation, with material interest for commercial and public lawyers. Unsurprisingly, many such final appeals seek to expand on settled legal comprehension. Given certainty’s value in law, such expansions should only be because the informing doctrines have themselves advanced, rather than they may operate harshly in the appellants’ individual circumstances. Similarly, statutory interpretation turns on identifying the will of Parliament, distinctly from regulators’ preferences for enforcement. Whether those concepts will be applied here awaits these judgments. Continue reading “Waiting on the Supremes”

Supreme Court allows limited protection of digital data

The Supreme Court has this week made a small dent in the proposition, upheld by the Courts of Appeal in New Zealand and England last year, that digital data is not property for the purposes of the law.

The Supreme Court held digital data is property for the purposes of the criminal law.  But civil reliance on property rights will not suffice to protect electronic information – at least for now. Continue reading “Supreme Court allows limited protection of digital data”

Supreme Court sets seal on competition law

The Supreme Court’s judgment today in The Commerce Commission v Telecom on Telecom’s 1999 dial-up internet package definitively confirms the test for liability under section 36 of the Commerce Act 1986.

Key points

The decision (available here):

  • unanimously dismissed the Commerce Commission’s final appeal against its previous losses in the High Court and Court of Appeal

  • comprehensively affirmed the long-standing test for breach of s36 of the Commerce Act, and

  • reinforced the essential commerciality of Telecom’s introduction of the 0867 package in 1999 to close down a multi-million dollar arbitrage opportunity exploited by other carriers and ISPs, risking severe congestion on Telecom’s network.

The statute

Section 36 of the Commerce Act prohibits use of market power for anti-competitive purposes.  The original statutory threshold, which applied to the conduct at issue in this case, prohibited a firm using its dominant position.  In 2001, to align with the Australian formulation, s36 was amended to prohibit a firm from taking advantage of its substantial market power.

The legal test

The legal test was established by the Privy Council in Telecom v Clear (1994):

“it cannot be said that a person in a dominant market position ‘uses’ that position for the purposes of s36 [if] he acts in a way which a person not in a dominant position but otherwise in the same position would have acted”.

In the face of considerable academic opposition and some judicial ambivalence as to the test’s relevance and utility, the Privy Council affirmed the position in Commerce Commission v Carter Holt Harvey (2004), saying “if a dominant firm is acting as a non-dominant firm otherwise in the same position would have acted in a market which was competitive it cannot be said to be using its dominance…”.  That test – dubbed the ‘counterfactual test’ – the Privy Council said was both “legitimate and necessary”.

The appeal

On its appeal to the Supreme Court, the Commission contended for alternative approaches to determining s36 liability, not requiring any comparison between actual and hypothetical market conduct, any of which could be deployed in circumstances to establish s36 breach.   The Commission, supported by the Attorney General in this respect, argued that this multiplicity of approaches was consistent with case law on the comparable Australian provision, and that ‘harmonisation’ with the Australian position was a desirable outcome.The Supreme Court rejected both arguments:

“It is important when addressing the statutory concept of use of market power to take an approach which gives firms and their advisers a reasonable basis for predicting in advance whether their proposed conduct falls foul of s36 and risks a substantial financial penalty.  Having a range of tests, all potentially applying, depending on the circumstances and whether a comparative approach can ‘cogently’ be adopted would not assist predictability of outcome.  Nor is such an approach consistent with the Australian cases when they are appropriately analysed”.

The Supreme Court confirmed that, under either the old or the new statutory formulation:

“[I]f the dominant firm would, as a matter of commercial judgment, have acted in the same way in a hypothetically competitive market, it cannot logically be said that its dominance has given it the advantage that is implied in the concepts of using or taking advantage of dominance or a substantial degree of market power”.

Echoing its comment on the desirability of predictable outcomes, the Supreme Court also emphasised that commercial rationality is key to interpretation of s36.  The assessment, the Court said, is “essentially a commercial judgment”, to be “made objectively”, and “informed by all those factors that would influence rational business people”:

“… the “use” question is a practical one, concerned with what the firm in question would or would not have done in the hypothetically competitive market. As the question is one of rational commercial judgment, the test should be what the otherwise dominant firm would, rather than could, do in the hypothetical market”.

The result

Applying that test to the facts of the case, the Supreme Court found that the Commission failed to establish that Telecom would have acted otherwise in the hypothetically competitive market.  The Commission’s arguments to the contrary were “not grounded in any evidence given in the High Court” and constituted an “unsatisfactory… attempt to remake its case on what is really a speculative basis”.

The Supreme Court concluded:

“Any firm acting competitively, whether dominant or not, would have taken steps to mitigate the loss by introducing a scheme analogous to the 0867 package rather than continue to incur substantial losses”.

Chapman Tripp partners, Jack Hodder SC and Pheroze Jagose, acted for Telecom throughout in this matter over the past decade, at trial and on first and final appeals.  Chapman Tripp also acted for Telecom throughout the original proceeding that gave rise to the Privy Council’s judgment in Telecom v Clear.