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Court decision seen limiting regulator

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, April 20 NZPA - A Supreme Court decision on Commerce Commission action against an Australian businessman is seen as limiting the ability of the commission to bring proceedings against foreign people and corporations in some instances.

In a newsletter today, law firm Minter Ellison Rudd Watts said the important judgment limited the extraterritorial scope of the Commerce Act regarding the conduct of people based overseas.

The Supreme Court held that Australian resident Andrew Robert Poynter was alleged to have entered into arrangements to fix prices and allocate customers in a well-known wood preservatives cartel.

But the relevant meetings that Mr Poynter attended took place outside this country and there was no evidence of Mr Poynter sending directions to further the alleged arrangements into this country, the newsletter said.

The High Court in March 2007, and the Court of Appeal in March 2009, ruled that the commission could pursue legal proceedings against Mr Poynter and two other defendants, who were living overseas when the cartel was operating.

But in a decision on Friday the Supreme Court unanimously allowed an appeal by Mr Poynter against the commission action, arguing the New Zealand courts had no jurisdiction and Mr Poynter must be dismissed from the proceeding.

The extraterritorial provision of the Commerce Act says: "This Act extends to the engaging in conduct outside New Zealand by any person resident or carrying on business in New Zealand to the extent that such conduct affects a market in New Zealand ..."

The Minter Ellison newsletter said the Supreme Court had clarified that the Act's extraterritorial provision meant what it said and there was no justification for the judiciary to read-in broader extraterritorial applications via other provisions of the Act.

"On a practical note the decision clearly limits the ability of the commission to bring proceedings against foreign persons, and corporations, in some instances," the newsletter said.

"Given that the majority of significant cartels being examined in New Zealand appear to be global in nature, the decision may have far reaching consequences."

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