COMMERCE COMMISSION v LODGE REAL ESTATE LTD [2020] NZHC 2329

COMMERCE COMMISSION v LODGE REAL ESTATE LTD [2020] NZHC 2329

The consensus among Hamilton agencies constituted an arrangement that interfered with the competitive setting of price and therefore contravened ss 27 and 30. Starting points for corporate penalties were set within the range applied to comparable Hamilton participants ($1.7–$2.1m). Considering market shares, roles,...

Source-derived case information.

Citation
[2020] NZHC 2329
Parties
Plaintiff: Commerce Commission; First Defendant: Lodge Real Estate Limited; Second Defendant: Lugton's Limited; Third Defendant: Monarch Real Estate Limited; Fourth Defendant: Online Realty Limited; Fifth Defendant: Success Realty Limited; Sixth Defendant: Brian King; Seventh Defendant: Jeremy O'Rourke
Court
High Court
Jurisdiction
New Zealand
Judgment Date
8 September 2020
Procedural Posture
Civil Enforcement Under the Commerce Act 1986 / Judgment Determining Pecuniary Penalties Following Supreme Court Remittal
Outcome
Pecuniary penalties imposed under s 80 of the Commerce Act 1986 for contraventions of ss 27 and 30
Legal Topics
Price Fixing, Pecuniary Penalties, Section 27 Commerce Act 1986, Section 30 Commerce Act 1986, Section 80 Commerce Act 1986
Competition Law Regulatory Enforcement Commercial Law Civil Procedure Price Fixing Pecuniary Penalties Section 27 Commerce Act 1986 Section 30 Commerce Act 1986 +1 more

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Parties

Commerce Commission

Plaintiff

Lodge Real Estate Limited

First Defendant

Lugton's Limited

Second Defendant

Monarch Real Estate Limited

Third Defendant

Online Realty Limited

Fourth Defendant

Success Realty Limited

Fifth Defendant

Brian King

Sixth Defendant

Jeremy O'Rourke

Seventh Defendant

Procedural Posture

Civil Enforcement Under the Commerce Act 1986 / Judgment Determining Pecuniary Penalties Following Supreme Court Remittal

Legal Issues

  1. 1 Whether the Hamilton agencies' consensus amounted to price-fixing contravening ss 27 and 30 of the Commerce Act 1986
  2. 2 Appropriate pecuniary penalties under s 80 for corporate contraventions
  3. 3 Whether individual directors (Mr O'Rourke and Mr King) should be ordered to pay pecuniary penalties

Ratio Decidendi

The consensus among Hamilton agencies constituted an arrangement that interfered with the competitive setting of price and therefore contravened ss 27 and 30. Starting points for corporate penalties were set within the range applied to comparable Hamilton participants ($1.7–$2.1m). Considering market shares, roles, absence of evidence that Lodge or Monarch were ringleaders, lack of aggravating individual factors, and parity with other attending directors, Lodge was ordered to pay $2.1 million and Monarch $1.9 million. No pecuniary penalties were ordered against Mr O'Rourke or Mr King because their roles did not materially differ from other directors present and there was not good reason...

Court Disposition

Pecuniary penalties imposed under s 80 of the Commerce Act 1986 for contraventions of ss 27 and 30

Orders

  • Lodge Real Estate Limited to pay $2100000 to the Crown as a pecuniary penalty under s 80 of the Commerce Act 1986
  • Monarch Real Estate Limited to pay $1900000 to the Crown as a pecuniary penalty under s 80 of the Commerce Act 1986