WELLINGTON INTERNATIONAL AIRPORT LIMITED V COMMERCE COMMISSION HC WN CIV-2011-485-1031

WELLINGTON INTERNATIONAL AIRPORT LIMITED V COMMERCE COMMISSION HC WN CIV-2011-485-1031

The Commission's cross-sectoral approach to developing Cost of Capital IMs and other IMs was lawful and did not breach s52V or procedural fairness so long as the Commission implemented the process it had publicly outlined and provided a fair and reasonable opportunity to comment; however Transpower was denied a fair opportunity to comment on the specific comparator-based leverage decision adopted for Transpower because that change was introduced after technical consultation closed, so the Transpower Cost of Capital IM is unlawful insofar as it fixes Transpower's leverage without further consultation.

Citation
openlaw-98d1471c_1b76_4287_86f8_96a02d793b2e.pdf
Parties
First Applicant: Wellington International Airport Limited; Second Applicant: Christchurch International Airport Limited; Applicant/plaintiff: Vector Limited; Applicant/plaintiff: Transpower New Zealand Limited; Respondent: Commerce Commission; Affected Party: Air New Zealand Limited; Affected Party: Major Electricity Users' Group Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
22 December 2011
Procedural Posture
Judicial Review of Input Methodology Determinations and Related Merits Appeals Under Part 4 Commerce Act 1986 / High Court Judgment on Procedural Challenges (22 December 2011)
Outcome
Judgment dismissing most judicial review challenges; Transpower's challenge on leverage partly upheld; declaration granted limited to Transpower leverage; remittal for further consultation; costs reserved.
Legal Topics
Input Methodologies, Cost of Capital, Leverage, Consultation Obligations, Legitimate Expectation, Closed Record Merits Appeals
Administrative Law Competition and Regulatory Law Utilities Regulation Judicial Review Input Methodologies Cost of Capital Leverage Consultation Obligations +2 more

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Parties

Wellington International Airport Limited

First Applicant

Christchurch International Airport Limited

Second Applicant

Vector Limited

Applicant/plaintiff

Transpower New Zealand Limited

Applicant/plaintiff

Commerce Commission

Respondent

Air New Zealand Limited

Affected Party

Major Electricity Users' Group Limited

Affected Party

Procedural Posture

Judicial Review of Input Methodology Determinations and Related Merits Appeals Under Part 4 Commerce Act 1986 / High Court Judgment on Procedural Challenges (22 December 2011)

Legal Issues

  1. 1 Was the Commerce Commission's cross-sectoral consultation approach lawful?
  2. 2 Were statutory process requirements in s52V satisfied?
  3. 3 Did legitimate expectation or natural justice require sector-only consultation or additional disclosure?

Ratio Decidendi

The Commission's cross-sectoral approach to developing Cost of Capital IMs and other IMs was lawful and did not breach s52V or procedural fairness so long as the Commission implemented the process it had publicly outlined and provided a fair and reasonable opportunity to comment; however Transpower was denied a fair opportunity to comment on the specific comparator-based leverage decision adopted for Transpower because that change was introduced after technical consultation closed, so the Transpower Cost of Capital IM is unlawful insofar as it fixes Transpower's leverage without further consultation.

Court Disposition

Judgment dismissing most judicial review challenges; Transpower's challenge on leverage partly upheld; declaration granted limited to Transpower leverage; remittal for further consultation; costs reserved.

Orders

  • Declare unlawful the Transpower Cost of Capital input methodology insofar as it fixes Transpower's leverage without adequate opportunity for Transpower to comment
  • Direct Commerce Commission to undertake further limited consultation on the Transpower leverage parameter and to remit a revised leverage decision (if any) back to the Court on completion if parties so apply