In the courts

Professional body fined over contravention of Commerce Act
The High Court agreed with the Commerce Commission that the Ophthalmological Society of New Zealand Incorporated contravened section 27 of the Commerce Act 1986 by entering into an arrangement or understanding with the purpose or likely effect of substantially lessening competition in the market for the supply of cataract surgery in Southland.

Small company penalised for attempted resale price maintenance
The High Court has approved a settlement of $60,000 negotiated over a breach of the Commerce Act 1986 for prohibited resale price maintenance by a supplier.

Mobile phone campaigns breached the Door to Door Sales Act and the Fair Trading Act
The High Court determined that a telephone company’s marketing campaign breached both the Door to Door Sales Act and the Fair Trading Act because customers were not adequately notified of their right to a “cooling off period” and the campaign included “false or misleading conduct or misrepresentations”.

Privy Council determines that Carter Holt did not engage in predatory pricing
The Privy Council’s decision in Carter Holt Harvey Building Products Limited v Commerce Commission acknowledges that businesses may respond to competition in a market where they hold a dominant position by decreasing prices, provided they do not engage in price cutting and later recoup losses by increasing prices.

Decision that pre-emption rights triggered on change in trustees overturned
In the Winter 2004 issue of Commercial Quarterly, we summarised a High Court decision that a change of shareholder trustees triggered rights of pre-emption for other shareholders. The Court of Appeal has subsequently overturned this decision.

When shareholders expectations are not met, when and how will a court intervene?
When shareholders of a listed company determined that the management of the company was not in their best interests, they unsuccessfully sought an order under section 174 of the Companies Act 1993 requiring the company to purchase their shares.

A fiduciary relationship can exist between parties without a finally concluded joint venture agreement
The Court of Appeal determined that an informal commercial relationship between property developers constituted a joint venture arrangement giving rise to fiduciary obligations.

Trustees fail to escape liability on basis of no personal liability, no consideration and not every party signed
In a case heard recently in the High Court, it was decided that trustees who had given an indemnity could not escape liability under that indemnity.

When is a company insolvent?
The New South Wales Supreme Court has summarised principles from accepted authorities on the question of whether a company is insolvent at a given time.

Payments made by insolvent companies – what is in the ordinary course of business?
The High Court considered the question of whether a payment made by an insolvent company was in the ordinary course of business and determined that, in this case, it was.

Payment by personal cheque not acceptable
The Court of Appeal has agreed with the High Court that a payment made by personal cheque is not acceptable payment until it has cleared.

Enquiries and information

For more information on any of the cases, articles and features in Commercial Quarterly, please email Rachel Gowing or call on 64 9 916 8825.