ComCom barred from seeking price-fixing prosecutions outside NZ

The Commerce Commission has failed in its bid to prosecute Nufarm executives living in Australia for price fixing after the Supreme Court ruled New Zealand courts had no jurisdiction in the matter.

The commission has been seeking to prosecute Elias Akle, Neil Harris and Andrew Poynter for price fixing by three Nufarm companies which operated under the Fernz Timber Protection brand, even though they were not in New Zealand at the time the offending took place.

The court action over the wood chemicals cartel has been seen as an important test case as it defined whether agreements that breach the Commerce Act and were entered into overseas – but are aimed at New Zealand markets – could be the subject of legal action here.

Nufarm has already been fined $1.9 million for price fixing and market sharing with competitor Koppers Arch.

The commission launched the action against the three men in 2007.

Both the High Court and the Court of Appeal supported the commission’s bid to prosecute the Australians, but in a judgement released today, the Supreme Court unanimously found New Zealand courts had no jurisdiction as the alleged conduct did not fall within the terms of s4 of the Commerce Act.

The commission’s proceedings against Mr Akle were discontinued last year, but Mr Poynter appealed the Court of Appeal ruling to the Supreme Court in June last year, arguing that the commission did not have the right to prosecute.

In today’s judgement, the Supreme Court judges found that the commission’s argument relied on attribution to Mr Poynter of conduct carried out within New Zealand by others but that no such attribution was available under the Commerce Act.

In a statement released after the court’s decision, commission chairman Dr Mark Berry said the ruling would now be considered by the commission to “consider the full implications of the judgement.”

The commission has been ordered to pay $15,000 to Mr Poynter to cover his costs of taking the case to the highest court in the country.

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