There were a number of key competition law developments in New Zealand during 2017, including the enactment of the Cartels Act, the postponement of the reform of the prohibition on taking advantage of market power and a significant increase in the proportion of declined merger clearances. In addition, the new Labour-led government stated that it is keen to empower the Commerce Commission to undertake market studies before the end of 2018.
There is a debate in competition law at present concerning whether a company can restrict online sales for their products. Under New Zealand competition law, a supplier restricting its customers from selling on online platforms could be penalised if, among other things, it has market power and imposes restrictions to take advantage of that market power for an anti-competitive purpose. However, legitimate and pro-competitive justifications can be relevant in assessing the legality of such restrictions.
The Commerce Commission recently released its Consumer Issues Report 2016/17. Although greater transparency is to be commended, a failure to balance this against the legitimate interests of businesses that have not been involved in any breach of the law, but which are still named and shamed, risks turning the report into a publication which does more harm than good.
The commerce and consumer affairs minister recently announced that the government was recommending changes to the Commerce Act, including providing the Commerce Commission with powers to undertake market studies and allowing Commerce Commission settlements to be registered as court-enforceable undertakings, so that the commission can litigate breaches of those undertakings without needing to prove that a breach of the Commerce Act has arisen.
The Commerce (Cartels and Other Matters) Amendment Bill was recently enacted into law. Businesses finally have the additional certainty of prohibitions that are better aligned with the equivalent Australian law and an exemption that is better targeted at efficiency-enhancing collaborations between competitors. Businesses are likely to regard this as a positive step towards having both a more fit-for-purpose exemption and legal certainty regarding the competition law regime going forward.
A recent High Court judgment has surprised some observers by allowing a representative action of homeowners to proceed against a government-owned earthquake insurer. The judgment is of note because it followed an earlier refusal by the same court to give the group leave to proceed. The case offers the opportunity to compare the unsuccessful and successful applications and briefly survey the landscape of such actions.
The High Court recently issued a decision regarding the coverage offered to the directors and general manager of a trust fund management company by a professional indemnity policy and separate directors' and officers' cover. The decision highlights that courts will consider a number of relevant factors to interpret multiple policies, the most relevant in this case being the commercial intent of the policies as a whole.
The Insurance Council of New Zealand (ICNZ) recently announced that Youi New Zealand Property Limited must pay the maximum fine of NZ$100,000 for failing to conduct business in accordance with the Fair Insurance Act. The fine is less significant than the ICNZ's clear message that it will use the full extent of its powers to protect the insurance industry's reputation and raise the standards and services that insurers provide to consumers.
A recent Court of Appeal decision has been praised as a victory for parties with a legitimate interest in seeing that release agreements are routinely upheld and enforced. However, the Supreme Court recently gave leave to appeal the decision. One of the approved grounds is the effect of the parties' release agreement, which will again shine a spotlight on the effectiveness of properly drafted settlement agreements.
Natural disaster cover under household insurance cover is often payable only to top up what the Earthquake Commission (EQC) has paid. Usually there is cooperation between the EQC and insurers to agree on apportionment between earthquakes and whether damage is over or under the cap which triggers insurance cover. If agreement is not reached, the EQC may settle directly with the home owners.
The Evidence Amendment Act 2016 came into force in January 2017 and is the fourth and most substantial amendment to the Evidence Act since its introduction in 2006. Most of the amendments relate to evidence in criminal proceedings. However, several amendments are relevant to civil proceedings. The amendments relate to the definitions relevant to the application of privilege, legal advice privilege, settlement privilege, prior consistent statements and the prohibition on using previous decisions as evidence.
The Supreme Court recently clarified the law applicable to unused registered trademarks in New Zealand and limited the scope of protection afforded to trademarks under the Trademarks Act 2002. The decision will affect companies which have sought to expand the protection available under the act by acquiring, but not actually using, trademarks that resemble their own purely to prevent other traders from using them.
The New Zealand Court of Appeal recently had to determine whether late payment fees of A$28 million on a 60-day loan of A$37 million were an unenforceable penalty according to the law of New South Wales, Australia, which was the law of the contract. Although the judgment addresses the law of New South Wales, it offers some insight into the New Zealand court's view of recent international developments on penalties.
The High Court recently ordered that a substantial amount be provided as security for costs by a litigation funder in relation to claims brought against seven defendants. The fact that the litigation was being funded by a third party was a significant consideration in the determination that the plaintiff could not pay costs itself and the exercise of the court's discretion to order that security be provided.
The Supreme Court recently upheld a ban on smoking in public mental health facilities, ruling that the ban did not breach patients' rights, even of those compulsorily detained on the property. The court held that there was no requirement under the Smoke-free Environments Act to provide a dedicated smoking room, and rejected the appellant's claim that the smoking prohibition infringed a number of rights under the Bill of Rights Act.