Price Fixing: Poynter v. Commerce Commission

An Australian manager of the Fernz Group has been removed by the Supreme Court from price-fixing litigation brought by the Commerce Commission. Living overseas and having no physical link with New Zealand operations meant he did not come within the Commerce Act net and the Commission’s allegations of price fixing.

The Commission has been pursuing companies, including Fernz Group, for allegedly fixing prices and divvying up market shares in relation to the wood chemical-treatment business. Mr Poynter was for a brief period a senior manager of Fernz in Australia. He was one of a number of managers and employees sued.

Mr Poynter challenged the right of the Commerce Comission to take legal action against him given that he had never lived in New Zealand and that there were no allegations that he had engineered any price-fixing from offshore.

The Commission argued offshore executives could be potentially liable: either as part of a conspiracy or by having New Zealand employees acting on their behalf.

The Supreme Court ruled that even if a manager had conspired while overseas to fix prices in New Zealand, the manager could only be sued for conspiracy if and when physically visiting New Zealand.

And, even if New Zealand employees were acting on an offshore manager’s instructions, they were not acting on behalf of the manager – they would be acting on his instructions on behalf of the company. Consequently, the off-shore manager could not be liable for their acts.

Poynter v. Commerce Commission – Supreme Court (16.04.10)

05.10.006