Court of Appeal rules on 'blatant' price fixing: Giltrap City Toyota ordered to pay $100,000
Published06 Nov 2003
Issued 5 November 2003
The Court of Appeal today upheld the High Court ruling that Giltrap City Limited, trading as Giltrap City Toyota, and its former managing director, Andrew Thomas MacKenzie, had breached the Commerce Act by entering into price fixing arrangements with other Toyota dealers in 1993.
Giltrap and Mr MacKenzie had appealed the September 2001 finding by the Auckland High Court.
In December 1996, seven Auckland Toyota dealers admitted breaching the Act following a Commerce Commission investigation. They were each ordered to pay penalties agreed by the Commission of $50,000. Giltrap did not admit any breach and elected to defend the Commission's prosecution.
In today's judgment, Justices Gault, McGrath and Tipping confirmed the High Court's finding that Giltrap and Mr MacKenzie had breached the provisions of the Commerce Act, commenting that this was a blatant price fixing arrangement by a number of car dealers.
"Contraventions of this kind are hard to detect and should be firmly dealt with when established. The deterrent effect of proving a contravention must be sufficiently reinforced by the level of penalty."
Commission Acting Chair Paula Rebstock said the Commission was pleased that the High Court's judgment had been upheld.
"Price fixing agreements are one of the most serious types of anti-competitive conduct prohibited by the Commerce Act. Price fixing prevents consumer choice by influencing prices - lessening competition in the most fundamental way," she said.
Justices Gault, McGrath and Tipping agreed that the original penalty imposed by the High Court against Giltrap be reduced from $150,000 to $100,000, but indicated that the penalty against Giltrap may have been in the vicinity of $250,000 were it not for the constraining effect of the $50,000 penalties imposed on the other dealers.
Giltrap and Mr MacKenzie were ordered to pay the Commission's costs of the appeal. Both parties have the right of further appeal.
Background information
The Commission has issued several media releases on this case:
1996/100 $350,000 penalties for Toyota dealers (4 December 1996)
1997/124 Toyota dealer to face trial for price fixing (16 December 1997)
1998/79 Commission wins in Privy Council: Giltrap City Toyota to pay costs and face trial for price fixing (30 October 1998)
2002/9 Giltrap City Toyota to pay $150,000 for price fixing (5 February 2002)
