Commission wins $500,000 penalties against Port Nelson Limited
Published02 Jun 1995
The High Court today ordered Port Nelson Limited to pay penalties totalling $500,000 for three breaches of the Commerce Act. This is the highest total yet imposed under this Act on a single company.
The action was taken by the Commerce Commission after it received complaints from Tasman Bays Marine Pilots Limited (TBMPL).
Justice McGechan found that Port Nelson had breached the Act in all three matters brought by the Commission.
Commission Chairman Dr Alan Bollard said the Commission had argued that Port Nelson had used its dominant position to prevent TBMPL competing with it and had also twice entered into contracts which had anti-competitive purposes.
Justice McGechan said that in refusing to hire tugs unless its own pilots were also hired Port Nelson had been using its dominant position to try to prevent competition. He set a $300,000 penalty and imposed an injunction stopping Port Nelson continuing this practice.
Port Nelson had also offered a 5 percent discount on its services, including those over which it has a monopoly, to people who bought all the services. At the same time it set a minimum price for hiring out its own pilots that was below cost.
Justice McGechan said that these two arrangements had the potential to eliminate TBMPL and one of their purposes was to substantially lessen competition. He set penalties of $100,000 on each matter and imposed an injunction preventing Port Nelson offering a discount on bundles of its services.
"The Court has sent a strong warning to all businesses that deliberately setting out to prevent competition will be dealt with severely," Dr Bollard said. "And if that action involves using a dominant position the penalties will be even higher."
The decision follows an eight week Court hearing, including a Saturday sitting, which finished on December 22 last year. The Court sat in Nelson for four weeks and then in Wellington. Justice McGechan's decision is 246 pages long.
Media contact: Vincent Cholewa, Communications Officer
