Following a Privy Council decision in London this morning (New Zealand time), Auckland Toyota dealer, Giltrap City Toyota, will pay costs to the Commerce Commission and face trial to hear allegations that it was involved in price fixing.

Commerce Commission Chairman Peter Allport said that this is the first time an appeal against Commission action have gone as far as the Privy Council.

The Privy Council has ordered the trial go ahead in the Auckland High Court and awarded costs, the amount of which it has not yet decided, to the Commission.

Mr Allport said that the Commission is alleging that Giltrap was one of eight Auckland Toyota dealers that breached the Commerce Act by agreeing to limit the discounts available to buyers of new cars.

In the Auckland High Court in December 1996 the other seven dealers admitted that at their regular monthly franchise meetings they discussed and eventually agreed on the maximum discounts they would offer to car leasing companies, fleet buyers and private individuals.

The Court imposed penalties of $50,000 against each of these seven dealers.

Giltrap denied it had breached the Act, and the Commission continued court action against it.

The company successfully applied to the High Court to have the action struck out. The Commission appealed the strike out, and in December last year the Court of Appeal upheld the Commission's appeal, ordered the case be heard in the High Court and awarded $5,000 costs to the Commission.

Giltrap then sought leave to appeal to the Privy Council but the Court of Appeal did not grant it leave. Following the Court of Appeal's refusal, Giltrap went to the Privy Council and sought special leave to have its appeal heard in London.

The Privy Council this morning heard Giltrap's application for special leave, rejected the application, ordered the case back to the High Court and awarded costs to the Commission.

Media contact: Commerce Act Manager Geoff Thorn

phone work (04) 498 0958

Communications Officer Vincent Cholewa

phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz