Judgment: Spark NZ v Commerce Commission

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IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
CIV-2017-404-230
[2017] NZHC 238

UNDER
the High Court Rules, Judicature Amendment Act 1972 and the Common Law

IN THE MATTER
of an application for interim orders

[…]

[1] These proceedings arise out of a decision by Sky Network Television Limited (Sky TV) and Vodafone New Zealand Limited (Vodafone) to merge their two businesses. Completion of the transactions will result in Sky TV owning 100 per cent of the shares in Vodafone, Vodafone Europe BV owning 51 per cent of the shares in Sky TV and the existing shareholders of Sky TV owning the balance. The proposal has already been approved by Sky TV’s shareholders by an overwhelming majority.

[2] Sky TV and Vodafone applied in June 2016 to the Commerce Commission (the Commission) for clearance of the proposed transactions under s 66 of the Commerce Act 1986 (the Act). The Commission has announced that it will deliver its decision, but not its reasons, in respect of the application for clearance on Thursday 23 February 2017.

[3] Two of Vodafone’s competitors, Spark New Zealand Limited (Spark) and Two Degrees Mobile Limited (Two Degrees) (the applicants) now seek urgent interim relief to enable them to give consideration to challenging the Commission’s decision in the event that it gives clearance for the transaction to proceed. Any challenge would be by way of judicial review proceedings.

[4] The applicants are supported by InternetNZ, which describes itself as a not-for-profit organisation that represents the interests of consumers and internet users. I have granted InternetNZ leave to intervene to the extent that I have taken into account its submissions in reaching my decision.

[5] Vodafone and Sky TV oppose the application for interim relief. They say there is no jurisdiction for the Court to grant relief and, even if there is, the Court should decline both applications.

[6] The Commerce Commission abides the decision of the Court in relation to the applications for interim relief, but opposes any order being made that would interfere with the process it proposes to adopt in relation to the provisions of reasons for its decision.

[…]

Decision

[35] I have concluded it is appropriate in the present case to make an order staying the effect of any clearance decision for a short period in order to enable the applicants to consider their options. I make that decision for the following reasons:

[…]

Orders

[36] I make the following interim orders:

(a) I grant leave to commence each proceeding by way of originating application.

(b) I make an interim order under s 8(1)(a) of the JAA prohibiting the respondents from completing the transactions in reliance on any clearance given by the Commission until midnight on the third day after the Commission has delivered the reasons for its decision to the applicants (the prescribed period).

(c) In the event that no application for judicial review of the Commission’s decision has been filed by the expiration of the prescribed period, the interim orders will lapse and the respondents will be free to complete the transactions in reliance on the clearance.

(d) In the event that any judicial review proceeding is filed within the prescribed period, the interim orders will remain in force pending further order of the Court.

[37] If an application for judicial review is filed and the respondents so request, the Court will arrange an early fixture at which the continuation of the interim orders will be reviewed having regard to the grounds relied upon in support of the application for review.

Undertaking as to damages

[38] At this stage I do not consider it appropriate to require either applicant to provide an undertaking as to damages. That issue may need to be revisited, however, in the event that either applicant files an application for judicial review.

Confidentiality orders

[39] Several parties have sought orders that documents filed in the proceeding are to be kept confidential and not available for search because they contain commercially sensitive information. I grant the orders sought and direct counsel to seal those orders so that the Registry is aware of documents that may not be searched without leave.

Lang J

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