Further delay for Air NZ cargo case

WILLIAM MACE
Last updated 14:25 17/05/2013

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The Commerce Commission fears its price-fixing proceedings against Air New Zealand could be "parked somewhere behind the terminal".

Air New Zealand revealed last week in court that it had agreed to settle with the competition watchdog before Christmas, admitting breaches of the Commerce Act in relation to price fixing for cargo services.

Ten other airlines have settled on the same charges, resulting in penalties of more than $35 million.

Air New Zealand subsequently filed an application to cancel the settlement based on the retraction of key evidence in the case, but the commission is arguing the airline cannot simply cancel the agreement and says the application is an attempt to delay the penalty or a trial, if it is needed.

In the High Court in Auckland today, Justice Allan parked the proceedings again, but ordered that they be called together rather than apart.

Lawyers for both sides argued in court over that point - whether the cancellation hearing should be heard at the same time as a hearing for "judgment on the admissions" given by Air New Zealand under the settlement agreement.

Essentially, Air New Zealand wanted the cancellation proceedings given priority and heard separately, while the commission wanted them to be combined.

Commission lawyer Brendan Brown, QC, said he was wary of the many appeal avenues Air New Zealand could exploit in the "no-man's land" that would occur if the cancellation application was heard separately.

"We could get to 2015 or 2016 and the air cargo proceeding is still parked somewhere behind the terminal," Brown said.

He said a press statement issued by Air New Zealand general counsel John Blair last week showed the airline would do anything it could to prevent the penalty hearing from progressing.

Brown argued that the settlement agreed to by Air New Zealand was as good as an undertaking to the court, and could not be cancelled without leave from the court.

The airline's lawyer, Alan Galbraith, argued that the agreement was a civil contract and did not yet involve the court.

Justice Allan decided the proceedings should be run together, and ordered another hearing on June 7.

"In my view, the appropriate course, at least for the time being ... was that proceedings be case-managed together," he said in his decision.

"The commission's application for judgment on admissions and Air New Zealand's separate proceeding should be determined by the same judge at the same trial, but the final determination will be for another judge at a later time."

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- BusinessDay.co.nz

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