Commerce Commission v Bunnings Ltd [2021] NZDC 8918

Published 14 December 2021

Reserved decision — false or misleading representations — conduct liable to mislead the public — Fair Trading Act 1986, ss 2, 10, 13(g) & 44 — Evidence Act 2006, s 7 — Taylor Bros Ltd v Taylors Group Ltd [1988] 2 NZLR 1 (HC) — Sound Plus Ltd v Commerce Commission [1991] 3 NZLR 329 — Ben Rumble Communications Ltd v Commerce Commission (1999) 9 TCLR 204 (HC) — Red Eagle Corp Ltd v Ellis [2010] 2 NZLR 492 (SC) — Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 — Godfrey Hirst NZ Ltd v Cavalier Bremworth Ltd [2014] 3 NZLR 611 (CA) — Marcol Manufacturers Ltd v Commerce Commission [1991] 2 NZLR 502 — Rural Management Ltd & Rutherford v Commerce Commission (1997) 6 NZBLC 99, 401 — Commerce Commission v Viagogo AG [2021] NZHC 1398 — Commerce Commission v Amark Publishing (NZ) Ltd (1989) 3 TCLR 567 (DC) — Thompson v Riley McKay Pty Ltd (No.2) 42 FLR 279 (FCA) — Megavitamin Laboratories (NZ) Ltd and Stewart v Commerce Commission (1995) 6 TCLR 231,242 — Commerce Commission v A & W Hamilton Ltd (1989) 3 TCLR 398 — Auckland Regional Authority v Mutual Rental Cars (Auckland Airport) Ltd [1987] 2 NZLR 647 — Geddes v New Zealand Dairy Board CA 180/03, 20 June 2005 — Marcol Manufacturers Ltd v Commerce Commission [1991] 2 NZLR 502 — Lewis v Daily Telegraph Ltd [1963] 2 ALL ER 151 — Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 304 ALR 186 — Financial Markets Authority v Carrington Securities LP et al HC Christchurch CIV-2011-409-000435, 12 May 2011 — Commerce Commission v Bunnings Ltd [2020] NZCA 310 — Imperial Group PLC v Philip Morris Ltd [1984] RPC 293. The defendant company faced charges under ss 10 and 13(g) of the Fair Trading Act (FTA) for misleading conduct and false or misleading representations as to the price of its goods. The seven representative charges under s 10 related to particulars written on interior and exterior signs and posters and on staff kit. The 38 representative charges under s 13 related to website, television, radio, newspaper and catalogue advertisements. The representation by the defendant company was that it had the lowest priced goods, which the prosecution alleged were misleading because it could not be guaranteed that all of the goods were the lowest in the industry. In terms of the s 10 charges, conduct "liable to mislead the public" was not defined in the FTA, but precedent noted that it was a question of fact for the Court to determine objectively having regard to the particular circumstances of the case. Here, the prosecution had to prove beyond a reasonable doubt that: the defendant was a person within the meaning of the FTA; the defendant was in trade within the meaning of the FTA; a significant number of consumers would have considered the representations amounted to the claim that the defendant had the lowest prices on the market, allowing for some tolerance because of the number of stock-keeping units (SKUs) and the competitive nature of the relevant market; the conduct was liable to mislead a significant section of the relevant consumer group; and the conduct was in relation to prices that the defendant did not have rather than the rare exception. By contrast s 13 made no reference to the public. There was no doubt that the defendant was a person in trade within the meaning of the FTA. The consumer group was deemed to be those interested in "do it yourself" and home improvements as well as general living and plants. The prosecution provided price comparisons which showed that the defendant did not have the lowest price on certain items in the survey period. No survey evidence was taken from consumers about their understanding of the representations made by the defendant. The Judge determined the s 10 charges must fail as there was insufficient evidence from consumers as to what they believed the statements to mean. The taglines constituted no more than holistic statements of the defendant's position in the market. With regards to the s 13 charges, the statements in the media advertising also constituted no more than taglines. The remedial nature of the lowest price guarantee (whereby the defendant would beat any lower price found by a consumer by 15 per cent) meant that the defendant and consumer accepted that there would be some items at other stores with lower prices. The amendment to the particulars of the charge "with rare exceptions" did not change the acceptable percentage range of products falling outside the lowest price range. The prosecution had failed to prove the charges under both s 10 and s 13 beyond a reasonable doubt. The Judge dismissed all the charges against the defendant. Judgment Date: 3 September 2021.