Court rules in favour of second-tier levies

Press, 6 October 1989, Page 11

Court rules in favour of second-tier levies

PA Wellington The Court of Appeal has ruled that second-tier levies imposed on apple growers by the Apple and Pear Marketing Board do not breach provisions of the Commerce Act. The Court has allowed an appeal by the board from a judgment of Mr Justice Holland delivered in judicial review proceedings brought by Apple Fields, Ltd, and Styx Mill Orchard Partnership No. 6. The president of the appeal court, Sir Robin Cooke, in his judgment said Apple Fields was a comparatively new but large-scale entrant into the apple-growing industry. The plaintiffs had claimed certain proposals and practices adopted by the board in consultation with the federation were in breach of provisions of the Commerce Act aimed at freedom of competition.

The attack was on the second-tier levy main-

tained by the board since May 1, 1986. That was a system of funding for the board whereby growers whose sales of apples to the board exceeded what they had sold to the board in the past were required to pay to the board each year a levy on the increase.

Sir Robin said attention was concentrated at the High Court hearing on the second-tier levy of $1.35 a tray carton imposed in 1988, although the lower second tier levies went back to 1983.

Initially the levy had been $l, then reduced to 50c and increased again and the plaintiffs were apprehensive of further increases.

Sir Robin said Sections 27, 29 or 36 of the Commerce Act were concerned with the substantial lessening of competition, which under the philosophy of the act was prima facie condemned, no matter how justified it might seem to be in a particular case.

The manifest policy of Section 31 of the Apple and Pear Marketing Act was directly contrary to that of Sections 27, 29 and 36 of the Commerce Act. In his opinion this conflict was clear on the face of the two statutes to justify holding that the give-way rule in the Commerce Act applied in favour of the board as far as the board’s capital requirements were concerned. Sir Robin said he would allow the appeals and declare that the board’s second-tier levies were excepted by virtue of Section 43 of the Commerce Act from the operation of Sections 27, 29 and 36 of that act. He said crossappeals from parts of Mr Justice Holland’s judgment should be formally dismissed.

The other judges — Mr Justice Richardson, Mr Justice Casey and Mr Justice Bisson — also in their judgments said they would allow the appeal.