High Court Finds For Telecom On Injunction

HIGH COURT FINDS FOR TELECOM IN REBIILLING INTERIM INJUNCTION APPLICATIONS

Justice Williams' judgment over Telstra's rebilling interim injunction applications speaks for itself, Telecom Manager External Relations Clive Litt said.

The High Court today "found against Telstra on each of the grounds on which it sought an interlocutory injunction" and dismissed its applications.

Telstra had lodged an application essentially seeking orders requiring Telecom to supply rebilling services specified in a Telecom standard Letter of Authority (LOA) and also to supply new LOAs within 10 days of receiving one until the substantive case could be tried. These applications were declined.

Further the court found that two of Telstra's major causes of action (breach of contract and estoppel) did not reach the standard that there is a serious question to be tried.

In relation to Telstra's causes of action alleging unlawful interference with contracts the judge found that "as Telecom is doing no more than adhering to the strict term of those contracts…, its conduct cannot be without lawful justification. Standing on the terms of its contracts is not interfering with its terms."

Justice Williams found that "The Court's view is that this is, in essence, a comparatively straightforward contract case despite the embellishments of the other causes of action, particularly those brought under the Commerce Act 1986. Telecom has a contract with its customers on which it is entitled to rely. Telstra's ability to participate in the benefits of the contract is limited by the contract itself and the LOAs and there is nothing in the contract or in Telecom's conduct to require it to make advantages available to its competitor. The public purpose aspect of an injunction brought under the Commerce Act 1986 is blunted by the commercial advantage which Telstra wished to wrest from its competitor." The Judge also commented that "there does not seem to be anything to debar Telstra or (its) customers from offering and receiving TMS whether with or without rebilling."

Earlier the judge had observed that "What has occurred in relation to rebilling since October 1997 and what may occur in the future looks very much like the ordinary ebb and flow of commerce in a competitive environment."

In relation to alleged anticompetitive behaviour, Justice Williams concluded "Finally it is difficult to stigmatise as anticompetitive an action taken by one competitor in a fiercely competitive market to decline to offer a service to another competitor to which that competitor was not entitled initially and which it only enjoyed for a relatively brief period as the result of an informal arrangement agreed by a couple of middle managers and never sanctioned by the competitors themselves."

Mr Litt said that Justice Williams' comments on the highly competitive nature of the New Zealand telecommunications marketplace and his firm decision on Telstra's general stance were most encouraging. "Our position has always been that Telecom was making a straightforward commercial decision in ceasing rebilling and the judge's comments support that view. This is a very positive judgment from Telecom's perspective."

Telecom website

http://www.telecom-media.co.nz/releases/

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