The decision
The details of the parties and the determination itself are confidential and, while the determination binds the particular parties to the dispute (subject to any appeals), it does not provide any binding precedent for other parties or other disputes.
However, the decision from a former Court of Appeal judge provides some useful guidance on the process under the Scheme for suppliers and wholesale customers as claimants and RGRs as respondents.
The Scheme
The Scheme operates under the Grocery Industry Competition Act 2023 (GICA) and regulations. The Scheme is administered by the NZDRC and can be used to resolve disputes between grocery suppliers, wholesale customers and “regulated grocery retailers” (RGRs) in relation to the Grocery Supply Code 2023 (the Code) or the wholesale access regime in the GICA. The Scheme Rules are published on the NZDRC website.
Remedies
Under the Scheme, suppliers and wholesale customers can seek damages of up to $5 million. However, other (non-monetary) remedies may also be available depending on the circumstances. A supplier or wholesale customer seeking a monetary damages award will need to adduce appropriate evidence of claimed losses.
Costs
Under the Scheme Rules, there is a presumption that the RGRs pay the adjudicator’s fees and the parties will pay their own costs of the adjudication. [1] This means that there is usually no cost to the claimant, other than its own legal fees.
However, the adjudicator may make a different allocation of costs, for example, if they have been incurred “unnecessarily” due to a party’s bad faith, or allegations or objections that are frivolous, vexatious and/or without substantial merit.[2]
Importantly, whether a retailer’s conduct towards the supplier lacks good faith is a distinct issue from whether the adjudication itself was conducted in bad faith. Regardless of the outcome, if the case is not conducted in bad faith and the defence is not frivolous, vexatious or without substantial merit, then the parties’ costs will lie where they fall.
Time frames
GICA provides for a default fast-track dispute resolution process of 25 working days. This translates into short turnaround periods under the Scheme rules, calculated from the date of the adjudicator’s appointment:
- A claimant (RGRs cannot be a claimant) must lodge the claim by the 5th working day.
- The RGR must provide its response by the 10th working day (a five-day turnaround).
- The claimant’s reply to that response must be made by the 15th working day.
- The RGR’s rejoinder to any reply must be made by the 18th working day.
However, the adjudicator has discretion to grant reasonable extensions and can work with the parties to provide sufficient time for submissions, taking into account the number of issues in dispute and the complexity of the case. The adjudicator also has a degree of flexibility in determining procedure and can ask for more information or submissions on particular issues and/or require confidentiality undertakings to be given in respect of particular documents or evidence.
In this first case under the Scheme, the adjudicator was prepared to extend the default timeframes given the complexity of the case and that this was the first time provisions of the Code needed to be considered and interpreted. In total, the process therefore ended up taking 62 working days from the appointment of the adjudicator to the issuing of the determination. This was still much faster than a case would be heard and dealt with by the Courts.
‘On the papers’
The process involves the adjudicator deciding based on the written material submitted by the parties, including submissions, witness statements and supporting documentation. The decision is usually made ‘on the papers’ without a hearing (unless a party requests a hearing and the adjudicator agrees to hold a hearing after conferring with the parties).[3]
This provides for a faster and more cost-effective process. However, witnesses are not cross-examined to test their credibility. It is incumbent on the parties to provide clear, concise, and well-structured submissions with clear linkages to the supporting evidence in a way that assists the adjudicator in navigating through the information provided.
Who makes the decision?
The New Zealand Dispute Resolution Centre appoints a well-qualified adjudicator chosen from suitable candidates from its panel (Profiles – New Zealand Dispute Resolution Centre). This includes former judges from the Senior Courts and High Court, King’s Counsel, and senior barristers and solicitors. Selection is based on the relevant skill set, ability to act within the required time frames, and ensuring there are no conflicts of interest.
References
[1] Rule 24.5 of the Scheme Rules https://nzdrc.co.nz/expertise/grocery-industry-dispute-resolution-scheme/grocery-industry-dispute-resolution-scheme-rules/
[2] Rule 24.8 (These phrases are similar to those in the costs provisions in sections 56 and 57 of the Construction Contracts Act 2002.)
[3] Rules16.25 and 16.26.
