Mercury brought an action against Utilicorp claiming that Utilicorp had failed to make the disclosure required by the Act. Utilicorp had not given notice of this relevant interest in the Councils' shares and accordingly had breached the Securities Amendment Act 1988. There is no criminal penalty for a breach of these provisions. However, the Court has a discretion to make a wide range of orders, including orders prohibiting the exercise of voting rights and orders for the forfeiture of shares or dividends. Essentially, the message from the decision for parties dealing in listed company securities is that the disclosure provisions of the Securities Amendment Act 1988 are very broad in their application, and that a wide range of arrangements, even if informal in nature, may be required to be disclosed under that Act.
Suppliers can generally choose who they do business with.
As an example, the Commerce Commission has indicated that a manufacturer and supplier who agree that neither of them will supply a range of goods to a retailer may each be at risk under the Act. For example, a manufacturer offered retailers a new contract containing a 3 rebate on all products, provided the retailer agreed to stock only the manufacturer's product range. The manufacturer's principal competitor successfully challenged the contract on the grounds that it contained an exclusionary provision. This may occur where a dominant company controls a facility that is essential for a competitor to be able to compete, and there is no legitimate reason for the dominant business to deny access to that facility. In every case, it is a matter of assessing the nature of the market involved, the characteristics of the parties to any arrangement or refusal to supply, and the circumstances of the refusal to supply, to determine whether the action is in breach of the Act.