Commission Files Proceedings In Anti-competitive Land Covenant Case

The Commerce Commission has filed proceedings in the High Court in Wellington against NGB Properties Limited (NGB) for allegedly contravening section 28 of the Commerce Act. Section 28 prohibits land covenants that have the purpose, effect or likely effect of substantially lessening competition. NGB is a sister company of Juted Holdings Limited (Juted). Juted is a Mitre 10 franchisee and operates the Mitre 10 MEGA in Tauranga.

The Commission alleges NGB acquired a property in central Tauranga and placed a covenant on it that would have prevented a hardware store from being built on the property. The Commission alleges that NGB’s intention in lodging the covenant was to prevent a Bunnings Warehouse from being built on the site. In the Commission’s view, this amounted to a purpose of substantially lessening competition for the retailing of hardware and home improvement goods in central Tauranga.

The Commission and NGB have agreed on a settlement to resolve the proceedings. A penalty hearing in the Wellington High Court will be scheduled shortly.

As the matter is before the Court, the Commission cannot comment further at this time.

Background

Section 28 of the Commerce Act prohibits the giving or enforcement of land covenants that have the purpose, effect or likely effect of substantially lessening competition. A land covenant is an agreement or promise to do, or not do, something in relation to a piece of land.

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