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Legal experts say the Commerce Commission faces a difficult task overturning the High Court judgment giving Woolworths and Foodstuffs the all-clear to buy The Warehouse.
"A lot of the issues that are being raised on appeal are factual issues, and it's always an uphill battle to overturn factual
findings made by the High Court," said James Craig, senior associate at Simpson Grierson.
The commission had argued that a takeover by either party would have substantially lessened competition in the supermarket sectors, given The Warehouse's foray into grocery retailing through the Extra format.
But Justice Jillian Mallon, in her ruling, said there was a "real prospect" that the Extra stores would be abandoned even if an acquisition did not go ahead.
Justice Mallon also believed that even if 15 more Extra stores were rolled out, The Warehouse would continue to focus on general merchandising and, as such, would not be a price leader that would "shake up" the competition between Foodstuffs and Woolworths.
Craig said this made the commission's task more difficult.
"... Court of Appeal judges usually give more deference to the High Court judge's findings on the fact, and generally focus more on issues of law. But that's a generalisation - that's not to say they won't look at issues of fact if there are obvious errors that the commission can point out."
Buddle Findlay competition lawyer Tony Dellow agreed.
"The High Court decision seems quite robust - it really does turn on some findings of fact which relate to how the High Court saw The Warehouse's strategy of moving into supermarkets.
"Although it's perfectly possible for the Court of Appeal to come to a different view about that, it tends to be that the Court of Appeal would be more reluctant to interfere with such findings than they would a finding of law."
Uncertainty, however, remains as to whether an appeal to the Supreme Court is an option.
Up until 2004, Section 97 of the Commerce Act had a subsection categorically stating that "the decision of the Court of Appeal on any such appeal shall be final".
But that was repealed on January 1, 2004, when the Supreme Court came into being. Leave to appeal, however, is at the discretion of the Supreme Court, and no Court of Appeal decisions on cases pertaining to the Commerce Act have to date been appealed against.
