The High Court in Wellington has found for the Commerce Commission in an anti-competitive case against the Ophthamological Society of New Zealand and five individual ophthalmologists.
In his judgment delivered yesterday, Justice Gendall found the ophthalmologists and the society breached the Commerce Act when they entered into arrangements in 1996 to
block entry by two Australian ophthalmologists from carrying out routine cataract surgery in Southland in 1997.
Justice Gendall said that in late 1996 there was a substantial waiting list of largely elderly people in Southland awaiting surgery for cataracts to their eyes.
They were people who could not afford private surgery and were consigned to the public waiting list.
The Government provided funding to Southern Health, the Crown health enterprise which operated hospital services in Southland, so as to provide substantial funds to provide surgical services to reduce the waiting list for cataract surgery.
"At the heart of this case is the provision of the services by specialist ophthalmologist surgeons to perform such cataract surgery on public, as opposed to private, patients," Justice Gendall said.
The commission alleged that two or more of the defendants came to an understanding or arrangement, and waged a campaign to thwart, hinder or prevent the performance of such surgery upon those patients by surgeons from Australia whom Southern health sought to contract.
Section 27 of the Commerce Act prohibits contract arrangements or understandings that substantially lessen competition.
The doctors concerned in the case were Philip Boulton of Palmerston North, who was president of the society in late 1996 and early 1997; Ken Tarr, a Canterbury ophthalmological surgeon who was vice-president of the society; Brett Rogers who was an ophthalmological surgeon practising in Invercargill and also employed by Southern Health to provide public services; Mark Elder an ophthalmological surgeon employed fulltime by Canterbury Health; and Professor Richard Clemett, a specialist ophthalmologist employed fulltime by Canterbury Health.
Justice Gendall concluded that the commission had succeeded in its cause of action against all defendants. The society was liable because of the actions of Dr Bolton so as to become part of the arrangement of understanding.
Each of the individual doctors was also liable because, in breach of section 27 (although unaware of its provision) they became parties to an arrangement designed to prevent, obstruct or hinder entry into the routine cataract surgery market, in Southland, of Australian doctors, without the consent or approval of the sole resident ophthalmologist.
Justice Gendall said he did not consider pecuniary penalties were required against Drs Boulton and Tarr and Prof Clemett.
"Dr Boulton was acting on behalf of the society based upon what he had been told. If any pecuniary penalty is to be levied (and that remains to be decided) it would be sufficient for it to be imposed on the society," Justice Gendall said.
Dr Tarr and Professor Clemett both fell within section 27 because they were a party and subscribed to the agreement or arrangement, along with other doctors, reached at a meeting in Christchurch.
"It was Dr Rogers who was the mover of the events that led to the prohibited arrangement being formulated," Justice Gendall said. "It was competition in the market in which he alone held command that he sought to hinder."
He said Dr Elder had lent considerable support to his colleague, Dr Rogers.
"Without his active assistance to aid and further the arrangement or understanding with Dr Rogers, his Invercargill colleague would not have been able to marshall the wide ranging support that he sought..." Justice Gendall said.
He said he considered that the society, Dr Rogers and Dr Elder only may face individual penalties. What those penalties will be is for later determination after further submissions were received from counsel.
The relevant maximum penalties at the time of the contravention were $5 million against an organisation and up to $500,000 against an individual.
Commerce Commission chairwoman Paula Rebstock today welcomed the judgment on the long-running proceeding which started in 1998.
She would not comment further as the matter was still before the courts.
- NZPA
The High Court in Wellington has found for the Commerce Commission in an anti-competitive case against the Ophthamological Society of New Zealand and five individual ophthalmologists.
In his judgment delivered yesterday, Justice Gendall found the ophthalmologists and the society breached the Commerce Act when they entered into arrangements in 1996 to
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