Shoye Venture Limited v Wilson - [2015] NZHC 319

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-004-7912 [2015] NZHC 319

BETWEEN
SHOYE VENTURE LIMITED

Plaintiff

AND

DONALD GORDON WILSON Defendant

Hearing: 25 and 26 February 2015

Counsel:

MRT Colthart for Plaintiff
Defendant in person

Judgment:

29 April 2015

JUDGMENT OF FOGARTY J

This judgment was delivered by me on 29 April 2015 at 4.00 p.m., pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors: Lee Salmon Long, Auckland

SHOYE VENTURE LIMITED v DONALD GORDON WILSON [2015] NZHC 319 [29 April 2015]

Introduction

[1] Under the Gambling Act 2003, the Manukau Golf Club is eligible to operate gambling machines for profit. Between October 2007 and September 2009, the golf club’s gambling machines were operated off the golf course, at the Trophy Bar in Takanini, pursuant to licenses granted under that Act. The club had an operator licence, the plaintiff, Shoye Venture Limited (Shoye) had a venue operator licence, and Mr Joyce was the licensed venue manager. These licences were granted under the Gambling Act following receipt of a “venue agreement” executed by these three parties on 9 October 2007.

[2] Mr Joyce agrees that he executed the October agreement on behalf of his company as the venue operator. However, the agreement shows that he signed Schedule 2 of it also on behalf of himself as venue manager. Mr Joyce’s evidence was that he did not know of the content of the venue agreement at the time he signed it and, by reason of the doctrine of non est factum, that agreement is void against him, inasmuch as he accepts the obligations of venue manager.

[3] Rather, Mr Joyce argues that he is entitled to the benefit of a deed of guarantee by the defendant, entered into a month earlier on 10 September 2007. This is a guarantee of due performance of the manager of the Trophy Bar under a contemporaneous management agreement to Shoye, as the business owner, and includes an obligation to purchase the business if the business owner is justified and terminates the management agreement. The management agreement referred to is dated 10 September 2007 and executed on the same date as this deed of guarantee.

[4] This September management agreement has a crucial difference from the second schedule of the October venue agreement, as in the September management agreement Ms Tania Mara executes as manager, not Mr Joyce. By the deed of guarantee, Mr Wilson was guaranteeing the performance the manager “under the management agreement dated on or about the date of this Deed”. Both were signed on 10 September.

[5] The issue in this case is whether or not Shoye can rely on the deed of guarantee, given that the September management agreement was superseded by the different October venue agreement.

The Deed of Guarantee

[6] The “INTRODUCTION” (Preamble) to the deed of guarantee reads as follows:

(a) The Business Owner and Tania Mara have agreed to enter into a deed known as the management agreement dated on or…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] NZHC 319
Decision Date: 29 April 2015

CaseChat Overview and Summary

Shoye Venture Limited, a licensed venue operator, sought to enforce a guarantee deed by Donald Gordon Wilson, against the backdrop of the illegal operation of gambling machines at the Trophy Bar in Takanini, New Zealand. Shoye had executed a venue agreement in October 2007, which replaced an earlier venue and management agreement signed in September 2007. The September management agreement named Ms Tania Mara as manager, while the October venue agreement named Mr Maurice Joyce as manager, who also signed the guarantee deed. Shoye argued that the October agreement was void under the doctrine of non est factum because Mr Joyce, who was dyslexic, did not understand the document when he signed it. The court found that while Mr Joyce met some of the criteria for non est factum, he did not act with reasonable care in the circumstances, and therefore the plea failed. The court further found that the September 2007 management agreement was superseded by the October 2007 venue agreement, and therefore the guarantee deed was no longer enforceable. Even if the September agreement had survived, the court found that under the Illegal Contracts Act 1970, it could not enforce the guarantee deed against Mr Wilson because it was based on an illegal operation. The court dismissed Shoye Venture Limited's claim and ordered that there be no order as to costs.

Orders