Shoye Venture Ltd v Wilson - [2013] NZHC 2339

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-007912 [2013] NZHC 2339

BETWEEN
SHOYE VENTURE LIMITED

Plaintiff

AND

DONALD GORDON WILSON

Defendant

AND

MANUKAU GOLF CLUB INCORPORATED

Third Party

Hearing:

6 September 2013

Counsel:

No Appearance of or for the Plaintiff A E Hansen for the Defendant

No Appearance of or for the Third Party

Judgment:

6 September 2013

JUDGMENT OF DUFFY J

Solicitors: Heimsath Alexander, Auckland

SHOYE VENTURE LTD v WILSON and ANOR [2013] NZHC 2339 [6 September 2013]

[1] This proceeding, which was to be heard by way of formal proof, and Manukau Golf Club Inc v Shoye Venture Ltd (CIV-2010-404-4422), which was to be tried by a Judge alone, were set down to be heard together in mid 2012. However, the Judge alone trial ran overtime, and so the formal proof of this proceeding was adjourned to a date to be fixed by the Registrar.

[2] When I delivered judgment in the related proceeding, Shoye Venture Ltd v Wilson [2013] NZHC 658, I found that the arrangements in place between Shoye Venture Ltd (Shoye Venture) and Manukau Golf Club Ltd (Manukau) for a gambling operation were illegal. After that judgment was released, Shoye Venture indicated its intention in this proceeding to pursue judgment by way of formal proof against the defendant, Donald Wilson. Mr Wilson now seeks leave to defend the claim against him out of time.

Background

[3] Mr Wilson provided a personal guarantee on 10 September 2007, purporting to ensure the due performance of a management agreement in relation to a gambling operation between Shoye Venture and Manukau, which was operated from the venue known as the Trophy Bar. Mr Wilson says that he derived no benefit from the guarantee and had no actual involvement in the operation. He provided the guarantee at Manukau’s request.

[4] The guarantee included the obligation to purchase the business of the Trophy Bar for the sum of $300,000 plus GST in the event of a breach of the management agreement. The guarantor also indemnified Shoye Venture from any loss or damage that it may suffer as a result of breach of the management agreement.

[5] In November 2009, Shoye Venture commenced proceedings against Mr Wilson by way of a summary judgment application. At that time, Mr Wilson opposed the summary judgment application. The proceedings continued. In May 2012, Mr Wilson abandoned his opposition because he believed that the

gambling arrangements were legal. It was then that the Court directed that this proceeding be set down for a formal proof hearing.

[6] On 28 March 2013, I delivered the judgment finding that the gambling arrangements between Shoye Venture and Manukau were illegal. Despite this, Shoye Venture continues to seek judgment by way of formal proof against Mr Wilson under the guarantee.

Submissions

[7] On the basis of my illegality findings, Mr Wilson now believes that he should not be held liable under his personal guarantee because, in essence, Shoye Venture is seeking to recover financial losses caused…

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.

Keep reading for free

Create a free CaseChat account to read Shoye Venture Ltd v Wilson and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2013] NZHC 2339
Decision Date: 6 September 2013

CaseChat Overview and Summary

In the case of Shoye Venture Ltd v Wilson, the defendant, Donald Gordon Wilson, sought leave to file a defence out of time against the plaintiff, Shoye Venture Ltd, in the High Court of New Zealand. The dispute centred around a personal guarantee provided by Wilson for a management agreement related to a gambling operation at the Trophy Bar, which was operated between Shoye Venture and Manukau Golf Club Inc. The plaintiff sought to enforce the guarantee after the gambling arrangements were found to be illegal in a related proceeding. Wilson argued that he should not be held liable under the guarantee because he had no involvement in the illegal gambling operation and had relied on the legality of the arrangements when he initially opposed the proceedings.

The primary legal issue before the court was whether the defendant, Wilson, should be granted leave to file his defence out of time, under Rule 15.9(3) of the High Court Rules. The court considered the factors relevant to determining whether there would be a miscarriage of justice if judgment were entered by default, including whether Wilson had a substantial ground of defence, whether the delay was reasonably explained, and whether Shoye Venture would suffer irreparable injury if the judgment were set aside.

The court concluded that Wilson had a substantial ground of defence based on the illegality of the arrangements, and that the delay in filing the defence was reasonably explained by Wilson's initial belief that the arrangements were legal. The court further found that Shoye Venture would not suffer irreparable injury, and that the future costs involved would be minimal as the issue of illegality could be determined in a short hearing. Therefore, the application for leave to file a defence out of time was granted. Wilson was directed to file and serve his statement of defence by a specified date, after which the matter would proceed as an ordinary proceeding warranting a defended hearing. Costs were reserved for later determination.

Orders