Four Winds wins against NZCT

FOUR WINDS FOUNDATION LTD v NEW ZEALAND COMMUNITY TRUST

Following NZCT’s refusal to give written notice of the surrender of venue licences, Four Winds sought a High Court declaration as to the correct legal position.   The case was held on 8 February 2022 in the Wellington High Court before Justice Cooke, and his judgment issued on 12 April. 

Justice Cooke found in Four Winds’ favour and concluded that a society has an obligation to give notice of the surrender of a licence, saying that this obligation arose by implication within the agreements approved under s39 of the Gambling Act from the administrative requirements arising from the statutory scheme, and the industry practices that have naturally followed.

‍Justice Cooke determined that:

• the venue agreement contains a contractual obligation to supply notice of surrender of a venue licence;  
• that obligation arises from an implied contractual term;
• such an implied term is necessary to give effect to both the venue agreement and purposes of the Gambling Act 2003;
• such a term must also be implied because of long-standing industry custom and practice.

Justice Cooke commented:

As to the precise nature of the obligation, it would be that the corporate society would give the Secretary notice that it was surrendering its licence at the end of the contracted period with a venue within a reasonable time following request made by the venue/new society. It is not possible to be more precise on what a reasonable time would be. It will be contextual. In the usual course it is unlikely to be an issue.   

(Paragraph [37] of the judgment).

The judgment made it clear that NZCT should provide surrender notices in a manner that would facilitate transfer of the venues.

The Judge considered Four Winds was ‘substantively successful’ and took the preliminary view that FWFL was entitled to costs on a 2B basis, although FWFL and NZCT ultimately agreed to bear their own legal costs.

In practice, trusts should follow a standard venue transfer process:

• providing a licence surrender notice at the end of the period contracted with the venues;  or
• provision of such notice within a reasonable time following such request.  (The Court determined that what is ‘reasonable’ will be contextual.  In practice this should mean that the notice should be supplied in sufficient time to allow the seamless transfer of venues without interruption to gaming operations).   

The judgment is significant and of wide-reaching effect because the implied term identified by the court will apply to all venue agreements across the industry.  

By clarifying the legal obligations of parties to a venue agreement, the judgment should go a long way to achieving the industry consensus on cooperation with future venue transfers.
‍

Click here to download the full judgement