View source for Shivas v Bank of New Zealand

{{Use New Zealand English|date=April 2024}}
{{Use dmy dates|date=April 2022}}

{{Infobox court case
| name = Shivas v Bank of New Zealand
| court = [[High Court of New Zealand]]
| date_filed = 
| image = 
| date decided = 14 November 1989 
| full name = Gillian Shivas & John Falloon v Bank of New Zealand 
| citations = [1990] 2 NZLR 327
| judges = [[Andrew Tipping|Tipping J]]
| prior actions =  
| subsequent actions = 
| opinions = 
| transcripts = [http://www.nzlii.org/nz/cases/NZHC/1989/862.pdf judgment]
| Keywords = duress
}}

'''''Shivas v Bank of New Zealand''''' [1990] 2 NZLR 327 is an important case in [[New Zealand]] regarding [[Coercion|duress]].<ref name="Walker">{{cite book |title=Butterworths Student Companion Contract |edition=4th |last1=Walker |first1=Campbell |publisher=LexisNexis |ISBN=0-408-71770-X|year=2004 |pages=143–144}}</ref>

==Background==
Mrs Shivas was a trustee of a [[family trust]] established by her husband Mr Shivas. Mr Shivas also ran a separate company involved in selling airplanes. As a result of the company experiencing financial difficulties and being unable to service its debts, the principal creditor, the [[Bank of New Zealand|BNZ]], asked for the company to provide extra security, namely for the family trust to give a guarantee over the company's debts as well as grant a mortgage over the Shivas family home.

The trustees, reluctant to give such a guarantee, which included the family home, ultimately gave the guarantee after the BNZ said they would appoint [[Receivership|receivers]] to the company if the guarantee was not given. The trustees had access to independent legal advice at the time.

Unfortunately, these guarantees only delayed the inevitable, as 18 months later, the company was placed into receivership, with the receivers seeking to enforce the trust's guarantee as well as the mortgage over the family home.

The trustees tried to set aside the guarantees on the grounds of duress, even though they had not raised this issue once with the BNZ in the 18 months that had passed since it was signed.

The trustees got an [[interim injunction]] in the meantime, preventing the BNZ enforcing the guarantee.

==Decision==
The court ruled that the trustees did not have to give the guarantee at the time, as they could alternatively have refused to grant the guarantee. The BNZ's threat of placing the company into receivership was held to not be illegitimate pressure. The judge also noted that the plaintiff did not protest duress at the time of signing, nor during the following two years. As a result, the court held that the trust's guarantee was enforceable.

==References==
{{Reflist}}

[[Category:High Court of New Zealand cases]]
[[Category:1990 in New Zealand law]]
[[Category:1990 in case law]]
[[Category:New Zealand contract case law]]
[[Category:Bank of New Zealand litigation]]