Scutts a reminder of the danger of side deals

Former NZ Wine Company chief executive Peter Scutts outside the Auckland High Court. Photo / Nick Reed

The High Court has "maintained its strict line against commercial bribery" in finding former wine boss Peter Scutts guilty, says law firm Bell Gully.

The decision, in which Scutts was found guilty on 17 charges including one under the Secret Commissions Act, was a rare one.

But Bell Gully partner Ian Gault and senior associate Andy Glenie say it is a reminder that "secret side-deals are dangerous".

"If an agent is to benefit from a transaction, the arrangement should be disclosed," they said.

The pair also said the case was a warning that "commercial transactions are not immune from the criminal law".

Scutts, a former New Zealand Wine Company chief executive, struck an agreement where Liquor Marketing Group would pay him A$1.00 for every supplied case of wine they sold.

Crucially in his High Court case, Justice Mary Peters found this agreement was reached before New Zealand Wine Company signed a supply contract with LMG.

Scutts, who acted as a consultant for NZWC in 2009 and became its CEO in June 2011, would go on to receive A$53,574.21 from LMG.

The agreement established an offence under the Secret Commissions Act.

Under that law, someone breaks the law if they advise a person to enter into a contract with a third party and receives or agrees to receive a gift or reward from that third party without the original person's consent or knowledge.

Scutts, who was remanded on bail last month, is expected be sentenced in July.