"PENAL" RENTS.

Sun (Christchurch), Volume I, Issue 227, 29 October 1914, Page 10

"PENAL" RENTS.

LICENSEE AND BREWER. TROUBLES OF AN HOTELKEEPER. In the"civil jurisdiction of the Magistrate's Court this morning, before Mr H. W. Bishop, S.M., Wm. Stewart Mitchell (Mr Hunt) claimed £73 16/11 from John Thos. Sutton (Mr Cassidy), being the amount paid. by. him on May 22, 1914, to Messrs Shand and Co., as a penalty enforced under a sub-lease of the City Hotel. Mr Hunt said that Sutton was the licensee of the City Hotel, which he held under a lease with a penal rent. He was to pay a rental of £1350 a year to Shand and Co. on the understanding that he would deal exclusively with that firm, otherwise a penal rent of £BOO would be imposed in addition. Sutton left the City Hotel and sub-let it to Mitchell, the defendant. Somewhere about July Shand and Co. informed Sutton that he was not dealing solely with them and demanded the penal rent. Mitchell refused to pay this extra £6O a month. Mr Bishop: You are going to let us into some of the secrets of the trade, Mr Hunt. Mr Hunt: Sutton demanded . the penal reni from Mitchell as Shand and Co. still demanded the' amount from him. Mitchell, rather than have any trouble, eventually paid the amolint. on the understanding that he would get it back. He understood the whole matter came before the Licensed.'-Victuallers' Association, which' tried to get the amount back"froni."Shand."and Co. Mr.Cassidy: 1 object to the Licensed Victuallers coming into it. Mr Hunt*.. The money was. paid on those conditions but- was not paid back. Since he, was not able to get back this £6O odd from Sutton, Mitchell sent

Shand and Co. their cheque, less £6O, they had received from Sutton. Even? tually lie did pay the money on the understanding that it would be refunded. He was now suing for the amount. TEAMING OUTSIDE THE LEASE. Wm. Stuart Mitchell, licensee of the City Hotel, said he was sub-let the license by Sutton at a rental of £1350 a year, or £ll2 10/.- a month. That rent was on the understanding that he dealt with Shand and Co. exclusively. The rent was paid up till May, when he seut a cheque to Sutton for the amount,, the cheque being returned. Sutton told him that witness had been trading outside his lease, and that Shand and Co. would uot accept rent at that rate. The additional penal rent was £66. This he refused to pay, and the.dispute arose. In July witness agreed to pay the penal rent to Sutton, in addition to the ordinary rent, on the understanding that he would make' arrangements with Shand and Co. to refund the amount. About seven months after, witness applied to defendant for repayment. He could get no settlement, and Sutton told him that he could get no satisfaction from Shand and Co. Witness told Sutton he would have to summons him. To Mr Cassidy:.He was sued by Shand and Co.. and paid the money. He did not deal with thorn exclusively, although he had agreed to <\o so. These covenants were not strictly adhered to in Chri«tchurch, and although he had promised to deal with Shand and Co. when they let him off the penal rent, he did not do so. NO EXPOSURE WANTED. Mr Hunt: What words were used when the arrangement was made between you and Sutton? Witness: Our final arrangements were made over the telephone, and he gave me to understand that he would get a refund of the amount. We mutually didn't want to have any exposure of trade methods. John Thos. Sutton, licensee ot the Dominion Hotel, previously licensee of the City Hotel, which he had sub-let to Mitchell, said that in 1913 Shand ami Co. claimed the higher rental, saying that Mitchell was not carrying out the contract. As the result of a letter received from Shand and Co. on the niat-

ter lie saw Mitchell. He had considerable trouble over the affair. Eventually, Shand ami Co. agreed to accept one month's penal rental. They said they did not particularly want the money, but wanted the hotel's business. Shand and Co. gave witness to understand that if Mitchell paid the penalty rental, at the end of six months, if he was doing his business with the firm, they would pay the money'back. At the end of seven months, as he had the interests of Mitchell somewhat at heart, he, being witness's tenant, saw Shand and Co., who told him the contract was not being carried out satisfactorily, and they would not refund the .money. Personally, witness made no promises to repay the money. He was a man of peace, but not at any price, and while he tried to obtain a refund from Shand and Co., he did not promise personally to pay the money back. ARE THE COVENANTS OBEYED? Mr Bishop: Are these covenants obeyed? You have heard Mitchell say that they-are broken generally in Christchurcli. Mr Sutton: I can't say that they are carried out exactly in the spirit of the law. It is only when tenants are inclined to transgress to a very large extent that action is taken. If they wanted particular lines of liquor they could procure it through the firm at current prices. Mr Bishop: Then they are practically tied houses? Mr Cassidy: It is a perfectly legal covenant in the lease. That is the Chief Justice 's decision. Mr Bishop:.Of course, I know! Tech-, nically it is all right, but they are tied houses, some of them tied up to the neck. - In giving judgment for the defendant Mr Bishop said that in doing so it appeared to him that the .plaintiff; had ■ absolutely, ho merit whatever. It seemed very strange that he should come to court and ask for judgment, having absolutely no k merit in his case. ■