OWNERSHIP OF HOTELS

Press, Volume LXXXI, Issue 24581, 1 June 1945, Page 4

OWNERSHIP OF HOTELS

♦ v *r* SURVEY IN AUCKLAND DISTRICT % evidence to be given TO COMMISSION (P.A.) AUCKLAND, May 31. An analysis of the evidence to be given in respect to hotel properties, including ownership, leases, huancial arrangements, and licences, w a » B|ven by Mr J. D. Willis, counsel assisting the commission, before the Royal Comnussion on Licensing. , , • , Mr Willis said he intended to.callßoy Fellowes Baird, District Land Registrar at Auckland, to produce search notes for what he believed to be every hotel in the licensing districts of Auckland, Onehunga, Otahuhu, Bemuera, and Waitemata. The search notes would show the names and-locatlons of hotels, the hotel area, the registered Pr°P tor, and current leases and sub-leases, with a summary of the relevant covenants. It would also show current mortgages and subrmortgages, stating the parties to whom money was secured, and the rates of interest. Mr Willis mentioned that further evidence would be called in Wellington relating to other hotels. They would also show the general state of the titles since January. 1935. The search notes would show who owned the hotels, who had the mortgages, and who was registered as the lessee of any one of them, or as lessee for the owner. It was necessary to bear in mind, said Mr Willis, that the search notes did not disclose the existence of any unregistered leases. The facts which had been extracted appeared to be a correct summary of the information contained in the search notes, Mr Willis said. His own analysis showed that Campbell and Ehrenlned and Company, Ltd., was the owner or part owner ox 17 hotels in five districts, and lessee of two. The company had no mortgages over any of the hotels. A company known as United Investments, Ltd., had a lease in respect to the Britomart Hotel. Dominion Breweries, Ltd., appeared to be interested as owner or part owner of seven hotels. It owned six absolutely, and had a half share in the Central Hotel. It had, a mortgage over two hotels, and the company had not registered any lease relating to any hotel. - "Gap to be Bridged” Hancock and Company, Ltd., was the owner or part owner of 17 hotels, and was interested as lessees of eight, continued counsel. The company appeared to have mortgages over three hotels. New Zealand Breweries, Ltd., was interested as owner or part owner of two hotels, and appeared to be interested as lessees in six; The company seemed to have mortgages over three hotels. Northern Properties, Ltd., was. interested in six hotels, and had a mortgage over one hotel. Auckland, Ltd., was interested as owner In one hotel, and was the lessee of part of the same property. ' Mr Willis said that a company known as Davis Consolidated,-Ltd., had a mortgage over certain leases relating to the Hotel Auckland. Two other companies, M. W. Powell, Ltd., and Brodie Properties, Ltd., each owned one hotel, but no significance seemed to attach to that, as they seemed to be family concerns. It would appear from the search notes, said Mr Willis, that the number 6f hotels not owned or leased to a brewery or allied companies by registered lease numbered 16. It would be fair to say, however, that most of these 16 hotels were leased to brewery companies pursuant to leases not registered against existing titles. It was a matter of knowledge that Dominion Breweries, while owning certain hotels and having mortgages over, them, also leased hotels, but the search notes did not disclose , Dominion Breweries as the registered lessee of any hotel property in the five districts. There was a gap to be bridged to show to what extent brewery and 1 similar companies had hotels pursuant to unregistered leases. He intended to call Mr Leonard G. Tuck, assistant commissioner of stamp duties at Auckland, to show the exact extent to Which hotels were so leased. Mr Willis said that even unregistered leases had to be presented to the Stamp Duties Office. Counsel believed that most of the 16 hotels referred to were leased’to brewery companies pursuant to unregistered leases. It would appear that breweries and other companies were interested as owners or as lessees or as mortgagees In practically every hotel in the five licensing districts. Witness Pleads Privilege Counsel said that Mr Tuck had been subpoenaed by the commission. He believed that he would be able to give assistance to the commission with various other information. It was, for instance. desirable and necessary to know what was the “set up” of the various companies interested in hotels, who were their shareholders and directors, and a general idea of their constitution, with a view to ascertaining to what extent the various companies were interlocked. „ , • , , . When Mr Tuck was called he pleaded privilege, saying that he was- appearing at the order of the commission, and that the records he was asked to supply had been kept by him for assistance in his duties. He was not obliged by statute to keep them. To Mr C. Fi Spratt, representing the New Zealand Alliance, the witness said that he was not expressly forbidden to keep such records, whereupon Mr Spratt submitted that the records should be presented. Mr P. B. Cooke, K.C., for the National Council of the Licensed Trade of New Zealand, did not raise any objection as far as those he represented were concerned, but said he could not consent to their presentation because there might well be parties to the documents who were not those he represented. He wondered where the, inquiries into other people’s affairs were going to end. Mr Willis said the information was necessary and could be obtained ffom other sources, but this would cause considerable difficulty. The chairman of the commission (Mr Justice Smith) then ruled that the evidence should be given, but that publication of it or subsequent cross-exami-nation would be forbidden meantime. Solicitor’s Evidence Opposition to Edward Joseph Prendergast, solicitor, of Auckland, giving evidence before the commission was expressed by Mr H. F. O’Leary, K.C., representing the National Council of the Licensed Trade in New Zealand. Mr Prendergast said that he was solicitor for the Auckland Provincial Licensed Victuallers’ Association,. and the executive had authorised him to appear and make a statement to the commission. Mr O’Leary, submitted that Mr Prendergast was counsel for the association and as such could not give evidence on Its behalf, but should call upon a representative of the association to supply evidence. The chairman (Mr Justice Smith) said he saw no objection to a solicitor appearing to give evidence about the affairs of his client if his client had authorised him to do so. Mr O’Leary said that no such procedure had come within his experience and maintained that it was a departure from long practice. The chairman; I rule that Mr Prendergast be sworn and give certain information which he has received from his clients. In recent years, said Mr Prendergast, a large and increasing number of hotels had been placed under management by brewery and wholesale companies and consequently had not been available for leasing. The executive of the association did not include any persons employed as managers of hotels. That was restricted to those holding leases in their own rights or owning freeholds of hotel property. "If the present policy of wholesale companies in respect to acquiring hotels whenever possible and placing them under management is continued it is only a matter of time before practically all hotels which are worth while pass into the control and management of wholesale companies,” the witness continued. Another matter which was giving the association some concern was whether there was a fair distribution of stocks among all hotels, or whether wholesale companies, which controlled nearly all