KILBIRNIE STADIUM

Dominion, Volume 31, Issue 154, 26 March 1938, Page 8

KILBIRNIE STADIUM

Speedways, Ltd, Granted Renewal Of Lease CONDITIONS IMPOSED Au order granting Wellington .Speedways, Ltd., a renewal of its lease of Kilbirnie Stadium from Association Football Grounds, Ltd., was made by the Chief Justice (Sir Michael Myers) iu the Supreme Court yesterday. His Honour imposed certain conditions, which, he said, would go far to overcome an objection by Association Football Grounds, Ltd., that Wellington Speedways, Ltd., was in a moribund condition and was seeking to deprive it of the use of its ground without the assurance, of any return. There were two sets of proceedings, both brought by Speedways, Ltd., out of what it contended was the wrongful and unjustifiable action of Association Football Grounds, Ltd., in cancelling the lease and refusing the right of renewal. Speedways, Ltd., asked for an order permitting renewal of the lease for a further .10 years and for relief against the forfeiture of the lease. The Association Football Company, in refusing the right of renewal, alleged breaches of covenant.

The case was heard by his Honour on March 8, 9,10,11. Mr. P. B. Cooke, K.C., with him the Hon. W. Ferry, appeared for plaintiff, and Mr. D. W. Virtue, with him Mr. J. Meltzer, for . defendant. “As to the motion for relief against the refusal to grant a new lease, I confess that for a time during the hearing I was very much inclined to think that plaintiff’s conduct should be regarded as pre.eluding it from being entitled to relief,” said his Honour in his written judgment. “It seemed to me that iu paying its shareholders a dividend in one year (1930) equal to 55 per cent, on the paid-up capital as well as by its ‘conduct in other respects and its several breaches of covenant, plaintiff bad completely ignored its obligations under the lease and forfeited any right to the favourable consideration of the court. “But on reflection I do not think that that would be altogether a just conclusion, in view (inter alia) of plaintiff’s position in 1936 as evidenced by the minutes of its meeting of September 9 of that year and of its present lack of actual cash, I doubt its ability to comply with the conditions that will be imposed. One has to remember that the business which plaintiff company was conducting on the leased premises was a new business which up to the time of the payment of the dividend referred to had been quite prosperous, and no doubt the directors considered themselves justified in believing that that prosperity would continue, and to as great an extent. £B5OO Spent On Property.

“In.deciding a matter of this kind, one must he carefjil to avoid what has been referred to by judges as ‘the easy but fallacious standard of subsequent events.’ Even supposing it can- be said that in the earlier years the directors of plaintiff company should have paid only a moderate dividend and retained a considerable portion of the company’s profits to meet the contingencies of subsequent years, the evidence satisfies me that, if plaintiff had retained a very substantial amount and had continued its operations on the leased'property during the years 1932-1933 and 112,33-1934, the 'business could not have been carried on at a profit, and in such circumstances defendant under the terms of the lease would have received no rental, and 1 think that the same position would have obtained during that portion of the later period when plaintiff company was not operating. “On the other hand plaintiff has expended upon the property a sum of about £B5OO, in the construction of a ‘dirttrack,’ and a stadium, and works incidental thereto. According to the evidence of Mr. Mitchell, an architect called for defendant, the present-day value of the stands, based on their cost iu 1929, is £5620, hut he says that, if the value is assessed at replacement cost to-day, the value would be £7560. It has been suggested on the other hand on behalf of defendant that the stands, in their present condition at all events, would he not an asset, but a liability to defendant. I cannot accept that suggestion, but, even if it be correct, the grant of a renewal of the lease, subject to certain conditions which J propose to make, should be a great advantage to defendant. Renewal on Same Terms. “It may be that the value given by Mr. Mitchell, though I have no doubt as to the honesty of his evidence, is somewhat exaggerated. But, even assuming that to be so, the position is that all the circumstances, especially having regard to the conditions that I intend to impose, defendant will have ineen caused no real financial loss by plaintiff’s breaches of covenant, while, on the other hand, the refusal to grant relief to plaintiff would mean a loss to that company of property worth several thousand younds which was erected or established not merely upon the basis of the original period of ten years, but also the assumption that that term would be twice renewed in accordance with the conditions of the lease.” His Honour granted a renewal of the lease on the same terms and conditions in all respects as if the covenants, conditions, and. agreements in the lease hail been observed and fulfilled. The order was made subject to certain conditions. Plaintiff must within two months give security by bond with one satisfactory surety approved by the registrar'of the court to the amount of £1156, to make specific repairs and replacements to the stadium, the whole of the work to be completed by October 31, 1938. “If the conditions lire complied with,” Said his Honour, “then I shall give any directions that may be necessary, such for example as for the endorsement of any necessary minute upon the lease. If the conditions are not complied with, then both action and motion will be dismissed with costs.”