CITY LEASES HIGHER RENTS WANTED CASE FOR THE LESSEES

Evening Post, Volume LXXXVII, Issue 71, 25 March 1914, Page 10

CITY LEASES HIGHER RENTS WANTED CASE FOR THE LESSEES

2*o SECURITY OF TENURE. The hearing of the application by the Wellington City Corporation to set aside the awards of the arbitrators in the assessment of the leases held by Messrs. J. TJ. Harcourt, Hall and Knight, Aitken and Wilson^ Kirkcaldie and Stains, and George and Kersley in the inner city area was continued at the Supreme Court before Sir Robert Stout, Chief Justice, yesterday afternoon after The Post went to press. Mr. T. F. Martin and Mr. J. O'Shea appeared for the Corporation, and Mr. C. P. Skerrett, K.C., and Mr. E. K. Kirkcaldie for the lessees. Mr. O'Shea, continuing his address, said that all the merchants in Wellington were trying to get a footing in Cus-tomhoUse-quay. He submitted _ that if" his Honour took every transaction that had taken place with regard to the leaseholds or freeholds, whether by persons independent of the transaction altogether or by persons interested in the transaction, the a.wards fixed by^ the arbitrators were absolutely inconsistent in relation thereto. Mr. Skerrett, in opening the case for the lessees, pointed out that in nearly all the cases the term for which the lease was fixed _ was only twelve years. In one, Kirkcaldie's, the term might be for fourteen years, but in the case of four others it was certainly for twelve years, and in the case of Aitken and Wilson's section No. 155 the terms of the lease required that the property should be put to auction at the upset rental. His Honour would see that the latter section, upon which Aitken and Wilson's warehouse was erected, had to be submitted to auction in the usual way. He contended that under the terms of their appointments the arbitrators either need not have taken evidence, and if they took it were entitled to act upon their own knowledge, judgment, and experience. This was of very grea.t importance in considering whether the awards should be set aside. The sole ground upon which his friend relied was partiality. Mr, Martin did| not spy that there had been a mistake or want of judgment; he contended in effect that there had been wilful partiality. Mr. Martin ; We put it "unconscious bias.'' , Mr. Skerrett said' "unconscious bias" would not do. Mr. Martin hesitated to charge these gentlemen with dishonesty or wilful partiality. "Unconscious bias" was no ground for imputing misconduct. To succeed his friend must prove conscious partiality in the sense of wilful unfairness t6 the Corporation. His friend had not as a matter of fact established partiality for or against the Corporation. The suggestion therefore was that the judgment or awards of the arbitrators' were such that no honest arbitrators could have arrived at. Mr. Martin : Not reasonable is what v/e suggest, * Mi\ Skerrett said he could not accept that. It was not a question of whether any reasonable man could have arrive d at such a decision, but of whether no honest man could have done so. tt' no honest man could have come to such , conclusions then there might It ground for saying that that showed wilful partiality or wilful perversity on the part of the arbitrators. The leasns at most were only for fourteen years His Honour : Yes, but the lessees have the perpetual right of renewal. Mr. Skerrett admitted that this Was so, but pointed out that if an award Was fixed by the arbitrator at _ higher than the lessees could afford to give the lessees would has'e to surrender their /ease together with their improvements. Taking the case of Sargood, Son,' and Ewen. he said that the rental was fixed at, £8 S per foot, a sum which shocked the conscience of Ehe lessees. Sargood, Son, and Ewen had an enormous building upon the land, and if they could 'have got anything in the way of compensation for that building they would have thrown up their lease at once rather than pay the rental fixed. He argued, therefore, from the very character of these leases that the tenant was at the mercy of th? arbitrators, and it the arbitrators fixed a high rental the tenant must lake it on, or forfeit the whole of Jug improvements. His Honour would see that these leases were stupid leases, both from the point of view of the corporation and of the tenants. They gave no security of tenure, and pul on improvements a highly artificial test as to what was to be the rental. The ienarit, moreover, always had to pay the rack rent. In contrasting the difference between the freehold and the leasehold of these sections, he pointed out that the lessees _ did not receive the value of the appreciation. His Honour , And depreciation. Mr. Skci'i-et 1 ;. continuing, said that at tlip end of 2b years each lessee was coii' fronted with what was the value of his bmlcli ig in relation to the site? If tie building lost in value then the tenant lost both ways — he lost in the value of his building and had to" pay a higher rent. When the T and G. Insurance Company had its lease assessed at £iS jjer < foot it "refused to pay it ami threw it up, with improvements valuMj at £1500. Was that, counsel asked, evidence of partiality on the part of the arbitrators ? What he submitted was that the corporation should give a reasonable tenure on. reasonable terms, and he contended .thtrt the corporation would never get a proper rental i for its sections until it did so. Many of the leases had no special site value, except that they were in the centre of the town. It was, he urged, opra for the arbitrators to find what they did, and the corporation had no right to object. He submitted that tho evidence tendered did not warrant any interference on the part of the Court. The arbitrators were men of high standing, honesty, and integrity in the city, and he submitted that the only real ground upon which the Court was asked to interfere was that the corporation was dissatisfied with the decisions. All his Honour needed to do was to satisfy himself that the judgments arrived at were honest judgments, and if he found that, then, counsel submitted, the awards must stand. Further argument was adjourned until 2 o'clock on Friday afternoon.