SALE OF HOTEL

Evening Post, Volume CVII, Issue 122, 28 May 1929, Page 6

SALE OF HOTEL

DANNEVIEKE CASE

DISPUTE OVER CONTRACT An action for specific. performance concerning Andrew's Hotel, Daunovirke, caino before Mr. Justice Blair in the Supreme Court yesterday. Harry Edward Andrews, surgeon dentist, of Wellington, and the Public Trustee executor of the estate of tho lato Sydney Andrews, of Dannevirke, were the plaintiffs, and the defendant was Mark trreen, draper, of Wellington. Mr. H. F. Johnston, with him Mr. 11. 11. ■ Cornish, appeared for the plaintiffs and Mr. P. S. K. Macassey, with him Mr. W. L. Eothcnberg, for the defendant.

Tho statement of claim set out that Harry Edward Andrews and his lato brother were owners of the hotel on 31st January, 1928, when, it way alleged^ tho defendant by an agreement in writing agreed to purehaso tlie property. The plaintiffs wero willing to' complete the contract, but, it was alleged, the defendant had refused to carry it out. On 28th December, 1928, the plaintiffs had agreed to grant the defendant an option to purchase for £45,500,. subject to a mortgage of ~ 14,100. By this agreement, £1000 was to be paid to the plaintiffs' agents G Harrison and Co., Ltd., when the option was exercised, and tho plaintiffs were to buy from Mark Green, Ltd., a property known as Goodwin's Buldings, Cuba street, for £28,000. Later on in the same day, the defendant, it was alleged, exercised the option, but had refused to pay the £1000. A" claim was made for specific performance of the contract. .Alternatively, the plaintiffs claimed £.2000 for breach of contract, or £2000 damages for loss sustained through an alleged misrepresentation by the defendant that he had the authority of Mark Green, Ltd., to sell the Cuba street property. The defendant denied that ho had contracted to purchase tho property on Slat January, 1928, or had exercised the option. He-alleged,that tho memorandum relating ■to • the exercise of the option was dictated by a man named Hopkins, as representative of the plaintifiV agents, who falsely represented to him that it was necessary to keep the option in force in case Sydney Andrews, then seriously ill, should die before it expired. It was further alleged that the defendant had repeatedly refused to sign the document, but was finally: induced to : sign. Sydney Andrews did not. die before the option expired, and the defendant made many efforts to have Hopkins return the- document to him, and directed the latter not to use it, but without success. The defendant further alleged that when he was advised that the signing of the document might be held to be an exercise of the option, he took all reasonable steps to repudiate the document. The defendant contended that tho contract to purchase, which he denied, was entered into on the misrepresentation of the plaintiffs' agent Hopkins, and was therefore null and void. It was also claimed to be null and void on account of alleged misrepresentations that the property had never been on the market before, that the weekly takings were yielding a clear net profit of £175, and that a tenant was available to take a lease for seven years at £100 a week. Finally, the defendant claimed that at no time was he authorised to sell or exchange the Cuba street property, which fact the plaintiffs knew or ought to have known. A counter-claim was made for the rescission of any contract the defendant might be held to have entered into.

In evidence, Harry Andrews said that his brother's price was £50,000. Green offered £45,000, ana on 31st January, 1028, offered an additional £500, which witness and his sister-in-law persuaded Sydney Andrews tf> . accept. Witness said he was willing at the present time to complete the contract. It was practically, impossible for hia sister-in-law to carry on at the hotel, and in order to bo relieved of the responsibility, the plaintiffs might possibly have to accept considerably less than the original price. When Green was told that his offer was accepted, he sat down in witness's prosence and wrote out the whole thing. Witness denied having told Green that the place had never been on the, market before. Ho had told him that his brother's illness proveuted them carrying on.

Witness was cross-examined by Mr. llacassey, who referred to a meeting between witness and Green early in January. Counsel asked: "When he said the price was too high and suggested a reduction, did you say, 'You arc going to finance the deal out of our money 1' " Witness: "No; I don't think I did. i I might havo made the remark, but I don't think so:" "Bid ho say that the only way lie could iind the money was to sell a lease of the hotel?"—" No. He did not eav that." , Witness said that ho could not remember any proposal mado to him by ! Hopkins to have the purchase prico reduced. Ho considered that the- hotel was very good value at £45,500. . Argument ensued as to the validity of the document exercising the option, his Hono.rir remarking that the person who drew Hie document, was not awuro of the limitations of company conveyancing.* . ' " .In reply to Mr. Johnston, witness said that if Hopkins had dictated the exercise of the option, he (witness) could not have helped hearing it. The next witness, Amy Isabel Andrews, widow of Sydney Andrews, said that on Ist January, 1929, she met Green in the- hotel, and he said tho place was his, and she would be seeing a lot of him. Ho told her brother-in-law that he would bring uu architect up with him next time. "Witness did not know on what terms Green had bought the hotel. Allan Hopkins, member of the linn of G. Harrison and Co., Ltd., produced an authority to sell the hotel on behalf of the plaintiffs. Witness detailed tho progress of negotiations between tho parties, and stated that on 14th January, Green asked him to tear up tho exercise of option so that a fresh start could bo made with the whole matter. Ho refused to do so. Witness produced documents relating to Green's repudiation of the contract. Cross-examined, witness snid that ho first approached the plaintiffs in connection with tho sale- of tho hotel in June, 1928. In August, ho received defmito instructions to find a buyer. He could not say -when he first discussed tho salo with Green, but he was certain ihattft was before December last, lie did not remember having told Green that the net profits were £175 a week, and that he (witness) was prepared to engage a tenant at a rental of £100 a week.

Asked if it were a fact that he told Green the hotel had not been on the market for thirty years, witness said that he did not remember making sucn a remark. Witness said that Green had insisted upon a deposit of £1000 being stipulated in the option. Ho had previously seen the agreement by which witness was to receive £1000 commission. The Court adjourned until ■ to-day.