QUESTION OF LAW

Evening Post, Volume CXVIII, Issue 50, 28 August 1934, Page 10

QUESTION OF LAW

ADJUSTMENT ACT

LEASE BETWEEN FIRMS

Reserved judgment was given in the Supreme Court today by Mr. Justice Ostler in a case raising the question' of law as to whether tho provisions of part three of tho National Expenditure Adjustment Act, 1932, dealing with reductions in rents, apply to a lca.se between Magnus Motors, Ltd. (the plaintiff) and "Truth" (N.Z.), Ltd (the defendant). . His Honour held that this part of-the Act applies to the lease. On July 22, 1931, the plaintiff company, entered into an agreement in writing to lease to the defendant-com-pany, two floors of its building in Wel-lington-known as "Austin House. In February, 1933, a memorandum ot lease, which, in terms of a clause in tho agreement, was to replace the agreement, was executed by the parties, and it was later registered. It contained, exactly the same provisions as the agreement. The plaintiff company claimed that, as the.date of execution of the memorandum of lease was February 2, 1933, and as section 30 (b) of 't.lio National Expenditure Adjustment Act, 1932, provided that the Act did not apply to rent payable pursuant to a contract entered into after April 1, 1932, the Act had no application. It was argued on behalf of the plaintiff company that tho agreement had been merged in the memorandum of lease, and that although tho memorandum of lease was made to date back to the date of the commencement of the agreement, yet the contract evidenced by the memorandum of lease was later in date than April 1, 1932.

His Honour said that in his opinion Ihis argument was not sound in law. The- memorandum of lease did not evidence a new contract. Tho memorandum of lease was merely tho original contract turned into • registered form. The rights and obligations of the parties had been the same ever since tho date of the agreement; they had not been altered in any respect by the memorandum of lease. He held, therefore, that part threo of the Act applied to the lease.

The plaintiff company -was ordered to pay the costs of the originating summons, which were fixed at six guineas. At the healing of legal argument, ■Mr. G. G. Watson, with him Mr. Win: ton B. Brown, appeared for the plaintiff, and Mr. 11. F. O'Leary, with him Miss J. Dunn, for the defendant.