HOTEL LEASE

Evening Post, Volume CXX, Issue 9, 10 July 1935, Page 13

HOTEL LEASE

A REFUSED EENEWAL

COURT GRANTS RELIEF

POST OFFICE, HOTEL CASE

In a reserved judgment delivered in the Supreme Court today, Mr. Justice Reed ordered Miriam Winnifred Kennedy to grant Kenneth Kennedy and his wife, Elsie Kennedy, a renewal of the lease of the Post Office Hotel. The case arose from the refusal of the lessor (Miriam Kennedy) to grant a renewal of the lease to the lessees, who, she alleged, had committed the following breaches of covenant:—(l) The rent was not paid punctually during the term of the lease; (2) the rates had not been paid at the date of the notice of desire to renew; (3) the licensee (one of the lessees) was twice convicted of offences ' against the Licensing Act during the term of the lease; (4) the lessees' books of account were not kept in such a manner as to record correctly the bar and bottlestore takings during the term of the lease. Although the parties in the case have the same name they were not related. TECHNICAL POINTS. In his judgment, -his Honour said that breaches (1) and (2) might be regarded as purely technical. The convictions for breaches of the Licensing Act were admitted, and, although they were in breach of covenants, his Honour held that on the lessor refusing to renew the lease on that ground the lessees, by-virtue'of the Property Law Amendment Act, 1928, had authority to apply for relief to the Supreme Court. . "An order such as is sought, v granted, is taking away from the lessor a right to which, by virtue of the contract between the parties, he is entitled," said his Honour. "The paramount question is whether, apart from the deprivation of that right, the lessor would be otherwise prejudiced by the grant of an order. This depends on the view taken of the two convictions under the Licensing Act, and the alleged imperfect state of the lessees' account books which, if they conceal the • real takings of the bar and bottle store, might affect the correct rent to be charged on renewal of the lease, to the detriment of the lessor. As -to the first point, the licensee pleaded guilty to selling liquor after hours on May 19, 1934, and was fined, and before .that charge came to trial, that is to say on June '1, 1934, committed a further ■ offence of exposing liquor for sale when the premises should have been closed, and was fined. Neither conviction was ordered to Be endorsed and the fines were £7 and £5 respectively. The inference is that the learned Magistrate did not regard cither of the cases as serious. The licensee applied for a renewal of his licence at the annual meeting of the Licensing Committee last month. The police reported that the hotel was indifferently conducted and that the licensee did not realise his responsibilities, which would be the natural report following on the two convictions. The police did not oppose the renewal of the licence and it was granted by the Licensing Committee without comment, By committing'these offences the lessees have committed a breach of the covenant in the lease to 'duly observe perform and keep the provisions and requirements of all laws for the time being in force relating, to licensed public houses.' . r EFFECT OF CONVICTIONS. • "I have examined, the provisions of the Licensing Act, 1908, to ascertain whether a renewal of the lease to the lessees would by reason of those convictions put the lessor's property in jeopardy. lam satisfied that it would not. The licence is not liable to be forfeited by reason of those convictions, more than six months having elapsed since the last..* It is provided by section 252 that evidence of a conviction after five years from the date of the conviction shall not be receivable in evidence for the purpose of subjecting an offender to an increased penalty or a forfeiture. A forfeiture can only be decreed by a Magistrate; a Licensing Committee has no power to do so. Before a Magistrate can do so there must be a substantive offence or offences justifying it. . . . But, after all, the lessor is fully protected against tha loss of the licence o£ the premises. If the licensee should be convicted of an offence and in consequence either becomes personally disqualified or has his licence forfeited, the lessor is fully protected in the continuance of the licence. Still further protection is given under sections 254 and 250. 1 conclude therefore that the property of the lessor has not been in any degree jeopardised by these convicX°Dealing with the keeping of the books his Honour said that the lessor -had repudiated emphatically any suggestion of fraud on the part of the lessees but claimed that muddlement had rendered/it impossible to ascertain the true rent. His Honour said that the general impression left on his mmd was that sufficient information was contained in the books to enable skilled accountants with a knowledge of the licensing trade to arrive, with reason, able accuracy, at the amount of the average weekly takings. . ffis Honour came to the conclusion that relief should be granted, and made an order to that effect At the hearing Mr. W. *<*??>%■?'£, and Mr D. Perry appeared foi the lessees and Mr.. P. B. Cooke and Mr. H. J. V. James for the lessor.