CAPTAIN COOK BREWERY V. RYAN.

New Zealand Herald, Volume XXXVIII, Issue 11630, 18 April 1901, Page 3

CAPTAIN COOK BREWERY V. RYAN.

JUDGMENT FOR THE PLAINTIFF.

NOTICE OF APPEAL GIVEN. At the Supreme Court yesterday morning, His Honor Mr. Justice Conolly delivered the decision of the Chief Justice (Sir Robert Stout), in the case, Captain Cook Brewery Company, Limited (Messrs. Hancock and Co.) v. Martin Ryan, licensee of the United Service Hotel, which was heard on March 13 last. The action has been causing a good deal of interest.

His Honor's judgment was as follows: — " In this case, the plaintiff company sues the defendant for £570 for rent due on February 11 under a lease. The defendant admits that £520 3s is due, and has brought that sum into court. He raises as to the balance two defences, based on a proviso in the lease. The lease is dated December 19, 1838, and by it the plaintiff company lets to the defendant that piece of land in the parish of Waitemata, and County of Eden, containing 18 perches and 5-10ths of a perch, being, part of allotment 10 of section 15 of the City of Auckland. The United Service Hotel is erected on the land, and the hotel, with all the fixtures, whether landlord's or tenant's then in the hotel, are included in the lease. The lease states that the land is let at the weekly rental of £30, payable on the Monday of each and every week. Then follows this proviso:—'Provided always that the lessee shall, if he so desire, have the right, privilege, and option during each and every week of the said term of purchasing from the lessor, or the person or company, for the time being, carrying on business under the said style or firm of " Hancock and Co." (hereinafter referred to as " the said firm") at the price ; of £4 per hogshead, net, free of duty, all ; draught colonial beer, ale, porter, and stout > brewed and manufactured by the lessor or ! ' the said firm, and also at the price of 8s I per dozen reputed quart bottles, and of 4s 3 per dozen reputed pint bottles, all bottled" colonial beer, ale, porter, and stout brewed ! and bottled by the lessor or the said firm, J and ako at the current market price from I time to time charged by the lessor to its ] ordinary customers for the same, all spirits, > spirituous liquors and liqueurs, wines, cigars, cigarettes, cordials, aerated waters, and." English bottled beer, ale, porter, or stout,. which shall respectively be directly or indirectly consumed, sold, or disposed of in or. upon or sent from the said hotel and premises, or any part or parts thereof during* such period, and if the lessee shall, during, each and every week of such term, exercise his right, privilege, or option as aforesaid, and the lessee or licensee or occupier for the. time being of such hotel and premises shall . during each and every week of the said term as aforesaid, purchase all such draught and bottled colonial beer, ale, porter, and stout, spirits, spirituous liquors, and liqueur■ wines, cigars, cigarettes, cordials, aerated waters, and English bottled beer, ale, porter, and stout, which shall respectively be directly or indirectly consumed, sold, or disposed of in or upon or sent from the said hotel and. premises or any part thereof during such, period (the onus of proof of which shall in cases of difference be upon the lessee), andwhich draught and tiled beer, ale, porter* and stout, directly or indirectly consumed.; sold, or disposed of, or sent in, upon, oc from the said hotel and premises as afore-, said, shall be those brewed and manufactured by the lessor or the said firm, and which spirits, spirituous liquors, and liqueur wines, cigars, cigarettes, cardials, aerated waters, and English bottled beer, ale, pointer, and stout, directly or indirectly sold, or consumed, or disposed of, or sent in, upon, or from the said hotel and premises ass aforesaid, shall be of the brands and classes at the time of such sale or disposition in ordinary use in hotels supplied by the lessor or the said firm, and sfcail pay to the lessor or the said firm such respective prices as aforesaid for such commodities, then (but not otherwise) the lessee shall be entitled, on the Monday of each ;vnd every week during the said term, to djsduct from the said rent, hereinbefore reserved, the sum of £13 3s for the week then erailing, or be entitled to receive from the lessor an allowance of such amount off such wet sidy rent as aforesaid.' The first defence is that the true | j rent is £16 17s per week'„ and not £60 per week, and that the difference between these sums (£l3 3s) is really a penalty to compel the defendant to buy his- beer and liquors, etc., from the plaintiff company, and void under the provisions -a-f the Alcoholic Liquors Sale and Control Act Amendment Act, 1895. The second defence is that the beer supplied in certain months was bad, and that, therefore, the defendant was discharged from continuing to take his supply of beer, etc., from the plaintiff company, and that it should be held, that he had complied with the proviso. The months in which the defendant alleged bad beer had been supplied were March, April, June, August, September, October, 1899, and February," May, July, August, and September, 1900. No beer was delivered by the plaintiff to the defendant after September 27, 1900, none being ordered after that date. The rent sued for was from October 1. The case came on for trial before a jury, but at the trial it was agreed to putt only one issue to the jury and to reserve all other questions for the decision of til e Court. lhe issue put was : —'Did the pHaintiff company in any, and if so, in which of the months of March, April, June, Augyisb, September, and October, in the year .1899, and February, May, July, August, .and September, 1900 supply the defendant with any beer, which was' at the time of such supply of inferior quality, and unfit io drink?' The jury answered the issue thtus: —'We find bad beer was supplied in March, April, August, and September, 1899, and February and May, 1900.' The defend ant moved for judgments on the pleading 1 .?, admissions, and findings, and the question is whether one or both of the defences «ifford any answer to the claim for the balance of rent £248 17s. . Reliance is place)i on the provisions of section 35 of the Alcoholic Liquors Sale and Control Act Amendment Act, 1898. Subsection 1 of that section states:—'That no covenant or agreement proviso, or stipulation, Avherejby any person or body corporate is purported! to be bound to purchase beer, wines, spir.fts, or other fermented or spirituous liquoirs from any other person or body corporate to the exclusion of any other persons or bodies corporate shall if entered: into after the passing of this _ Act, shall have any force or validity whatever. The other parts of this section re framed to carry out this law. It was contended that the proviso of the lease came under the'word agreement, ana that the true rent was £16 17s, the form used being but a mode of insisting on a penalty under the poise of giving a privilege or option. This, section of the statute was passed to abolish what is termed in the margin of the statu tied houses.' The proviso in the Lease is no doubt therefore within the mischinf that the statute was passed to remedy . W hat, however, the Court has to see is whether the statute has, by fit and propel Avordb, brought this kind of proviso within the jterms employed. If the section had declared that the supply of beer, etc., by a landlord, who was a brewer, or by a person namisd by the landlord in his lease, was illegal, then no form that might have been adopted to evade such an express statutory prohibition would have availed. The case would have been brought within that class of case « of which Booth v. Bank of England, 7, CI. and Fin., 509. I'ickard v. 'Marriage, L.R., 51, Excli. Div., 364, Jeffries v. Alexander, 3d, L.J., Ch. 9, may be cited as examples. _ 11 is not, however, even the general policy: of the statute to say that no brewer landlord is to supply a tenant with his beer. If it were so the principle mentioned in ' Pothier on Obligations' (Evans' Translations), page 1, and which is found in many English cases, "vould have applied. The • statute, however, stops far short of saying that such a supply is illegal. It only makes ' covenants,' ' agreements,' ' provisos, or ' stipulations' binding the tenant to buy from the landlord oi some named person void. Can the fixing of rent at &30 per week, and allowing a rebate of £Li 3s, if beer, etc., are purchased, be said "to come within the very words of section Si? It is said this is in form a penalty, and that it amounts to fining the defendant .£l3 3s per week for each weekly breach. Perhaps the nearest analogy is that of a proviso in a mortgage deed, that the interest fixed shall be lowered, if prompt payment is.made. On that mode of dealing with interest, Lord Hatherly, in Wallingl'ord v. Montreal Society, L.R., 5, App. Cases 702, said: —'The other question which was much argued be-

foce your Lordships was the question of penalty. . . . The illustration of tlioi foam adopted in mortgages is a very good ilhistration, I think, of what the true principle is. The form adopted long since—l do not know whether it is continued or not --in mortgages, was when you wished to reserve in reality interest at 4 per cent., to reserve the interest by contract at 5 per cent-., but to mitigate the severity of that contract in the event of the money being paiid by a certain day. It" is not a penalty on, non-payment (though it seems a fine distinction), where you say that your contract shell be made for interest at 5 per cent., to be reduced in the event of your punctual pa yment to 4 per cent.; but it is a relaxation of the terms of that original contract, nost taking it by way of penalty at all, but a relaxation. of your contract "which you would merit and purchase by paying at a definite fixed time.' See also Thomas v. Hudson, 4, E. and 1., App., at page 1. There is this distinction between a mortgage deed, with such a provision, and this lease, that, if a tenant- agreed in the lease to buy beer, etc., the agreement would be void. lam at. a loss, however, to see how the Court can strike out the agreed rent in the lease, £150 per week, and substitute for it £16 17s. That power is certainly not given to the Court by the section of the statute relied an. The tenant is not bound, in fact, to purchase his beer, etc., from his landlord, lough, no doubt, this so-called concession "VI"ill force him to do so. The terms used iii the Act do not seem to me to cover this, what I may term conveyancing device, and ilf it does not, the Court is helpless. (See Wardell v. McGrath, 19, N.Z.L.R., 114, Davis v. Stephenson, 4, Q.8.D., at page i 532.) It is a casus omissus, and if the legislature wishes to ensure absolute freedom for the hotelkeeper to purchase Lis Ibeer, etc., how and when and where he ■pleases, the statute will require to be i ;amended. The cases decided on the Bills of [ (Sale Act were referred to (see in re Watson, L.R., 25, Q.8.D., 27, Mandell v. Thomas, J L.R., 1, C.P.D., 638, and other cases), but I'they were decidcd, on a special statute, i; which made it the business of the Court to ! > ascertain the real transaction, and look beI hind deeds, bailments, or other documents. All that the Court can do under this Act is to inquire whether there is any ' contract,' ' agreement,' ' proviso,' or ' stipulation,' compelling the tenant to buy his beer, etc., from a particular person. If there is, the Court may declare the contract, etc., void, ar;d strike it out of the lease, but this, in form, does not come under any of the terms vsed in the statute. I am, therefore, compelled, though I may think the spirit of the statute has been ingeniously evaded, to hold that the letter has not been violated. It is for Parliament, not for a Court, to make the statute effective, if it is desirable to prevent hotelkeepers being even indirectly compelled to prefer one brewer or spirit- merchant to another in the purchase of their supplies. 2. As to the second offence, the jury found that good beer was supplied in the months of June, July, August, and September, 1900. If, therefore, this case could have been brought within that class of case wkich enables a purchaser to refuse further goods purchased, if the previous supply has been bad, the finding of the jury does not warrant such being done. The defendant might have a remedy under the covenant in the lease by the plaintiff company to supply good bedr, but he cannot say that the supply of bad beer, during the months mentioned by the jury, enables a Court to declare that he had fulfilled the terms of the proviso in the lease. Both defences, therefore, fail, and judgment must be given for the plaintiff company for £249 17s, in addition to the sum paid into Court. As to costs, I award costs to plaintiff according to scale on £520, till the money was paid into Court, and on £249 17s, since that date. As the defendant mainly succeeded before the jury I award no costs for extra days. I award plaintiff's witnesses expenses, excluding the expenses of any witness whose testimony dealt exclusively with the supply of the beer in the months in which the jury found bad beer was supplied. I award also the plaintiff his disbursements. Judgment accordingly." Mr. F. E. Baume (instructed by Messrs. Maekechnie and Nicholson) appeared for the plaintiffs, and Mr. J. R. Reed for the defendant. Mr. Reed gave notice of appeal.