CLAIM BY LICENSEE.

New Zealand Herald, Volume LXVIII, Issue 20929, 20 July 1931, Page 11

CLAIM BY LICENSEE.

DEALINGS WITH MERCHANTS. OLD TRANSACTIONS REVIEWED. JUDGMENT FOR DEFENDANTS. The law relating to '-tied" licensed houses was one of the points dealt with by Mr. Justice Smith in his judgment, delivered in the Supreme Court on Saturday, in tlio case in which William George .Abbott, hotelkeeper (Mr. Sullivan), and his wife, Ella Augusta Abbott, proceeded against L. D. Nathan and Company, Limited (Mr. McVeagh and Mr. Finlay). Plaintiffs sought the taking of accounts regarding a property at Epsom owned by Mrs. Abbott, over which a second mortgage had been given to defendants in 1917, and also for £IOOO, which Abbott alleged had been paid by him to defendant company without legal justification. "I find that the plaintiffs have not afc any fcimo established any right to an account between the parties," said His Honor, who then reviewed the circumstances with regard to ■ the £IOOO in dispute. In 1914 Abbott proposed to purchase a hotel at Ohaupo, the purchase price of which was £6500. Lease and Sub-lease of Hotel. "Abbott paid a sum in cash to the vendor, who was to hold a first mortgage for a further amount. The balance was secured on second mortgage to defendants, in whose favour Abbott executed a lease of the hotel for a period of 10 years, at a rental of 10s a year if demanded.

On the same day the company executed a sub-lease to Abbott at a weekly rental of £2O. The sub-lease contained a clause to the effect that the plaintiff had the right and option to purchase specified liquors from the company and if he did so each week he was to be entitled to an allowance in respett of the £2O. The result of the arrangement was that although the rent continued to be payable weekly plaintiff was under no obligation to make payment if he had purchased his liquors as specified during the week.

In 1915 plaintiff sold the hotel to two buyers from Wellington, and he approached the defendant company for a re-lease, and in consideration of the sum of £IOOO the company surrendered its rights in connection with the lease, continued His Honor. Beading of Section of Act. "It is clear that the leasing transation must bo regarded as separate from the mortgage transaction," continued His Honor. -"It is contended by counsel for the plaintiff that the transaction is rendered void by section 178 of the Licensing Act, 1908, which states, 'lt shall not bo lawful for the' owner or landlord of any licensed premises to demand or receive any fine, payment, bonus, premium, or consideration for his consent to any assignment, sub-lease or transfer of the licensed premises or any lease thereof, or the licence by the licensee.' "The section is aimed at preventing any owner or landlord from exacting a payment in respect of a transaction to which his consent was necessary, in order to prevent him from asserting rights which were to continue to the detriment of some party to the transaction after that transaction had been completed. "I think the transaction in question in this case is not within section 178. Counsel for the plaintiff further contends that the whole transaction was a mere device for the purpose of evading section 178, and that the Court ought to regard it in such a way as to bring it within the section.

Demand For £IOOO Not Unlawful. "No doubt the transaction may be regarded as extraordinary. The sub-lessee owned the freehold, and gave a lease to defendant, who sub-leased to him, but he had no need to pay the £2O a week if he bought the alcoholic liquors specified in the sub-lease. It was entirely at plaintiff's option whether he bought the liquors or not. This clause was good in law and did not amount to a trade -tie.' "My conclusion is that it was not unlawful for defendant to demand £IOOO for the surrender of a lease with an unexpired term of about nine years, and the consequent surrender of a sublease securing to defendant either £2O a week or the purchase of liquor .from defendant exclusively," concluded His Honor. He gave judgment for defendant company against both plaintiffs with costs on the highest scale with witnesses' expenses and disbursements.