SALE OF A HOTEL.

New Zealand Herald, Volume LXIX, Issue 21163, 21 April 1932, Page 12

SALE OF A HOTEL.

CLAIM FOR £2OOO DAMAGES. ALLEGED MISREPRESENTATION. CASE IN THE SUPREME COURT. A contract for the sale of the Mangawai Hotel effected in April, 1930, gave rise to a claim, tho hearing of which was commenced before Mr. Justice Hcrdman in the Supremo Court yesterday. Tho purchaser, John O'Sullivan, hotelkeeper, of Mangawai, proceeded against the vendor, II ay ward Charles Subritzky, hotclkeeper, of Auckland, on the ground that the sale had been brought about by misrepresentation. The price paid for the hotel and 22 acres of ground was £BOOO, which the plaintiff paid by £6350 in cash and £1650 on mortgage. The alleged misrepresentations were that Subritzky claimed that his turnover was £lO5 weekly when it was much less; that ho obtained £lO or £l2 a week from gum royalties when these were for six months only; that there was a first mortgage of £'lsoo easily renewable, whereas the mortgagees had refused to renew; that stock, stores and furnituro were said to bo worth £IOOO, when they were worth not more than £450; that defendant said ho paid £4O a month freight charges to tho Northern Steamship Company, when he actually paid much less; and that he had never been prosecuted for a breach of the Licensing Act while holding the licence of tho Mangawai Hotel, when that was not, true. Plaintiff contended that the place was not worth more than £6OOO, and asked for the cancellation of the mortgage and £750 damages. In the alternative, lie asked for £2OOO damages. Tho defence was complete denial of misrepresentation and the assertion that tho plaintiff had complete knowledge of the position when ho bought. Counsel for plaintiff said that the misrepresent at ions were alleged to have been made by tho defendant or his agents. Early in 1930 plaintiff was shown at tho office of 11. 11. Burrctt, Limited, ;in authority to sell the Mangawai Hotel showing tho price of the hotel to be £9OOO, and stating that the turnover from December to March was £lO5 a week, and that the receipts from kauri gum were £7O every six weeks. The stock of liquor was valued at £IOOO. It was further stated that a first mortgage of £4500 had just been arranged. After personal inquiries plaintiff decided not to purchase, but defendant and his lawyer and agent camo and saw him again. They visited the defandant's bankers and found that the takings averaged £lO5 a week for a period, but other matters had to be taken into consideration. Eventually plaintiff was persuaded to purchase. During tho first year, said counsel, plaintiff's actual takings averaged only £SO a week. Plaintiff could not keep up his payments and the Court granted relief under the Mortgagors' Relief Act. Plaintiff had attempted to sell the hotel, but had failed to do so, even at £6OOO. The plaintiff described his negotiations with Subritzky, v.-ho told him the takings would average over £IOO weekly throughout the whole year. In addition, he got from £lO to £l2 a week for gum royalties. When witness inspected the hotel lie was not able to see the wine and spirit stock because it was locked and Subritzky said someone had taken the key. Witness insisted on getting an order to inspect defendant's accounts with his brewers. The case will be continued to-day.