SUPREME COURT.

Otago Daily Times, Issue 20335, 17 February 1928, Page 3

SUPREME COURT.

(Before his Honor Mr Just ire Sim.) Mr Justice Sim presided ;d a sitting oi the Supreme Court yesterday. POSSESSION OF AN HOTEL. THE CLAIMANTS FAIL. Esther Eliza Ellis and Bruce Erriugton Bums proceeded against Donald Hnteheon, claiming possession of the premises known as the Victoria Hotel, Dunedin. There was also a counter claim by defendant, who asked, in (he event of the cnurt deciding that the plaintiffs had the right of entry, for relief from forfeiture. Mr j. -S. Sinclair appeared for the plaintiffs and Messrs W. G. Hay and J. M. Paterson for the defendant. Mr Sinclair said that this was an action under which the plaintiffs, who are the, joint owners of the Victoria Hotel, claimed posse.*on of the premises and mesne profits. Under a lease dated October 1, 1925, the plaintiffs leased the premises to Percy George Allan and Ivy Pringle for a term of six years at an annual rental of £1728. The lease had been transferred on September 22, 1526, to the defendant. Amongst the covenants and conditions under the lease was clause 10, which provided that if the license were endorsed in respect to a conviction under the Licensing Act, or any other Act, it should be lawful _ for the lessor to enter upon the premises and determine the term of the lease. The transfer of the lease had been conseentd to by the plaintiffs. On November 12, 1927, the defendant, who had been in the premises since September, 1326, had his hotel raided by the police. Counsel detailed how the hotel had been watched at night by the police, and stated that Hutcheon had been proceeded against by the police on two charges connected with after-hours’ trading. He had been convicted on December 5 and fined £lO, and the conviction wag ordered to be recorded on the license, and it was so recorded. That being so, the defendant came within tho terms of the clause he had quoted. Assuming that the plaintiffs had complied with the legal procedure required of them up to the time they re-entered the place, it was submitted that they were entitled to forfeiture. There was th e lease; there were the conditions agreed to by the parties. They now found that the conditions had been broken. It was laid down that endorsement should be considered as a right of re-entry, and that thereby the tenancy should be determined. Subsequently, said counsel, an interview took place between the solicitors of the different parties, and it was very definitely communicated to Mr Callan, who was acting then for the defendant, that the plaintiffs insisted on forfeiture. Moreover, no further rent was accepted by the landlords after the conviction was recorded. On January 19 formal notice was sent to the defendant informing him of the breach and that at the expiration of three days the plaintiffs had determined to re-enter and thereby determine the tenancy. The notice did not ask for any damages, the reason being that the breach was incapable of redress and that it was impossible to asssess the damages for such breach. His Honor pointed out that the notice under the Act should have included a demand for compensation. Counsel said that the endorsement of the license was a personal one; it was not recorded against the premises. Mr Hay: In other words yon wipe out the endorsement if we transfer. Counsel contended that there had been a specific breach of the Act, and the publication of such disgraceful proceedings in connection with the breach must bring the premises into disrepute and maybe have a serious effect on the licensing poll. If the conduct of a party seeking relief was so bad as in the present case, then ho submitted that the defendant was debarred from obtaining relief even although great discretion was given to the court. They claimed that tiie defendant could produce no evidence whatever in justification of his conduct. Evidence could be produced to show that such conduct by the defendant was not isolated to one occasion. His Honor asked if Mr Sinclair proposed to meet by anticipation the application made by the defendant for relief. It would be "better if he endeavoured to establish his case for possession, and, after the defendant had made his application for relief, to answer it. The counterclaim could be heard after the claim had been dealt with. Bruce Errington Burns said he had ail equal share with Mrs Ellis in the hotel. He was in Australia when ne heard of the conviction of Hutchins, and lie immediately gave orders that the lease should be determined. His Honor said the only question was apparently the question of the sufficiency of notice. So far as the facts were concerned, on the face of it the plaintiffs were entitled to recover. Mr Hay said it was admitted that the defendant had committed a bad breach 'f the licensing act. There was a question whether the conviction was properly endorsed on the license. It must not only be a conviction, but the conviction must be endorsed. They did not admit that the license was properly endorsed. Horace Brent, managing clerk for Messrs Irwin and Irwin, said that on January 16 it was mentioned to the defendant’s solicitors that the plaintiffs insisted on forfeiture. To Mr Hay: It was oil December 16 that a resale was made. Mr Hay said they had been pretty prompt. Mr Brent said that the resale was conditional on the court granting the forfeiture. John M’lndoc, clerk of the Magistrate’s Court and clerk of the Dunedin Licensing Committee, gave evidence regarding the endorsement of the license. The endorsement was on the side of tho license because there was no room on the face. He considered that the endorsement could be made on the back or the front—wherever there was room. He (witness) had signed the endorsement as clerk of the court. Mr Hay asked if the endorsement should ,not have been signed by the magistrate. Mr MTndoe said he himself usually signed the endorsements. It had always been the practice for the clerk of the court to sign endorsements. Mr Sinclair said that that completed the case for forfeiture. Mr Hay said that the defence of the claim for possession depended on legal argument. (The covenant of the lease had to bo strictly construed. They claimed that there had been no breach of covenant or conditions. His Honor: One of your covenants is to carry on the business in an orderlymanner. If you commit au offence of the Licensing Act, is that an “ orderly manner.” Mr Hay contended that “ quiet and orderly ” manner referred to the conduct of tho hotel in general, and not to a breach of the Licensing Act. Counsel also contended that the conviction had not been endorsed on the license. His Honor: Why? Mr Hay said that between £3OOO and £4OOO was involved, and that he must make every possible point, ' endorsed ” primarily meat,! “ writr-n in on the i hack,” accordHe to Murray's dictionary, 1 and this endor-.ament was on the face of tho license. 'Che endorsement was not a proper one. It was on the back of the license, and had not been signed by the court, which in this case was the magistrate. ' He held that the clerk had no authority to sign the endorsement. His Honor: Supposing there is no mom? It would be impossible to comply with the Act. Mr Hay-: Tho endorsement could be attached on another paper. His Honor: It would not be an endorsement on the license if your views are correct,” added his Honor. Mr Hay said he had to make every point he could. He would not go on with that point. Continuing, he said that there hart been no broach of covenant at all, inasmuch, as the licensee personally had committed no offence. The

endorsement was not in proper form, because it had been signed by the clerk of Ihe court, and not by ihe magistrate. As regarded the notice given to the defendant. Section 114 of the Property Law Act, 11)08. applied. It required that a landlord before he could forfeit hod to give reasonable notice to the tenant, so as to enable the tenant to consider his position and take steps to avoid lyu n K penalised, by arranging with the landlord or offering him compensation, or taking other measures. The, notice required also that the actual complaint on which the plaintiffs claimed the right to forfeit should he set cut in the notice. It was submitted that the time, which was only three days, was not reasonable notice, and that the complaint, as sot out in the notice, was not the complaint on which the plaintiffs now asked for forfeiture. The complaint' stated that two counts had been endorsed on the conviction. The complaint now issued to them stated that only one of these counts was endorsed on the conviction. His clients had the previous day made an offer to the plaintiffs of £4OO as a peace offering. Mr Sinclair held that his clients had observed all the formalities required by law. The circumstances warranted the shortest of notices. It was a fact that the defendant had decided to resist the forfeiture before the notice was given. His Honor said that the plaintiffs must fail in their action because they had noc given the notice required by Section 94 of the Property Law Act. It seemed to him that the time allowed by the noticethree days—was not sufficient. It did not give the defendant the opportunity he ought to have had to consider his posi tion. He had been practically nllowe.) only two days, becar.se the notice was served on the Thursday, that giving defendant only Friday and a half-day on Saturday. He thought the time inadequate, and on that ground, without considering the other points raised, plaintiff must fail in his action. Mr llay asked for costs. His Honor granted the defendant costs according to scale as on a claim for £IOOO. In the face of the decision it was not necessary to consider the counter-claim.