BASIC RENT

Otago Daily Times, Issue 25660, 7 October 1944, Page 8

BASIC RENT

GLASGOW LEASE CASE CITY CORPORATION'S APPEAL FAILS (P.A.) WELLINGTON, Oct. 6. The Court of Appeal on September 19 heard an appeal by the Dunedin City Corporation against A. Taylor and Sons, Ltd., of Dunedin, furniture manufacturers. The case was an originating summons under the Declaratory Judgments Act, 1908. for determination of what in the circumstances was the basic rent of certain premises for the Purposes of part 3 of the Economic tabilisation Emergency Regulations, 1942. In 1922 the Dunedin City Corporation granted what is commonly called a Glasgow lease. The lease was for 21 years and contained a provision which bound the lessor to offer by public auction a new lease to run from the expiration of the existing term. There was no obligation upon the tenant to take a further lease, but if he did not he might lose the value of the buildings and improvements. He was held by the judge to be in no way bound to take the new lease. The applicant contended that the basic rent was, in terms of the proviso to regulation 14, the rent fixed by the new lease, namely £37 a year, while the respondent claimed that the basic rent was £22,45, the rent being paid in respect of the premises on September 1, 1942. The judge held that the true answer depended upon the application of the proviso to regulation 14 of the Economic Stabilisation Emergency Regulations, 1942. He found that the basic rent was not a rental, of £37 per year, and that it was open to either party to apply under regulation 15 to have the fair rent fixed. From this judgment the Dunedin City Corporation appealed The court, which delivered its judgment to-day, dismissed the appeal, its view being that the rent payable by the tenant in respect of the renewed period was in no sense payable pursuant to the original lease. . . Mr Osborne Stevens represented the lessee company and Mr J. C. Robertson the corporation at the hearing of the appeal. '