POSSESSION OF HOTEL

Otago Witness, Issue 3869, 8 May 1928, Page 15

POSSESSION OF HOTEL

CLAIM BY LANDLORD. BREACH OF LEASE ALLEGED. Before his Honor Mr Justice Sim in the Supreme Court on Thursday a claim for possession of the Victoria Hotel. St. Andrew street, Dunedin, was heard, the grounds of the claim being an alleged breach of a clause in the lease. The plaintiffs were Esther Eliza Ellis and Bruce Errington Burns, and the defendant was Donald Hutcheon. Mr J. S. Sinclair appeared for the plaintiffs and Mr W. G. Hay, with him Mr J. M. Paterson, for the defendant. There was also a claim by defendant for relief against forfeiture. In opening the case for the plaintiffs, Mr Sinclair said that they were the registered owners of the fee simple of the property on which was the Victoria Hotel. In October, 1925, the defendant leased the property to Percy George Allan and Ivy Pringle for a term of six years at a rental of £l4 a week, the tenants also paying a goodwill of £3500. Those tenants carried on till September, 1926, when the defendant bought them out and took a transfer of the lease. Defendant had been in the premises ever since. The lease contained a clause which set out that if the tenant comiditted a breach of the Licensing Act, or any other Act, and if his license were endorsed, the lessors were entitled to reenter the premises. On November 12, 1927, the police raided the premises, and as a result defendant, on December 5,

■was convicted on two charges. The conviction the plaintiffs relied on was that of selling liquor during closing hours. It was claimed that, by reason of the conviction and the endorsement, the defendant had brought himself within the clause of the lease in regard to the right of re-entry. The prescribed notice under the Property Law Act was given to the defendant on February 20, 1928, and on the expiry of a month the plaintiffs entered and determined the lease. The defendant had refused possession. Bruce Errington Burns, one of the plaintiffs, said that on February 20 he arranged for notice to be sent to the defendant indicating the intention to determine the tenancy. Tn January witess had also asked defendant to vacate, but defendant refused. Witness pointed out that defendant had committed a breach by selling after hours, but he said he was only doing what many other publicans were doing. To Mr Hay: In December an arrangement was entered into on the plaintiff’s behalf for the sale of the lease to a Mr MTntosh for £3OOO for a three years’ lease, the rent to be £l4 a week. Witness knew there had been correspondence indicating that Mr Hutcheon had attempted to remedy the breach. The substance of that was that Hutcheon offered to sell to a man and pay plaintiffs £4OO as damages. James M'lndoe, clerk of the Magistrate’s Court, gave evidence respecting the conviction of defendant. Witness produced the license, showing an endorsement by himself. It was usual for him to write the endorsement on a license. To Mr Hay: He was not present in court when the convictions were entered. He claimed that he was entitled to make the endorsement. Mr Hay said it was denied there had been a breach of the lease. The' question of relief came in, and he would like his Honor to take the two matters together. His Honor intimated that he would hear the matters sepal ately. Mr Hay said it was contended there had been no real endorsement on the license. The endorsement was not properly signedit should have been signed by the convicting magistrate. On this occasion it was not even signed by the clerk of the court who was officiating when the case was heard. It was claimed that if there had been a breach it could have been- remedied. They had endeavoured to substantially remedy it, but the other side would not meet them. ILs -Honor- Do you suggest a breach of this kind can be remedied? Mr Hay replied that he did. He pointed out that it had been held that a personal endorsement was not of such a serious nature as to be a defect or blot on the title, and could be remedied by the tenant not committing a further breach within two years. If there were no further en dorsement within two years the first endorsement would be worked out entirely. There was a distinction between a personal endorsement and an endorsem’ent against the house. If the license were transferred to another person—as defen dant wished to do—the other person would come in under no cloud at all. Had defendant been asked to remedy a breach he could have given' the remedy proposed. Tn reply, Mr Sinclair said it was submitted that the breach was incapable of being remedied. His Honor said his present opinion was that tho plaintiffs were entitled to re cover possession. He would, however, consider the matter further. In the meantime defendant, had better go on with his application for relief. Mr Paterson submitted that it was a clear case for relief against forfeiture. It was contended that it was a case of unconscionable and harsh treatment by the landlord, of the kind that the court had . referred to as the ground for relief. It was admitted that defendant had been in experienced in the conduct of an hotel. The Victoria Hotel relied largely upon beer trade, its customers mainly being working men. Many of these worked out of town, and from the nature of their employment required something to satiate their thirst during the week-ends. Defendant admitted ho yielded to temptation, and he was then caught by the police. It was not denied that the selling of liquo'r after hours was a serious offence. Hutcheon, however, denied that he sold liquor for consumption on tho premises• what he sold was taken away. The offence for which • the defendant was convicted was not regarded by the Licensing Act itself a-’ being very serious. Hutcheon realised that he would be better out of the business, and wag prepared to transfer the lease. If forfeiture were granted, Hutcheon would lose something like £3200 or £3500. His mort-

gagees would certainly not get back what Hutcheon owed them, because they had a security over the lease and over the furniture, and only tho proceeds of tho furniture would be available. Defendant had offered tho plaintiffs £4OO as relief, and learned counsel contended that that was generous. Plaintiffs refused to consider the offer at all. When it was considered that an experienced man was willing to take a transfer of the license from Hutcheon, that Hutcheon had offered a sum to cover plaintiffs’ expenses, and that the breach would be entirely remedied when a new man came in, the attitude of the plaintiffs was perverse and unreasonable It meant that, if forfeiture were granted, Hutcheon would be fined something like £3OOO or £3500. Plaintiffs had suffered no pecuniary loss which could not be remedied by relief given by the court. Evidence was given by John Lang, solicitor, that an offer was open from Mr Oldridge, of Christchurch, to take over the lease from Mr Hutcheon. Mr Oldrido-e offered to purchase the balance of Mr Hutcheon’s lease for £3200, together with £5OO for the furniture. Hutcheon stated in evidence (hat if the lease were forfeited he would be penniless. He had received offers to purchase tho lease from him.

To Mi Sinclair, Hutcheon said he made £6OO his first year in the hotel. He had no recollection of making an affidavit stat ing that ho estimated he would make £3330 a year.

Mr Sinclair called Sergeant Dunlop, who said that Sergeant Turner and he were detailed in October last to warch tho hotel, because of complaints regarding after-hour trading Witness detailei how Large numbers of men were seen going m and coming out of the hotel, some with handbags, some with parcels, and others with a bulging under their coats to sug"gest they had liquor. He went on to describe what happened and what was said when the police entered the premises. His Honor asked if after-houi trading in Dunedin was not a very common practice.

Sergeant Dunlop: Too common! “ Is there any hotelkeeper that scrupulously regards the law? ” queried • his Honor.

Sergeant Dunlop said that he would not like to say there was one that did not commit some breach of the regulations. His Honor: If all one hears is true afterhour trading is carried on fairly openly. His Honor reserved judgment to see if the parties could not agree, but intimated that at present he would be inclined to grant relief.