HOTEL PROPERTIES

Timaru Herald, Volume CLVII, Issue 23216, 1 June 1945, Page 4

HOTEL PROPERTIES

Brewery Interests Evidence Tendered To Commission

(N Z.P.A ) AUCKLAND, May 31. Au analysis of the evidence to be given in respect to hotel properties, including owners of leases, financial arrangements and licences was given by Mr J. D. Willis, counsel assisting the Commission before the Royal Commission on Licensing.

Mi' Willis said he intended to call Roy Fellowes Baird, District Land Registrar at Auckland, to produce search notes for what he believed to be every hotel in the licensing district of Auckland, Onehunga, Otahuhu, Remuera and Waitemata. These related to 18 hotels. The search notes would show the names and locations of the hotels, the hotel area, the registered proprietor and the current leases and sub-leases with a summary of the relevant covenants. It would also show the current mortgages and submortgages, stating the parties to whom the money was secured and the rates of interest. Mr Willis mentioned that further evidence would be called in Wellington relating to other hotels. They would also show the general state of titles since January, 1935. The search notes would show who owned the hotels, who had mortgages and who was registered as the lessee of any one of them or as lessee for the owner. It was necessary to bear in hind, said Mr Willis, that the search notes did not disclose th e existence of any unregistered leases, but there was a lease between a brewery company and a lessee which was .unregistered. The facts which had been extracted appeared .to be a correct summary on the information contained in the search notes. Analysis Presented Mr Willis said his own analysis showed that the Campbell and Enrentried Company, Limited, were the owners or part owners of 17 hotels in five districts, and the lessees of two. The company ' had no mortgages over any of the hotels. A company known as United Investments, Ltd., had a lease in respect to the Britomart Hotel. Dominion Breweries Ltd. appeared to be interested as owners or part-owners of seven hotels. They owned six absolutely, and had a half-share in the Central Hotel. They had a mortgage over two hqtels, and the company had not registered any lease relating to any hotel. Hancock and Co., Ltd., were the owners or part-owners of 17 hotels and were interested as the lessees of eight, continued counsel. The company appeared to have mortgages over three. New Zealand Breweries, Ltd., were interested as owners or part-owners of two hotels and appeared to be interested as lessees in six. The company seemed to have mortgages over three hotels. Northern Properties, Ltd., were interested in six hotels and had had a mortgage over one hotel. Auckland, Ltd., was interested as owner in one hotel, and was the lessee of part of the same property. Mr Willis said that a further company known as Davis Consolidated, Limited, had a mortgage over certain leases relating to Hotel Auckland. Two other companies, M. W. Powell, Limited, and Brodie Properties, Limited, each owned one hotel, but no significance seemed to attach to that as they seemed to be family concerns. It would appear from the search notes, said Mr Willis, that the number of hotels not owned or leased to a brewery or allied companies by registered lease numbered 16 or so. It would be fair to say that most of these 16 hotels were leased to brewery companies pursuant to leases not registered against existing titles. It was a matter of common knowledge that Dominion Breweries, while owning certain hotels and having mortgages over them, also leased hotels, but the search notes did not disclose Dominion Breweries as the registered lessees of any hotel property in the five districts. There was a gap to be bridged to show to what extent brewery and similar companies had hotels pursuant to unregistered leases. He intended to call Mr Leonard G. Tuck, Assistant Commissioner of Stamp Duties at Auckland, to show the exact extent to which hotels were so leased. Mr Willis said even unregistered leases had to be presented to the Stamp Duties qffice. Counsel believed that most of the 16 hotels referred to were leased to brewery companies pursuant to unregistered leases. It would appear that breweries and other companies were interested as owners or as lessees or as mortgagees in practically every hotel in the five licensing districts. Counsel said that Mr Tuck had been subpoenaed by the Commission. He believed that he would be able to give assistance to the Commission with various other information. It was, for instance, desirable and necessary to know what was the “set up” of various companies interested in hotels, who were their shareholders and directors and a general idea of their constitution with a view to ascertaining to what extent the various companies were interlocked. Publication Forbidden

When Mr Tuck was called he pleaded privilege, stating that he was appearing at the order of the Commission and that the records he was asked to supply had been kept by him for assistance in his duties. He was not obliged by Statute to keep them.

To Mr C. F. Spratt, representing the New Zealand Alliance, witness said that he was not expressly forbidden to keep such records, upon which Mr Spratt submitted that the records should be presented. Mr P. B. Cooke, K.C., for the National Council of the Licensed Trade of New Zealand, did not raise any objection as far as those he represented were concerned, but said he could not consent to their presentation because there might well be parties to the documents who were not those he represented. He wondered where inquiries into other people’s affairs were going to end. Mr Willis said the information was necessary and could be obtained from other sources, but this would cause considerable difficulty. The chairman of the Commission (Mr Justice Smith) then ruled that the evidence should be given, but that the publication of it or of the subsequent cross-examination would be forbidden in the meantime. Fears Of Licensees Exception to Mr E. J. Prendergast, solicitor, of Auckland, giving evidence before the Commission was expressed by Mr O’Leary. Mr Prendergast said that he was solicitor for the Auckland Provincial Licensed Victuallers’ Association, and the executive had authorised him to appear and make a statement to the Commission. Mr O’Leary submitted that Mr Prendergast was counsel for the Association and as such could not give evidence on its behalf, but should call upon a representative of the Association to supply evidence. Mr Justice Smith said he saw no objection to a solicitor appearing to give evidence about the affairs of his client if his client had authorised him to do so. Mr O’Leary said that no such procedure had come within his experience and maintained that it was a 'departure from long practice. The chairman: I rule that Mr Prendergast be sworn in and give certain information which he has received from his clients.

In recent years, said Mr Prendergast a large and increasing number of hotels had been placed under management by the brewery and wholesale companies and, consequently, had not been available for leasing. The executive of the Association did not include any persons employed as managers of hotels but was restricted to those holding leases in their own rights or owning freehold hotel property. “If the present policy of the wholesale companies in respect to acquiring hotels, whenever possible, and placing them under management is continued, it is only a matter of time before practically all hotels which are worthwhile pass into the control and management of wholesale companies ” witness continued. Another matter which was giving the Association some concern was whether there was a fair distribution of stocks among all hotels or whether the wholesale companies which controlled nearly all the supplies gave preference to their own hotels which were being conducted for them by managers. If they did that preference must operate to the detriment of other hotels. Of the 224 hotels in Auckland province, 90 were managed. There were 34 freehold hotels, while 80 hotels were leasehold.