SALE OF BOARDINGHOUSE.

Waikato Times, Volume 97, Issue 15276, 28 June 1923, Page 5

SALE OF BOARDINGHOUSE.

RECJSSJON OF OONTR*CT SOUGHT.

A claim, asking for the recission of a contract over the purchase of a boarding.house at Te Kuiti, and £i2oo damages, was brought in the Supreme . Court, Hamilton, to-day, by Thomas White Millar and his wife, Margaret May (Mr Vernon), against Emma Tate,, .r wife of James Henry Tate, boarding ' house-keeper, of Te Kuiti (Mr G. P. Pinlay). It was shown that plaintiffs purchased in October, i 9-22, the interest held by defendant in the leasehold property containing a boarding house, known as the Commercial Hotel, together with the furniture and fittings, at a, sum of £ISOO, of which £BOO was to be paid in cash, and the balance in quarterly instalments of £IOO. Prior to signing the agreement defendant represented that the yearly takings were £4OOO, that the weekly takings ranged from £7O to £IOO, and that the income derived by defendant from the business was over £BOO. Plaintiffs now . alleged that the representations were false, in that' the average weekly takings were only between £SO and £6O per' week. Plaintiffs therefore sought a recission of the agreement, the return of £BOO paid by them to defendant, the sum of £2OO general damages, and £IOOO damages. Defendant admitted stating that her takings during her occupancy of the premises had been from £6O to £7O per week, and that Oh more than one occasion she had taken over £IOO per week. She cquld not say exactly what her yearly takings were, but was under the impression she had taken about £3500 the previous year, and that that year she had expected she would take £3QQ less, but could not say definitely, as her figures were not made up. She denied that she made any false or fraudulent representation. Mr G. P. Findlay argued that the parties had formed a contract, and that this had been confirmed by plaintiffs carrying out papering and by altering the stairs, and also by applying for a reduction of rent. There could, therefore, be no recission of the contract. The only remedy—if there was one at all —was to give damages for misrepresentation, and as damages could not be secured as a result of innocent misrepresentation, then it would be necessary to prove that the misrepresentation was deliberate and false within the knowledge of defendant. Such, he submitted, had not been proved. On the contrary, Mrs v Tate declared that all she said was that the 1 weekly takings were between £6O and £7O and that the annual takings were between £3OOO and £4OOO. These statements were perfectly true, as she showed by her evidence. Mr Vernon alleged that a deliberate misstatement had been made by defendant in order to bring about the sale. He thought there was no shadow of doubt that Mrs Tats stated the takings were from £75 to £IOO per week and that they aggregated over £4OOO a year, and that she made these statements knowing them to be false. His Honor: Couldn't you have based your action on breach of warranty? Mr Vernon agreed that the yearlytakings during the first year of Mrs Tate's ownership amounted to over £4OOO, but during the 12 months prior to her selling out to plaintiffs the takings, according to her books, were about £3IOO. This would make all the difference between success and failure. The overhead expenses of a boarding-house stood still, and did not recede with the declining business. So that over and above a certain turnover the additional takings would be largely profit, and this made all the difference in a case of this kind. His Honor said he was perfectly satisfied that the Millars were telling the truth and that they had no intention to deceive the Court. The only question in the case was whether defendant had stooped to fraud in order to sell plaintiffs this boarding-house. "It had been laid down from time to . time," said his Honor, "that before you can convict a person of fraud you must prove the fraud beyond all reasonable doubt." The charge was tantamount to a criminal one. The case was adjojrned till this afternoon to enable the accountant who examined the books to attend.