HOTELKEEPERS AT LEGAL BAR

NZ Truth, Issue 1294, 2 October 1930, Page 10

HOTELKEEPERS AT LEGAL BAR

. — . » . • . McDUFF AND KELLEHER QUAFF FROM FOUNT OF WISDOM TROUBLE OVER LEASE OF SHADES HOTEL (From "N.Z. Truth's" Special Christchurch Representative.) Did Archie Malcolm McDuff, hotel'keeper of Christchurch, tell Daniel Joseph Kelleher, also a Christchurch hotelkeeper, that the takings of the Shades Hotel amounted to £250 a week, before the latter entered into an agreement with the former to purchase the balance of the lease with the right of renewal? Kelleher has asked Mr. Justice Adams to find that such was the case m his claim before the court to have the contract rescinded or alternatively, £250 damages for misrepresentation or breach of warranty. .

JOSEPH KELLEHER'S allegation is J that McDuff 's takings m the Shades Hotel were considerably less than £250 a week, and m his statement of claim he sets out that on November 15, 1929, he entered into a contract with McDuff by which the latter sold to him the balance of the lease of ,the Shades Hotel, Christchurch, which had approximately fourteen months to run, together with the option of a further lease for a period of three years. The amount paid fer the goodwill of the lease was £2000, and the exercise of the option, if he decided to do so, would involve the payment of another £2000 to the landlord of the hotel. ' The contract stated that the plaintiff was to pay £100 deposit, the balance to be paid, on possession. The plaintiff took possession of the hotel on December 1, 1929. Kelleher declared that because the takings were represented as being £250 a week he was induced to enter into the contract, and upon the truth of the statement he had estimated the price he could pay for the goodwill of the lease and business. He alleged that the representation was false and because of this he had lost £1250. Mr. H..F. O'Leary, with him Mr. A. J. Malley, appeared for 'the plaintiff, and Mr. A. T. Donnelly, with him Mr. P. P. J. Amodeo, for the defendant. When Kelleher went into the wit-ness-box he told the court that he entered the hotel business m 1904 and had later been farming. When he called on McDuff m connection with a deal m salt, the latter suggested that ■ plaintiff . sell his hotel for him. McDuff gave him particulars.* He had endeavored to sell the hotel to a man named Cloudesley, whom he took -tot see McDuff, he continued. .*"" "Cloudesley asked for the books," said Kelleher, "and some books, not correctly- made up, were produced. Mr. McDuff said an accountant was keeping the books and was out of town." Kelleher declared that McDuff told him the takings were £250 a week, but were not shown m the books. ■■■•■•'• "When taking stock I found the takings were not anything near what they should have been," complained Kelleher. He added, "I went into the office and found Mrs. McDuff cutting the leaves out of the bedroom book." Mr. Donnelly, producing an envelope on which was written a note that the hotel takings were £250 a week, asked Kelleher if he knew the importance of it as evidence. When Kelleher replied m the affirmative, Counsel then asked witness if his previous solicitors, Messrs. Duncan and Cotterill, had asked him if he had anything m writing from McDuff. Kelleher said he gave these solicitor's a copy and had not given them the original because he was afraid it might get lost and he wanted it as a safeguard m case it was needed as evidence. Mr. Donnelly: When you made your affidavit of discovery, why didn't you produce it? — I was ignorant of the fact that it should be produced, Youi know it is essential evidence? — I do now. . His Honor: You said you kept it back, so you must have' known then, not only now. Mr. Donnelly: You knew you had to discover all your documents, didn't you? — I didn't know exactly. Why didn't" you produce it? — 1 thought it might have been lost, and it was the only one I had. His Honor: And yet you were swearing an affidavit that they were all the documents! Referring his Honor to Kelleher's second affidavit of discovery, Mr. Donnelly addressed the publican again. "Now then," he said, "you say you kept it back because you were afraid it might ___ have been ,lost. You say m your affidavit, 'I put the original away m an old coat pocket and had forgotten where I put it." "Which is the truth?" demanded his Honor. "I kept it back for safe-keep-ing," replied Kelleher, "and mislaid it." You say both stories are true? Mr. Donnelly: How iong was it lost? — It was not lost at all.' It was mislaid for about a month. Is that the truthful account of why you didn't produce it? — The first statement is the truth, and the second follows on. And this pocket-book? You've only produced that since July? — Yes. That book contains the first interview you had with McDuff, doesn't it?— Yes. Why did you keep it back?— l didn't know it was essential. At the time of the "mock trial" or "rehearsal" or whatever it was, Mr. Gressori was called m, wasn't he? — Yes.. ' Did you tell him about this envelope? — 1 did, sir. Mr. Donnelly: Did you tell McDuff you were m a hurry because your man. wouldn't wait? — I said I was m a hurry because Dwan was on his way to Wellington. Both McDuff and his wife will say you represented to them you- were dealing with a client? — That is not true! They will say you asked for a commission of £115 if you put the deal through? — That is not, true! The next witness called by Mr. O'Leary was Edward James Leydon. a Palmerston North valuer, who declared he was m the bar of the Shades Hotel when McDuff told Kelleher that his takings 'were £.250 per week. Thomas Beaumont Dwan, hotel broker, stated he had had 45 years' experience; - He "met Kelleher m Christchurch, and discussed the Shades Hotel with him, and later financed Kelleher m the deal. . "I wouldn't have touched it if the takings had not been £250 a week," added witness. Kelleher was to pay him £250 for the transaction, but he had not received this money. Later Kelleher told him the takings were not as represented. W'tness said the personality of the hotelkeeper had a good deal, to do with the success of an hotel, and that hotel takings had dropped everywhere. A public accountant, William Henry Nicholls, was next called by Mr. O'Leary, and he declared that from £750 to £790 had been overpaid for

HIS AFFIDAVIT

BEDROOM BOOK

goodwill, based upon the reduced takings. lie had examined Kelleher's books, and the takings, including house and bar, were £180. Mr. O'Leary closed his .case, and Mr. Donneily, addressing the Court asked for a non-suit on the grounds that Kelleher, throughout the negotiations, acted as McDuff' s. agent for the sale 'and not as a prospective purchaser. Mr. O'Leary submitted that he had shown that the relationship altered. Pribr to. going into the Shades ' Hotel, he had held two other licenses, one m Timaru and one m Christchurch, said McDuff m evidence. Kelleher, whom he had known for many years, had asked him if the Shades Hotel was for sale. His reply had been that he would sell at a price. Through Kelleher he had endeavored to sell to the managing-director of Messrs. Quill Morris, and also to a man named Cl<sudesley, but. neither sale eventuated; McDuff stated that he gave Kelleher ! authority to sell, but he could not remember the date, nor could he recollect how 'he came to give him the authority. . . Later he saw Kelleher again about the sale of the hotel. This' was /early m November. On November .15 Kelleher stated he ha.d a purchaser, added witness, and declared that Kelleher said the man had offered £ 2000 for the goodwill, and the stock and furniture at valuation. ' McDuff said that he agreed to pay Kelleher commission amounting to £115 at the : completion of-the sale. This agreement was reached bet/ween them m regard to commission when there was a possibility of a sale being effected to Cloudesley. Later, said McDuff, Kelleher ■ came into the bar and said, "My man is not coming, I'll take it myself." McDuff denied that he had told Keileher that his takings were £250,' and it was not true that prior to the place being sold Kelleher told him he was buying it himself. , He had not suggested giving Kelleher £115 for work done previously m trying to sell the hotel. McDuff said he did not remember signing the snvelope with his signature on it, and lie could not say how his signature same to be on this document. He did not know when the, envelope was signed. He did not remember reading it.-*; Mr. Donnelly: . You heard Mr. Leyion say he heard you say m the private bar, "My books will show I am 3oing £250 a week"?— That never occurred. McDuff denied making such a statement, and told his counsel that there was no trouble over handing over the books. - • Referring to the contract, Mr. O'Leary said to McDuff :■ "There is not one word suggesting ' that it is a contract as ah agent, is : there ?" McDuff: No. ■ Mr. O'Leary: Well, you realise the document bears out what Kelleher says? — Apparently. — Now, Mr. McDuff, I don't suppose you are m the habit of putting your signature on a blank piece of paper? — t have done. ' • / What! With a name like McDuff? [ don't suppose you ever put your signature on a blank piece of paper and nanded it to Kelleher? — No. I put it to you that it is, a fair inference that you signed -that? — No. Well/ what do you suggest? — I have nothing to suggest. Counsel suggested to McDuff that the words, "possession Dec. 1" and 'p.n.'s for stock," written on the envelope above his signature,, showed that they had been written near the end of ' the contract. "I don't know anything about that- piece of paper," was McDuff 's reply. Following her husband into the witness-box, Helen Rosetta McDuff declared she had torn leaves out of the hotel register for her own use, and did not think' Kelleher would want them. ' Kelleher came to the hotel on November 15, and witness heard him say to her husband, "I've got a buyer for your hotel,.* Archie." This conversa-. tion took place outside the office. Her husband asked foi half an hour to think it over, declared witness, and Kelleher came back within that time, saying:, "My man won't be humbugged, I want to know yes or no." "He asked Mr. McDuff to write at his dictation," .said Mrs. McDuff, "and the original agreement was written and signed by both of. them. "Mr. Kelleher gave Mr. McDuff a cheque for £100, and said, 'What about my commission, Archie?' Mr. McDuff said, he had agreed to pay him £115, and Kelleher asked for it m writing. "It is not true that' Mr. Kelleher was buying the place for. himself," Mrs. McDuff declared. Mrs. McDuff said her reason for taking the leaves out of the bedroom book was because she had some accounts she wanted to get out and the liames. were on the 'leaves. The book was too heavy to take away. She did not think Kelleher wanted the book. "Kelleher spoke to me about the sale of the Shades Hotel," declared John Thomas Sutton, managing director of Messrs. Quill Morris, wine and spirit merchants, who was next called. Mr! Donnelly: In what capacity was he acting?— As an agent for Mr. McDuff. In reply to Mr. O'Leary's crossexamination, witness said he believed the man named Cloudesley had made negotiations for the purchase of the hotel. His firm had considered finane-' ing Cloudesley on a 50-50 basis. After hearing counsels' addresses, his Honor said he would reserve his decision, but he had formed some definite ideas as to the' facts. His strong impression was that the relationship between principal and agent had m effect continued between the two parties, up till the last moment when Kelleher declared himself as buyer. . . - He accepted the view of McDuff and the story which he told. He had been corroborated by his wife and also by circumstances. His Honor intimated he wished to refresh his memory on certain of the evidence, and reserved his judgment.