BIG HOTEL DEAL.

Taihape Daily Times, Volume XI, Issue 3341, 20 November 1919, Page 5

BIG HOTEL DEAL.

I ]‘N'I‘EHE§T.[;.\ZG ])ISPU'I.‘E. §ACTION CONCERNING A 'l‘.r‘-.'.11'.:\.1"F 1-lOUSE. . An interesting action concerning a big hotel deal was heard in the Snpreme Court at Wellington on Tuesday, by Mr Justice Edwards and a jury of I twelve. ' l The plaintifl’ was William Mel.enunan, farmer, who was represented by Mr A. Blair, and tlle defendant’ was Walter Julius Jorgensen, hotelkecper, ‘for Whom Mr A. Gray, K.C._. and Mr - V. B. Willis appeared. ! The statement of claim set out that the defendant leased to _plaintifl", on 'August 16, 1.915, the Gretna Hotel, Taihape, for five years. The plaintiif paid to the defendant as a premiuni for the grant oif the lease £IO,OOO ’which also included payment for the furniture and 5' effects, which were {valued at £822. When six o’clock ;closing was carried the plaintiff gave defendant notice requiring him to re duce the rent. The defendant elected to accept a surrender of the lease, On the acceptance of the surrender there was payable by the lessor a propol’~‘ tionate part of the pl'elninm. At the time of the taking over of the pres mises by the defendant, it was agreed! that the proportion of the term. for which goodwill was payable ‘was two years and 151 days. .For the purpose of settlelllellt_ the amount paid for goodwill was assumed to have been £7500; the sum, tllerefol'e, payable to the plaintiff by the defendant on this‘ assumed basis wlas £3620 10/11, and! this, it was; claimed, was duly , paid. It was fnrtlier set out that the gl'oss sum on which _g'oodwil°l should be calculated was the sum of £IO,OOO, less £822 for t'urniture and effects, and thel proportion of goodwill should be cal—| culated on‘ £9178, instead of £7500. It‘ was therefore claimed that a further sum of £BIO was due to the plainfiif by the defendant——tlle difference between £~1430 11/10 and ‘£3620 10/11 actually‘ “paid. According to” the V stat‘einXeii‘t "o":t' 'd‘ov‘ fence, the agreement arrived at be» «tween "the. plaintiff -and}-‘V the: de‘fendant_j. fixed. the value ef.‘the fnl'niture- and effects at £2500, and,’ rtherefore, the alllollrltgp.aid for goodwill was £7500, the proper basis: on which the propor-. "rion repayable on.s-urrender of the‘ lease should be calculated. '

In opening the case, Mr Blair‘ said that prior to leasing the hotel, McLennan had been concerned in its management. Hearing -that the lease of the house was for sale, he approached Jorgenscn, who said he was pr.epa.red to sell a five years’ lease for £lo,ooo—a lease including the hotel with the furniture in it. Plaintiff’ wentxiaway to finance it, and returned.V.ncx‘t day and made the deal at £2O a Week rental and £IO,OOO premium. At the time nothing was said about the value of the furniture. There was provision made that at the end of the lease thelandlord had. to take the »fu'rni.ture back at valuation. After the lease had been in force for about two years 6 o’clock closing was cal'l'i(?d. The Act contlained a provision that the Lessee could call on the landlord p'i'oportion—ately TO the loss of business, and McLennen made such a claim. Terms were not agreed on, and a surrender of the lease was accepted by Jorgensen. The surrender was made somewhere about St. Patrick's day last year. The question then czrme as to how much of the £IO,OOO was referable to the furniture. and how much to the goodwill. That. was really the ‘qnesti.on the jury had to decide. ‘i\lc.Denn!an {thought there was about’£lsoo worth of furniture in the house. At the termination of the lease two Valuers fixed the value of the furniture at £822. Therefore it was submitted that the amount to be handed back was the proportion of £IO,OOO less £822. Secondhand furniture was more Valuable in 1918 than in 1915, but ‘Mc.Lennan was giving Jergensen the henefit of that. He was content to take the valuation, and said the balance was goodwill. Robert John Lon-ghnan, solicitor, Taihape. said, in evidence, that he was called to the hotel on the evening on which the. deal was made and took notes of the transaction for the purpose of drawin'g'up a document. It was provided that Jorgensen should buy back the furniture'at valuation. At that time no Value was mentioned-

Mr Gray described the dispute as one between two publicans, both of whom were :1? present fennporarily retired. Thc dispute was as to 110 W much of the £.10.000 was attributable to goodwill and how much to furniture. Summing up, his Honor said -the only question the jury had to consider was what was the value of the» furniture at the time Me-Lennan took Over the hotel in 1915. The rest was a mere matter of calculation. Mr Loughnan’s_:, evidence was to the efiect that the xrlilue of the furniture Was not discussed when the deal waswmade, and from the evidence of one of defenda.nt’s witnesses it Eieemed that the value wa:9 fithcn reckoned by pl'a.intifl:' to be £ISOO. ,

The jury assessed the value of the furnitujre;.at £822, and »hi_s_,( Honour .en_iterea jhdgmeht for'thc amomifi claimed, £9lO. “ \ - > «_' E *