ROSEWOOD HOTEL DISPUTE

Rosewood History, Qld.

Telegraph (Brisbane, Qld. : 1872 – 1947), Friday 12 July 1935, page 11

ROSEWOOD HOTEL
Brewery versus Licensee Source of Liquor Supplies

In the Supreme Court to-day, before Mr,. Justice E. A. Douglas, a motion for an injunction was called in which the Queensland Brewery, Ltd., was the plaintiff, and Thomas Ernest Baker, licensed victualler, of Rosewood, the defendant, and which related to the source from which the defendant should purchase supplies of liquors.

Mr. A. D. McGill, K.C., with him Mr. N. Macrosoan (instructed by Messrs. O’Shea, O’Shea, Corser and Wadley) appeared for the plaintiff, and Mr. T. McLaughlin (instructed by Mr. J, G. Drake) for the defendant.

Mr. McGill said that the matter was a notice of motion for an injunction until the trail of the action in the terms of the injunction claimed in the writ. The injunction claimed was one to restrain the defendant from committing any alleged breach of the covenants of a sub-lease dated October 11, 1927, relating to the Rosewood Hotel, and in particular from purchasing wines, ales, beers, and other liquors from any other person: firm, or company than the plaintiff.

LEASE AND SUB-LEASE.
The hotel, Mr. McGill explained was formerly owned by a man named Edwin Mclntosh, who on October 11, 1927, gave a lease to the plaintiff for 15 years from March 1, 1929. At the same time the plaintiff gave him a sub-lease for 15 years, less one day, from March l, 1929. The important matter for his Honour’s consideration was in clause 23 of that sub-lease, which provided that any wines, ales, beers, porter and other liquors used, sold or consumed on the hotel premises, should be exclusively supplied by the Queensland Brewery Ltd..

Mr. McGill said that Mcintosh on July 2, 1928, sold to the defendant the freehold of the hotel, together with the unexpired term of the sublease. The transfer of the sub-lease from Mcintosh to the defendant was presented to the company for its consent. The company gave its consent and the transfer of the sub-lease was duly registered.

TWO MORTGAGES.
On September 10, 1928, the defendant morgtgaged to the company the freehold of the hotel, subject to certain incumbrances. The mortgage was registered. On the same day the defendant by registered mortgage transferred to the plaintiff another lease that expired on the last day of February, 1929, and the sub-lease in question. The consideration for these mortgages was a guarantee given by the company of the defendant’s bank account to the extent of 72,000. Counsel drew his Honour’s attention to that to show that after the defendant went into the hotel, he obtained by way of mortgage, financial assistance from the company.

DEFENDANTS CONTENTION.
The position was, Mr. McGill said, that the defendant claimed that he was not bound by the terms of clause 23 of the sub-lease; and through his solicitor he informed the plaintiff’s company that he did not intend to observe the provisions of that lease. In point of fact he claimed that he was entitled to have both the lease and the sub-lease removed from the title. He had not purchased supplies from the plaintiff since April 16 of this year. Those were the facts, and he (counsel) submitted that he was entitled, to have an injunction until the trial of the action. He submitted that the case was one that might very well proceed to trial without pleadings at the earliest possible date. This was a primary case for relief.

Mr. McLaughlin said that the defendant was the owner of the freehold. The object of the sub-lease had to be looked at. The granting of an interlocutory injunction, was a discretionary remedy, and in this case, for reasons he would show, such an injunction might cause injustice. The plaintiff claimed, that notwithstanding that the defendant had paid the plaintiff off it still was entitled to its rights.

JUDGE’S ORDER.
His Honour ordered that upon the defendant’s undertaking to pay £50 into court within four days to abide any order that the trial judge might make as to damages suffered by the plaintiff between the present date and that of the trial, and upon his further undertaking to go to trial before a judge without a jury within a month from the present date if the necessary arrangements for that purpose could be made by the plaintiff no ordec would be made on the application for an injunction.

The plaintiff was to deliver statement of claim within eight days from the present date and defendant to deliver defence within eight days of receipt of the statement of claim. Plaintiff to deliver any further pleadings within four days of receipt of defence. Plaintiff and defendant to give discovery in the usual manner within three days of delivery of defence; costs to be costs in the cause.

Courier-Mail (Brisbane, Qld.), Friday, 25 October 1935, page 11

BREWERY’S CLAIM
Exclusive Right to Supply Liquor
ROSEWOOD HOTEL DISPUTE

The principle of “clogging” the equity to redeem was discussed in a case heard before his Honour Mr. Justice Webb in the Supreme Court yesterday, the plaintiff being the Queensland Brewery, Ltd., of Brisbane, and the defendant Thomas Ernest Baker, licensed victualler, carrying on business at Rosewood.

The plaintiff alleged that through a breach by the defendant of a sub-lease of land at Rosewood, on which the Rosewood Hotel is situated, the plaintiff suffered damage in that it had lost profit upon liquors, which, but for the alleged breach, would have been supplied by the plaintiff to the defendant.

The defendant said he had paid off a loan he obtained from the plaintiff, and contended that he was now entitled to say that, on payment of the loan any stipulation under the agreement came to an end.

The plaintiff claimed a declaration that a lease was a valid and subsisting lease, and binding on the defendant as the registered proprietor of the land on which the hotel was situated, and a declaration that a sub-lease of the land was a valid and subsisting lease and binding on the defendant as the assignee and registered transferee of a lease from Edwin Mclntosh. The plaintiff also asked for an injunction to restrain the defendant from purchasing liquors during the currency of the sub-lease from any other person, firm, or company, except the plaintiff, and claimed £250 damages for alleged breach of covenant of the sub-lease.

THE DEFENCE
The defendant admitted that he entered into an agreement with Edwin Mclntosh on July 2, 1928. The lease and sub-lease mentioned in the statement of claim were made and executed by Edwin Mclntosh in favour of the plaintiff simultaneously with the making and executing of bill of mortgage over the leased land and over the sub-lease, for the purpose of securing to the plaintiff moneys and interest therein referred to. The lease and sub-lease formed a security for the repayment, of the money and interest in the bill of mortgage, and were part of the mortgage transaction.

The defendant said that contemporaneously with, or prior to his purchasing or acquiring from Edwin Mclntosh the leased land, the moneys owing to the plaintiff by Mclntosh and secured by the bill of mortgage and the lease and sub-lease were fully paid to the plaintiff by Mclntosh, who then became entitled to have the lease and sub-lease can-celled and removed from all certificates of title embracing the lands. The lease and sub-lease at the time of the defendant’s buying the land were never of any value to the defendant or the plaintiff on account of Mclntosh’s having discharged the whole of his indebtedness to the plaintiff. The agreement referring to the exclusive dealing with the plaintiff in liquors was unreasonable, oppressive, and in restraint of trade.

Mr. McGill, reviewing the case, told his Honour that the land formerly was owned by Edwin Mclntosh, licensed victualler, then of Crow’s Nest, who on October 11, 1927, gave a lease of it to the plaintiff for 15 years from March 1, 1928, for an annual rental of £192, and at the same time the plaintiff, as lessee, gave Mclntosh a sub-lease for 15 years, for £192 a year, less one day, from March 1, 1929. An important matter for consideration was clause 23 of the sub-lease, which provided that any liquors used, sold, or consumed on the hotel premises should, for the term of the lease, be exclusively supplied by the Queensland Brewery, Ltd.

BANK GUARANTEE OF £2000
On July 2, 1928, Mclntosh sold to the defendant Baker the freehold of the hotel, together with the unexpired term of the sub-lease. The transfer of the sub-lease from Mclntosh to the defendant was presented to the plaintiff for its consent. The plaintiff company gave its consent. On September 10, 1928, the defendant mortgaged to the plaintiff the freehold of the hotel, subject to certain encumbrances, and the mortgage was registered. On the same day he mortgaged to the plaintiff the sub-lease in question. All the documents were dealt with together, and were presented for registration on November 22, 1928.

The consideration for the mortgage was a guarantee for £2000 given by the plaintiff of the defendant’s bank account, and the defendant became the purchaser of the lease and sub-lease. Both the freehold and the sub-lease were the subject matter of the sale by Mclntosh to Baker, and they were the subject matter of the mortgage offered by Baker to the Queensland Brewery. The creation of the two interests or estates by the lease and sub-lease were no part of this mortgage transaction, and were not a term of the mortgage transaction. Those estates and interests were accepted by Baker, the applicant for a loan, as continuing estates or interests, and he offered, among other things, the security of a mortgage over the sub-lease. The defendant now claimed to cancel the lease to the brewery, and to cancel the sub-lease from the brewery to Baker, and contended that he was entitled to have the lease and the sub-lease removed from the title.

His Honour: The brewery treated the lease and the sub-lease as continuing after the mortgage was paid off by the defendant?

Mr. McGill: Oh, yes.

After evidence was heard for the plaintiff and the defendant ,Mr. Fahey said that the money advanced by the plaintiff to the defendant should be treated as an ordinary mortgage transaction, and, therefore, the defendant was entitled to say, on the paying off of the loan, any stipulation in the agreement in favour of the mortgagee necessarily came to an end.

The further hearing was adjourned until Monday next. Mr. A. D. McGill. K.C., with him Mr. N. Macrossan (Instructed by Messrs. O’Shea, O’Shea, Corser, and Wadley), appeared for the plaintiff; and Mr. B. F. Fahey. with him Mr. T. McLaughlin (instructed by Mr. James G. Drake), for the defendant.

Courier-Mail (Brisbane, Qld.), Tuesday, 29 October 1935, page 11

ROSEWOOD HOTEL DISPUTE
Judgment Reserved

Argument was concluded in the Supreme Court yesterday in the action brought by the Queensland Brewery, Ltd., of Brisbane, against Thomas Ernest Baker, licensed victualler, carrying on business at Rosewood. The dispute arose out of a lease and a sub-lease of the land at Rosewood, on which the Rosewood Hotel is situated.

His Honour Mr. Justice Webb, who was on the bench, reserved his decision. Mr. A. D. McGill, K.C., with him Mr. N. Macrossan (instructed by Messrs. O’Shea, O’Shea, Corser, and Wadley), appeared for the plaintiff, and Mr. B. F. Fahey, with him Mr. T. McLaughlin (instructed by Mr. James G. Drake), for the defendant.

Courier-Mail (Brisbane, Qld.), Thursday, 28 November 1935, page 11

THE LAW COURTS
BREWERY’S CLAIM FAILS
Rosewood Hotel Dispute
CLOGGING EQUITY OF REDEMPTION

Judgment in favour of the defendant was given in the Supreme Court yesterday by his Honour Mr. Justice Webb in the action brought by the Queensland Brewery, Ltd., of Brisbane, against Thomas Ernest Baker, licensed victualler, carrying on business at Rosewood.

The plaintiff company alleged that through a breach by the defendant of a sub-lease of land at Rosewood, on which the Rosewood Hotel is situated, it suffered damage in that it had lost profit upon liquors, which, but for the alleged breach, would have been supplied by the plaintiff to the defendant.

The defendant said that he had paid off a loan obtained from the plaintiff company, and contended that he was now entitled to say that on payment of the loan any stipulation under the agreement came to an end.

In his judgment Mr. Justice Webb said that after the plaintiff company notified its willingness to guarantee an advance of £2000 to Baker, Mclntosh transferred the fee-simple and the sub-lease to Baker, free from the mortgages given by Mclntosh to the company. The endorsement on the sub-lease showed that the release of the mortgage over the sub-lease from Mclntosh to the company was registered on November 24, 1928, and that five days later there were registered in that office, the transfer of the sub-lease from Mclntosh to Baker, and a mortgage from Baker to the company over the sub-lease. That showed Mclntosh, Baker, and the company treated the sub-lease as having survived the payment off by Mclntosh of his debt to the company.

BAKER’S ATTITUDE
“As to the law,” his Honour remarked, “I think that Mclntosh could not validly have done anything that would have operated to continue that life of the sub-lease after he had paid off his debt to the plaintiff company if the sub-lease contained clauses running with the land that would have continued to bind Mclntosh to the plaintiff company. The rule against clogging the equity of redemption operated to protect him against himself.”

“’The difficulty in the way of the plaintiff company was that if the sub-lease was kept alive after Mclntosh paid off his loan it was kept alive for all purposes, and for and against all parties, including Mclntosh. Mclntosh was a necessary party to its being kept alive, and yet as against him, it came into existence as a security for his loan, and as between him and the plaintiff company it could never have been anything but a security. The relationship between those two parties never changed.

Baker’s attitude was that he bought and paid for the freehold without any brewer’s tie, or at most with a tie that did not provide the payment off of the loan to the bank, which the plaintiff company guaranteed. No evidence, however, was adduced to show what Mclntosh believed as to his position, or what he was actually paid for. Neither he nor Baker appeared to have had anything to gain by treating the lease and the sub-lease as surviving Mclntosh’s mortgage, and so, even if Mclntosh sold subject to the clog, and for a reduced price, his Honour did not think the plaintiff company could take advantage of the fact. That would warrant an adjustment as between Mclntosh and Baker, but could transfer no rights on the company. In other words Mclntosh’s mistake as to his rights did not operate to add to the plaintiff company’s rights, and so reduce Mclntosh’s rights as would be the case, if McIntosh lost his claim to the additional sale money, and the company thereby required an extension of the lease and sub-lease with its brewer’s tie.”

EXPIRED WITH REPAYMENT
In his Honour’s opinion the view that Mclntosh was a necessary party to the continuance of the sub-lease involved an infringement of the rule against clogging. On the other hand, if, contrary to his Honour’s opinion, the correct view be that the sub-lease was kept alive by the agreement merely of the plaintiff company and the defendant Baker, then it survived as a term of the security, and expired with the repayment of the bank’s advance by Baker, because it did not then have a continuous existence independently of the company, so as to have been the subject matter of the security as distinct from a mere term of the security.

His Honour gave judgment for the defendant Baker, with costs. Mr. A. D. McGill, K.C., with him Mr. N. Macrossan (Instructed by Messrs. O’Shen, O’Shea, Corser, and Wadley). appeared for the plaintiff, and Mr. B. F. Fahey, with him Mr. T. McLaughlin (instructed by Mr. James G. Drake), appeared for the defendant.