Lease of theatre — Arrears of rent, rates and insurance — Deed of guarantee — Appropriation of “caution money” — Judgment for landlords
This was a claim by the trustees of the will of the late Mr John Brennan Mulholland, as landlords of the King’s Theatre, Hammersmith, for £3,617 in respect of arrears of rent, rates and insurance premiums, repayable under a lease dated December 31, 1943.
The plaintiffs, Mr Thomas Joseph Pigott, of Westbury Road, Cheam; Mr John Victor Mulholland, of Flood Street, SW; and Mrs Aimee Joan Gettins, of Canal Hill, Tiverton, sued STH Ltd, of Leicester Square, W; Mr Jack Buchanan, actor and theatrical manager; and Mrs Dorothy Elisabeth Donaldson-Hudson and Mr Frederick Moriel King-Lewis, executors of Mr John Donaldson-Hudson, late of Pall Mall, W.
The first two defendants admitted liability, but liability was denied by the two third defendants.
Mr HV Lloyd-Jones QC and Mr John May (instructed by Messrs Thompson and Co) appeared for the plaintiffs; Mr Richard Elwes QC and Mr WE Behrens (instructed by Messrs Gregory, Rowcliffe) represented the third defendants.
Mr Lloyd-Jones said Mr Buchanan and Mr Hudson took over the theatre under the lease, but during 1944 attendances fell due to bombing, and arrears of rent, rates and insurance premiums arose.
Concessions amounting to £1,300 were made by the plaintiffs, but by November the arrears were over £1,000.
On the same date as the lease, Mr Buchanan and Mr Hudson signed a deed of guarantee, in which they covenanted for, and guaranteed, the rent and other sums.
They paid £1,950 “caution money” to the plaintiffs, of which £1,000 was, in February, 1945, appropriated towards repayment of the arrears.
Mr Buchanan had submitted to judgment in this matter and had made payments amounting to £2,000. In effect, the present action was for the balance.
Mr Elwes said the defence was that the plaintiffs had, in variation of the agreement and without the consent of the late Mr Hudson or themselves, failed to retain the whole of the £1,950 and had thereby discharged Mr Hudson from liability under the deed of guarantee.
Mr Justice Sellers, giving judgment, said that in 1944 the plaintiffs had given every consideration to the lessees, but, by the end of the year, approached them with regard to the arrears.
They had made concessions, and letter had passed with regard to the liquidation of the arrears.
It was suggested that the trustees might be willing to allow part of the “caution money” to be used on account of the rent due, and to be replaced at a later date.
That was done in February, 1945, but when Mr Hudson was sued, although he was a sick man, he raised the defence that he knew nothing about it.
His Lordship had no hesitation in accepting evidence given my Mr Buchanan that Mr Hudson did know.
The evidence was both probable and was given convincingly and with studied moderation.
His joint venture with Mr Hudson was an informal one, and they had been friends for many years.
It was almost unthinkable that the guarantee and the question of the arrears should not have been discussed.
Mr Elwes was in a difficulty as Mr Hudson died in November, 1949, but the transfer of £1,000 of the caution money would have been a very practical way of dealing with the situation.
As Mr Buchanan had paid £2,000, there would be judgment for the plaintiffs, with costs, for the balance of £1,617, against the third defendants.
