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From sea change to tsunami

IT’S a bit of an Australian dream for 40-something couples to leave their nine-to-five city jobs for a more simple, relaxed life in the country.

Some choose to utilise the technology of the Internet to work from their new homes, while others embark on a whole new career.

Falling into the second category was Perth public relations officer Jenny Hodder, who decided to follow her dream and buy a country pub, do it up, make a bit of money and create a marriage of work and lifestyle.

But what was supposed to be a dream similar to the ABC’s Sea Change tuned out to be a nightmare more like a tsunami.

In November 1997, after six months of negotiation with the freeholder (owner) John Clune, Ms Hodder leased the National Hotel in the Goldfields town of Sandstone. She had visions of turning the 100-year old pub into a boutique hotel for tourists along the wildflower trail and a conference location for country business people between Kalgoorlie and Wiluna.

Instead, two years of effort and expenditure went to waste and the parties were left to fight the issue in court – all because an agreement over who would pay for various renovations was never put in writing.

“It was a beautiful old hotel, all hand built. Nonetheless, it was pretty run down and I could see that there was a lot of work to be done on it,” Ms Hodder said.

“I though about how much money it would take to buy in. How much rent I would have to pay. What it would cost to do the place up and make it a bit more attractive, and what the potential income was.

“I decided to have a go at it.”

Legal contracts concerning the lease price and rent were drawn up and signed, and Ms Hodder said she was engaged in private talks with Mr Clune regarding the repairs and restorations needed to improve the hotel. She said that, at their last meeting, a verbal agreement was reached regarding the hotel’s upgrade and who would pay for each of a list of improvements.

Ms Hodder claims she drew up a letter covering these issues, but it was never signed.

She said that, after almost two years of running the hotel and a significant investment, an amount of $20,000 she believed was due from the owner was not forthcoming. Instead, she decided to place the rent of $1000 a week into a trust account so as to recoup the debt. Six weeks later Ms Hodder arrived at the hotel to find it locked and security guards standing at the front doors. Her dream, it seemed, was over.

Mr Clune said no such contract, verbal or otherwise, ever existed and he believes he was well within his rights to bar Ms Hodder from the business after six weeks’ rent went unpaid.

He did acknowledge that he had agreed to provide some money towards the restoration of the hotel, including paying $11,000 to have the bar upgraded to a finer wood finish and agreeing to contribute funds to having some of the outside accommodation painted.

But that, according to Mr Clune, was all.

Aside from the fact that both parties are less than thrilled with the outcome of the venture, there seems to be little other common ground in this tale of a business venture gone horribly wrong.

Apart from anything else there was then, and is now, clearly a fundamental difference of opinion as to how things should have been done and what the potential and future of the hotel was.

Ms Hodder saw the pub as an opportunity to create a boutique hotel in the country, an opinion she believed Mr Clune shared.

But he claims he told her “don’t spend any money” and was always of the opinion that the county pub had potential to be no more than that. Ms Hodder said she put around $80,000 into the development, addition to and restoration of the hotel, including the installation of a pool. But Mr Clune complains about many of the renovations, which he claims were completed without his knowledge or authorisation.

Even the creation of an art gallery in the abandoned cellar is a bone of contention.

It is perhaps unsurprising that legal action resulted from the situation, although neither party is happy with the $130,000 settlement, which effectively bought Ms Hodder out of the remaining lease.

Ms Hodder said the experience had forced her to petition for bankruptcy. It is the second time she has been pushed to such circumstances, having entered a Part 10 bankruptcy in 1985, after a failed film venture in the Maldives.

Ms Hodder admits that much of the problems stem from her failure to get everything in writing before embarking on such a big venture.

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