VALUE REDUCED

Auckland Star, Volume LXXIV, Issue 75, 30 March 1943, Page 4

VALUE REDUCED

PROPERTY IN CITY

TEST CASE DECISION

About 100 city properties may be affected, it is said, by an Assessment Court judgment delivered to-day by Mr. J. H. Luxford, S.M., in a test case brought by the tenant of a shop and restaurant in the Pacific Buildings, Queen Street, who objected to the fixing of the annual value on the current basis. The magistrate, on the uncontradicted evidence of the objector, found that the annual value should be reduced by 25 per cent, and reduced it accordingly. The objector, Leonard W T aite, confectioner, had carried on business in the premises for nearly nine years, his lease expired on June 1, 1942. At the time of the hearing he was occupying the premises as a tenant at will. In the City of Auckland, the system of rating of property on its annual value is in force, and the city valuer had fixed the value of the objector's premises at a sum equal to the rent payable by the objector, less the statutory reduction of 20 per cent. The objector paid a rental of £10 a week, plus rates. At the hearing, Mr. Goldstine appeared for the objector, and the city solicitor, Mr. Stanton, for the City Council. The principle on which the annual value must be assessed having been settled, the fixing of the annual value became an actual fact, said the magistrate. The Court of Appeal in the case, Dunedin City Corporation v. Young, 1941, settled the basis on which a valuer must assess the annual value of the property for the purpose of the Rating Act, 1925. Powers of Authority The magistrate said the rating authority was authorised to fix the annual value of each property within its area, and the amount so fixed was final as against the ratepayer, unless he lodged an objection in the Assessment Court. At the hearing of an objection, the Court should treat the annual value fixed by the rating authority as the correct annual value, and call on the objector to prove that a different annual value should be substituted. If he discharged the onus placed on him, the rating authority must produce evidence in rebuttal, and the Court would then decide the question on the whole, of the evidence before it. Mr. Luxford said that in the present case, the objector had proved to the jury in 1942 that a feeling of insecurity had developed among shopkeepers, with the result that there was a reluctance to bind themselves, as tenants, for any specified time. According to the evidence it was almost impossible to let premises, except on a monthly tenancy. The objector had refused to renew - his lease, and would not, unless forced to do so, bind himself under a tenancy from year to year. In the opinion of one witness, a landlord desirous of letting premises on a yearly tenancy; he would have to reduce the rent payable under monthly tenancies, by at least 25 per cent. The City Council called no evidence- in rebuttal, but Mr. Stanton contended first that the annual value must be assessed with regard only to circumstances existing at the time of making the valuation; and, secondly, that the readiness and willingness of the objector to pay the pr'esent rent, if-forced to become a yearly tenant, was sufficient evidence to sustain the valuation. - Letting Values Mr. Luxford stated that he agreed with.the first contention, but that;did not assist the corporation. Although the fears which affected letting values referred to future events, they were in actual being at the time the valuation was made and were a relevant consideration in determining the annual value. The second contention presented some difficulties. It was • true that the actual occupier migh.t,be regarded as a possible tenant of the premiseSj and consequently the - admission by the objector that he would take a yearly tenancy at the existing rental, if he had to choose between that and being evicted, might be some evidence of the gross annual amount a hypothetical tenant would be prepared to pay within the meaning of the rule formulated by the Court of Appeal. Mr. Luxfard considered, however, that the evidence was not conclusive, as a tenant who had conducted a business _in_ the , same premises for a number, of. years was not in the ordinary course of events desirous of vacating, and might be coerced into binding himself merely to protect his I business. "That is the position in the present case, s concluded Mr. Luxford. "The objector does nothing more than admit a willingness to shoulder an ODhgation for reasons personal to himself. I cannot regard such an admission as evidence of the true gross annual rental on which the annual value should be placed. The position is, therefore, that the uncontradicted evidence adduced on behalf of the objector shows that the annual value should be reduced by 25 per cent, and it is reduced accordingly."