LAW REPORTS.

Dominion, Volume 7, Issue 2016, 25 March 1914, Page 5

LAW REPORTS.

SUPREME. COURT. THE RENtS OF BUSINESS BLOCKS. OWNED BY CITYi : ( WERE THE VALUATIONS TOO LOW? ; The Wellington'■'; "City. Corporation owns a good deal of reclaimed land in the heart of .Wellington. This land is leased to business people, and every fourteon years, the rent valuo of the leases is determined by valuers or-arbi-trators. In 1913, eleven Sections wero revalued. "With six; of-the revaluations-tho City Council is so dissatisfied that it has moved the Supreme Court to sot thom-aside. ~ ■ • Properties Affected. . ' Theso six properties and their valuations are as follow :— Section 155 to Customhouse Quay, 40ft! by 66ft. 10in., £2 ss. por foot; and Section 156,'45ft. by ■ 66ft. 10in. to Customhouse . Quay and Brandon Street, £3 15s. per foot (Aitken, Wilson, and Co.). Sections 98, 35ft. frontage to La'mbton Quay by a-depth of 70ft., -£5 10s. per foot, and Section 114, 30ft.. frontage to Johnston Street, by a depth of 80ft. (Kirkcaldie and ■ Stains). -~ Section 62a, 32ft. 6in. frontage to. Panama Street by a depth of 80ft., £3 per foot (Hall and-Knight). Section; 66c, 30ft:; frontage to Lambton Quay by average depth of 80ft.; part of 65a, lift. 9in. front-, age to Panama Street and depth of 36ft. 7in., £4 por foot (George and Kersley). ■• '•'. -. 1 -.-. '■•■ ■■'■'■ Section 64a,.'43ft. 4in. frontage • to Lambtoh Quay by a depth of /, 79ft. fronting Panama -Street, and • 66ft. on. other boundary/ averago depth 70ft., £s.per foot. Tho case was 6pe'iv?d in "the Supremo. Court yesterday. /The Chief Justice (Sir Robort Stout) was on the Bench. Mr. T. F.. Martin and Mr. J. JCfShea appeared in support of the motion to set tho revaluations aside. ■■'•The lessees were represented Mr. C. P. Skcrrett, K.C:, with whom was Mr. B. K. Kirkcaldie. '• Case for the City Council. Mr. Martin opened. by referring to George'and Kersloy's lease. He stated thai the' motion was to have the valuation set aside on tho ground that two of the'arbitrators '(William 'Moiiatt Hannay and Alexander M'lntosh) "misconducted themselves," in that they/did not act judicially, and were biased in favour of George and Kersley, Ltd. They had, said counsel, fixed the ground rental at a sum grossly under, what a 'prudent * lessee', .would . /have. ' .given. Moreover, tho awards gave no "rea-. sou" ; they simply,gave .-.the. annual rental. ■ Theso .rentals' were fixed at so low an annual sum (as compared with other similar leases, with similar.conditions as to renewal, and so on) thattho City Council had thought it a duty.to bring the matter before the Court,; particularly as there were a considerable number of other valuations to be made.

The City!;. Council .quite understood that the! ftt ; nStjoiiib"fsiiho.,'.Qourtw ai.not merely to .V^viov//.th : o.;rpntals ; v fqun&?by; tho arbitrator's. /^TKoy.-u^BerXt^oyithat l that .the function award; was' so nowp,insovio^;i6f'-(the''. ; e.vf<' deuce'as to afford that the arbitrators "did .cially;; ■ . y ! His- Honour:. Did".the;three'-,arbitra-tors agree? ' ■.':■•.:'■'''"::■'■-"■' No;* / ;."y;;'.;l His Honour: Then, : . do you appeal against the award of'two' arbitrators? .Mr ..-.Martin: Yes; ' " '"' ' His Honour: The corporation arbitrator did not sign the award? Mr.'Martin: No. ' ' ' . ■ Mr.' , Skerrett': Yes, he sigupfl it. Mr. Martin: Oh,, yes;.' he did. ■ : No "Personal Reflection." Mr. Martin went on to say that the City Council submitted that, on tho evidence, tho ( awards were far too low. ■ Tho council made no personal .reflection on the honour or integrity of tho arbitrators who had decided against Incni.,. .-They used the term "misconduct" 'in>another sense.. His Honour: You say that it is like a jury verdict against, tho weight,.of. evidence?.. .'■'...' \. ... ! ' Mr. Skerrett : 1 don't think that view will satisfy us. . . . ' Mr. Martin, contiivuing, contended that tho evideuce , which ■■,tho City ■Council had submitted."'to;tlie..arbitrator's.w,as. / the best kind of .oyidehcfe--iiamely,' what" other lessees were-'paying/for .similar, leases in tho lieightjburho&i;' :T;he':suitability of the/various;, site's, for.', general-, business purposes should, 'be: looked 'to,. but, in the evidence, before- tho,'arbiWtors, this point-was ignored: , '.■ Something had been said before ,iih& •' •. arbitrators! about the council's figures being .".based? on boom time,■"values,'.'but .tlo...council' had produced, ovitlenc&'to : the .effect -tlyit;. there had .been 'a ' steady , in.', heart-of-city, .valuations. :'for.'' the A last' twenty years.' Fivo peiOcekt; of .the: freehold valuo might bo •tnUe'ri-.' as';a : g\iide—' though not.taken as dennite—rih'assessing the rental. The awards of'tho'arbitrators did not nearly equal a five per cent.'basis., ■ : .. , . Mr. Skerrett: My learned friend commenced by saying that ho attributed no personal misconduct to the arbitrators,., and I submit that, unless he can show misconduct or fraud, the Court has jio jurisdiction. ' •■''..., His Honour said ,'tliat ho presumed that tho corporation '/would say that, owing to some.mistake, the awards wore eudi as should beset aside.

Mr. Martin :■ I would just like to seo what , , would-hanpen if tho Government to tako this land for public purposes. . ■ ■■ .. . :.. . .. . •■■

His Honour: That Tvould.be. as a namesake of yours said, putting the cart before tha.'horse. ■•'■'., Mr. Martin:- The lessees' would simply borrow our evidence.-' Mr. Skorrett: And the Crown would borrow ours. ■■;. . .;,.,■..; ;', . . V The Lessees'' Side,. Mr. Skerrott said that he desired first to point out that, in nearly all of tho cases with which this motion, was coiicorned,' the rent was fixed for :i period of only twelve years. 'In Kirkcaldie's case tne periodniay have been fourteen years, but in Aitken and Wilson's case thelease was to bo put up to auction. Theyiiexfc circumstance was that the arbitrators, were referred to as valuers, and it was submitted that they were not bound to Teceive evidence unless they chose—rthat they might proceed upon their own judgment. This point was of Croat value in considering whether tho Court had power to set aside tho award. Coming to what he termed tho point as to "wilful partiality," Mr. Skorrett said that Mr. Martin had hesitated to cbargo the arbitrators' with dishonesty or wilful partiality, bnt had hinted at nnconsciou* bias. That, however, would not do.. What the council had to establish was wilful partiality, and .there was no evidence of that. The suggestion Was that the judgment and award of tho arbitrators waa such, as no honest arbitrator could arrive at.

Mr. Martin: No reasonable man. Mr. Skorrett: Nα, no. I ■will not accept that.

Mr. Skerrett, referring; to one of the leases, deemed it a stupid one —there was no security of tenure, .' and no

security for improvement. There- was, ho remarked, a great difference between a freehold and this class of leasehold. People would often give;a great deal moro for a freehold than, perhaps, they could niako oiit of it immediately. Could anyone doubt.the bona fides.of Mr. Aitken's■'■offer when ho,. said ::"If you are dissatisfied "with -the "award, take tho building, -take the and give me only the value of tho building" ? Mr. Skcrrett quoted tabulated sets of figures with tho idea of combating the contention that the award was far too low. Mr. ~o'Shea: We will havo to havethis arbitration system wiped one. Mr. Skcrrett: I hope .that Mr, O'Shea won't do anything desperate. Tho City Council, Mr. Skcrrett said, would not get big-rpntals until they gave bettor torms, including a longer period of lease. The question, "What would a prudent man give?" was a vague one, and was subject to differences of opinion. Because the corporation people- considered the/awards too low, why should tho arbitrators be termed dishonest? Tho question was entirely one for. business men. Tho case stands adjourned-till 2 p.m. on Friday.