"FAIR" & "BASIC" RENT

Evening Post, Volume CXXXVI, Issue 71, 21 September 1943, Page 7

"FAIR" & "BASIC" RENT

POWER OF THE COURT

Whether the Court, 911 an application under the Economic Stabilisation Emergency Regulations, 1942, by a landlord or tenant for an order determining the fair rent of any property subject to the regulations, has power to fix a fair rent in excess of the basic rent as fixed by the regulations, is one of two questions on which decision has been reserved by the Full Court. The second question is that if the Court has that power, what principle or principles would be followed in fixing a fair rent. On the Bench were the Chief Jusr tice (Sir Michael Myers), Mr. Justice Blair, Mr. Justice Smith, Mr. Justice Fair, and Mr. Justice Northcroft. The plaintiff was the Otago Harbour Board (Mr. A. C. Stephens, Dunedin) and the defendant Mackintosh Caley Phoenix, Ltd., biscuit,. manufacturers, Dunedin (Mr. G. G. G. Watson, with him Mr. F. M. Hanan, Dunedin).

The facts of the case as outlined by Mr. Stephens were that a property was leased to the defendant by the plaintiff for a term of fourteen years from April 21, 1929, at a ground rent of £612 a year. The rent was fixed by valuers appointed by both parties, with a provision for submission to an arbitrator in the event of a disagreement. Under the National Expenditure Adjustment Act, 1932, the rent was reduced by 20 per cent, to £489 12s, and that was the rent payable at September 1, 1942, when the stabilisation regulations made it the basic rent. At the expiration of the lease, following a practice, the rent was valued at £680 a year and put up for auction at that figure. The defendant was the only bidder and he bid £680, without prejudice to his right to invoke the basic rent. Unless altered by the Court, the rent remained at £489 12s. The regulations covered every property except dwelling-houses.