ASSESSMENT COURT

Patea Mail, Volume LIII, 18 April 1932, Page 4

ASSESSMENT COURT

OBJECTIONS TO VALUATIONS. A sitting of the Assessment Cou:t was hold at Patou on Frida}' before Mr. J. H. Salmon, S.M. Mrs. IV. Wills objected to the valuation of £.‘U) on her property, a shop and dwelling, situated in Egmont Street.

Mr. L. W. Austin, Town Clerk and borough valuer, gave evidence with regard to tiro compilation of the valuation roll, which he produced. Mr. Ecbcrts, who appeared for the objector, said that the building laid been let at tho rate of £1 per week. The actual rent was not the measure of the value. Other circumstances went to show that the rent was not always a fair one, one way or the other. The Borough Council some time ago had condemned the building and the owner had had to spend all the rent received and more on repairs. The present position was that an endeavour had been made to let the building at £1 per week, but so far nothing definite had been done. The owner and the mortgagee had offered to let the property on a basis of £1 per ■week on condition that the tenant improved the property and deducted the cost out of tho rent. The building at present was in an insanitary state. Why the building should be valued so highly when for a period of six years it had only been occupied for three years and seven months, ho did not know. It seemed inequitable to rate the property at its full value when it had been unoccupied for so long. He submitted that there should be some deduction, say on a basis of Ids per week rent.

Mr. F. W. Hamel, who appeared for the Borough Council, said the owner,’s inability to collect the rent was lio concern of the council. 'The Eating Act said that the annual value should he the letting value less 20 per cent. The council had taken 25 per cent, off.

His Worship said he would see the property before giving his decision. The Bank of New South Wales, the Bank of New Zealand, and the Bank of Australasia each objected to their respective valuations. The Bank of Australasia was rated iit £IOB, the Bank of Now Zealand at £175, and the Bank of New South Wales at £145.

Mr. Eoberts, who appeared for the objectors, said this year’s valuations were an increase in the ease of the Bank of Australasia of from £l4O to £1()S; in the ease of the Bank of New South Wales from £127 to £145; and the Bank of New Zealand from £l4O to £175. All the buildings were old buildings. The increases were reasonable to a certain extent, owing to the increase in the value of the town of recent years. In the present year of depression to increase the valuations on a weekly basis seemed to be out of all proportion to the progress of the town and country. He submitted that it would have been more fitting to decrease than increase the valuations. If they could ascertain the real market Jetting value of any business building it would be an easy matter for the valuer to fit the value of the banks, but in this ease there was nothing special to indicate their letting value. Comparisons with the various grocery businesses were inequitable, owing to the goodwill attachable to their businesses. Pulley’s garage might form a basis of comparison, but they and to remember that Pulley’s garage uas a new building, whilst the banks were all old buildings. The capital value of the Bank of Australasia was £1633, the Bank of New Zealand £2OOO, and the Bank of New South Wales £1294, so allowing for the minimum value of five per cent, of the capital value, it would be found that all the banks were overvalued. The town, Mr. Eoberts claimed, had not gone ahead, and letting values had retrograded rather than advanced. The fact that theic wc.ie no new buildings showed there was no demand for them. The value of the banks was due to skill and not to the site value. There was no goodwill to ho taken into consideration. If a reduction in rents all over New Zealand were brought about, as suggested, then the present valuations would be too high.

His Worship: “I cannot take notice of prospective legislation.” H. A. Findlay, manager of the Bank of Australasia, stated that he had been manager for nearly 12 ycais. There was no demand for now buildings in the main street. In the past 12 years Pulley’s garage was the only building that had been erected in the main street. Pulley’s garage was built in concrete and was practically fireproof. The bank was at least 40 years old. Sonic years ago the bank’s architect had condemned the bank building, but owing to the high cost of material it had not been rebuilt. The residential quarters were draughty and riddled with borer. If the bank were vacated it would not be worth much.

His Worship said that was not the point. He had to assess the value of the building as a bank. He had been called upon to find the value of a racecourse. which was of no use for anything but a racecourse. If the banks went out of business the buildings would be of no use at all, that was the position.

Continuing, the witness said the increases in the valuations of recent years had been due to the high price of produce and rents going up. Personally he thought instead of the values going up they should go down. Some time ago he had received instructions from the bank’s superintendent to endeavour to get till rates reduced. The value of the building in his books was set down at £I2OO. To Mr. Hamel: He could not say there were any vacant shops except the old cycle shop. He admitted fheic

were three shops in Deane’s building, where previously there was only one. He knew of the alteration to the Patca Butchery’s buildings, where another shop was added. It was on witness’ recommendation that objection was made to the valuations. He was emphatic on the point that valuations should come down and not go up. A. G. Thompson, manager of the Bank of New Zealand, said he had been two years and three months in Patea. Generally speaking, Mr. Findlay’s evidence was correct. Witness’ bank was 49 years old and going back as a building. 'The borer was in the building. The bank’s rental value of the building was £IOO a year. Like Mr. Findlay, he did not think there was any justification for an increase in rates.

To Mr. Hamel: The value of £IOO a year was fixed by his head office. Witness could not say when the building was painted. To His Worship; Witness did not challenge the value last year. C. V. Herbert, manager of the Bank of New South Wales, said he had been ~>l years in Patea. Ho valued the building at £I2OO. He could not understand the reason for the increase in the value. To Mr. Hamel: 'The value of £I2OO was fixed about six years ago. The bank fixed the rental value at £IOO a year, based on the amount they would have to pay for rent if the premises wore burnt down. The building was painted recently, otherwise h would have fallen to pieces. Mr. Hamel suggested that His Worship should inspect the buildings before giving a decision. The valuations had been increased to do away with an anomaly. It would either have been necessary for the valuer to reduce a large number or raise a few, and he had done the latter. Other values had been raised, but no other objections had been received.

L. W. Austin, borough valuer, in evidence, stated that in making the values ho had attempted to remove the anom alios. Had they left the banks alone they would have had to reduce the ma jority of values in the town. Other properties had boon written up in the past, and tbc banks left. The Bank of Australasia had a frontage of 43 feet, the Bank of Now Zealand had a frontage of 4(5 feet, and the Bank of New Bouth Wales had a frontage of 49 feet. The Chain Stores, with a frontage of 108 feet, was valued at £273, Deane's building, with a frontage of (56 feet was valued at £198; Haworth and Harris' building was valued at £139; Roots' cash and carry store, with a frontage of 22 feet, was valued at £9B; E. A. Adams' shop, with a frontage of 40 feet, was valued at £156; Mrs. Lawson's property, of 33 feet, was valued at £lO7. In comparison with other properties, the banks were in an excellent state of repair. If the bank values were reduced it would bo very unfair to nine out of ten of the other ratepayers in the town. The' whole of the valuations were increased in 1929, with the exception of the banks, which were not touched. They were left at the 1928 value, and this year he had put £2B additional value on the banks. He valued the banks on the basis of residence and banking chambers. The dwelling portion was worth at least 35s per week. There was a good demand for dwellings. They had the case of one dwelling ccpial to about one room in the bank, and it was let at 18s per week. The rental value in the case of the dwelling portion of each bank was fixed at £9l and the office portion in the case of the. Bank of New Zealand £B4, Bank of New South Wales £54, end the Bank of Australasia £77. To Mr. Roberts: The value of the banks had been too low for years in the past. Witness did not think there would bo much value attachable to goodwill. In the case of Deane’s building the rents of the shops were very small. In witness’ opinion the banks would have no difficulty in letting their buildings as flats or converting them into shops. It was unfair for one building to be rated differently to another if the rental values were equal. The banks had been too fairly treated in the past. They could only compare. the banks Avith other businesses. There Avas no demand for offices in the town, but there was a demand for shops. He could not admit that shops were kept filled to keep other businesses out of the town. Structurally he Avo.uld consider the banks as good now as the day they Avere built. Nine out of ten of the houses in the toAvn Avere oldfashioned, and they were still fetching high rents. It was more than probable that it AA’as an oversight in 3929 when the values of other properties than the banks were increased. Witness had not made the valuation last year or the banks’ values would have been increased. Witness honestly thought that people AA-ould pay 33s per week for the banks for residential . purposes. Rents in Batca Avere most decidedly high. He objected to the suggestion that the banks Avere fair game. He had not dismissed his reasons for increasing the values Avith anyone. 'To His Worship: The general increase that had gone on in I’atca properties in recent years had applied to all properties except the banks.

'To Mr. Hamel: He denied absolutely that he had thought the banks fair game.

His Worship: 1 have no doubt Mr Austin has done Ids work conscientious ly and well. This concluded the evidence.

His Worship said the court, when viewing properties, did so not for the purpose of making evidence, but of comparing evidence. The court then adjourned to inspect the properties.

After having viewed the properties. His Worship said dealing first of all with Mrs. Hill's objection, the case presented some difficulties, as the condition of the property was certainly not good. He would not say too much, except that in his opinion the property

deserved the attention of the Health Department. It was hard to say what was a reasonable and fair valuation for such a building. They had it that (he property had been lot at £1 per week, and it was also clear that for a considerable time the property had remained unlet. It was quite dear that the property in its present state would not let at £1 a week. He thought it would bo fair to value it at los or 16s, a week. Ho would therefore fix an arbitrary value for the property of £32 a year.

With regard to the banks, their valuations did not present so great a difficulty, but there was no basis to guide a court as to what figure the properties would let at from year to year if they were vacant. The court must he guided by the value of similar properties in the town. What struck him was the remarkable jump in the valuations to- £2B. Mr. Austin explained lids by the fact that he was faced with anomalies in the valuations of (he buildings. Ho was bound to say the banks had made out a good case, but lie did not propose to disturb the values below those of last year, as the hanks h'ad not objected to these, and he must therefore presume they were fair and reasonable. He proposed to fix the values as follows: Bank of Australasia £l4O, Bank of New South Wales £127, and Bank of New Zealand £143. These were the valuations prior to this ye'ar’s valuation. Mr. Roberts applied for costs.

His Worship said it was not usual to grant costs. The Town Clerk and valuer had done his work fairly and conscientiously, and he would not grant costs.