VALUATION BASIS UNDER DISPUTE.

Star (Christchurch), Volume XLIV, Issue 65, 18 March 1931, Page 7

VALUATION BASIS UNDER DISPUTE.

APPEAL made against DECISION OF UMPIRE. Per Press Association. WELLINGTON, March 17. The Court of Appeal is engaged in hearing the case concerning the decision of an umpire in a transaction in which New Zealand Newspapers, Ltd., and Sun Newspapers, Ltd., were concerned. In connection with the purchase by New Zealand Newspapers, Ltd., of property owned by Sun Newspapers, Ltd., at Auckland, valuers were appointed by both parties to assess the value of land and buildings. The valuers having arrived at different estimates, Sir Walter Stringer was appointed to act as umpire for the purpose of fixing the value. In his decision, given on November 20, 1930, the umpire fixed the value at £59.700. Sir Cecil Leys, managing director of New Zealand Newspapers. Ltd., contended that the assessment of Sir Walter Stringer had been made on a wrong basis, and without regard to the facts placed before him.

Mr Johnstone, in support of the motion, said New Zealand Newspapers took the ground that Sir Walter Stringer in making the award had taken an entirely wrong view of his duties and had gone outside the scope of his authority. Counsel submitted that the agreement of September 17 contained a submission to arbitration. Sir Walter was, consequently, acting as arbitrator or umpire in a judicial capacity, not as a valuer. He derived the whole of his authority from the submission to arbitration, and was bound to make his award within the scope thereof. If he went outside it the award might be set aside. The case before the Court also came within the class of case where arbitrators, having admitted they had proceeded on wrong principles of law, the aw r ards made by them had been referred back for reconsideration. Sir Walter had made a valuation which he was not asked to make. He was informed that certain lands and buildings were to be purchased at a valuation of the lands and buildings as they stood at a price which any prudent purchaser would pay for them. Sir Walter had admittedly put upon them the price which was originally paid for them by the vendors, less certain deductions. Sir Walter was bound to take all factors of value into consideration, but by the terms of submission was not to value the subject matter as a going concern. The meaning of this restriction was that it was to be valued as having no

connection whatsoever with the business which was previously carried on there. This restriction had not been given effect to by Sir Walter. He had also adopted a different basis of calculation in making a valuation of the land from that adopted in valuing the buildings. This he had no authority to do, for he was asked to value them together. Even if the award were good on its face value there were two grounds on which it could be set aside or referred back: (1) Excess of jurisdiction, and (2) an admitted mistake by law. TO-DAY’S HEARING. Per Press Association. WELLINGTON, March 18. Argument in the case was continued to-day. Mr Rogerson, in support of Mr Johnstone, submitted that the element of adaptability of the building for newspaper production, which had been a predominant factor in Sir Walter Stringer’s assessment, was only one of the elements which should have been considered by the arbitrator and should not have been made so all-important. It was not suggested by New Zealand Newspapers, Ltd. that the system of valuation advocated by Mr Yaile, their valuer, was the only system to be taken into consideration, but it should have been considered by Sir Walter Stringer and it was not. The mere fact that they called no evidence before the arbitrator did not relieve him of his obligation to act in a judicial capacity. The Chief Justice intervened, saying that all the difficulties in the case arose from a false sense of economy on the part of both parties, for if the parties had been represented by capable counsel before an arbitrator then all the difficulties would have been avoided, and the method of valuation for which Mr Rogerson contended would have been placed before the arbitrator and considered by him. (Proceeding.)