ACTION CONDEMNED

Nelson Evening Mail, Volume 77, 28 August 1942, Page 3

ACTION CONDEMNED

STAMP DUTY OFFICIAL

HOTEL LICENSE VALUATION Wellington, Aug. 27. Severe condemnation of the conduct of tlie Commissioner of Stamp Duties in connection with the assessment of I the value of ,he license of the Manchester Hotel, Feilding, for the purpose J of death duties, is contained in a judg- ; ment given in the Supreme Court bv l the Chief Justice (Sir Michael Myers) ; His observations, said his Honour, were j made in what lie considered to be a ■ j strict sense of duly, and were made with great pain and regret; but in his j opinion, the conduct of the Commisj sioner was not the way a high officer ’ of a revenue Department should con- , duct the business- of the Department : The case was cne in which Mrs i Louisa Maria Barrett, of Wellington, j widow of the late David Prideaux Bar j rett, retired hotelkeeper and admin--1 istratrix of his estate, appealed against i an assessment made by the Commissioner Mr D Perry appeared for the . appellant, and Mr P B Broad for the , respondent. Mr Barrett died on 15th 1940 He was the owner of the Manchester Hotel and the land, for which the Government valuation as at .'list March, 1932, was £4500 (unimproved ' £2711). That valuation did not inj elude the value of the license and the j goodwill connected with it. The pre- ! mises had been leased by Mr Barrett ■ to Harold Percy Standing for five vears ■ from Ist September, 1938, for the sum of £IOOO and an annual rental of £IO4O. In her returns under the Death Duties Act the appellant put in the | Government valuation of £4500 (undisputed by the respondent), and in the same returns claimed that the value ' of the license and goodwill was £3OOO. For the purpose of assessing death duty, the Commissioner determined * that the value of the license and goodwill was £BOOO and that the total value was therefore £12.500. He assessed death duties accordingly, and the ap- , pellant’s objection way disallowed To his Honour, Mr Broad said he I could not contend for more than £SOOO j as the value of the license. : His Honour: Why did he make it i £BOOO then? j Mr Broad replied that the CommisI sioner was prepared to give evidence j in support of £BOOO, but bad brought j down his personal value slightly. ■{ His Honour: Well, it’s very amazing. 1 If he’s prepared to give evidence that .• it’s worth £BOOO. he should adhere to : £BOOO I can’t understand it. Mr Broad said the Commissioner had not expressed any agreement to reduce ■ his valuation, but on the evidence coun. - sel could not contend for more than £SOOO- - CASE His Honour said that m a previous case, heard in May last, he had occasion to condemn the course taken by the present respondent. “I very much regret that his conduct in this case also calls for severe condemnation.” he continued. “Mr Broad, at the commencement of the case, very properly admitted on the evidence which was available to him, and which he has [ since called, it was impossible for him ! to ask the Court to assess the value of : the license of the Manchester Hotel at a higher amount than £SOOO. The assessment was made by the respondent Commissioner in September, 1940. at ; £BOOO. His method of arriving at that | assessment may have been all very 1 well as some kind of test or guide, ; but it certainly was no more than that. ) The value of the license of a hotel is j a matter to be ascertained from mer- | chants or agents or other persons deal- { ing in that particular class of property, j “I do not sav that the respondent i may not have been justified in the first place in making his assessment, but obviously it was a wrong method of valuing a license. In August. 1941. he obtained a valuation from an agent. Mr Baker, who is put forward, and rightly so, as an expert in this class of business, and that expert reported to the Commissioner that he valued the license at £5009. It would have been quite competent for the Commissioner to obtain other valuations had he thought fit; but be did not. lie knew then, as he admitted in Court, that if the matter went further and had to be dealt with by the Court he would have to rely on Mr Baker as a witness. I asked him the question, why then did j lie not in August, 1941, reduce his asi sessment to £SOO0 —that is to say. make | a reassessment and inform the apI pellant accordingly. His reply, to my i astonishment, was that he did not coni ceive it to be his duty to do so. 1 “I then asked him a question which 1 he answered, and his answer explains why he did not do what I consider was his plain duty in August. 1941 His j answer was that he expected to have j negotiations for a settlement, and j meantime ho retained his assessment |at £BOOO That is not the way in I which in my opinion, a high officer ; of a revenue Department should coni duel the business of the Department. Tu say the least, it is not fair ! “Now I come to the question of value. 1 and the witness who has impressed me I most is Mr Small The other witnesses ; Mr Baker and Mr Harcourt. have been ! quite fair ifi the evidence they have ! given, but my own view is that the i witness upon whom one may most rely j is Mr Small. He has valued the license .of this hotel al £4(500 I think that that, is about right, and I accept his valuation. The appeal will be allowed The Commissioner’s assessment will be reduced by £3400 that is. from £BOOO to £4600. and I allow costs against the respondent, twenty-five guineas and disbursements. I repeat that the obser vations that I have considered myself called upon to make are made in what I conceive to be a strict sense of duty, and they are made with great regret and pain ”—P A.