The Daily News. FRIDAY, NOVEMBER 3, 1901. THE VALUATION QUESTION.

Taranaki Daily News, Volume XXIII, Issue 264, 8 November 1901, Page 2

The Daily News. FRIDAY, NOVEMBER 3, 1901. THE VALUATION QUESTION.

A vebt important judgment, in the course of which the method of making valuations that should be adopted was laid down, was delivered in Wellington on Tuesday by the Chief Jusice and Mr Justice Edwards in regard to the appeal of Mr John Duthie from the decision of the Assessment Court, which had upheld the Valuation Department's assessment of the appellant's interest, a3 lessee, in the unimproved value of certain sections in Willis and Victoria-streets. The appellant's lease has 26 years to run, the first four years being being at an annual rental of .£4OB 4s 2d, and the balance of the term at £583 14s 2d. The depart-! ment arrived at appellant's interest in the unimproved value by estimating the unimproved value of the fee simple free of any tenancy at £16,030 reaching the annual value at 5 per cent, thereon, or £BOI ss, deducting from the latter sum the rent actually paid, and capitalising the difference. The Assessment Court, by another process, arrived at the conclusion that the department's assessment was not above the marketable value of the appellant's interest in the unimproved value, and therefore sustained the assessment. l Their Honours, after quoting the technical definitions in the Act, held that the methods adopted by the! Valuation Department and the Court were wroDg, and that tha duty of the department is take the lease and, looking at all its provisions, to ascertain what the unexpired term might be expected to realise by sale if there were no improvement* whatever upon the land, and if such unexpired term were offered for sale on such reasonable conditions as a bona fide seller might be expected to require. In dealing with I the matter upon this basis the improve-1 ments must be put completely out of the question. The land was for this' purpose to be trotted as though it were bare and unimproved at the time when the valuatian was made. To the rental of land as being necessarily equal to 5 percent, per annum upon its capital value (as had been done by the Valuation Department), was clearly to proceed upon an erroneous basis. It was equally clear that to enter (as the Assessment Court had done) upon calculations as to the value of the buildings, the amount required to provide for a sinking fund sufficient to recoup their cost, and the profit rental derivable from the land in its improved state was fallacious and misleading. The appeal was therefore allowed, and the matter was remitted to the Assessment Court with a direction to ascertain the worth of the appellant's interest in the unimproved value of the property in the manner indicated in the judgment.