The Principle of Valuation. Section 32.

When the Bill was in Committee of the House of Representatives these words were added to Clause 32: "And the estimated value of all property or interests in property included in such statements shall be the sum it might be expected to bring if offered at public auction for cash." This established a standard of value, but it may be doubted whether it is as clearly expressed as it might have been. The intention was to say that a thing should be valued at what it would sell for if submitted to public competition, its price not being enhanced by giving long terms, page 6 Some ingenious folks attempt to argue that cash means that on the fall of the hammer the money must be paid, just as you see done in small auction rooms in large cities, where watches and jewellery of doubtful value are put up as often as a few people are decoyed in by a boy who takes up his stand on the footway. Cash before delivery is insisted on. This cannot be in any way taken as the signification of "cash," but the term would be held to mean payment at a short date, say a month, or thereabouts. "At public auction" must not be taken to be a knock-down sale without reserve, but rather a public sale on fair notice. This is undoubtedly the common-sense view to take of the question, and it is not likely that a Court of Reviewers, or any other Assessment Court, would give these words a different interpretation. This provision gets rid of a difficulty that was more than once referred to when the Bill was introduced, viz., that a man might have some things which he would not sell, and if he assessed them at the rate at which he valued them, i.e., the price which he would take, he would have to put down a sum out of all proportion to the marketable value. Now, he need not assess a family picture at what he prizes it at, but at the figure it might be expected to bring by auction as a work of art. The difference would not unfrequently be more than nominal. This will set at rest the minds of collectors of pictures, books, manuscripts, rare coins, old china, postage stamps, &c. They need not appraise their collections at what they would take, but at what others would give.

The correct interpretation of this provision has the most important bearing on real property. Undoubtedly in assessing a £200,000 freehold, cash could not be held to mean coin of the realm paid on the fall of the hammer, but cash at a month or on completion of title. Indeed, in estimating the value of a large estate the assessor would consider whether it would sell best as a whole or cut up into smaller properties, and no owner who reads the Act fairly would think of claiming that the assessment of an immense freehold should be what it might be expected to realize if offered at public auction in one lot for cash in the room. Some may assess themselves in that way, but Reviewers, who will be well-informed and clearheaded men, would decline to endorse such a valuation as correct.