Kiwifruit growers have won their court battle to stop Gisborne District Council from including valuable kiwifruit licenses in grading assessments – Photo/File
Kiwifruit growers have won their court battle to prevent Gisborne District Council from including valuable kiwifruit licenses in grading assessments.
A test case brought by Gisborne kiwifruit grower Tim Tietjen’s Bushmere Trust, backed by NZ Kiwifruit Growers Incorporated (NZKGI), was heard at the Land Valuation Tribunal in Gisborne last November and the decision was handed down this week.
The case challenged Gisborne District Council’s triennial tariff review decision for 2020, in which the council deviated from long-standing and accepted practice by including, for the first time in New Zealand, the value G3 Gold Kiwifruit licenses in all taxable values for gold. licenses for kiwifruit in the future.
The decision to include Gold kiwifruit G3 licenses as an “improvement” – i.e. “all work done or for the benefit of the earth” – follows a meeting between the new service providers of board evaluator, Lewis Wright, and evaluator general Neill Sullivan.
The equity valuation on the 5.85ha property in Tietjen Bushmere Rd, Gisborne has risen from $1.65m to $4.1m.
About 3.11 ha of the property is covered with orchards, which were converted from the green variety to the golden variety before 2018.
The council’s decision angered kiwifruit growers and raised concerns at NZKGI that other councils might follow suit.
The NZKGI said the council, having identified what it might have seen as a “cash crop”, was trying to leverage successful growers’ business decisions to increase their tariff revenue.
The court’s decision this week in favor of the producers, while not strictly a binding precedent, should be a strong deterrent to other councils trying to apply a similar scoring methodology in the future as it is a a court ruling on the illegality of including G3 licenses for rating assessment purposes.
The court found that the Zespri Gold kiwifruit license could not legally be included in the valuations because it was not an improvement or benefit to the land.
Rather, the license is a speculative investment on the part of the grower – profits are not guaranteed and there are historical cases of kiwifruit disease crippling the industry.
Additionally, any new owner needs a new permit, and when the permit has been transferred and the Gold vines have been removed, the remaining rootstock can be used to grow other species without a permit.
Ultimately, the court concluded that the Kiwi Gold license represents only another aspect of the value of the orchard business (such as staff, facilities and machinery) and therefore could not be included for the purposes. property assessments.
He concluded that the capital value of Tietjen’s property for the district’s reassessment under the Rating Valuations Act was $2,800,000 – none of which should include the value of his kiwi fruit license.
NZKGI chief executive Colin Bond said “a council singled out the orchardists in an effort to levy significantly higher rates on their private intellectual property contracts which smack of unfairness and appeared to be local government targeting the successful businesses based on their performance rather than the value of their land”.
He said the kiwifruit sector had a lot to do recently.
“The industry has struggled in recent years with Covid-19 restrictions and related labor shortages and shipping delays. Growers continue to adapt to demands around increased regulation of cultivation, labor, reporting, monitoring and spraying requirements for their orchards,” he said. .