The ruling could have major ramifications for the industry.
The case concerns the Bushmere Trust, which owns a 5.859 hectare property northwest of Gisborne. The Trust holds a licence from Zespri to grow sell SunGold, Gold3 or G3 kiwifruit.
The Land Valuation Tribunal held that the value of the licence needed to be deducted from the capital value of the property, putting its value at one equivalent to that of a green kiwifruit orchard.
The Gisborne District Council, supported by the Valuer-General, appealed that decision, taking it to the High Court.
The High Court ruled that the capital value (the price paid for an asset or group of assets) includes the value of the land as enhanced by the licence.
“Accordingly, under the Ratings Valuations Act 1998… the rateable value of the property includes the value of the SunGold licence,” the court ruled.
This would mean that the property value includes the value of the licence.
NZKGI chief executive Colin Bond says his organisation is disappointed by the decision.
He says NZKGI has advocated strongly on behalf of growers and recognises the importance of these proceedings as they are precedent-setting.
“Increasing industry costs can make the kiwifruit industry a less attractive investment and reduce growers spend in local communities, ultimately impacting upon economies across New Zealand,” says Bond.
He says Gisborne growers return over $80 million to the Gisborne economy and should be supported by their council.
“In 2022, growers paid a median of $921,150 (incl. GST) per hectare for SunGold licence.”
“The result is not just an issue for kiwifruit growers in the Gisborne district as the decision could be wide-ranging with other councils across New Zealand indicating that they will follow suit,” says Bond.
He adds that the case has been eagerly watched by other sectors of the horticultural industry who are concerned other local councils might adopt a similar approach.
“NZKGI will continue to advocate for growers in this space and seek leave to appeal from the High Court for this test case.”
Horticulture New Zealand chief executive Nadine Tunley says her organisation supports NZKGI’s decision to appeal the ruling.
“We are concerned that this ruling could be applicable to councils across New Zealand and expanded to other licenced crops.”
