Kiwifruit growers are taking Gisborne District Council to the High Court for including the licence to grow the gold variety in rating land valuations.
The national body representing growers, NZ Kiwifruit Growers Incorporated (NZKGI), has brought a judicial review proceeding of the decision to the High Court, and is supporting a grower on Bushmere Road, who has lodged an objection to their property valuation before the Land Valuation Tribunal.
Gisborne was the first region to adjust land valuation methods to include the value of the gold kiwifruit growing licence, known as the G3 licence, on the rateable value of the property.
The move has resulted in a rates hike Gisborne growers called "absurd" and inequitable, with reports of rates tripling for some.
NZ Kiwifruit Growers chief executive Colin Bond said it would advocate strongly on behalf of Gisborne growers and recognised the importance of these "precedent-setting" legal proceedings.
Following a preliminary hearing on August 23, Justice Francis Cooke decided to hold off on the judicial review proceedings until the tribunal had made its decision.
The tribunal hearing is expected to go ahead in late November.
In his judgement, Justice Cooke said there would be an advantage in allowing the specialist tribunal that included valuation expertise to proceed first.
His decision to delay the judicial review proceedings was made on the basis that appeals from the tribunal make their way to the High Court where they are heard by a judge alongside an expert valuer.
This is not the case with the judicial review proceedings.
There are 49 growers on the G3 licence in the Gisborne district with over 63 orchards.
The median price for new gold kiwifruit licences this year was $550,000 a hectare, up from $400,000 last year.
NZKGI claims the licences are not part of the land value and alleges that natural justice has been breached, according to Cooke's judgement.
Growers argue that they should have had the opportunity to be heard before the council adopted the policy.
Change to valuation methods in Gisborne followed a meeting between the Valuer-General and valuers in August last year.
According to the judgement, the council adopted the policy following a statement published by the Valuer-General in January "to the effect" that the value of the G3 licences should be included in rating valuations.
Gisborne grower and NZKGI representative Tim Tietjen said they believed the decision to include the licence was wrong because the licence was not attached to the land.
"NZKGI and Gisborne growers have made every attempt to resolve the issue before taking legal action.
"Gold growers will be required to pay significantly more rates because of increased valuations. In some instances, rates have tripled.
"Rates will be significantly higher than seasonal cropping neighbours, who receive the same service."
In submitting to the council's long-term plan hearings earlier this year, NZ Kiwifruit Growers gave the example of a Thompson Horticulture kiwifruit property on Tiniroto Road that was valued at $4.485 million in 2017.
A revaluation of the property in 2020, which included the growing licence, put the property at $13.31m. The proposed rates for that property in 2021/22, including a horticultural remission, is $20,000 - an extra $7700.
Council chief financial officer Pauline Foreman said it would be inappropriate for the council to comment while the issue was before the courts.
The council still had a rates remission policy for horticulture properties with permanent crops, despite a proposal to remove the remission earlier this year.
Following the long-term plan process, the remission policy was modified so that any remission relating to the capital value of the permanent crop must be greater than $100 but not more than $7000 for any one property.