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Lobby Groups Misunderstand High Country Rental Ruling

Source: High Country Accord media release
Lobby Groups Misunderstand High Country Rental Ruling

The decision of the Land Valuation Tribunal in Dunedin not to include amenity values such as lake and mountain views when setting rents for high country farms does not change the law, or disadvantage the public in any way, says the High Country Accord.
“It simply reaffirms that the process used for setting rents since 1948 is correct and that the decision of the last government to change that process was incorrect,” says Accord chair Jonathan Wallis.
Mr Wallis, who is also co-owner of Minaret Station at the head of Lake Wanaka, challenged the rental valuation of the station in the Tribunal.
“The Tribunal’s decision has not reduced Minaret’s rent but substantially increased it.  But the increase reflects the market for a prescribed use,” he says.
“The assertion by Forest & Bird that the Government should appeal or ‘risk losing millions of dollars of taxpayers’ money’ is nonsense.
“This is not a case of the Crown missing out on rent, or farmers getting a windfall gain, rather it is a case of the Court applying the law to a form of tenure that has been in place since the 1948 Land Act. Similarly the assertion by Forest & Bird that the Land Valuation Tribunal decision ‘severely reduces the extent of public ownership of the high country’ has no basis in fact or law.”
Mr Wallis says it is imperative to understand that rent review valuations are carried out on a different basis to tenure review valuations. It must also be understood that tenure review does not involve the alienation of Crown land, but is a review of the tenure of land that is already alienated from the Crown.
“The job of the Tribunal was to ensure that the annual rent for Minaret Station was set in accordance with the Land Act. This is a prescribed process, quite different from any normal valuation of a house or commercial property.”
He says under this process valuers are required to ascertain the value of the land after excluding the improvements which have been made to that land by farmers themselves.  In some cases these improvements go back 150 years.
The Land Act then applies a set rental to that land ‘exclusive of improvements’.  The Land Act also excludes a number of elements that would otherwise be included in a capital value for open market or sale purposes and focuses on the fact that the land has been leased by the Crown to farmers for pastoral farming.
“The farmer’s rights under a pastoral lease are held in perpetuity. The Crown’s interest is subject to these rights granted to farmers. One of those rights is to have the rent fixed in the manner determined by the Land Act, and not in a manner which suits those who have a particular axe to grind from time to time,” Mr Wallis says.
“The assertion that amenity values which are excluded from the rental value become lessee improvements is incorrect. The Land Valuation Tribunal decision does not disturb the balance of property rights granted by the Crown to farmers, it merely confirms that the rental value has to be fixed in the manner set out in the Land Act and for a specific purpose -- pastoral farming.”
Statements made last week by other interest groups reflect the misunderstanding that Crown land is public land to which the public have an automatic right of access. The High Court confirmed just a couple of months ago in the Fish & Game case that this is not the case and that pastoral lease land has been alienated from the Crown, and that farmers are entitled to occupy their land free of public interference provided they comply with the terms of their leases.
“The public’s remaining interest in the land is to ensure that the land is managed in an environmentally sustainable manner.  That is also the common interest of high country farmers and is backed up by extensive provisions of the Land Act and the Crown Pastoral Land Act,” Mr Wallis says.
“It is surprising that even now following such clearly expressed decisions of the High Court and the Land Valuation Tribunal commentators such as Forest and Bird should so misconceive and thus mis-state the correct position.
“I consider the current Government is clear in its understanding that what is a matter of contract between the Crown and the farmer, a business agreement if you like, is not a political issue to warrant some other method of rent setting unrelated to the purpose of a pastoral lease. This is simply a matter of contract.”
In the face of this Government’s apparent recognition of the rationality of the lessee’s case it would be a huge about-turn to appeal a decision they have publicly welcomed as closure to an issue which, in the case of Minaret Station, has been going on for six years, he says.
“The rental formula introduced by the previous government has been a huge threat to the successful pastoral operation of Minaret and most other high country leases. It has resulted in a period of great uncertainty and distress to the lessees.
“The courts do not respond to policy. They determine the meaning of legislation and apply that meaning to the facts. That is what has happened in the Minaret case.”


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