Interference in land values alleged

Political interference in the valuing of high-country pastoral lease land to force lessees into tenure review, was alleged at the Land Valuation Tribunal sitting in Dunedin yesterday.

Nick Davidson QC made the claim when opening the case for Minaret Station in its dispute with the Commissioner of Crown Lands over the level of rent for the Wanaka pastoral lease, saying the Crown admitted that in its evidence last week.

"The Crown is increasing rent to get tenure review going by forcing lessees to the table. This was expressly recognised [during the Crown's evidence] and at that time it also recognised legislation will have to change. But legislation hasn't changed, yet the Crown has directed a change in approach," he said.

Minaret Station, on the western shores of Lake Wanaka, is appealing changes to the way the land is valued and rent calculated, which includes amenity or non-pastoral values.

The case is being seen by the Crown as a test for the way it values land and sets rents, but lessees say the lease agreement forfeits the Crown's right to rent for those amenity values.

Many say the new rents are unaffordable.

Mr Davidson said the Crown directed land valuers to include amenity values even though it acknowledged the new rents were in many cases not affordable.

He said the valuation method proposed by the Crown was inconsistent with the legislation which, he asserted, dictated that land be valued on pastoral values only.

He said there was a fatal flaw in the application of the statute: ". . . the Crown seeks to impose a rent on values which already belong to the lessee, by virtue of the bundle of rights associated with the lease, including the right of occupation in perpetuity."

Prices paid recently for Mt Soho, Birchwood, Mototapu and St James pastoral leases were based on non-pastoral values; what he called "a foreign element".

Mr Davidson said the 1948 Land Act stated rents should take account of a lessee's ability to pay, and that both parties shared in the income - the Crown as the ultimate owner of the asset and the lessee for their investment and the risk they had taken.

"Whose risk is it? Who is taking the risk and spending all the money? The Crown doesn't. The Crown's only risk is the lessee not paying the rent or not doing it properly, for which they can be booted off."

Claims lessees facing hardship could seek assistance were not allowed for in the legislation.

The Land Act allowed lessees to seek assistance in times of natural disasters, not because they could not afford the rent.

Mr Davidson said the Crown risked creating a major problem if it continued including amenity values.

"It's going to be a problem if it is endorsed. It is going to have a huge practical effect, but also a huge legislative effect, because it rewrites the bundle of rights granted to the lessee by the pastoral lease."