High Court confirms Council powers to grant licences over road reserve

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Environmental / Resource Management

High Court confirms Council powers to grant licences over road reserve

It has been a longstanding practice for councils in New Zealand to grant licences to occupy parts of the legal road that they control, provided that the licence preserves public access and does not create a nuisance.  However, the precise basis for issuing licences over road has not always been clear, given that there is no express statutory power relating to the issuing of such licences.

The recent HC decision of Ours Not Mines v Hauraki District Council [2024] NZHC 63 provides useful clarification of the existence and origin of this power (i.e. it stems from the common law rights the local authority has as landowner) and its limitations.

Ours Not Mines Limited (ONM) challenged a decision of the Hauraki District Council (HDC) to grant a licence to occupy (LTO) a paper road to mining company, Oceania Gold (New Zealand) Limited (OGL).  The unformed paper road was in a remote location, covered in dense bush and surrounded by conservation land in the Wharekirauponga Forest.  The LTO was sought as part of a proposal to carry out exploratory drilling and mining beneath the Forest.  As part of the proposal, OGL intended to construct up to four eight-metre high evasés, or ventilation shafts, on the paper road for the 40-year duration of the mining permit, and required permission from HDC as the owner and controller of the road to occupy those areas. The maximum licence area surrounding each evasé did not obstruct the full road, and became smaller following a construction phase. The licence included provisions for an unobstructed margin for public passage within the road around the licensed area, remediation and rehabilitation works, and monitoring following the closure of the mine. The decision to issue a LTO was a landowner approval – it did not authorise the construction of the ventilation shafts or any other mining activities.  The proposal also required resource consents.  While OGL had obtained resource consent to carry out the exploratory drilling, the mining proposal, including the construction of the ventilation shafts, was part of an ongoing resource consent process involving several consent authorities, including HDC.

ONM argued that HDC’s decision to issue the LTO was unlawful because:

  • The Local Government Act 1974 was a complete code of the powers of a road controlling authority and it did not confer any express power to issue a LTO;
  • The LTO created a public nuisance because it impeded the ability of the public to pass over every part of the road;
  • The duration of the licence and its terms which in substance enabled some exclusive use of the licensed areas meant that the licence was a lease (all parties agreed that it is unlawful to lease the surface of the road);
  • The LTO was not granted for a roading purpose and was therefore issued for an improper purpose.

Justice Harvey rejected the judicial review on all grounds.

Lawful authority to issue a LTO

His Honour confirmed that HDC’s authority to grant a licence over its land, including road, stemmed from the common law right of any landowner to grant licences over their land. The Court dismissed ONM’s argument that the road controlling powers in the Local Government Act 1974 constituted a complete code of HDC’s powers in respect of the road, rather, finding the Act conferred broad powers on the Council to undertake work in respect of the road which goes beyond the types of things landowners could do without regulatory approval. Powers under the Act do not preclude the more general common law rights the HDC had as landowner.  His Honour agreed that the ability to grant LTOs over parts of the road was recognised in ss. 341 and 357 of the LGA74, and was also supported by the powers of general competence of a local authority, confirmed by s.12 of the Local Government Act 2002.

The Court agreed with  HDC that while it has lawful authority to license parts of the road, that power is subject to an important limitation – it must not unreasonably interfere with the public right to pass and repass over the road, which would create a public nuisance.  

Was there a public nuisance?

Justice Harvey agreed that the right to pass and repass applies equally to paper roads as it does to formed roads, and therefore that the principles of public nuisance apply to both.  However, His Honour rejected ONM’s argument that any obstruction, other than something fleeting in time or effect, would constitute a public nuisance.  Justice Harvey said that the particular circumstances must be considered, and what may be an unreasonable obstruction on a formed road in an urban setting will not necessarily create a public nuisance on an unformed road in a remote rural setting. Here the impossibility of vehicle access, and difficulties and infrequency of pedestrian access were relevant factors in considering whether the licence makes the road “less commodious” and whether the encroachment is reasonable in duration and effect. Considering that the assessment must be alive to the context, the Court found that the inconvenience, if any, to the public will be limited, owing to the infrequent use and the terms of the LTO which preserved the ability of members of the public to use the road in the same manner (i.e. by foot) as they were able to use the road prior to the issue of the licence. Therefore, the Court held that the licence did not create or authorise a public nuisance.

Licence or Lease?

The Court found that the licence did not amount to a lease. This was supported in part by express provision in the licence to the right of the public to pass and repass over the road reserve, the terms of the agreement being more consistent with the Council retaining exclusive possession, the limited nature of the rights granted, and the ability to terminate the licence if appropriate consents and permits were not held. His Honour found exclusive possession of a small area of the whole cannot convert what is fundamentally not a lease into a lease. The Court found it must be possible for a landowner to authorise the construction of structures on its land via a licence without the land below those structures being considered leased to the licensee.

Improper Purpose

ONM submitted that even if there was power to grant the licence, it was improper for the Council to do so to permit the construction of mining infrastructure. The Court found that argument was tied to the argument that the Council could only exercise powers in relation to the road for roading-related purposes. As the power to issue a licence was a common law right, it is not restricted to being exercised for a particular purpose, except possibly by general Local Government Act 2002 principles.

ONM argued the licence was sought to circumvent the statutory access regime for mining on conservation land. The Court found no ground of review would link that allegation to any error in the Council’s decision.  His Honour also confirmed that it was lawful for HDC to leave consideration of the environmental effects of the proposal to the separate resource consent process.

Brookfields represented the Hauraki District Council, with David Neutze and Lisa Wansbrough appearing.

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