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Property rights in natural resources

Public Property and Private Use Rights:
Exclusive occupation of the coastal marine area in
New Zealand


Keywords: allocation, coastal, exclusive, private, property, public,

occupation, ownership, use, right.

Abstract:

In New Zealand individual rights to occupy the coastal
marine area are conferred under the Resource Management
Act 1991 (“RMA”). Occupation is best understood as a
private use right over public property. While the nature and
extent of coastal occupation rights remains unclear, they do

display a number of characteristics that we would otherwise
identify as belonging to the bundle of rights normally
associated with private property.
Any comparison of coastal occupation rights to private
property needs to be tempered by recognition that the
coastal marine area is vested in the Crown and may not be
alienated under the Foreshore and Seabed Act 2004
(“FSA”). There is also a presumption under the RMA in
favour of public access to the coastal marine area. The
neoliberal approach to land based activities under the RMA
is reversed in the coastal marine area, and private
occupation is prohibited unless allowed by a plan or a
resource consent. Furthermore, the extent to which
resource consents are recognised as being either real or
personal property is governed by the RMA. These statutory
restrictions signal that occupation rights are a statutory
creature in origin.
Nevertheless, when occupation rights are broken down into
their component parts it is clear that they include rights to
exclude, possession, use and transfer. This entitles
consent holders to take actions related to trespass,
exclusive possession and non-derogation of entitlement. It
is clear that occupation rights are not purely statutory or
property based rights. This raises the question, what kind
of rights are they? This paper concludes they are
something new, and might be best considered a hybrid right
that confers both statutory and property rights to a public
resource.

∗ Director, North South Environmental Law, PO Box 37893 Auckland 1151 New Zealand, Tel: +64 9 304 0048 Fax: +64 9 303 2427 Email: rmakgill@nsenvironmentallaw.com
Introduction
In New Zealand the Resource Management Act 1991 (“RMA”) is the prevailing legislative regime for resolving conflicts between the protection and use of the environment. Unsurprisingly, much of the discourse on environmental regulation concerns the extent to which it can be legitimately employed to control the exercise of property rights in order to achieve sustainable outcomes. At its extremes the debate is polarized between those who trumpet “my house is my castle” and those who argue that capitalism is the root cause of environmental degradation. While both camps generate a lot of noise, this is usually a signal that the engine is revving, fossil fuels are burning, but that the transmission has blown and the vehicle is sitting in the middle of the road blocking other traffic. Absolute property rights, as I will discuss, are extinct if in fact they ever existed at all.On the other hand, the neoliberal purpose of the RMA recognises that people should be able to use their property to provide for their social and economic wellbeing while satisfying required environmental outcomes. This paper is concerned with the other side of the property rights coin. I am interested in the extent to which the RMA grants private rights to use public property. I focus on the coastal marine area in New Zealand, over which private rights of occupation can be conferred under the Act. Our coast line measures 18,000 km in lengthand our territorial waters encompass 16.3 1 There have always been limitations on property rights. In the seventeenth century the Court of the King’s Bench considered a plaintiff’s claim that the defendant had erected a too close to his house, so that the stench made his own house unlivable. The Court held the defendant had "no right to maintain a structure upon his own land, which, by reason of disgusting smells, loud or unusual noises, thick smoke, noxious vapors, the jarring of machinery, or the unwarrantable collection of flies, renders the occupancy of adjoining property dangerous, intolerable, or even uncomfortable to its tenants”. See William Aldred's Case (1611) 9 Co Rep 57b; 77 ER 816. 2 Ministry for Environment, Environment New Zealand 2007, December 2007 at 6. million hectares. Our ports are crucial for international trade. Economic activity associated with tourism, boating, fishing, marine farming, and urban development all take place in our coastal marine area. At the same time, access to the coast is guarded by New Zealanders as a birth right. As our population and technological capability grow, so too will the competition for access to our coastal marine area. The RMA sets in place a regime that looks to balance competing demands for access to the coastal marine area by allocating private use rights while preserving public access. Turning the property debate on its head, my paper is concerned with public property and Chapter 1 provides a brief overview of the history and characteristics of private property rights. It is necessary to have something of an understanding of the nature of private property rights before entering into a discussion about the character of rights to use public property. In one sense it helps to have an idea of what something is not in order to gain a full appreciation of what it is. It is equally important, however, to appreciate that absolute property rights were exchanged over time for a bundle of rights approach to property. Property rights were redefined as a collection of rights and duties between people, rather than rights in respect of things. This exchange was principally driven by the growth of intangible property and new social, political and economic forces. It is my view that these forces are still at work (albeit in a different way) and that they help to explain the nature of rights to use public 3 Rennie, H. “Coastal fisheries and marine planning in transition” in Memon, P.A. and Perkins, H. (eds.) Environmental Planning & Management in New Zealand (2000) Chapter 19, 215 to 222 at 216. 4 It is thought that about 30 per cent of the total marine environment experiences some degree of disturbance from human activities. This is sobering when the size of our population (i.e. measured by Statistic New Zealand as at December 2007 to be 4,291,900) is considered against the size of our coastal environment (i.e. at 4.4 million square kilometres it is the sixth largest in the world). See Ministry for Environment, Environment New Zealand 2007, December 2007 at 57. 5 Rennie, H. “Coastal fisheries and marine planning in transition” in Memon, P.A. and Perkins, H. (eds.) Environmental Planning & Management in New Zealand (2000) Chapter 19, 215 to 222 at 216. In chapter 2 I look at the Crown’s ownership of public property. Crown property is held for the benefit of the public, who have certain rights to the use of that property. These rights are not secured as individual rights, but rather as social rights in the use of social resources. In New Zealand the coastal marine area is somewhat contentiously vested in the Crown. There is a presumption against alienation of the coastal marine area. This is akin to the American doctrine of public trust which holds that public land under navigable waters cannot be irrevocably surrendered to private interests. The RMA is concerned with the protection of public access to the coastal marine area. Conversely it is also concerned with the use and occupation of the coastal marine area.Nevertheless, the neoliberal approach to land based activities under the RMA is reversed, and private use and occupation of the coastal marine area is prohibited unless allowed by a plan or a resource consent. In chapter 3 I analyse occupation of the coastal marine area under the RMA. It is clear that occupation confers private use rights on consent holders to exclude other persons from the area of land that is occupied. Bearing in mind the national importance of public access, the Courts have been careful as to the extent of the coastal marine area over which exclusion is granted. In general it would seem that exclusion is granted over the physical space occupied by structures allowing public access to be retained. Nevertheless, there are circumstances where occupation cannot coexist with rights of access, and in these instances public access is restricted. I go on to question the nature of use rights in the coastal marine area and whether they have any of the characteristics of private property rights identified under the first chapter. I conclude that while coastal use rights do have some property characteristics, it is unnecessary to try and label them as either statutory or property rights. They are rather something new, and might be considered a hybrid right composed of statutory and property rights to a public resource. Property as a bundle of rights
It is important to have a notion of what property rights are, where they come from and the form they take in the twenty first century. I intend here to provide a brief overview of private ownership and the system of rights and duties that were eventually codified in most modern jurisdictions as environmental controls. In my view it is evident that our preoccupation with private property rights and the appropriate limitations that should apply to Crown intervention is tied to our identification of property with our freedom and liberty. It is perhaps ironic, as will be discussed later, that our claim to public property stems from a similar set of values. In the seventeenth century John Locke wrote of material objects becoming the embodiment of one’s identity. Your body was your foremost possession. When you utilized your body in the form of labour, and mixed that labour with land, these things became a part of yourself. The product of your labour became your property by natural right as an extension of your liberty, social status and personality. The protection of that property, in the form of state- supported property rights, was a protection of your liberty as well as a definition of the limitations of state intervention in personal affairs. William Blackstone famously characterised property rights in the eighteenth … sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other Blackstone, like Locke, was an exponent of natural law. According to this mode of thought the law needed to conform to certain standards of justice and 8 Krueckeberg, D., “The Difficult Character of Property: To Whom do things Belong?”, (1995) 61:3, Journal of the American Planning Association, 301 at 303 to 304. 9 Schorr, D. "How Blackstone Became a Blackstonian", (2009) Vol. 10, Theoretical morality or it would be invalid. Blackstone saw any wanton interference with the will of a person, whether by a monarch or a popular assembly, as a degree of tyranny. He thought that such tyranny ought to be prevented or resisted through property rights. That meant a non-consenting property owner should be indemnified against the taking of his property by eminent domain, and protected against the physical invasion of his property by the John Austin, writing at the beginning of the nineteenth century, argued that the law did not need to conform to a moral code. Austin was a positivist for whom the law consisted of commands issued through statutes, common law and delegated legislation. He drew a sharp line between the person and things. Property was simply a system of rules governing access to and control of things by persons. Nevertheless, Austin described ownership A right – indefinite in point of user – unrestricted in point of disposition – and unlimited in point of duration – over a determinate thing. In this respect ownership was still viewed as a fundamental right to be given the fullest possible scope. The liberties of the individual and the sanctity of property were paramount. Limitations that did exist were treated as exceptions and interpreted restrictively. 1 0 Sir William Blackstone, “Commentaries on the Laws of England in Four Books. Notes selected from the editions of Archibold, Christian, Coleridge, Chitty, Stewart, Kerr, and others, Barron Field’s Analysis, and Additional Notes, and a Life of the Author by George Sharswood. In Two Volumes.” (Philadelphia: J.B. Lippincott Co., 1893). Vol. 1 - Books I & II, Chapter I: Of The Absolute Rights of Individuals, at 126. Accessed from http://oll.libertyfund.org/title/2140 on 2 June 2009. 1 1 Sir William Blackstone, “Commentaries on the Laws of England in Four Books. Notes selected from the editions of Archibold, Christian, Coleridge, Chitty, Stewart, Kerr, and others, Barron Field’s Analysis, and Additional Notes, and a Life of the Author by George Sharswood. In Two Volumes.” (Philadelphia: J.B. Lippincott Co., 1893). Vol. 1 - Books I & II, Chapter I: Of The Absolute Rights of Individuals, at 139. Accessed from http://oll.libertyfund.org/title/2140 on 2 June 2009. 1 2 Waldron, J., The Right to Private Property, (3rd ed, 1990), ch 2 at 33. 1 3 Dias, R., Jurisprudence, (5th ed, 1985), ch 14 at 301. 1 4 Dias, R., Jurisprudence, (5th ed, 1985), ch 14 at 301. However, from the middle of the nineteenth century the emphasis began to shift away from the individual and towards society. The preoccupation shifted from one’s rights to the wants of others and one’s duties towards them. A person’s use of his property was limited by the interests of others.The definition of property began to shift from absolute dominium over things to a set of legal relations between persons. These legal relations were defined by a bundle of rights and corresponding duties between people in respect of The idea of property as a bundle of rights took hold in the late nineteenth and early twentieth century for two distinct reasons. The first reason was to facilitate a growing economy based on intangible property. Although property as ownership of things worked for an economy based primarily on land and secondarily on tangible goods, the concept did not work very well for an economy promoting new ideas such as business identity, securities for investment, licenses and government benefits. The second reason was to limit private property rights in response to new social, political and economic forces. Such things as urbanization, industrialization, new concentrations of wealth, protectionism and rising standards of living all demanded a redefinition of private property to allow for greater government regulation. These forces led to the rise of the regulatory state in the twentieth century and the development of laws that sought to regulate (amongst other things) the redistribution of wealth and protection of the environment. In simple terms, property rights had transcended both the physical and the individual and transformed into separate and overlapping rights to possess, use and dispose of property. According to the bundle of rights approach to 1 5 Dias, R., Jurisprudence, (5th ed, 1985), ch 14 at 301. 1 6 Arnold, C., “The Reconstitution of Property: Property as a Web of Interests”, (2002) 26 Harvard Environmental Law Review 281 at 286. 1 7 Arnold, C., “The Reconstitution of Property: Property as a Web of Interests”, (2002) 26 Harvard Environmental Law Review 281 at 288. 1 8 Arnold, C., “The Reconstitution of Property: Property as a Web of Interests”, (2002) 26 Harvard Environmental Law Review 281 at 289. property, it is not the resource itself which is owned; it is a bundle, or portion, of rights to use a resource that is owned. Property rights are not rights of people in respect of property, but rather rights of people against other people. Legal relations cannot exist between people and things, because things cannot have rights and duties or be bound by or recognise rules. It is generally accepted that the bundle of rights in respect of property include: the right to alienate (or transfer or dispose of); the duty to refrain from using property in a way that harms others. The two factors identified above as the impetus for the bundle of rights approach to property permeate my thinking on the relationship between “public property” and “private use rights”. This is because it seems to me that while there are new forces at work in the twenty first century, intangible property and social, political and economic change remain the principal drivers behind the emergence of new categories of rights. In respect of public property, these are the rights conferred by environmental legislation that govern the allocation and use of public resources. I will return to this idea later in the paper under my discussion on private use rights. 1 9 Guerin,K., “Property Rights and Environmental Policy: A New Zealand Perspective”, (2003) New Zealand Treasury Working Paper 03/02 at 3. 2 0 Kirkpatrick, D., “Property Rights – Do You Have Any?”, (1997) New Zealand Journal of 2 1 Arnold, C., “The Reconstitution of Property: Property as a Web of Interests”, (2002) 26 Harvard Environmental Law Review 281 at 285. Guerin,K., “Property Rights and Environmental Policy: A New Zealand Perspective”, (2003) New Zealand Treasury Working Paper 03/02 at 4 and 5. Kirkpatrick, D., “Has the Resource Management Act replaced the Property Law Act”, in Intensive Resource Management (2007) New Zealand Law Society at 41. Public property and the coastal marine area
Public property is property which is jointly owned by a whole community of individuals or by a democratically elected government. In Commonwealth countries such as New Zealand, such property is said to be owned by the Crown. There are two types of Crown title to real property or land. Imperium (or sovereignty) is the Crown’s supreme legal and territorial authority over land. Dominium (or radical title) is the Crown’s absolute ownership as The Crown’s ownership of land is generally attended by the expectation that individuals can generally make use of public property. These expectations are variously referred to as natural rights, public servitudes or merely public rights. They are not secured as individual interests but as social interests and may be referred to as the social interest in the use and conservation of social resources. Public rights over the foreshore and seabed are recognised at common law as the rights of navigation and fishing. Although the common law recognised that it is quite possible for the Crown to grant private title over the foreshore and seabed (in respect of its ownership, dominium or radical title), such grants were subject to the public rights of navigation and fishing. Accordingly, the House of Lords held in Malcolmson v O’Dea that since the Magna Carta the Crown could not establish exclusive fishing rights by grant (dominium), and that the public rights of fishery could only be overturned by statute (imperium). 2 2 Boast, R., Foreshore and Seabed, (2005) ch 2 at 14 to 16. 2 3 Pound, R., Jurisprudence (1959) ch 30 at 191 to 192. 2 4 Boast, R., Foreshore and Seabed, (2005) ch 5 at 40 to 41. 2 5 Malcolmson v O’Dea [1863] 11 ALL ER 1155. The Treaty of Waitangi is seen as conferring both imperium (the right to government) and dominium (radical title) on the Crown. However, article 2 of the Treaty acknowledges that aboriginal title (“the full exclusive and undisturbed possession of [Maori] Lands .”) operates as a qualification on the Crown’s radical title. Despite this qualification, there was a general presumption of Crown ownership of the foreshore and seabed as a consequence of sovereignty. In Attorney-General v Ngati Apa, however, the Court of Appeal affirmed that the Crown’s radical title acquired on cession of sovereignty (dominium) was subject to the pre-existing rights of Maori. Sovereignty should not be conflated with absolute ownership and the Crown’s radical title was qualified by Maori property interests even if they did not accord with traditional notions of property law. Richard Boast states that the real significance of Ngati Apa is that the Court of Appeal determined that a very large area of land, composing the foreshore and seabed, long assumed to belong to the Crown in dominium was at least potentially Maori customary land and capable of being Maori freehold land. Immediately following the release of the Court’s decision the government moved quickly to announce that public rights of access to the seabed and foreshore were not going to be compromised. Most New Zealanders are familiar with the subsequent introduction of the Foreshore and Seabed 2004 Act (“FSA”). The principal sections of the FSA Section 13(1) which vests “the full and beneficial ownership of the public foreshore and seabed’ in the Crown “so that the public foreshore and seabed is held by the Crown as its absolute property”; 2 6 Joseph, P., Constitutional and Administrative Law in New Zealand (3rd ed, 2007) ch 2 at 2 7 Attorney-General v Ngati Apa [2003] 3 NZLR 643 (CA). 2 8 Joseph, P., Constitutional and Administrative Law in New Zealand (3rd ed, 2007) ch 3 at 2 9 Boast, R., Foreshore and Seabed, (2005) ch 8 at 79. 3 0 Boast, R., Foreshore and Seabed, (2005) ch 8 at 85. Section 7(2) which provides that “[e]very natural person has access rights in, on, over, or across the public foreshore and seabed”; and Section 8(1) which provides that “[e]very person has rights of navigation within the foreshore and seabed”. The use of the term “public property” in connection to the coastal marine area in New Zealand remains politically if not legally contentious. What is clear is that the FSA vests dominium or radical title over the foreshore and seabed in the Crown. It follows that the Crown is entitled to grant private rights to the foreshore and seabed in return for a rental or charge. That entitlement is subject, however, to statutory rights of public access and navigation under the FSA, which has codified those common law rights. It is also subject to the statutory requirement for the sustainable management of the use of the The foreshore and seabed is described under the RMA as the coastal marine area. The coastal marine area is defined as meaning: [the foreshore, seabed, and coastal water, and the air space above the
water]
Of which the seaward boundary is the outer limits of the territorial sea: Of which the landward boundary is the line of mean high water springs, … The sustainable management of the use of the coastal marine area under the RMA is guided by the principle of public access, and a general prohibition on (amongst other things) use and occupation unless expressly allowed in a 3 1 A review of the FSA was provided for in the Confidence and Supply Agreement between the National Party and the Maori Party. A Ministerial Panel is to provide a written report to the Attorney-General by 30 June 2009. 3 2 Section 2 RMA. 3 3 Section 6(d) RMA. plan or resource consent. I discuss the relevant sections of the RMA in more detail below. I wish to preface that discussion, however, with a brief overview of how other legal codes have addressed public ownership and access rights in the coastal marine area. It is my view that these codes provide both a historical backdrop (and a mirror) to the way in which property in the coastal marine area is provided for under the FSA and the RMA. The idea that the coastal marine area can be used for private purposes is not new. It would seem, however, that there has been an ongoing qualification from at least antiquity that private use may not unreasonably restrict public use. The “Institutes of Justinian”, a body of Roman law assembled in approximately 530 A.D., introduced common property law in the interests of natural resource preservation. This extended to the public the protection of the air, rivers, sea and seashores, which were unsuited for private ownership and dedicated to the use of the general public.In Roman law the shore and the sea were res communes, meaning they were owned by no one but their use was common to all. While the use was public, one could build on the shore to the extent that it did not interfere with a public use. Scholars of legal history believe that the concept of common property spread throughout and was adopted by the common law system of medieval Europe. The English common law (as discussed above) recognised that while the Crown had ownership of the shore this ownership was “liable to general rights of egress and regress for fishing, trading and other uses” by the Crown’s subjects. Indeed “the Crown owned all navigable waterways and the lands lying beneath them as trustee of a public trust for the benefit of the 3 4 Sections 12(1) and (2) RMA. 3 5 Smith, P. and Sweeny, W., “The Public Trust Doctrine and Natural Law: Emanations within Penumbra”, (2006) Boston College Environmental Affairs Law Review 307. Accessed from SSRN: http://ssrn.com/abstract=1081974 on 2 June 2009. See page 3. 3 6 Pound, R., Jurisprudence (1959) ch 30 at 150. 3 7 Hall, R., Essay on the Rights of the Crown and the Privileges of the Subject in the Sea Shores of the Realm, (2nd ed, 1875) at 108. Cited in Sax, J., “The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention”, (1970) Michigan Law Review 471 at 476. people.” It is interesting to note that the public trust doctrine in American jurisprudence arose from the same tenets of Roman law and English common law as those found in our own jurisdiction and which have been codified in the The American public trust doctrine is a creature of both Roman law and English common law, concerning the nature of property rights in rivers, the sea and the seashore.It is unsurprising then that it has its roots in litigation over the preservation of the public’s interest in free navigation and fishing. The seminal public trust case in American law is the decision of the United States Supreme Court in Illinois Central Railroad v Illinois. In this case the Illinois legislature made an extensive grant of submerged lands to the Railroad. Some years later, the legislature repented on its excessive generosity and brought an action to have the grant declared invalid. The Court held that title to the state’s land under navigable waters could never be surrendered irrevocably to private interests. Despite the constitution’s strong recognition of individual property rights, the Court made it clear that there was a general public trust principle that applied to all states at all times. The When a state holds a resource which is available for the free use of the general public, a court will look with considerable scepticism upon any governmental conduct which is calculated either to relocate that resource to more restrictive uses or to subject public uses to the self-interest of private 3 8 Kleinsasser, Z., “Regulatory and Physical Takings and the Public Trust Doctrine”, (2005) Boston College Environmental Affairs Law Review 421 at 423 to 424. 3 9 Sax, J., “The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention”, (1970) Michigan Law Review 471 at 475. 4 0 Illinois Central Railroad v Illinois 146 U.S. 387 (1892). 4 1 The grant was more than one thousand acres comprising virtually the entire commercial 4 2 Smith, P. and Sweeny, W., “The Public Trust Doctrine and Natural Law: Emanations within Penumbra”, (2006) Boston College Environmental Affairs Law Review 307. Available at SSRN: http://ssrn.com/abstract=1081974. See page 10. 4 3 Sax, J., “The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention”, (1970) Michigan Law Review 471 at 490. Since Illinois Central, courts and state legislatures have slowly expanded the public trust doctrine. While once limited to navigable and tidal waters, the doctrine has crept from beaches and rivers to lakes, tributaries, riparian banks, and now encompasses aquifers, marshes, wetlands, springs, and groundwater. The public trust doctrine also includes non-water natural resources and by the late twentieth century, courts had explicitly included such things as beach access and whole ecosystems under the doctrine's In New Zealand private rights to the coastal marine area frequently relate to use and occupation rather than ownership, and the coastal marine area is seldom alienated by the Crown.Indeed under the FSA there is a presumption against alienation of the Crown’s ownership of the coastal marine area except in exceptional circumstances. In any case, it is clear that both jurisdictions share the idea that the coastal marine area should only be alienated in exceptional cases and that the right of public access must be Section 6(d) of the RMA provides for “[t]he maintenance and enhancement of public access to and along the coastal marine area” as a matter of national importance. Marine farming case law has made it clear that public access is not limited to the shoreline, it also extends to the public’s access and use of the sea. The Court has gone so far as to say that any development which prevents free public access to the coastal marine area “amounts to an 4 4 Kleinsasser, Z., “Regulatory and Physical Takings and the Public Trust Doctrine”, (2005) Boston College Environmental Affairs Law Review 421 at 425 to 426. 4 5 Guerin, K., Property Rights and Environmental Policy: A New Zealand Perspective, (2003) New Zealand Treasury Working Paper 03/02 at 31. 4 6 Section 14(1) of the FSA provides that [d]espite any enactment to the contrary, no part of the public foreshore and seabed may be alienated or otherwise disposed of. Section 14(2) provides that “subsectidoes not prevent the alienation of any part of the public foreshore and seabed— (a) by a special Act of Parliament enacted after the commencement of this section; or (b) under sectiof the RMA which provides for the vesting of reclaimed land. 4 7 Sanford (South island) Ltd v Southland Regional Council, C 106/02 (EC). alienation of that public space and must be balanced against other relevant In the decision In Tandem Marine Enhancement v Waikato Regional Council an application for resource consent to control access to 6.6 ha of water column (and charge a licence fee to dive on a ship wreck) was considered as a matter of degree to be significant given that it would restrict “freedom of passage and enjoyment of the public at large”. The Court agreed with opposing counsel’s view that the application represented an important departure from marine farming cases where the public may still gain access for fishing and other purposes without interfering with the activity itself. A pragmatic approach seems to be taken to public access where it comes to working ports and it is accepted practice not to require public access along wharves where ships are to berth or cargo is to be loaded or unloaded. Some commentators have observed that the need for security of private property has been seen as a pragmatic reason for restricting public access. In support of this view they observe that most marinas and piers have security cards and are kept closed during certain hours. However, it is important to note that the Courts have been careful to ensure that there is alternative public access to the coastal marine area where access is excluded. It would seem that there is a presumption in favour of public access to the coastal marine area under the RMA. The Environment Court supported this view in Re Auckland Regional Council, where it held that there is a general 4 8 Thomas v Marlborough District Council, W 16/95 at 17 (PT). 4 9 In Tandem Marine Enhancement v Waikato Regional Council, A 58/00 at 12 (EC). 5 0 In Tandem Marine Enhancement v Waikato Regional Council, A 58/00 at 10 and 13 5 1 Nolan, D. and Kirman, C., “The Coastal Environment” in Environmental and Resource Management Law, (3rd ed, 2005) ch 5 at 325. 5 2 Nolan, D. and Kirman, C., “The Coastal Environment” in Environmental and Resource Management Law, (3rd ed, 2005) ch 5 at 326. 5 3 P W Investments v Auckland Regional Council, A 79/05 at 8 (EC). 5 4 Re Auckland Regional Council, A 109/00 (EC). thread starting at section 6(d) and culminating with section 122(5) (which provides no coastal permit should be regarded as conferring occupation to the exclusion of other classes of persons) that requires “a council to actively address its mind – not to whether public access should be permitted – but to The RMA generally has a neo-liberal approach to the use of private property, which enables activities that promote people’s well-being while creating an obligation to deal with the adverse effects on the environment of those activities. In keeping with this approach the RMA allows landowners to use their real property as they wish unless prevented by a rule in a plan.In the coastal marine area, however, the approach of the RMA is decidedly more command and control in nature. Crown ownership and common property, as discussed, does not always sit comfortably alongside ideas of private Section 12 of the RMA addresses this dichotomy by generally prohibiting all use and occupation of the coastal marine area unless permitted by a rule in a regional coastal plan or a coastal permit. In Golden Bay Marine Farmers v Tasman District Council the Environment Court held that the prohibition emphasises the significance of the coastal marine area to the environment and people of New Zealand, and “provides a statutory presumption against wholesale use and development”. Describing occupation under section 12 Unlike the rest of the RMA, which is not specifically concerned with allocation issues, s.12 does provide for occupation of the CMA. The effect of s 12(2)(a) 5 5 Section 122(5) of the RMA is discussed in more detail under chapter 3. 5 6 Re Auckland Regional Council, A 109/00 at 9 (EC). 5 7 Section 9 RMA. 5 8 Sections 12(1) and (2) RMA. 5 9 Golden Bay Marine Farmers v Tasman District Council, W 42/2001 (EC). 6 0 Golden Bay Marine Farmers v Tasman District Council, W 42/2001 at 47 (EC). 6 1 Golden Bay Marine Farmers v Tasman District Council, W 42/2001 at 47 (EC). is to provide that where a person requires exclusive occupation of space, then a consent is required, unless the occupation is otherwise allowed by the provisions in the plan. This results in a “licensing” type arrangement which provides the occupier of that space the right to exclude others within the terms of the consent. It effectively allocates to the user rights to whatever The Court’s description of occupation is important insofar as it signals the remaining issues to be dealt with in this paper. These are that occupation of requires exclusive occupation of coastal space; results in a licence that confers private use rights on the licensee; and entails the allocation of coastal space. The remainder of this paper considers the following questions: (a) what constitutes exclusive occupation; and (b) does exclusive occupation confer private property rights on holders. I note that there are two further questions that logically carry on from the first two questions. These are: (c) does the RMA have an allocative function; and (d) should the Crown and public be compensated for the conferral of private use rights in the coastal marine area. There is not sufficient room to consider these questions in this paper, and they will need to be addressed at a later point in time. Occupation and private use rights
The term “occupy” has a rather lengthy definition under section 2 of the RMA. It can be abbreviated in simple terms as meaning the activity of occupying any where the occupation is reasonably necessary for another activity; and where it is to the exclusion of all or any class of persons …; and for a period of time and in a way that, but for … this Act, a lease or licence to occupy that part of the coastal marine area would be necessary to give effect to the exclusion of other persons … It is not required for the purposes of this paper to provide an exhaustive analysis of how the definition has been applied in the courts. It is relevant to note, however, that there are three elements to occupation. The first element is that occupation must be reasonably necessary for another activity. In Golden Bay Marine Farmers the Court observed that this requirement effectively separates the activity of occupying from the activity for which the occupation is required. Turning its mind to marine farming the Court held that the activity was aquaculture and that the occupation is by marine farming structures. “It is self evident that the occupation by marine structures of the CMA is reasonably necessary for carrying on the activity of aquaculture”. The first element has been critiqued for being circular insofar as a person being there for itself and no other reason would not be an occupier. In my view this fails to recognise the presumption against occupation of the coastal marine area. Legally use and occupation may be the same thing. This does not undermine the function of the first element, which is to vet whether occupation is reasonably necessary in the circumstances. The second element is that occupation involves the exclusion of other persons. In Auckland City Council v Ports of Auckland Ltd the High Court considered whether a floating pontoon that moved up and down with the tide in a fixed range, due to retaining collars attached to piles affixed to the seabed, amounted to an exclusive occupation of the coastal marine area. The Court held that in reality there was an exclusive occupation of the 6 2 Golden Bay Marine Farmers v Tasman District Council, W 42/2001 at 49 (EC). 6 3 Re Lyttelton Marina Limited, C 104/98, (Environment Court) at 14. 6 4 Auckland City Council v Ports of Auckland Ltd, [2000] 3 NZLR 614 (HC). airspace in which the floating pontoons moved with the tide. The Court It understates the position, as did the respondent in support of its cross- appeal on this point, to say its right is no more than to a priority of use. There can be no shared occupation of that airspace. The position can be likened to the area of movement of overhead telephone wires in Telecom Auckland (see para [78] above). The airspace through which the pontoons move is equally to be regarded as owned by the respondent during the term of currency of its s The breadth of exclusive occupation and its relationship to the presumption of public access under section 6(d) of the RMA is an issue that has been hotly contested in the courts. In Re Auckland Regional Council the council sought clarification on whether a coastal permit in respect of a jetty authorised the holder to exclude members of the public from using the jetty to gain access to, from and along the foreshore. The Environment Court identified the relevant sections of the Act as sections 6(d), 12 and 122(5). Sections 6(d) and 12 are discussed under the preceding chapter of this paper. Section 122(5) provides That the coastal permit expressly provides otherwise; and That is reasonably necessary to achieve the purpose of the coastal No coastal permit shall be regarded as— An authority for the holder to occupy a coastal marine area which is land of the Crown or land vested in a regional council to the exclusion 6 5 The definition of coastal marine area under section 2 of the RMA includes “the air space 6 6 Auckland City Council v Ports of Auckland Ltd, [2000] 3 NZLR 614 at 633 per McGrath J Conferring on the holder the same rights in relation to the use and occupation of the area against those persons as if he or she were a Section 122(5), as discussed above, is a part of the thread of the Act that presumes public access to the coastal marine area, insofar as exclusive occupation must be either expressly stated or reasonably necessary for the purpose of the permit. The Environment Court found that a coastal permit authorising the construction of the jetty structure conferred on the applicant the legal exclusivity of the coastal marine area for the structure, reasoning It would be idle to suggest that the structure itself does not now exclusively occupy the specified parts of the coastal marine area to the exclusion of any other class of persons referred to in s122(5). Those other persons cannot interfere with the structure of the jetty or endeavour to build other structures in However, the Environment Court held that without express provision the coastal permit did not confer rights concerning the air space, over or below the structure or the area of water below the structure. Members of the public were therefore entitled to use the air space, land and water surrounding the On appeal the High Court upheld the decision adding that “the coastal marine area is held by the Crown on behalf of the people of New Zealand as is reflected in the New Zealand Coastal Policy Statement”. The High Court 6 7 It is noted here that the Court of Appeal read sections 122(5)(a) and (b) disjunctively rather than conjunctively. See Hume v Auckland Regional Council, CA262/01 at 8 to 10 per Tipping J (CA). 6 8 Re Auckland Regional Council, A 109/00 at 6 (EC). 6 9 Re Auckland Regional Council, A 109/00 at 7 (EC). 7 0 Hume v Auckland Regional Council, AP.52-SW/01 at 9 per Potter J (HC). See also New Zealand Coastal Policy Statement 1994 at 3: “People and communities expect the lands of the Crown in the coastal marine area shall generally be available for free public use and enjoyment.” went on to hold that all members of the public have a right to use the coastal marine area. The permit authorising the jetty imposed restrictions on the use and enjoyment of that area. The jetty remained the property of the permit holders, but that did not confer any additional rights not specified in the permit. The permit holders could use the jetty structure, not because they own it, but because along with all other members of the public they have a right to use the coastal marine area in which the jetty was constructed. That right applied equally to all members of the public: The right to erect a jetty and to occupy part of the coastal marine area in so doing, is a privilege conferred on the permit holders by the permit; it is a grant out of the crown’s ownership of the coastal marine area which it holds on behalf of all members of the public, and is limited by the express terms of the The High Court’s decision was upheld in the Court of Appeal which added in respect of section 122(5) that the default position in the absence of express provision (or necessary implication) is that public use and access is permitted. The Court of Appeal did note, however, that the public use must not be such that it unreasonably impedes the jetty owner’s use of the jetty to gain access to their property. “The legislation is designed on the basis that public and private access will reasonably and peacefully co-exist”. The idea of what constitutes exclusive occupation has been further defined in two more recent decisions concerning liability for rates. In Waahi Paraone Ltd v Far North District Council the council sought to levy rates on a shop and residential accommodation built on piles over the coastal marine area. The appellant argued that it did not enjoy the degree of exclusive occupation of the property necessary to establish liability for rates. The Court held that the 7 1 Hume v Auckland Regional Council, AP.52-SW/01 at 9 and 10 per Potter J (HC). 7 2 Hume v Auckland Regional Council, CA262/01 at 11 and 12 per Tipping J (CA). 7 3 Waahi Paraone Ltd v Far North District Council, CIV 2003-488-203 per Hansen J (HC). space occupied by the building was exclusively occupied despite the fact that the public had rights of access under the building. In Marlborough District Council v Valuer General the council sought a declaration that mussel farms authorised by coastal permits under the RMA were rateable land. The council argued that mussel farms were land because the coastal permit gives farmers exclusive occupation of the area occupied by the farm componentry on the seabed, water column and airspace above. Referring to Hume the Court observed that section 122(5) of the Act provides that coastal permits do not give exclusive occupation unless expressly stated in the permit, or it is a necessary implication of the grant.In this case there was no express provision for exclusive occupation in the permits, neither was there a necessary implication that the exercise of the rights under the permits The Court also distinguished the case from Ports of Auckland and Waahi Paraone noting that the mussel farm componentry displaced only a small amount of space and could be easily moved. The Court had noted earlier in its decision that permit areas are often shared with other users of the sea including fishermen. The marine farming industry encouraged fishing and provided information on how boats could safely tie up to the mussel farm to facilitate fishing. In essence, beyond the farm componentry there was nothing to stop public use and access to the coastal marine area. 7 4 Waahi Paraone Ltd v Far North District Council, CIV 2003-488-203 at para [34] per 7 5 Marlborough District Council v Valuer General CIV-2006-485-933 per Young J (HC). 7 6 Marlborough District Council v Valuer General CIV-2006-485-933 at paras [17] and [22] 7 7 Marlborough District Council v Valuer General CIV-2006-485-933 at para [49] per Young 7 8 Marlborough District Council v Valuer General CIV-2006-485-933 at para [14] per Young 7 9 Marlborough District Council v Valuer General CIV-2006-485-933 at para [58] per Young The third element to establishing occupation under the RMA is that the occupation is for a period of time and in a way that, but for the Act, a lease or licence would be required to give effect to the exclusion of other persons whether in a physical or legal sense. In Hume the High Court observed that there is an aspect of permanency inherent in the concept of occupation in contrast with a swimmer, who may occupy part of the coastal marine area transiently and impermanently. Likewise in Waahi Paraone the High Court held that visiting a place by foot, swimming and mussel harvesting does not constitute occupation. They involve the exercise of the right of access.And in Hauraki District Council v Moultonthe Environment Court held that sailors exercising their public right of navigation would not be occupying the coastal marine area. However, where the sheer duration of a mooring goes beyond the incidental rights of navigation the mooring is no longer protected by the common law right of navigation since it is no longer temporary. Does exclusive occupation, or for that matter any other allocation of resources, under a resource consent confer a property right? In Hume the High Court held that coastal permits do not grant property rights, “but an authority to occupy part of the coastal marine area for a limited purpose”. This is prima facie a correct statement of the law. After all section 122(1) of the RMA provides that “[a] resource consent is not real or personal property”. It would appear, however, “notwithstanding the broad scope of section 122(1), the reality is that a resource consent is a type of property for some purposes 8 0 Hume v Auckland Regional Council, AP.52-SW/01 at 5 per Potter J (HC). 8 1 Waahi Paraone Ltd v Far North District Council, CIV 2003-488-203 at para [34] per 8 2 Hauraki District Council v Moulton, C 38/97 (EC). 8 3 Hauraki District Council v Moulton, C 38/97 at 12 (EC). 8 4 Hume v Auckland Regional Council, AP.52-SW/01 at 10 per Potter J (HC). 8 5 Kirkpatrick, D., “Has the Resource Management Act replaced the Property Law Act”, in Intensive Resource Management (2007) New Zealand Law Society at 28. In Armstrong v Public Trustthe High Court considered the meaning of section 122(1) and related sections of the RMA. In this case coastal permits for a whitebait stand had been obtained by a father and son. Such whitebait stand permits confer a valuable right, and on the death of his father the son claimed the permits as a survivor of a joint tenancy. Blacks Law Dictionary Real or personal property held by two or more persons with a right of The Public Trust argued that under section 122(1) of the RMA the consent was neither real nor personal property. Furthermore, section 122(2)(a) of the RMA vested the father’s interest in the consent on his death in his personal representative (the father’s daughter). Accordingly, the doctrine of survivorship did not apply. The Court held in respect of section 122(1) that: It is not possible to interpret that subsection as saying that Parliament has set its face against the creation of property rights as incidental to holding consents under the RMA, for that proposition is confounded immediately by The Court identified the remaining subsections of section 122 and the transfer provisions under sections 134 to 138A of the RMA as providing recognition of property rights subject to the statutory limitations contained therein. The Court went on to find that the Act carries within it an implicit recognition of the ordering of private affairs. A joint holder would not expect to be able to dispose of an interest in property on death because the interest would be extinguished. If the joint holders had an agreement to hold to a resource consent in common, however, then they would be able to dispose of that property in their will. This is because section 122(2)(a) allows the sole holder of a consent to dispose of the consent in their will. There was no reason that 8 6 Armstrong v Public Trust [2007] NZLR 859 per Fogarty J (HC). 8 7 Blacks Law Dictionary (8th ed, 2007) at 1253. 8 8 Armstrong v Public Trust [2007] NZLR 859 at 863 per Fogarty J (HC). this would not apply to an interest held in common. In the absence of an interest held in common the common law right of survivorship applied. The Court held that it would “not find that legislature has … intervened to displace the common law as to joint tenancy, by side wind, when pursuing control over Armstrong makes it clear that resource consents can confer property rights on the holder. This interpretation is not without criticism. Specifically it has been argued that resource consents are statutory licences and not subject to common law principles or statutory rules pertaining to real and personal property. They are solely governed by the rules of the statutes that create them and other generic principles of law that do not require for their application a traditional real or personal property right. Nevertheless, when we consider the nature of resource consents conferring rights of allocation and use under the RMA, we find a number of characteristics that we would otherwise identify as belonging to the bundle of private property rights discussed in chapter 1. These include (amongst others) the right to exclude, The “right to exclude” is an owner’s power to keep others out and traditionally it is protected by trespass law, which allows an owner to call the police to remove an uninvited person. Section 3(1) of the Trespass Act 1980 provides that everyone commits an offence “who trespasses on any place and, after being warned to leave that place by an occupier of that place, neglects or refuses to do so”. Section 3(1) of the Act defines an occupier in relation to
any place or land” as meaning “any person in lawful occupation of that place or land …”. Occupation of the coastal marine area under section 12 of the RMA would certainly constitute a lawful occupation for the purposes of the aforementioned Act. As discussed, coastal permits authorising occupation of the coastal marine area can confer on holders varying degrees of exclusivity. At the very least a coastal permit to occupy excludes others from interfering 8 9 Armstrong v Public Trust [2007] NZLR 859 at 864 per Fogarty J (HC). 9 0 Grinlinton, G. “The Nature of Property Rights in Resource Consents”, (2007) 7 Brookers with the space occupied by the structure. At the other end of the spectrum the permit can confer on the holder the right to exclude others from an area of the coastal marine area surrounding the structure. The Courts have been reluctant, however, to allow applications to exclude others from large areas of the coastal marine area, as this has been viewed as contrary to the principle The “right of possession” is the right under which one may exercise control over something to the exclusion of all others.Possession and the right to possession are extremely important in property law not only as the evidence of a claim to the property, but in order to found certain actions. For example, the right to bring an action in trespass is based on the right of possession rather than ownership.The difference between the “right to possession” and the “right to exclude” is that the ability to exercise the latter depends on the existence of the former. For example, in Aoraki Water Trust v Meridian Energy Limited Aoraki sought a declaration that water permits (resource consents) held by Meridian entitling it to the full allocation of water from Lake Tekapo did not operate as a legal constraint on the ability of the regional council to grant others consents in respect of the same water under the RMA. The High Court held that where a resource is already fully allocated in a 9 1 Re Auckland Regional Council, A 109/00 at 6 (EC). 9 2 Auckland City Council v Ports of Auckland Ltd, [2000] 3 NZLR 614 at 633 per McGrath J 9 3 In Tandem Marine Enhancement v Waikato Regional Council, A 58/00 at 10 and 13 9 4 Blacks Law Dictionary (8th ed, 2007) at 1201. 9 5 Farran, S. and Paterson, D. South Pacific Property Law (2004) at 14. 9 6 See for example the concept of exclusive possession in respect of the law of leases. “Exclusive possession allows the occupier to use and enjoy the property to the exclusion of strangers. Even the reversioner is excluded except to the extent that a right of inspection and/or repair is expressly reserved by contract or statute. A tenant enjoys those fundamental, if temporary, rights of ownership that stem from exclusive possession for a defined period. Stipulated reservations stem from that premise. The reverse is true for a licensee. Lacking the right to exclusive possession, a licensee can merely enter upon and use the land to the extent that permission has been given. It is this reversal of starting point that provides the rationale for recognising an estate in the land, in the one case, and a mere personal right or permission to enter upon it, in the other.” See Fatac Ltd (in liq) v CIR [2002] 3 NZLR 648 at 660 per Fisher J (CA). 9 7 Aoraki Water Trust v Meridian Energy Limited, [2005] 2 NZLR 268 per Chisholm and physical sense to a permit holder, a consent authority cannot lawfully grant another party a permit to use the same resource unless specifically The Court interpreted Aoraki’s argument as follows: [A] water permit is a bare licence in that it does not pass an interest or transfer property in anything but only authorises the holder to act in a way that would otherwise be unlawful, by expressly allowing it to take, use or divert water (s 14) … In particular, a consent itself is neither real nor personal property (s 122) and therefore does not confer upon the holder any rights of ownership in the resource which remain with the Crown (s 354). The High Court rejected Aoraki’s argument on three property related grounds. Each relied on the finding that the water permits allocated to Meridian the “right to use” the resource in question. The “right to use” is the right to enjoy the benefits of real property or personal property, whether the owner of the right has ownership of title or not. Where there is no ownership of title the right to use is called a usufruct, which is defined as a “right to use and enjoy the fruits of another’s property for a period without damaging or diminishing Turing to the Court’s grounds for declining the declaration, Chisholm and Harrison JJ found, firstly, that the RMA provides a comprehensive statutory management regime for water allocation and use. The Court reasoned that if Aoraki’s argument was taken to its logical conclusion a council could grant an unlimited number of permits to a resource that had already been exclusively and fully allocated in a physical sense. “[T]his chaotic regime would be the 9 8 Aoraki Water Trust v Meridian Energy Limited, [2005] 2 NZLR 268 at 282 per Chisholm 9 9 Aoraki Water Trust v Meridian Energy Limited, [2005] 2 NZLR 268 at 274 per Chisholm 1 0 0 There was a fourth public law ground based on the doctrine of legitimate expectation. 1 0 1 Blacks Law Dictionary (8th ed, 2007) at 1580. antithesis of the management regime contemplated by the Act”. Second, Aoraki’s argument was found to be contrary to the legal test for determining priority between competing applications. The priority or “first come first served” doctrine was developed to determine procedural priority between competing applications.It was not developed to deal with priorities in terms of the allocation of the resource. Nevertheless, the High Court used the concept of procedural priority to justify proprietary priority, finding that: [T]he Court of Appeal’s adoption of the first-come, first served approach where there is competition for the same resources would be pointless unless it meant that the first permit in time of grant had priority in terms of the right to Third, the Court found that Aoraki’s argument overlooked the fact that a resource consent confers a right to use the subject resource. Indeed the fact that Meridian’s consents were of considerable value was seen as explicable only on the basis that such value derives from the holder’s right to use the property in accordance with its permit. It followed that granting a permit to Aoraki would reduce Meridian’s ability to make full use of the water thereby devaluing its grant. The Court held that: The principle of non-derogation from grant is applicable to all legal relationships which confer a right in property. Common law principles apply to the express provisions of a statute unless Parliament has clearly indicated a contrary intention (R v Secretary of State for the Home Department, ex p Pierson [1998] AC 539 per Lord Browne-Wilkinson at pp 573 – 574). The maxim prevents one party from taking any steps, unless expressly authorised by the relevant instrument (whether statutory or contractual), to interfere with, diminish or derogate from the other's entitlement. Traditionally 1 0 2 Aoraki Water Trust v Meridian Energy Limited, [2005] 2 NZLR 268 at 277 per Chisholm 1 0 3 Fleetwing Farms Ltd v Marlborough District Council [1997] 3 NZLR 257 (CA). 1 0 4 Aoraki Water Trust v Meridian Energy Limited, [2005] 2 NZLR 268 at 278 per Chisholm 1 0 5 Aoraki Water Trust v Meridian Energy Limited, [2005] 2 NZLR 268 at 279 per Chisholm the principle applies to sales of land or leases but it governs all relationships. As Blanchard J observed in Tram Lease Ltd v Croad[24] . . . no one who has granted another a right of property, whether by
sale, lease or otherwise, may thereafter do or permit something which is inconsistent with the grant and substantially interferes with the right of The Court held that the principle of non-derogation is based on an implied obligation on a grantor not to act in such a way as to injure property rights granted by the grantor to the grantee. It considered that Meridian must have assumed that the council would not take any steps during the term of the consents to interfere with, erode or destroy the valuable economic right which the grants had created. Granting Aoraki consent to the water “would either frustrate or destroy the purpose for which Meridian’s permits were granted.” It is important to note that the application of the principle of non-derogation is qualified in Southern Alps Air v Queenstown Lakes District Council which was an appeal against an Environment Court decision that held that granting resource consent to a new commercial jet boat operator would derogate from the rights of an existing operator. In particular, the Environment Court held that the existing operator, if required to cooperate with the new operator in the formulation of a safe operation plan, would suffer interference and labour under the obligations to engage in communications with the new operator. This would be to the detriment of the existing operator’s customers because there would be less time to talk to them. The High Court found that the Environment Court was correct in characterising “these impositions as affecting the use and enjoyment of the resource consent”. However, “these impositions” were “insufficient to infringe the non-derogation principle.” 1 0 6 Aoraki Water Trust v Meridian Energy Limited, [2005] 2 NZLR 268 at 280 per Chisholm 1 0 7 Southern Alps Air v Queenstown Lakes District Council [2008] NZRMA 47 per 1 0 8 Southern Alps Air v Queenstown Lakes District Council [2008] NZRMA 47 at 57 per The High Court found that the Environment Court had approached the issue of non-derogation incorrectly in a number of respects. First and foremost, a wrong legal test was applied insofar as derogation only applies where there is a frustration of a previous grant. The relevant interference must be substantial. In the High Court’s view, the substance of the right was not affected by the incursions that had been identified. Second, the required approach was to look at the rights conferred on the consent holder. In this case the consent holder had not been granted exclusive use of the river in question. For a time the first operator had enjoyed exclusivity, but that was a matter of chance and circumstance. Third, the decision overlooked the fact that the existing operator was always likely to be subject to regulatory obligations related to safety. Finally, the approach of the Environment Court was contrary to section 104(3)(a) insofar as it seemed to accord weight to “Transfer” is the movement of property from one person or entity to another; or the passage of title to property from the owner to another person. Blacks Law Dictionary states that the term embraces every method of disposing of or parting with property or an interest in property. Likewise, in ORD v Calan Healthcare Properties Ltdthe High Court observed that the prima facie meaning of the word transfer was to convey a title, right, or property by legal process. The Crown, as discussed, is prevented from alienating the coastal marine area under section 14 of the FSA. Nevertheless, under section 135(1)(a) of the RMA the holder of a coastal permit “may transfer the whole or any part of the holder's interest in the permit to any other person”. In Armstrong, as discussed above, the High Court held that coastal permits 1 0 9 Southern Alps Air v Queenstown Lakes District Council [2008] NZRMA 47 at 57 per 1 1 0 Blacks Law Dictionary (8th ed, 2007) at 1535. 1 1 1 ORD v Calan Healthcare Properties Ltd (2003) 23 FRNZ 465 per Fisher J. 1 1 2 ORD v Calan Healthcare Properties Ltd (2003) 23 FRNZ 465 at 468 per Fisher J: “For legal purposes “transfer” is relevantly defined as “to make over (property, etc) to another; convey” (Collins English Dictionary Glasgow, Collins, 2001, meaning 3) and “To convey or make over (title, right, or property) by deed or legal process” (Oxford English Dictionary (2nd ed) Oxford, OUP, 1989 meaning 2). confer a limited property right on holders. Considering the limitation under s 122 falls, under the heading “Transfer of consents”. The following sections 134. Land use and subdivision consents attach to land – . . . 135. Transferability of coastal permits – . . . 136. Transferability of water permits – . . . 137. Transferability of discharge permits – . . . 138A. Special provisions relating to coastal permits for dumping and Accordingly, the purpose of s 122(1) is to prevent other transfer of consents, except as provided for in this statute. Subsection (2) of s 122 can then be seen as providing some general qualifications. Paragraphs (a) and (b) deal with the involuntary transfer and para (c) and subs (3) allow the securitisation of consents. Such recognition of property rights is contained. What Parliament has set its face against is the unfettered transfer of resource consents except where specifically provided. [emphasis added] Although the Court recognised a property interest in coastal permits conferring rights to allocation and use, it was clear that the right to transfer that interest is controlled by the RMA. As discussed above, the Court was signalling that property rights in resource consents are in fact recognised under the Act. Those rights are limited, however, insofar as the normal laws of property rights do not necessarily apply. In this case the transfer of those rights is limited to the extent that such transfer is consistent with the sustainable allocation and use of scarce resources under the RMA. That the extent of rights to scarce resources is ultimately governed by the RMA brings me back to the point I make in the introduction to this paper. 1 1 3 Armstrong v Public Trust [2007] NZLR 859 at 863 per Fogarty J (HC). 1 1 4 Armstrong v Public Trust [2007] NZLR 859 at 864 per Fogarty J (HC). While coastal use rights do have some property characteristics, it is unnecessary to try and label them as property rights. A property focused approach to the categorisation to coastal permits, and more specifically rights to occupy the coastal marine area, fails to acknowledge that they are creatures of statute. The rights conferred under the coastal permits are both authorised and proscribed by the statutory regime under the RMA. So if coastal permits are not purely statutory or property rights, what are they? In my view they are something new, and might be considered a hybrid right that confers both statutory and property rights to a public resource. It is arguable that coastal permits are analogous to incorporeal or intangible property insofar as they are rights affecting land and a statutory interest that is capable of transfer. This view is supported in Aoraki Water Trust where the High Court held that a resource consent confers a right to use the subject resource. “In that sense it has similarities with a profit a prendre.”The Court also favorably cited Harper v Ministry for Sea Fisheries where the Australian High Court found that statutory licensing systems are intended to deprive the general public the right to unfettered exploitation of the Tasmanian abalone fisheries. What was in the public domain is converted to the exclusive controlled preserve of license holders. Describing the licenses as a 1 1 5 “Incorporeal hereditaments … are not physical things at all, but rights affecting land which the common law treats as real property. In New Zealand the only incorporeal hereditaments of importance are easements, profits a prendre and rentcharges.” See Hinde, G. McMorland, D., Introduction to Land Law (2nd ed, 1986) at 4. “Alternatively, the terms ‘tangible’ and ‘intangible’ may be used for things which are corporeal and incorporeal. See Farran, S. and Paterson, D. South Pacific Property Law (2004) at 1. Incorporeal property is defined as “legal right in property having no physical existence”, for example patent rights. Intangible property is similarly defined as “property that lacks a physical existence’, for example stock options or business good will. See Blacks Law Dictionary (8th ed, 2007) at 1253. 1 1 6 Aoraki Water Trust v Meridian Energy Limited, [2005] 2 NZLR 268 at 279 per Chisholm 1 1 7 Harper v Minister for Sea Fisheries (1989) 168 CLR 314 per Mason C.J., Deane and 1 1 8 Harper v Minister for Sea Fisheries (1989) 168 CLR 314 at 325 per Mason C.J., Deane This privilege can be compared to a profit a prendre. In truth, however, it is an entitlement of a new kind created as part of a system for preserving a limited public natural resource … [emphasis added] The respective Courts’ comparison of the privilege to a profit a prendre provides a starting point for consideration of statutory licences that confer rights to the use of resources. A profit a prendre confers a right to sever and take from the servient tenement to the grantee’s own use some part of the realty of that tenement which is capable of ownership. In Fitzgerald v Firbank the plaintiffs had been leased "the exclusive right of fishing" in a specified portion of a river. Identifying the right as a profit a prendre the Court held it was of such a nature that a person who enjoys that right has such possessory rights that he can bring an action for trespass at common law for the infringement of those rights. In New Zealand the idea of a resource consent conferring a profit a prendre is debatable in respect of some resources such as water, which arguably is not owned by the Crown. But it is certainly less contentious, at least in a legal sense, when applied to the coastal marine area the ownership of which is vested in the Crown.
While the concept of profit a prendre may provide some guidance as to the nature of the rights conferred under resource consents, we should not mistake a resource consent for a profit a prendre. A profit a prendre is the result of a private agreement between parties, and a resource consent is not the product of an agreement.Furthermore, in the Valuer General decision the High 1 1 9 Hinde, G. McMorland, D., Introduction to Land Law (2nd ed, 1986) at 366: “Common types of profit in New Zealand are to cut and remove timber, or flax, and to remove parts of the soil such as gravel, clay, sand or stone.” 1 2 0 Fitzgerald v. Firbank, [1897] 2 Ch. 96, [1895-9] All E.R 445 at per Lindley J (CA). 1 2 1 Fitzgerald v. Firbank, [1897] 2 Ch. 96, [1895-9] All E.R 445 at 448 per Lindley J (CA). 1 2 2 Grinlinton, G. “The Nature of Property Rights in Resource Consents”, (2007) 7 Brookers 1 2 3 Section 13(1) FSA. 1 2 4 Marlborough District Council v Valuer General CIV-2006-485-933 at para [88] per Young J (HC): “Nor can a coastal permit be seen as an “agreement”. Such a permit is granted Court held in the case of coastal permits that exclusive occupation does not give rise to an interest in land. In the Court’s view if a resource consent created an interest in land it would be real property and this, in the Court’s view, would amount to an alienation prohibited under section 14 of the FSA.It is interesting to note in passing here that according to at least three legal definitions alienation requires the transfer of title. Nevertheless, in Harper the High Court was careful to point out that statutory licences are “an entitlement of a new kind”. In Aoraki the High Court recognised that the water permits were “of considerable economic value”. Likewise, in Valuer General the High Court favourably cited an environment Court decision that said resource consents are “primarily a bundle of economic rights”. It seems reasonably clear that in Harper and Aoraki, as in the other aforementioned decisions, the Courts have recognized the emergence of a new kind of right that is conferred under a statutory regime, but which confers on the holder valuable interests in - and use of - publically owned resources. While recognizing that these are statutory rights, the Courts have struggled to deal with the fact that there is scant statutory direction on how the economic interests in these resources should be dealt with. Not surprisingly the Courts have sought to employ the laws of property as the loadstar for navigating uncharted territory. as a result of a judicial process applying facts to the law and reaching a conclusion, often in the face of competition between a number of parties.” 1 2 5 Marlborough District Council v Valuer General CIV-2006-485-933 at para [35] and [61] 1 2 6 “[A]ny transfer of real estate short of a conveyance of title is not an alienation of the estate.” See Blacks Law Dictionary (8th ed, 2007) at 80. “[T]he transfer of title to real property, voluntarily and completely. It does not apply to interests other than title.” Accessed from http://dictionary.law.com on 2 June 2009. “Alienation is an act whereby one man transfers the property and possession of lands, tenements, or other things, to another. It is commonly applied to lands or tenements, as to alien (that is, to convey) land in fee, in mortmain.” Accessed from http://www.lectlaw.com on 2 June 2009. 1 2 7 Aoraki Water Trust v Meridian Energy Limited, [2005] 2 NZLR 268 at 279 and 280 per 1 2 8 Marlborough District Council v Valuer General CIV-2006-485-933 at para [41] per Young Private property rights can assist to characterize the nature and extent of rights to use resources allocated under the RMA. They need to be adapted, however, in order to recognize that rights to public resources are a privilege that carry with them a unique set of duties. This should not be seen as an insurmountable challenge. As one economist states: Property rights are not immutable. They appear, evolve and vanish in response to economic, societal and environmental pressures and do so within institutional frameworks which differ geographically and over time. The extent to which a rights structure offers advantages over alternatives eventually And so this paper comes full circle to my comments at the end of chapter 1. It seems to me that as with the evolution of the bundle of rights approach to property in the nineteenth and twentieth century, intangible property and social, political and economic change are the principal drivers behind the emergence of new categories of rights. The enactment of the RMA has resulted in a situation whereby environmental legislation confers rights to allocation and use of public resources that have the look and feel of private property rights. These rights are intangible insofar as they are creatures of statute. While they have economic value they do not create an interest in land. They are a response to social change insofar as we recognise that freedom in the commons brings ruin to all. Without a mechanism for determining who has rights to the resource we end up with a situation where each user will take as much of the resource as they can to make gains in the immediate term to the expense of the longer term.
Recognising that resource consents confer valuable economic rights to use public resources is a starting point from which we can begin to determine the 1 2 9 Guerin,K., Property Rights and Environmental Policy: A New Zealand Perspective, (2003) New Zealand Treasury Working Paper 03/02 at 10. 1 3 0 Hardin, G., “The Tragedy of the Commons” (1968) Vol.3 Science 1243 at 1244. price that should be placed on that right. If we are to confer private rights to the coastal marine area, and for that matter any other public resource over which the Crown has ownership, then the Crown and by inference the public should be compensated for the loss of access. Furthermore, the payment of rentals for the occupation of the coastal space could play an important role in ensuring that the limited spaces of the coastal marine area available for occupation are granted to users who value that space most.These are issues of allocation which have not been able to be addressed in the space allowed by this paper. Nevertheless, they raise important questions such as whether the RMA has an allocative function, whether the RMA creates a presumption that a rental should be paid for occupation and whether the First Schedule of the RMA is the most effective mechanism for determining price. These are questions that remain to be addressed. Conclusion
It is clear that private property rights can play a significant role in helping us to define the nature and extent of rights to occupy the coastal marine area under the RMA. If we are to use private property rights as a basis of interpretation, however, we need to acknowledge that they are not absolute. An absolute conception of property rights is inappropriate in the context of public property. It also fails to recognise that absolute property rights have not existed in any form since at least the middle of the nineteenth century. We supposedly live in an enlightened age where we are not defined by our relationship to property, but rather our relationship to one another. Those relationships are composed of a bundle of rights which inform us as to the legal nature of relations between people in respect of things. Separation of property into 1 3 1 Guerin,K., Theory vs Reality: Making Environmental Use rights Work in New Zealand, (2004) New Zealand Treasury Working Paper 04/06 at 9. 1 3 2 Auckland Regional Council, Section 32 Report: Coastal Occupation Charges, 4 July 2007 at 4: ‘Two key principles can be identified: firstly that private occupation of public space is a privilege not a right; and secondly that any person who obtains a private benefit from a public resource should be required to pay some form of ‘compensation’ to recompense the public for that private use and loss of public space.” 1 3 3 Palmer, J. Crengle, H. and Sinner, J., Implementation Failure: Resource Rentals for the Occupation of Coastal Space Ecologic, Research Report No. 5 November 2005 at 2. these component parts enables us to identify those characteristics of coastal occupation rights that share a private property heritage and those that do not. We must bear in mind, however, that the coastal marine area is held in Crown ownership and it is only through special legislation that title can be transferred into private ownership. Furthermore, the Crown holds the coastal marine area in a form of trust on behalf of all New Zealanders. Public rights to access the coastal marine area are recognised under both the FSA and RMA. Furthermore, the laissez faire approach to land use under the RMA is reversed in the coastal marine area, and private occupation is prohibited unless allowed by a plan or a resource consent. It only seems to be in rare cases that the applicants are granted exclusive occupation of the seabed, water column, surface and airspace surrounding an activity or structure in the coastal marine area. It must also be recognised that the extent to which resource consents are recognised as either being real or personal property is governed by the RMA. Together these statutory restrictions provide a strong signal that the occupation rights to the coastal marine area are conceived of a It would be a mistake, however, to treat the rights conferred under resource consents as solely actionable through public law. This would be to ignore that occupation rights have an economic value that arises quite independently of the statutory instruments from which they derive. Markets invariably develop where new forms of property evolve (whether tangible or intangible) and are perceived to have economic value. Property rights provide the framework through which we can possess, use and dispose of property. They are not immutable and continue to evolve and vanish in response to technical and Occupation rights under the RMA bear some of the characteristics of property rights insofar as they include: the “right to exclude” access to the public; the “right to possession” against the claims of other parties; “right to non- derogation of use”; and the “right to transfer” of the resource consent. There is no fundamental contradiction between these property characteristics and the management of scarce natural resources under the RMA. In this light it is suggested that it is possible to conceive of occupation rights as a new entitlement, which might be best described as a hybrid right that confers both statutory and property rights to a public resource. That right has neither the full attributes of a statutory entitlement or a property right. It is not yet complete and further statutory guidance may be necessary, unless its nature and extent is to be defined by the Courts. Whatever the case, the emergence and redefinition of statutory and property rights into private rights to use public resources need simply be regarded as a response to a changing environment.

Source: http://www.nzcel-conf.auckland.ac.nz/papers/Makgill_Robert.pdf

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