Court of Appeal sets aside licence over Coromandel “paper road”

Background

The Court of Appeal case concerned a 40 year licence granted by the Hauraki District Council under the Local Government Act 1974 (LGA) to Oceana Gold (New Zealand) Limited, authorising the construction of ventilation shafts on an unformed road within the Wharekirauponga Forest.

While the surrounding forest is Crown conservation land, the unformed road is owned by the Council. Oceana Gold sought a licence from the Council for ventilation shafts to support its underground gold and silver mining operation, thereby avoiding the more restrictive “access arrangement” regime that applies to mining activities conducted on conservation land.

The core issues: public nuisance and the public’s right of passage

An environmental group, Ours Not Mines Ltd, challenged the licence by way of judicial review, arguing it was unlawful. The High Court dismissed the challenge, accepting that the road was so remote and difficult to access that the proposed mining infrastructure would not give rise to any practical interference with public rights of passage.

In its 40-page judgment, the Court of Appeal took a different view. Its analysis centred on two core principles:

1. Roads are to be held on trust for a public purpose: Although local authorities own the freehold estate in roads, they hold them on trust for the public purpose of passage.  
2. The “appreciable interference” test: Drawing on previous cases, the Court reaffirmed that the decisive question is not how often a road is used, but whether an obstruction amounts to an “appreciable interference” with the public’s right of passage. A local authority may not authorise an obstruction that amounts to a public nuisance.

Why the licence was unlawful

The Court concluded that the scale and duration of the proposed mining works crossed the threshold into an unlawful public nuisance. The main factors considered were:

1. Significant footprint: The structures and fencing would occupy approximately one third of the road’s width.
2. Extreme duration: A 40‑year licence was described as “very lengthy” and far removed from the kind of temporary or minor encroachments tolerated at common law.
3. Legal status prevails over physical reality: An unformed road has the same legal status as a busy urban street. The mere fact that the licensed area is remote does not entitle a council to effectively remove public land from use for decades at a time.

The Court of Appeal declared that the Council’s decision to grant the licence unlawful, and noted that:

“The public right to pass and repass remains the paramount consideration. Unformed roads have full legal status and the public may not be unreasonably obstructed even if the road is unformed and seldom used”.

Key Takeaways

1. Common law powers persist: The LGA is not an exhaustive code. While local authorities retain the common law right to grant licences, they do not have the power to authorise a public nuisance.
2. Interference is a consideration, scale and permanency are key: While the degree of interference is context‑dependent, scale and semi‑permanence can be decisive. Significant and enduring obstructions will seldom be lawful, regardless of how infrequently a road is used.
3. Procedural integrity is essential: If a road is truly no longer required, the proper course is to pursue the formal road‑stopping process, rather than attempting to licence across public rights.

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Disclaimer: The content of this article is general in nature, does not constitute legal advice and should not be relied upon for that purpose.  Parties should seek specific legal advice tailored to their circumstances before acting on any of the matters discussed.