Court of Appeal Judgments of Public Interest

Administrative law — judicial review — right to refuse to undergo medical treatment — whether actionable procedural obligation on public decision-maker to consider Bill of Rights issues when making decisions — mandatory relevant consideration — New Zealand Bill of Rights Act 1990, ss 5 and 11 — Health Act 1956, pt 5A

In 2022 the Director-General of Health acting under pt 5A of the Health Act 1956 issued letters to 14 local authorities directing them to fluoridate their drinking water supplies. Although the Director-General complied with and detailed his consideration of the mandatory criteria under the empowering provision of the Health Act, neither the Director-General’s letters nor the appendices annexed to them made any express reference to the Bill of Rights. The fluoridation directions, however engaged the right to refuse medical treatment under s 11 of the Bill of Rights.

In June 2023, New Health New Zealand Inc issued judicial review proceedings against the Director-General and the Attorney-General challenging the directions. The essence of New Health’s error of law argument was that the Bill of Rights created an actionable process obligation on all actors caught by s 3 to undertake a Bill of Rights assessment whenever protected rights were engaged, meaning the Director-General erred in failing to turn his mind to the right to refuse medical treatment and justify his decision under s 5 of the Bill of Rights.

Given its novelty, the error of law ground was isolated in the High Court and dealt with as the following question of law: “Is … there an obligation in a procedural sense on those to whom the [Bill of Rights] applies to consider the application of the [Bill of Rights] if their exercise of power might engage a protected right?”.

In November 2023, Radich J answered in the affirmative. The Judge confirmed the existence of such an actionable process obligation which he held was owed by all public decision-makers and which if breached would render their decision unlawful independently of whether the decision itself was rights-consistent. Although the Health Act did not explicitly mandate consideration of the Bill of Rights, a protected right was engaged, meaning the Director-General was required to turn his mind to whether the directions were in each case a reasonable limit on the right to refuse medical treatment and be satisfied that they were. Failure to treat the Bill of Rights as a mandatory relevant consideration rendered the Director-General’s decision to issue the directions unlawful and that was so regardless of whether it was in fact compliant with the Bill of Rights.

In a relief judgment issued in February 2024, the Judge ordered the Director-General to reconsider the decision while keeping the directions in place. In December 2024, the Director-General concluded that fluoridation of water was a substantively justified limit on the s 11 right and reconfirmed the directions.

Despite the appeal being moot with no practical effect on the dispute, the Crown appealed the November 2023 High Court decision given its legal significance. A Full Court heard the appeal.

Did the High Court err in ruling that the Director-General’s decision to issue the water fluoridation directions was unlawful because he failed to address the restriction on the protected right to refuse medical treatment and consider whether that restriction was justified under s 5 of the New Zealand Bill of Rights Act 1990? Held: Yes

French P, Courtney, Katz and Thomas JJ: Having reviewed New Zealand Supreme Court authorities — and United Kingdom authorities affirmed by the Supreme Court — the better view was that the actionable process obligation adopted by the High Court was not part of New Zealand’s current law. Absent an express provision in the empowering legislation requiring a s 3 decision-maker to consider the Bill of Rights, the Bill of Rights was not generally a mandatory consideration. Substantive compliance with the Bill of Rights was the touchstone of illegality, rather than the process by which the administrative decision had been reached.

Although adopting the novel actionable process duty might heighten awareness of the Bill of Rights, any benefits that might result from recognising such a stand-alone duty were limited and far outweighed by well-founded concerns of practicality, undue formalism, doctrinal confusion and uncertainty.

The High Court therefore erred in finding that through a failure to expressly undertake a Bill of Rights assessment prior to issuing the directions under s 116E of the Health Act, the Director-General acted unlawfully.

Mallon J (dissenting): Mallon J agreed with the High Court that an actionable process obligation arose and would have dismissed the appeal. In her view, unless the empowering statute under which the discretionary public power was exercised clearly excluded it, the Bill of Rights gave rise to both a stand-alone procedural requirement and a substantive constraint on a public decision-maker.

The appeal against the High Court decision of 10 November 2023 is allowed.

The ruling that the first appellant’s decision to issue the water fluoridation directions was unlawful because he failed to address the restriction on the protected right to refuse medical treatment and to consider whether that restriction was justified under s 5 of the New Zealand Bill of Rights Act 1990 is set aside.

We make no award of costs in relation to the appeal.

The costs award made by the High Court in favour of the respondent is set aside, and the costs paid to the respondent refunded.

Presumption of resulting trust. Presumption of advancement. Adult children. Transferor's intentions. 

The appeal is dismissed. The appellants must pay the respondents costs for a standard appeal on a band A basis together with usual disbursements. 

In 2012, Ms Liao purchased a residential property in Glen Innes, Auckland. Her parents, Mr and Mrs Liao (the appellants) contributed 10 per cent of the purchase price. Ms Liao said that the funds were advanced to her as a gift. Mr and Mrs Liao said, to the contrary, that the funds had been advanced on the basis that the property would belong to them. They bought proceedings alleging that Ms Liao held the property on resulting trust. 

Did the Judge err in treating the presumption of advancement as applying to adult children? Held: No. 

In New Zealand the presumption of advancement has continued to be recognised with respect to adult children. The Court considered the decision of the Canadian Supreme Court in Pecore v Pecore which held that the presumption of advancement no longer applied to adult children, being predicated on parental obligation to support children. Parents had no legal obligation to support their adult children, so adult children should not benefit from a presumption of advancement. However, the Court preferred the reasoning of Abella J, in dissent, to the reasoning of the majority in Pecore. The Court held that the presumption of advancement reflects the unique relationship between parent and child and the fact that the emotional ties underpinning that relationship endure regardless of age. While the parental relationship does involve moral and legal obligations, it is not reducible to them. The uniqueness of the relationship justifies a presumption that parents who advance money to their children can be assumed, absent contrary evidence, to have intended to gift them that money. 

On the facts, was the presumption of resulting trust displaced? Held: Yes

Woolford J in the High Court was satisfied that the presumption of advancement applied, such that the funds should be treated as a gift to Ms Liao. However, this Court was satisfied that the evidence was sufficient to rebut the presumption of resulting trust without recourse to the counter-presumption of advancement. Given the surrounding circumstances, it was inherently unlikely that Mr and Mrs Liao would have become interested in buying an investment property in New Zealand at the relevant time. Moreover, Ms Liao had contributed a significant amount of equity to the property and taken on a substantial mortgage liability. It was implausible that she would have done this with the sole purpose of improving her credit score (as submitted by the appellants). Some of the advanced funds had been borrowed from Ms Liao's brother (without Ms Liao's knowledge). The appellants subsequently asked Ms Liao to pay her brother back, which she did. There was no obvious reason for her to have done so if she had no interest in the property. Further, the Court was satisfied on the balance of probabilities that it was Ms Liao and her husband who met the shortfall between the rent and the mortgage, not the appellants. Again, there was no obvious reason Ms Liao would have met the shortfall without an interest in the property. The Court attached no significance to the fact that there were no contemporaneous documents describing the advance as a gift: there was no evidence before the Court that previous gifts made by the appellants had been documented. 

Criminal practice and procedure — extension of time — conviction appeal

On 26 March 2020 Mr Tarrant pleaded guilty to 51 charges of murder, 40 charges of attempted murder and one charge of engaging in a terrorist act.  He was convicted of those 92 offences immediately upon pleading guilty.  On 27 August 2020, Mr Tarrant was sentenced to life imprisonment without parole.  On 3 November 2022, Mr Tarrant filed a notice of appeal against his convictions and sentence.  His notice of appeal was filed 505 working days out of time.

The hearing in this Court was confined to Mr Tarrant's conviction appeal and his application to extend time to appeal those convictions.  After the hearing, Mr Tarrant filed a notice of abandonment, advising the Court that he no longer wished to pursue either his conviction or sentence appeal and the accompanying extension of time applications.

Issue one: should Mr Tarrant be permitted to abandon his applications for extensions of time and any resultant appeals?
Held: No, in part.  An appellant loses their absolute right to abandon their appeal once the hearing of the appeal has commenced.  Once this occurs, wider public interest considerations become relevant.  Mr Tarrant's application and conviction appeal are of significant public interest, and so we decline Mr Tarrant leave to abandon his application for an extension of time and any resultant conviction appeal.  Different considerations apply to Mr Tarrant's sentence appeal.  This was not addressed at the hearing, and so we accept Mr Tarrant's notice of abandonment to the extent it relates to his sentence appeal.

Issue two: should Mr Tarrant's application for an extension of time to bring an appeal against his convictions be granted?
Held: No.  This Court does not accept Mr Tarrant's evidence about his mental state.  There were inconsistencies in Mr Tarrant's own evidence, and his evidence is at odds with the detailed observations of prison authorities and the assessments of mental health professionals at the time of him entering his pleas.  His evidence is also at odds with the evidence of his two very experienced trial lawyers.  The only evidence in support of Mr Tarrant's case was given by Witness B, a clinical psychologist.  However, Witness B's opinions were significantly undermined both by the fact that the basis upon which he was asked to assess Mr Tarrant's state of mind was not borne out by the evidence, and by his responses to the Crown's questions in cross-examination.

Mr Tarrant's guilty pleas were voluntary.  He was not coerced or pressured in any way to plead guilty.  The evidence overwhelmingly demonstrates that he was not suffering any significant psychological impacts as a result of his prison conditions at the time he pleaded guilty.

Ultimately, Mr Tarrant's proposed conviction appeal is utterly devoid of merit.  Mr Tarrant has also failed to adequately explain the delay in filing his notice of appeal.  His own evidence was that his health started to improve well before November 2022, and prison records show that Mr Tarrant had almost unlimited access to lawyers.  While this Court accepts that Mr Tarrant was not able to find a lawyer who was willing to accept his instructions to file a notice of appeal, he was aware of the process of filing a notice of appeal and had no difficulty personally doing so in November 2022.  This Court does not accept his claims that he believed two other lawyers he had instructed were going to file a notice of appeal on his behalf.  The overall interests of society and the administration of justice also favour declining the application to extend time to appeal.

Local Government — Powers — Mining — Roads— Public Nuisance

The Hauraki District Council (the Council) owns an unformed or paper road running through the Wharekirauponga Forest, which forms part of the Coromandel Forest Park. The forest (apart from the unformed road) is Crown Land administered by the Department of Conservation. The road itself is indistinguishable from the surrounding forest.

Oceana Gold Ltd (Oceana), a mining company, holds a mining permit in respect of the Wharekirauponga orebody, which is located directly beneath the Wharekirauponga Forest. However, that permit only covers exploration and mining activities that occur beneath the surface of the land. The permit does not authorise any mining activities or infrastructure on the surface. In order to conduct surface-level work or build structures on the surface, Oceana Gold must secure separate property rights (such as a licence to occupy or a Department of Conservation access arrangement) together with any necessary resource consents.

Oceana proposes to develop a mine beneath the Wharekirauponga Forest. The mine requires up to four ventilation shafts for health and safety purposes. The final footprint of each of these vents would be approximately 100 square metres, and possibly up to 150 square metres. Rather than applying to the Minister of Conservation for an access arrangement to enable it to build these vents in the Wharekirauponga Forest, Oceana instead entered into a licence with the Council enabling it to construct the ventilation shafts on the unformed road running through the forest. The licence is for a 40 year term.

Ours Not Mines Ltd (ONM), an environmental interest group, challenged the Council’s decision to grant a licence to Oceana. At first instance, the High Court held that the Council was acting within its powers and the licence was lawful. ONM appealed.

Did the Council have the power to grant the licence? Held: No.

While the Council’s ownership of the unformed road is derived from the Local Government Act 1974 (LGA 1974), that Act is not a code in respect of the Council’s roading powers. Rather, the Council’s roading powers are derived from both the common law and a range of statutory sources. The Council has a pre-existing common law power as landowner to grant licences over roads in its ownership.

Critically, however, council owned roads are held on trust for a public purpose, namely to facilitate the public right to pass and repass over the road (Fuller v MacLeod [1981] 1 NZLR 390 (CA) and Man O’War Station Ltd v Auckland City Council [2000] 2 NZLR 267 (CA)). Accordingly, the Council may only grant a licence over a road if the licenced activities or structures will not “appreciably” interfere with the public’s right of passage. To do otherwise would be to authorise a public nuisance, which is beyond the scope of the Council’s common law powers as landowner (Lower Hutt City Council v Attorney-General ex rel Moulder [1977] 1 NZLR 184 (CA)).

The requirement of an “appreciable” interference means that not all obstructions to the public’s right of passage will be actionable. In determining what constitutes an “appreciable” interference with the right to pass and repass, relevant factors include the quantum and duration of the interference (Harper v GN Haden & Sons Ltd [1933] Ch 298 (CA)). The existence of the right to pass and repass does not depend on how often a road is used or whether it has actually been formed. Nevertheless, what constitutes an “appreciable” interference is context dependent. Hence, the nature, location and usage of the road are also relevant factors.

Applying the appreciable interference test to the present case, the Court found that proposed vents would constitute an appreciable interference with the public right of passage. The licence purports to permit construction of four vents up to eight metres tall, with a footprint of 100 square metres (that may increase to 150 square metres). The works involve excavation and long-term installation of steel and concrete infrastructure. During the construction, the area in usage will be even larger, leaving only a five-metre unobstructed margin for pedestrians to use. The final structures will be approximately 10 metres wide, taking up roughly one third of the road’s width. Further, the 40-year licence term is very lengthy. The licence authorises obstructions that are materially different to the relatively minor or temporary encroachments typically tolerated on roads at common law.

The fact that some pedestrian access will remain does not negate the existence of a public nuisance. The land within the licensed areas is rendered unavailable for any other use, including public passage, for decades. There is no requirement that a remote or unformed road must be completely blocked before an obstruction can constitute a public nuisance. While the road is currently not in use and may never be, this context can only be taken so far. If the Council is of the view that the road is no longer needed for roading purposes, it could embark of the process of stopping the road or advise the Crown of its view that the land is no longer required for a road. As the Crown has a statutory right to resume ownership of unformed roads at any time, without consideration, the likely result in either case would be that the road would then be resumed by the Crown and become part of the Wharekirauponga Forest. It would then be subject to the same constraints as the surrounding Crown land.

As the licence permits activities and structures on the road that constitute an appreciable interference with the public’s right of passage, it purports to authorise a public nuisance, which the Council has no power to do. The decision to grant the licence is accordingly declared unlawful and is set aside.

As the Court decided that ONM’s appeal succeeded on this ground, it was not necessary to address the alternative grounds, namely that the Council had exercised its powers for an improper purpose (to circumvent the stringent requirements of the access regime for mining on conservation land) or that the licence was in substance a lease, which the LGA 1974 prohibits the Council from granting.

Property law - Cross-lease - Consent to alterations 

Cross-lease titles are a relatively common form of residential property ownership in New Zealand. Cross-leases commonly provide that no structural alterations can be made (or new structures erected) without the prior consent of the lessors with the proviso that consent is not to be unreasonably withheld. This case concerns the interpretation of that type of clause and in particular whether the dicta in a 1991 High Court decision, Smallfield v Brown, is wrong in law.

The Martelli/Keiths and the Liow/Tans owned neighbouring cross-leased properties. The Martelli/Keiths
proposed to develop their flat but the Liow/Tans' refused to consent. The Martelli/Keiths referred the dispute to arbitration. The arbitrator applied Smallfield v Brown and found the Liow/Tans' withholding of consent was not unreasonable. The case came to Gault J as an appeal on a question of law from the arbitral award, the question being "whether, in the context of cross-leases for residential properties, consent in respect of alterations will be unreasonably withheld . . . only where the benefit to the party seeking change will be substantial and the proposed alteration would produce only trifling detriment to the cross-lessor, as held in Smallfield v Brown". The Judge answered "no" and remitted the case to the arbitrator. The Liow/Tans now appeal to this Court.

The appeal is dismissed. The appellants must pay the respondents one set of costs for a standard appeal on a band A basis with usual disbursements.

Is the Smallfield v Brown test for when consent to alterations will be unreasonably withheld wrong in law? Held: Yes.
The Court approached the interpretation of the alterations covenant from first principles, rejecting the submission that it should be loath to interfere with the Smallfield test. In summary, the Court agreed with the High Court that the test in Smallfield v Brown is wrong in law. The words of the alterations covenant do not contain the constraints that test imposes and nor are those constraints appropriate in light of their context and purpose. The analysis begins by addressing whose consent to alterations is required and in what capacity. In a cross-lease development, the lessors are all of the owners as tenants in common of the estate in fee simple (or other underlying estate). They together grant the cross-leases of each and every flat in the crosslease development to the respective lessees. It is the lessors jointly who must consent or reasonably withhold consent. Most cross-leases have a term of around 999 years. Inevitably, structures will require rebuilding a number of times. In that context, it cannot be right that the intention of the alterations covenant is to preserve structures in the same overall configuration as at the beginning of the cross-lease. The starting point must be that alterations will not only be desired but necessary over the term of the cross-lease. Whether the lessors, acting reasonably, can withhold consent in a particular case is ultimately a question of fact. It can be approached by asking whether a reasonable lessor, having regard to the interests of all the lessees and the context of the cross-lease, could withhold consent. However, without intending to create rigid rules, the Court provided further guidance at [107]-[112].

Should the case be remitted to the arbitrator? Held: Yes.
The arbitrator himself indicated he may well have reached a different result were he not constrained by Smallfield. The whole of the arbitrator's decision was predicated on the Smallfield test and the Court could not be satisfied that, notwithstanding the error in law, the result would be the same.