Supreme Court wades into seabed issues: Part II

The Supreme Court has issued its second decision on appeals in respect of applications for orders under the Marine and Coastal Area (Takutai Moana) Act 2011 (“MACA Act”) in the eastern Bay of Plenty area.

As covered in our previous article, the Supreme Court’s first decision (issued late 2024) focused on section 58 of the MACA Act, which sets out the test for establishing Customary Marine Title (“CMT”), and whether the Court of Appeal’s interpretation of the section 58 test was correct (spoiler alert: it was not). The Supreme Court’s second and final decision considers residual and applicant-specific issues regarding CMT and protected customary rights (“PCR”).

In this article, we summarise key findings in the Supreme Court’s second decision. We also comment on potential ramifications for the MACA Amendment Bill.

CMT over navigable rivers?

Under the MACA Act, CMT or PCR orders are available in respect of the common “marine and coastal area”, defined as including the beds of rivers that form part of the coastal marine area as defined in the RMA.

However, the MACA Act also provides that orders cannot be granted in respect of customary title or rights that are “extinguished as a matter of law”. This is relevant because section 261(2) of the Coal Mines Act 1979 relevantly provided, in summary, that except where the Crown specifically granted the bed of a navigable river, the bed remained in Crown ownership, and was to be treated as always being Crown ownership.

The Supreme Court was asked:

• whether section 261(2) of the Coal Mines Act 1979 extinguished customary title and rights in the beds of navigable rivers, such that the MACA Act precludes recognition orders being made in relation to them; and

• if section 261(2) of the Coal Mines Act did have an extinguishing effect, whether any customary rights or title lost would be resurrected by s 11(3) of MACA Act – which provides that on commencement of the MACA Act, the Crown is divested of every title as owner of any part of the common marine and coastal area.

Applying statutory interpretation principles, the Supreme Court held that the wording of s261(2) is not sufficiently clear to extinguish customary rights or title to the beds of navigable rivers. It considered s261(2) to be declaratory, not confiscatory, and that its wording indicates that the Crown already owned such riverbeds and therefore presupposed that the Crown had purchased or otherwise acquired the riverbed from the customary owner.  Further, the section was intended to apply to Crown grants: therefore, it had no impact on customary rights or title, which are not granted by the Crown.

The Court also drew on the relevant legislative history, which showed that the equivalent provision to s261(2) in predecessor legislation was intended to assert Crown ownership of coal. Its purpose was to codify the common law position that there was a rebuttable presumption that the Crown retained rights to coal in the beds of navigable rivers when granting adjacent riparian land. There was no mention of Crown ownership of the riverbeds themselves at that stage.  

Overall, the Court held that because customary rights or title to the beds of navigable rivers had not been extinguished, the beds of navigable rivers meet the MACA Act’s definition of “marine and coastal area”, and therefore recognition orders may be made in relation to them, so long as the other statutory requirements are met. Given this finding, the Court was not required to determine the s11(3) resurrection issue. 

The practical consequence of this ruling is that recognition orders under the MACA Act are available in respect of the beds of rivers, at the lesser of 1km upstream from the mouth of the river, or the point upstream that is 5x the river mouth by 5.

 ‘Exclusive use’ as required under s58 can be shared exclusivity

Under the section 58 test for CMT, the applicant group must show that it exclusively used and occupied a specified area of the common marine and coastal area (“CMCA”).

The Supreme Court confirmed that the MACA Act envisages CMT orders being made over areas where there is shared exclusivity by more than one applicant group. Where there is shared exclusivity, a joint CMT order should be issued – not separate, overlapping CMT orders. This was for two reasons.

• First, separate overlapping CMTs would be inconsistent with the statutory scheme. The MACA Act’s definition of ‘applicant group’ expressly contemplates multiple iwi/hapū/whānau coming together as a single applicant group, resulting in a single joint CMT. The Court clarified that groups do not have to arrive as a single “applicant group” before the hearing of applications – while that may have been Parliament’s prediction, it does not preclude later consolidation. A constituent group may also create a legal entity during or after the hearing to be the holder of the joint order and exercise the rights afforded

• Second there would be practical problems with overlapping CMTs. In particular, two groups would be unable to both exercise the rights conferred by CMT orders, such as using, commercially benefiting from, or developing a CMT area.

In addition, the Supreme Court determined that there can be shared exclusivity even where applicant groups assert CMT to the exclusion of other groups. As long as the Court is satisfied that, between them, the applicant groups hold all customary rights according to tikanga in the CMT area, to the exclusion of third parties, whether the groups have a cooperative relationship is not relevant. Should joint CMT be granted, it is for constituent groups, not the Court, to determine how to exercise the rights afforded by the CMT – which may include establishing tikanga-based dispute resolution mechanisms.

Application of s58 test: Whakaari/Te Paepae o Aotea (White Island and offshore reef)

Joint CMT was sought over the area surrounding Whakaari and Te Paepae o Aotea. The lower courts found that the applicant groups had not met the test for CMT in relation to these areas. The Supreme Court was asked to reconsider this conclusion – applying its findings on the proper construction and interpretation of s58 test from its first decision.

The Supreme Court found that relationships with the seascape in a zone around Whakaari had been maintained by multiple groups in a way that extended beyond mere resource use. This included spiritual significance, the naming of fishing grounds, maintenance of the matauranga, and coordinated use among several iwi. Together, this pointed to a holistic relationship. In reaching this conclusion, the Court applied the test from its earlier decision: to “hold in accordance with tikanga”, the relationship must be more than a series of disconnected activities – it must reflect an integrated or holistic connection with the seascape.

The Supreme Court held that the Court of Appeal had erred in its assessment of “exclusive use and occupation” by failing to adequately consider the nature of the location, being an island. It considered that the nature and intensity of the use and control reflected the characteristics of the seascape – including the island’s remoteness, weather conditions, and the practical difficulties of sustained presence on the island. This was applying its interpretation of the requirement of “exclusive use and occupation” from its earlier decision – that this is a contextual inquiry informed by the nature of the particular  seascape.

The Supreme Court ultimately held that the Court of Appeal had asked the wrong question in considering the claim – it was not whether the applicant group’s rights existed at all, but rather how to construct the matrix of rights that the evidence clearly supported. It ordered that the matter be remitted to the High Court for rehearing.

MACA Amendment Bill: further revisions to come?

As a related update, after months of inactivity, the Government has confirmed that it will progress the MACA Amendment Bill, aimed to reinstate the ‘high bar’ intended by Parliament for establishing CMT.  Reasons cited for pushing forward with the Bill were that the Supreme Court did not go far enough in its first decision in its interpretation of the section 58 test.

This announcement preceded the issuance of the Supreme Court’s second decision. While the Bill was initially expected to be passed by the end of October, we anticipate the Supreme Court’s second decision may prompt consideration by the Government regarding whether additional amendments may be needed – notably, with respect to navigable rivers. As drafted, the Bill would “clarify” extinguishment by vesting, giving riverbeds as an example — a position at odds with the Supreme Court’s ruling.   

ChanceryGreen act for clients on MACA Act applications for CMT and PCR.