Neil Sands
Public law experts warn that planned changes aimed at streamlining compulsory acquisition of property for critical infrastructure projects drastically reduce the rights of landowners and may be unconstitutional.
Under reforms contained in the Public Works (Critical Infrastructure) Amendment Bill, owners can no longer contest the compulsory acquisition of their land in the Environment Court if projects are deemed to be critical infrastructure.
Instead, they must appeal to the Land Information Minister, currently Chris Penk, or the local authority responsible for the project, which critics say raises concerns about conflict of interest.
Introducing the bill to Parliament, Penk said it would address an “infrastructure deficit” in New Zealand that was slowing delivery of critical works such as roads, schools, housing, hospitals and renewable energy projects.
“When objections are made and these reach the Environment Court, costs rise hugely for all concerned and project timelines blow out,” Penk said, adding that the new submission process imposed a timeframe of approximately 60 working days.
But The Law Association (TLANZ) and the New Zealand Law Society (NZLS) have raised concerns that the changes will deepen the power imbalance between landowners and the state.
“Landowners have no choice and little or no power to defend the notion of holding onto any right to an ‘indefeasible title’ against the huge resources and powers available to the state when it is focused on getting the land required under ownership for a project,” the TLANZ Public & Administrative Law Committee said in a submission on the bill.
It said denying landowners the right of appeal to the Environment Court meant project approvals were not subject to “proper and rigorous scrutiny at a judicial level”.
‘Inferior option’
TLANZ said the new process allowed the minister or local authority to decide the fate of its own projects.
“The submission process effectively replaces former judicial scrutiny with an inferior option… where the requiring authority effectively polices itself,” it said in a submission to Parliament’s Transport & Infrastructure Select Committee.
Barrister Garther Richards, a member of the NZLS Public Law Committee, raised similar concerns.
“Speaking bluntly and candidly, what the submission process says is you go back to the person who’s already inclined to acquire the land and say ‘can you think about that again?’… it’s fair to expect landowners to query whether they see that has been a fair reconsideration of the position,” he told the select committee.
Penk said landowners could still seek judicial review in the High Court, telling Parliament: “I’m confident that this process ensures natural justice rights are upheld”.
But Richards said seeking judicial review in the High Court was not comparable to taking an objection to the Environment Court.
“High Court litigation is typically far more costly than Environment Court litigation,” he said.
“Secondly, the current Environment Court objection process invites quite a wide inquiry as to whether or not the land should be acquired, whereas in an application for judicial review the High Court is typically on far narrower grounds, where the applicant would need to point to some legal, procedural or technical error in the process.”
Timeframes ‘impractical’
Richards questioned whether the changes to the process were necessary, saying there was no evidence that appeals to the Environment Court were delaying projects.
“We’re not quite sure there’s a problem that justifies quite a drastic removal of rights from landowners on these projects,” he said.
Phil Shannon, a member of the TLANZ Public & Administrative Law Committee, said that retaining the option of appealing to the Environment Court was desirable but, in his experience, clients tended to avoid court action because of the costs involved.
“I’ve done maybe 1,000 of these and none of my clients have ever gone anywhere near the Environment Court – except maybe a couple early on trying to object to a notice of requirement – and I think we’ve only ever been to the Land Valuation Tribunal once,” he told the select committee.
“So I’m just wondering what sort of data you’ve got, which shows that the court process might be slowing down the acquisition side of things and therefore making the project take longer to get underway and cost more, because it’s not been my experience.”
Richards said the NZLS was concerned the timeframes set down in the bill were too tight and would not allow landowners to seek legal advice, consult experts and obtain information from the organisation making the purchase.
“The idea of you having to do all that and also meet this current six-week process to get a submission and administer a local authority is just impractical,” he said.
“The organisation will take its full 20 working days to give you that information. It could be a quite voluminous set of information. These projects are complex. The options analysis is often very complex.”
Rolls Royce compensation
Shannon said the best way to speed up the system was to offer generous compensation, so those affected did not feel short– changed, making them less likely to lodge objections.
“If there’s any doubt about the value of the property, then you should settle generously in favour of the higher of the two valuations. I think that could be written into the Public Works Act,” he said.
“What I perceive as a taxpayer is that these people are taking a hit for the greater good of the community, so they deserve to be looked after in almost a Rolls-Royce, red-carport sort of fashion.
“Over the years, I’ve seen very low valuations that the government has got, higher valuations from the landowner. That leads to delays of months and months while you work out or what’s it really worth and try and reach an agreement on that, and arguments over legal fees and valuation fees… that leads to delays and adds to costs. It’s like a false economy.”
Nick Kearney, another member of the TLANZ Public & Administrative Law Committee, said the bill did not address the problem that arose when a property was designated for compulsory purchase but the agency involved then took no action for years.
He said this often occurred with roading projects, leaving owners “landlocked” with properties that were difficult to sell.
“It’s the doubt that leaves property owners in limbo,” he said.
“I think the answer should be that if the requiring authority is bold enough to say to a property owner ‘we might need your land in the future’, then it should back that up with a purchase at market value within six months.
“If the requiring authority ends up no longer needing the land into the future, then it can be sold.
“I understand the view of the authorities is that it is not in the position of being a property magnate and holding masses of properties, but in my view that is too bad. The alternative is a very large intrusion into basic property rights.”
‘Arguably unconstitutional’
The TLANZ submission noted that protections for freehold property were enshrined in New Zealand law and based on legal tradition dating back to the 13th century.
“Such laws are in the nature of constitutional foundations that underpin our democratic society in 2025,” it said.
“We take the view that any further derogation of private property rights, such as the removal of a judicial objection procedure, is arguably unconstitutional in its nature.”
The committee said that rather than making piecemeal amendments to the Public Works Act, the government should repeal the legislation and completely rewrite it.
“Such replacement legislation would, it is hoped, capture best practice from legal jurisdictions around the world, where landowners are more generously compensated for bearing the burden of a public project for the greater good of their community.”
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