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Property rights versus ecological values clash head-on within the Crown Pastoral Land Reform Bill

Property rights versus ecological values clash head-on within the Crown Pastoral Land Reform Bill

The Crown Pastoral Land Reform (CPLR) Bill has struck rocky ground as it now works its way through the Environment Select Committee stage. The Bill is opposed vigorously by most and perhaps all of the remaining 171 pastoral leaseholders in high-country New Zealand. These are the people who did not reach any settlement with the Crown during Tenure Review over the last two decades.  

The importance of this CPLR Bill extends well beyond the pastoral leaseholders themselves. It is also relevant to any New Zealander who has an interest in land law and the ownership of land.  It is also important to anyone who has an interest in high-country conservation.

There have been 192 submissions to the Bill from interested parties. The submissions fit into two broad categories. The leaseholder submissions argue that the proposed new rules are bureaucratic and unworkable, showing a lack of understanding of high-country realties. However, non-leaseholder submissions strongly support moves to weaken the current leaseholder property rights in the interests of conservation.

 In this article I will focus on one leaseholder submission from the owners of The Lakes Station, which lies between Lake Sumner and Lake Taylor in North Canterbury.

Two of the three joint owners of The Lakes Station are identified in the submission as “Hugh and Sian Fletcher”. What is not explicit, although it would be recognised by most high-country folk, is that Sian Fletcher is the same person as Sian Elias who for many years was Chief Justice of New Zealand.

Reading The Lakes Station submission leads quickly to a conclusion that it has been written by someone with considerable legal expertise. Arguments are developed to demonstrate that the draft bill does “not reflect good legislation practice”. The submission states that, if enacted in its present state, the legislation would inevitably be challenged through the court system.

 The language is polite but the criticisms are withering. The submission even goes as far as rewriting the Draft Bill. That is something I have never before seen in a submission!

But first some recap about what the CPLR Bill is all about.

The pastoral history of most high-country runs goes back to around the 1850s.  However, the key legislation is the 1948 Land Act which gave leaseholders perpetually renewable 33-year leases.  The division of rights between leaseholders and the Crown meant that the leaseholder owned all improvements including soil fertility, improved pastures, fencing, watering systems, tracks and buildings. The Crown retained residual rights in the unimproved value of the land for which it would be paid an annual lease fee.

A fundamental right of the leaseholder is ‘quiet enjoyment’. This right means that the public has no right to enter the land. This allocation of rights has been confirmed in various court cases. The exception is that a designated agent of the Crown may enter the property subject to giving appropriate notice to inspect observance of various land covenants.

Then in 1998 the National Government of the time enacted the Crown Pastoral Land Act (CPLA) which, among other things, codified a process of tenure review. The fundamental principle of tenure review was that the productive lower country should change from lease to freehold and the higher more fragile country should be retired from grazing and revert to the Crown.

As part of tenure review, the principle was that leaseholders would be compensated for retiring land from grazing and the Crown would be compensated for residual rights that it was giving up on land that was converted to freehold.

 A little less than half of the pastoral leases came to agreement with the Government as to the respective transactions. On those properties there are no longer any pastoral leases. However, for a range of reasons, somewhat more than half the pastoral runs were unable to come to an agreement with the Crown as to a fair split and so tenure review processes failed.

Over time, the tenure review processes became embroiled in controversy. Much of this related to misunderstanding by the general public as to what the runholders were buying when freeholding the land.  Most of the public did not understand that leaseholders already owned most of the value of the property and were simply upgrading, for a fee, their leaseholder rights to freehold rights.

At this point it is necessary to highlight that leasehold rights and freehold rights are simply two different bundles of property rights. Land can never be owned in an absolute sense the way that a car, a shirt or a table can be owned.

The way I used to explain it to my students at Lincoln University was that if I wanted to get a hammer and put big dents all over my car, then I had a legal right to do so. That was my right because I owned the car absolutely. It might reflect badly on my mental state, but that was a different matter.

In contrast, there are many restrictions as to what people can do with land that they consider they ‘own’. It is definitely illegal to destroy land. In essence, land ownership, be that leasehold or freehold, involves custodianship. Consequently, many actions require approval from relevant authorities.  Land ownership is always conditional and never absolute.

There is a widespread public perception that under Tenure Review the Government gave away its rights too cheaply. In some cases that may be true. But if under-valuation was a generality, then why did the remaining 171 runholders not take up the supposed gift they were being offered?

The problem now is what should be done to protect ecological values on the remaining 171 pastoral leases?

The CPLR Bill before Parliament, which is currently at the Select Committee stage, does this by introducing a new set of regulatory procedures to constrain what runholders can do. The Lakes Station and other submitters claim that these regulations are impractical and in their current form take away existing property rights. 

The Lakes Station submission draws on the established common-law principle that the Crown has over-riding responsibilities to honour existing property rights. and to provide compensation for any property rights that are removed. This principle relates to both leasehold and freehold ownership systems. It is something that any ‘Government of the day’ is not entitled to legislate away.

The CPLR Bill was first introduced to Parliament in 2020 by Green Party Minister Eugenie Sage. Although the Greens are no longer part of the Government, Ms Sage has continued as Chair of the Environment Select Committee that is responsible for this bill. This situation does not impress pastoral groups.

At some stage, the Government may need to look again at whether the existing bill provides the path forward that it seeks. Although ‘Tenure Review’ has come to the end of its life, at least by that name, the fundamental principles of protecting fragile land and freeholding productive land are hard to argue against.

The much-maligned tenure-review process led to 372,000 ha (3720 square kilometres) entering the conservation estate through to 2017. As a mountain person, I applaud that every time I cross those lands.

 In now moving forward once again, we need to do so within a framework where the Crown honours existing rights and compensates accordingly when these are taken away. That underpins all New Zealand land law.


*Keith Woodford was Professor of Farm Management and Agribusiness at Lincoln University for 15 years through to 2015. He is now Principal Consultant at AgriFood Systems Ltd. My previous articles on high-country issues are archived at https://keithwoodford.wordpress.com/category/the-high-country/. You can contact him directly here.

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21 Comments

Two of the three joint owners of The Lakes Station are identified in the submission as “Hugh and Sian Fletcher”. What is not explicit, although it would be recognised by most high-country folk, is that Sian Fletcher is the same person as Sian Elias who for many years was Chief Justice of New Zealand.

The same Hugh Fletcher, who together with Ron Trotter were the founding fathers of this corporate debacle?:
Can Fletcher meet the challenge?

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And the same Sian Elias responsible for this environmental debacle https://i.stuff.co.nz/business/farming/76287613/cattle-belonging-to-chi…

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Yes I remember the case of Sian Elias and Hugh Fletcher's cattle blissfully wallowing in the pristine waters of some alpine lake....there was a large photo in the press. But of course the couple were untouchable because of who they were. Such hypocrisy and arrogance should have been severely dealt with. Personally, I think the government should have stepped in and taken back the land.

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streetwise,
The relevant body to take action would have been ECAN. It is indeed interesting that they did not take action. Presumably they did not think they had a strong enough case to get a conviction, which would have had a fine associated with it. As for the Government 'stepping in and taking back the land' there would have been no legal right for them to do that. In the same way, the Government cannot simply step in and take your home away from you should you offend in some way, unless they can show that the home was purchased with the proceeds of a crime.
KeithW

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ECAN...that was the organisation at which National replaced the democratically elected board with its own people for years, wasn't it?

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ECAN has taken many cases against farmers for pollution and with a very high success rate.
KeithW

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Yes, it was.

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Foundation membership of “The Round Table” whose birth unfortunately was facilitated by the cronyism that came to the fore during Robert Muldoon’s prime ministership. In fact it was probably the first episode of NZ ever witnessing the unsavoury methodology of what is colloquially known as lobbying today and which is a confounded curse for any democracy.

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In defence of Hugh Fletcher
I met Hugh a number of times while working for Fletcher Challenge
An extremely intelligent and inspirational guy who you would want to work for
He became Managing Director while Sir Ron Trotter was Chairman
The conflict between the two was telling. Trotter won the day but destroyed the company
I met Hugh's brother James first who was killed in a home invasion
What you see now are the last vestiges of the Fletcher dynasty
They are old now. That's probably all they have left.
Let them go in peace

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Well the outfit got themselves hopelessly crosslegged. Trotter came with the rural and/or primary production heritage and once he prevailed plunged disastrously into the like of a meat industry already in dire straits. We used to call the concern, The Hungry Lion in those days. Suspect your point is that if Fletchers had just remained with their core industry, construction and supply etc, life for the Fletcher family and that division would have been both happier and beneficial. If so, totally agree.

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Thanks iconoclast
My key interest is in the underlying principles of pastoral leases including the embedded property rights and how as a nation we can now move forward.
I think your comment may help in directing attention back to the issues rather than being distracted by personal criticisms of some of the individuals embroiled in the process. And it does seem to me that Sian Fletcher has brought some relevant expertise to that process.
KeithW

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Relevant hypocrisy is evident in the Fletchers contribution to the process. It's also worth reflecting that the 1948 Land Act that enabled tenure rights was brought in in response to a public outcry over the massive acceleration of degradation & erosion of the high country lands by sheepfarmers overstocking & abysmal land management practices as they chased the maximum meat and wool clip. That's why DoC was given oversight.

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The key purpose of the 1948 Land Act was to give security of tenure so that farmers had an incentive to look after the land. Retirement of the high country was well under way in the 1960s - maybe even before that, managed by Catchment Boards. DOC came along a great deal later.
KeithW

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What really concerns me is what has happened or is happening to the land that has become part of the conservation estate and hence DOC's responsibility as a result of the tenure review process. How well, or at all, is DOC maintaining that land. I recall several years ago in the Matukituki valley crossing the boundary between the runholders land and DOC land. The farmed land was largely free of noxious weeds whereas the land for which DOC was responsible was an absolute mess with ragwort and other weeds everywhere. Is this Bill simply a way for the Government to force more conservation costs onto farmers?

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Recent time on the St James Station land in the Amuri would confirm that point. The crown paid over $40 mill for it and the DOC staff are really doing their best but they are under funded and under equipped it seems. There is there too, noxious plants springing up, wildling pines much of which though is blowing in from the land to the east which is overrun with it. If I said who owned that I would likely be called racist.

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Just another case of hypocrisy.
Reminds me of the OBE for Services to Children who owns and runs a string of barely habitable rat-infested boarding houses including 97 Pirie Street Mt Victoria
The more 'honorable' the title the more knee deep in filth

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Keith, I believe that this government has no realisation of what rural property rights actually involve. During the consultation process on the freshwater reforms I raised the issue of the loss of use of land when fencing off waterways- the original proposal was for a five metre set back, since reduced to three. Farmers are still expected to meet all costs associated with this land, but are deprived of the use of it. On our previous farm we would have lost upwards of twenty hectares. When I contrasted this with the actions of Transit NZ , who required about a quarter of a hectare for road realignment, and in doing so met all the costs involved and paid us the land value, the representatives of MBIE and MoE claimed they could not see my point. I was also involved with Transpower who sought easements over land under transmission lines when they were stringing a second wire on an existing line. Transpower met all legal costs and paid compensation for the injurious effects of the easement. The principle of compensation for land taken for the public good is well embedded, but for some reason is considered to not apply when "environmental" issues are involved.

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wee willy winkie,
I agree that a poor understanding of land law extends through most of the Government agencies. Transit NZ would in all likelihood have been acting under the 1981 Public Works Act which set out the procedures and rules of acquisition. That Act has generally worked very well. It sets out how the Crown always has the right to acquire land that is required for the public good but that compensation is always possible. The first step is to try and negotiate an agreed price but the Crown has a right if necessary to enforce the purchase at the Government's valuation. In contrast, the tenure review legislation did not have the power to enforce purchase by the Commissioner of Crown Lands as agent of the the Crown. One of the problems of tenure review was that the valuations were often very complex. In a rational world, tenure review would continue but guided by experience from a number of operational flaws over the last 20 years. The subdivision of land that subsequently occurred, in some cases providing windfall profits, would no longer be possible under the current district plans. But sentiment has been stirred up, much of it based on ignorance, such that finding a rational path forward is very difficult.
KeithW

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What's the difference between this and asking people to pay for the cost of their pollution of land / water around them that does not belong to them? If the pollution is carried to surrounding areas you don't own, who should pay for cleaning that up?

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The concerns in regard to the CPLR act do not relate to pollution. The concerns are about the restrictions to what have been considered farming best practice together with a great increase in the bureaucratic approval systems for what have been regarded as normal best practice. Issues of pollution are dealt with under totally different legislation and are not affected by whether or not the land is freehold or leasehold.
KeithW

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True, but I was responding to the previous commenter's notes on water and environmental issues.

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