Ipsofactoj.com: International Cases  Part 7 Case 12 [PC]
THE PRIVY COUNCIL
Man O’War Station Ltd
- vs -
Auckland City Council
LORD MACKAY OF CLASHFERN
LORD PHILLIPS OF WORTH MATRAVERS
LORD SCOTT OF FOSCOTE
29 MAY 2002
(delivering the judgment of the Board)
There are two appeals against judgments of the New Zealand Court of Appeal before the Privy Council. The principal judgment under appeal is dated 11 April 2000. The second judgment under appeal is dated 27 November 2000. In the second judgment the Court of Appeal rejected a motion to recall the first judgment on the ground that Blanchard J, who gave the principal judgment, was disqualified by apparent bias. Logically, it was necessary for the Privy Council to consider separately; and first, the appeal against the second judgment of the Court of Appeal. That is how the Board invited counsel to proceed.
Having heard the appellants’ counsel’s argument on the matter and without calling on counsel for the respondent their Lordships were satisfied that the judgment of the Court of Appeal of 27 November 2000 was correct and announced that they would humbly advise Her Majesty that the appeal against that judgment should be dismissed with costs. These are the reasons for that advice.
In outline the forensic background is as follows. By judgments dated 19 August 1997 and 31 July 1998 Anderson J in the High Court of New Zealand upheld on the basis of the implied dedication doctrine the public status of certain roads at the eastern end of Waiheke Island. The two appellant companies, who were identified in the proceedings with a Mr. Spencer, appealed to the Court of Appeal. The Auckland City Council cross appealed against a part of the High Court judgment in which Anderson J held that a further section of the roads at issue was not a public road. In a judgment dated 11 April 2000 the Court of Appeal (Gault, Henry, Keith, Blanchard and Tipping JJ) dismissed the appeal of the appellants. In the same judgment the Court of Appeal allowed a cross appeal of the Council and confirmed on the basis of the implied dedication doctrine the public character of the further section of road. Blanchard J delivered the judgment of the Court of Appeal.
The unsuccessful appellants applied to the Court of Appeal for an order setting aside or, in the alternative, recalling the principal judgment. In an amended notice dated 19 July 2000 the ground of the application was stated to be as follows:
One of the members of the Court, the Rt. Hon. Justice Blanchard, was disqualified from so sitting by reason of his undisclosed acquaintance and association with the first respondent’s principal witness and the resulting appearance of bias ....
The witness in question had been Mr. Ian Grierson, a surveyor. He was the son of Mr. Max Grierson, who had been the judge’s former employer, long term partner and mentor for some 30 years. Mr. Ian Grierson was the brother of Mr. Bruce Grierson who had been a partner of the judge for some 11 years.
Before and at the hearing of the motion to recall the principal judgment counsel for the appellants submitted that the court hearing the application should exclude all members of the court who decided the appeal. Blanchard J obviously could not sit. Henry J had retired. In the result the Court of Appeal decided that Gault, Keith and Tipping JJ would hear the application. It was within their power to hear and determine the application. Nothing was said before the Privy Council which could throw any doubt on the legality, regularity or appropriateness of the proceedings of the Court of Appeal so constituted in hearing and deciding the application. In a judgment of the court Gault J dismissed the motion.
The issue is whether the Court of Appeal erred in ruling against the submission that Blanchard J had been disqualified, by reason of his acquaintance and association with Mr. Ian Grierson, from sitting in the case. There is no suggestion that the judge had been biased. The case is that there was an appearance of bias.
The appellants advanced that case both on the basis of the relationship between Blanchard J and Mr. Ian Grierson’s father, which has been described above, and of the relationship of Blanchard J with Mr. Ian Grierson himself. As to the latter, the broad picture, as revealed in the evidence before the Court of Appeal, was as follows:
The judge and Mr. Ian Grierson were not personal friends.
Although the two men had met from time to time at gatherings (usually those marking notable events in Mr. Max Grierson’s life), they did not belong to the same sporting clubs or business associations, and had nothing much in common.
Mr. Ian Grierson had not spoken to the judge since his appointment to the High Court bench some 8 years before the appeal was heard.
The firms of which the judge was a partner before he was appointed to the bench had acted for the firm of which Mr. Ian Grierson was a partner before its incorporation as a company. The judge had never acted for Mr. Ian Grierson personally.
The judge had acted as a trustee in respect of retirement arrangements for the partners of Mr. Grierson’s firm prior to incorporation of that partnership in around 1984. However, there was apparently no direct contact between the judge and Mr. Ian Grierson on a professional basis.
The broad picture is that the two men had known of each other for a long time and had some sporadic contact over the years, but had no contact at all since the judge was appointed to the High Court Bench.
While this brief summary is necessarily imprecise it is unnecessary to set out the effect of the evidence in greater detail.
Gault J considered the importance of Mr. Ian Grierson’s role in the trial. He said that Mr. Ian Grierson was not only a witness as to technical survey work but also as to “events and the roles of key people involved at the relevant times”. The Court of Appeal treated him as an important witness.
Against this background Gault J approached the matter on the basis of legal principles established in New Zealand law. In accordance with the speech of Lord Goff of Chieveley in R v Gough  AC 646, which had been followed by the New Zealand Court of Appeal in Auckland Casino Ltd v Casino Control Authority  1 NZLR 142, Gault J addressed the question whether there was a real danger of bias on the part of Blanchard J. He also took into account the guidance of the English Court of Appeal in Locabail (UK) Ltd v Bayfield Properties Ltd  QB 451 and observations by the Constitutional Court of South Africa in President of the Republic of South Africa v South African Rugby Football Union 1999 (4) SA 147, 177.
Gault J rejected the contention that there was an appearance of bias. He explained the position as follows:
The submission is of appearance of bias by a Judge of some eight years standing. He participated in the hearing of the appeal in a civil case on a dispute between landowners and a local authority. He had occasional association before appointment with a surveyor witness essentially in unrelated business circumstances. Even taking full account of the relationship both Judge and witness had with Mr. Max Grierson we do not consider this gives rise to concern for a real danger or possibility of bias. The fact of a solicitor-client relationship which terminated eight years earlier does not add to that. To take any other view would be unrealistic in the New Zealand situation; even in Auckland. Senior legal practitioners with busy commercial and conveyancing practices must come into contact and establish business associations with a considerable proportion of the professional practitioners in related fields such as surveying and civil engineering. The proposition that because of such an association they should be regarded as in danger of failure to carry out judicial functions impartially eight years after retiring from practice is unreal.
This was the basis on which the reconstituted Court of Appeal unanimously dismissed the motion.
On appeal to the Privy Council the appellants invited the Board to adopt for New Zealand the adjustment of the test in Gough enunciated by Lord Hope of Craighead in Magill v Porter & Weeks  UKHL 67, namely that “the question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased” (para 103). This adjustment is consistent with European and Scottish jurisprudence, and is broadly in line with Australian jurisprudence. Both tests proceed from the point of view of an informed view of the facts, and both concentrate on the possibility of bias. But the adjusted test emphasises the perspective of the fair-minded observer rather than the view of the court. The Board does not have the benefit of the view of the Court of Appeal on the point whether the law in New Zealand should be so altered. In these circumstances their Lordships are not persuaded that it would be right to restate the law for New Zealand as requested. In any event, the distinction is a fine one, notably since even on the Gough test the court undoubtedly had to take account of public perception and confidence. On the facts of the present case the difference between the two tests cannot arguably influence the outcome.
This is a corner of the law in which the context, and the particular circumstances, are of supreme importance. In their Lordships’ view an intense focus on the essential facts of the case, as highlighted by Gault J, convincingly shows that there was no danger or possibility of apparent bias. The same is true on the Magill test. Much was made by counsel for the appellants of the analogy of a judge being disqualified from sitting on a case involving the son of his brother or best friend. No doubt this proposition would usually be correct. But such disembodied analogies, stripped from their context, are not helpful. They do not answer the specific reasoning of the Court of Appeal on the particular facts of the present case. The lengthy written arguments, and sustained oral argument of counsel for the appellants, have in their Lordships’ view in no way dented the reasoning of the Court of Appeal. On the contrary, their Lordships are satisfied that no fair-minded observer could possibly have doubted the neutrality and objectivity of Justice Blanchard
Lord Scott of Foscote
(delivered the judgment of the Board; on 17 June 2002)
The issue in this case is whether the part of the loop road around Waiheke Island that runs through Man O’War Station was effectively dedicated as a public highway. The trial judge, Anderson J, held that the road, bar a short stretch of about 400 yards, had been effectively dedicated. On appeal the Court of Appeal upheld the judge as to the main part of the road but, in disagreement with the judge, held that the short stretch (“the south-west deviation”) also had been effectively dedicated. The owner of the land, Man O’War Station Ltd, now appeals to the Privy Council.
The part of the loop road that passes over Man O’War Station was constructed by the Waiheke County Council over a period from November 1970 to the end of 1972. It was the last part of the loop road to be completed. Use of the loop road by the public commenced more or less as soon as construction had been completed, that is to say, towards the end of 1972. Man O’War Station, then owned by Mr. Arthur Hooks, was sold by him to Man O’War Station Ltd, the appellant, in 1979. The appellant was, and is, owned and controlled by a Mr. Spencer. Mr. Hooks’ title to the Station was registered under the Land Transfer Act 1952. So the appellant became, on completion of the purchase, the registered proprietor. There was no reference on the register to the new road over the Station. Nor was there any reference to it on Mr. Hooks’ Certificate of Title. The appellant contends that, in these circumstances, no right to use the road can be maintained against it and that it is entitled to bar public use of the road. The purpose of this litigation is to test whether those contentions are correct.
The Auckland City Council, the successor as local highway authority to the Waiheke County Council and respondent on this appeal, accepts, as it must, that there was never any documentary transfer of the site of the new road by Mr. Hooks to the Council. But it says that the circumstances in which the road came to be constructed and in which use of the road by the public commenced, and continued until the sale of the Station to the appellant, show that both Mr. Hooks and the Council intended the road to be a public road and to be used, when completed, by the public as of right. In these circumstances the Council submits that the road became a public highway:
.... by reason of the dedication of the right of passage to the public by the owner of the soil and of an acceptance, that is user, of the right by the public.
(see Halsbury’s Laws of England Vol 21 para 65)
The appellant disputes the proposition that the circumstances justify imputing to Mr. Hooks an intention to dedicate. And in particular the appellant disputes that proposition in so far as it relates to the south-west deviation.
In any event, even if, which the appellant disputes, there was an effective dedication of the new road as a public highway, the appellant submits that its registered title overrides any rights created by the dedication. It relies on section 62 of the Land Transfer Act 1952.
In answer to the Land Transfer Act point, the Council relies on section 77 of the 1952 Act. Section 77 provides that:
No right to any public road .... shall be acquired, or be deemed to have been acquired, by the unauthorised inclusion thereof in any certificate of title or by the registration of any instrument purporting to deal therewith otherwise than as authorised by law.
It is common ground that, if the Council’s dedication case is well-founded, the new road is a “public road” for section 77 purposes. But the appellant submits that section 77, on its true construction, has no application to this case.
In summary, therefore, the following issues arise on this appeal:
Do the relevant circumstances justify the conclusion that the new road over the Station became, by dedication, a public road before the purchase of the Station by the appellant?
If the requisite dedication can be established in relation to the main part of the road, can it be established also in relation to the south-west deviation?
Does section 77 of the 1952 Act apply?
There are two further issues which their Lordships should briefly mention.
The respondent sought, in its pleaded case and at trial, as an alternative to its section 77 escape from the appellant’s reliance on section 62 of the 1952 Act, to escape by relying on the fraud exception to section 62 (see also section 182). Anderson J held that the fraud case against the appellant was not made out. The Court of Appeal, since it was in the respondent’s favour on each of the three main issues, did not find it necessary to deal with the fraud issue. If their Lordships were to find in the respondent’s favour on the dedication issue but in the appellant’s favour on the section 77 issue, the respondent would wish to pursue its appeal on the fraud issue. In that event the case would have to be remitted to the Court of Appeal for that Court to deal with the respondent’s appeal on that issue.
After the Court of Appeal had given its judgment in favour of the respondent on each of the three main issues, the appellant applied for the judgment to be set aside and the appeal re-heard on the ground of the appearance of bias on the part of one of the members of the Court. The application was rejected. The appellant appealed to the Privy Council. Its appeal was conjoined with its appeal against the main judgment of the Court of Appeal. In a separate judgment delivered by Lord Steyn the Board has dismissed the bias appeal.
Anderson J’s finding in favour of dedication was a finding of mixed fact and law. The Court of Appeal upheld his judgment and his findings - other than in relation to the south-west deviation. On issue 1, therefore, there are concurrent findings of fact by the Courts below. The appellant, however, has contended that the primary facts found proved do not support imputing to Mr. Hooks an intention sufficient to constitute a dedication of the road as a public highway. This is a challenge that, despite the concurrent findings of fact, it is, in their Lordships’ view, open to the appellant to make.
As to the south-west deviation, there are no concurrent findings of fact and the Board must decide whether to prefer the view of the evidence taken by the Court of Appeal or that taken by Anderson J. But, of course, if the appellant succeeds on issue 1, issue 2 will not arise.
Waiheke Island is situated in the Hauraki Gulf about 11 miles east of Auckland City. The island is about 12 miles long. In 1970 the island was sparsely populated with the main concentration of houses at or near its western end. The eastern end consisted mainly of farms. Man O’War Station, a property of about 2,500 acres, is at the eastern end of the island. The west half of the Station straddles the island; its northern boundary is part of the island’s north shore; its southern boundary is part of the island’s south shore. The easternmost end of the island consists, to the north, of the east half of Man O’War Station and, to the south, of Waiti Station. Waiti Station was, in 1970, owned by a Dr Harbutt.
The length of loop road that passes over Man O’War Station is about 6¼ miles. There could not have been a loop road around the island without a substantial part of the road passing over the Station.
Access to the island from the mainland is by ferry, private water transport or seaplane. The main public wharf is in Matiatia Bay at the western end of the island. There is also a wharf at Man O’War Bay, more or less in the middle of Man O’War Station’s south shore boundary. This was the wharf that Mr. Hooks used. His homestead was situated not far from this wharf.
Man O’War Station was a grazing station. On it Mr. Hooks grazed cattle and sheep. The land was not good farmland. It consisted of rough pasture interspersed with clumps of native bush. The easternmost part of the Station, lying to the north of Waiti Station and known as Thumb Point, was jointly owned by Mr. Hooks and his brother.
In 1970 Mr. Hooks was over 70 years old. He lived in his farmhouse at Man O’War Bay with his wife. She had the misfortune to be blind. They had one son, John, who lived and worked on the mainland. Mr. Hooks was described by Anderson J (pp 4 and 5) as:
.... a man who valued the privacy of his fairly isolated farm, who did not take kindly to strangers presenting themselves on his land without introducing themselves, and who had an old-fashioned farmer’s diffidence to bureaucracy.
In 1970 there were no public roads on Man O’War Station. There was, however, a road known as the Old Army Road which ran from the wharf at Man O’War Bay northwards for some distance before turning right-handed and crossing into Waiti Station. The Old Army Road had been constructed during the war in order to give access to an area of Crown land on high ground in the middle (more or less) of Waiti Station. This Crown land was known as Stony Batter. It had been acquired by the Crown during the war in order to install artillery to protect against an invasion by the Japanese. By a document dated 3 November 1952, Mr. Hooks had granted the Crown a right of way over what, when constructed, became the Old Army Road.
The Old Army Road was not a public road. There were, however, “roads” over Man O’War Station described as “Crown grant roads”. These were merely paper roads shown on various plans and maps of the Station. These were not formed roads but had, in the distant past, been laid out on paper by a surveyor and vested in the Crown to await the time when a decision to commence construction was made. So, although the Crown grant roads existed, as roads, only on paper and there was nothing on the ground to show their existence, they represented a subtraction from the registered title held by the owner of the Station. The soil of the Crown grant roads was, in 1970, still vested in the Crown.
THE NEGOTIATIONS RELATING TO THE NEW ROAD OVER MAN O'WAR STATION
During the 1950s a number of residents of Waiheke Island began pressing for the construction of a road around the island which would assist access to amenities and alleviate such difficulties as obtaining medical attention in the event of accident or illness. Mr. Hooks was well aware of the pressure for the construction of the proposed loop road. Anderson J referred to letters which Mr. Hooks wrote in 1955 objecting that the rateable value proposed for his farm was too high “until the Board forms and maintains an all-weather road to the eastern end of the Island”.
Construction of the loop road began in about 1960 and, by 1968, was approaching the boundaries of Man O’War Station both on the north-western and on the south-western sides of the Station.
The Council had available to it alternative procedures by which it could acquire land for roads and other public works. It could exercise compulsory purchase powers under sections 22 and 23 of the Public Works Act 1928 or it could, under section 32 of the Act, acquire the requisite land by private agreement with the landowner. In either case, if the land was being taken for a road, the Council would construct the road and, on completion of the construction, dedicate it, expressly or impliedly, as a highway.
The construction of the section of the loop road passing over Man O’War Station was all that was needed to complete the loop. So it is not surprising that in 1970 there was correspondence between the Council and Mr. Hooks regarding the acquisition by the Council of the land on the Station needed for the road. An Auckland solicitor, a Mr. Sheffield, was acting for Mr. Hooks and took part in the negotiations. In addition a Mr. McIntosh, the chairman of Waiheke County Council, was personally acquainted with Mr. Hooks and had a number of discussions with him about the new road.
Progress of the negotiations was hindered when, in July 1970, Mr. Hooks suffered a stroke. He was taken to hospital in Auckland and was never able to return to the island. His wife could not remain on the island on her own, so she, too, had to leave the island. Management of the Station was entrusted to their son, John.
It appears that Mr. Hooks’ stroke did not significantly affect his mental faculties and he continued to have discussions about the new road both with his solicitor, Mr. Sheffield, and with Mr. McIntosh. It appears also that he entertained hopes, never in the event realised, of being able at some time to return to live at Man O’War Station. It was in these circumstances that a critical negotiating meeting took place in an Auckland hospital between Mr. Hooks, Mr. Sheffield and Mr. McIntosh on 21 September 1970. Agreement in principle about the road was reached. The terms that were agreed were set out in a letter dated 23 September 1970 from Mr. Sheffield to the Council. The following day the Council replied confirming the contents of the letter. The letter said this:
Referring to the conference held between Mr. McIntosh, ourselves and Mr. Hooks on the 21st September, we confirm that Mr. Hooks in general principle is prepared to transfer to the Waiheke County Council the land required by them for road purposes through his property on the following conditions:-
We should be pleased if you would let us have in due course whatever formal agreement is necessary to evidence the above arrangement.
The following features of this important letter should be noted.
The agreement reached was expressed to be an agreement “in general principle ....” to transfer to the Council the land required for the road. Mr. Craddock QC, counsel for the appellant, has stressed that the words “in general principle” are not consistent with a binding contractual commitment.
Mr. Craddock has pointed out, also, that the letter shows the parties were contemplating a consensual transfer of the land to the Council i.e. a choice of the section 32 route, leading to a dedication of the road as a public highway by the Council. The terms of the letter do not suggest that Mr. Hooks himself would dedicate the road.
The six conditions specified in the letter could not have been intended as conditions precedent to the commencement by the Council of the road construction. Conditions (b), (c), (d) and, particularly, (e) make that clear.
THE CONSTRUCTION OF THE ROAD OVER MAN O'WAR STATION
The construction of the road over Man O’War Station commenced in about November 1970 and was completed towards the end of 1972. The progress of construction is described by Anderson J at p 14 of his judgment. Mr. Craddock has submitted that the evidence did not justify the conclusion that Mr. Hooks was kept informed about the progress of the construction. He pointed out that Mr. Sheffield never visited the island and that there was no firm evidence that John Hooks had kept his father informed. One of the problems for Anderson J was that there was very little first hand evidence. Both Mr. Arthur Hooks and Mr. McIntosh had died before the litigation began. Mr. John Hooks could not be traced and so was not available to give evidence. Mr. Spencer, who had purchased the Station, via the appellant, from Mr. Hooks and had had a number of conversations with Mr. Hooks before the latter’s death, was not regarded by Anderson J as a reliable witness. So Anderson J was forced to rely on inherent probabilities. On that basis he concluded that Mr. Hooks had been kept informed about the construction of the road, of its completion towards the end of 1972 and of the commencement of public use of it. The Court of Appeal drew the same inferences. In their Lordships’ opinion these inferences were justifiable ones.
The contractor in charge of the road construction was a Mr. Wilkinson. The judge found that Mr. Wilkinson had cut the road along a route broadly following that which had been delineated on a plan shown to Mr. Hooks at the meeting on 21 September 1970. At the north- western boundary of the Station the road followed for about ¼ mile the line of a Crown grant road. Then it continued in an eastwards direction until it met the Old Army Road. In this eastwards stretch Mr. Wilkinson deliberately located the road away from ridges from which travellers would have a view of the Station’s north shore beaches. He did so in order to accommodate Mr. Hooks’ fears that the enticing views of the beaches might tempt travellers to trespass over the Station in order to reach them. The new road followed the line of the Old Army Road southwards towards Man O’War Bay, but before reaching the Bay the line of the road diverted westwards in a loop around the Hooks’ homestead. The purpose of this loop was to comply with condition (c) in the 23 September 1970 letter. The loop took the new road down to Man O’War Bay where it met and, turning right, followed the line of a Crown grant road towards the Station’s south-western boundary. The plan shown to Mr. Hooks at the 21 September 1970 meeting had depicted the road following the line of this Crown grant road all the way to the boundary. In the event, however, Mr. Wilkinson took the new road off the line of the Crown grant road and along the south-west deviation. He did so after discussion with John Hooks (see Anderson J’s judgment p 15). The reason for his doing so was the topography (see the Court of Appeal judgment para 60). Anderson J expressed the view that Mr. Arthur Hooks had not been consulted about the south-west deviation and “resented this from the time he first learned of it” (pp 15/16 of his judgment). The Court of Appeal thought that Anderson J had been brought to this view by the contents of letters written in 1972 which he, Anderson J, thought related to the south-west deviation. As the Court of Appeal pointed out, Mr. Hooks’ concerns expressed in these letters did not relate to the south-west deviation but to the part of the new road that followed the line of the Crown grant road along the beach front of Man O’War Bay. This was the main reason why the Court of Appeal disagreed with Anderson J’s finding that Mr. Hooks had never consented to the south-west deviation. In their Lordships’ opinion the Court of Appeal’s conclusion on this issue is to be preferred to that of the judge. There does not appear to their Lordships to have been any reason at all why it should have mattered one jot to Mr. Hooks whether the new road made its way to his south-western boundary via the Crown grant road or via the south-west deviation. Any unused areas of Crown grant road were all to be transferred to him (see condition (b) in the 23 September 1970 letter); the amount of grazing available to his cattle and sheep would not be affected by the choice between the Crown grant road and the south-west deviation; this part of the new road was some distance away from his house and the choice would have no effect on his privacy. Mr. Hooks was content to leave the exact route to be taken by the new road to be settled on site between Mr. Wilkinson and his son, John. This was so both in the eastern stretch and in the south-western stretch of the new road. The dedication inferences in relation to the south-west deviation are, in their Lordships’ opinion, no different from those that apply to the new road as a whole.
In addition to completing the loop road round the island by constructing the new road through Man O’War Station, the Council constructed a spur road from the loop road into Waiti Station. The purpose of this was twofold; in part to give access to the loop road to the owners of Waiti Station and in part to give access to the public to Stony Batter, which was Crown land and in 1983 had been declared an historic reserve. The spur into Waiti Station followed the line of the Old Army Road.
Construction of the new road over Man O’War Station, including the spur to Waiti Station, was completed towards the end of 1972. Use of the new road by the public then began and continued until interrupted by Mr. Spencer after the appellant had purchased the Station.
The findings of fact regarding the construction of the new road are important. Anderson J held that Mr. Hooks had been kept informed of the progress of the construction (p 22, para 10):
Arthur himself was undoubtedly kept reasonably informed of the road development, by his son and his solicitors.
The Court of Appeal concurred (para 50):
.... it would be contrary to common sense to suppose that he did not keep himself fully informed about the progress of construction ....
Mr. Craddock submitted that the evidence did not warrant these conclusions. However, the basis on which they were reached are fully set out in the respective judgments and are, in their Lordships’ view, conclusions which were open to be reached on the evidence. It is not necessary to explore the circumstances in which the Board may be entitled to reject concurrent findings of fact reached by the courts below for their Lordships, on the material available in this case, have no inclination to do so.
The appellant, in its printed Case, has raised, but not sought to argue, the issue whether the common law doctrine of implied dedication is applicable to land in New Zealand. The Case says that the appellant does not seek to argue that there cannot be an implied dedication of New Zealand land but “neither do they concede the point” (para 54). Neither of the courts below expressed any doubt about the point and, in the absence of any argument, their Lordships can see no reason why the common law doctrine should not apply in New Zealand but, nonetheless, the consequences of its application are, in one respect at least, different in New Zealand from the normal common law consequences.
At common law, the dedication of land as a public highway creates a public right of passage but does not divest the landowner of his title to the land. He retains his title subject only to the public rights that he has created. In New Zealand, however, section 316 of the Local Government Act 1974 comes into play. Section 316(1) provides that:
.... all roads and the soils thereof, and all materials of which they are composed, shall by force of this section vest in fee simple in the council of the district in which they are situated. There shall also vest in the council all materials placed or laid on any road in order to be used for the purposes thereof.
In Narracan v Leviston (1906) 3 CLR 846, 861 Griffith CJ said that:
.... dedication means that the owner of the land intends to divest himself of any beneficial ownership of the soil, and to give the land to the public for the purposes of a highway.
The Chief Justice was dealing with land in Victoria and with a statute, the Local Government Act 1874, containing a similar vesting provision to that in section 316. Common law dedication certainly does not mean that the owner of the land intends to divest himself of his beneficial ownership in the land and their Lordships do not think that the statutory vesting provision in section 316, or for that matter in the 1874 Act in force in Victoria, requires the addition of that divesting intention to the requisites of an effective animus dedicandi. If the requisite animus dedicandi is expressed or can be inferred, and the dedication is accepted by public use of the land in question as a public highway, the land becomes, under common law, a public highway. Statutory vesting consequences may then follow, and do follow under section 316. There has been no argument before their Lordships as to whether section 316 effects a complete divesting of the landowner’s title to the land over which the public road passes or whether there is only divested so much of the sub-soil as is necessary to support and maintain the road. Griffith CJ in Narracan referred to a complete divesting. Their Lordships are not sure that that is right but do not find it necessary to reach a final decision on the issue.
For the purposes of the present case their Lordships proceed on the footing, first, that common law dedication does apply in New Zealand and, second, that where it applies section 316 will bring about an automatic divesting of the surface and at least part of the sub-soil under the road in favour of the local Council. It follows from this that their Lordships are in disagreement with the proposition expressed in para 55(d) of the appellant’s Case that for a road to be dedicated at all, the local highway authority (as opposed to the public, whose acceptance of the dedication will be demonstrated by their use of the road) must agree.
In considering whether there was an implied dedication of the road over Man O’War Station, it is convenient to start by rehearsing the factual foundation upon which the conclusions about dedication must be reached.
The letter of 23 September 1970 shows that Mr. Hooks was willing in principle that the Council should construct the new road over his land. There was broad agreement as to the route to be taken by the road (see condition (c) in the letter). It was contemplated by Mr. Hooks and the Council that the road construction works would be commenced more or less immediately. The notices required by condition (f) were put in place. The contractual obligations imposed by conditions (a), (b), (d) and (e) were accepted by the Council. These conditions were not conditions precedent to the commencement by the Council of the road construction works. The “arrangement” referred to in the final paragraph of the letter was an arrangement for the consensual transfer by Mr. Hooks of the site of the new road to the Council.
The construction of the road, commencing in 1970 and continuing until its completion at the end of 1972, was carried out at the expense of the Council. This was consistent with the arrangement agreed in September 1970. Use of the road by the public began as soon as construction was complete. This, too, was consistent with the September 1970 agreement and was what both Mr. Hooks and the Council had contemplated and intended.
It is common ground that dedication requires an intention to dedicate. There must be an animus dedicandi. In Echolands Farms Ltd v Powell  1 NZLR 750 Moller J said, at p 757, that the animus dedicandi:
.... may be openly expressed in words or writing, but, as a rule, it is a matter of inferences from evidence as to the acts and behaviour of the person concerned when viewed in the light of all the surrounding circumstances.
Mr. Craddock submitted that an implied dedication had to be based on evidence giving rise to a compelling inference about the owner’s unilateral intention to dedicate. There could not, he submitted, be a dedication where the evidence showed an intention on the owner’s part to dedicate the land on terms, as part of a bargain. He cited Barraclough v Johnson (1838) 8 A & E 99, Narracan v Leviston (1906) 3 CLR 846 and Stewart v Wairoa County Council (1909) 28 NZLR 178 in support. These cases are interesting but do not, in their Lordships’ opinion, go as far as Mr. Craddock would like them to go.
Barraclough was a case in which a landowner had agreed to allow the local inhabitants to use a road over his land in return, inter alia, for a rental payment of 5s. a year. The road was then used by the public. It was held that the public user pursuant to the agreement did not justify inferring an intention by the landowner to dedicate. Lord Denman CJ posed the question whether there could ever be a conditional dedication. He said, answering himself, at pp 103-104:
Perhaps not. A dedication must be made with intention to dedicate. The mere acting so as to lead persons into the supposition that the way is dedicated does not amount to a dedication, if there be an agreement which explains the transaction: and, referring to the agreement here, it is plain that there was only a licence to use.
This case does not establish that a dedication cannot be part of a bargain. It goes no further than to establish that the grant of a right to the public to use a road on terms that remain executory does not justify the inference of an animus dedicandi. Their Lordships would echo Lord Denman’s “Perhaps not” answer to the question whether a dedication can be conditional. The aphorism “once a highway, always a highway” underlines an important aspect of the nature of an effective dedication. The acts and circumstances from which the dedication is to be inferred must justify the inference of an intention to bestow on the public a continuing right of user of the road, not a right the continuance of which is subject to the occurrence, or non-occurrence, of some future event such as the payment of rent.
Barraclough was followed and applied by the High Court of Australia in Narracan v Leviston. The facts, it was held, constituted an implied agreement that the public could use a road pending its proclamation as a public road, at which time the landowner would receive compensation for the land taken for the road. Griffith CJ noted, at p 857, that the actual user of the road by the public was “just such as might have been expected if it had been admittedly a public way” and then formulated the issue: “was such use had in the exercise and assertion of a public right, or must it be ascribed to the tolerance of successive proprietors?” He preferred the second of these two alternatives on the ground that (pp 862/863):
Turner [the landowner] believed that the proper authorities intended to take the land for the road in the manner provided by statute, and .... he acquiesced in that being done, and made no objection to the public using the road in the meanwhile, knowing that in due time he would receive proper compensation for the land so taken; in other words .... there was a tacit agreement between Turner and the local authority that, pending the necessary steps being taken for completing the title of that authority to the road, he would allow the public to use the road.
The Chief Justice explained that (p 863):
The landowner did not interfere with the user [by the public], but the dedication contemplated at that time was by the Shire and not by the landowner.
Barton J and O’Connor J reached the same conclusion as the Chief Justice. It is important to notice, however, that the critical issue in the case was treated as one of fact, not of law. Barton J, at p 870, said that:
There are a number of facts proved in evidence which are susceptible of one or other of two interpretations. One of them is that there was an intention on the part of the successive owners of this land to dedicate this track as a highway. But the same body of evidence is open to another interpretation, viz, that the holder of the land might reasonably look forward, under the circumstances of the acts being performed by the Shire and other persons, to such a statutory dealing with the question of a public road as would entitle him to compensation together with a fence on each side of the road. It was open to [the trial judge], dealing with these two interpretations of the facts, to come to the conclusion either that there was an animus dedicandi according to the common law, or that the right complexion to be put upon those acts was that the user was by the owner’s indulgence, and attributable to the intended statutory acquisition of a road by the Shire. I am inclined to think that the facts are stronger in favour of the latter interpretation than of the former.
The decision does not establish a principle of law that the anticipation by the parties of a statutory acquisition of the land by the local authority negatives an animus dedicandi. Nor does it establish as a principle of law that where compensation is to be paid for the land and the amount has yet to be agreed, there cannot be an animus dedicandi. It establishes no more than that these are significant matters to be taken into account, together with all the other circumstances of the case, in deciding whether an animus dedicandi is or is not to be inferred. But where monetary compensation is to be paid for the land it would, their Lordships think, be unusual for an animus dedicandi to be present before the compensation had been paid. The intention that the land should be a public highway would be likely to be subject to the payment of the compensation. But, their Lordships would emphasise, this is a question of fact, not a principle of law.
In Stewart v Wairoa County Council the New Zealand Court of Appeal held that a permission given by the landowner for use by the public of a temporary track did not constitute a dedication. This was a decision well justifiable on the facts. Stout CJ, at p 187, expressed the law in terms on which the appellant in the present case heavily relies. He said:
They [the judges in Narracan] .... affirmed the principle, as stated in the headnote of the case, that an agreement between the owner and the Crown or the owner and the local authority having charge of the roads that the road should be acquired, and permitting user till acquisition, negatives dedication.
However the headnote in Narracan did not go that far. It reads:
An intention to dedicate land as a highway will not be presumed from mere user if that user is explained by circumstances negativing such an intention.
That statement accurately reflects the decision in Narracan. The circumstances that will negative dedication will vary from case to case and an agreement of the sort described by Stout CJ may or may not, when taken into account with all the other circumstances of the case, negative dedication.
In the present case Anderson J, taking into account all the circumstances, concluded that the requisite animus dedicandi on Mr. Arthur Hooks’ part ought to be inferred (see pp 21 to 26 of the judgment and, in particular, the numbered paragraphs 1 to 7 at pp 24 to 26). The Court of Appeal said, at para 49, that, having studied the evidence, they were “satisfied that it was well open to the Judge to make the finding that by 1975 there had been what the common law would recognise as an implied dedication”.
The appellant’s main objection to these conclusions is that they do not take sufficiently into account the conditions and reservations to which the agreement evidenced by the 23 September 1970 letter was subject and the expectation of the parties that the agreement would in due course be carried into effect by a formal section 32 transfer of the road to the Council and an express dedication by the Council.
There was, however, in their Lordships’ opinion, ample material to justify the finding of implied dedication. Anderson J concluded that, by 1975, the conditions set out in the 23 September 1970 letter, to the extent that they had yet to be fulfilled, were not conditions on which the right of the public to use the road depended but were simply contractual obligations owed by the Council to Mr. Hooks (see paras 3 and 4 at p 25). Since the conditions were plainly not conditions precedent to the right of the Council to commence construction of the road it is a justifiable consequential inference that they were not intended to be conditions precedent to the right of the public to use the road once construction had been completed. Anderson J concluded also that by 1975 the “in principle” agreement of September 1970 had become a binding enforceable agreement from which Mr. Hooks could not have resiled (paras 5 and 6 at pp 25/26). The Court of Appeal concurred (para 49) and, in particular, rejected the argument that Mr. Hooks could have resiled from the agreement to transfer the land to the Council (para 50) and that Mr. Hooks’ intention to dedicate remained subject to the section 32 procedure being carried through (paras 51 and 52).
Their Lordships do not dissent from this approach to the facts but there is a flavour of unreality about it. It is as certain as anything can be that dedication of the road as a public highway by Mr. Hooks himself never crossed his mind. Why should it? He was not a lawyer and would never have heard of the common law doctrine of dedication. Their Lordships would be minded to accept that Mr. Hooks, in so far as he thought about the legal consequences of the construction of the road and the public’s use of it at all, thought that eventually he would be called on to transfer the land to the Council. But this does not necessarily negative an implied dedication. By the end of 1972 the road had been completed. Public use of it had begun and was continuing. That was the purpose of the construction of the road. The conditions of the 23 September 1970 letter were not conditions upon which the public right to use the completed road depended. They had become conditions binding on the Council, as the Council accepted.
The position reached by, say, 1973, as between Mr. Hooks and the public who used the road, had become analogous to the position established by proprietary estoppel where a landowner has allowed another to build a house on his, the landowner’s, land in the expectation, encouraged by the landowner, that when the house has been built it will belong to the builder. The landowner cannot, once the house has been built, claim it as his own and deny the builder’s right to it (see Dillwyn v Llewelyn (1862) 4 De G F & J 517 and Inwards v Baker  2 QB 29). In the present case, the Council at its expense had constructed the road in the expectation, shared by Mr. Hooks, that when built it would be a public road used by the public as of right. Mr. Hooks could not, in their Lordships’ view, once the road had been built at public expense, have repudiated the basis on which it had been built. Nor did Mr. Hooks ever attempt to do so. Public use of the road corresponded with his intentions as well as those of the Council. In these circumstances, in their Lordships’ view, there was every reason, on the evidence, for inferring an animus dedicandi on Mr. Hooks’ part.
Suppose also a case in which a landowner has agreed for compensation, say $10,000, to allow the local authority to build a road over his land for the public to use. And suppose the compensation is paid, the road is built and public use commences and continues. The intention of both the landowner and the Council is that the road should be a public highway. The intention, once the compensation has been paid, is subject to no condition at all. The actual transfer of the land to the Council has become no more than machinery. In these circumstances, in their Lordships’ view, the landowner’s and the Council’s joint intention in relation to the use of the road by the public would constitute the requisite animus dedicandi. So here. Once it had been found, on evidence that justified the finding, that the conditions in the 23 September 1970 letter were not conditions precedent to the construction of the road or the use of it by the public, the joint intention of Mr. Hooks and the Council that the road should be used by the public as of right constituted the animus dedicandi and, under common law, bestowed on the road the status of a public road.
THE NEED FOR OTHER CONSENTS
The point was taken, on behalf of the appellant, that the consent of third parties with an interest in the land over which the road ran was necessary in order for there to be an effective dedication but was absent. Their Lordships accept the principle that a person with an interest in the land inconsistent with the public right of way must consent to the dedication if the dedication is to be effective. So, if the land is subject to a mortgage, the mortgagee must consent, and, if it is subject to a lease, the lessee cannot dedicate without the consent of the lessor (see Griffith CJ in Narracan at p 864). The third party interests on which the appellant relied were various interests of the Crown.
The Old Army Road was subject to an easement to give access to Stony Batter. But since the substitution of the new public road for the Old Army Road could hardly constitute an interference with the Crown’s right of passage, there is nothing in this point. The Crown’s consent, qua proprietor of the easement, was not necessary.
The closure and transfer to Mr. Hooks of the Crown grant roads not incorporated into the new road required the consent of the Crown. This is, in principle, correct.
Similarly, the construction of a road through Stony Batter in order to give access to Thumb Point required the consent of the Crown.
As to (ii) and (iii), these relate to conditions (a) and (b) in the letter of 23 September 1970. But these conditions, as the courts below held, were not conditions on which the construction of the road or the public right to use it depended. They were, or had become, no more than collateral contractual obligations of the Council to Mr. Hooks. So Crown consent to enable the conditions to be fulfilled was not necessary for the efficacy of the implied dedication.
Their Lordships would, therefore, decide issues 1 and 2 in favour of the respondent.
THE SECTION 77 ISSUE
The consequence of the dedication of the new road as a public highway was that, under section 316 of the Local Government Act 1974, the road vested automatically in the Council in fee simple. The question is whether, when the appellant acquired its registered title on completion of the purchase from Mr. Hooks in 1979, it acquired title to the site of the new road, thereby divesting the Council. Section 77 of the Land Transfer Act 1952 sets out two exceptions to the indefeasibility of a registered title. Both relate to public roads.
As to the first exception, section 77 provides that:
No right to any public road .... shall be acquired .... by the unauthorised inclusion thereof in any certificate of title ....
This has no application to the present case. There were no public roads included in Mr. Hooks’ certificate of title other than the Crown grant roads.
The second exception is dealt with by the second half of section 77:
No right to any public road .... shall be acquired .... by the registration of any instrument purporting to deal therewith otherwise than as authorised by law.
This, on a natural reading, appears to their Lordships, as it appeared to Anderson J and the Court of Appeal, to cover the present case. The deed of transfer whereby Mr. Hooks transferred the Station to the appellant was an instrument purporting to deal with the whole of the area of the Station including the site of the new road. But the inclusion of the site of the new road was not authorised by law. So, on registration of that instrument, no right to the road was acquired by the appellant. The appellant has submitted that the “therewith” in section 77 refers not to “any public road” but to “any certificate of title”. Their Lordships are unable to accept this construction and agree with the reasons given by the Court of Appeal who likewise rejected it.
Accordingly their Lordships are in agreement with the Court of Appeal on each of the three issues referred to in paragraph 8 of this judgment. The fraud issue cannot now arise. Their Lordships will humbly advise Her Majesty that the appeal should be dismissed. The appellants must pay the 1st respondent’s costs.
R v Gough  AC 646; Auckland Casino Ltd v Casino Control Authority  1 NZLR 142; Locabail (UK) Ltd v Bayfield Properties Ltd  QB 451; President of the Republic of South Africa v South African Rugby Football Union 1999 (4) SA 147; Magill v Porter & Weeks  UKHL 67; Narracan v Leviston (1906) 3 CLR 846; Echolands Farms Ltd v Powell  1 NZLR 750; Barraclough v Johnson (1838) 8 A & E 99; Stewart v Wairoa County Council (1909) 28 NZLR 178; Dillwyn v Llewelyn (1862) 4 De G F & J 517; Inwards v Baker  2 QB 29
Land Transfer Act 1952: s.62, s.77
Local Government Act 1974: s.316
Authors and other references
Halsbury’s Laws of England Vol 21
all rights reserved