Both the High Court and Court of Appeal agreed DoC had made errors, but believed it was still consistent with the Treaty.
In a majority decision released today, the Supreme Court ruled in Ngāi Tai's favour. It said the concessions needed to be reconsidered in a manner that involved a "proper application of s4".
The Ngāi Tai Trust argued in court that, as Ngāi Tai ki Tāmaki has mana whenua in relation to the motu, it has the right and responsibility to exercise manaakitanga and kaitiakitanga in its traditional rohe.
It argued the Treaty principles of partnership, active protection, right to development, and redress meant it was neither appropriate nor in accordance with tikanga for other groups to be providing guided tours on the motu.
The respondents' position was that Ngāi Tai Trust's argument was a claim to have a veto over the granting of concessions, and was an "overstatement of the content of the s4 obligation".
The alleged errors of law were contained in internal DoC reports provided to the decision-maker.
These reports argued "there is no basis for preferential entitlement to concessions in favour of any party under the relevant legislation or current planning documents" and that "economic benefit that could potentially be accrued as a result of a concession … is not something that can be taken into account".
The Supreme Court ruled this advice was wrong.
"The statement contained in the internal DoC report that there is no basis for preferential entitlement to iwi in relation to concessions was in error.
"Similarly, the statement that economic benefit to an iwi with mana whenua cannot be taken into account, failed to recognise the active protection principle of the Treaty.
"The decision-maker's dismissal of the possibility of preference being accorded to an iwi meant she did not give proper consideration to that possibility as s4 required her to do."
However, the court did not make a finding on the Ngāi Tai Trust's argument that only those with mana whenua should be granted concessions on the motu, at least for a period of years.
Ngāi Tai ki Tāmaki Tribal Trust chair James Brown said they were happy with the decision.
"But we are not surprised. This was about how DoC should have done this process, and they simply haven't and that culture has been enshrined for the 30 years the act has been in place."
The people of Ngāi Tai have deep historical and spiritual connections with the
two motu. A voyager in the waka Tainui, Taikehu, established himself on Motutapu.
The iwi had its own commercial, cultural and customary plans for the motu, Brown said.
They would be happy to work with other operators, as long as the process properly took into account Treaty principles.
"Our argument was about whether or not they had they given effect to Treaty principles, it doesn't say anything about exclusive tourism.
"We are happy to support some of the existing operations, such as the core work by the Motutapu Restoration Trust."
The decision had national implications, Brown said.
"This is not just Ngāi Tai and DoC, I think it has national reach for all Māori, especially those with Treaty settlements."
Exactly how DoC gave effect to Treaty principles would vary across the country, but put simply it needed to include genuine engagement with iwi, Brown said.
A Department of Conservation spokesman said DoC was carefully considering the ruling and that it would be "inappropriate" to comment until they had time to work through the implications.