Auckland Council has failed in its bid to win a court order to remove Occupy protesters from Aotea Square.
The council claimed the protesters were breaking various bylaws and attempted to seek an injunction from the court to force them to leave, more than six weeks after they first pitched their tents there.
Judge David Wilson refused the interim injunction because the protesters were not given enough time to prepare for the court date.
The council's application for a permanent injunction will be heard at Auckland District Court next week.
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Earlier, during a lively hearing, council representative Ross Burns said the occupation was causing tens of thousands of dollars in damage to the public space, including causing grass to die and threatening nearby trees.
To this, protesters in the packed public gallery erupted in coughs and someone muttered "bull****" under their breath, prompting a reprimand from Judge Wilson.
Mr Burns said the protesters were denying members of the public their right to access and enjoy the space. "The interference with other people's rights ... has been going on for so long now it has become unreasonable."
Mr Burns acknowledged the occupiers' right to protest as set out in the Bill of Rights, but "these particular rights aren't absolute, for example, one person can't exercise their entitlement to protest at the detriment of others", he said.
In an impassioned address to the court, occupier Penny Bright submitted the council had no right to seek an injunction because there had been no resolution among its elected representatives that it was an appropriate course of action to take.