December 2012 Māori Law Review

High Court rejects Māori Council water rights case

New Zealand Māori Council v Attorney-General

[2012] NZHC 3338

11 December 2012

The High Court declined the New Zealand Māori Council’s application for judicial review of decisions relating to the proposed partial privatisation of the State-owned Enterprise Mighty River Power. The Supreme Court will hear the Council’s appeal from that decision at the end of January 2013.

Download New Zealand Māori Council v Attorney-General [2012] NZHC 3338 here (519 KB PDF).

Overview and result

On 11 December, Ronald Young J issued his decision in the High Court litigation brought by the New Zealand Māori Council to challenge the Government’s decision to proceed towards the partial privatisation of State-owned Enterprise Mighty River Power.

The Court found that the decisions taken by the Crown to advance the sale of those shares were not reviewable.  Furthermore, even if the decisions were reviewable, none of the grounds for review raised by the Māori Council would succeed.

The Māori Council has subsequently been granted leave to appeal this decision directly to the Supreme Court.

Background

The New Zealand Māori Council (joined by the Waikato River and Dams Claims Trust and the Pouakani Claims Trust) sought to challenge three key Crown decisions:

(a)    the advice to the Governor-General to bring into force, by Order in Council, the State-Owned Enterprises Amendment Act 2012. This has the effect of changing the status of Mighty River Power (‘MRP’) from a State-Owned Enterprise (‘SOE’) to a Mixed Ownership Model (‘MOM’) company;

(b)    amending the constitution of MRP (and later other SOE companies) which requires 100 per cent of the shares to be held by the Crown through the relevant Minister, to permit 49 per cent ownership by private persons; and

(c)    offering for sale and selling up to 49 per cent of the shares in MRP. (See [48].)

The Māori Council contended, with respect to each decision, the Crown must act in a manner that is not inconsistent with the principles of the Treaty of Waitangi.  This argument was premised on the decisions being subject to the Treaty principles provision in either s 9 of the State-owned Enterprises Act 1986 or s 45Q of the Public Finance (Mixed Ownership Model) Amendment Act 2012.  According to this argument, Ministerial action would be inconsistent with the Treaty if the Crown did not first implement protective mechanisms to provide for redress and protect Māori proprietary rights to water and geothermal resources before making any of the three decisions.

In the alternative, the Māori Council argued that:

(a)    there was inadequate consultation in relation to these decisions, which was inconsistent with the principles of the Treaty;

(b)    the Crown made an error of law by taking into account the idea that “no-one owns the water” when deciding whether its actions were consistent with Treaty principles;

(c)    the Crown’s failure to wait for the completion of both stages of the Waitangi Tribunal’s urgent inquiry into claims about water and geothermal energy was unreasonable;

(d)   it was an error of fact or law to conclude that a sale of 49 per cent of the shares of MRP would not be inconsistent with Treaty principles;

(e)    the intention to proceed with the sale of shares was a breach of a legitimate expectation held by Māori that the Crown would act with utmost good faith and actively protect Māori interests; and that

(f)     the Crown had breached the requirements of natural justice by proceeding with the sale of shares before Māori claims to the water and geothermal resources could be properly heard. (See [51].)

The Waikato River and Dams Claims Trust also argued that the Crown’s decision to proceed with the sale of shares in MRP is a breach of s64(3) of the Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010.

Discussion

Justice Ronald Young accepted the Crown’s arguments.  He found that the decision to bring the State-Owned Enterprises Amendment Act into force was not subject to the Treaty provisions in either the SOE Act or the Public Finance Amendment Act (at [65]-[84]).

The Crown argued that in enacting the State-owned Enterprises Amendment Act, Parliament delegated the decision to bring it into force to the Executive but without discretion for the Executive to consider the policy decisions that underlie making MRP a MOM company.  Those policy matters have already been determined by Parliament, including the nature of the protection of Treaty principles that are required.

Parliament’s intention in passing the SOE Amendment Act and the Public Finance Amendment Act was to ensure that those companies that are subject to the new MOM regime are not subject to the s 9 SOE Act Treaty compliance requirement but to the s 45Q Treaty compliance requirement. (At [82].)

Decisions to amend the constitution of MRP (a precondition to the sale of the shares) and to offer up to 49 per cent of the shares for sale were not reviewable because they were the exercise of common law powers and not statutory powers (at [96]-[105]).  This was a direct application of the 1996 Court of Appeal decision relating to the sale of shares in Radio New Zealand (New Zealand Māori Council v Attorney-General [1996] 3 NZLR 140 (CA)). (At [106]-[125].)

Justice Ronald Young also rejected the Māori Council’s argument that the sale of shares in MRP would materially affect the Crown’s ability to recognise Treaty rights and provide redress.  On this point the Court came to a different conclusion than the Waitangi Tribunal, which had determined that in relation to the “shares plus” concept, the Crown’s ability to recognize Māori rights would be compromised (see (2012) September Māori LR).  The Court considered that the shares plus concept would be unworkable (at [242]) and did not accept the Māori Council’s submission that if the Crown was to reject the shares plus option, it had an obligation as a reasonable Treaty partner to come up with an alternative scheme. (At [243]-[244].)

Note

On 18 December 2012, the Supreme Court granted the Māori Council leave to appeal this decision directly to the Supreme Court (see New Zealand Māori Council v Attorney-General [2012] NZSC 115).  The appeal will be heard on 31 January and 1 February 2013.