Mita Michael Ririnui v Landcorp Farming Ltd

JurisdictionNew Zealand
CourtSupreme Court
JudgeElias CJ,Arnold J,Glazebrook J,O'Regan J,William Young J
Judgment Date09 June 2016
Neutral Citation[2016] NZSC 62
Docket NumberSC 47/2015
Date09 June 2016

[2016] NZSC 62

IN THE SUPREME COURT OF NEW ZEALAND

Court:

Elias CJ, William Young, Glazebrook, Arnold and O'Regan JJ

SC 47/2015

Between
Mita Michael Ririnui
Appellant
and
Landcorp Farming Limited
First Respondent
The Attorney-General
Second Respondent

and

Wheyland Farms Limited
Interested Party
Counsel:

M T Scholtens QC, A N Isac and J B Orpin for Appellant

J E Hodder QC, B Gnanalingam, B J Maltby and, on 19 August 2015, S A Barker for First Respondent

D J Goddard QC, J R Gough and S J Humphrey for Second Respondent

A A Hopkinson for Interested Party

Appeal from a Court of Appeal (CA) decision which held that while the advice given by Office of Treaty Settlements (OTS) under the protocol was wrong in law, it was not reviewable and that neither the shareholding Ministers nor the Minister for Treaty of Waitangi Negotiations had the power to intervene to prevent the sale of Whārere farm. The CA decision also dismissed a bad faith claim — OTS had informed the respondent that farmland was not required to settle any historical Treaty of Waitangi claims — Ngāti Whakahemo claimed mana whenua over the land and sought an order setting aside the agreement for sale and purchase — whether the CA had been correct to refuse the relief sought by the appellant on the basis of the respondent's alleged bad faith, the acknowledged error of law by the OTS in its advice to the respondent and/or the failure of the shareholding Ministers of the respondent to intervene — whether the respondent's entry into the agreement for sale and purchase was tainted by bad faith — whether the shareholding Ministers' decision not to give the undertaking sought by Ngāti Whakahemo or to take other steps to protect Ngāti Whakahemo's interests breached s9 State-Owned Enterprises Act 1986 (Treaty of Waitangi) and was based on the erroneous view that they had no power to intervene — whether the advice of OTS was erroneous and had materially affected all consequent decisions of the respondent and the shareholding Ministers.

Held: The shareholding Ministers had acted within their powers when they had asked Landcorp to halt the tender process and to give Ngāti Mākino the opportunity to purchase Whārere on a commercial basis and their decision had involved the exercise of a public power. The Ministers had decided to intervene on behalf of Ngāti Mākino while almost at the same time advising Ngāti Whakahemo that such intervention was not possible. There was no indication that the Ministers' decision not to intervene on behalf of Ngāti Whakahemo was based on anything other than the Crown's mistaken view as to the settlement of Ngāti Whakahemo's historical claims. It had been an exercise of a public power that was based on a material error, albeit not one of the Ministers' making.

Ngāti Whakahemo had not been given an opportunity to acquire Whārere by being invited to participate in the tender, that same invitation was extended to Ngāti Mākino, who had not accepted it but sought and received special treatment. The invitation to Ngāti Whakahemo to participate in the Ngāti Mākino initiative had not been sufficient to meet the group's interests. Landcorp's decision to offer Whārere to Micro was susceptible to review on broader grounds than simply fraud, corruption, bad faith or something analogous. Landcorp's decision-making in relation to Whārere had been based on the Crown's mistaken view of Ngāti Whakahemo's position. Landcorp's offer of Whārere to Micro was reviewable by reason of a material mistake. While many decisions made in connection with Treaty settlements would not be justiciable as they would involve policy, political, fiscal and similar considerations that were the particular province of the executive, that did not apply to all decisions having a Treaty dimension.

Ngāti Whakahemo had been misled into thinking that there was an opportunity for them to put together a bid to acquire Whārere and that they attempted to do so. An inference could fairly be drawn that Landcorp had intended to mislead Ngāti Whakahemo to buy time to enable the agreement for sale and purchase with Micro to be finalised. It was fair to conclude that there was bad faith but no relief was appropriate. The bad faith at issue had not come into play until after the Landcorp board had made its decision to sell to Micro, a decision which Ngāti Whakahemo accepted had been made in good faith.

Section 21 SOEA (saving of certain transactions) did not prevent the granting of relief in respect of a contract in judicial review proceedings. The fundamental issue where an applicant for judicial review sought to have a contract set aside in a case where the contracting public body had capacity to make the contract was the existence and extent of prejudice to third parties.

By majority, a declaration was given that the decision of Landcorp's shareholding Ministers and the Minister for Treaty of Waitangi Negotiations not to intervene in the tender process on behalf of Ngāti Whakahemo as they had on behalf of Ngāti Mākino, was a wrongful exercise of public power because it was made under a material mistake. A declaration was given that the decision by Landcorp to sell Whārere farm to Micro was a wrongful exercise of a public power because it had been made under a material mistake.

The majority declined to set aside the agreement for sale and purchase of Whārere would be inappropriate given the impact of doing so on an innocent third party.

A The appeal is allowed in part.

B The following declarations are made:

(i) The decision of Landcorp Farming Limited's shareholding Ministers and the Minister for Treaty of Waitangi Negotiations not to intervene in the tender process on behalf of Ngāti Whakahemo as they did on behalf of Ngāti Makino was a wrongful exercise of a public power because it was made under a material mistake.

(ii) The decision by Landcorp Farming Limited on 28 February 2014 to sell Whārere farm to Micro Farms Limited was a wrongful exercise of a public power because it was made under a material mistake.

C All other forms of relief claimed by the appellant are declined.

D The restraining order made by this Court in Order C of its judgment granting leave to appeal ( Ririnui v Landcorp Farming Ltd [2015] NZSC 72) is discharged.

E Costs are reserved. The parties may file written submissions as to costs in this Court and in the Courts below if they are unable to reach agreement.

JUDGMENT OF THE COURT

REASONS

Elias CJ and Arnold J

[1]

Glazebrook J

[147]

O'Regan J

[150]

William Young J

[193]

Elias CJ AND Arnold J

(Given by Arnold J)

Table of Contents

Para No

Introduction

[1]

Factual background

[4]

Facts primarily relevant to the error of law grounds

[5]

Facts primarily relevant to the bad faith ground

[27]

The sale and purchase agreement: cls 21 and 22

[33]

The proceedings

[35]

Issues in this Court

[39]

Evaluation

[42]

The context: land sales by Landcorp

[43]

The Crown's error

[53]

The decisions and/or powers at issue

[56]

The reviewability of Landcorp's decision to sell Whārere to Micro

[64]

Decisions of Ministers

[77]

March 2014 decision

[78]

December 2013 decision

[83]

Drawing the threads together

[98]

The bad faith claim

[100]

Relief

[110]

Section 21

[114]

An agreement has been concluded

[118]

Third party prejudice

[131]

Overall assessment

[138]

Result

[143]

Introduction
1

This is a judicial review case. Judicial review is a supervisory jurisdiction which enables the courts to ensure that public powers are exercised lawfully. In principle, all exercises of public power are reviewable, whether the relevant power is derived from statute, the prerogative or any other source. The courts acknowledge limits, however. These limits are reflected primarily in the notions that the case must involve the exercise of a public power, that even if the court has jurisdiction, the exercise of power must be one that is appropriate for review and that relief is, in any event, discretionary. It is the scope of these limits that is at issue in the present case.

2

The appellant, Mita Ririnui, is the Chairman of the Ngāti Whakahemo Claims Committee and Te Runanga o Ngāti Whakahemo. He brought judicial review proceedings on behalf of Ngāti Whakahemo in an attempt to halt the sale of a farm property, Whārere, over which Ngāti Whakahemo claim mana whenua. The respondent, Landcorp Farming Ltd (Landcorp), a state-owned enterprise, was the vendor and the interested party, Wheyland Farms Ltd (Wheyland), was the purchaser (by nomination).

3

In this Court, the principal relief sought by Ngāti Whakahemo seek an order setting aside the agreement for sale and purchase. By way of background to the description of the factual and other context which follows, their contentions may be summarised as follows:

  • (a) First, the agreement was tainted by bad faith on Landcorp's part. Were it not for Landcorp's bad faith, Ngāti Whakahemo would have issued these proceedings before the agreement had been concluded and sought an interim injunction to prevent any sale prior to their resolution.

  • (b) Second, Landcorp was labouring under an error of law as to Ngāti Whakahemo's status at all relevant times. But for that error, Landcorp would not have entered the agreement in the way that it did.

  • (c) Third, the shareholding Ministers refused to intervene in the sale process both because they wrongly thought they had no ability to intervene and also because they were labouring under the same error as Landcorp as to Ngāti Whakahemo's status.

Factual background
4

For ease of presentation, we will divide the description of the factual background into two segments – the facts primarily relevant to the bad faith ground and those primarily...

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