The New Zealand Maori Council v The Attorney-General

• Jurisdiction: New Zealand
• Judge: Elias CJ,McGrath,William Young,Chambers,Glazebrook JJ
• Judgment Date: 27 February 2013
• Neutral Citation: [2013] NZSC 6
• Docket Number: SC 98/2012
• Court: Supreme Court
• Date: 27 February 2013

BETWEEN

The New Zealand Maori Council

First Appellant

and

The Waikato River and Dams Claim Trust

Second Appellant

and

The Attorney-General

First Respondent

and

The Minister of Finance

Second Respondent

and

The Minister for State-Owned Enterprises

Third Respondent

[2013] NZSC 6

Court:

Elias CJ, McGrath, William Young, Chambers and Glazebrook JJ

SC 98/2012

IN THE SUPREME COURT OF NEW ZEALAND

Direct appeal from High Court on questions of law arising from a judicial review application of Crown's proposed restructuring of State owned enterprise, Mighty River Power Ltd — Crown proposed that under State-Owned Enterprises Amendment Act 2012, Mighty River would be reconstituted as a “mixed ownership model company” under Part 5A Public Finance Act 1989 (“PFA”) — appellants said this was unlawful by reason of s9 State Owned Enterprises Act (Treaty of Waitangi) and s45Q PFA (Treaty of Waitangi), both of which prevented the Crown from acting inconsistently with the Treaty of Waitangi — use rights of relevant waters were subject to long-standing claims of Treaty breach — Waitangi Tribunal found customary rights of Maori included authority over these resources and the right to economic benefit from their use — Mighty River held resource consents over use of water from Waikato River — whether proposed sale of 49 per cent of shares (on which the claim of material prejudice was based), was reviewable for consistency with principles of the Treaty — whether the partial privatisation of Mighty River would impair, to a material extent, Crown's ability to remedy any Treaty breach in respect of Maori interests in the river — whether sale was in breach of s64 Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010 (creating or disposing of interests).

Counsel:

C R Carruthers QC, P D Green and F Geiringer for Appellants

D J Goddard QC, J R Gough and S Kinsler for Respondents

P T Harman for V Winitana, G Morrell and F Timutimu (Interveners)

• A The appeal is dismissed.

• B No order is made as to costs.

JUDGMENT OF THE COURT

REASONS

Table of contents

	Para No
Introduction	[1]
Background to the litigation
Treaty claims to waters	[10]
The water consents held by Mighty River Power	[12]
The SOE case	[15]
The development of the mixed ownership company policy	[19]
The freshwater claim to the Waitangi Tribunal	[21]
The further consultation on “shares plus”	[27]
Is the proposed sale of shares in Mighty River Power reviewable for consistency with the principles of the Treaty of Waitangi?	[31]
The legislative context	[32]
Principal features of the new legislation	[39]
The submissions of the parties	[46]
Our evaluation	[51]
The effect of s 45Q	[60]
Alternative submission: s 22(3)	[65]
Is Cabinet's decision to bring into effect the State-Owned Enterprises Amendment Act reviewable?	[69]
Submissions of the parties	[70]
Our assessment on the commencement issue	[75]
Was the Crown in breach of s 64 of the Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010?	[78]
The adequacy of the consultation following the Freshwater Report	[83]
Is the proposed sale of shares in Mighty River Power consistent with the principles of the Treaty of Waitangi?
What is the test?	[88]
The underlying claims	[93]
Evolution of statutory regimes controlling the use of water	[95]
Positions of the parties as to ownership interests in water	[99]
An overview of the competing positions as to the extent of available Treaty claims	[102]
Treaty settlements involving water	[106]
Treaty principles and the SOE case	[114]
How the privatisation of the power-generating companies might impair the ability of the Crown to respond to claims — the contentions of the parties	[116]
The views of the Waitangi Tribunal	[122]
The approach of Ronald Young J in the High Court	[128]
Our approach — a preliminary comment	[131]
The effect of privatisation on direct claims against the lands of theState enterprise power-generating companies	[134]
The significance of privatisation in relation to the ownership and control of the power-generating companies	[135]
The effect of privatisation on more general reform of the law relating to the governance and management of water	[142]
The current social and legislative environment in relation to Treaty rights	[147]
Conclusion on this issue	[149]
Result	[151]

Introduction

1 The appeal concerns the restructuring of the Crown's ownership of the State enterprise, Mighty River Power Ltd. When the provisions of the State-Owned Enterprises Amendment Act 2012 are brought into effect in respect of Mighty River Power by Order in Council, the company will be reconstituted as a “mixed ownership model company” under Part 5A of the Public Finance Act 1989. 1 The result will be to permit the Crown to sell up to 49 per cent of the shares in the company which, as a State enterprise, is currently required by legislation to be wholly owned by the Crown. The Crown has announced its intention to bring the legislation into effect in relation to Mighty River Power and to offer 49 per cent of the shares in it by initial public offering (IPO) in the first quarter of 2013. 2

2 The New Zealand Maori Council, 3 the Waikato River and Dams Claim Trust 4 and the Pouakani Claims Trust 5 each applied for declarations in the High Court that the bringing into effect of the legislation removing Mighty River Power from the State-Owned Enterprises Act 1986 and the proposed sale of 49 per cent of its shares are unlawful by reason of s 9 of the State-Owned Enterprises Act and s 45Q of the Public Finance Act, both of which prevent the Crown acting inconsistently with the principles of the Treaty of Waitangi. There is an issue as to whether ss 9 and 45Q apply. But, if they do, it is common ground in the litigation that the Crown proposals will be inconsistent with the principles of the Treaty if they would materially impair the ability of the Crown to act on recommendations of the Waitangi Tribunal relating to Treaty breach. The claimed breaches in issue relate to waters used for the generation of electricity and subject to Treaty claim.

3 The appellants were unsuccessful in the High Court. 6 Ronald Young J held that the change to the status of Mighty River Power which clears the way for sale of shares is achieved by primary legislation which cannot be questioned for compliance with the principles of the Treaty in the courts. 7 In addition, he held that the proposed actions of the Crown were not in any event inconsistent with the principles of the Treaty because the sale of 49 per cent of Mighty River Power would not materially prejudice Maori claims and interests in the water. 8

4 Whether the Judge was right in these conclusions is the principal question on the appeal. The issues raised by the appellants are:

• (a) Is the proposed sale of shares in Mighty River Power reviewable for consistency with the principles of the Treaty of Waitangi?

• (b) Is Cabinet's decision to bring into effect the State-Owned Enterprises Amendment Act reviewable?

• (c) Is the proposed sale of shares in Mighty River Power in breach of s 64 of the Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010 (Settlement Act)?

• (d) Was the consultation undertaken by the Crown with Maori following the recommendation of the Waitangi Tribunal inconsistent with the principles of the Treaty of Waitangi, in breach of s 45Q of the Public Finance Act?

• (e) Is the proposed sale of shares in Mighty River Power inconsistent with the principles of the Treaty of Waitangi, in breach of s 45Q of the Public Finance Act?

5 The appeal from the High Court is brought directly to this Court 9 at the request of the Crown to meet the time constraints it has in finalising the IPO and realising up to 49 per cent of the value of Mighty River Power for important government purposes. Counsel have cooperated in preparing for and fully arguing the appeal to meet a tight timetable. The Court has however been deprived of the assistance of an intermediate appellate judgment. That circumstance and the fact that some of the arguments touch on fundamental elements of the New Zealand legal order prompt caution in straying beyond matters essential to disposition of the appeal.

6 The Court is unanimous on all questions on the appeal. Its reasons are expressed in this single opinion.

7 For the reasons that follow, we are of the view that the proposed sale of the shares (on which the claim of material prejudice is based) is reviewable for consistency with the principles of the Treaty. We explain our reasons for that conclusion, in disagreement with the decision of Ronald Young J on the point, at paragraphs [51]–[68]. Because of this conclusion, it is unnecessary for us to determine whether the proposed Order in Council to bring the State-Owned Enterprises Amendment Act into effect is also able to be reviewed for consistency with the principles of the Treaty.

8 We have concluded, however, that the partial privatisation of Mighty River Power will not impair to a material extent the Crown's ability to remedy any Treaty breach in respect of Maori interests in the river, for reasons explained in paragraphs [131]–[150]. For that reason, we decide that the appeal must be dismissed.

9 The appeal points based on breach of s 64 of the Settlement Act and inadequacy of consultation fail for the reasons given at paragraphs [78]–[82] and [83]-87] respectively.

Background to the litigation

Treaty claims to waters

10 The Waikato River and other waters in respect of which Mighty River Power has use rights are subject to long-standing claims of Treaty breach, based...